Monday, June 16, 2008

News From the Middle East


I am curious as to how you know more about the situation in Iran than the great majority. Is it your research, connections, unique sources. I would like to believe that an agreement is at hand, but I am very doubtful.


My sources are not so unique but make me a list of how many mentions you have seen about the numerous multi-billion dollar pipelines being built around Iran or any commentary outside of mine about the strategic importance of these pipelines. Or, make me a list of how many times you have seen information about the major new 123 Agreements that have been signed or the magnitude of the deal with Russia or any commentary about the importance of the spent fuel deal with Russia. Reading about these pipelines and the 123 Agreements should have given you a sense of what is going on in the Middle East that you would not have gotten from the mainstream media. Make your list from what is on your TV news and in your regular newspapers and then make it again after doing some searching on the Internet and then compare to what I have written.

I have had a bit of inside information about the Soroush and Nowrouz oil fields and the "blockade" of oil in Iran but most of what I have written has been freely available on the Internet. The exception is my subscription to George Friedman often includes some coverage that is either difficult or impossible to find in the public media.

Most of what I do is tie the pieces of information together to make common sense out of them. For example, it has been more and more widely reported that Bush has proposed that the USA be allowed to keep 52 bases in Iraq after the UN authorization expires. The back and forth on this item in the main media has been primarily stories saying that McCain wants to keep troops in Iraq for 100 years, stories about how Bush is thirsting for a spot from which to attack Iran, or stories about how Obama would go ahead and talk directly to the Iranians. The implication has been that the USA is blood thirsty and unwilling to negotiate with Iran but those who read can easily discover that there have been negotiations going on between the "allies" and Iran for 30 years, very intense negotiations for the past couple of years. For example, the Bush administration has had numerous meetings with Iran and Iraq about "security in Iraq". Bush has said repeatedly that US channels are open and will remain open for continued discussions. Maliki went to Iran weekend before last to try to work out a compromise. This was covered but the coverage did not put these negotiations into context nor did they tie these negotiations to the set of negotiations being advanced by Javier Solana. Ahmadinejad has stated that the biggest impediment to a deal is the continued presence of the US in Iraq. The public announcements are about refining uranium but both sides are ready to allow uranium to be enriched on Iranian soil under the supervision of the IAEA. Of course, the US does not go splashing around telling the widely known "secret" that predominately Sunni nations such as Saudi Arabia desire the continued presence of the US in the Middle East. Leaders in Saudi Arabia and in Iraq have to be political cautious about supporting the presence of troops, but they do. Most articles give the impression that the US is not wanted in the theater. Many partisan democrats will not admit that there has been progress in Iraq, they will not admit that there is a need for peace keeping troops and they will not admit that we need more domestic oil drilling. The democratic focus is on $600 vote buying checks for the average man while ignoring the threat of Iran.

As I said this morning, part of the problem is a problem with simple addition. Those who never liked math, do not bother to add up the numbers before taking a position. Congress has spent billions to subsidize windmills and billions more to subsidize solar panels but we produce less than one half of one percent of our electricity with windmills and solar panels. Had the same subsidies been spent on building clean coal plants or on drilling for oil (not that I would recommend such subsidies), huge amounts of energy would have been produced and gasoline would not be at $4. Any company that entered a side business like windmills and lost money year after year for 30 years would shut down the business. The company that invents the cost effective solar panel will make billions of dollars, we do not need to build scores of demonstration plants at a loss in order to encourage research. It is only government subsidies that keep the wind mill business in the forefront of the news. I am not saying that there is no place for windmills but that mathematically it is not practical to expect windmills to provide a major portion of our power needs. In a few years, the left will be able to attack T-Boone Pickens for making millions of profits off the great windmill farms of Texas but the government dollars given to him will be long gone. The good news for Exxon is that it is coming off the top of the list of villains because the pork spending freely given to ethanol and windmill farmers is so wasteful.

It is now public knowledge that Iran has had plans to "suit case sized" nuclear bombs for 10 years. How much money should we spend to keep suit case sized bombs out of the hands of terrorist? If it was your decision to make, would you spend a trillion dollars of tax payer money to keep nuclear bombs out of the hands of terrorist or would you spend that trillion dollars subsidizing wind mills? Understanding what is news is understanding what is important. A few days ago, there was a major push by the left suggesting that it is time to talk directly with the sponsors of terror. They do not appreciate the risk of letting nuclear bomb making skills spread to the hither lands. This is a fundamental misunderstanding of what we need to do to protect our "environment".

The fact is that countries from every continent are working together to encourage Iran to lay down its arms and to participate in trillions of dollars worth of commercial deals. After 30 years of sanctions, Iran, the second richest oil and gas nation on earth is rationing gasoline and suffering from hyper inflation. The leadership is considering increasing its expenditures on imported gasoline from 7 Billion Dollars per year to 9 Billion Dollars. It is not clear that this gasoline will be available at any price. Living in Iran right now is not a lot of fun. Theoretically the leadership could hold out for many more years but if they want to participate in the "new nuclear power age" they need to sign on within a couple of months.

The sanctions on Iraq lasted about 10 or 12 years. They worked only to an extent. They ended with regime change. The latest sanctions against Iran include the participation of Russia and China. Many a mainstream news article or editorial mentions Russia and China as being on Iran's side. One Senator on the committee that is reviewing the 123 Agreement with Russia, made statements a couple of weeks ago revealing that he was not aware that Russia has assisted with enforcement of Iranian sanctions. The nuclear power plant built by Russia would be operating by now if Russia were cooperating with Iran. Not only is the public ill informed but members of the US Senate committees choose to read the fluff and not the news!

Are Iranian Leaders Crazy or Crazy Like a Fox?

Some folk say that Ahmadinejhad is a crazy man. The cleric who leads the country is "crazy like a fox". Last week, when a University Professor was charged with sexual discrimination, the clerics clamped down on the lose dress habits of the female students. This male dominated society knows how to twist the news and how to apply pressure. The twist that oil is being put in tankers in order to block the Straight of Hormuz is a convenient story. This super tanker storage began right at the deadline for trading out of dollar deposits. Oil bulls and leftist politicians have been quick to declare that oil will go to $200 and that Iran is in control. The facts do not support their case. The building of billion dollar pipelines around the Straight has been in progress for years and the pace is picking up. The rapid pace of exploration and developing around the world will soon make Iran's oil of little importance in the short run. Iran still has levers, but it is not in control. The oil being exported from Iran has been reduced because the world has decided not to buy it. Iran does not have the refineries to produce enough gasoline for its own people because the world will not supply the equipment and knowledge necessary. Iran, has over 26 Trillion Metric Cubic Feet of natural gas and cannot supply its own needs even though its 16 billion dollar deal with China to develop a major gas field has been on hold since February. If Iran does not make a deal with Bush, will Obama desire to reverse the three unanimous votes by the UN Security Counsel to sanction Iran? Would Obama make a deal to allow Iran or any other Middle Eastern country to refine uranium? If so, what would be the circumstances, $10 per gallon gasoline?

The story of Bush's just completed tour of Europe is that in every case he won support for additional sanctions. France and Italy have given enthusiastic support and the UK will keep troops in Iran and add troops in Afghanistan. Another major offensive is ready to start in southern Afghanistan. France has even helped negotiate the early give up of Israeli lands to Syria in order to encourage Syria's split with Iran. Have you read about this deal elsewhere? It is not secret but I doubt if it will be widely reported. The loss of Syria's support would be a major blow to Amadinejad.