Page 1 of
2 The
energy wars heat up By Michael
T Klare
Conflict and intrigue over
valuable energy supplies have been features of the
international landscape for a long time. Major
wars over oil have been fought every decade or so
since World War I, and smaller engagements have
erupted every few years; a flare-up or two in
2012, then, would be part of the normal scheme of
things.
Instead, what we are now seeing is
a whole cluster of oil-related clashes stretching
across the globe, involving a dozen or so
countries, with more popping up all the time.
Consider these flash-points as signals that we are
entering an era of intensified conflict over
energy.
From the Atlantic to the Pacific,
Argentina to the Philippines, here are the six
areas of conflict - all tied to energy supplies -
that have
made news in just the
first few months of 2012.
A brewing
war between Sudan and South Sudan: On
April 10, forces from the newly independent state
of South Sudan occupied the oil center of Heglig,
a town granted to Sudan as part of a peace
settlement that allowed the southerners to secede
in 2011. The northerners, based in Khartoum,
then mobilized their own forces and drove the
South Sudanese out of Heglig. Fighting has since
erupted all along the contested border between the
two countries, accompanied by air strikes on towns
in South Sudan. Although the fighting has not yet
reached the level of a full-scale war,
international efforts to negotiate a ceasefire and
a peaceful resolution to the dispute have yet to
meet with success.
This conflict is being
fueled by many factors, including economic
disparities between the two Sudans and an abiding
animosity between the southerners (who are mostly
black Africans and Christians or animists) and the
northerners (mostly Arabs and Muslims).
But oil - and the revenues produced by oil
- remains at the heart of the matter. When Sudan
was divided in 2011, the most prolific oil fields
wound up in the south, while the only pipeline
capable of transporting the south's oil to
international markets (and thus generating
revenue) remained in the hands of the northerners.
They have been demanding exceptionally
high "transit fees" - US$32-$36 per barrel
compared to the common rate of $1 per barrel - for
the privilege of bringing the South's oil to
market. When the southerners refused to accept
such rates, the northerners confiscated money they
had already collected from the south's oil
exports, its only significant source of funds.
In response, the southerners stopped
producing oil altogether and, it appears, launched
their military action against the north. The
situation remains explosive.
Naval
clash in the South China Sea: On April 7,
a Philippine naval warship, the 115-meter
Gregorio del Pilar, arrived at Scarborough
Shoal, a small island in the South China Sea, and
detained eight Chinese fishing boats anchored
there, accusing them of illegal fishing activities
in Filipino sovereign waters.
China
promptly sent two naval vessels of its own to the
area, claiming that the Gregorio del Pilar was
harassing Chinese ships in Chinese, not Filipino
waters. The fishing boats were eventually allowed
to depart without further incident and tensions
have eased somewhat. However, neither side has
displayed any inclination to surrender its claim
to the island, and both sides continue to deploy
warships in the contested area.
As in
Sudan, multiple factors are driving this clash,
but energy is the dominant motive. The South China
Sea is thought to harbor large deposits of oil and
natural gas, and all the countries that encircle
it, including China and the Philippines, want to
exploit these reserves. Manila claims a
200-nautical mile "exclusive economic zone"
stretching into the South China Sea from its
western shores, an area it calls the West
Philippine Sea. Filipino companies say they have
found large natural gas reserves in this area and
have announced plans to begin exploiting them.
Claiming the many small islands that dot
the South China Sea (including Scarborough Shoal)
as its own, Beijing has asserted sovereignty over
the entire region, including the waters claimed by
Manila; it, too, has announced plans to drill in
the area. Despite years of talks, no solution has
yet been found to the dispute and further clashes
are likely.
Egypt cuts off the
natural gas flow to Israel: On April 22,
the Egyptian General Petroleum Corp and Egyptian
Natural Gas Holding Co informed Israeli energy
officials that they were "terminating the gas and
purchase agreement" under which Egypt had been
supplying gas to Israel.
This followed
months of demonstrations in Cairo by the youthful
protestors who succeeded in deposing autocrat
Hosni Mubarak and are now seeking a more
independent Egyptian foreign policy - one less
beholden to the United States and Israel. It also
followed scores of attacks on the pipelines
carrying the gas across the Negev Desert to
Israel, which the Egyptian military has seemed
powerless to prevent.
Ostensibly, the
decision was taken in response to a dispute over
Israeli payments for Egyptian gas, but all parties
involved have interpreted it as part of a drive by
Egypt's new government to demonstrate greater
distance from the ousted Mubarak regime and his
(US-encouraged) policy of cooperation with Israel.
The Egyptian-Israeli gas link was one of
the most significant outcomes of the 1979 peace
treaty between the two countries, and its
annulment clearly signals a period of greater
discord; it may also cause energy shortages in
Israel, especially during peak summer demand
periods. On a larger scale, the cutoff suggests a
new inclination to use energy (or its denial) as a
form of political warfare and coercion.
Argentina seizes YPF: On
April 16, Argentina's president, Cristina
Fernandez de Kirchner, announced that her
government would seize a majority stake in YPF,
the nation's largest oil company. Under President
Kirchner's plans, which she detailed on national
television, the government would take a 51%
controlling stake in YPF, which is now
majority-owned by Spain's largest corporation, the
energy firm Repsol YPF.
The seizure of its
Argentinean subsidiary is seen in Madrid (and
other European capitals) as a major threat that
must now be combated. Spain's foreign minister,
Jose Manuel Garcํa Margallo, said Kirchner's move
"broke the climate of cordiality and friendship
that presided over relations between Spain and
Argentina". Several days later, in what is
reported to be only the first of several
retaliatory steps, Spain announced that it would
stop importing biofuels from Argentina, its
principal supplier - a trade worth nearly $1
billion a year to the Argentineans.
As in
the other conflicts, this clash is driven by many
urges, including a powerful strain of nationalism
stretching back to the Peronist era, along with
Kirchner's apparent desire to boost her standing
in the polls. Just as important, however, is
Argentina's urge to derive greater economic and
political benefit from its energy reserves, which
include the world's third-largest deposits of
shale gas.
While long-term rival Brazil is
gaining immense power and prestige from the
development of its offshore "pre-salt" petroleum
reserves, Argentina has seen its energy production
languish. Repsol may not be to blame for this, but
many Argentineans evidently believe that, with YPF
under government control, it will now be possible
to accelerate development of the country's energy
endowment, possibly in collaboration with a more
aggressive foreign partner like BP or ExxonMobil.
Argentina re-ignites the Falklands
crisis: At an April 15-16 Summit of the
Americas in Cartagena, Colombia - the one at which
US Secret Service agents were caught fraternizing
with prostitutes - Argentina sought fresh
hemispheric condemnation of Britain's continued
occupation of the Falkland Islands (called Las
Malvinas by the Argentineans). It won strong
support from every country present save
(predictably) Canada and the United States.
Argentina, which says the islands are part
of its sovereign territory, has been raising this
issue ever since it lost a war over the Falklands
in 1982, but has recently stepped up its campaign
on several fronts - denouncing London in numerous
international venues and preventing British cruise
ships that visit the Falklands from docking in
Argentinean harbors. The British have responded by
beefing up their military forces in the region and
warning the Argentineans to avoid any rash moves.
When Argentina and the UK fought their war
over the Falklands, little was at stake save
national pride, the stature of the country's
respective leaders (Prime Minister Margaret
Thatcher vs an unpopular military junta), and a
few sparsely populated islands. Since then, the
stakes have risen immeasurably as a result of
recent seismic surveys of the waters surrounding
the islands that indicated the existence of
massive deposits of oil and natural gas.
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