News is coming in of an explosion on a minibus in the Turkish Aegean coast holiday resort of Kusadasi. Reports are at this stage confused. It seems four people may be dead, two of them foreign tourists. Several British tourists are said to be seriously injured. The attack may be the work of a female suicide bomber.
33 thoughts on “Bus Blast In Turkey”
One Irish fatality amongst the four. If I remember right, there was another bombing in a tourist area of Turkey a couple of weeks ago that went below the radar screen with all the other news — but this of course makes it a disturbing trend. Maybe this tangent is more appropriate for A Few Euros More, but the last thing that the Turkish economy needs right now is a collapse in forex earnings from tourism.
“but the last thing that the Turkish economy needs right now is a collapse in forex earnings from tourism.”
Well quite, and this puts a lot of the arguments about EU accession in some sort of perspective. This attack symbolically can only be read in the context of what happened in London. What we have is a Turskish state which is trying to reform and escape from the legacy of its own history. In the military and amongst radical Islam people will be trying to resist this (and in today’s case possibly Kurdish radical islam). The representatives of civilisation in Turkey deserve all the help they can get from us.
Further proof that invading Iraq didn’t fuel terrorisme.
So will Turkey invade Kurdistan this year or next year?
If anybody out there has doubts about wether the English invasion of Iraq might be fueling terrorism on the English islands I recommend this short 12 minute streaming video….
I don’t think anyone, even Tony Blair, has any doubts that it *might* be fuelling terrorism, the issue seems to be whether it was the direct cause of this last attack. Or was the G8 meeting the objective?
Britain’s role in trying to find a way forward in N Ireland also lead to the spilling of a lot of innocent British and Irish blood. Britain was historically responsible too (I draw the parrallel since many mention Britain’s original role in the creation of Iraq). Britain’s callousness towards the Irish at the time of Cromwell, during the potatoe famine, during the Easter Rising, with the ‘Black’n Tans’ etc, obviously formed part of the background to the Birmingham pub bombings. Were they the explanation for them: no they weren’t. The distinction is subtle, but important.
Pakistan’s ambassador to the UN has a rival theory:
“It is important not to pin blame on somebody else when the problem lies internally,” Akram told BBC Radio 4’s World this Weekend programme.”I think you have to look at British society, what you are doing to the Muslim community and why is it that the Muslim community is not integrating into British society.”
Again, this is obviously part of the environment for the attacks, but is not the direct cause. I think if you are looking for simplistic explanations you are going to go hopelessly wrong.
The report from Chatham House (reported in the Independent) seems to be going in the right direction:
The Royal Institute of International Affairs, known as Chatham House, said that Britain’s support for the US did not mean it was an equal partner but a “pillion passenger compelled to leave the steering to the ally in the driving seat”.
The think-tank concluded that “the UK is at particular risk because it is the closest ally of the United States, has deployed armed forces in the military campaigns … in Afghanistan and in Iraq, and has taken a leading role in international intelligence, police and judicial co-operation against al-Qa’ida and in efforts to suppress its finances,” it said.
Chatham House warned that Iraq had created difficulties for the UK and the coalition. “It gave a boost to the al-Qa’ida network’s propaganda, recruitment and fundraising, caused a major split in the coalition, provided an ideal targeting and training area for al-Qa’ida-linked terrorists, and deflected resources that could have been deployed to assist the Karzai government [in Afghanistan] and bring Bin Laden to justice,”
We still don’t have all the details, but this bombing appears to be the work of Al-qaeda. It is therefore there we need to look if we want an explanation, in the objectives of Al-qaeda itself.
As to the bombers themselves, there may well be multiple factors which lead them to this kind of extremism. Pakistan’s UN ambassador may well in part be right, the Iraq war (and NB the Afghan one) may well be factors, you need to know when they were recruited, and have more personal biography. If you aren’t able to profile terrorists, you aren’t able to do the footslogging necessary to stop them *before* they act.
Details matter. The Times reports the following:
“Former schoolfriends of Lindsay, who grew up in Huddersfield, said that he visited Afghanistan four years ago and returned to Britain as a hardline Muslim.”
This, if confirmed, is pre Iraq war, and in all probablility pre 09/11.
“he visited Afghanistan four years ago and returned to Britain as a hardline Muslim.”
Hardline muslim is not the same as willing to kill civilians. What made them think it was worth killing themselves and killing the more civilians the better?
I don’t think it is a coincidence that the two larger attacks in Europe in last years (Madrid and London) happened after the Iraq war, against war-mongerering and occupying countries.
Edward,
You write that “Details matter. The Times reports the following:”Former schoolfriends of Lindsay, who grew up in Huddersfield, said that he visited Afghanistan four years ago and returned to Britain as a hardline Muslim.”This, if confirmed, is pre Iraq war, and in all probablility pre 09/11.”
Indeed – details do matter. While for you the Iraq event started with the British invasion of Iraq only in 2003 for the Iraqi civilians their misery at the hands of the British started more than 10 years ago – the British had been bombing Iraq relentlessly from the air for 10 straight years during the years of the UN sanctions.
So the misery in Iraq goes back much longer than these last 2 years of the actual occupation of Iraq which have added to the misery of all Iraqi civilians.
This English and American obsession with confiscating all of the worlds resources is putting the security of the entire planet at risk.
Why do the Americans and the English feel it is acceptable for them to post hundreds of thousands of troops in countries like Iraq and Saudi Arabia ? These are sacred places to many muslims – why dont the English and the Americans stay in their own countries and fix their own very messes up countries ?
How would the Americans feel if Saudi Arabia posted a 100,000 Saudi military troops in Kansas, Nebraska and Iowa to safeguard the worlds “breadbasket”.
The English and the Americans should deploy back to their own countries- nobody needs these people . Every country should be allowed to live freely without the terror and misery of a brutal occupation by a foreign army.
“Every country should be allowed to live freely without the terror and misery of a brutal occupation by a foreign army.”
Obviously most right thinking people would agree with this immediately, but aren’t we rather forgetting about Saddam here Helmut?
“While for you the Iraq event started with the British invasion of Iraq only in 2003”
No, the question goes back a lot longer than all this. At least to the 1918-32 period when Britain was an occupying colonial power.
If we take the view that the whole history of colonialism is the background to this, then it might be relevant that there seems to be a significant community from the Kashmir in Beeston, and that Britain’s role in the partitioning of the Indian sub-continent may also be an active ingredient in some of the minds involved.
“Hardline muslim is not the same as willing to kill civilians.”
Yes, but tell me gulliver, what did he go to Afghanistan for? To be clear, I am not saying that Iraq is not part of the picture, but it is that, a part.
Morocco was also part of the picture of the Madrid bombings, Ceuta, Mellila, Western Sahara, Perejil.Incidentally I think Aznar is being highly (is there a stronger word?) irresponsible playing around with this isssue right now.
I also would resist the idea that Spain is a warmongering nation. The military and political class in Spain bears little relation to that which existed at the time of 23F.
Also Spain is now out of Iraq, but the investigative evidence seems to suggest that the problem of international terrorism is increasing in Spain, and that if they are not apprehended first there are still groups of people out there planning future attacks.
Once again, shot from both sides. Jack Straw is apparently saying this:
“I’m astonished that Chatham House is now saying that we should not have stood shoulder to shoulder with our long-standing allies in the United States,”
Now if you look at the RIIA quote I put above they aren’t saying anything about not standing shoulder to shoulder with anyone. What Chatham House are saying is that the UK became “a pillion passenger compelled to leave the steering to the ally in the driving seat”. What does this mean, that the UK shared the risks, but that the UK didn’t have sufficient say. When British military leaders argued against Fallujah, they simply weren’t listened to. We have had insufficient control over the conduct of the war, and this has been part of the reason for the way the situation has spiralled out of control. Part of the reason, not all of it. Invading a country to introduce democracy by force (if that is at the end of the day the reason) was never going to work when you have a militarily powerful minority which adamantly refuses to accept majority rule.
More shot-from-both-sides, Blair is has just been quoted as saying this:
“The question you have to pose is: what is this report suggesting we should have done? It is suggesting we should simply have put our heads down and hoped that we weren’t going to be attacked?”
I think he, and we, should all read the report. I think what they are saying is that going into Iraq may not have been the best way to fight OBL. The resources should have been used differently, not that people should have simply put their heads down and done nothing.
I’m posting on this now directly, and the thread can continue there.
“Invading a country to introduce democracy by force”
Democracy in this case means Israel loving, cheap oil selling, anti islam goverment who loves to sell their Unocal’s.
Nobody in his right mind believes that the US and UK invaded Iraq to get a real democracy because that would be a worse situation for them than what they had with Saddam.
Most of the car bombs that are exploding in Iraq and killing Shiite and Sunni clerics and community leaders are actually the work of the American, British and Israeli intelligence services.
This is a brilliant opportunity for the English and the Americans- they can just kill whoever they want in Iraq (mostly Iraqi politicians and religious figures that are against the confiscation of Iraq) and all the killing is blamed on “Al Qaeda” and the “foreign terrorists”….
Any Iraqi civilian today that speaks up against the British invasion is a target- they are hunted and culled by the Brits and the Americans.
These are very dark days for our planet- the English and the Americans are killing everybody that is against their attempts to confiscate all of the worlds resources.
It is a duty for all global citizens to speak up against this reign of terror by the anglos – the entire planet should work together to send the English and the Americans back to their own homelands so that we can all leave in peace on this little planet.
“Democracy in this case means Israel loving, cheap oil selling, anti islam goverment who loves to sell their Unocal’s. ”
Well the current Iraqi government doesn’t seem to fill this bill at all. Do you think this is why the US and the UK are considering leaving?
But seriously, your arguments remind me so much of those that were used against nascent democracies like S Korea in the 1970’s. They were just US puppets, the real ‘self-determination people’, they were in places like North Korea. Obviously these days N Korea is replaced by Iran, which of course has a form of democracy which doesn’t love Israel, doesn’t sell it’s oil to the highest bidder, and certainly isn’t willing to sell-off the company to the Chinese.
Actually I don’t think you understand too much about how oil markets work, and – hadn’t you noticed – the role of the refining industry in regulating the flow.
“a real democracy because that would be a worse situation for them than what they had with Saddam.”
Actually, (and genuinely) this part I don’t understand at all. In what way would it be worse?
I suppose in Europe we are OK because we still used manure and processed potatoes to run our cars.
There was a “very small” demonstration in 2003 and that scared the shit out of the coalition so that plan was altered into getting civil war in Iraq.
“so that plan was altered into getting civil war in Iraq.”
I’m still having difficulty with your reasoning, how would this help anyone – apart, of course, from Iran?
“so that plan was altered into getting civil war in Iraq.”
Especially since the other outcome of this will very possibly be de-stabilising Turkey and Saudi Arabia. Or do you think ‘they’ are hedging, and what they really want is a global economic crash? This may, of course, be one of the best ways to get one.
An Iraq in civil war wouldn’t be a treat because they would miss the money to develop the military industial complex to treaten us. Also a democratic Iraq would de-stabilise Saudi Arabia and Jordania much more than a civil war as the people of those countries would want the same thing.
ps. Democratic arab states are by definition very anti Israel and wouldn’t look particulary well on states that support Israel. And their opinion is very important as they have the oil weapon.
Turkey was very importent during the cold war but isn’t anymore. A renewed Kurdish indepenence war makes it also easier to manipulate Turkey
“An Iraq in civil war wouldn’t be a treat because they would miss the money to develop the military industial complex to treaten us.”
Well this one’s more interesting. But isn’t the reality that after the ending of the old USSR, there is a virtual monopoly of sophistocated armaments manufacture, and no global arms race. So they aren’t going to be able to buy that sort of equipment. This is where the terrorism question really comes from, since militarily the issue is over, the only way of threatening the west is with nuclear armament (which as we saw with the USSR tends to lead to stalemate) or terrorism. This is one reason why some people who want to get at the Europeans and the US are putting money into terrorism: frustration.
“Democratic arab states are by definition very anti Israel and wouldn’t look particulary well on states that support Israel.”
This I accept completely.
“Turkey was very importent during the cold war but isn’t anymore.”
For the US this might be true, but for Europeans it is, it may become the largest state in the Union by population.
“Also a democratic Iraq would de-stabilise Saudi Arabia and Jordania much more than a civil war”
I don’t buy this. Not for us it wouldn’t be destabilising, not like the increasing Jihadi type radicalism would – and obviously the encircled Sunnis in Iraq would attract wide support in these two countries (you don’t have a car I take it). Democracy in SA and Jordan would sure as hell bring down the level of terror alerts, but I don’t imagine we are going to see anything resembling it anytime soon.
“there is a virtual monopoly of sophistocated armaments manufacture,”
I wouldn’t call USA, EU, Russia and some countries for certain weaponsystems a monopoly. Besides i didn’t say they would buy the weapons but the machines to make those weapons. There are fewer countries in that case (mainly Japan, South Korea, Germany, UK and Italy) but they are easier to persuade. Also Iraq wouldn’t be a big supporter of terrorisme because they would have 30 nuclear powerplants and the industry to supply it with uranium. Add the Arab competitor to the Italian vega and you have the reason why.
Not destabilise in the way as creating civil war but destabilising as an example as how a country can be run better. The Jordanians Egyptions and Saudi’s would see that democracy would work much better and would kick their US controlled masters out
“I wouldn’t call USA, EU, Russia and some countries for certain weaponsystems a monopoly.”
Look, as far as weapon systems are concerned there is one country: the US. Britain has a certain capacity, and then that’s it, in terms of things that can be sold and could threaten the West.
Another thing are weapons which could be sold to allow two third world countries to have a war with each other.
Forget Russia. Russia is in decline into decadence, for demographic reasons apart from anything else. Now Russia is a menace, in terms of its non-conventional weapons programme, and what can be sold to people like Al-qaeda.
On the other countries, the issue is you need battle field testing. Someone might say, if there weren’t wars you would have to invent them. I hate all this, but see that it is a reality.
I think one of the reasons for the way the decision to go to war in Iraq was so possible in the UK – and I am ashamed to recognise this part – would have been the fact that there is a long standing opinion in the MoD that you need real life battlefield experience. The UK recognises that you need to keep up with the US, or get left behind completely, like the other EU countries effectively have been. If you want to understand how a country can go to war, you need to look at how the decisions are taken, and what are the influences which are brought to bear. If the democrats get back in the US in 2008 I have some hope that we might get an enquiry which will really tell us what actually happened in the Iraq case. To expect this in the UK is whistling in the dark, IMHO. (Although the very appearance of the Chatham House report indicates that others, elsewhere in the security and diplomatic structure are not happy. That is why it is getting so much coverage).
Apart from anything else, one of the ways that the UK pays its BoP situation is through arms exports. All these factors play a part.
“The Jordanians Egyptions and Saudi’s would see that democracy would work much better and would kick their US controlled masters out”
The point is that if all this was really simply about money, then make business not war would win. The global economy is in ‘imbalance’ because of a shortage of global consumers (simply put, its more complex, but this will do). So having a lot of people consuming much more in SA, Jordan, Iraq and elsewhere would be good for making money, not bad.
On oil, I don’t know whether you remember, but during the dot com boom there were lots of people who bought up domain names in the hope of selling them later. After the crash these became effectively worthless. Well oil can be a bit like this. One day all that black stuff under the ground can become so cheap it is hardly worth taking it out of the ground because demand will technologically have moved on. So the maximumization problem most oil rich countries have is to get it out of the ground and sell as much as possible before that happens. This isn’t about stealing oil, at the end of the day its about them being able to make some money and set themselves up in another business (like China is doing selling shirts and shoes) before it is too late and they miss the boat completely.
So the point is I don’t think anyone is going to be posing a conventional military threat to the US or the EU member states anytime soon, which is why we keep coming back to terrorism.
@ Edward
?I am not saying that Iraq is not part of the picture, but it is that, a part.?
I agree with you, but I think Iraq is an outstanding part. Maybe going to Afghanistan or Bosnia to fight against an army is not so difficult psychologically if you have the right motivation. But you have to cross a high psychological barrier to kill civilians in the country where you have been living all of your life. There must be a clear, distinctive grievance to make these people pass the barrier and go against Britain. The only grievance strong enough I can think of is Iraq. I mean the last Iraq war, I don?t think the 1991 war and the embargo were strong enough as stimulation.
?Morocco was also part of the picture of the Madrid bombings, Ceuta, Mellila, Western Sahara, Perejil?.
Maybe, but in the video claiming the attacks only Iraq and Afghanistan are mentioned.
?I also would resist the idea that Spain is a warmongering nation. The military and political class in Spain bears little relation to that which existed at the time of 23F?
I meant Aznar was backing Bush and Blair in Iraq and cheer-leading the preparations of the war.
?Also Spain is now out of Iraq, but the investigative evidence seems to suggest that the problem of international terrorism is increasing in Spain, and that if they are not apprehended first there are still groups of people out there planning future attacks.?
That may be true. Because there are Spanish troops in Afghanistan, for revenge or for other reasons.
Edward, The day that oil is to cheap to get out of the ground in Iraq is way out on purely economic grounds. You do not only have to develop the technology but also build the machinery that uses it. Your speaking of atleast ten years to replace a significant part of cars if you would have the technology now (which we don’t). And cars are not durable compaired with other oil using machines.
“So the maximumization problem most oil rich countries have is to get it out of the ground and sell as much as possible before that happens.”
Before oil we used coal but nobody uses that anymore :-). The maximumization problem is IMHO wrong. The oil using countries will not subsidies oilproduction if it isn’t that important anymore and so prices will rise instead of your predicted fall
The majority of energy produced in the US is from coal, if I’m not mistaken.
Wholesale oil prices are over double what they were just a few years ago. We may have gotten used to 50-60 dollars/barrel, but it’s not entirely unthinkable for it to drop under 30. Besides, do you think the oil lobby in the US is more powerful than all other businesses put together? High oil prices increase costs for businesses, which would be passed onto consumers, who in turn can’t buy as much. It also eats up the military budget for the US.
Look at Saudi Arabia, and OPEC, even when they announce a drop in output, it’s not held to, since oil prices are so high, its in each producers individual interest to pump as much as quickly as possible and get it at a high price. If oil does get much higher then it may actually prompt people to look for alternatives or conservation
@ Gulliver
“I agree with you, but I think Iraq is an outstanding part.”
Well, it seems we are not that far apart, since we would end up having simply a semantic discussion about the meaning of ‘outstanding’. I have posted here on various occassions about how the Iraq war has served to increase the level of terrorism in various ways, the Chatham House report says this too, and the CIA also argue this (which is in part understandable since the background to the decision to go to war is a shift in influence away from the CIA and to the Pentagon). This is why I think the Blair/Straw argument is both ridiculous and outrageous.
What I am trying to stress is that the terrorism problem will be with us long after the Iraq war recedes into history. Also that the Iraq war and the Afghan war are very different, and if you notice, Afghanistan is once more being stressed in terrorist circles.
“But you have to cross a high psychological barrier to kill civilians in the country where you have been living all of your life.”
This point is a fair one. It may be the case, but don’t discount what people can be lead to do once they are inside a sect. The Sarin gas case in the tokyo underground would be one example, the people concerned were Japanese. Also, inside the US itself, right wing terrorism has killed civilians with no very clear aim. Radical islamists also do something pretty similar in India. I suppose you can say that the Kashmir there is an issue, but, if you look at who is in Beeston, so it is in the July 7 bombings. The family of at least one of the bombers came from Kashmir, and Britain, of course, is the ‘guilty party’ there too.
Sadique also felt very strongly about Israel, if the reports that he was there with a suicide mission are correct.
“I mean the last Iraq war, I don?t think the 1991 war and the embargo were strong enough as stimulation.”
My feeling is that these people weren’t in the least bothered about this part of history. Saddam was the enemy of radical islam, not the friend. If he was having problems, I guess they didn’t give a damn. It is only after he fell, and Iraq became an area of potential jihad that it’s level of importance rose. Actually I’ve even speculated on this blog that OBL knew the Neo-con agenda (it wasn’t exactly a secret), and that his objective on 11 September was precisely to draw the US into Iraq. You have to imagine he realised that there would be a response, that the war in Afghanistan was predictable, but he might also have been able to guess the next move. I think we shouldn’t make the mistake of imagining our enemies are stupid. At one swoop he got rid of an enemy (Saddam), opened Iraq to his ideas, and provided a battleground where he could attack the US military.
OBL was concerned about the 1991 war, but I think only because of its impact in having US bases in Saudi. Remember he had been fighting people similar to Saddam (Russian allies) in Afghanistan, and had, of course, allied himself with the US to do so. I think the post 1991 war issue is one for anti-US people in Europe, it is important to try and keep these distictions clear.If you look at the comments you will find arguments which go from 1991, to Kosovo, to Afghanistan, to Iraq. This is just anti Americanism pure and simple.
“That may be true. Because there are Spanish troops in Afghanistan”
Well you may be right that it is for this reason, but my feeeling is that more issues will arrive. I don’t see how Spain can stay in Ceuta and Melilla and not have problems (anyway it shouldn’t be there, it is a remnant of colonialism), but I see lots of discussion about Gibraltar, and none about an exit strategy from North Africa.
@ c
“Your speaking of atleast ten years to replace a significant part of cars if you would have the technology now (which we don’t).”
Oh, I’m talking about a lot longer than ten years. Let”s say 40 or 50. Apart from gasoline, there is also the petro-chemical industry to think about. Making a transition won’t be easy, but I am sure we are in the process of doing so. Partly we want cleaner energy, so I don’t think (James) that coal will be a solution (this is also a Kyoto related question, and sets the EU in contrast to major energy users like the US and China, China has moved into coal in a big way, but this can be ecologically disastrous). But note, even Bush is now talking about getting off petrol.
It is impossible to say how long large scale demand for petrol will last, but I am sure one day it will be a lot less than it is now. The big issue is the development of the third world, especially at the moment China and India. All this extra demand is what is forcing up prices.
I can’t remember offhand how long oil stocks are set to last. There is a lot of debate about this. But lets say there are stocks for 200 years, but we come off using oil in a big way in 50. This would be the issue. Of course oil producers can’t increase output too much anyway, since even if they could do it technically, this would simply collapse the price, that’s why they need a delicate balance.
@ James
“We may have gotten used to 50-60 dollars/barrel, but it’s not entirely unthinkable for it to drop under 30.”
I’m sure you’re right. We still haven’t got to the level of prices of the 1970’s in real terms (80 odd $ a barrel). The big issue is the OECD-isation of large parts of the global population, after that demand for oil and many other raw materials will be in relative decline as we get into alternative energy sources, and more efficient energy use, especially in China and India. So the question is will the oil producers be able to make the leap and diversify? Those large petro-related accounts sitting in dollars and euros, and buying government debt, suggest they may not be. Miguel Octavio, a blogger in Venezuela, calls his blog ‘the devils excrement’ for what I think should be obvious reasons. By and large, having petroleum can be more of a curse than a blessing.
Incidentally, Gulliver, Adam Smith made a somewhat similar argument about Spanish bullion from the Americas: it simply corrupted Spain, and left her KO’d when the industrial revolution came.
At the moment the oil price is so high that you can spend the money and still have plenty left. The rest you could invest or throw away on Rolls Royce’s but is that smart?
The world is at this moment in time not exactly full of good investment opportunities so keeping the oil in the ground may infact be the wise investement strategy.
ps. Why do you think the Bolivians don’t want the gas.
Demand for oil will certainly increase with 2.3billion+ people integrating into the global economy. If I’m not mistaken, China’s adding thousands and thousands of cars per month.
But most of the current rise is due to a terrorism or insecurity-premium, with large producers like Iraq and even SA uncertain, the business climate in Russia and concerns over places like Nigeria & Venezuela, etc.
I don’t really think it’ll drop back down to 30/barrel, but if the sense of insecurity subsides in those countries, new producers are brought on, and/or actual progress is made on alternatives, then the price could ease.
Speaking of the alternatives, and sorry to take this so far off topic, with the recent reporting on the inefficiency of biofuel, http://www.nytimes.com/aponline/business/AP-Ethanol-Study.html. I’m wondering if similar or opposite conclusions had been made in other countries, ie Brazil, that use biofuel heavily.
@ James
I agree with you assessment over the short term. Andy Xie argues that there is a bubble related to China, that they have massively substituted coal for oil (at some cost to human life in the mining industry) and that imports into China have been dropping since the start of the year.
But even if the bubble bursts, and oil futures come significantly down at the end of the year, there is still a big secular upward pressure.
So prices will continue a drift upwards each time we have strong growth years (which won’t be every year). Then we get to the longer term – I have no idea of the timesecale, where the upward pressure (and possibly politically related supply concerns) forces a switch in energy source.
This, when it happens can be rapid and dramatic. The gas-station infrastructure remember is a network system with lock-in. It’s no use having just one or two outlets for the alternative energy, you need a whole national network.
This means it will probably come with govenment prodding, and maybe even subsidies. The oil companies, who control the outlets will resist. This is one product market structural reform which hasn’t been pushed to date.
Once one country moves over, others can follow quickly. Basically the petrol outlets will be phased out, and the new energy ones introduced sytematically, rather like the lead free petrol issue.
Once the transition is complete, it could be bye-bye gasoline. The Japanese are already building hybrid cars.
“on the inefficiency of biofuel”
I didn’t know about this, thanks for the link.
If oil becomes too expensive, there are natural gas and coal-based substitutes that can use the current gas-station infrastructure:
“Currently, two companies have commercialised their Fischer-Tropsch technology. Shell in Bintulu, Malaysia, uses natural gas as a feedstock, and produces primarily low-sulfur diesel fuels. Sasol in South Africa uses coal as a feedstock, and produces a variety of synthetic petroleum products. The process is today used in South Africa to produce most of the country’s diesel fuel from coal by the company Sasol. The process was used in South Africa to meet its energy needs during its isolation under Apartheid.”
China is already building plants to obtain coal-based fuel.
I don’t think hydrogene will be available for a long time, there are lots of problems. Joseph Romm, author of “The hype about hydrogen”, said fuel-cell cars should be viewed as a post-2030 tecnology.
@ Gulliver
OK, thanks for this.
“I don’t think hydrogene will be available for a long time”
Probably not, but the issue is how long is ‘long’. We may be talking about fifty years, but this is still a short horizon if you are sitting on reserves of 200 or 300 years at current rates.
Coal has the big problem that it can have global warming, negative-feedback side-effects. In particular higher global temperatures can lead to more air conditioning and more energy consumption.
China and the US of course are not in Kyoto. Looked at rationally the current high prices may be a blessing in disguise, since they will undoubtedly increase the quantity of resources going into looking for alternatives. Put it like this, I think there is a better chance spending more money on research will come up with something than there is that the Big Pharma will come up with a new generation but conventional ‘blockbuster’ drug. (Genetic therapy would, like non-conventional energy, be a whole new ball game).
Incidentally, did you note Spain’s new energy saving plan to reduce oil imports by up to 20%? (Portugal has also announced something similar).
One Irish fatality amongst the four. If I remember right, there was another bombing in a tourist area of Turkey a couple of weeks ago that went below the radar screen with all the other news — but this of course makes it a disturbing trend. Maybe this tangent is more appropriate for A Few Euros More, but the last thing that the Turkish economy needs right now is a collapse in forex earnings from tourism.
“but the last thing that the Turkish economy needs right now is a collapse in forex earnings from tourism.”
Well quite, and this puts a lot of the arguments about EU accession in some sort of perspective. This attack symbolically can only be read in the context of what happened in London. What we have is a Turskish state which is trying to reform and escape from the legacy of its own history. In the military and amongst radical Islam people will be trying to resist this (and in today’s case possibly Kurdish radical islam). The representatives of civilisation in Turkey deserve all the help they can get from us.
Further proof that invading Iraq didn’t fuel terrorisme.
So will Turkey invade Kurdistan this year or next year?
If anybody out there has doubts about wether the English invasion of Iraq might be fueling terrorism on the English islands I recommend this short 12 minute streaming video….
12 Minute Streaming Video Link:
http://www.informationclearinghouse.info/article9174.htm
“English islands” ?????
“might be fueling terrorism”
I don’t think anyone, even Tony Blair, has any doubts that it *might* be fuelling terrorism, the issue seems to be whether it was the direct cause of this last attack. Or was the G8 meeting the objective?
Britain’s role in trying to find a way forward in N Ireland also lead to the spilling of a lot of innocent British and Irish blood. Britain was historically responsible too (I draw the parrallel since many mention Britain’s original role in the creation of Iraq). Britain’s callousness towards the Irish at the time of Cromwell, during the potatoe famine, during the Easter Rising, with the ‘Black’n Tans’ etc, obviously formed part of the background to the Birmingham pub bombings. Were they the explanation for them: no they weren’t. The distinction is subtle, but important.
Pakistan’s ambassador to the UN has a rival theory:
“It is important not to pin blame on somebody else when the problem lies internally,” Akram told BBC Radio 4’s World this Weekend programme.”I think you have to look at British society, what you are doing to the Muslim community and why is it that the Muslim community is not integrating into British society.”
Again, this is obviously part of the environment for the attacks, but is not the direct cause. I think if you are looking for simplistic explanations you are going to go hopelessly wrong.
The report from Chatham House (reported in the Independent) seems to be going in the right direction:
The Royal Institute of International Affairs, known as Chatham House, said that Britain’s support for the US did not mean it was an equal partner but a “pillion passenger compelled to leave the steering to the ally in the driving seat”.
The think-tank concluded that “the UK is at particular risk because it is the closest ally of the United States, has deployed armed forces in the military campaigns … in Afghanistan and in Iraq, and has taken a leading role in international intelligence, police and judicial co-operation against al-Qa’ida and in efforts to suppress its finances,” it said.
Chatham House warned that Iraq had created difficulties for the UK and the coalition. “It gave a boost to the al-Qa’ida network’s propaganda, recruitment and fundraising, caused a major split in the coalition, provided an ideal targeting and training area for al-Qa’ida-linked terrorists, and deflected resources that could have been deployed to assist the Karzai government [in Afghanistan] and bring Bin Laden to justice,”
We still don’t have all the details, but this bombing appears to be the work of Al-qaeda. It is therefore there we need to look if we want an explanation, in the objectives of Al-qaeda itself.
As to the bombers themselves, there may well be multiple factors which lead them to this kind of extremism. Pakistan’s UN ambassador may well in part be right, the Iraq war (and NB the Afghan one) may well be factors, you need to know when they were recruited, and have more personal biography. If you aren’t able to profile terrorists, you aren’t able to do the footslogging necessary to stop them *before* they act.
Details matter. The Times reports the following:
“Former schoolfriends of Lindsay, who grew up in Huddersfield, said that he visited Afghanistan four years ago and returned to Britain as a hardline Muslim.”
This, if confirmed, is pre Iraq war, and in all probablility pre 09/11.
“he visited Afghanistan four years ago and returned to Britain as a hardline Muslim.”
Hardline muslim is not the same as willing to kill civilians. What made them think it was worth killing themselves and killing the more civilians the better?
I don’t think it is a coincidence that the two larger attacks in Europe in last years (Madrid and London) happened after the Iraq war, against war-mongerering and occupying countries.
Edward,
You write that “Details matter. The Times reports the following:”Former schoolfriends of Lindsay, who grew up in Huddersfield, said that he visited Afghanistan four years ago and returned to Britain as a hardline Muslim.”This, if confirmed, is pre Iraq war, and in all probablility pre 09/11.”
Indeed – details do matter. While for you the Iraq event started with the British invasion of Iraq only in 2003 for the Iraqi civilians their misery at the hands of the British started more than 10 years ago – the British had been bombing Iraq relentlessly from the air for 10 straight years during the years of the UN sanctions.
So the misery in Iraq goes back much longer than these last 2 years of the actual occupation of Iraq which have added to the misery of all Iraqi civilians.
This English and American obsession with confiscating all of the worlds resources is putting the security of the entire planet at risk.
Why do the Americans and the English feel it is acceptable for them to post hundreds of thousands of troops in countries like Iraq and Saudi Arabia ? These are sacred places to many muslims – why dont the English and the Americans stay in their own countries and fix their own very messes up countries ?
How would the Americans feel if Saudi Arabia posted a 100,000 Saudi military troops in Kansas, Nebraska and Iowa to safeguard the worlds “breadbasket”.
The English and the Americans should deploy back to their own countries- nobody needs these people . Every country should be allowed to live freely without the terror and misery of a brutal occupation by a foreign army.
“Every country should be allowed to live freely without the terror and misery of a brutal occupation by a foreign army.”
Obviously most right thinking people would agree with this immediately, but aren’t we rather forgetting about Saddam here Helmut?
“While for you the Iraq event started with the British invasion of Iraq only in 2003”
No, the question goes back a lot longer than all this. At least to the 1918-32 period when Britain was an occupying colonial power.
If we take the view that the whole history of colonialism is the background to this, then it might be relevant that there seems to be a significant community from the Kashmir in Beeston, and that Britain’s role in the partitioning of the Indian sub-continent may also be an active ingredient in some of the minds involved.
“Hardline muslim is not the same as willing to kill civilians.”
Yes, but tell me gulliver, what did he go to Afghanistan for? To be clear, I am not saying that Iraq is not part of the picture, but it is that, a part.
Morocco was also part of the picture of the Madrid bombings, Ceuta, Mellila, Western Sahara, Perejil.Incidentally I think Aznar is being highly (is there a stronger word?) irresponsible playing around with this isssue right now.
I also would resist the idea that Spain is a warmongering nation. The military and political class in Spain bears little relation to that which existed at the time of 23F.
Also Spain is now out of Iraq, but the investigative evidence seems to suggest that the problem of international terrorism is increasing in Spain, and that if they are not apprehended first there are still groups of people out there planning future attacks.
Once again, shot from both sides. Jack Straw is apparently saying this:
“I’m astonished that Chatham House is now saying that we should not have stood shoulder to shoulder with our long-standing allies in the United States,”
Now if you look at the RIIA quote I put above they aren’t saying anything about not standing shoulder to shoulder with anyone. What Chatham House are saying is that the UK became “a pillion passenger compelled to leave the steering to the ally in the driving seat”. What does this mean, that the UK shared the risks, but that the UK didn’t have sufficient say. When British military leaders argued against Fallujah, they simply weren’t listened to. We have had insufficient control over the conduct of the war, and this has been part of the reason for the way the situation has spiralled out of control. Part of the reason, not all of it. Invading a country to introduce democracy by force (if that is at the end of the day the reason) was never going to work when you have a militarily powerful minority which adamantly refuses to accept majority rule.
More shot-from-both-sides, Blair is has just been quoted as saying this:
“The question you have to pose is: what is this report suggesting we should have done? It is suggesting we should simply have put our heads down and hoped that we weren’t going to be attacked?”
I think he, and we, should all read the report. I think what they are saying is that going into Iraq may not have been the best way to fight OBL. The resources should have been used differently, not that people should have simply put their heads down and done nothing.
I’m posting on this now directly, and the thread can continue there.
“Invading a country to introduce democracy by force”
Democracy in this case means Israel loving, cheap oil selling, anti islam goverment who loves to sell their Unocal’s.
Nobody in his right mind believes that the US and UK invaded Iraq to get a real democracy because that would be a worse situation for them than what they had with Saddam.
Most of the car bombs that are exploding in Iraq and killing Shiite and Sunni clerics and community leaders are actually the work of the American, British and Israeli intelligence services.
This is a brilliant opportunity for the English and the Americans- they can just kill whoever they want in Iraq (mostly Iraqi politicians and religious figures that are against the confiscation of Iraq) and all the killing is blamed on “Al Qaeda” and the “foreign terrorists”….
Any Iraqi civilian today that speaks up against the British invasion is a target- they are hunted and culled by the Brits and the Americans.
These are very dark days for our planet- the English and the Americans are killing everybody that is against their attempts to confiscate all of the worlds resources.
It is a duty for all global citizens to speak up against this reign of terror by the anglos – the entire planet should work together to send the English and the Americans back to their own homelands so that we can all leave in peace on this little planet.
“Democracy in this case means Israel loving, cheap oil selling, anti islam goverment who loves to sell their Unocal’s. ”
Well the current Iraqi government doesn’t seem to fill this bill at all. Do you think this is why the US and the UK are considering leaving?
But seriously, your arguments remind me so much of those that were used against nascent democracies like S Korea in the 1970’s. They were just US puppets, the real ‘self-determination people’, they were in places like North Korea. Obviously these days N Korea is replaced by Iran, which of course has a form of democracy which doesn’t love Israel, doesn’t sell it’s oil to the highest bidder, and certainly isn’t willing to sell-off the company to the Chinese.
Actually I don’t think you understand too much about how oil markets work, and – hadn’t you noticed – the role of the refining industry in regulating the flow.
“a real democracy because that would be a worse situation for them than what they had with Saddam.”
Actually, (and genuinely) this part I don’t understand at all. In what way would it be worse?
I suppose in Europe we are OK because we still used manure and processed potatoes to run our cars.
There was a “very small” demonstration in 2003 and that scared the shit out of the coalition so that plan was altered into getting civil war in Iraq.
“so that plan was altered into getting civil war in Iraq.”
I’m still having difficulty with your reasoning, how would this help anyone – apart, of course, from Iran?
“so that plan was altered into getting civil war in Iraq.”
Especially since the other outcome of this will very possibly be de-stabilising Turkey and Saudi Arabia. Or do you think ‘they’ are hedging, and what they really want is a global economic crash? This may, of course, be one of the best ways to get one.
An Iraq in civil war wouldn’t be a treat because they would miss the money to develop the military industial complex to treaten us. Also a democratic Iraq would de-stabilise Saudi Arabia and Jordania much more than a civil war as the people of those countries would want the same thing.
ps. Democratic arab states are by definition very anti Israel and wouldn’t look particulary well on states that support Israel. And their opinion is very important as they have the oil weapon.
Turkey was very importent during the cold war but isn’t anymore. A renewed Kurdish indepenence war makes it also easier to manipulate Turkey
“An Iraq in civil war wouldn’t be a treat because they would miss the money to develop the military industial complex to treaten us.”
Well this one’s more interesting. But isn’t the reality that after the ending of the old USSR, there is a virtual monopoly of sophistocated armaments manufacture, and no global arms race. So they aren’t going to be able to buy that sort of equipment. This is where the terrorism question really comes from, since militarily the issue is over, the only way of threatening the west is with nuclear armament (which as we saw with the USSR tends to lead to stalemate) or terrorism. This is one reason why some people who want to get at the Europeans and the US are putting money into terrorism: frustration.
“Democratic arab states are by definition very anti Israel and wouldn’t look particulary well on states that support Israel.”
This I accept completely.
“Turkey was very importent during the cold war but isn’t anymore.”
For the US this might be true, but for Europeans it is, it may become the largest state in the Union by population.
“Also a democratic Iraq would de-stabilise Saudi Arabia and Jordania much more than a civil war”
I don’t buy this. Not for us it wouldn’t be destabilising, not like the increasing Jihadi type radicalism would – and obviously the encircled Sunnis in Iraq would attract wide support in these two countries (you don’t have a car I take it). Democracy in SA and Jordan would sure as hell bring down the level of terror alerts, but I don’t imagine we are going to see anything resembling it anytime soon.
“there is a virtual monopoly of sophistocated armaments manufacture,”
I wouldn’t call USA, EU, Russia and some countries for certain weaponsystems a monopoly. Besides i didn’t say they would buy the weapons but the machines to make those weapons. There are fewer countries in that case (mainly Japan, South Korea, Germany, UK and Italy) but they are easier to persuade. Also Iraq wouldn’t be a big supporter of terrorisme because they would have 30 nuclear powerplants and the industry to supply it with uranium. Add the Arab competitor to the Italian vega and you have the reason why.
Not destabilise in the way as creating civil war but destabilising as an example as how a country can be run better. The Jordanians Egyptions and Saudi’s would see that democracy would work much better and would kick their US controlled masters out
“I wouldn’t call USA, EU, Russia and some countries for certain weaponsystems a monopoly.”
Look, as far as weapon systems are concerned there is one country: the US. Britain has a certain capacity, and then that’s it, in terms of things that can be sold and could threaten the West.
Another thing are weapons which could be sold to allow two third world countries to have a war with each other.
Forget Russia. Russia is in decline into decadence, for demographic reasons apart from anything else. Now Russia is a menace, in terms of its non-conventional weapons programme, and what can be sold to people like Al-qaeda.
On the other countries, the issue is you need battle field testing. Someone might say, if there weren’t wars you would have to invent them. I hate all this, but see that it is a reality.
I think one of the reasons for the way the decision to go to war in Iraq was so possible in the UK – and I am ashamed to recognise this part – would have been the fact that there is a long standing opinion in the MoD that you need real life battlefield experience. The UK recognises that you need to keep up with the US, or get left behind completely, like the other EU countries effectively have been. If you want to understand how a country can go to war, you need to look at how the decisions are taken, and what are the influences which are brought to bear. If the democrats get back in the US in 2008 I have some hope that we might get an enquiry which will really tell us what actually happened in the Iraq case. To expect this in the UK is whistling in the dark, IMHO. (Although the very appearance of the Chatham House report indicates that others, elsewhere in the security and diplomatic structure are not happy. That is why it is getting so much coverage).
Apart from anything else, one of the ways that the UK pays its BoP situation is through arms exports. All these factors play a part.
“The Jordanians Egyptions and Saudi’s would see that democracy would work much better and would kick their US controlled masters out”
The point is that if all this was really simply about money, then make business not war would win. The global economy is in ‘imbalance’ because of a shortage of global consumers (simply put, its more complex, but this will do). So having a lot of people consuming much more in SA, Jordan, Iraq and elsewhere would be good for making money, not bad.
On oil, I don’t know whether you remember, but during the dot com boom there were lots of people who bought up domain names in the hope of selling them later. After the crash these became effectively worthless. Well oil can be a bit like this. One day all that black stuff under the ground can become so cheap it is hardly worth taking it out of the ground because demand will technologically have moved on. So the maximumization problem most oil rich countries have is to get it out of the ground and sell as much as possible before that happens. This isn’t about stealing oil, at the end of the day its about them being able to make some money and set themselves up in another business (like China is doing selling shirts and shoes) before it is too late and they miss the boat completely.
So the point is I don’t think anyone is going to be posing a conventional military threat to the US or the EU member states anytime soon, which is why we keep coming back to terrorism.
@ Edward
?I am not saying that Iraq is not part of the picture, but it is that, a part.?
I agree with you, but I think Iraq is an outstanding part. Maybe going to Afghanistan or Bosnia to fight against an army is not so difficult psychologically if you have the right motivation. But you have to cross a high psychological barrier to kill civilians in the country where you have been living all of your life. There must be a clear, distinctive grievance to make these people pass the barrier and go against Britain. The only grievance strong enough I can think of is Iraq. I mean the last Iraq war, I don?t think the 1991 war and the embargo were strong enough as stimulation.
?Morocco was also part of the picture of the Madrid bombings, Ceuta, Mellila, Western Sahara, Perejil?.
Maybe, but in the video claiming the attacks only Iraq and Afghanistan are mentioned.
?I also would resist the idea that Spain is a warmongering nation. The military and political class in Spain bears little relation to that which existed at the time of 23F?
I meant Aznar was backing Bush and Blair in Iraq and cheer-leading the preparations of the war.
?Also Spain is now out of Iraq, but the investigative evidence seems to suggest that the problem of international terrorism is increasing in Spain, and that if they are not apprehended first there are still groups of people out there planning future attacks.?
That may be true. Because there are Spanish troops in Afghanistan, for revenge or for other reasons.
Edward, The day that oil is to cheap to get out of the ground in Iraq is way out on purely economic grounds. You do not only have to develop the technology but also build the machinery that uses it. Your speaking of atleast ten years to replace a significant part of cars if you would have the technology now (which we don’t). And cars are not durable compaired with other oil using machines.
“So the maximumization problem most oil rich countries have is to get it out of the ground and sell as much as possible before that happens.”
Before oil we used coal but nobody uses that anymore :-). The maximumization problem is IMHO wrong. The oil using countries will not subsidies oilproduction if it isn’t that important anymore and so prices will rise instead of your predicted fall
The majority of energy produced in the US is from coal, if I’m not mistaken.
Wholesale oil prices are over double what they were just a few years ago. We may have gotten used to 50-60 dollars/barrel, but it’s not entirely unthinkable for it to drop under 30. Besides, do you think the oil lobby in the US is more powerful than all other businesses put together? High oil prices increase costs for businesses, which would be passed onto consumers, who in turn can’t buy as much. It also eats up the military budget for the US.
Look at Saudi Arabia, and OPEC, even when they announce a drop in output, it’s not held to, since oil prices are so high, its in each producers individual interest to pump as much as quickly as possible and get it at a high price. If oil does get much higher then it may actually prompt people to look for alternatives or conservation
@ Gulliver
“I agree with you, but I think Iraq is an outstanding part.”
Well, it seems we are not that far apart, since we would end up having simply a semantic discussion about the meaning of ‘outstanding’. I have posted here on various occassions about how the Iraq war has served to increase the level of terrorism in various ways, the Chatham House report says this too, and the CIA also argue this (which is in part understandable since the background to the decision to go to war is a shift in influence away from the CIA and to the Pentagon). This is why I think the Blair/Straw argument is both ridiculous and outrageous.
What I am trying to stress is that the terrorism problem will be with us long after the Iraq war recedes into history. Also that the Iraq war and the Afghan war are very different, and if you notice, Afghanistan is once more being stressed in terrorist circles.
“But you have to cross a high psychological barrier to kill civilians in the country where you have been living all of your life.”
This point is a fair one. It may be the case, but don’t discount what people can be lead to do once they are inside a sect. The Sarin gas case in the tokyo underground would be one example, the people concerned were Japanese. Also, inside the US itself, right wing terrorism has killed civilians with no very clear aim. Radical islamists also do something pretty similar in India. I suppose you can say that the Kashmir there is an issue, but, if you look at who is in Beeston, so it is in the July 7 bombings. The family of at least one of the bombers came from Kashmir, and Britain, of course, is the ‘guilty party’ there too.
Sadique also felt very strongly about Israel, if the reports that he was there with a suicide mission are correct.
“I mean the last Iraq war, I don?t think the 1991 war and the embargo were strong enough as stimulation.”
My feeling is that these people weren’t in the least bothered about this part of history. Saddam was the enemy of radical islam, not the friend. If he was having problems, I guess they didn’t give a damn. It is only after he fell, and Iraq became an area of potential jihad that it’s level of importance rose. Actually I’ve even speculated on this blog that OBL knew the Neo-con agenda (it wasn’t exactly a secret), and that his objective on 11 September was precisely to draw the US into Iraq. You have to imagine he realised that there would be a response, that the war in Afghanistan was predictable, but he might also have been able to guess the next move. I think we shouldn’t make the mistake of imagining our enemies are stupid. At one swoop he got rid of an enemy (Saddam), opened Iraq to his ideas, and provided a battleground where he could attack the US military.
OBL was concerned about the 1991 war, but I think only because of its impact in having US bases in Saudi. Remember he had been fighting people similar to Saddam (Russian allies) in Afghanistan, and had, of course, allied himself with the US to do so. I think the post 1991 war issue is one for anti-US people in Europe, it is important to try and keep these distictions clear.If you look at the comments you will find arguments which go from 1991, to Kosovo, to Afghanistan, to Iraq. This is just anti Americanism pure and simple.
“That may be true. Because there are Spanish troops in Afghanistan”
Well you may be right that it is for this reason, but my feeeling is that more issues will arrive. I don’t see how Spain can stay in Ceuta and Melilla and not have problems (anyway it shouldn’t be there, it is a remnant of colonialism), but I see lots of discussion about Gibraltar, and none about an exit strategy from North Africa.
@ c
“Your speaking of atleast ten years to replace a significant part of cars if you would have the technology now (which we don’t).”
Oh, I’m talking about a lot longer than ten years. Let”s say 40 or 50. Apart from gasoline, there is also the petro-chemical industry to think about. Making a transition won’t be easy, but I am sure we are in the process of doing so. Partly we want cleaner energy, so I don’t think (James) that coal will be a solution (this is also a Kyoto related question, and sets the EU in contrast to major energy users like the US and China, China has moved into coal in a big way, but this can be ecologically disastrous). But note, even Bush is now talking about getting off petrol.
It is impossible to say how long large scale demand for petrol will last, but I am sure one day it will be a lot less than it is now. The big issue is the development of the third world, especially at the moment China and India. All this extra demand is what is forcing up prices.
I can’t remember offhand how long oil stocks are set to last. There is a lot of debate about this. But lets say there are stocks for 200 years, but we come off using oil in a big way in 50. This would be the issue. Of course oil producers can’t increase output too much anyway, since even if they could do it technically, this would simply collapse the price, that’s why they need a delicate balance.
@ James
“We may have gotten used to 50-60 dollars/barrel, but it’s not entirely unthinkable for it to drop under 30.”
I’m sure you’re right. We still haven’t got to the level of prices of the 1970’s in real terms (80 odd $ a barrel). The big issue is the OECD-isation of large parts of the global population, after that demand for oil and many other raw materials will be in relative decline as we get into alternative energy sources, and more efficient energy use, especially in China and India. So the question is will the oil producers be able to make the leap and diversify? Those large petro-related accounts sitting in dollars and euros, and buying government debt, suggest they may not be. Miguel Octavio, a blogger in Venezuela, calls his blog ‘the devils excrement’ for what I think should be obvious reasons. By and large, having petroleum can be more of a curse than a blessing.
Incidentally, Gulliver, Adam Smith made a somewhat similar argument about Spanish bullion from the Americas: it simply corrupted Spain, and left her KO’d when the industrial revolution came.
At the moment the oil price is so high that you can spend the money and still have plenty left. The rest you could invest or throw away on Rolls Royce’s but is that smart?
The world is at this moment in time not exactly full of good investment opportunities so keeping the oil in the ground may infact be the wise investement strategy.
ps. Why do you think the Bolivians don’t want the gas.
Demand for oil will certainly increase with 2.3billion+ people integrating into the global economy. If I’m not mistaken, China’s adding thousands and thousands of cars per month.
But most of the current rise is due to a terrorism or insecurity-premium, with large producers like Iraq and even SA uncertain, the business climate in Russia and concerns over places like Nigeria & Venezuela, etc.
I don’t really think it’ll drop back down to 30/barrel, but if the sense of insecurity subsides in those countries, new producers are brought on, and/or actual progress is made on alternatives, then the price could ease.
Speaking of the alternatives, and sorry to take this so far off topic, with the recent reporting on the inefficiency of biofuel, http://www.nytimes.com/aponline/business/AP-Ethanol-Study.html. I’m wondering if similar or opposite conclusions had been made in other countries, ie Brazil, that use biofuel heavily.
@ James
I agree with you assessment over the short term. Andy Xie argues that there is a bubble related to China, that they have massively substituted coal for oil (at some cost to human life in the mining industry) and that imports into China have been dropping since the start of the year.
But even if the bubble bursts, and oil futures come significantly down at the end of the year, there is still a big secular upward pressure.
So prices will continue a drift upwards each time we have strong growth years (which won’t be every year). Then we get to the longer term – I have no idea of the timesecale, where the upward pressure (and possibly politically related supply concerns) forces a switch in energy source.
This, when it happens can be rapid and dramatic. The gas-station infrastructure remember is a network system with lock-in. It’s no use having just one or two outlets for the alternative energy, you need a whole national network.
This means it will probably come with govenment prodding, and maybe even subsidies. The oil companies, who control the outlets will resist. This is one product market structural reform which hasn’t been pushed to date.
Once one country moves over, others can follow quickly. Basically the petrol outlets will be phased out, and the new energy ones introduced sytematically, rather like the lead free petrol issue.
Once the transition is complete, it could be bye-bye gasoline. The Japanese are already building hybrid cars.
“on the inefficiency of biofuel”
I didn’t know about this, thanks for the link.
If oil becomes too expensive, there are natural gas and coal-based substitutes that can use the current gas-station infrastructure:
“Currently, two companies have commercialised their Fischer-Tropsch technology. Shell in Bintulu, Malaysia, uses natural gas as a feedstock, and produces primarily low-sulfur diesel fuels. Sasol in South Africa uses coal as a feedstock, and produces a variety of synthetic petroleum products. The process is today used in South Africa to produce most of the country’s diesel fuel from coal by the company Sasol. The process was used in South Africa to meet its energy needs during its isolation under Apartheid.”
China is already building plants to obtain coal-based fuel.
I don’t think hydrogene will be available for a long time, there are lots of problems. Joseph Romm, author of “The hype about hydrogen”, said fuel-cell cars should be viewed as a post-2030 tecnology.
@ Gulliver
OK, thanks for this.
“I don’t think hydrogene will be available for a long time”
Probably not, but the issue is how long is ‘long’. We may be talking about fifty years, but this is still a short horizon if you are sitting on reserves of 200 or 300 years at current rates.
Coal has the big problem that it can have global warming, negative-feedback side-effects. In particular higher global temperatures can lead to more air conditioning and more energy consumption.
China and the US of course are not in Kyoto. Looked at rationally the current high prices may be a blessing in disguise, since they will undoubtedly increase the quantity of resources going into looking for alternatives. Put it like this, I think there is a better chance spending more money on research will come up with something than there is that the Big Pharma will come up with a new generation but conventional ‘blockbuster’ drug. (Genetic therapy would, like non-conventional energy, be a whole new ball game).
Incidentally, did you note Spain’s new energy saving plan to reduce oil imports by up to 20%? (Portugal has also announced something similar).