Lacandona, the great Mayan jungle that extends through the state of Chiapas in southern Mexico, is home to natural wealth and indigenous peoples' settlements that are once again threatened by the probable reactivation of abandoned oil wells. Image: Ceiba

By Emilio Godoy
MEXICO CITY, Jan 19 2024 (IPS)

The Lacandona jungle in the southern Mexican state of Chiapas is home to 769 species of butterflies, 573 species of trees, 464 species of birds, 114 species of mammals, 119 species of amphibians and reptiles, and several abandoned oil wells.

The oil wells have been a source of concern for the communities of the great Mayan jungle and environmental organizations since the 1970s, when oil prospecting began in the area and gradually left at least five wells inactive, whether plugged or not."The situation is always complex, due to legal loopholes that do not delimit the jungle, the natural protected areas are not delimited, it has been a historical mess. The search for oil has always been there." -- Fermín Domínguez

Now, Mexico’s policy of increasing oil production, promoted by the federal government, is reviving the threat of reactivating oil industry activity in the jungle ecosystem of some 500,000 hectares located in the east of the state, which has lost 70 percent of its forest in recent decades due to deforestation.

A resident of the Benemérito de las Américas municipality, some 1,100 kilometers south of Mexico City, who requested anonymity for security reasons, told IPS that a Mexican oil services company has contacted some members of the ejidos – communities on formerly public land granted to farm individually or cooperatively – trying to buy land around the inactive wells.

“They say they are offering work. We are concerned that they are trying to restart oil exploration, because it is a natural area that could be damaged and already has problems,” he said.

Adjacent to Benemérito de las Américas, which has 23,603 inhabitants according to the latest records, the area where the inactive wells are located is within the 18,348 square kilometers of the protected Lacandona Jungle Region.

It is one of the seven reserves of the ecosystem that the Mexican government decreed in 2016 and where oil activity in its subsoil is banned.

Between 1903 and 2014, the state-owned oil company Petróleos Mexicanos (Pemex) drilled five wells in the Lacandona jungle, inhabited by some 200,000 people, according to the autonomous governmental National Hydrocarbons Commission (CNH), in charge of allocating hydrocarbon lots and approving oil and gas exploration plans. At least two of these deposits are now closed, according to the CNH.

The Montes Azules Biosphere Reserve, in the Lacandona jungle in the southern Mexican state of Chiapas, faces the threat of oil exploration, which would add to phenomena such as deforestation, drought and forest fires that have occurred in recent years. Image: Semarnat

The Lacantun well is located between a small group of houses and the Montes Azules Biosphere Reserve (RBMA), the most megadiverse in the country, part of Lacandona and near the border with Guatemala. The CNH estimates the well’s proven oil reserves at 15.42 million barrels and gas reserves at 2.62 million cubic feet.

Chole, Tzeltal, Tzotzil and Lacandon Indians inhabit the jungle.

Other inactive deposits in the Benemérito de las Américas area are Cantil-101 and Bonampak-1, whose reserves are unknown.

In the rural areas of the municipality, the local population grows corn, beans and coffee and manages ecotourism sites. But violence has driven people out of Chiapas communities, as has been the case for weeks in the southern mountainous areas of the state due to border disputes and illegal business between criminal groups.

In addition, the Zapatista National Liberation Army (EZLN), an indigenous organization that staged an uprising on Jan. 1, 1994 against the marginalization and poverty suffered by the native communities, is still present in the region.

Chiapas, where oil was discovered at the beginning of the 20th century, is among the five main territories in terms of production of crude oil and gas in this Latin American country, with 10 hydrocarbon blocks in the northern strip of the state.

In November, Mexico extracted 1.64 million barrels of oil and 4.9 billion cubic feet of gas daily. The country currently ranks 20th in the world in terms of proven oil reserves and 41st in gas.

Historically, local communities have suffered water, soil and air pollution from Pemex operations.

As of November, there were 6,933 operational wells in the country, while Pemex has sealed 122 of the wells drilled since 2019, although none in Chiapas, according to a public information request filed by IPS.

Since taking office in December 2018, leftist President Andrés Manuel López Obrador has strengthened Pemex and the also state-owned Federal Electricity Commission by promoting the extraction and consumption of fossil fuels, to the detriment of renewable energy.

The state of Chiapas is home to hydroelectric power plants, mining projects, hydrocarbon exploitation blocks and a section of the Mayan Train, the most emblematic megaproject of the current Mexican government. Image: Center for Zoque Language and Culture AC

Territory under siege

The RBMA is one of Mexico’s 225 natural protected areas (NPAs) and its 331,000 hectares are home to 20 percent of the country’s plant species, 30 percent of its birds, 27 percent of its mammals and 17 percent of its freshwater fish.

Like all of the Lacandona rainforest, the RBMA faces deforestation, the expansion of cattle ranching, wildlife trafficking, drought, and forest fires.

Fermín Ledesma, an academic at the public Universidad Autónoma Chapingo, said possible oil exploration could aggravate existing social and environmental conflicts in the state, in addition to growing criminal violence and the historical absence of the State.

“The situation is always complex, due to legal loopholes that do not delimit the jungle, the natural protected areas are not delimited, it has been a historical mess. The search for oil has always been there,” he told IPS from Tuxtla Gutiérrez, the capital of Chiapas.

The researcher said “it is a very complex area, with a 50-year agrarian conflict between indigenous peoples, often generated by the government itself, which created an overlapping of plans and lands.”

Ledesma pointed to a contradiction between the idea of PNAs that are depopulated in order to protect them and the historical presence of native peoples.

From 2001 to 2022, Chiapas lost 748,000 hectares of tree cover, equivalent to a 15 percent decrease since 2000, one of the largest sites of deforestation in Mexico, according to the international monitoring platform Global Forest Watch. In 2022 alone, 26,800 hectares of natural forest disappeared.

In addition, this state, one of the most impoverished in the country, has suffered from the presence of mining, the construction of three hydroelectric plants and, now, the Mayan Train, the Mexican government’s most emblematic megaproject inaugurated on Dec. 15, one of the seven sections of which runs through the north of the state.

But there are also stories of local resistance against oil production. In 2017, Zoque indigenous people prevented the auction of two blocks on some 84,000 hectares in nine municipalities that sought to obtain 437.8 million barrels of crude oil equivalent.

The anonymous source expressed hope for a repeat of that victory and highlighted the argument of conducting an indigenous consultation prior to the projects, free of pressure and with the fullest possible information. “With that we can stop the wells, as occurred in 2017. We are not going to let them move forward,” he said.

Ledesma the researcher questioned the argument of local development driven by natural resource extraction and territorial degradation as a pretext.

“They say it’s the only way to do it, but that’s not true. It leaves a trail of environmental damage, damage to human health, present and future damage. It is much easier for the population to accept compensation or give up the land, because they see it is degraded. A narrative is created that they live in an impoverished area and therefore they have to relocate. This has happened in other areas,” he said.

President Jair Bolsonaro launched the sale of shares of Eletrobras, the largest company in the electricity sector in Brazil, which will be privatized through its capitalization. The State will remain as a minority partner, in a privatization process approved by Congress, conditional on the construction of gas thermoelectric power plants in the interior of the country, far from gas fields and pipelines. CREDIT: Alan Santos/PR-Public Photos

By Mario Osava
RIO DE JANEIRO, Jun 21 2022 (IPS)

Brazil has abundant low-cost energy, but by the time it reaches the consumer it is one of the most expensive in the world. This contradiction hinders the country’s human and economic development and the “solutions” found have actually aggravated the problem.

The rise of hydrocarbon prices on the international market, intensified by Russia’s invasion of Ukraine, unleashed a battle by the government to curb energy prices, as the rising costs hurt the administration’s hopes for reelection in the October elections. Lower taxes were the chosen formula.

“It is positive, it mitigates the problem, but it does not improve energy efficiency,” said Paulo Pedrosa, president of the Association of Large Industrial Energy Consumers and Free Consumers (ABRACE), whose members are responsible for the consumption of 40 percent of the electricity and 42 percent of the natural gas used in Brazil.

Now that the debate on the subject has been sparked, the opportunity should be used to bring about structural changes, aimed at “removing from energy the costs of public policies, of many extra costs that should not be in the electricity bill,” he argued.

Energy is expensive in Brazil due to numerous subsidies, charges, taxes and various contributions that drive up prices, especially the cost of electricity. They account for half of the total cost paid by the consumer, according to ABRACE.

This is what puts the cost of energy in Brazil among the two or three most expensive in the world, along with Germany and Colombia, according to the International Energy Agency, even though the country is an oil exporter and 60 percent of its electricity comes from an abundant, cheap source: water.

The Itaipu binational hydroelectric power plant, shared with Paraguay, was the last large, low-cost plant to be located close to major consumer markets. Inaugurated in 1984 on the Paraná River, on the border with Paraguay and close to Argentina, its installed capacity is 14,000 megawatts. Brazil’s hydroelectric potential since then has been limited to rivers in the Amazon rainforest, with more expensive construction costs and the need for long transmission lines to large consumers. CREDIT: Itaipu Binacional

Industry suffers the consequences

This paradox reduces the competitiveness of the national economy, especially in energy-intensive industries, and hinders growth and human development, said Pedrosa.

As a result, the deindustrialization that Brazil has been suffering for at least three decades has accelerated.

The situation “has worsened in the last 10 years, when decision-making has been captured by particular interests in the industry’s chain, politicians and local economies,” he said in a telephone interview with IPS from Brasilia.

The Court of Accounts, responsible for public expenditure oversight, identified 16 types of subsidies included in the monthly bill that electricity distributors pass on to consumers.

All consumers are charged for the cost of fossil fuels to generate electricity in remote areas of the Amazon, for the losses suffered by distribution companies due to the COVID-19 pandemic, and even for subsidies to give polluting coal-fired power plants a longer lifespan, until 2040.

“Irrigated agriculture receives the subsidy, it does not pay for part of its consumption under the pretext of producing food. But what is the point of subsidizing the production of soy, most of which is destined for export?” asked Roberto Kishinami, head of energy questions at the non-governmental Climate and Society Institute.

Navy Admiral Bento Albuquerque was removed from his post as minister of mines and energy by President Jair Bolsonaro on May 11, 2022 for failing to impose fuel price containment on state-owned Petrobras. Bolsonaro is trying to prevent the oil hike from affecting his popularity and his slim chances of reelection in October. CREDIT: Marcelo Camargo/Agência Brasil

Social policy

Some subsidies could be justified because of their social purpose, but it shouldn’t be energy that should be taxed, but the national budget, he argued. “An income transfer program like the Bolsa Familia would be better,” he said.

Kishinami was referring to the program that since 2004 provides a subsidy of about 80 dollars a month to poor families, which was renamed Auxilio Brasil by the administration of far-right President Jair Bolsonaro.

“Lowering the price of energy is also a social policy,” said Pedrosa. “Brazil has a vocation to produce cheap and clean energy, something that the world values more and more every day, and wasting this advantage harms everyone, not only industry,” he argued.

On Jun. 14, ABRACE released a study on “The impacts of electricity and natural gas prices on growth and economic development”, commissioned from the economic consultancy Ex Ante.

If a “competitive price” for electricity were achieved, with a reduction of 23 to 34 percent for industries that vary in terms of energy consumption, Brazil could raise its annual economic growth from the expected 1.7 to 4.8 percent on average over the next 10 years, and generate 6.74 million additional jobs, according to the study.

The country could thus move up 10 positions in the United Nations Development Program (UNDP) Human Development Index ranking, from 84th place in 2019 to just under Mexico, which ranked 74th.

The study is aimed at broadening and guiding the energy debate, which is in the interest of the whole country, not just the industry and politicians, Pedrosa said.

In this South American country of 214 million people, energy represents 17.1 percent of the total cost of living for families, and an even higher proportion among the poor. This includes direct spending on electricity, gas and other fuel.

It also takes into account the cost of energy embedded in the goods and services consumed by the family, or indirect energy consumption. Bread, for example, contains 27.2 percent of energy in its final price, milk and meat 33.3 percent and school notebooks 35.9 percent.

In a family’s basic food basket, the study estimated the share of energy in the total cost at 23 percent.

In other words, rising energy prices cost everyone different amounts, depending on their consumption of goods and services. This is also the case for companies. The construction industry spends 14 times more on energy included in supplies and machinery than in the plant where it operates.

The timing is opportune for the debate on energy prices and their social and economic effects, because Brazil will elect its president, state governors and national and state legislators in October.

Another reason is that the rise in oil and gas prices provoked a strong reaction from the government and pro-government parliamentary leaders. Bolsonaro has tried to blame the state-owned Petrobras oil giant for increasing its prices according to international prices, a rule adopted by the company with the endorsement of the government, its majority partner, since 2017.

The Itá Hydroelectric Power Plant, on the Uruguay River in southern Brazil, is also one of the last low-cost plants due to its proximity to the consumer market. It is a concrete face rock-fill embankment dam, a low operational cost structure, with the reservoir at the top of the mountain, which was favored by the topography. CREDIT: Mario Osava/IPS

Legislators of chaos

On Jun. 15, Congress approved a law that caps the maximum merchandise circulation tax charged by state governments on fuel, energy, mass transit and telecommunications, considered essential services, at 17 percent.

This tax varied greatly among the 26 Brazilian states and the Federal District, from 25 to 34 percent, for example, on gasoline, and from 12 to 25 percent on diesel, the most important fuel for the transportation of cargo.

The same legislators who are now seeking to curb energy prices, with the risk of generating serious fiscal problems for the states, with ineffective measures, according to analysts, passed several laws in recent years that incorporate undue costs in energy.

The privatization of Eletrobrás, the largest company in the sector in Brazil, was approved conditional upon the construction of natural gas thermoelectric power plants that would produce a total of eight gigawatts of power. The costs will be high because areas were chosen far from the natural gas fields and without gas pipelines for the plants.

Pedrosa and Kishinami believe the measures were taken with the elections in mind and do not correct the tangle of errors and expenses accumulated in Brazil’s energy system. Both are betting on Bill 414, already approved in the Senate and pending in the Chamber of Deputies, which would reform the sector.

It will be the first step in separating infrastructure from electricity sales and establishing a system of competition, with the supply of different types of energy from a variety of sources, renewable or not, Kishinami told IPS in Rio de Janeiro.

The Comarsa oil waste deposit in the southwestern province of Neuquén, in Argentina, parked a social conflict due to the environmental impact, which led to a promise that it would be shut down. The one planned for the municipality of Catriel, in the neighbouring province of Río Negro, would be almost 20 times larger. Credit: Fabián Ceballos / Oil Observatory of the South

By Daniel Gutman
BUENOS AIRES, Mar 1 2018 (IPS)

A project to install a huge deposit of oil field waste pits has triggered a crisis in the north of Argentina’s southern Patagonia region, and brought the debate on the environmental impact of extractive industries back to the forefront in this Southern Cone country.

Catriel, in the province of Río Negro, about 1,000 km southwest of Buenos Aires, was a small town untilan oil deposit was discovered there in 1959. Since then, the population has boomed, with the town drawing people from all over the country, driving the total up to around 30,000 today.

The conflict broke out in 2016, when the city government announced a plan to set up a “special waste deposit” on 300 hectares of land, for the final disposal of waste from oil industry activity in the area.

This generated social division and resistance that ended last November, when opponents of the project were successful in their bid to obtain an amendment to the Municipal Charter – the supreme law at a local level – which declared Catriel a “protected area”, and prohibited such facilities due to the pollution."The establishment or installation of nuclear power plants, reservoirs, landfills, repositories of final or transitory disposal of contaminated material from the nuclear, chemical or oil industry, or any other polluting activity, is prohibited." -- Municipal Charter of Catriel

Mayor Carlos Johnston described the modification of the charter as “shameful” and asked the courts to overrule the amendment, arguing that those who drafted the new text overstepped their authority.

The court decision is still pending.

“At all times it was practically impossible to access information. When we went to ask, the city government gave us a document that had a map of where they want to install the plant and practically nothing else,” said Natalia Castillo, an administrative employee who is part of the Catriel Socio-Environmental Assembly, a community group that emerged to fight the project.

“We are very worried about the possible impact of the plant and we are trying to raise public awareness. The problem is that many people around here work in the oil industry and prefer not to meddle with this issue,”Castillo told IPS.

Mayor Johnston confirmed his position to IPS: “We have had environmental liabilities since 1959. It is our obligation, as the State, to address them. It would be much worse not to do it.”

“The environmental authorisation came from the provincial authorities. It may be that we have so far failed to provide enough information to society. But we value the work of environmental organisations and are ready for dialogue because this project is necessary,” he added.

Johnston said the waste that will be accepted at the plant will come from Catriel and other municipalities in the province of Río Negro.

However, environmental organisations suspect, due to the large size that is projected for the deposit, that it could receive waste from oil industry activity in the entire area and not just from the municipality.

Catriel happens to be located in the so-called Neuquén Basin, the main source of oil and gas in the country, and is very close to VacaMuerta, the unconventional oil and gas deposit in the neighbouring province of Neuquén, which fuels Argentina’s dreams of becoming a major fossil fuel producer.

The United States Energy Information Administration (EIA) estimated the recoverable reserves in the 30,000-square-km Vaca Muerta at no less than 27 billion barrels of oil and 802 trillion cubic feet of gas.

The Argentine government also places its hopes in this field to bolster its hydrocarbon production, which has been declining for 20 years, and has forced the country to import fuel to make up for the deficit.

“The problem is that ‘fracking’, which is used to extract unconventional hydrocarbons, generates waste on a much larger scale than conventional exploitation,” said Martín Álvarez, a researcher at the non-governmental interdisciplinary Oil Observatory of the South (OPSur).

He explained that with this technology, which drills rocks at great depths through large injections of water and additives, “not only do the chemicals used to carry out the drilling and hydraulic fracturing come back to the surface, but also radioactive materials of natural origin that are in the subsoil.”

“There is a saturation of oil waste in the Neuquén Basin from fracking, which is a dirty technique. Then came this new business, waste disposal, which has a huge environmental impact because contaminants can seep into the groundwater,” added the expert.

Together with the Environment and Natural Resources Foundation and Greenpeace Argentina, two of the most influential environmental organisations in the country, OPSur requested access to information from different provincial bodies in Río Negro.

In addition, it issued a critical report, drawing attention to the size of the project. Covering 300 hectares, it would be almost 10 times larger than what is currently the biggest South American plant of its type, with an area of 34 hectares.

The document refers to Comarsa, an oil waste deposit that is only 135 km from Catriel, in the province of Neuquén, near the provincial capital. The installation has been questioned for years by residents, forcing the local authorities to promise to close it once and for all last November, although it has not yet happened.

The environmental organisations also complained that during the Mar. 31, 2017 public hearing where the project was discussed, many questions and objections raised by the participants were not answered.

They also questioned the approval of the environmental impact assessment conducted by the Rìo Negro Secretariat of Environment, “despite the rejection by different sectors in the community of Catriel.”

In the middle of this conflict, Catriel had to reform its Organic Charter, a task that is to be carried out every 25 years.

With the issue of the plant at the centre of the debate, the local ruling party, Juntos Somos Rio Negro (Together We Are Río Negro) won the elections with 35 percent of the vote and obtained six seats on the reform committee. But the other nine seats went to different opposition parties, which joined forces against the waste pit project.

“The establishment or installation of nuclear power plants, reservoirs, landfills, repositories of final or transitory disposal of contaminated material from the nuclear, chemical or oil industry, or any other polluting activity, is prohibited,” says Article 94 of the new Charter, which came into force on Jan. 1.

But the mayor argues that it must be revised because “it is not feasible.”

Johnston also rejected the possibility of calling a referendum on the authorisation to install the plant, as requested by the Catriel Socio-Environmental Assembly.

In a communiqué, the assembly asked: “What will happen when diseases become visible in the people who live in Catriel, due to the environmental contamination caused by the oil waste deposit?”

A fact that has not gone unnoticed is that the company that is to install the treatment plant is Crexell Environmental Solutions, which has strong political connections, to the point that its president, Nicolás Crexell, is the brother of a national senator for Neuquén, and nephew of the person who governed that province until 2015.

In November 2009, Guyana made a deal with Norway, which agreed to pay up to 250 million dollars over the course of five years if Guyana maintained its low deforestation rate. The country has been lauded for its low-carbon development path. Credit: Desmond Brown/IPS

By Desmond Brown
GEORGETOWN, Mar 3 2017 (IPS)

The recent discovery of large volumes of oil offshore of Guyana could prove to be a major headache for the country, as the Caribbean Community (CARICOM) and other Alliance of Small Island States (AOSIS) members press for keeping global temperature rise to 1.5 degrees C above pre-industrial levels as provided for in the historic Paris Climate Agreement.

Exxon Mobil recently announced the successful drilling of a deep-water exploration well that may soon confirm that the seafloor beneath Guyana’s coastal waters contains one of the richest oil and natural gas discoveries in decades.“If you are now finding plenty of oil, and basically to keep temperatures down we are saying no more carbon fuels, then who are you going to sell it to?" --Dr. Al Binger of the Caribbean Centre for Renewable Energy and Energy Efficiency

Experts now estimate that one of its offshore fields alone, known as Liza, could contain 1.4 billion barrels of oil and mixed natural gas.

But in the face of a changing climate fueled by greenhouse gas (GHG) emissions, Dr. Al Binger, interim executive director of the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREE), said Guyana should not get too excited about the discovery.

“Guyana finds themselves inside AOSIS, the group that is fighting to keep temperatures under 1.5 degrees C, and now they are going to want to sell carbon which is going to get burned. I think they are going to have a lot of head-scratching to figure out ‘is this a blessing or is this a curse?’” Binger told IPS.

“If you are now finding plenty of oil, and basically to keep temperatures down we are saying no more carbon fuels, then who are you going to sell it to?” he said. “I don’t know how much they are going to be able to sell because they are trying to meet the Intended Nationally Determined Contributions (INDCs) requirements to actually keep the temperatures below 1.5 degrees C.”

Countries across the globe adopted an historic international climate agreement at the U.N. Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP21) in Paris in December 2015. The INDCs are publicly outlined post-2020 climate actions countries intend to take under the agreement.

The climate actions communicated in these INDCs largely determine whether the world achieves the long-term goals of the Paris Agreement: to hold the increase in global average temperature to well below 2 degrees C, to pursue efforts to limit the increase to 1.5 degrees C, and to achieve net zero emissions in the second half of this century.

The rallying cry of AOSIS has been “1.5 to Stay Alive”, saying it represents a level of global warming beyond which many vulnerable small island states will be overwhelmed by severe climate impacts.

The scientific findings based on low-emission scenarios (also examined by the IPCC in its fifth assessment report) show that it is both physically and economically feasible to limit warming to below 1.5 degrees C by 2100, after temporarily exceeding 1.5 degrees C in the 2050s (but still staying well below 2 degrees C).

Binger said holding warming below 2 degrees C requires early and rapid action with the level of action in the next ten years very similar to 1.5 degrees C. By 2030, action towards 1.5 degrees C needs to be faster than for 2 degrees C, he said.

“So, if you have a lot of carbon, what are you going to do with it? We keep emitting carbon and now we are reaching a stage where we just basically can’t emit anymore because there is no space for it if we are going to stay in temperatures that we can survive,” Binger said.

With an average global temperature increase of under 1 degree C, small islands have already experienced impacts including severe coastal erosion, saltwater intrusion, marine habitat degradation, and power tropical storms.

Binger explained that limiting warming to below 1.5 degrees C by 2100 requires a reduction of global greenhouse gas emissions by 70 to 95 percent relative to 2010 levels by 2050. This is significantly deeper than the 40 to 70 percent by 2050 for 2 degrees C.

Total greenhouse gas emissions have to reach global zero by 2060 to 2080 for 1.5 degrees C compared to 2080 to 2100 for 2 degrees C.

“If we have to decarbonise and we have to go to zero carbon fuels, then the only carbon we could actually burn would be some portion of what we sequester,” Binger said.

In November 2009, Guyana made a deal with Norway, which agreed to pay up to 250 million dollars over the course of five years if Guyana maintained its low deforestation rate. It was the first time a developed country conscious of its own carbon-dioxide emissions had paid a developing country to keep its trees in the ground.

Under the initiative, developed by the United Nations and called REDD+ (for Reducing Emissions from Deforestation and Forest Degradation plus conservation), Guyana can continue logging as long as biodiversity is protected.

Guyana is one of the poorest countries in the region and officials have been banking on the production of oil, expected to begin around 2020, to turn around the economy.

Early rough estimates by experts of how much recoverable oil Guyana could have range to more than four billion barrels, which at current prices would be worth more than 200 billion dollars.

Binger could not comment on what advice, if any, Guyana might be receiving from AOSIS or the Caribbean Community Climate Change Centre (CCCCC).

“I don’t know what AOSIS is saying to them. I guess AOSIS is maybe saying, ‘nice you have oil, but we are trying to get rid of carbon so we don’t know why you are trying to find more’,” Binger said.

“There are quite a few reports out that we can’t burn a lot of the hydrocarbons, so what’s down there will have to stay down there unless they are going to use it to make things like plastic, chemicals, fertilizers. Anything that is going to be a combustion project is going to have issues with basically how much more carbon we emit relative to where we need to be to stabilize global climate,” he added.

The Maersk Venturer drillship, which is drilling the Raya-1 well that set a new world record in terms of water depth, and will determine the existence of commercially viable oil and gas reserves on Uruguay's continental shelf. Credit: Ancap

By Veronica Firme
MONTEVIDEO, Jun 9 2016 (IPS)

Uruguay is just weeks away from finding out if it will have a chance to stop being totally reliant on oil imports at some point in the future, when the first offshore exploration well in national waters – which set a new world record in terms of water depth – is completed.

Since Mar. 30, the consortium headed by France’s Total has been prospecting 250 km from the Atlantic coast, in more than 3,400 metres of water, and 3,000 metres below the seabed.

The Raya-1 well in Block 14, drilled with an investment of some 200 million dollars in ultra-deep waters on the continental shelf, is hunting for commercially viable oil or gas reserves.

On Thursday Jun. 8, the representative of Total in the country, Artur Nunes da Silva, said the drilling would be done in about two weeks and the samples would be sent to France for analysis. Only then, he said, would the results be announced.

The next day, the local media reported that, according to information from the industry, only water was found in Raya-1, although that did not fully rule out the existence of oil and gas on the continental shelf.

The drilling represents a major turning-point for this South American country of 3.4 million people, because it will soon know if it has a future as an oil producer. The effort to find oil here was not stalled by the oil-price crisis, which has discouraged investment at a global level, especially in high-risk ventures such as deepwater drilling.

“When the current drop in prices began, most of the contracts had already been signed,” Víctor Bacchetta, a journalist who specialises in environmental issues and who edits Uruguay’s Mining Observatory publication, told IPS.

The contracts form part of the goals set by the Ministry of Industry, Energy and Mining’s 2005-2030 energy policy, which, although it puts a priority on strengthening renewable energies, also paves the way for exploration and prospecting for oil and natural gas.

The state oil company Ancap is responsible for implementing the policy, which also requires attempts at participating in joint ventures for exploring deposits in other countries.

Geologist Ethel Morales told IPS that the first attempts to find fossil fuels in Uruguay dated back to the 1950s, when exploratory wells were drilled in the Northern Basin, which covers some 90,000 sq km in this country of 176,220 sq km.

A screenshot from a presentation by geologist Ethel Morales, showing the contracts granted so far on Uruguay’s continental shelf, to the right. The second from the top is Block 14, awarded to French oil major Total. Credit: Uruguay Round

Exploratory wells were also drilled on the continental shelf in the 1970s, said Morales, a professor at Uruguay’s University of the Republic. But shallow water prospecting ended in 1976, after two wells were declared dry.

Besides the energy policy itself, Morales said another factor that fuelled offshore exploration was the appearance of the so-called pre-salt deposits, located beneath a two-kilometre-thick salt layer under rock, sand and deep water, to the north of this country’s continental shelf, off the coast of Brazil.

These huge deposits drew the oil corporations’ attention to the South Atlantic. Morales said Brazil’s Santos basin, where the pre-salt deposits are located, and the Uruguayan basin “share the same origins,” although their later evolution was different.

In this context, Ancap began to search for partners to drill exploratory wells in Uruguayan waters, although its spokespersons stress that the chances of finding commercially viable reserves stand at just 15 percent.

Uruguayan Minister of Industry, Energy and Mining Carolina Cosse (3rd-left) with high-level officials from the state oil company Ancap, during their visit to the drillship that is exploring for oil in ultra-deep waters 250 km off the coast of Uruguay. Credit: Ancap

The Uruguay Round 1 bidding process was launched in 2009, offering continental shelf blocks, followed in 2011 by Round 2, in which eight contracts were signed, including the one with Total.

“Up to 2012 there was no 3D (tridimensional) seismic, and now we have nearly 40,000 sq km covered in the area of greatest prospectivity, which reflects a quantitative and qualitative leap with respect to the information available,” Ancap reported in late 2015.

Oil industry analysts stress the participation in the exploration here of the world’s leading oil companies, and note that the contracts assign a large proportion of the profits to the Uruguayan state.

Ancap and the Ministry of Industry decided to launch Uruguay Round 3, whose chief aim is the same: to determine whether there is oil and gas on the continental shelf, and if there is, whether it is commercially viable.

Total’s partners in Block 14 are the U.S. ExxonMobil (which has a 35 percent share) and Norway’s Statoil (15 percent), and the state will take 70 percent of the earnings, if the presence of light crude reserves is confirmed.

But even if the results from Raya-1 are positive, between two and three dozen additional wells will have to be drilled in the 6,900-sq-km block, and some six billion dollars will have to be invested if there is mainly oil, and 20 billion if there is mainly gas.

It could take up to six years before the start of commercial production of oil or gas, according to Total.

The oil companies granted contracts in the two bidding rounds held so far have invested a combined total of up to one billion dollars in exploration and prospecting.

The most important thing, in Ancap’s view, is that “after a period of nearly 30 years with no exploration” for fossil fuels, the oil companies are interested in investing in Uruguay, at their own expense and risk.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Experts predict that in the long term, shale gas production will not be sustainable in the United States. The photo shows a shale gas well in Montrose, in the U.S. state of Pennsylvania. Credit: Emilio Godoy/IPS

By Emilio Godoy
WASHINGTON, Oct 7 2015 (IPS)

The emergence of fracking has modified the global market for fossil fuels. But the plunge in oil prices has diluted the effect, in a struggle that experts in the United States believe conventional producers could win in the next decade.

The U.S. oil industry had peaked – when the discovery of new deposits and output from existing wells begins to fall – which made the country more dependent on imports. But the equation was turned around thanks to the new technique.“The bubble won’t explode, but it will progressively deflate. At current prices, we would see a relatively quick shrinking of capital availability for the shale sector, because those companies are producing at a loss.” -- David Livingston

The innovative technology of hydraulic fracturing or fracking and the discovery of large deposits of shale gas and oil, along with massive investment flows, led to predictions that the United States would become autonomous in fossil fuels this decade. But these forecasts have been undermined by the drop in prices.

“The world is entering a new era of uncertainty in the geoeconomics of oil,” said David Livingston, an associate in the Energy and Climate Programme of the U.S. Carnegie Endowment for International Peace. “It is far from certain that the notoriously volatile oil market will become less cyclical.”

The analyst told IPS that as a result of domestic U.S. demand, “Companies will lose spare capacity, between what they can produce and what they produce, which is important, because the market is determined by that capacity.”

After 2003 international oil prices climbed, to 140 dollars a barrel in 2008, when the global financial crisis brought them down.

This decade they rallied, to around 100 dollars a barrel. But they have fallen again since late 2014, to about 40 dollars a barrel.

That means U.S. producers, in particular shale gas producers, are facing extremely low prices, overproduction, a lack of infrastructure for storing the surplus and a credit crunch for the industry’s projects, even though prices have gone down.

In addition, China’s economic slowdown and Europe’s stagnation are hindering the recovery in demand for energy.

The development of shale oil and gas has also put the U.S. industry on a collision course with the members of the Organisation of the Petroleum Exporting Countries (OPEC), especially since one of its widely touted objectives is to reduce imports from that bloc.

A warning about the danger of methane emissions in one of the shale gas Wells in Dimock, Pennsylvania. Credit: Emilio Godoy/IPS

Since November 2014, OPEC has kept its production quotas stable, as part of a strategy imposed by the bloc’s biggest producer, Saudi Arabia, aimed at keeping prices low and discouraging the development of shale deposits, which are much more costly to tap into than the organisation’s conventional reserves.

In late 2014, the Norwegian consultancy Rystad Energy put the cost of producing a barrel of shale oil in the United States at 65 dollars a barrel, which means the industry is operating at a loss. The average cost of extracting a barrel of conventional oil in that country is 13 dollars, compared to five dollars in the Gulf.

For Miriam Grunstein, a professor at the Centre for Economic Research and Teaching (CIDE) in Mexico, the outlook is very uncertain.

“There are doubts for several reasons. First of all, due to the low prices,” she told IPS from Mexico, which has begun to explore its significant reserves of shale gas.

“Although it has forced many companies to improve their operating capacity, reduce investments and achieve greater efficiency, they are in an environment where they have to look for markets, in Europe or Asia. But that requires liquefaction infrastructure, which implies major investments,” she added, referring to the current situation faced by shale gas producers.

In June, the United States produced 9.3 million barrels per day of crude oil, about half of which was shale oil, according to data from the Energy Information Administration (EIA).

The prospects for the industry are beginning to look less promising. In its Drilling Productivity Report published in late August, the EIA projected a fall in shale gas production in September, for the first time this year, to 44.9 billion cubic feet per day.

The agency stressed that output from new wells is not enough to offset the decline in existing wells.

For Livingston, “OPEC as an institution – and Saudi Arabia, its leader – is likely to emerge from this paradigm shift stronger than before in many ways. With its new strategy – one born out of necessity – the kingdom is emphasising market share, rather than price, while also moving to delegate the burden of balancing the world oil market to the U.S. shale industry.”

The United States would become the new “swing producer”, although without achieving the same power as the Gulf producers in influencing the market.

In the long run, total U.S. oil production will tend to drop, according to EIA projections. In 2020, crude oil production is expected to stand at 10.6 million barrels per day; in 2030, 10.04; and 10 years later, 9.43.

In the case of shale gas, projections are favourable, but at higher prices. In 2020, the country should be producing 15.44 trillion cubic feet per day; 10 years later 17.85; and in 2040, 19.58.

In total, the EIA forecasts that the country will produce 28.82 trillion cubic feet per day of natural gas in 2020; 33.01 in 2030; and 35.45 in 2040.

But the average price will go up. This year, the Henry Hub reference price for U.S. natural gas has stood at 2.93 dollars per million British thermal units (Btu), the heat required to raise the temperature of one pound of water.

The price should go up to 4.88 dollars per Btu in 2020; to 5.69 in 2030; and to 7.80 in 2040.

“The bubble won’t explode, but it will progressively deflate. At current prices, we would see a relatively quick shrinking of capital availability for the shale sector, because those companies are producing at a loss,” said Livingston.

Grunstein said: “Saudi Arabia’s aim is to keep the United States from becoming a major exporter. The strong markets exert the most pressure. If demand does not recover, the demand-price ratio is awkward. Consumption is needed, and I don’t see where it would come from.”

Livingston said one option is to review the 1970s-era ban on exporting U.S. crude oil, because “If production rises, refineries can’t process it and therefore new markets are needed.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

An oil tanker in Rio de Janeiro’s Guanabara Bay. Just 250 km from the coast lie the country’s presalt oil reserves, the wealth of the so-called Blue Amazon. Credit: Fabíola Ortiz/IPS

By Fabíola Ortiz
RIO DE JANEIRO, May 2 2015 (IPS)

The Atlantic ocean is Brazil’s last frontier to the east. But the full extent of its biodiversity is still unknown, and scientific research and conservation measures are lagging compared to the pace of exploitation of resources such as oil.

The Blue Amazon, as Brazil’s authorities have begun to call this marine area rich in both biodiversity and energy resources, is similar in extension to the country’s rainforest – nearly half the size of the national territory.

And 95 percent of the exports of Latin America’s giant leave from that coast, according to official figures.

Brazil’s continental shelf holds 90 and 77 percent of the country’s proven oil and gas reserves, respectively. But the big challenge is to protect the wealth of the Blue Amazon along 8,500 km of shoreline.

“We haven’t fully grasped just how immense that territory is,” Eurico de Lima Figueiredo, the director of the Strategic Studies Institute at the Fluminense Federal University, told Tierramérica. “To give you an idea, the Blue Amazon is comparable in size to India.”

“But we aren’t prepared to take care of it; it isn’t yet considered a political and economic priority for the country,” the political scientist said.

Figueiredo, who presided over the Brazilian Association of Defence Studies (ABED) from 2008 to 2010, said the Blue Amazon is a term referring to the territories covered by new treaties on international maritime law.

Brazil is one of the 10 countries in the world with the largest continental shelves, in an ocean like the Atlantic which conceals untold natural wealth that offers enormous economic, scientific and technological potential.

According to the United Nations Convention on the Law of the Sea, a country’s Exclusive Economic Zone (EEZ) comprises an area which extends to 200 nautical miles (370 kilometres) off the coast.

Official map of part of the Blue Amazon, off the east coast of Brazil, where conservation and research are lagging behind economic development, mainly by the oil industry. Credit: Government of Brazil

Brazil’s EEZ was originally 3.5 million sq km. But it later claimed another 963,000 sq km, which according to different national institutions – including scientific bodies – represents the natural extension of the continental shelf.

The U.N. Convention’s Commission on the Limits of the Continental Shelf (CLCS), made up of 148 countries, has so far sided with Brazil, adding 771,000 sq km to its EEZ. The decision on the rest is still pending.

Brazil’s demand, at least with respect to the expansion of the continental shelf granted so far, meets the requisites of the U.N. Convention and grants the country the power to exploit the resources in the expanded area and gives it the responsibility of managing it.

The recognition of Brazil’s claim, although only partial, has annoyed some neighbour countries, because of the huge economic benefits offered by the additional continental shelf it was granted.

Figueiredo said the challenge now is to monitor and protect the continental shelf. “We don’t have full sovereignty with regard to the maritime territory. Brazilian society is unaware of the important need to protect the Blue Amazon. There are enormous shortcomings, with respect to our needs.”

In 2005 a plan was approved to upgrade the navy with an estimated investment of 30 billion dollars until 2025. Defending a country is a complex task, said Figueiredo, because it involves a number of dimensions: military, economic, technical and scientific.

But scientific research in Brazil’s marine territory is currently far outpaced, he said, by the exploitation of resources such as the oil located 250 km off the coast and 7,000 metres below the ocean surface, beneath a thick layer of salt, sand and rocks.

Development of the so-called presalt reserves, discovered a decade ago, would make Brazil one of the 10 countries with the largest oil reserves in the world. And they already provide 27 percent of the more than three million barrels a day of oil and gas equivalent produced by this country.

“That region belongs to Brazil, the country has assumed commitments with the U.N. to monitor and study the living and non-living resources like oil, gas and minerals. If we don’t preserve it, we’ll lose this great treasure,” oceanographer David Zee, at the Rio de Janeiro State University, told Tierramérica.

In his opinion, Brazil is far from living up to the commitments assumed with the international community. “We have duties – we have to meet the U.N.’s scientific research requirements. We have to take greater care of our marine resources,” he said.

Apart from the oil and gas wealth, a large part of the EEZ borders the Mata Atlántica ecosystem, which extends along 17 of Brazil’s 26 states, 14 of which are along the coast.

The environmental organisation SOS Mata Atlántica explains that coastal and marine areas represent the ecological transition between land and marine ecosystems like mangroves, dunes, cliffs, bays, estuaries, coral reefs and beaches. The biological wealth of these ecosystems turns marine areas into enormous natural nurseries.

And the convergence of cold water from the South with warm water from the Northeast contributes to biological diversity and provides shelter for numerous species of flora and fauna.

But only 1.5 percent of Brazil’s maritime territory is under any form of legal protection, Mata Atlantica reports.

Thus, ensuring national sovereignty over jurisdictional waters is still an enormous political and military challenge. In March, some 15,000 naval troops and 250 Navy boats and aircraft took part in Operation Blue Amazon, the biggest of its kind carried out so far in Brazilian waters.

“This was an opportunity to train and guarantee the security of navigation, crack down on drug trafficking, and patrol the sea. The mission involved the entire territorial extension of Brazil,” Lieutenant Commander Thales da Silva Barroso Alves, commander of one of the three offshore patrol vessels that Brazil has to monitor the Blue Amazon, told IPS.

These vessels control the extensive coast in “areas of great economic interest, exploitation and accidents. Illegal fishing is also a recurrent issue,” he said.

The officer argued that the extraction of marine resources should be carried out in a “conscious, sustainable fashion,” with the aim of preserving biodiversity.

Figueiredo, the political scientist, concurs. “Our ability to defend the Blue Amazon depends on our capacity to develop technical-scientific means of protecting biodiversity in such an extensive area,” he said.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Abu Firuz, the commander of Liwa (Brigade) Salahadin, a Kurdish military unit fighting alongside rebel fighters, watches the besieged district of Karmel al-Jabl in eastern Aleppo, on Dec. 6, 2012. Several of the GCC states, specifically Saudi Arabia, UAE and Qatar, are significant suppliers of weapons, mostly unofficial and clandestine, to some of the warring factions in Syria, Libya, Iraq and Yemen. Credit: สังฆมณฑล เชียงใหม่/cc by 2.0

By Thalif Deen
UNITED NATIONS, Mar 16 2015 (IPS)

The ongoing conflicts in Syria, Iraq, Libya and Yemen have helped spiral arms sales upwards to the Middle East, according to a study released Monday by the Stockholm International Peace Research Institute (SIPRI).

The primary beneficiaries were the United States and Russia, whose overall arms exports show a marked increase through 2014, with China lagging behind, according to the latest figures.“As the oil-supplier countries have recovered economically, they have resumed their arms purchases. Financial pressures are not an effective long-term control measure." -- Natalie Goldring

Arms sales to Gulf Cooperation Council (GCC) states – Bahrain, Qatar, Saudi Arabia, Kuwait, Oman and the United Arab Emirates (UAE) – increased by 71 per cent from 2005–2009 to 2010–14, accounting for 54 per cent of imports to the Middle East in the latter period.

Saudi Arabia rose to become the second largest importer of major weapons worldwide in 2010–14, increasing the volume of its arms imports four times compared to 2005–2009.

Several of the GCC states, specifically Saudi Arabia, UAE and Qatar, are significant suppliers of weapons, mostly unofficial and clandestine, to some of the warring factions in Syria, Libya, Iraq and Yemen.

Pieter Wezeman, senior researcher at SIPRI’s Arms and Military Expenditure Programme, said GCC states have rapidly expanded and modernised their militaries – primarily with arms from the United States and Europe.

“The GCC states, along with Egypt, Iraq, Israel and Turkey in the wider Middle East, are scheduled to receive further large orders of major arms in the coming years,” he added.

Dr. Natalie J. Goldring, a senior fellow with the Security Studies Programme in the Edmund A. Walsh School of Foreign Service at Georgetown University, told IPS the ongoing conflicts in the Middle East and the former Soviet Union provide ready markets for arms transfers.

But those transfers, she pointed out, aren’t always reflected in the SIPRI data. SIPRI’s database focuses on major conventional weapons.

“This means that the light weapons and small arms often featured in recent conflicts are not captured in the SIPRI totals,” said Golding, who also represents the Acronym Institute at the United Nations on conventional weapons and arms trade issues.

She said the drop in crude oil prices since September 2014 reduces the revenues available to oil-rich nations.

According to the International Monetary Fund (IMF), the oil price cuts have had strong effects across the oil-producing nations because of their dependence on oil exports.

For the short term, those effects can be moderated by using the financial buffers that are available to countries such as Kuwait, Qatar, Saudi Arabia, and the UAE.

In the past, however, financial pressures have only slowed weapons acquisitions for as long as they have persisted, Goldring said.

“As the oil-supplier countries have recovered economically, they have resumed their arms purchases. Financial pressures are not an effective long-term control measure,” she noted.

According to the most recent SIPRI data, roughly three-quarters of all countries in the world imported major conventional weapons between 2010-2014. Just 10 countries accounted for roughly half of all imports of major conventional weapons during this period.

Of the top 10 largest importers of major weapons during the five-year period 2010–14, five are in Asia: India (15 per cent of global arms imports), China (5 per cent), Pakistan (4 per cent), South Korea (3 per cent) and Singapore (3 per cent).

These five countries accounted for 30 per cent of the total volume of arms imports worldwide.

India accounted for 34 per cent of the volume of arms imports to Asia, more than three times as much as China. China’s arms imports actually decreased by 42 per cent between 2005–2009 and 2010–14.

The new SIPRI data make it clear that the United States and Russia continue to dominate the global arms trade in major conventional weapons.

The United States accounted for 31 percent of the market, up from 29 percent from 2005-2009. Russia’s share increased even more significantly, going from 22 percent of the world market in 2005-2009 to a 27-percent share of the international market from 2010-2014.

“The United States has long seen arms exports as a major foreign policy and security tool, but in recent years exports are increasingly needed to help the U.S. arms industry maintain production levels at a time of decreasing U.S. military expenditure,” said Dr. Aude Fleurant, director of the SIPRI’s Arms and Military Expenditure Programme.

“Enabled by continued economic growth and driven by high threat perceptions, Asian countries continue to expand their military capabilities with an emphasis on maritime assets,” said Wezeman.

He said Asian countries generally still depend on imports of major weapons, which have strongly increased and will remain high in the near future.

Goldring told IPS that although SIPRI notes the significant percentage increase in Chinese exports between the two periods, China is still a minor supplier in comparison to the United States and Russia.

Even with a large increase in its exports, China still only accounts for five percent of the global trade.

The United States and Russia alone account for nearly 60 percent of the world market. U.S. and Russian dominance of the world market is simply not threatened by China, she said.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

Representatives from a coalition of over 30 environmental and progressive groups delivered more than 800,000 messages to Democratic Senator Harry Reid and Republican Senator Mitch McConnell in 2012 urging them to block attempts to resurrect the Keystone XL tar sands pipeline. Credit: 350.org/cc by 2.0

By Kitty Stapp
NEW YORK, Feb 12 2015 (IPS)

With battle lines sharpening over the stalled Keystone XL pipeline, a new analysis details the intense industry lobbying of both houses of the U.S. Congress since 2013 – to the tune of 58.8 million dollars by five refinery companies alone.

According to MapLight, a nonprofit, nonpartisan research organisation that reveals money’s influence on politics, the oil and gas industry gave, on average, 13 times more money to members of the House of Representatives who voted “yes” (43,375 dollars) on the bill called H.R. 3 than those who voted against it (3,610 dollars)."Another climate denier-controlled House vote in favour of oil isn't a surprise, and the Democrats who voted with them of course are oil-funded politicians too." -- Kyle Ash of Greenpeace

The bill would allow TransCanada to build the highly controversial Keystone XL pipeline without a presidential permit or additional environmental review. It passed the House on Wednesday with a vote of 270-152.

The U.S. Senate approved a virtually identical measure last month.

“How can we truly trust legislators to vote in the public interest when they are dependent on industry campaign funding to get elected?” Pamela Behrsin of MapLight told IPS. “Our broken money and politics system forces lawmakers into a conflict of interest between lawmakers’ voters and their donors.”

She noted that Rep. Kevin Cramer, a Republican from North Dakota and the sponsor of the legislation, received 222,400 dollars from the oil and gas industry, the ninth most among members of the House voting on H.R. 3.

Figures for the Senate were comparable, with the oil and gas industry giving, on average, 10 times more money to senators who supported the measure (236,544 dollars). The Senate sponsor, John Hoeven – also a Republican from North Dakota – received 275,998 dollars.

“Big Oil thinks it can buy votes in DC, and unfortunately the Keystone vote shows that is still possible in the halls of Congress,” David Turnbull of Oil Change International, a nonprofit working to promote a shift away from fossil fuels, told IPS.

“But what’s more important is that Big Oil can’t buy the American people, who are standing up to the industry’s bullying in Washington and demanding the president reject the pipeline and take bold action to move us off fossil fuels and towards a safer climate future.”

President Barack Obama has 10 days to decide on a veto. Since the 1,179-mile pipeline crosses national borders, Obama needs to issue a permit declaring the pipeline serves the “national interest” in order for it to be approved. The new legislation would circumvent such approval.

The pipeline has united every prominent U.S. environmental group in opposition, and even prompted the venerable Sierra Club to suspend its 120-year ban on civil disobedience. The group’s executive director, Michael Brune, was arrested in front of the White House during a protest against Keystone in February 2013, and there have been massive rallies against it since then.

Studies have shown that burning the heavy oil the pipeline would carry would emit more than 181 million metric tonnes of carbon dioxide each year – equal to the emissions of nearly 38 million cars or 51 coal-fired power plants.

The International Energy Agency (IEA) has warned that two-thirds of proven fossil fuel reserves need to be kept in the ground in order to have a 50 percent chance of staying below the two-degree threshold of warming that could avoid the worst consequences of climate change.

Kyle Ash of Greenpeace told IPS that since the House had already passed the companion of the Senate bill, normally each chamber would reconcile their respective bills in conference, especially since both chambers are now controlled by the Republicans.

Instead, the full House went ahead and voted on the Senate version without making any changes, “apparently because GOP leaders fear that House Republican conferees will be too crazy”.

“As the Senate votes on climate amendments like Hoeven and Schatz also demonstrated, that the House voted on S.1 (the Senate version of the bill) ironically may be a sign that at least the crassest of congressional fossil fuel love is no longer in vogue,” he said.

“Another climate denier-controlled House vote in favour of oil isn’t a surprise, and the Democrats who voted with them of course are oil-funded politicians too.”

Indeed, MapLight found that the oil and gas industry gave, on average, 3.2 times more money to Democratic Senators voting for S.1 (73,279 dollars) compared to Democratic and Independent Senators voting against it (22,882 dollars).

The industry gave, on average, five times more money to Democratic Representatives voting “yes” (18,199 dollars) on H.R. 3 compared to Democratic and Independent Representatives voting “no” (3,610 dollars).

“We’ve done quite a bit of work on the massive amount of money members of Congress receive from the industry,” Turnbull said. “Indeed, it’s unfortunately not a surprise.”

The pipeline would carry petroleum from Canada’s oil sands to the U.S. Gulf Coast, and MapLight notes that some of Keystone XL’s strongest supporters are the Gulf Coast refinery companies that have expanded their facilities and would benefit from Canadian oil that will flow through the pipeline.

Valero, ExxonMobil, Marathon Petroleum, Phillips 66, and Motiva Enterprises (a company owned by Shell and the Saudi Arabian state oil company Saudi Aramco) constitute the five companies with the most refinery capacity along the Gulf Coast, the group says.

Together, the five companies control 45 percent of the refining capacity in the U.S., and all have been reported as possible customers of the pipeline.

“The vote in Congress on Keystone XL is a desperate distraction by an oil-soaked Congress. The president has said numerous times that he will veto the bill, and he’s right to do so,” Turnbull said.

“As the EPA [Environmental Protection Agency] recently laid out, the Keystone XL tar sands pipeline clearly fails the president’s own climate test, and should be rejected. The president has all the information he needs to reject the pipeline and we hope he does so as soon as possible, so we can all move on to building the clean energy economy rather than catering to the whims of Big Oil.”

A Washington Post/ABC News poll last month found 34 percent of respondents wanted the pipeline built now, while 61 percent said the environmental impact reviews – including by the State Department and the heads of eight other government agencies – should continue.

“The House is expediting this bill getting to the president so they can gloat about how Congress loves oil and he doesn’t – despite the Obama administration going out of its way to expand oil drilling on public lands,” Ash said.

“However, the KXL pipeline may have died when the president agreed with New York Times reporter Tom Friedman last June that growing fossil fuel supply is bad for the climate (‘we can’t burn it all’). I believe he will do as he said and veto this bill.”

Edited by Roger Hamilton-Martin

If we keep on burning coal, oil and gas at ‘business as usual’ levels, our grandchildren will inhabit a planet some 5 degrees Celsius hotter by the end of the century. Credit: Bigstock

By Rob McCreath
BRISBANE, Feb 10 2015 (IPS)

Nothing is more important to farmers like me than the weather. It affects the growth and quality of our crops and livestock, and has a major impact on global food supply.

The world’s weather is being messed up by global warming, mainly caused by the burning of fossil fuels, which releases heat-trapping gases into the atmosphere.If your bank lends money to coal, oil and gas projects, then take your business to one that doesn’t. It will put a smile on your face.

Every national science organisation in the developed world agrees that global warming is real and caused by human activities. That’s good enough for me.

If we keep on burning coal, oil and gas at ‘business as usual’ levels, our grandchildren will inhabit a planet some 5 degrees Celsius hotter by the end of the century – rendering large parts of it uninhabitable, including many currently densely populated areas, which will be under water due to melting glaciers and ice caps.

The impacts on farming in Australia (and everywhere else) of such a rise in temperature would be very severe indeed.

To avoid such a bleak future, we simply must stop putting greenhouse gases into the atmosphere. If our politicians had any common sense, they would change quickly to renewable energy, but sadly they are captives of the fossil fuel industry that funds their re-election campaigns.

Just look at the Nationals, who in spite of claiming to represent farmers, this month declared donations of 30,000 dollars from oil & gas company Santos, 25,000 from coal miner Peabody, and 50,000 dollars from prominent climate change denier and coal & oil company director Ian Plimer.

So, for the sake of future generations, we have to make this change happen ourselves, and the best way to do this is to disrupt the business model of companies trying to make money from fossil fuels by pulling the financial rug out from underneath them.

It’s called divestment, which is simply the opposite of investment. Here’s how it works. If you’ve got shares in fossil fuel companies, then sell them and invest in something that won’t wreck the planet.

If your super fund invests in fossil fuels, then transfer your money to a fund that doesn’t. If your bank lends money to coal, oil and gas projects, then take your business to one that doesn’t. It will put a smile on your face.

The global movement to divest from fossil fuels is gaining momentum, and the more people that take part, the better it works. Share prices (just like wheat and cattle prices) are set by supply and demand, so as more people sell, the price falls.

When a company’s share price falls far enough, it finds it more difficult to borrow money, with which to fund its next coal mine. Take oil and gas company Santos, for example. Due mainly to the recent plunge in oil prices, in the past six months its share price has dropped by almost 50 percent.

As a result, the company has announced plans to cut back on expenditure and reduce its operations.

On the flip side, the more money that flows into companies involved in renewable energy, energy efficiency and green technology, the faster they will grow and the sooner we can put a lid on runaway climate change.

A brave new world awaits. Let’s divest together and change the future!

Global Divestment Day will be taking place on Feb. 13-14. Hundreds of events spanning six continents will be taking place. Join an event near you. For more information visit: gofossilfree.org

Edited by Kitty Stapp

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS-Inter Press Service.

Excerpt:

The continuing decline in oil prices has already reduced purchasing power and impacted negatively on some of the world's currencies. Credit/Justin R/cc by 2.0

By Thalif Deen
UNITED NATIONS, Jan 2 2015 (IPS)

In a satirical piece titled ‘An Unserious Look at the Year Ahead’ in the Wall Street Journal last week, Hugo Rifkind predicts the price of a barrel of oil will fall so low that people across the world would start buying oil for the barrel – and throw the oil out.

The journalistic spoof about the oil market may be an improbable scenario, but in reality the sharp decline in prices has generated both good and bad news – mostly bad.If Middle Eastern sales flatten out or decrease, arms companies may fight harder for contracts in other parts of the world where military expenditure is still on the increase and less dependent on oil prices, such as in North, South East and South Asia.

In the United States, the fall in oil prices is being viewed as an unexpected – but welcome – stimulus to the country’s recession-struck economy.

As one U.S. newspaper headline read: ‘For (U.S. President Barack) Obama, Low Oil Prices Bring Hope’

The London Economist points out that a 40-dollar price cut would shift about 1.3 trillions dollars from oil producers to consumers.

But in the developing world, the current plunge is threatening to undermine oil-dependent economies in Africa, Asia, Latin American and the Middle East.

The continuing decline – from around 107 dollars per barrel last June to less than 70 dollars last month – has already reduced purchasing power and impacted negatively on some of the world’s currencies, including the ruble (Russia), real (Brazil), rupiah (Indonesia), bolivar (Venezuela), naira (Nigeria), peso (Chile), lira (Turkey) and ringgit (Malaysia).

But sooner or later the fall in oil prices is also likely to have a negative impact on both military spending and the thriving multi-billion-dollar arms market in the Middle East.

Perhaps for peace activists, this may be a positive sign in the global campaign for disarmament – mostly in conventional arms.

Arms buying by the six Gulf monarchies alone – Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Oman and Bahrain – have been traditionally fueled by rising oil incomes: more incomes, more state-of-the art weapons.

The exceptions in the Middle East are Israel and Egypt, which depend heavily on U.S. military grants that are gratis and non-repayable.

Pieter Wezeman, a senior researcher at the Arms Transfers and Arms Production Programme, at the Stockholm International Peace Research Institute (SIPRI), told IPS lower oil revenues will undoubtedly put pressure on the military expenditure of Middle Eastern states, as in the past.

Saudi Arabia’s arms imports peaked in the 1990s, he said, but then fell rapidly, partly because of oil price-related lower government revenues.

“However, for 2013, we estimated Saudi Arabia will be the world’s fourth largest military spender [about 67 billion dollars] and the UAE the fifteenth largest [19 billion dollars],” said Wezeman, who closely tracks the Middle Eastern arms market.

The world’s three largest military spenders are the United States (640 billion dollars), China (188 billion) and Russia (88 billion), according to 2013 figures released by SIPRI.

Striking a cautionary note, Wezeman said it is, however, too early to say anything about this with certainty, as the arms procuring states in question tend to be highly secretive and undemocratic about military matters and arms procurement programmes and plans.

“They may very well decide to cut spending in other sectors instead, if lower oil prices force them to cut overall government spending,” he declared.

Unveiling its 2015 budget last week, Saudi Arabia said it was “rationalising” its expenditure, but did not specify any details.

According to estimates by the International Monetary Fund (IMF), Saudi Arabia’s total foreign exchange reserves amount to about 750 billion dollars.

Nicole Auger, a military analyst covering the Middle East and Africa at Forecast International, a leader in defence market intelligence and industry forecasting, told IPS a projected five-year defence spending (2015-2019) for the Middle East region shows the Compound Annual Growth Rate (CAGR) at approximately 3.48 percent.

This number is lower than the past five years’ CAGR (2010-2014), which was 8.45 percent.

“I do credit some of this decline to the anticipated fall in oil prices,” she said.

For Saudi Arabia, Qatar, Kuwait, and the UAE, this trend will only serve as a nuisance they can comfortably withstand for a few years – “so I do not expect any significant changes in their defence spending tendencies.”

These markets are huge, and they all spend lavishly on building up their defence capabilities, she said.

Saudi Arabia alone has the world’s fourth-largest military budget and will continue to dominate the Middle East arms market, with a defence budget nearly four times the size of the next closest Middle East military investor, she noted.

“I don’t see a major change in Iran and Iraq’s defence spending trends, even though they stand to be the most hurt by this.”

Auger said due to other regional and internal fractures, these two neighbours will have to maintain their defence spending levels as a cautionary measure.

Even though Iran is already suffering from international sanctions with its unresolved nuclear issue, it still feels it is being threatened, and therefore lower defence spending will only make it more vulnerable from its own perspective, she added.

“With Iraq, you may see them lean more heavily on its allies,” Auger said.

SIPRI’s Wezeman told IPS the importance of the Middle Eastern market for arms producing companies is the fact that sales of weapons to Saudi Arabia alone accounted for 20 percent of sales in 2013 for the third largest arms producer in the world, BAE systems.

And the second largest arms producer, Boeing, sees declining sales of combat aircraft to its main client the United States, and is increasingly dependent on exports, he added.

At the same time, Wezeman said, there are signs the military industry in the region is growing too, though it is still small compared to arms industries in the traditional arms producing countries.

If Middle Eastern sales will flatten out or decrease, he predicted, arms companies will have to fight harder for contracts in other parts of the world where military expenditure is still on the increase and less dependent on oil prices, such as in North, South East and South Asia.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

Soldiers patrol an oil field in Paloug, in South Sudan's Upper Nile state. Credit: Jared Ferrie/IPS

By Thalif Deen
UNITED NATIONS, Dec 23 2014 (IPS)

The sharp decline in world petroleum prices – hailed as a bonanza to millions of motorists in the United States – is threatening to undermine the fragile economies of several African countries dependent on oil for their sustained growth.

The most vulnerable in the world’s poorest continent include Nigeria, Angola, Equatorial Guinea, Gabon and Sudan – as well as developing nations such as Algeria, Libya and Egypt in North Africa."In the long run, governments in these oil-exporting countries should use oil revenues to support productive sectors, employment generation, and also build financial reserves when oil prices are high." -- Dr. Shenggen Fan of IFPRI

Dr. Kwame Akonor, associate professor of political science at Seton Hall University in New Jersey, who has written extensively on the politics and economics of the continent, told IPS recent trends and developments such as the outbreak of Ebola and the fall of global oil prices “shows how tepid and volatile African economies are.”

In 2012, for instance, Sierra Leone and Liberia (two of the hardest hit countries with Ebola) were cited by the World Bank as the fastest growing sub-Saharan African countries, he pointed out.

In a similar vein, countries such as Algeria, Equatorial Guinea and Gabon are considered top performing economies due to the large concentration of their oil and gas reserves.

“But the ramifications of any economic crisis will undoubtedly negatively impact the fortunes of these countries,” said Akonor, who is also director of the University’s Centre for African Studies and the African Development Institute, a New York-based think tank.

The world price for crude oil has declined from 107 dollars per barrel last June to less than 70 dollars last week.

There are multiple reasons for the decline, including an increase in oil production, specifically in the United States; a fall in the global demand for oil due to a slow down of the world economy; and a positive fallout from conservation efforts.

As the New York Times pointed out: “We simply don’t burn as much energy as we did a few years ago to achieve the same amount of mileage, heat or manufacturing production.”

There are also geopolitical reasons for the continued decline in oil prices because Saudi Arabia, one of the world’s largest producers, has refused to take any action to stop the fall.

Despite the crisis, the Saudi oil minister Ali Al-Naimi was quoted as saying, “Why should I cut production?”

This has led to the conspiracy theory it is working in collusion with the United States to undermine the oil-dependent economies of three major adversaries: Russia, Iran and Venezuela.

Besides Saudi Arabia, the fall in prices is also affecting Iraq, Kuwait, United Arab Emirates (UAE), Qatar and Oman.

But they are expected to overcome the crisis because of a collective estimated foreign exchange reserve amounting to over 1.5 trillion dollars.

The drop in oil prices, however, will have the most damaging effects on Africa which has been battling poverty, food shortages, HIV/AIDS, and more recently, the outbreak of Ebola.

The heaviest toll will be on Nigeria, the largest economy in Africa which depends on crude oil for about 80 percent of its revenues, according to the Wall Street Journal. The country’s currency, the naira, has declined about 15 percent since the beginning of the fall in oil prices.

Dr. Shenggen Fan, director general of the International Food Policy Research Institute (IFPRI), sees both a positive and negative side to the current oil crisis. He told IPS the recent decline in oil prices will help reduce food prices.

Since oil prices are highly co-related to food prices, high oil prices make agricultural production more expensive and thus cause food prices to increase, he added.

“Now that oil prices are on a downward trend, this is, by and large, good for global food security and nutrition,” he said.

Dr. Fan said poor producers and consumers in developing countries should be able to benefit from this – as long as their purchasing power increases.

However, he cautioned, oil exporting countries may lose government revenues from low oil prices.

Indeed, crude oil producing nations in Africa have felt the pinch of declining oil prices given the dependence of their economies on crude oil, he noted. In the short run, he said, poor people may suffer, if their governments reduce food subsidies.

“In the long run, governments in these oil-exporting countries should use oil revenues to support productive sectors, employment generation, and also build financial reserves when oil prices are high.”

When oil prices are low, these governments should use reserves to ensure that poor people are protected through social safety net programmes, he added.

Dr. Akonor told IPS as impressive as the current and long-term economic projections for Africa might seem, it does not change the precarious and fragile nature of the continent’s economic foundations.

“The high debt overhang and the heavy reliance on raw materials (such as oil) and minerals for exports, makes African economies susceptible to shock and systemic risks,” he noted.

Moreover, he said, the underlying human capital formation, especially amongst the burgeoning unemployed youth population, lacks the requisite skills that could lead to real sustainable growth and transformation.

“What is needed then is the effective implementation of development strategies and policies that would lead to long-term structural transformation and durable human development,” he argued.

One way to achieve this is through closer regional cooperation, given the small size of domestic markets and poor continental infrastructure. Transformative and human needs development must, amongst other things, address Africa’s poor infrastructure, said Dr. Akonor.

According to the African Development Bank, the road access rate in Africa is only 34 percent, compared with 50 percent in other developing regions. Only 30 percent of Africans have access to electricity, compared to 70-90 percent in other developing countries.

“What makes Africa’s development challenges vexing is that there has not been a shortage of autonomous development-related ideas between African leaders and interested publics,” Dr. Akonor said.

One can argue that Africa has debated and produced too many blueprints and programmes for over half a century without any tangible results or follow through, he said.

“Thus the major obstacle to durable economic performance in Africa has not been the ambitious nature of the development targets, but rather the absence of political will by African governments and the lack of consistency, coordination, and coherence at the sub regional, regional and even global levels to implement structural change,” Dr. Akonor declared.

“Transformational development will require that Africa add value to, and diversify, its export commodities. Building a solid industrial base and infrastructural capacity are also necessary prerequisites toward autonomous structural change.”

Dr. Fan told IPS that on the broader issue of the factors that influence food prices, it is important to realise the right price of food is not easy to determine.

What is important is that the prices of food (including the natural resources that are used for food production) fully reflect their economic, social, and environmental costs and benefits in order to send the right signals to all actors along the food supply chain.

“If this causes food prices to increase, social safety nets should be provided to protect poor people in the short term and also to help them move on to more productive activities in the long term,” Dr. Fan said.

In so doing, their food security and nutrition is not compromised, he declared.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

Oil pumps in southern Russia. Photo: Gennadiy Kolodkin/World Bank

By Miriam Pemberton
WASHINGTON, Dec 20 2014 (IPS)

After months of whispered warnings, Russia’s economic troubles made global headlines when its currency collapsed halfway through December. Amid the tumbling price of oil, the ruble has fallen to record lows, bringing the country to its most serious economic crisis since the late 1990s.

Topping most lists of reasons for the collapse is Russia’s failure to diversify its economy. At least some of the flaws in its strategy of putting all those eggs in that one oil-and-gas basket are now in full view.Moscow’s failure to move beyond economic structures dominated by first military production, and now by fossil fuels, can serve as a cautionary tale and call to action.

Once upon a time, Russia did actually try some diversification — back before the oil and gas “solution” came to seem like such a good idea. It was during those tumultuous years when history was pushing the Soviet Union into its grave. Central planners began scrambling to convert portions of the vast state enterprise of military production — the enterprise that had so bankrupted the empire — to produce the consumer goods that Soviet citizens had long gone without.

One day the managers of a Soviet tank plant, for example, received a directive to convert their production lines to produce shoes. The timetable was: do it today. They didn’t succeed.

Economic development experts agree that the time to diversify is not after an economic shock, but before it. Scrambling is no way to manage a transition to new economic activity. Since the bloodless end to the Cold War was foreseen by almost nobody, significant planning for an economic transition in advance wasn’t really in the cards.

But now, in the United States at least, it is. Currently the country is in the first stage of a modest defence downsizing. We’re about a third of the way through the 10-year framework of defence cuts mandated by the Budget Control Act of 2011.

Assuming Congress doesn’t scale back this plan or even dismantle it altogether, the resulting downsizing will still be the shallowest in U.S. history. It’s a downsizing of the post-9/11 surge, during which Pentagon spending nearly doubled. So the cuts will still leave a U.S. military budget higher, adjusting for inflation, than it was during nearly every year of the Cold War — back when we had an actual adversary, the aforementioned Soviet Union, that was trying to match us dollar for military dollar.

Now, no such adversary exists. Thinking of China? Not even close: The United States spends about six times as much on its military as Beijing.

Even so, the U.S. defence industry’s modest contraction is being felt in communities across the country. By the end of the 10-year cuts, many more communities will be affected. This is the time for those communities that are dependent on Pentagon contracts to work on strategies to reduce this vulnerability. To get ahead of the curve.

There is actually Pentagon money available for this purpose. Its Office of Economic Adjustment exists to give planning grants and technical assistance to communities recognising the need to diversify.

As we in the United States struggle to understand what’s going on in Russia and how to respond to it, at least one thing is clear: Moscow’s failure to move beyond economic structures dominated by first military production, and now by fossil fuels, can serve as a cautionary tale and call to action.

Diversified economies are stronger. They take time and planning. Wait to diversify until the bottom falls out of your existing economic base, and your chances for a smooth transition decline precipitously. Turning an economy based on making tanks into one that makes shoes can’t be done in a day.

This story originally appeared on Foreign Policy in Focus.

Edited by Kitty Stapp

Excerpt:

Young protesters at the U.N. climate talks in Lima, Peru highlight out-of-touch North American energy policies. Credit: Adopt a Negotiator.

By Leehi Yona
LIMA, Dec 13 2014 (IPS)

While U.S. and Canadian officials delivered speeches about how the world needs to step up to their responsibilities at the U.N. climate negotiations in Lima, Peru, activists from North America demanded clear answers back home on their governments’ relationships with fossil fuel corporations, as well as the future of several major oil projects across the continent.

U.S. Secretary of State John Kerry spoke Thursday about the role each country should play on tackling climate change and referred to the U.S.-China agreement announced in November. The agreement, which pledged unforeseen emissions reductions for both countries, has been lauded by many countries as a progressive step forward at the U.N. negotiations.“Under Stephen Harper, Canada has no climate policy beyond public relations.” -- Canadian MP Elizabeth May

However, civil society delegates have expressed concern over the disconnect between the messaging the United States has been taking in Lima, and its domestic fossil fuel reliance.

This international discourse collides with Washington’s hesitance to repeal the Keystone XL pipeline, a proposed project that would transport over 800,000 barrels of bitumen a day from the Alberta tar sands to Texas oil refineries.

“The best way the U.S. can support progress in the U.N. Climate Talks is to start at home by rejecting the Keystone XL pipeline now,” said Dyanna Jaye, a U.S. youth delegate attending the conference with SustainUS.

TransCanada’s Keystone XL pipeline has been stalled in political procedures since 2011. Once considered to be a done deal, the project has grown to be a bone of contention among environmental groups, who have mobilised to put pressure on President Barack Obama to reject it.

Having been presented as a bill to Congress numerous times, it most recently passed a House of Representatives vote but failed in the Senate by only one vote on Nov. 5.

Youth have taken a leading role on been pushing for Kerry to reject Keystone XL, shining a spotlight on the influence of the fossil fuel industry in hindering progress.

Following Kerry’s speech to the U.N. on Thursday, Jaye and other U.S. and Canadian youth activists organised an action in protest of proposed pipelines through the two countries.

Calling for the industry to be kicked out of the negotiations, youth have highlighted that a successful deal in Lima would necessitate a phasing out of fossil fuel use to zero production by 2050, as stated in a World Wildlife Fund report.

“Dirty fossil fuel projects like Keystone XL clearly fail the climate test,” Evan Weber, executive director of US Climate Plan, told IPS. “We’ll be drawing the line on any new fossil fuel infrastructure and calling for investment in renewable energy solutions.”

Protesters emphasised the need for domestic action at home in order for there to be any progress at the United Nations

The United States, however, isn’t the only country whose domestic issues directly contradict their statements here at COP20. The Canadian government has been criticised for their lack of domestic ambition and their close relationship with fossil fuel companies at this conference.

At the talks, Environment Minister Leona Aglukkaq stated on Dec. 9 that Canada is “confident [they] can achieve a climate agreement” at these talks, “however it will require courage and common sense.”

While the government has attempted to portray itself as a climate leader in these negotiations, members of civil society have pointed out discrepancies between the emissions goals they are promising and the emissions trajectory the country is actually on track to produce.

“Under Stephen Harper, Canada has no climate policy beyond public relations,” said Elizabeth May, a Canadian Member of Parliament and leader of the Canadian Green Party attending COP 20.

“The zeal to exploit fossil fuels has led to the evisceration of ‎environmental laws. We have distorted our economy in the interests of exporting bitumen,” she told IPS.

Canada has once again entered into the non-governmental spotlight at U.N. climate negotiations. On Tuesday, uproar ensued when Prime Minister Stephen Harper stated that any regulation of the oil and gas industry would be “crazy” considering the industry’s current financial state.

On the conference’s last day, Canada was also awarded a Fossil of the Day, a daily non-prize awarded by civil society during the Climate Talks to the most regressive country, for its consistent meddling with and lack of participation in the U.N. process.

“As members of civil society, we’ve seen Canadian negotiators prioritise fossil fuel companies over public interest time and time again in Lima,” Catherine Gauthier of ENvironnement JEUnesse, a Québec youth environmental organisation, told IPS.

Both countries have come under scrutiny for their promotion of climate action on the international level while promoting tar sands expansion and shale gas fracking projects at home. Shale gas has particularly been promoted by both governments as a bridge fuel to help wean societies off fossil fuels with the goal of increasing renewable energy sources.

“The use of fracking as a bridge fuel is the biggest lie the American public has ever been fed,” Emily Williams of the California Student Sustainability Coalition told IPS. “It poisons our health and our communities, and destroys our environment. It cannot be part of the climate solution as it starves the renewable energy revolution of the investment it needs.”

Both Canada and the United States have been active in calling for swift action on the international level when it comes to climate change. The U.N. negotiations are currently running over time in Lima as countries work towards a compromise agreement.

Edited by Kitty Stapp

A group of activists protests minutes before the start of an event organised by the oil giant Shell at COP20 in Lima. Credit: Adopt a Negotiator

By Leehi Yona and Diego Arguedas Ortiz
LIMA, Dec 8 2014 (IPS)

Even as the presence of major oil and gas corporations is nearly ubiquitous at the U.N. climate talks in the Peruvian capital known as COP20, fossil fuel divestment campaigns have gained ground in various countries and are moving to counter the influence of the “dirty energy” lobby here.

As the COP20 enters its second and final week, delegates from 195 countries are still trying to address the urgency of climate change by reaching an international agreement to decelerate global warming. However, activists are worried that the influence of fossil fuel companies within COP20 might slow down an already sluggish process.The premise is simple, according to the movement organisers: if it is morally wrong to wreck the planet, it is morally wrong to profit from that wreckage.

In response to climate inaction, student organisers have called for fossil fuel divestment. The movement aims to disinvest endowments from a list of 200 companies that are ranked by the largest known fossil fuel reserves.

Divestment campaigns advocate full divestment from the list, which includes Gazprom, Petrobras, PetroChina, Chevron and ConocoPhillips, among other major companies. The intention of the campaign is both to erode financial support for major oil corporations, as well as revoke their own moral license.

Maddy Salzman, a former organiser of Fossil Free Washington University, sees divestment as a potential solution to the current stalemate on climate action. “The necessary legislation and investment decisions cannot and will not be made in our current political system, and as citizens we must play a role in making the changes we believe in,” she told IPS.

The motivation behind the campaign stems from a 2011 Carbon Tracker Initiative report which warned that about four-fifths of the total known fossil fuel reserves worldwide must remain in the ground in order to avoid the worst impacts of climate change.

The premise is simple, according to the movement organisers: if it is morally wrong to wreck the planet, it is morally wrong to profit from that wreckage.

There are hundreds of campaigns across four continents seeking fossil fuel divestment. While most of these campaigns target university endowments, they also include state pension funds, cities, and places of faith.

Some campaigns, including at U.S. and Canadian universities, have already succeeded in obtaining commitments from their investment officers to divest their funds.

Divestment campaigns, while local, connect to broader international issues. Students involved with fossil fuel divestment campaigns are quick to acknowledge that their movement is a global one – an international solution that parallels the stalemate at the U.N.

In fact, they’ve recently launched Global Divestment Day, a day of action to elevate the growing momentum around fossil fuel divestment campaigns.

In the case of the U.N. climate negotiations, divestment has helped shed light on the influence of the fossil fuel industry at these talks.

“Even here at the annual meeting to create global policy to respond to climate change, fossil fuel companies have an influential pressure and continue to dilute the strength of the outcome of the COPs,” Dyanna Jaye, chair of the Virginia Student Environmental Coalition, told IPS.

“While the science becomes increasingly alarming, we continue to be fed another profit-driven story about continuing the use of fossil fuels,” said Jaye, a youth delegate with the SustainUS youth advocacy group in Lima.

On Monday, climate activists at the U.N. talks protested outside an event hosted at the conference venue by fossil fuel giant Shell. The event, initially titled “Why Divest from Fossil Fuels When a Future with Low Emission Fossil Energy Use is Already a Reality?”, has since changed names and times on multiple occasions.

Sally Bunner, an organiser with Earlham College Responsible Energy Investment, explains why fossil fuel companies cannot be part of a solution at COP20.

“Fossil fuel companies are irresponsible, because it has been proven for many decades that the extraction and burning of fossil fuels poisons people, water, air, and soil,” she said, referring to human rights implications. “Unfortunately, the fossil fuel industry hasn’t switched to a better form of energy production because it’s not profitable for them to do so.”

The Shell event is not the only example of industry presence at the conference. Oil companies have been meeting with delegations from numerous countries negotiating in Lima. On Saturday afternoon, the British Columbia Minister of Environment, Mary Polak, tweeted that she was going to meet the Climate Change Advisor for Chevron, a major player in the fossil fuel industry.

Questioned in the social network about the motives of their meeting, Polak answered that “you can’t change oil company behaviour if you won’t talk with them.”

Representatives from both Chevron and TransCanada have participated in closed stakeholder meetings with the Canadian delegation, designed to brief Canadian non-governmental organisations.

While they are allowed to be present in those meetings, many youth delegates have noted the disproportionate representation of a stakeholder that comprises such a small number of the general Canadian population.

Edited by Kitty Stapp

Children playing in mining tailings in Morococha, Peru. Credit: Milagros Salazar/IPS

By Carey L. Biron
WASHINGTON, Nov 6 2014 (IPS)

The world’s largest corporations continue to publicise scant information about their global operations, according to new analysis that warns that extractives companies in particular are unprepared for pending disclosure requirements.

The findings come from the global watchdog Transparency International, which looked at 124 of the world’s largest companies. Using publicly available information, the researchers ranked each corporation based on three concerns: anti-corruption measures, transparency around global operations and subsidiaries, and disclosure of country-by-country and project-level finances.“Industry resistance to this kind of regulation has been pretty strong, so it’s not surprising that companies aren’t voluntarily disclosing this information and instead waiting until they’re forced to do so.” -- Alexandra Gillies

While the level of anti-corruption activities is relatively high and growing, the current state of the latter two metrics is far weaker. Indeed, the average score for country-by-country reporting, seen as a transparency lynchpin, is a dismal six percent – and 50 companies have scored zero.

In introducing the study on Wednesday, Transparency International’s chair, Jose Ugaz, noted that the power of multinational companies in today’s global economy rivals even the biggest countries.

“With greater economic power comes greater responsibility,” he said. “Bad corporate behaviour creates the corruption that causes poverty and instability.”

In general, British companies fare best in the new index, Chinese and Asian companies more broadly fare worst, and the U.S. technology sector receives special criticism for its lack of transparency. Transparency International has been reporting on corporate governance since 2008, with the last such study being released in 2012.

The weak results for country-by-country reporting, in particular, will worry anti-poverty advocates and proponents of public sector spending. Such disclosure would, for instance, allow governments to efficiently compare crossborder information with the aim of cutting down on tax evasion as well as outright theft of revenues.

Developing countries may have lost an estimated six trillion dollars in the decade before 2011 due to tax evasion and other shady financial dealings, according to the Washington watchdog group Global Financial Integrity.

“Domestic resource mobilisation is seen as key to unlock economic development,” Koen Roovers, the E.U. advisor for the Financial Transparency Coalition, a global network that funded the new Transparency International report, told IPS.

“Publicly available [country-by-country reporting] information would enable citizens of developing nations to determine whether the taxes paid by the transnational companies that trade in their countries is in line with their activities. The apparent absence of this information gives reason for suspicion.”

Industry resistance

With the aim of ensuring that lucrative natural resources-related revenues are safeguarded in developing countries, the global extractives industry has been a special focus for disclosure requirements.

The United States, European Union and Canada in recent years have all passed project-by-project disclosure requirements, mandating reporting on all payments made by extractives companies to foreign governments.

And while the U.S. legislation is currently held up in court due to a lawsuit brought by the oil industry, the E.U.’s requirements are set to go into effect by the middle of next year. Canada’s new rules could be implemented even sooner.

Yet Transparency International warns that extractives companies are “not ready” to comply with these new rules.

“Even though country-by-country reporting was first introduced in the extractive sector, the 19 oil and gas companies in the study only scored an average of 10 per cent,” the report states. “Six companies in this industry scored zero.”

Not all of these companies did poorly on country-by-country reporting. For instance, the Norwegian oil company Statoil scored highest of all of the 124 companies on this metric, with a score of 66 percent.

Other strong performers included the Indian companies Oil & Natural Gas Corporation and Reliance, as well as the Australian-headquartered BHP Billiton, by certain calculations the world’s largest mining company.

Yet overall the sector still appears to be biding its time until the new requirements in the U.S., E.U. and Canada go into effect. For supporters of stricter disclosure, the findings underscore just how transformative those new legal regimes will be.

“Industry resistance to this kind of regulation has been pretty strong, so it’s not surprising that companies aren’t voluntarily disclosing this information and instead waiting until they’re forced to do so,” Alexandra Gillies, the head of governance at the Natural Resources Governance Institute (NRGI), a think tank, told IPS.

“While there are a few smaller companies that have taken this step, the big players certainly haven’t. Nonetheless, it will be interesting to see how the same data looks in another two years.”

Indeed, the U.S. and E.U. disclosure requirements alone would cover an estimated 65 percent of the global extractives sector in terms of value, according to Publish What You Pay, a global advocacy group. And the new Canadian rules, formally tabled late last month with the aim of implementation by April, would likewise affect the world’s largest national mining industry.

Further, at a summit next week, the Group of 20 (G20) industrialised countries are expected to approve a new country-by-country reporting standard that would cover all multinational companies. The Financial Transparency Coalition’s Roovers says the new findings from Transparency International will “up the ante” for the G20 discussions.

Still, he notes that, as currently envisioned, the G20 reports would likely not be made public due to concerns over commercial “sensitivities”.

On to contracts

For many advocates, non-public disclosure would defeat an important purpose of stricter transparency requirements: empowering citizens and civil society to engage in local-level oversight.

“The real innovation around project-level data is that citizens or journalists or parliamentarians would be able to understand the deals that their government has entered into. Right now all we have are highly aggregated figures,” NRGI’s Gillies says.

“If someone is dealing with, say, a huge mine in their community, that data can help them to understand how much money the government is collecting for that project – and whether the disruption they’re facing is worthwhile.”

Nonetheless, with country-by-country reporting requirements now on the horizon, Gillies and others are already turning their attention to a corollary data set: contract-level disclosure. Indeed, certain countries – including Liberia, Guinea, the Democratic Republic of Congo and others – as well as some companies are already making all information on contracts related to natural resource extraction publicly available.

“If you have good revenue or payment data, it’s still difficult to understand what those figures mean unless you know what agreements have been signed,” Gillies says.

“But contract disclosure is already becoming more widely accepted, with a few countries and companies taking the lead. It hasn’t yet become standard practice and what is being done remains piecemeal, but it’s enough to show that this activity isn’t commercially dangerous.”

Within a few years, advocates hope to see the disclosure of both payments and agreements signed with foreign governments become standard procedure.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

Flooding on the A361, the main road from Taunton to Glastonbury, England. Scientists warn that climate change is well underway, producing costly and tragic extreme weather events. Credit: Mark Robinson/cc by 2.0

By Stephen Leahy
UXBRIDGE, Canada, Nov 3 2014 (IPS)

“Greenhouse gas emissions from human activity are higher than ever, and we’re seeing more and more extreme weather and climate events….We can’t prevent a large scale disaster if we don’t heed this kind of hard science.”

Question: Is that statement about the latest Intergovernmental Panel on Climate Change (IPCC) report from Greenpeace or the U.S. State Department?The fact that Kerry must appeal to the fossil fuel industry’s sense of morality rather than tough regulations on CO2 emissions makes plain the industry’s naked power in the U.S. political system.

Answer: It’s by John Kerry, U.S. secretary of state, the second most powerful official in the Barack Obama administration.

Important officials in many other countries have made similar statements about the IPCC Synthesis Report released Nov. 2 in Copenhagen. Canada’s Stephen Harper government remains in denial and has been silent.

“The longer we are stuck in a debate over ideology and politics, the more the costs of inaction grow and grow,”said Kerry in a statement.

The IPCC Synthesis Report distills seven years of climate research by thousands of the world’s best scientists and concludes that climate change is well underway, producing costly and tragic extreme weather events. These will grow worse than anyone can imagine unless humanity weans itself off fossil fuels.

Climate change is actually easy to understand and can be summed up in less than 60 seconds:

For decades humanity has pumped hundreds of millions of tonnes of carbon dioxide (CO2) into the atmosphere from burning fossil fuels —coal, oil and natural gas.

Measurements show there is now 42 percent more CO2 in the atmosphere than 100 years ago. It is long-established science that CO2 acts as blanket, keeping the planet warm by trapping some of the sun’s heat. Each year our emissions of CO2 is making that blanket thicker, trapping more heat.

That fossil-fuel CO2 blanket has raised global temperatures 0.85C. It would far hotter if not for the oceans absorbing 95 percent of the extra heat trapped by the blanket. But the oceans won’t help us for much longer. 2014 will be the warmest year on record.

“Urgent action is needed to cut global greenhouse gas emissions,”said Michel Jarraud, Secretary General of the World Meteorological Organization.

“The longer we wait, the more expensive and difficult it will be to adapt –to the point where some impacts will be irreversible and impossible to cope with,” Jarraud said in a comment about the Synthesis Report.

There is nothing fundamentally new in this latest IPCC document. All that’s really changed is the urgency and desperation in the language climate scientists now use.

Everyone knows by now that fossil fuels have to be phased out and replaced by energy sources that don’t add more CO2 to the stifling blanket we’ve woven.

And we already know how to make the low-carbon transition because it is “hardly rocket science,” said Bob Watson, former chair of the IPCC.

To reiterate the steps: big increases in energy efficiency, massive roll outs of renewable energy, shutting down most coal plants, a carbon price, etc. There are dozens of studies on how to do this with no new technology. All of this can be achieved with very little extra cost to the global economy, according to The Global Commission on the Economy and Climate.

These studies end up concluding that what’s missing in a shift to low-carbon living is political will or political courage. Left unsaid is the incredibly powerful and influential fossil fuel industry, their bankers, investors, lawyers, public relations consultants, unions and others all fighting desperately to keep humanity addicted to their products.

That means opposing low-carbon alternatives and branding grandparents who worry about their grandchildren’s future as “green radicals”.

“Think of this as an endless war,”public relations consultant Richard Berman told oil and gas industry executives last June in Colorado.

It’s a dirty war against environmental organisations and their supporters. Industry executives must be willing to exploit emotions like fear, greed and anger of the public against green groups and individuals, Berman said, according a recent New York Times article.

A tobacco industry PR specialist, Berman was speaking at an event sponsored by the Western Energy Alliance, a group whose members include Devon Energy, Halliburton and Anadarko Petroleum. The speech was secretly recorded by an energy industry executive offended by the tactics.

Berman advised major energy corporations secretly financing anti-environmental campaigns not to worry about offending the general public because “you can either win ugly or lose pretty,” he said.

‘Big Green Radicals’ is Berman and Co.’s latest multi-million-dollar campaign and it targets groups like the Sierra Club and the Natural Resources Defense Council. It has also aggressively attacked groups opposing fracking and lobbies to prevent stricter controls over the process that pollutes both air and water.

Berman also promises strict confidentiality for anyone who funds his efforts, saying: “We run all of this stuff through nonprofit organisations that are insulated from having to disclose donors.”

Berman is hardly alone in his efforts. The fossil fuel industry spends hundreds of millions of dollars each year on PR, advertising and lobbying in the U.S., Canada, Australia and elsewhere.

“Those who choose to ignore or dispute the science so clearly laid out in this report do so at great risk for all of us and for our kids and grandkids,” Secretary Kerry said to conclude his statement on IPCC Synthesis Report.

The fact that Kerry must appeal to the fossil fuel industry’s sense of morality rather than tough regulations on CO2 emissions makes plain the industry’s naked power in the U.S. political system.

In Copenhagen on Sunday, U.N. Secretary-General Ban Ki-moon was able to say what Kerry couldn’t and urged big investors such as pension funds and insurance companies to reduce their investments in fossil fuels and invest in renewable energy instead.

That’s a start but far more action is needed by everyone who believes that our children and grandchildren have a right to a liveable planet.

Edited by Kitty Stapp

Uganda is estimated to have two billion barrels of oil reserves. Environmental experts are concerned that many African countries lack the capacity to exploit oil and gas at minimal risk to the environment. Credit: Wambi Michael/IPS

By Miriam Gathigah
NAIROBI, Oct 30 2014 (IPS)

Recent discoveries of sizeable natural gas reserves and barrels of oil in a number of African countries — including Uganda, Tanzania and Kenya — have economists hopeful that the continent can boost and diversify its largely agriculture-based economy. 

But environmentalists and climate change experts in favour of renewable energy say that the exploration of oil and gas must stop, as they are concerned that many African countries lack the capacity to exploit oil and gas at minimal risk to the environment.

Economic policies are not driven by environmental concerns, Hadley Becha, director of local nongovernmental organisation Community Action for Nature Conservation, told IPS.

Becha said that despite the global shift away from fossil fuels, “exploration and production of oil and gas will continue” while Africa’s natural resources, particularly oil and gas, are controlled by multinationals.

Like many experts in the oil and gas industry, Becha believes that multinationals will still be awarded permits by local governments as the extractive industry has shown a great potential for revenue generation.

According to KPMG Africa, a network of professional firms, as of 2012 there were 124 billion barrels of oil reserves discovered in Africa, with an additional 100 billion barrels still offshore waiting to be discovered.

And while only 16 African countries are exporters of oil as of 2010, at least five more countries, Mozambique, Uganda, Tanzania, Kenya and Ghana, are expected to join the long list of oil-producing countries.

But Kenyan environmentalist and policy expert, Wilbur Otichillo, believes that in light of the global shift away from fossil fuels, “newly-found oil will remain underground. Most of the companies which have been given concessions for exploration in East Africa are from the West.”

He told IPS that these companies were likely to heed calls for clean energy, “especially since they are likely to be compensated for investments made to explore.”

But unlike Egypt, which has specific Environmental Impact Assessment (EIA) guidelines for oil and gas exploration, many African countries, including Kenya, have only one classification of EIAs, Becha said.

For example, in Kenya, oil and gas exploration and production is controlled by the archaic Petroleum Act of 1984, which was briefly updated in 2012.

“The Petroleum Act of 1984 is a weak law, especially with regards to benefits sharing and is also silent on the management of gas,” Becha said, adding that the oil and gas sector was very specialised and required detailed and specific environmental impact guidelines.

Experts say fossil fuels will have a significant impact on weather patterns. The Intergovernmental Panel on Climate Change (IPCC), which was released last month, revealed that temperatures on the African continent are likely to rise significantly.

“There ought to be specific guidelines for upstream [exploration and production], midstream [transportation, storage and marketing of various oil and gas products] and downstream exploration [refining and processing of hydrocarbons into usable products such as gasoline],” Becha said.

Policy experts are pushing Kenya’s government to develop sound policies and comprehensive legal and regulatory frameworks to ensure that Kenya benefits from upstream activities and can also explore technology with fewer emissions.

Executive director of Green Africa Foundation John Kioli told IPS that Kenya was committed to adopting technology with fewer emissions “for example, coal [one of Kenya’s natural resources] will be mined underground as opposed to open mining.”

Kioli, the brains behind Kenya’s Climate Change Authority Bill 2012, emphasised the need to address the issue of governance and legislation in Africa.

He added that while Africa was committed to climate change mitigation and adaptation efforts, “the continent lacks the necessary resources. Africa cannot continue looking to the East or West indefinitely for these resources.”

Kenya’s government estimates that the 2013-2017 National Climate Change Action Plan for climate adaptation and mitigation would require a substantial investment of about 12.76 billion dollars. This is equivalent to the current 2013-2014 national budget.

Danson Mwangangi, an economist and market researcher in East Africa, told IPS that to achieve growth and development, and hence reduce poverty, “Africa will need to exploit fossil fuels.”

He says that industrialised countries are responsible for a giant share of greenhouse gas emissions and Africa too “should be allowed their fair share of greenhouse gas emissions, but within a certain period. Not indefinitely.”

Mwangangi said it is now common to find assistance to Africa simultaneously counted towards meeting climate change obligations and development commitments. “This means that measured against more pressing problems like combating various diseases, climate change projects will not be given a priority,” he added.

But even as Africa is adamant that oil and gas exploration will continue, Becha says the gains will be short term and unlikely to revive the economy.

“With oil and gas, it is not just about licensing, there are also issues of taxation…” Becha said.

He explained that in the absence of capital gains tax, as is the case in Kenya and many other African countries, “the government will lose a lot of revenue to briefcase exploration companies who act as middlemen, robbing national governments of significant revenue.”

He added that African countries will have to establish a solvent fund where revenue from oil and gas will be stored to stabilise the economy “oil can inflate the prices of certain commodities hence the need to control surges in inflation.”

Ghana is also among the few countries with a capital gains tax and a solvent fund.

Edited by: Nalisha Adams

This is part of a series sponsored by the Climate and Development Knowledge Network (CDKN).

Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Oct 15 2014 (IPS)

Lawmakers here are urging President Barack Obama to put transparency in the extractives sector at the centre of an upcoming trip to Myanmar.

While the government of Myanmar has recently engaged in a series of bilateral and multilateral pledges to make its lucrative but highly opaque mining and oil and gas industries more transparent, advocates increasingly warn that officials are failing to keep these promises."The real heart of the issue for civil society in Burma is the details of these contracts. They also want to start talking about the tremendous amount of money the Burmese government makes off of these oil and gas deals, and how most of that doesn’t benefit the people of Burma.” -- Jennifer Quigley

The U.S. government has been a key sponsor in facilitating these pledges, and many now see President Obama’s visit, slated for next month, as an important opportunity to prompt legal change in Myanmar, also known as Burma. Myanmar officials are currently revising related legislation, although little is known about these secretive talks.

Supporters say reforms, particularly around public information on extractives deals and revenues, could help to ensure that Myanmar’s significant natural resources wealth is used for development rather than simply enriching businesses close to the regime.

“Despite commitments to transparency and good governance, decision-making over the management of Burma’s national resources remains largely hidden from public scrutiny … the gap between the Burmese government’s promises and its delivery is widening,” 16 members of the U.S. Congress warned President Obama in a letter sent Tuesday.

“We therefore urge you, during your visit to Burma, to call on the Burmese government to ensure provisions on transparency and accountability are incorporated into revised laws, regulations and policies governing the extractives sector, and negotiated into new contracts and licenses.”

The letter, a copy of which was seen by IPS, includes backing from both Republicans and Democrats. Last year, the United States initiated a partnership between the Myanmar extractives industry and the Group of 8 (G8) rich countries, which could offer Obama additional leverage in demanding new transparency measures.

The lawmakers’ call comes not only a month ahead of President Obama’s planned trip to Myanmar (his second), but also as a global summit on extractives transparency begins in the country’s capital, Naypyidaw. The two-day meeting of the Extractives Industries Transparency Initiative (EITI), which promotes guidelines that are currently followed by 46 countries, comes just three months after Myanmar became one of the EITI’s newest candidate countries.

Under these guidelines, Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues.

Just a month after its EITI candidature was accepted, Myanmar signed several dozen contracts with domestic and international oil and gas companies. Yet according to Tuesday’s letter, the terms of those contracts remain secret, as are ongoing revisions to policies overseeing the extractives sector.

“The laws and regulations governing the extractive industries are currently being revised behind closed doors, with no public consultation,” the lawmakers state.

“Drafts of the first of these new pieces of legislation contain no provisions on public disclosure of data and do not reflect any of the promises of greater transparency made by the government through the EITI process.”

Beneficial owners

The contracts signed in August were for 36 oil and gas blocks, both on land and offshore, auctioned off to 46 local and global companies over the past year. While the details of those contracts remain under wraps, until recently almost nothing was known even of these companies’ owners.

Around the country’s EITI application, an international watchdog group called Global Witness began focusing on what’s known as ultimate beneficial ownership – information on who, ultimately, controls and benefits from a company’s activities. In June, the group had such information on the companies involved in just three of the blocks.

Yet after requesting information directly from the companies, Global Witness last week reported that many more companies had come forward with these details. The companies were also asked whether any of their beneficial owners were politically powerful individuals in Myanmar.

“In total, 28 companies have now participated in Global Witness’ ownership review, and we have been provided with full beneficial ownership details of all partners in 17 oil and gas blocks,” the group says in a new report, published Friday. “This shows that businesses can and will provide such information if they have an incentive, such as protection of their reputation, to do so.”

Global Witness says the information remains unverified and that a “hard core” of 18 companies continue to refuse to provide any information. Still, the group says this corporate response has already set a surprising international example.

“Not only is this significant locally, but it puts Myanmar in the unlikely position of setting a global precedent on transparency, as it’s the first time anywhere in the world that companies have systematically declared their ultimate ownership,” Juman Kubba, an analyst at Global Witness, told IPS.

“Our findings show that companies can reveal their owners if they’re pushed to do so. It’s now up to the Myanmar government with the support of the U.S. and other backers to make that push so that all oil, gas and mining company ownership in the country is public.”

Outside the framework

Still, some worry that the recent corporate disclosure wasn’t actually carried out through the EITI framework, thus suggesting that the government’s transparency pledges remain weak. They also dispute whether beneficial ownership is of foremost importance in the Myanmar context.

“This disclosure is incredibly important on the global scale, but when it comes to Burma the real concern has never been about ownership but rather about conflict related to resources,” Jennifer Quigley, the president of the U.S. Campaign for Burma, an advocacy group, told IPS.

“This wasn’t done through the EITI in this instance, and the real heart of the issue for civil society in Burma is the details of these contracts. They also want to start talking about the tremendous amount of money the Burmese government makes off of these oil and gas deals, and how most of that doesn’t benefit the people of Burma.”

Quigley says that Myanmar’s government has long been comfortable making pledges it has no intention of keeping, and she see little prospect of that changing in the near term. Still, she says the United States has linked itself so closely to extractives transparency in Myanmar that President Obama will need to broach the subject during his trip next month.

“This is really an area in which the U.S. has married itself to the Burmese government,” she says. “So they need to be paying more attention to the fact that the Burmese government isn’t living up to its EITI promises.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

The open wounds of the Amazon. Credit:Rolly Valdivia/IPS

By Michelle Tullo
WASHINGTON, Apr 9 2014 (IPS)

Indigenous leaders are warning of increased violence in the fight to save their dwindling forests and ecosystems from extractive companies.

Indigenous representatives and environmental activists from Africa, Asia, Australia and the Americas met over the weekend here to commemorate those leading community fights against extractive industries. The conference, called Chico Vive, honoured Chico Mendes, a Brazilian rubber-tapper killed in 1988 for fighting to save the Amazon.“Right now in our territory we can’t drink the water because it’s so contaminated from the hydrocarbons from the oil and gas industry." -- Chief Liz Logan of the Fort Nelson First Nation in BC, Canada

The gathering also recognised leaders who are continuing that legacy today.

“His struggle, to which he gave his life, did not end with his death – on the contrary,” John Knox, the United Nations independent expert on human rights and the environment, said at the conference. “But it continues to claim the lives of others who fight for human rights and environmental protection.”

A 2012 report by Global Witness, a watchdog and activist group, estimates that over 711 people – activists, journalists and community members – had been killed defending their land-based rights over the previous decade.

Those gathered at this weekend’s conference discussed not only those have been killed, injured or jailed. They also shared some success stories.

“In 2002, there was an Argentinean oil company trying to drill in our area. Some of our people opposed this, and they were thrown in jail,” Franco Viteri, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, told IPS.

“However, we fought their imprisonment and the Inter-American Court of Human Rights ruled in our favour. Thus, our town was able to reclaim the land and keep the oil company out.”

Motivated by oil exploration-related devastation in the north, Ecuadorian communities in the south are continuing to fight to defend their territory. Viteri says some communities have now been successful in doing so for a quarter-century.

But he cautions that this fight is not over, particularly as the Ecuadorian government flip-flops on its own policy stance.

“The discourse of [President Rafael] Correa is very environmentalist, but in a practical way it is totally false,” he says. “The government is taking the oil because they receive money from China, which needs oil.”

China has significantly increased its focus on Latin America in recent years. According to a briefing paper by Amazon Watch, a nonprofit that works to protect the rainforest and rights of its indigenous inhabitants, “in 2013 China bought nearly 90% of Ecuador’s oil and provided an estimated 61% of its external financing.”

The little dance

Many others at the conference had likewise already seen negative impacts due to extractives exploration and development in their community.

“We have oil and gas, mines, we have forestry, we have agriculture, and we have hydroelectric dams,” Chief Liz Logan of the Fort Nelson First Nation in British Columbia, Canada, told IPS.

“Right now in our territory we can’t drink the water because it’s so contaminated from the hydrocarbons from the oil and gas industry … The rates of cancer in our community are skyrocketing and we wonder why. But no one wants to look at this, because it might mean that what [extractives companies] are doing is affecting us and the animals.”

Logan described the work of protecting the community as a “little dance”: first they bring the government to court when they do not implement previous agreements, then they have to ensure that the government actually implements what the court orders.

Others discussed possible solutions to stop the destruction of ecosystems, and what is at stake for the communities living in them. The link between local land conflicts and global climate change consistently reappeared throughout many of the discussions.

“My community is made up of small-scale farmers and pastoralists who depend on cattle to live. For them, a cow is everything and to have the land to graze is everything,” said Godfrey Massay, an activist leader from the Land Rights Institute in Tanzania.

“These people are constantly threatened by large-scale investors who try to take away their land. But they are far more threatened by climate change, which is also affecting their livelihood.”

Andrew Miller of Amazon Watch described the case of the contentious Belo Monte dam in Brazil, which is currently under construction. Local communities oppose the dam because those upstream would be flooded and those downstream would suddenly find their river’s waters severely reduced.

“People are fighting battles on local levels, but they are also emblematic of global trends and they are also related to a lot of the climate things going on,” Miller told IPS. “[Hydroelectric] dams, for example, are sold as clean energy, but they generate a lot of methane, which is a powerful greenhouse gas.”

According to Miller, one value of large gatherings such as this weekend’s conference is allowing participants to see the similarities between experiences and struggles around the world, despite often different cultural, political and environmental contexts.

“In each case there are things that are very specific to them,” Miller said. “But I think we are also going to see some trends in terms of governments and other actors cracking down and trying to limit the political space, the ability for these folks to be effective in their work and to have a broader impact on policy.”

Yet activists like Viteri, from Ecuador, remain determined to protect their land.

“We care for the forest as a living thing because it gives us everything – life, shade, food, water, agriculture,” Viteri said. “It also makes us rich, even if it is a different kind of richness. This is why we fight.”

Activist shareholders hope that publicly assessing and disclosing the financial risk associated with certain carbon-intensive operations will dissuade Exxon and other energy companies from extracting oil and natural gas in high-risk, environmentally sensitive areas like deep water and tar sands. Credit: Bigstock

By Bryant Harris
WASHINGTON, Mar 25 2014 (IPS)

As the international community and the U.S. government place a heightened emphasis on reducing carbon emissions as a way to combat global climate change, shareholders have convinced the oil-and gas giant ExxonMobil to publicly disclose the risk that strengthened regulation could pose to its profits.

The Texas-based company announced its intentions last week and agreed to publish a carbon asset risk report on its website by the end of the month.“If Big Oil can’t redirect capital to low-carbon energy alternatives, investors will.” -- Natasha Lamb

“Investors … are looking at the energy market and starting to see shifts that they’re concerned about,” Danielle Fugere, president of As You Sow, an advocacy group that spearheaded shareholder pressure on the issue, told IPS.

“Those range from the potential for carbon regulations to what happens if the world actually gets smart and works to limit carbon in order to prevent global warming. The investors are looking at increasing cost curves for non-conventional fuels.”

Activist shareholders hope that publicly assessing and disclosing the financial risk associated with certain carbon-intensive operations will dissuade Exxon and other energy companies from extracting oil and natural gas in high-risk, environmentally sensitive areas like deep water and tar sands.

Exxon’s decision was largely due to pressure from As You Sow and a key shareholder, Arjuna Capital. In return, Arjuna Capital and As You Sow dropped a shareholder resolution that would have put the issue to a vote at Exxon’s annual shareholder meeting.

“If we are going to avoid catastrophic climate change, we can only burn one third of [known] carbon reserves,” Natasha Lamb, the director of equity research and shareholder engagement at Arjuna Capital, told IPS. “So the big question is, if regulation market forces prevent oil companies from burning that other two-thirds, why are they spending so much in shareholder value exploiting more?

“As investors, we want to understand what kind of scenario analyses they’re running taking these huge risks into account, and if they’re profitably allocating shareholder capital.”

Investors ultimately hope that a combination of increased regulations on carbon emissions and subsequent shareholder concerns will prompt large energy firms to diversify their assets and invest in more sustainable forms of energy.

“Forward-thinking companies need to re-assess how they allocate shareholder capital and act strategically to shift their business models,” said Lamb. “If Big Oil can’t redirect capital to low-carbon energy alternatives, investors will.”

Lamb also believes that Exxon’s decision will set a precedent and encourage other companies to similarly disclose their carbon asset risks, lest they alienate their investors.

“There are 10 other shareholder proposals this year asking companies to report on carbon emissions risks,” Lamb said. “I would expect that, after Exxon’s announcement, you’ll see increasing disclosures from fossil fuel companies.”

The move also signifies that Exxon, which has a history of lobbying against climate change legislation, may start to take the issue more seriously in public – particularly as shareholders become concerned about the effects of carbon emissions regulations on the energy giant.

“I think it’s important that Exxon has questioned whether climate change is occurring, and I think the company’s finally saying, ‘Yes, climate change is real,’” said As You Sow’s Fugere.

While Exxon initially challenged the resolution with the Securities and Exchange Commission (SEC), the country’s main corporate regulator, the SEC overruled the challenge. Although the SEC had instituted a requirement compelling companies to publicly report on the impacts of climate change on their businesses, Congress passed legislation that blocked that mandate in 2010.

Stranded assets

Along with the rest of the international community, the United States and European Union have agreed to limit the average increase in global temperatures to two degrees Celsius above pre-industrial levels.

Yet climate scientists calculate that if humans burn more than a third of the world’s current proven carbon reserves between 2000 and 2050, there is a 20 percent risk that the global temperature will rise beyond this level. Non-profit advocacy groups like the Carbon Tracker Initiative have thus coined the term “unburnable carbon” to describe the excess reserves that would raise the global temperature by more than two degrees above pre-industrial levels.

Nonetheless, in 2012, the 200 largest publicly traded fossil fuel companies invested approximately 674 billion dollars to discover and develop new carbon reserves. Because companies cannot utilise new reserves without breaking the international community’s agreed-upon standards, some shareholders consider the exploration and development of additional carbon reserves to be a “stranded asset”, an asset that is obsolete and must therefore be recorded as a loss on a company’s balance sheets.

The Carbon Tracker Initiative’s 2013 report on unburnable carbon and the large amount of shareholder money invested in new carbon reserves prompted Ceres, a group of 70 international investors with more than three trillion dollars in assets, to pressure the top 45 energy companies to assess and report on the risks that a global decrease in carbon demand could pose.

Such initiatives are already starting to have a public impact. Last January, for instance, Ceres’s shareholders successfully pressured FirstEnergy, an Ohio-based utility company, into studying and reporting on what it could do to reduce carbon emissions in line with President Barack Obama’s goal of reducing total U.S. carbon emissions by 80 percent by 2050.

Additionally, last year As You Sow filed a vote with shareholders at CONSOL Energy, a natural gas and coal firm, requesting that the company report on the risk of stranded assets derived from carbon emissions. While CONSOL was resistant to the request on the grounds that it already produces a corporate social responsibility report, nearly 20 percent of CONSOL shareholders voted in favour of the proposal, a figure that Fugere deems significant.

“Over a billion dollars in investor assets voted in favour of that,” said Fugere. “That was about a 20 to 22 percent ruling, depending on who you ask. When you have over 20 percent of your shareholders indicating it’s a concern, companies are going to take note.”

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. So-called ‘blood diamonds’ helped fund civil wars in Sierra Leone and Liberia, but now provide much-needed jobs as well as revenue for the government. Credit: Tommy Trenchard/IPS

By Carey L. Biron
WASHINGTON, Mar 24 2014 (IPS)

An unusual combination of industry, government, investors and civil society here is celebrating the United States’ initial acceptance into a prominent global initiative aimed at strengthening transparency and accountability in the extractives industry.

Last week, the Extractives Industry Transparency Initiative (EITI) board accepted the U.S. application to become a candidate country in the grouping. The United States thus became the first Group of Eight (G8) wealthy nation to formally become part of EITI, and joins around 41 other countries that have already done so.“We’re at the end of the era of easy access to resources, where operators have to go further afield and at greater risk." -- Paul Bugala

EITI, based for the past decade in Oslo, promotes a set of global standards for the oil, gas and mining sector that works to reduce corruption and promote good governance. Proponents say the United States’ participation underlines a strengthening global trend towards transparency, particularly in the extractives sector.

“This is just another part of the wave of transparency – recognition that this information is important not only to investors but also to countries in which industry operates and to the communities that share their environment with mines and drilling,” Paul Bugala, a member of the panel that drew up the U.S. EITI application and an analyst at Calvert Investments, a socially responsible firm, told IPS.

“We’re at the end of the era of easy access to resources, where operators have to go further afield and at greater risk. If investors don’t have project-level payment information, we’re flying blind in many ways.”

The EITI process offers equal voice to government, industry and civil society representatives, and the United States’ application was jointly fashioned – and approved – by broad representation from each of these sectors.

“The oil and gas industry has worked with civil society groups and governments for over a decade through EITI to promote payment transparency in various countries,” Stephen Comstock, an official with the American Petroleum Institute (API), a central industry lobby group, told a trade journal last week.

“Expanding this effort to the United States will hopefully provide U.S. citizens with a new perspective of the significant revenue and economic impact generated from U.S. exploration and production.”

Project-level information

At its base, the EITI standard mandates that governments and companies provide regular disclosure of royalties and revenues from natural resource extraction. The idea is that these parallel reports will allow for easy understanding of money local communities may be owed – and where any discrepancies may be coming from.

The U.S. application will go beyond the standard, to include renewable energy sources and additional minerals. In 2013, the U.S. federal government collected some 14 billion dollars from companies involved in natural resource extraction, typically the country’s second largest source of revenue.

Yet critics say domestic accountability mechanisms are too opaque.

“The kind of information that’s available for the public is aggregated, searchable only by year and state and some commodities,” Mia Steinle, the U.S. EITI civil society coordinator and an investigator at the Project on Government Oversight (POGO), a watchdog group here, told IPS.

“Coal mining communities, for instance, can’t really tell whether they’re getting the money due to them by the federal government. If industry wanted to work in a community that had project-level information, however, its members could make a decision based on whether a previous project had been worthwhile or not.”

Empowering the public with such data is, of course, of particular importance in developing countries, where extractives contracts have often been struck between powerful companies and governments that can be oblivious to local benefit. EITI currently lists 26 countries as compliant with its standards, and another 18 countries as candidates.

The initiative is being bolstered by landmark though pending legislation in the United States and the European Union. Due the E.U. moves, Tullow Oil, a British company, on Tuesday became the first drilling company to offer project-level payments reporting in every country in which it’s operating.

“Tullow’s move shows that global oil companies can disclose such information at little cost and without fear of competitive harm,” Ian Gary, a senior policy manager at Oxfam America, an anti-poverty campaigner, said Tuesday. “The disclosures … show that some oil and mining companies are embracing – rather than fighting – the global transparency tide.”

1504 pending

Yet even as the E.U. moves towards implementation of its new transparency requirements, known as the Accounting Directive, by next year, a similar proposal in the United States remains stuck in litigation. The provision, known as Section 1504, became law back in 2010, but its implementation has since been held up by regulators and industry pressure.

Last year, a proposed Section 1504 rule, which would require disclosure of all payments made by U.S.-listed extractives companies to foreign governments, was struck down in the courts. Campaigners are now pointing to the United States’ EITI candidacy as added impetus for the main regulator, the Securities and Exchange Commission (SEC), to speed up its work rewriting the rule.

“The new EITI standard … calls for fully public reporting, by company and by project. This is what the SEC proposed in its 2012 rule,” Jana Morgan, coordinator of Publish What You Pay USA, a pro-transparency group, told IPS.

“The EITI board’s decision puts additional pressure on the SEC to prioritise scheduling a rulemaking for Section 1504. U.S. government support for the Section 1504 rule released in 2012, coupled with its advocacy for U.S. candidacy in the EITI, makes clear that the [Obama] administration views these initiatives as complementary.”

Interestingly, the legal challenge to Section 1504 was spearheaded by the American Petroleum Institute, the group that helped fashion the U.S. EITI application and which has welcomed the country’s new candidature. POGO’s Steinle says that, given the recent court decision, EITI-related project-level reporting for the United States remains unresolved and will be discussed this year.

Nonetheless, she stresses that the EITI discussions between civil society, industry and government representatives were surprisingly fruitful.

“It’s so useful and powerful for those three sectors to be face to face for these types of discussions. We’ve broken down a lot of walls, simply having people get together who would normally never talk to one another,” she says.

“As other countries are committing to EITI or similar initiatives, it’s very important that the United States is now following these good international examples. Hopefully this will help to set an example for those countries that aren’t yet on board.”

The United States will now have three years to bring its reporting into alignment with the EITI standard. U.S. officials say they plan to file their first report in 2015.

President of Fishermen and Friends of the Sea (FFOS) Gary Aboud is arrested near the International Waterfront in Port of Spain. Credit: Peter Richards/IPS

By Peter Richards
PORT OF SPAIN, Nov 21 2013 (IPS)

The demonstration took place on land and sea simultaneously. In the end, police had arrested three people, including Gary Aboud, president of the Trinidadian NGO Fishermen and Friends of the Sea (FFOS), but protesters were undaunted. They would be back.

“We are going to re-assemble and go back to the drawing board. The action gave the government a clear indication of how serious we are,” Aboud told IPS. He now faces charges of resisting arrest, obstructing the police and protesting without permission on Nov. 13."Each air gun is emitting almost double the sound of a single jet and is equivalent to sound that occurs when you use explosives." -- Gary Aboud

At the centre of the dispute are the seismic surveys in which energy companies searching for oil and hydrocarbons in the seabed deploy air guns, which are towed behind ships and release intense impulses of compressed air into the water.

According to the U.S. -based Natural Resources Defence Council, seismic surveys have been shown to cause catch rates of some commercial fish to plummet – in some cases over enormous areas of ocean.

“What we are asking is for is the same thing every country in the world has asked for,” Aboud said, noting that the issue has become controversial enough that the International Maritime Organisation and U.N. Food and Agriculture Organisation (FAO) will convene a meeting in London next February to highlight ways of minimising the impact of seismic surveys.

FFOS also says a government-appointed committee is skewed heavily in favour of people closely affiliated with the energy sector here.

“It only has two fisherfolk representatives and 14 government representatives – that is an imbalance. We are recommending one scientist be appointed by the fisherfolk, one scientist by the government and the two scientists appoint a third scientist,” he said.

“The government has appointed a lot of yes men and people who work for the energy sector. If you work for the energy sector we can’t expect justice,” Aboud told IPS.

Food Production Minister Devant Maharaj, speaking at the end of the weekly cabinet meeting, disputed these assertions.

“Seismic surveys are routinely conducted as part of the exploratory process in an effort to obtain information on the location and the quantum of raw hydrocarbon in the various strata of rocks,” he said.

Maraj said that several studies have been done regionally and internationally, and documentation on the effect of seismic surveys on different species of fish can be found in a policy document titled “The National Seismic Operations of Trinidad and Tobago.”

“A draft version developed in July 2010 was circulated to committee members and other major stakeholders for comment. The policy document was also submitted to the Ministry of Energy for its consideration,” Maharaj said.

Critics argue that there should be a moratorium on seismic testing while the government creates a regulatory framework that will include making it mandatory for companies to submit an independently-conducted Environmental Impact Assessment (EIA) before testing.

“All the oil companies know that the EIA is a standard procedure…so it is not just something we are saying, it is standard procedure around the world,” Aboud told IPS.

He added that a judge in Mexico recently ruled “that you cannot do seismic bombing where the fishes are spawning (and) where there is a migratory path”.

The fisherfolk here have directed their anger mostly at British Petroleum (BP) and the state-owned Petroleum Company of Trinidad and Tobago Limited (PETROTRIN). Aboud said he has already started talks with the trade union movement here.

He also plans to hold talks with religious leaders in the hope they would empathise with what he called the “national plight” of the fishing industry.

But PETROTRIN has hit back, saying that its plans for an Ocean Bottom Cable (OBC) seismic survey was being undertaken in “conformance with the licence requirements” from the relevant authorities as well as putting in place “measures to ensure that the seismic survey is conducted in conformance with international safety and environmental best practices”.

In a full page-newspaper advertisement this week, PETROTRIN said that research has indicated that the “effects of seismic surveys on fish stock have indicated little or no negative impact” and that the mortality caused by air-emitting devices on fish eggs and larvae might amount to an average of 0.0012 percent a day.

“In comparison to the natural mortality rate of 5-15 percent per day, the seismic induced damage is insignificant,” the oil company asserted, adding “we stand by our statement that the decibel levels of the underwater pulses are similar to the naturally occurring sounds in the ocean.

“The sound from the survey does not exceed 250 decibels which can be compared to a ship sound, close to the hull, which emits 200 decibels and a bottlenose dolphin click which emits 229 decibels.”

At the start of the year, BP conducted a 275-million-dollar seismic study that the company’s regional president Norman Christie said “has given reason for even more confidence in the future of Trinidad and Tobago’s hydrocarbon industry.

“This survey will allow us to improve our understanding of our existing acreage to ensure we are maximising the recovery of the resources. The survey has stirred up quite a bit of excitement as it is the first time we are using this specialised seismic technology in the BP world,” he added.

Aboud says the oil companies’ arguments simply don’t hold water.

“They are saying they are not using explosives. We never say they are using dynamite. We say that the air gun blasts are 260 decibels. A jet aircraft is 140 decibels and human ordinary pain is 130 decibels.

“We are also saying the seismic ships are using 20 to 35,000 individual air guns and each air gun is emitting almost double the sound of a single jet and is equivalent to sound that occurs when you use explosives,” he told IPS.

One of the Berber militiamen blocking the gas and crude oil complex in Nalut, Libya. Credit: Karlos Zurutuza/IPS

By Karlos Zurutuza
ZWARA, Libya , Nov 9 2013 (IPS)

“Oil tankers won´t get crude from this port until Tripoli finally meets our demands,” says Younis, one of the Amazigh rebels today blocking one of Libya´s largest gas and crude oil plants.

Located 100 kilometres west of Tripoli, the Mellitah complex is a joint venture between the Italian oil and gas multinational ENI and Libya´s National Oil Corporation (NOC). The plant remains blocked since a group of armed activists took over the docking port for oil tankers, on Oct. 26. Younis provides IPS with the details:

“We arrived at night by sea from Zwara [the city near Mellitah] and we’ve been organising ourselves in shifts of 30 men,” explains the activist under the tent that hosts the command centre for this strategic location.

“We are the true guardians of the revolution” reads a banner displayed next to the tent.

“In 2011, we Amazighs took up arms against a regime that had treated us like dogs for decades. But two years later we are still struggling for our rights against the new Libyan government,” laments Younis, as he helps to unload supplies from a small boat that has just arrived.

Also called Berbers, the Amazigh are indigenous inhabitants of North Africa with a population extending from Morocco´s Atlantic coast to the west bank of the Nile, in Egypt. Touareg tribes deep in the Sahara desert share the same common language.

The arrival of the Arabs in the region in the seventh century was the starting point of a gradual process of Arabisation that was sharply boosted during Muammar Gaddafi´s four-decade rule in Libya. Estimates put the number of Amazighs in this country at around 600,000 – about 10 percent of the total population.

“The government does not recognise us and we do not recognise the government,” reads another of the banners displayed throughout the complex. Most of them are written in three languages: Arabic, English and Tamazight, the Amazigh language which also has its own alphabet.

“We´re strongly against the committee in charge of writing the new constitution, as we have literally no chance to achieve our rights as a people through it,” says Ayub Sufian, another member of the rebel group controlling the port.

He is referring to the 60-member constituent assembly set to work on the draft of Libya’s post-Gaddafi constitution. The crux of the matter seems to be the six-seat quota given to the country´s minorities.

“Two for the Amazigh, two for the Touareg and two for the Tubu [a group living in the far south of the country],” the rebel tells IPS.

“It is a system that will rule on majorities of two-thirds plus one, so you basically need 41 votes out of 60 to reach an agreement. What are our choices as non-Arab Libyans? We want our language to be co-official, and we want to be able to decide on key issues concerning the country,” says the rebel spokesman, who would favour an agreement “based on consensus, not on majorities.”

Today Sufian wears a camouflage uniform and a gun at his waist. But he is also one of the members of the Amazigh Supreme Council, an umbrella organisation for every Libyan Amazigh town. Most of the towns are distributed across the Nafusa mountain range, in the country´s northwest, but Zwara is an unexpected yet compact enclave on a flat coastal spot bordering Tunisia.

The lack of an effective central government in the country has led to a fragmentation of power along regional and tribal lines. The former insurgents against Gaddafi have turned into a myriad of militias, each one in control of their places of origin and who only pay loyalty to their local councils. And the Amazigh rebels blocking the plant are no exception.

“We receive a lot of food and supplies from Zwara. The whole city is with us,” Sufian claims.

The reasons behind the alleged “unconditional” support are detailed by Fathi Buzakhar, a senior Amazigh activist today working for the Libyan Centre for Strategic and Future Studies, an NGO with offices throughout the country.

“So far we have conducted many peaceful protests and we have also met several times with United Nations representatives, but it has simply not worked. The action in Mellitah takes it a step further,” Buzakhar tells IPS from his home in Tripoli.

“Our region in the Nafusa mountains played a key role in the takeover of Tripoli during the war. They used us and now they reject us under the ridiculous pretext that we are working under a foreign agenda,” laments Buzakhar, who recently visited the oil pipeline south of Nalut, 250 km southwest of Tripoli, which has also remained blocked by the Amazighs, since Sept. 29.

IPS also visited the complex, a cluster of pipes and solar panels under the control today of Amazigh militias from the Nafusa mountain range, Libya´s main Berber stronghold southwest of Tripoli.

“People are coming from every corner, even our Tuareg brothers from the south. They followed suit and blocked the Ubari plant [a complex run by Spain’s Repsol company,  700 km southwest of Tripoli], “ Jadu militia spokesman Omar Srika told IPS.

The rebel had a message to convey: “All this started as a move to get language recognition, but today we also want to tell all those interested in setting foot on Amazigh soil that they will have to take us into account from now on.”

So far the government has not made any military or political move on Mellitah and the Libyan parliament also decided not to address the issue in its last session, on Nov. 5.

In the meantime, blocking gas and crude oil complexes has seemingly turned into a trend to pressure the government across the country.

The crews of the anchored tugboats in Mellitah kill time fishing until a solution comes, while similar protests across the country have knocked down Libya´s crude production by 90 percent.

Workers at the Mellitah plant confirmed to IPS that while the country’s oil shipments -around 160,000 barrels of crude a day – remain interrupted, neither the complex nor its staff have suffered any damage, aggression or threats by the occupants.

However, the rebels say they are willing to take new steps in their protest.

“So far we have only cut oil supplies. Gas is flowing at 40 percent. But if our demands are not immediately addressed in the next few days we will also block the underwater gas pipeline completely,” a rebel spokesman told IPS at the port.

Collateral victims of the dispute between Tripoli and the Amazigh would then be the Italians, who would see their gas supplies on the brink at the gates of winter.

Textiles are one of the key sectors to benefit from the African Growth and Opportunity Act (AGOA). Credit: Kristin Palitza/IPS

By Ramy Srour
WASHINGTON, Oct 1 2013 (IPS)

With a key U.S.-Africa trade agreement up for renewal in 2015, advocates on all sides of the issue say current policies are rife with shortcomings that leave many African businesses out in the cold.

Since its enactment in 2000, the African Growth and Opportunity Act (AGOA) has sought to create trade opportunities for small- and medium-sized African businesses by helping them export their products to the U.S. market.“The greater challenge is to get those key commodities such as sugar and cocoa products to access the U.S. market.” -- Kimberly Elliott of the Centre for Global Development

But policymakers and activists alike are currently increasing focus on AGOA’s failures at empowering Africa’s poorer communities, and whether the act can be tweaked by 2015.

“AGOA has been successful, but only within its limited parametres,” Kimberly Elliott, a senior fellow and expert on trade policy and globalisation at the Centre for Global Development (CGD), a think tank here, told IPS. “The bill has been relatively effective in removing U.S. barriers to African trade, but it hasn’t addressed the fundamental competitiveness issue in Africa.”

And while U.S. exports to Africa have tripled over the last decade, “only as little as 1.3 million jobs have been created on the African continent since the enactment of AGOA,” Ambassador Michael Froman, the U.S. trade representative, recently warned.

According to the U.S. Department of State, “African exports under AGOA have more than quadrupled since the programme’s inception. In 2012, AGOA-eligible countries exported nearly 35 billion dollars in products to the United States duty free under AGOA.”

Limited reach

One of the obstacles to a truly successful outcome for AGOA has been its focus on only some sectors of the economy – including oil exports – to the detriment of those sectors with a more immediate impact on poorer segments of society. That includes the agricultural sector, the single most important for African communities.

“Outside of clothing and other few sectors, U.S. tariffs were already quite low prior to AGOA,” Elliott says. “The greater challenge is to get those key commodities such as sugar and cocoa products to access the U.S. market.”

So far, agricultural products have been excluded from the AGOA framework because of U.S. domestic regulations. This seems to be the biggest bump on AGOA’s road to decreasing poverty in Africa.

“There aren’t that many sectors benefiting from AGOA, apart from textiles,” Zenia Lewis, an analyst on economic development in Africa at the Brookings Institution, a Washington think tank, told IPS. “And unfortunately, the sector that has reaped most of the benefits has been the oil industry.”

According to recent estimates, oil exports cover nearly 90 percent of goods leaving African shores.

At the same time, AGOA has managed to open the U.S. market to the growing African textile industry. Many are today touting as a key AGOA success story the recent boom in Kenyan textile exports to the United States, to companies such as Victoria’s Secret and Macy’s.

According to the most recent estimates, Kenya was the United States’ 103^rd-largest supplier in 2011, with a total of 382 million dollars’ worth of imported goods, a nearly 23 percent percent increase from 2010.

“So far,” CGD’s Elliott says, “this has been AGOA’s best result when it comes to the poorer segments of African producers.”

Sheri Berenbach, president of the U.S. African Development Foundation (USADF), a federal agency, told IPS, “It is important to recognise that one of the most important constituencies of AGOA are the small local and marginalised communities. USADF has been very supportive of AGOA and trade, because a quarter of the producers that we support are small local groups that are now deeply involved with exports to the United States.”

USADF offers development grants to small African businesses seeking to access the U.S. market. Berenbach says such opportunities can have a direct impact on poverty. “Most of the work in Africa is about dealing with the weakest part of the African economy, the impoverished communities,” she says.

Deprivation

As the bill is set to expire, a broad cross-section of interests are looking to 2015 and providing recommendations on how to improve AGOA. They suggest that the bill’s ineffectiveness to date may not be entirely a result of hidden trade barriers.

“AGOA can’t reach those many African communities that aren’t involved in the production process, simply because of domestic restrictions and a lack of adequate infrastructure,” Mwangi S. Kimenyi, the director of the Africa Growth Initiative at the Brookings Institution here, told IPS.

A recent poll by Afrobarometer, an independent research organisation, finds that almost half of Africans still perceive themselves as being poor. Based on polls conducted in 34 countries, the survey shows that at least 20 percent of Africans still feel deprivation with respect to their most basic needs such as food, water and medicines.

One way to do address this, some suggest, would be to include a provision in the next version of AGOA that would provide assistance to small-scale African traders to build their skills at dealing with international trade concerns. USADF’s Berenbach calls this a “trade capacity-building”, or TCB, component.

“Including a strong TCB component would enable even the smaller producers to be more productive and trade effectively, so that we can really use trade to achieve development,” she says.

At the same time, Brookings’s Kimenyi notes that many see AGOA as doing very little for U.S. companies seeking to invest in Africa. Many corporate interests will thus be looking to the debate leading up to the 2015 renewal as an opportunity to change this aspect of the trade agreement.

Almost five years ago, as his village in northern Kyrgyzstan endured daily power outages, rays of light always emitted from Sabyr Kurmanov’s garage. They came from his egg incubator, a 12-volt contraption powered by something he and his neighbours have in abundance – wind.

Kurmanov is no environmentalist. But he knew that he could not rely on the ailing national energy grid for a steady supply of power. “Hatching eggs requires stable light and temperature,” he says. Kurmanov fashioned the turbine himself; parts for the 60-egg incubator setup cost less than 300 dollars.

“Mine was the only business in Kochkor working around the clock,” he jokes.

These days, Kurmanov, a small-time businessman and former engineer, has inspired his neighbours. Each summer, he helps them use solar-powered pumps to get clean water out of the ground. Not far from Kochkor lies an alpine lake, Song-Kul, where shepherds live with their families for a few months a year. Now visitors can enjoy the disorienting experience of waking up in an isolated yurt hearing a shepherd’s favourite brand of techno – the beat powered by the sun.

But while public interest in alternative energy has increased – mainly spurred by an ongoing energy crisis – heavily subsidised domestic electricity, when it works, provides a disincentive for local businesses to invest in off-the-grid options.

Rates in Kyrgyzstan are the cheapest in Central Asia. And mindful of the fate of ex-President Kurmanbek Bakiyev, who was chased from power shortly after imposing a steep utility rate hike in 2010, today’s leaders in Bishkek are wary of raising tariffs, despite the World Bank’s prediction of a protracted supply deficit beginning this winter.

Igor Kuon worked for 14 years in the state hydroelectric sector and now leads Inkraft, a company supplying small-capacity hydropower-units and solar panels. He has been well placed to observe the “deterioration of national energy”. When his company started working on renewables in 2003, there wasn’t much demand for their services, he told EurasiaNet.org.

“Energy was plentiful and it was cheap. The [national] grid wasn’t well managed but it had retained some of its former capacity. The equipment was in better condition. Some specialists had left [Kyrgyzstan], but not all,” Kuon explained.

Since then, however, rapid degradation of physical infrastructure and mismanagement has taken a toll.

“By the time Bakiyev came to power [2005] much of the infrastructure was ruined. … A few people began to realise cheap energy is only useful if it exists,” said Kuon.

Industry experts argue that Kyrgyzstan would be ripe for a renewables drive, if only investment was forthcoming. The country enjoys an average of 270 days of sun per year and only Tajikistan and Russia have more significant hydropower potential among former Soviet countries, says Edil Bogombayev, who coordinates a U.N. project that helps build small hydropower stations (between five- and 300-kilowatts) for rural households and communities living close to rivers.

According to Bogombayev, a five-kilowatt hydropower unit can power a small farm, but with construction and installation costing several thousand dollars, such initiatives are mostly donor-funded. Off-grid energy amounts to less than one percent of the total produced and consumed in Kyrgyzstan, he says.

Small, privately financed initiatives such as Kurmanov’s wind-powered incubator and larger commercial operations such as a 500-kilowatt hydro-powered dairy factory based in the western town of Belovodsk remain the exception rather than the rule.

Although unrelenting budget woes mean the government is short on cash for alternative energy, there is hope that amendments to the Law on Renewable Energies last August will stimulate private-sector investment in low-capacity hydropower stations. Mirroring a global trend, the amendments increased the fee energy producers can make by selling excess power to the national grid, a move that could help relieve stress on the system. Regulators are still working out the details.

Bogombayev sees foreign investment in renewables as integral to taming Kyrgyzstan’s energy risk and notes the interest of Toulouse-based MECAMIDI in constructing and renovating mini-hydro stations in the north of the country. He acknowledges, though, that instability in Bishkek remains a deterrent: “investors will react according to the political situation.”

Nevertheless, despite falling prices over the last few years, fully green commercial operations are currently “not realistic”, a hotelier in Cholpon-Ata, a town on the shore of Kyrgyzstan’s main tourist attraction, Lake Issyk-Kul, told EurasiaNet.org. The hotelier, who insisted on anonymity for fear of hurting revenues, estimates her 15-room facility generates under 6,000 dollars a year in utility bills.

“I have six Chinese solar-paneled water heaters that cost 500 dollars each and heat 150 litres of water each. But solar infrastructure to power the whole hotel would cost 25,000 dollars. It would take nearly five years to earn back.”

By contrast, in places where energy is expensive, such as in Scandinavia, solar users are prepared to wait up to seven years for their capital investments to pay off, notes Kuon, the Inkraft director. Kyrgyz reluctance is explained by “a lack of savings capital and the local mentality”, he explains. People are wary of investing long-term in anything because of ongoing political instability.

“While electricity costs [0.015 dollars] per kilowatt-hour, why invest your own money in solar?” he asks. “People will wait for the system to collapse first.”

Editor’s note:  Chris Rickleton is a Bishkek-based journalist. This story originally appeared on EurasiaNet.org.

Regional temperature increases predicted by 2100. Source: Intergovernmental Panel on Climate Change Synthesis Report 2004

By Stephen Leahy
UXBRIDGE, Canada, Aug 15 2013 (IPS)

Two reports released Wednesday reveal the dangerous gap between science and politics. New climate research shows that extreme events such as the severe heat wave in the U.S. last year will double in 2020, increase 400 percent by 2040, and then get far worse without significant carbon reductions.

Meanwhile, an analysis shows Canada cannot meet its weak 2020 carbon emissions reduction target even as it plans to triple the size of its massive tar sands operations in coming decades.

Canada’s has no credible carbon reduction plan and has done virtually nothing on climate since Stephen Harper’s government came to power in 2006, said activists.

“It will be very difficult for the Canadian government to achieve its own emissions reduction target for 2020 even without tar sands expansion,” Danny Harvey, a climate scientist at the University of Toronto, said at a press conference Wednesday.

Canada, the United States and other countries pledged to reduce their total carbon dioxide (CO2) emissions by 17 percent compared to 2005 levels by the year 2020 under what is known as the Copenhagen Accord. Scientists say that target is too weak and will result in global temperatures rising by at least 3.5C, a very dangerous level of climate change.

Those high temperatures will likely produce heat extremes that kill people, animals and crops, and blanket 85 percent of the planet’s land area in summer by 2100, German and Spanish scientists reported late Wednesday.

“That’s what our calculations show for a scenario of unabated climate change,” said co-author Dim Coumou of Germany’s Potsdam Institute for Climate Impact Research (PIK).

Shockingly, it is already too late to prevent a doubling of heat waves by 2020 and four-fold increase by 2040, concludes the study published in the journal Environmental Research Letters.

The reason for this is that burning enormous amounts of fossil fuels over the past 50 years has added 40 percent more heat-trapping CO2 gas to the atmosphere. Even if all human sources of CO2 emissions ended today, temperatures will continue to rise from the present 0.8C of additional warming to as much as 1.1. to 1.5C due to a time lag in the climate system, scientists say.

And those temperatures would not decline for a very long time.

That is why all countries agreed to cut CO2 emissions at the 2009 U.N. climate treaty negotiations in Copenhagen.

Canada matched the U.S. pledge to reduce emissions 17 percent but then did little to reduce its emissions and instead dramatically expanded the world’s biggest energy project, the Alberta tar sands.

Each year, the tar sands burn nearly 40 billion cubic metres of natural gas, roughly two-thirds of what India uses annually. This gas is mainly used to heat water so the tarry bitumen can be boiled out of the ground and converted into heavy crude oil.

In 2011, 370 million cubic metres of freshwater was used. This is more than the city of Toronto’s 2.8 million people use. Oil companies pay nothing for the water even though the water becomes too toxic to be returned to rivers or to aquifers.

Most analyses show that oil from the tar sands is the most polluting and has the highest CO2 footprint compared to other sources of oil. Those CO2 emissions are increasing as bitumen becomes harder to extract and are expected to double by 2020.

“Canadian politicians are simply not telling the truth. You can’t keep expanding the tar sands and meet the reduction target,” said Mark Jaccard, an energy economist at Simon Frasier University and a Harper government appointee to the now-shuttered National Round Table on the Environment and the Economy.

There are no federal regulations on oil and gas emissions in Canada. Instead of acting, the Harper government launched a 16-million-dollar public relations campaign in the U.S. and Canada promoting the economic benefits of “responsible resource development” of the tar sands – a move mocked by activists as “greenwashing”.

Deep cuts in emissions after 2020 will be needed to avoid most of the world suffering under devastating heat waves before the end of the century, the Potsdam Institute’s research shows. Those reductions “will be impossible to achieve if we lock in 40 years of increased tar sands emissions by building more pipelines” like the Keystone XL, said the University of Toronto’s Danny Harvey in a press conference here in Toronto Wednesday.

The U.S. is on target to make its meet its Copenhagen reduction pledge. However, Canada’s abysmal environmental record has come to the attention of the Barack Obama administration. President Obama recently said that he would only approve the Keystone XL tar sands pipeline if it “does not significantly exacerbate the problem of carbon pollution”. The long-delayed Keystone XL would bring 800,000 barrels of tar sands bitumen (heavy oil) to refineries on the U.S. Gulf Coast.

Keystone XL will increase Canada’s emissions by allowing the tar sands to expand in size, said Gillian McEachern of Environmental Defence Canada. And there is no technology nor any policies that will allow Canada to reduce those emissions before 2020, McEachern said.

Other proposed pipelines that are needed to support tar sands expansion have met strong opposition in Canada and it is far from certain if they will be completed, said Jaccard.

“We are now at a point where the only acceptable alternative is for the U.S. government to reject Keystone XL,” he said.

Activists taking part in the annual 'Healing Walk' through the tar sands site in Fort McMurray, Canada, call for the expansion of the energy project to end. Credit: Keepers of the Athabasca

By Flossie Baker
NEW YORK, Aug 5 2013 (IPS)

“First the bugs began to disappear,” says Eriel Deranger, spokesperson for Athabasca Chipewyan First Nation.

By Deranger’s account, her small community of Fort Chipewyan is increasingly affected by the expansion of the world’s third largest crude oil deposit, the Athabasca tar sands of Alberta, Canada."Our people are being held as economic hostages in the race to develop our homeland." -- Eriel Deranger of the Athabasca Chipewyan First Nation

In the last decade, the town of Fort Chipewyan in northeastern Alberta has witnessed its local caribou herds threatened with extinction, a decline in the numbers of migratory birds, and elevated rates of certain types of cancer.

An independent study conducted from 2006 to 2009 was inconclusive about the cause of the rise in cancer.

“The most recent statistics indicate that overall rates of cancer are not higher in Fort Chipewyan compared to the Alberta average,” John Muir, spokesperson for Alberta Health Services, told IPS.

“However, the rate is higher for specific cancers such as lung cancer. Independent medical studies have found no causal links between oil sands development and the community health downstream.”

Many locals do not believe it is a coincidence that cancer rates and tar sands production have both increased. Nevertheless, the community is pleased with its new health facilities, which were largely paid for by the oil company Suncor.

Oil companies continue to heavily fund projects for Native people in northeastern Alberta. In 2009, they donated more than 23 million dollars to organisations in the region, including youth and community programmes. Yet for a lot of local indigenous people, this support is bittersweet.

Like many northern indigenous communities, Fort Chipewyan has struggled economically since the fur trade, on which it heavily depended, was outlawed in the early 1970s. Now, with fears of contamination compounding the hardships of living off the land, many residents have turned to the tar sands for employment.

This is a move encouraged by oil companies, one of which provides a fly in/fly out service every two weeks for its workers from the isolated town.

“[The oil] industry is proud of the solid relationship it has with Aboriginal people…[and] has created mutually beneficial employment and business opportunities,” Geraldine Anderson of the Canadian Association of Petroleum Producers told IPS.

The town’s elders, however, have mixed feelings about younger generations leaving to work in the tar sands.

“The elders who lived through the end of the fur trade, and then the [economic] depression…are now seeing this resurgence,” Deranger says. “This economy on the one hand is ensuring that their families are fed …and are allowing new and better health facilities…people are able to live well.

“However it’s also going hand in hand with the loss of land, the loss of culture, the loss of identity.”

Deranger explained that a deep understanding and connection with the land is central to the culture of indigenous people.

“The blades of grass, the leaves on the trees, the medicine, the water, the animals: they are our brothers and sisters and cousins…the land is where we learnt to be human and self-sufficient,” she said.

Deranger says that there has been a surge in the numbers of Fort Chipewyan tar sands workers taking drugs and alcohol. She attributes this to the racism they face in the workplace as well as the psychological trauma of leaving their land.

“We are seeing increases in the cases of post-traumatic stress disorder because they are watching the destruction of their ancestors. And this is why we are seeing an epidemic of substance abuse…they are trying to numb that pain,” Deranger told IPS.

Covering 142,200 square kilometres, the tar sands span an area the size of New York State. Only 20 percent of the deposit has thus far been mined and it is estimated that the Athabasca tar sands have the potential to produce three million barrels of oil per day for the next 150 years.

Environmentalists say that mining tar sands oil produces three to five times more greenhouse gas emissions than conventional crude. Large amounts of water and natural gas are required to heat and separate oily tar – or bitumen – from the sand.

Extracting one barrel of oil from the tar sands requires 650 cubic feet of natural gas, according to Shell Canada figures.

Shell, one of the world’s largest oil companies, estimates that by 2050, only 30 percent of the world’s energy sources will be will be renewable, with the remaining 70 percent coming from fossil fuels and nuclear energy.

There is a huge incentive for oil companies to expand. If U.S. President Barack Obama gives the go-ahead for the expansion of the Keystone XL pipeline, oil would be transported all the way from Alberta to Houston, Texas.
This is a worrying prospect for Deranger who believes that expansion has already committed a “cultural genocide” against her community. Being both an economic catalyst and environmental hazard, the tar sands pose a difficult dilemma for many Fort Chipewyan residents.

“We need these jobs …because there are members that can’t pay their bills and [whose] children are starving. Our people are being held as economic hostages in the race to develop our homeland,” Deranger says.

Despite a pledge by the oil companies to reduce environmental contamination, it still occurs. For the last six weeks, oil has been continuously leaking from the ground into the forests of Cold Lake, Eastern Alberta. Attempts to stop it have so far failed.

The continuing expansion of the tar sands is viewed by some as a practical solution to the world’s increasing demand for energy, and by scientists and climate activists on both sides of the border as a catastrophe. For local indigenous people who live at ground zero, their traditional culture is in jeopardy.

“When there is no Athabasca left, there will be no Athabasca Dene Suline [the Native language]…You will have completely annihilated an entire people,” says Deranger.

Ervand Abrahamian, a leading historian of modern Iran, has recently explored the 1953 Anglo/American-sponsored coup that overthrew Iranian Prime Minister Mohammad Mosaddeq.

The 28 months under Abrahamian’s scrutiny in The Coup: 1953, The CIA, and the Roots of US-Iranian Relations form a defining fault line in Iranian history.

Ervand Abrahamian. Courtesy of Baruch College.

His book is particularly timely given the striking parallels between the debates he recounts and those surrounding the current dispute over Iran’s nuclear dossier.

Competing narratives

The overthrow of Iran’s democratically elected prime minister, who oversaw the nationalisation of Iran’s oil industry, significantly impacted Iranian collective memory and political culture.

While some Western analysts trace the roots of current U.S.-Iranian hostilities to the 1979 Revolution and the hostage crisis, for Iranians it begins with the coup, with the memory of Mossadeq representing a future denied.

In recent years, Western scholars and journalists have put forth a narrative asserting that U.S. policymakers recognised the shortcomings of British strategy in the age of postcolonial nationalism and had pressured London to accept Iran’s legitimate demands prior to 1953.

According to this argument, U.S. diplomats pressed both sides towards compromise and presented innumerable proposals that sought to reconcile British mandates with Iranian imperatives.

Such narratives also place the responsibility for the failed negotiations squarely on Mossadeq for his intransigence – even attempting to trace this to his aristocratic background or presumed martyrdom complex.

Abrahamian effectively challenges this understanding by providing a detailed account of the 1953 coup from its genesis to its aftermath.

The most impressive aspect of the book is its diligent scholarship and exhaustive use of primary sources.

The lion’s share of Abrahamian’s narrative is substantiated by declassified documents from U.S. and British national archives and those of the Anglo-Iranian Oil Company (AIOC) – an antecedent of the modern BP.

To this he adds interviews from oral history projects, biographies, memoirs and the private documents of key individuals both Western and Iranian.

If Abrahamian has an axe to grind, he does so with facts and figures.

For him, the dispute was a zero-sum struggle for control over Iran’s oil industry.

Abrahamian underscores “control” as the operative word underlying the crisis, as it appears repeatedly in internal government documents, and is used by all parties to articulate their objectives.

For Iran, national sovereignty was equated with control over its oil industry.

For the British, the nationalisation of Iran’s oil meant the loss of their control over the global market during a period of imperial contraction.

The United States had as much invested in the crisis as Britain.

The U.S. thus participated in the coup not as a means of curbing communist expansion in Iran, as is often stated, but because of the repercussions that oil nationalisation could have in other parts of the world.

For this reason, Abrahamian argues, the negotiations were destined to fail.

Detailing a number of proposals made to Iran, Abrahamian demonstrates how much of what is lauded today as Anglo-American fair compromises were deemed even by some in the West as “raw deals” – at best meaningless oxymorons, at worst deceptive smokescreens.

These proposals were predicated on the principle of conceding to Iran “general authority” while maintaining “executive management” in British hands.

As the British ambassador to Washington reported in 1951, U.S. policymakers “suggested accepting the pretense and the façade of nationalisation while maintaining effective control.”

In other reports, he would replace “façade” with “cloak”.

An exception was a package offered by Assistant Secretary of State George McGhee, which was deemed acceptable by Mosaddeq during his 1951 visit to the United Nations.

But the incoming Tory government in Britain rejected it as “totally unacceptable”, insisting that it was “far better not to have an agreement than to have a bad one”.

Accounts like this debunk arguments that it was Mosaddeq’s absolutist rhetoric and intransigence that militated against a judicious resolution of the crisis.

Mossadeq’s legacy

For Abrahamian, the career politician and legal scholar Mosaddeq was a leader accountable to his people.

His actions were dictated by Iran’s national rights, interests and security.

Given the significance of oil to the economic livelihood of Iranians and their exploitation by the AIOC, Mosaddeq could not give ground at the whim of great powers.

Moreover, he was a willing participant in the negotiations.

As Abrahamian details, Mosaddeq offered compensation, sale of oil to the AIOC and the employment of foreigners.

This is significant because Western arguments against nationalisation highlighted Iran’s lack of skilled labour to manage the installations.

Throughout “The Coup”, Abrahamian approaches every episode in the crisis with due treatment.

His narrative locates the coup firmly inside the conflict between imperialism and nationalism.

While this refreshing perspective clears away much of the Cold War cobweb of existing literature, an outright rejection can be limiting and insufficiently nuanced.

The viewpoint Abrahamian provides and the one he counters must be viewed as complementary in providing a comprehensive understanding of the period rather than mutually exclusive.

Then and now

It’s impossible to read “The Coup” without relating what’s passed to the present.

The events leading up to 1953 involved sanctions, affirmations of Iranians’ sovereignty, the assertion of great power demands and interests and even the beating of war drums.

In 1952, a British press attaché in Tehran strongly urged the Foreign Office to keep a “steady nerve” and wait for Mosaddeq’s fall.

She insisted, “Our own unofficial efforts to undermine him are making good progress. If we agree to discuss and compromise with him, the effort will strengthen him.”

Such rhetoric might resonate with contemporary pundits whose analyses hinge on regime change in Iran.

One moral that can be extracted from “The Coup” is that negotiations only work when all parties involved are genuinely dedicated to the process.

On Iran’s side today, both the intention and the means seem to be present.

Nicknamed the “diplomatic sheikh”, Hassan Rouhani won the presidency following Jun. 14 elections on a platform of moderation, stating at the ballot box that he had “come to kill extremism”.

In his public statements he sharply criticised Iran’s inflexible stance on the nuclear issue and called for a more constructive dialogue.

During his tenure as Iran’s chief nuclear negotiator, Iran signed two agreements with the UK, France and Germany to suspend enrichment and reprocessing activities, temporarily and voluntarily, in exchange for technical and economic incentives.

The show of popular force behind Iran’s president-elect is bound to allow the state a degree of flexibility in its negotiations and ability to grant concessions.

In short, if Washington is indeed committed to a diplomatic resolution of the impasse, the time to act is now.

*Reyhaneh Noshiravani is a doctoral candidate at King’s College London, where she studies Iranian foreign policy and Persian Gulf security.

Children in Georgetown, Guyana learn about solar energy during an exhibition. Credit: CREDP

By Jewel Fraser
PORT OF SPAIN, Trinidad, Jul 8 2013 (IPS)

When James Husbands, a 24-year-old Barbadian businessman, began weighing the possibility of manufacturing solar water heaters, there was already a prototype on the island that had been designed and installed by an Anglican priest living there in the early 1970s.

A market study on the viability of producing solar water heaters had been done by a local NGO. This study, coupled with the Barbados government’s imposition of import duties on the solar water heaters sold by an Australian company to the island, convinced James that the time was right to enter the field."Governments cannot promote what they do not understand and utilities do not promote what they are not supplying themselves." -- CREDP's Thomas Scheutzlich

Husbands, now managing director of Solar Dynamics, told the IPS that government support in the late 1970s was crucial to the success of his venture in the early days. Barbados currently has the fifth highest penetration worldwide of solar water heaters per thousand households.

Arnaldo Vieira de Carvalho, a specialist in the Energy Division of the Infrastructure and Environment Sector of the Inter-American Development Bank, told IPS that Latin America and the Caribbean use renewable energy (RE) in much greater proportion than any other region, although much of that is hydropower and biofuels. The use of wind and solar remain quite small.

IDB and its partners have sponsored a competition since 2009 for RE and Energy Efficiency projects in the Caribbean, the winners of which receive up to 100,000 dollars in financing and technical support. Eight winners were selected last year. The competition, IDEAS, has among its criteria that winners’ projects should benefit the poor, gender equity, and indigenous communities.

An added incentive to accelerate the slow pace of RE development, even though the region is not a major source of fossil fuel emissions, is the spate of devastating natural disasters over the past decade.

Ulric Trotz, deputy director and science adviser of the Caribbean Community Climate Change Centre (CCCCC), told IPS in an e-mail, “Extreme weather events (often associated with climate change) have caused significant damage to the region. For example, Hurricane Ivan in Grenada wiped out approximately 200 percent of her GDP in 2004. Similarly, a one in 100-year flood in Guyana in 2005 wiped out more than 60 percent of that country’s GDP in that year, moving it from a positive growth position to a negative real growth.”

Consequently, Caribbean governments have begun taking a more proactive approach to promoting the development of renewable energy, establishing an Energy Unit at the Caricom regional headquarters which works in conjunction with the CCCCC.

Trotz said promoting renewable energy is important, because “by diverting costs away from the importation of fossil fuels, [Caribbean] countries will have additional resources from the savings to put towards building resilience to the impacts of Climate Change and Climate Vulnerability.

“It is not just the conversion to renewable energy but energy efficiency” that the region is focusing on, he said.

He added that “pooling RE projects across the region might have a catalytic effect of encouraging investment as this may significantly lower transaction costs and make investment more attractive.”

The Caribbean, apart from Trinidad and Tobago, which is an oil producer, currently spends billions on the importation of fossil fuels every year. In May, while on a visit to Trinidad, U.S. Vice President Joe Biden made the point that energy costs in the region need to be lowered and the use of renewable energy increased.

“There’s probably no group of nations better situated to take advantage of renewable energy possibilities than here in the Caribbean. And we know that many Caribbean nations pay three times more for energy than we do in the United States of America…[We] are working together on this, looking to invest in connected regional grids to create economies of scale and renewable energy – economies of scale that are driven by renewable energy,” he said.

The region has also sought the assistance of European Union partners, and launched the Caribbean Renewable Energy Development Programme with the major objective of strengthening the ability of Caribbean countries to mobilise investors to make the shift from conventional energy investment to renewable energy investment.

According to Thomas Scheutzlich, principal advisor of the Caribbean Renewable Energy Program (CREDP) since 2003, lack of an enabling legal policy framework and lack of well-defined bankable project proposals have been major barriers to the development of RE projects in the Caribbean region.

Scheutzlich has overall responsibility for implementation of the CREDP programme on behalf of the German consultancy company Projekt-Consult GmbH, which is charged by the German Agency for International Cooperation (GIZ) with the implementation of CREDP. Germany is responsible for 80 percent of CREDP’s funding.

One problem is that many banks in the region are unsure of the economic soundness of RE ventures and are unable to judge the risks inherent in such new technology, Scheutzlich said. The lack of government guarantees also makes traditional banks reluctant to back such ventures.

However, regional and international banks such as the Inter-American Development Bank (IDB), the European Investment Bank, and the Caribbean Development Bank “are all looking for bankable energy projects and offer financing,” he said.

Scheutzlich added that, “There is still a widespread and general lack of understanding of the potential of indigenous energy sources and energy efficiency throughout the society. Subsequently, governments cannot promote what they do not understand and utilities do not promote what they are not supplying themselves.”

Utility companies in the region generally have universal monopoly over the generation, transmission, distribution, and sale of electricity. “This is their traditional business model and they will only divert from that model if it is economically attractive” for them to do so, he said.

But despite the slow pace in the Caribbean, during the last few years the energy landscape has been “positively changing with the change processes accelerating and gaining a certain dynamism, and this is exactly what CREDP wants to trigger.”

Oil rigs and pumps. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Jul 2 2013 (IPS)

A federal judge here on Tuesday struck down a key new regulatory provision that would require large U.S.-listed extractives companies to disclose payments made to foreign governments, a rule that rights groups had long pushed as a way to cut down on corruption in developing countries.

The judgement is being seen as technical, however, and could allow government regulators to tweak and re-issue the rule.

The ruling is seen as a major victory for the American Petroleum Institute (API), a lobby group that sued the U.S. government following the rule’s adoption, last August, on several grounds, including that it would force businesses to divulge proprietary secrets, impose significant costs and infringe on their Constitutionally mandated right to free speech.

“The court has vacated the SEC’s requirement that U.S. companies report competitive information that can be used against them by global competitors,” Harry Ng, API vice president and general counsel, said in a statement.

“U.S. companies are leading the way to increase transparency, but the rule would have jeopardised transparency efforts already underway by making American firms less competitive against state-owned oil companies.”

Ng points out that several major companies under the API umbrella are engaged in the Extractives Industry Transparency Initiative (EITI), a set of standards currently being implemented in around three-dozen countries. Yet the U.S. Congress had felt that the EITI standards were not strong enough (they have since been tightened), and thus mandated the SEC to come up with the extractives payment rule.

The rule is known as Section 1504, part of financial industry overhaul legislation known as the Dodd-Frank Act, signed into law in 2010. As finally adopted in August, Section 1504 requires that all oil, gas and mining companies listed on U.S. stock exchanges engage in annual, public reporting of any payments over 100,000 dollars made to foreign governments.

The rule would apply to around 1,100 companies, and disclosures would have been required starting next year.

Passage of Section 1504 was seen as an important victory by pro-transparency activists and development groups, who suggest that such transparency can crack down on rampant corruption and help to lift the “resource curse” in some resource-rich, governance-poor developing countries, particularly in Africa.

“Needless to say we are incredibly disappointed with this decision, particularly given that the United States has been a leader on this issue through the passage of Section 1504,” Jana Morgan, a Washington campaigner with Global Witness, an advocacy group, told IPS.

“We are now seeing similar initiatives in the European Union and Canada, with transparency in resource payments becoming the new paradigm and the new standard for best business practices.”

Senator Ben Cardin, who co-authored Section 1504, similarly expressed concerns over the potential broader effects of Tuesday’s court decision.

“The U.S. has been at the forefront of the transparency fight, and this decision will delay implementation of vital transparency rules,” Cardin said in a statement.

“Congress was clear in the letter and the spirit of the law that this information should be in the public domain. It’s unfortunate that the court believes that company disclosures to the SEC should remain hidden.”

‘Substantial errors’

The court’s decision revolves around the SEC’s interpretations of the law originally handed down by Congress. In this context, the judge ruled that the SEC had overreached the Congressional mandate in two important ways.

First, the commission’s rule required that company reports on this issue be made public, rather than publishing only, say, summaries of the reports. API-aligned companies had stated in court that changing this element would have cleared up most of their concerns over Section 1504.

Second, the rule did not offer any exemption for companies operating in countries where national laws disallow any such disclosure – Angola, Cameroon, China and Qatar are the four at issue in this case, though this is disputed by transparency advocates.

“The record of comments to the SEC shows clearly that no one has yet correctly identified a single country where Section 1504 disclosures would come into conflict with local laws,” Heather Lowe, director of government affairs with Global Financial Integrity (GFI), a Washington watchdog group, said in a statement on Tuesday. GFI has estimated that illicit financial flows cost developing countries a trillion dollars a year.

Yet companies say Section 1504’s lack of an exemption for national rules would force them to pull out of certain countries, resulting in massive economic costs.

U.S. District Court Judge John D. Bates noted these two points constituted “substantial errors … the commission misread the statute to mandate public disclosure of the reports, and its decision to deny any exemption was, given the limited explanation provided, arbitrary and capricious.”

Because Bates had already struck down the rule based on these two points, he did not offer a decision on the remaining arguments, including the issue of constitutionality. The decision now sends the issue back to the SEC to refashion a new rule, unless the commission moves to appeal the judgement to a higher court.

Contacted by IPS, John Nestor, an SEC spokesperson, said only that the agency is reviewing the decision.

Towards re-enactment?

While rights groups here and internationally are expressing disappointment over the decision, they are noting that the judgement leaves intact significant components at the heart of Section 1504.

“We strongly disagree with the court findings, but that said, the court hasn’t precluded the possibility that the rules will be re-enacted in the same form but with a stronger justification,” Gavin Hayman, the London-based director of campaigns for Global Witness, told IPS.

“Further, we note that nothing in the decision blocks the SEC from requiring public reporting or allows for exemptions from reporting. The oil industry has never been able to clearly show the existence of host country prohibitions against payment disclosure.”

Similar points were made Tuesday by the Washington office of Oxfam America, a humanitarian group that filed a court brief in support of the SEC in this case.

“Nothing in the decision says that the SEC may not require public reporting or deny exemptions – it just says that the SEC needs to use its discretion and provide a fuller analysis,” Ian Gary, Oxfam’s senior policy manager, said in a statement to IPS.

“We disagree with the court’s analysis of the SEC’s justification for not providing reporting exemptions. Despite the court’s conclusions, the SEC balanced the potential costs and benefits of granting exemptions.”

Gary also noted the court’s refusal to rule on the API’s free speech-related argument, but suggested that the judge “did recognise that the Supreme Court has upheld public disclosure requirements as an appropriate approach to regulation.”

An electricity pylon in Somaliland being repaired by Edwin Mireri. Somaliland’s first Electricity Energy Act will be launched this year and it will be the country’s first legal and regulatory framework aimed at managing energy production and distribution. Credit: IPS

By Jared Metzker
WASHINGTON, Jul 2 2013 (IPS)

During an eight-day trip to Africa, President Barack Obama unveiled an ambitious plan to improve access to electricity across the continent, a move the White House says is designed to lift Sub-Saharan Africa out of poverty and help the region develop a stable middle class.

While the initiative may appear to be a generous increase in U.S. government aid to the continent, analysts suggest that it is perhaps more noteworthy as a change in the paradigm of how the United States assists developing nations.

The plan, dubbed Power Africa, will be aimed at doubling access to electricity in the region, where some 85 percent of the rural population continues to lack access to power. The hope is that vastly increasing this infrastructure will in turn strengthen African economies.

“The initiative seeks to address a major, major issue,” John Campbell, a senior fellow for Africa policy studies at the Council on Foreign Relations, a think tank here, told IPS. “The absence of electrical power, among other things, makes it difficult to establish the kind of manufacturing that generates employment.”

Power Africa was announced on the heels of an address given by President Obama at the University of Cape Town, in South Africa. The president, who has been criticised for actions that fail to live up to his impressive speeches and for largely ignoring Africa during his first term, called on the United States to “up [its] game when it comes to Africa”.

Obama referenced Nelson Mandela’s experience in captivity as analogous to Africa’s continued suffering with poverty and underdevelopment.

“(J)ust as freedom cannot exist when people are imprisoned for their political views,” he stated, “true opportunity cannot exist when people are imprisoned by sickness, or hunger, or darkness.”

The president also asserted that development assistance to the region would be in the United States’ own interests, saying an enlarged middle class there would translate into “an enormous market for [U.S.] goods”.

Assistance as insurance

Establishing reliable sources of electricity, the Obama administration believes, will be a key part of the effort to bolster that middle class.

An estimate endorsed by the administration states that it would take around 300 billion dollars to grant all Sub-Saharan Africans access to electricity by 2030. With Power Africa, the U.S. ensures the region will receive seven billion dollars over the next five years.

That sum will be split among six countries (Kenya, Ethiopia, Ghana, Liberia, Tanzania and Nigeria). It will be used to exploit the region’s large, newly discovered reserves of oil and gas, as well as its potential to develop renewable energy from geothermal, hydro, wind and solar sources.

But, as Campbell points out, the way the United States will raise the seven billion dollars represents a shift in how it provides aid to Africa, focusing more on private trade and investment rather than on direct government aid.

“The old model would have been a government aid agency providing U.S. taxpayer money to fund development projects,” he says. “Here we will have the government partnering with private sources of money by guaranteeing against losses.”

Essentially, Campbell explains, the United States will marshal seven billion dollars’ worth of both money and material from private investors, who will then provide much of this by exporting manufactured goods intended to improve African infrastructure. These investors will be protected from losses by guarantees from Washington, which will play a role similar to that of an insurance provider.

Five billion dollars of support will be provided by the U.S. Export-Import Bank (Ex-Im) to U.S. exporters, while another 1.5 billion dollars in financing and insurance will come from government’s Overseas Private Investment Corporation (OPIC).

Only a small portion of the seven billion dollars will come in the form of government aid. One billion dollars will come from the publicly-funded Millenium Challenge Corporation (MCC), while the country’s main foreign assistance arm, U.S. Agency for International Development (USAID), will provide just 285 million dollars.

“At the end of the day, if it all works out well, the U.S. government will actually make money,” Campbell says.

He also notes that the new model will mean insured profits and new jobs for U.S. manufacturers assigned with exporting needed products.

Campbell is concerned, however, that the new plan could fall short of its goals without additional U.S. government funding. But given the budget-conscious attitude prevailing in the U.S. Congress, he suggests this funding could be unobtainable.

China question

Some have speculated that the revamped assistance to Africa comes as a response to Chinese movement into the continent. China has, over recent years, invested massive amounts of its reserve funds into bolstering African infrastructure, and thus making inroads for future commercial and political relations.

Yet Campbell believes this speculation reflects an outmoded Cold War-era mentality and is an incorrect interpretation of what motivates the United States. He points out that Obama on Sunday welcomed investment in Africa by states other than the U.S. – including China.

“Governments and businesses from around the world,” Obama stated, “are sizing up the continent, and they’re making decisions themselves about where to invest [and] that’s a good thing. We want all countries – China, India, Brazil, Turkey, Europe, America – we want everybody paying attention to what’s going on here, because it speaks to your progress.”

Oil giant Chevron's corporate offices in Houston Texas are housed in the old Enron buildings at 1400 Smith St. Credit: Jonathan McIntosh/cc by 2.0

By Carey L. Biron
WASHINGTON, May 29 2013 (IPS)

At an annual shareholder meeting held Wednesday, upper-level management for the oil conglomerate Chevron faced renewed questioning over its record-setting political contributions during last year’s national election.

At the meeting, a shareholder resolution on the issue focused on Chevron’s alleged refusal to explain how the company’s political spending has benefited shareholders, particularly given the excoriating criticism the contribution has garnered, and called for a cessation of the practice.

The resolution failed to pass, however, receiving just four percent of shareholder backing.

Of particular interest has been a lump payment of 2.5 million dollars spent by a Chevron subsidiary. Given that Chevron receives government contracts, the contribution’s timing (in the last weeks of the election) and its beneficiary (a group focused on electing Republicans to the House of Representatives) have raised concerns that the payment could have violated U.S. law.

Chevron is wrapping up “its most expensive year of political spending to date,” Green Century Capital Management, which filed the resolution, stated Tuesday, just ahead of the shareholder meeting. The advisory firm is now formally urging the company to “refrain entirely from political spending, arguing that doing so would protect against risks to shareholder value”.

Chevron, the second-largest oil company in the United States, reportedly spent a total of 3.9 million dollars during the 2012 campaign. Yet it was the 2.5-million-dollar payment to a group called the Congressional Leadership Fund that has become the focus of much interest, in part because it is the largest single corporate political contribution to date.

In 2010, the U.S. Supreme Court handed down a controversial ruling that lifted restrictions on most corporate election-related spending. The decision made the 2012 presidential election the most expensive to date.

It has also sparked a significant public backlash: according to a September poll, more than four-fifths of U.S. respondents would support limiting election spending. Further, at least 14 states have now passed resolutions urging a constitutional amendment to overturn the judicial decision, known as Citizens United.

Against this backdrop, Chevron has been widely pilloried for having racked up the largest-yet corporate political contribution since the Citizens United decision was handed down.

“This issue is important for our members because Chevron has not been willing or able to demonstrate value to shareholders of its political expenditures,” Leslie Samuelrich, a senior vice-president with Green Century, told IPS.

“Given high negative press coverage that Chevron’s contribution garnered for the company, we feel that it’s important that Chevron explain why it made this contribution, as well as a long list of growing political contributions over the years. They weren’t able to do so, so we went forward with the resolution.”

Following Wednesday’s vote, Samuelrich lauded the results, telling the media the process represented “a turning of the tide”.

Risky business

The Citizens United decision appears to have led to an immediate response from Chevron. The company has reported spending a little more than a million dollars on political contributions in 2008 and a little less than that amount in 2010, when the Supreme Court ruled.

Two years later, those figures have almost quadrupled. In addition, watchdog groups have noted that around 90 percent of corporate spending in the 2012 election went to Republicans.

“This appears to be very risky business to us,” Samuelrich says, noting that Green Century has filed similar resolutions this year with the oil company ExxonMobil, Bank of America and 3M, a manufacturing conglomerate.

“We spoke with Chevron earlier this year, but that dialogue resulted in no change whatsoever – they didn’t offer any analysis about why they made the initial contribution, nor any evaluation of the impact of their highly publicised political spending.”

Further, the company continues to be dogged by allegations that the Congressional Leadership Fund contribution could have been illegal in the first place, given Chevron’s contracts with the government.

“Under a legislative prohibition known as ‘pay to play’, government contractors can’t make these types of contributions,” Kelly Ngo, a legislative assistant at Public Citizen, a consumer watch group, told IPS. “The law is pretty clear on this.”

In March, Public Citizen and several environment groups filed a joint complaint on the issue with the Federal Election Commission, though the commission has yet to respond. The company, meanwhile, has pointed out that the payment was made through a subsidiary that doesn’t hold a government contract.

In documentation sent to IPS, Chevron’s board unanimously recommended that shareholders vote against the resolution to halt political spending.

“Chevron exercises its fundamental right and responsibility to participate in the political process … [and] advocates positions on proposed policies that will affect the Company’s ability to realize strong financial returns while meeting the world’s growing demand for energy,” the Chevron board states.

“[The] Board is confident that the Company’s political activities are aligned with its stockholders’ long-term interests.”

Ecuador legacy

Two additional resolutions floated by Chevron shareholders on Wednesday dealt with longstanding litigation against the company’s predecessor, Texaco, for having wilfully dumped oil wastes in a remote part of Ecuador from the 1960s until the 1990s. (Extensive documentation on the case can be found here, while Chevron’s responses can be found here.)

While the Ecuadorian courts have repeatedly assessed the company for 19 billion dollars in liability, Chevron has taken an aggressive line in refusing the penalty, saying a multi-million-dollar remediation has already taken place. In an unusual step, in December the company even subpoenaed some of its own shareholders, alleging that they were colluding with the Ecuadorians.

Shareholders floated a related resolution, impugning the Chevron management for the ongoing Ecuador situation, at last year’s meeting.

Although that move was rejected, it did win the backing of around 40 percent of shareholders – slightly more than was ultimately received during Wednesday’s vote, indicating continued shareholder interest to resolve the issue.

Meanwhile, the Ecuadorian plaintiffs, who allege health problems and ruined lands, are now suing Chevron in other countries in which the company operates. Following on an order earlier this month, Chevron CEO John Watson will now have to testify in a fraud-related counter-suit filed by the company against the Ecuadorians.

This year, activists have increasingly targeted Watson himself, singling him out for having originally overseen the acquisition of Texaco.

“My parents both died from cancer due to Chevron’s contamination,” Servio Curipoma, from San Carlos in Ecuador’s northeast, told Chevron shareholders and management Wednesday.

“I am still fighting for justice so that no one else will have to suffer the pain they did, and the loss I have. Chevron has lied to its shareholders, to the world, to me. I’m here on behalf of all of us to say that CEO Watson should be fired.”

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. In resource-rich countries, the natural resource sector is usually the main source of illicit financial flows. Credit: Tommy Trenchard/IPS

By Carey L. Biron
WASHINGTON, May 28 2013 (IPS)

Over the past three decades, Africa has functioned as a “net creditor” to the rest of the world, the result of a cumulative outflow of nearly a trillion and a half dollars from the continent.

The new data, to be formally released Wednesday by the African Development Bank (AfDB) and Global Financial Integrity, a Washington-based watchdog group, stands in stark contrast to widely held images of Africa receiving massive amounts of foreign aid."While these figures are amazing, we have to recognise that they’re being directly facilitated by Western banks and tax havens." -- GFI's Clark Gascoigne

Foreign assistance levels are indeed high for Africa – following on a 2005 pledge among the Group of Eight (G8) rich countries, the continent receives more than 50 billion dollars a year, making it the world’s most aid-dependent region. Yet according to the new joint report, the interplay of corruption, tax evasion, criminal activities and other factors resulted in a net outflow of some 1.4 billion dollars between 1980 and 2009.

“In development circles we talk a lot about how much aid is going to Africa, and there’s this feeling among some in the West that after we’ve been giving this money for decades, it’s Africa’s fault if the continent’s countries still haven’t developed,” Clark Gascoigne, communications director at Global Financial Integrity (GFI), told IPS.

“In fact, our research shows that while the West has been giving money to Africa, far more is flowing out illicitly. Further, you can assume that illicit outflows from other regions would likely lead to high net resource transfers from other developing regions, as well.”

In Africa, this trend appears to have particularly strengthened over the past decade, during which time some 30.4 billion dollars every year are thought to have illegally leaked from the continent. Of that, around 83 percent is thought to have come from North African countries alone.

Over the full three decades, perhaps counter-intuitively, dark-money outflows appear to have originated particularly in resource-rich countries, those most prominently engaged in oil, gas and other natural resource extraction. Some of the most notable include Nigeria, Libya, South Africa and Angola.

Such findings are bolstered by a new index, released last week by the Revenue Watch Institute (RWI), another watchdog group, that for the first time systematically correlated governments’ economic dependency on natural resources and low human development indicators.

The RWI index looked at 58 countries responsible for the vast majority of the world’s petroleum, copper and diamond extraction, and reported that the profits of their extractive sectors added up to more than 2.6 trillion dollars in 2010, far outweighing Western aid flows. Yet more than 80 percent of those countries had also failed to put in place satisfactory standards for openness in these sectors – and half hadn’t even taken basic steps in this regard.

“In resource-rich countries, the natural resource sector is usually the main source of illicit financial flows,” the AfDB-GFI study states, noting a finding by the International Monetary Fund (IMF) that Angola’s oil sector in 2002 failed to report around four billion dollars.

“These countries generally lack the good governance structures that would enable citizens to monitor the amount and use of revenues from the natural resource sector. Often, rents and royalties derived from resource management are not used to support the social and economic development of resource-rich countries but instead are embezzled or expended in unproductive ways through corruption and cronyism.”

The impacts of this mass leakage on both African public coffers and foreign development-focused aid are clear.

“The resource drain from Africa over the last 30 years – almost equivalent to Africa’s current gross domestic product – is holding back Africa’s lift-off,” Mthuli Ncube, chief economist and vice-president of the African Development Bank, said Tuesday.

“[But] the African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development.”

Halting “absorption”

The new report, which is being released Wednesday at the African Development Bank annual meetings in Morocco, does not look into country-specific drivers of these outflows.

Yet while it is clear that differing levels of strengthening of country-level regulatory mechanisms will be required to ensure that natural resource development in Africa benefits public sector aims, it is impossible to ignore the role of Western countries in this ongoing situation.

“While these figures are amazing, we have to recognise that they’re being directly facilitated by Western banks and tax havens that allow for the creation of anonymous shell companies, by Western governments that don’t share tax information and continue to lack adequate money-laundering enforcement,” GFI’s Gascoigne says.

“While the onus for change is on both national and international players alike, the Western countries can control the international component of this dynamic – the international financial structure.”

The AfDB and GFI analysts are encouraging strengthened alignment of financial policies between African countries and those countries that are “absorbing” these illicit flows. The United States, for instance, continues to be the largest incorporator of shell companies in the world, while Gascoigne says there is also far more that Washington and other Western capitals can do on swapping tax information and refusing to tolerate bank and tax haven secrecy.

In this regard, many observers are eagerly awaiting the G8 summit slated to be held in the United Kingdom in mid-June. The first part of this year has seen unique international momentum build around issues of tax evasion and tax havens, energised particularly by depleted government coffers in the aftermath of the global economic crisis.

British Prime Minister David Cameron, who is hosting the upcoming summit, has taken on the issue of tax evasion as a key priority for his government’s G8 presidency this coming year. He has been widely praised for his recent leadership on the issue, particularly for pushing a new global standard under which governments would automatically share tax information.

European Union countries have now largely aligned themselves with the U.K. stance. But key to watch at the June summit will be whether the United States, Canada, Japan and Russia agree to sign on to a robust new initiative – or choose instead to stand in the way of greater reform.

“Curtailing these outflows should be paramount to policymakers in Africa and in the West because they drive and are, in turn, driven by a poor business climate and poor overall governance, both of which hamper economic growth,” GFI chief economist Dev Kar, formerly with the IMF, said Tuesday.

“The slower growth rate results in more aid dependency, with foreign taxpayer funds filling the shortfall in domestic revenue – to the extent that tax evasion is a part of illicit flows.”