Caspian apple of discord

Caspian apple of discord

Валерий Туманов, обозреватель

Caspian apple of discord

Valery Tumanov, commentator

The Caspian Sea remains the apple of discord for the five littoral states, and they are trying to resolve the situation at different levels and in different formats. On September 16-17, the Kazakh city of Aktau on the seacoast will host another event devoted to the Caspian problems, the Paradigms of International Cooperation in the Caspian Sea conference.

In the early 1990s, after the breakup of the Soviet Union, disputes concerned division of the water zone. Today, the parties are arguing about rational use of the sea’s natural wealth, environmental problems, navigation practices and a pipeline initiative, which is close to becoming a working project.

The debates are getting hotter. Azerbaijan and Turkmenistan are nursing plans to lay a gas pipeline across the Caspian Sea that would transport their energy to countries that need it. By connecting the eastern and western coasts of the sea with a pipeline, Baku and Ashgabat, which have huge gas reserves in their respective parts of the sea, hope to sell it to Europe and Asia, at a large profit, of course.

No wonder that both countries are actively lobbying the idea. To a certain extent, they are supported by Kazakhstan, which is not as rich in gas, but still has some and hopes to benefit from the project.

These plans are vigorously opposed by Russia and Iran. Critics can definitely say that the reason for their stance is that they don’t have gas reserves in their parts of the Caspian Sea. However, Moscow and Tehran have forward a fairly solid argument: environment protection. Laying a pipeline across the sea will further aggravate its already serious environmental problems and may even result in an ecological crisis, experts say.

It should be remembered that since the Caspian Sea became a source of oil production after the war, in the late 1940s, the environmental situation here has changed drastically for the worse. At the time, a unique piled town – Neftyanye Kamni – was built 100 km from Baku, in the open sea. This was the starting point for negative changes in the vulnerable organism of the closed Caspian Sea basin.

First of all, industrial presence affected the sea fauna: many species have disappeared, unable to tolerate the influx of oil, which is harmful for living organisms. The first to suffer were the famous Caspian sturgeons; the equally popular Caspian herring was seriously damaged, and so were other species that in the past had earned the sea the fame of a water body with the ideal natural environment for rare fish.

There is no need to say how much the unmerciful exploitation of oil and gas fields has reduced the reserves of the Caspian black caviar, a delicacy that brought the Soviet Union significant returns on exports. However, the returns on exports of oil and gas – strategic energy resources – were even higher, which made the Kremlin allow the development of Caspian fields.

And now, Baku and Ashgabat want to join the race for windfalls promised by the gas pipeline construction. If the Caspian Sea was their own, it would be their own business. But it washes the shores of another three states, and the problem of the water zone’s pollution and the need to preserve the natural integrity of the sea’s unique characteristics – something geographers and biologists from all over the world keep calling for – are a common task for all the five littoral states.

Construction of the pipeline, doctors say, may affect even the Caspian Sea’s recreation zone: its resorts are used widely for treating and preventing different diseases. Fields development, oil shipments and oil spills have already spoiled many Caspian beaches. The pipeline would further aggravate the situation.

At an international symposium held a few years ago and devoted to the Caspian Sea, participants emphasized the need to treat it carefully, to develop oil and gas fields sensibly and to preserve precious bio resources. The sea needs efficient treatment facilities that will bring water pollution to a minimum, scientists said. Unfortunately, the way littoral states treat the Caspian Sea and its problems leaves much to be desired.

Another closed sea nearby, Aral, has already been wiped out. It would seem that this horrible example should provide a sufficient lesson. But no, profit rules the world and it is much stronger than the threat of an environmental disaster.

Yes, the energy needs of the present-day economy are enormous, and the Caspian Sea’s huge energy reserves may partially meet them. But it should be done with caution, sensibly, without getting euphoric about predatory exploitation of the sea wealth.

It is too early to say whether the five littoral states will agree on the pipeline and other disputed issues. One thing is clear, though: the Caspian Sea has not yet become a sea of understanding, a connecting bridge in relations between the countries whose shores it washes. This unique sea remains an apple of discord, the topic of heated debates on problems that need to be resolved with responsibility to the nature and to future generations.

“Our [Azerbaijan’s] main enemies are Armenians of the world,” NOT the Iranians As Washington Implies

State Dept. Responds to ANCA Concerns on Azeri Aggression

Continues Artificial Even-Handedness in Condemning Azerbaijan’s Recent Cease-Fire Violations

WASHINGTON—The U.S. State Department this month once again failed to properly condemn Azerbaijan’s escalating violence against Armenia and Nagorno-Karabagh in a June 13 letter responding to the Armenian National Committee of America’s (ANCA) concerns about Azerbaijan’s recent cross-border attacks.

The response came to a letter by ANCA Chairman Ken Hachikian on the June 4-6 Azerbaijani attacks against Armenia and Karabagh that left eight soldiers dead and more wounded.

Philip Gordon 300x225 State Dept. Responds to ANCA Concerns on Azeri Aggression

Phil Gordon

Assistant Secretary of State for European and Eurasian Affairs Phil Gordon, responding for Secretary Hillary Clinton, said the U.S. “deeply regret[s] this senseless loss of life,” and went on to note that “the United States has urged the parties to refrain from the use or threat of force.”

“We remain deeply disturbed by the ongoing artificial even-handedness applied to a belligerent Azerbaijani leadership, which has repeatedly shown–through threats and violence–a blatant disregard for international calls for a peaceful resolution of the Karabagh conflict,” said Hachikian.  “This time it was eight soldiers who were killed on the front lines–brazenly timed to coincide with Secretary Clinton’s visit to the region.  How many more must die before we hear a clear rebuke from the U.S. and international community of Azerbaijan’s escalating violence and war-rhetoric?”

Commenting on the ANCA’s concerns about reports of an impending sale of military equipment to Azerbaijan for use on helicopters for border monitoring, Gordon noted that “the United States’ security assistance to the region is carefully considered to ensure it does not undermine efforts for a peaceful settlement in Nagorno-Karabagh.”

 

The ANCA has circulated a set of seven specific policy recommendations for the Obama Administration and the U.S. Congress to check Baku’s aggression and support the peaceful and democratic resolution of Azerbaijan’s conflicts with Armenia and the Republic of Nagorno Karabagh.  Among the recommendations is a call for the Obama Administration to “suspend all military aid to Azerbaijan, and stop the sale or transfer to Baku of any military equipment or dual-use items (including the proposed sale of advanced helicopter-based surveillance equipment, DDTC 12-002).”

Review the recommendations and urge Congress to take action by visitingwww.anca.org/action_alerts/action_disp.php?aaid=61443201.

Pending Military Sale

Azerbaijan’s threats against Armenia and Karabagh and a possible U.S. weapons sale to the Aliyev regime were issues of concern at last week’s Senate Foreign Relations Committee confirmation hearing for U.S. Ambassador to Azerbaijan Designate Richard Morningstar.

During his questioning, Sen. Robert Menendez (D-N.J.) cited Azerbaijani President Ilham Aliyev’s recent assertion that “Our [Azerbaijan’s] main enemies are Armenians of the world,” and asked Morningstar, “Do you think, based upon those types of statements, that the proposed sales of military hardware to be used in conjunction with Azerbaijan’s military helicopter fleet is really in the national interest of the United States?”

Morningstar argued, “There are increasing tensions with respect to other neighbors, in particular with Iran. And we have to provide, I think, security assistance, possibly military assistance in ways that cannot be used to exacerbate any situation with respect to Armenia or Nagorno-Karabagh.”  Menendez was quick to respond, reminding Morningstar that “I didn’t hear President Aliyev say, ‘My main enemy or security concern is Iran.’ He said that, ‘Our main enemies are the Armenians of the world…’ I have a real problem with going ahead and selling military hardware to the Azerbaijanis based upon what has happened.”

Watch Menendez’s exchange with Morningstar

Alarm bells regarding the State Department’s consideration of a sale of helicopter equipment that could be used for cross-border monitoring were first raised in a letter to Clinton by House Foreign Affairs Committee Ranking Democrat Howard Berman last month.  In addition to possible attacks against Armenia, Berman expressed concern about the “message that such a sale would send to the regional parties, both in terms of perceived U.S. even-handedness and in terms of our seriousness about persuading Baku to cease its bellicose rhetoric and agree to Minsk Group co-chair demands that it remove its snipers from the ‘line of contact’ in the Nagorno-Karabagh region.”

Russia’s ‘rational’ and ‘moral’ stance on Syria

MOSCOW — As Syria’s uprising against Bashar al-Assad deteriorates into a potentially nation-destroying civil war, most of the diplomatic discourse has been dominated by a high-stakes blame-game between Russia and the West over who is most at fault for the horrific massacre and mayhem.

The most recent example: Monday’s tense meeting between the Russian and US presidents in Mexico, in which Obama failed to get Putin’s help in easing Assad from power.

So far Russia has been losing this rhetorical battle. But the Kremlin insists that its case transcends mere self-interest, and points the way back to a world governed by the rule of law.

Moscow’s community of foreign policy experts — many of whom routinely excoriate the Kremlin — seem uncommonly united in support of Russia’s stance on Syria. They argue that the Kremlin is adhering to a conservative set of international values, based on respect for national sovereignty and the right of Syria’s people to sort out their own future.

The West, they claim, is out of legal bounds and pursuing its own geopolitical interests thinly disguised as a humanitarian “responsibility to protect” in a manner that is reckless, hypocritical and — perhaps the unkindest cut — incompetent.

“The West talks in terms of noble goals, but their actions tend to wreck any stability, threaten the lives of millions, and leave people worse off than before,” says Yevgeny Satanovsky, president of the independent Institute of Middle Eastern Studies in Moscow. “I don’t carry any brief for the Kremlin, but in the case of Syria, the Russian aim is to try to minimize negative outcomes. Russian approaches may be old fashioned and conservative but, I’m sorry to say, they’re more rational than current Western policies.”

Russian experts dish out examples of botched Western interventions going back to the 1999 Kosovo war, which Moscow helped to resolve after receiving NATO’s assurances that Kosovo would never be given independence; a few years later Kosovo was made independent. The long and inconclusive US occupation of Iraq and the ongoing imbroglio in Afghanistan are cited as examples of “making things worse.”

But uppermost in Russian minds is the UN-authorized NATO intervention in Libya last year, which Moscow acquiesced to as a measure to protect civilians, only to see it morph into a full rebel campaign for regime change backed by Western air power.

“We’ve been lied to repeatedly; not a single promise the West has made to us in the past two decades has been honored,” says Sergei Markov, vice president of the Plekhanov Economic University in Moscow and a frequent adviser to Russian President Vladimir Putin in the past.

“We’ve learned to take our own counsel on problems like Syria. What we see is an extraordinarily difficult situation that threatens to explode into a massive bloodbath. Nobody likes Assad, but if you just remove him the entire state will collapse with awful consequences. We wish we could have an intelligent conversation with Western leaders about this, but so far that hasn’t proved possible,” he says.

After vetoing (along with China) two UN Security Council resolutions that would have imposed tough sanctions and enabled a process for easing Assad out, Russia got on board with the UN-sponsored Kofi Annan plan, which envisaged democratic reforms and UN observers but no sanctions or outside military interference. With the Annan plan in shreds, and violence spiraling in many parts of Syria, the war of words is heating up again.

Russia’s primary argument for its position is that it conforms with international law. Sovereignty is the supreme principle, Russian officials say, and Western attempts to change those rules have not led to good results anywhere.

The fixation on sovereignty is rooted in self-interest, and comes with its own healthy dose of hypocrisy. The Kremlin harbors a deep-seated fear that authorizing outside military force to support rebellious populations might one day be used to license intervention in Russia. And the principle does not seem to apply when Moscow is dealing with its own neighbors in the post-Soviet area; after defeating Georgia in 2008, Moscow effective dismembered its southern neighbor by granting independence to the breakaway republics of Abkhazia and South Ossetia.

Putin, who has effectively ruled Russia for the past 12 years, viewed the pro-democracy “colored revolutions” that erupted in Georgia, Ukraine and Kyrgyzstan over the past decade as the creations of foreign intelligence services. When tens of thousands of anti-Kremlin protesters took to the streets of Moscow last December to demand fair elections, his first public response was to blame Hillary Clinton: “She set the tone for some opposition activists, gave them a signal, they heard this signal and started active work,” Putin said at the time.

“Russian leaders fear revolution very deeply, and they look with horror on the Arab Spring and the totally disordered changes that have followed in its wake,” says Sergei Strokan, a foreign affairs columnist with the Moscow daily Kommersant.

“The only thing that’s worse for them is the idea of popular revolution approved of and supported by the West. They observe all that’s happening through a conspiratorial lens. Hence they see Western-backed rebels creating a pretext for Western military intervention that leads to pro-Western regime change. The biggest regret in Russian official foreign policy circles, and the worst accusation against (former President Dmitry) Medvedev, is that he authorized our UN delegation to abstain on the Security Council resolution that authorized the use of force to protect civilians in Libya last year. They are determined not to enable anything like that, not ever again,” Strokan says.

Russia also has significant financial and political reasons to back Assad.

Syria has been Moscow’s most important strategic partner in the Middle East since 1971. It’s been a major customer for Russian arms and engineering goods. Russia currently has about $5 billion in outstanding arms contracts with Syria, plus as much as $15 billion in other traditional military and economic cooperation — including Russia’s only foreign military base, a naval refueling station at the Syrian port of Tartous.

Financially, abiding by Western-backed sanctions never seems to work out in Moscow’s favor. Over the past year, Russia has sacrificed about $4.5-billion in broken arms deals with Libya, and lost as much as $13 billion due to UN sanctions against Iran, experts say.

“Moscow is afraid events in Syria will spin out of control,” says Alexander Konovalov, president of the independent Institute for Strategic Assessments in Moscow. “We have lots of economic interests that we stand to lose, but this is not the main thing. The loss of political influence is more important, because Syria is the last point in the Middle East where Russia has a major role to play.”

Still, the Kremlin has reacted defensively to charges that it is fueling Syria’s civil war by continuing to sell arms to Assad. Stung by Hillary Clinton’s recent claim that Russia was sending attack helicopters to Syria for use against demonstrators, Russia’s state arms exporter Rosoboronexport made public the list of weaponry it does sell to Syria, including anti-aircraft systems, coastal defense missiles and jet trainers. “We supply armaments that are self-[defensive] rather than attack weapons, and there can be no talk about any violations by Russia or Rosoboronexport either de jure or de facto,” the agency’s spokesman, Igor Sevastyanov, told journalists.

(It also appears that Clinton’s claim was incorrect. Syria’s fleet of at least 36 Mi-25 “Hind-D” helicopter gunships — a deadly flying artillery platform made famous by Soviet forces in Afghanistan in the 1980’s — was purchased from Russia at least 20 years ago. The helicopters Clinton was referring to were recently serviced in Russia, and were being returned to Syria, but no new helicopter contracts have been signed in over ten years, experts say.)

Russia retorts that it’s the West, and Sunni-dominated Arab states like Saudi Arabia and Qatar, who are smuggling in weapons to fuel the armed rebellion against the Alawite minority rule headed by Assad in Syria.

“We think we know how the world works as well as anyone else, and our diplomats have been active in the Middle East for a long time. We do not have the slightest romantic illusion that something that comes after Assad will be better,” says Satanovsky. “We see a religious war shaping up in Syria, and across the region — Sunni against Shia — and we want no part of it. We see all sorts of extremist groups, including Al Qaeda, fighting alongside these anti-Assad rebels and we wonder why you don’t seem to notice that ….

“Our Western colleagues point to these terrible atrocities (taking place with increasing frequency in Syria) and say, ‘We have to do something!’ But your own Western track record shows that you get the regime change you wanted, then lose all interest in the humanitarian problems,” he says.

“As for Russia, we’ve learned to base our policy on national interest. We simply don’t believe Western leaders know what they’re doing, and we’re not listening to all that chatter anymore. So, Russia’s Syria policy will remain basically the same, and there is no significant debate over this in the Russian establishment today,” he adds.

$10Billion Expansion At Saudi-Owned Texas Refinery (America’s Largest) Undercut By Saudi Oil Surge

(Reuters) – Saudi Arabia’s unexpected surge in oil exports to the United States this year has fallen into question following a deepening crisis this month at the kingdom’s jointly owned and newly expanded Texas refinery.

With the huge 325,000 barrel per day (bpd) crude oil unit at Motiva’s Port Arthur, Texas, refinery now expected to be out of commission for as long as a year, crippling the biggest plant in the United States just weeks after the completion of a $10 billion expansion project, the Saudis are likely to throttle back U.S. exports that hit four-year peaks in recent months.

But a deeper look at detailed import data suggests that any curbs on production may not be as deep as many expect. In fact, a Reuters analysis of government data shows that the 27 percent jump in Saudi shipments in the first quarter was driven by higher sales to a variety of customers, not only Motiva, which the kingdom jointly owns with Royal Dutch Shell (RDSa.L).

The world’s top exporter boosted shipments to independent refiners Valero (VLO.N), Marathon Petroleum (MPC.N) and PBF Energy (PBF.N) as part of a 300,00 bpd rise in the first quarter, according to U.S. Energy Information Administration data. Some of that increase was due to unusually low imports in early 2011.

But only about a quarter was destined for the Motiva refinery in Port Arthur, according to a Reuters analysis of more detailed data that identifies which plants consume imported oil. The increase in sales to Valero was nearly twice as large.

To be sure, the kingdom’s state oil firm Aramco must still scramble to rearrange its shipping plans to avoid surplus crude piling up in Motiva’s storage tanks or driving prices lower still by reselling excess oil, measures that are almost certain to require throttling back full-on output.

An industry source in Saudi Arabia said that Motiva had reduced its orders for deliveries of crude in July but declined to give details on volume. An industry source familiar with Saudi oil policy said production “is likely to be affected.”.

The bigger question is how these logistical hiccups are affecting oil policy at a higher level.

Saudi Oil Minister Ali al-Naimi has made no secret of his desire to curb $100-plus oil prices in order to provide a “stimulus” for ailing world economies, driving production this year to more than 10 million bpd, near a record high.

But now with Brent crude now dropping to less than $95 a barrel, its lowest since early 2011, the disruption at Motiva may provide a useful excuse to tighten the taps without abandoning its commitment to helping restore global growth.

“Just a couple of months ago, you had people going ‘Oh my gosh, look at all this Saudi crude!'” says Jamie Webster of PFC Energy in Washington.

“A lot of it was for Motiva…. Now the question is: Are they going to find 325,000 barrels of customers elsewhere, are they going to have to bring production down, or are they just going to continue to put it in their stocks?”

The massive expansion at Port Arthur was shut down in early June just weeks after it was commissioned, due to what sources have said is extensive corrosion in the brand new crude unit. It was first expected to restart operations within two to five months, but sources now say it may be shut for up to a year.

BREAKING IT DOWN

Saudi Arabia shipped 300,000 bpd more crude to U.S. refiners in the first quarter than a year ago, the biggest such year on year rise in a decade, EIA data showed. Imports reached 1.4 million bpd, rising sharply even as a boom in U.S. domestic production and diminished demand reduced overall crude imports to their second-lowest quarterly level since the 1990s.

In total, Motiva imported 315,000 bpd of Saudi crude in the first quarter, a 112,000 bpd increase from the year before, the calculations show. Of that, about 250,000 bpd went to Port Arthur, the plant’s largest intake since early 2007 and enough to meet nearly all the refinery’s pre-expansion demand.

But shipments to Port Arthur were up only 74,000 bpd from a year ago, a relatively modest rise that is in many ways logical: Operators would have needed only a bit of extra oil in order to build up additional inventories ahead of commissioning the new units, which didn’t begin running until mid-April.

The balance of Motiva’s crude imports from Saudi Arabia in the quarter went to its Convent plant in Baton Rouge, Louisiana, which had bought almost no Saudi crude a year ago.

The data also shows that Saudi Arabia found other customers ready to increase purchases to a degree not previously known.

Valero’s imports in the quarter jumped nearly 130,000 bpd to a total 217,000 bpd, the data show. That’s a more than 50 percent rise over its average for all of last year, and pushed its intake of Saudi crude to the highest since 2008.

Sources familiar with Valero’s purchases said that the increase was due to a drop in traditional heavy crude supplies from Latin America and Mexico. First-quarter U.S. imports from Mexico fell 300,000 bpd from a year ago to just 1 million bpd.

Marathon Petroleum and Paulsboro Refining — a unit of independent refiner PBF Energy — also saw sizeable increases of nearly 40,000 bpd each, the data showed, although that was partly due to a particularly low base. Paulsboro’s imports are up by just over 15,000 bpd versus last year’s average.

GRAPHICS ON SAUDI SHIPMENTS:

U.S. imports of Saudi crude: link.reuters.com/zyj78s

Saudi crude shipments grow: link.reuters.com/syj78s

It is not clear whether the same customers have continued to buy Saudi crude at the same rate. Most oil supply contracts are agreed on an annual basis, allowing for some flexibility in the timing of deliveries. Detailed oil import statistics for the second quarter won’t be fully available until late August.

It is also too early to assess the impact on Saudi Arabia’s production. In theory, the kingdom could seek to keep pumping at a near-record rate of around 10 million bpd, hoping to find new customers or pushing the crude into storage.

But storage is running out.

“Saudi Arabia has been showing the world that it is capable at pumping at high levels of above 10 million bpd, and of course not all this oil is being sold — a lot is going into storage,” said Kamel Al Harami, an independent Kuwaiti analyst.

Saudi oil minister Ali al-Naimi said back in March that storage inside Saudi Arabia and in its facilities in Rotterdam, Sidi Kerir and Okinawa were already full with around 10 million barrels in stock, leaving the United States as a key sink for millions of Saudi barrels.

The extra Saudi shipments amount to a year-on-year rise of around 26.75 million barrels in the first quarter alone. Over the same period, U.S. crude oil stocks rose by 28 million barrels. New weekly EIA data on Wednesday showed U.S. stockpiles unexpectedly rose last week after two declines, pushing stockpiles back toward the 22-year highs they reached in May.

Overall Saudi-U.S. crude exports continued at unusually high levels throughout April and May, with deliveries averaging 1.54 million bpd in the six weeks to mid-June, according to provisional weekly import figures from the EIA.

The question is how much of that oil was earmarked for the 600,000 bpd Port Arthur plant, which is now running at half-strength.

In late May, as the top brass from Shell and Aramco inaugurated the $10 billion expansion, Motiva President and CEO Bob Pease said the new units were expected to run only heavy Saudi crude for about two months before diversifying supplies.

That plan was foiled within days, however, as the new crude unit experienced a glitch on June 3 that forced it to shut down. A week later, following two failed restarts, it was said to be bracing for an up to year-long shutdown. The company has said it cannot say when the unit will be running again.

“All of that (crude) is now going to go into storage and if you fill up storage, then it has to go somewhere,” says Chakib Khelil, an oil analyst and former Algerian energy minister.

(Reporting by Daniel Fineran in Dubai and Jonathan Leff in New York; additional reporting by Reem Shamseddine, Amena Bakr and Janet McGurty in New York; Editing by Marguerita Choy)

Saudi Puppet League Grasps for Political Advantage Over Russian Statesmen

[While the Arab League demands that the entire world surrender to the limitless ambitions of the Saudis and their little sheikh puppets, Russian diplomats are the only ones with the moral courage to take concrete steps to interrupt their blatant plan for a long-term war of aggression in the Middle East.  One thing is certain, anything that the sheikhs can do to promote new wars is the most certain way to keep the price of oil artificially high.  The Arabs and their co-conspirators have finally come out of the closet.  They now feel confident that world opinion has been sufficiently twisted, so that they can do openly what they have always done from the shadows, up until now.   The Saudi-led gangsters are aggressively pushing the Americans to enlarge the war on Syria and to start new conflicts in Yemen and Somalia, in order to, not only maintain oil inflation, but more importantly, to give substance to a  Saudi/Sunni superstate (or “caliphate,” as their “al-Qaeda” friends like to call it).  

The Saudi “royal” family and all of their “emirate” co-conspirators should be the next stop on the American “regime change” train, not the last.  

Until we get rid of the Wahhabi terrorist masters, we will never end the “Global War On Terrorism.”]

Arab League calls on Russia to stop giving Syria weapons

HQ Arab League, Tahrir Square, Cairo

Valet parking at HQ.

 

MOSCOW: Russia should halt arms sales to Syria and U.N. sanctions could be needed to force President Bashar al-Assad and rebels fighting to oust him to implement a failing peace plan, a senior Arab League official was quoted as saying on Thursday.

The UN observer mission in Syria, which suspended operations on Saturday because of the rising violence, should be replaced by peacekeepers, the League’s deputy secretary general Ahmed Ben Helli told Interfax news agency in an interview.

“Any assistance in aiding violence should be stopped. When you deliver military equipment you are helping to kill people.
That should be stopped,” Interfax on Thursday quoted him as saying in response to a question about Russian military
cooperation with Syria.

Russia, one of Assad’s main suppliers of military equipment, has shielded its long-standing ally Syria from tougher UN
sanctions. It says the transfers are unrelated to the conflict inside Syria, something US Secretary of State Hillary Clinton
dismissed on June 13 as “patently untrue”.

A ship believed to be carrying the attack helicopters to Syria apparently turned back to Russia, Britain’s Foreign Secretary said on Tuesday, after its insurer withdrew coverage for the ship. Russia says its weapons are defensive and cannot be used against civilians.

Ben Helli said a provision in the UN charter which allows the Security Council to authorise actions ranging from sanctions to military intervention was needed to bolster a peace plan by Kofi Annan, joint envoy of the Arab League and the United Nations.

“As we see, neither side is stopping the fighting, therefore I think we’ll have to use Chapter 7 in order to realise the Annan plan,” Interfax quoted him as saying.

“I think that step will be taken sooner or later if the situation continues to develop like this.”

Ben Helli said the Arab League did not support military intervention and his comments to Interfax appeared to suggest that sanctions would apply to anti-Assad forces as well as the Syrian government.

Russia has rebuffed Western and Arab efforts to force Assad to step aside and urged political dialogue, an approach most of the Syrian opposition rejects.

The United Nations says more than 10,000 have been killed by government forces during the revolt against Syrian President Bashar al-Assad’s rule.

Uruguay mulls government marijuana sales

Uruguay mulls government marijuana sales

 NORML

MONTEVIDEO, Uruguay –  Peaceful Uruguay is planning a novel approach to fighting its rising crime: having its government sell marijuana to take drug profits out of the hands of dealers.

Under the plan backed by President Jose Mujica’s leftist administration, only the government would be allowed to sell marijuana and only to adults who register on a government database, letting officials keep track of their purchases over time. Profits would reportedly go toward rehabilitating drug addicts.

“It’s a fight on both fronts: against consumption and drug trafficking. We think the prohibition of some drugs is creating more problems to society than the drug itself,” Defense Minister Eleuterio Fernandez Huidobro told reporters late Wednesday.

Fernandez said the bill would soon be sent to Congress, which is dominated by Mujica’s party, but that an exact date had not been set. If approved, Uruguay’s national government would be the first in the world to directly sell marijuana to its citizens. Some local governments do so.

The proposed measure elicited responses ranging from support to criticism to humor.

“People who consume are not going to buy it from the state,” said Natalia Pereira, 28, adding that she smokes marijuana occasionally. “There is going to be mistrust buying it from a place where you have to register and they can typecast you.”

Media reports have said that people who use more than a limited number of marijuana cigarettes would have to undergo drug rehabilitation.

“I can now imagine you going down to the kiosk to buy bread, milk and a little box of marijuana!” one person in Uruguay’s capital, Montevideo, wrote on their Twitter account.

Behind the move is a series of recent gang shootouts and rising cocaine seizures have raised security concerns in one of Latin America’s safest countries and taken a toll on Mujiica’s already dipping popularity. The Interior Ministry says from January to May, the number of homicides jumped to 133 from 76 in the same period last year.

The crime figures are small compared to its neighbors Argentina and Brazil but huge for this tiny South American country where many still take pride in its safety leaving their doors open and gathering in the streets late at night to sip on traditional mate tea.

To combat rising criminality, the government also announced a series of measures that include compensation for victims of violent crime and longer jail terms for traffickers of crack-like drugs.

The idea behind the marijuana proposal is to weaken crime by removing profits from drug dealers and diverting users from harder drugs, according to government officials.

“The main argument for this is to keep addicts from dealing and reaching substances” like base paste, a crack cocaine-like drug smoked in South America , said Juan Carlos Redin a psychologist who works with drug addicts in Montevideo.

Redin said that Uruguayans should be allowed to grow their own marijuana because the government would run into trouble if it tries to sell it. The big question he said will be, “Who will provide the government (with marijuana)?”

During the press conference, the defense minister said Uruguayan farmers would plant the marijuana but said more details would come soon.

“The laws of the market will rule here: whoever sells the best and the cheapest will end with drug trafficking,” Fernandez said. “We’ll have to regulate farm production so there’s no contraband and regulate distribution … we must make sure we don’t affect neighboring countries or be accused of being an international drug production center.”

There are no laws against marijuana use in Uruguay. Possession of marijuana for personal use has never been criminalized here and a 1974 law gives judges discretion to determine if the amount of marijuana found on a suspect is for legal personal use or for illegal dealing.

Liberal think tanks and drug liberalization activists hailed the planned measure.

“If they actually sell it themselves, and you have to go to the Uruguay government store to buy marijuana, then that would be a precedent for sure, but not so different than from the dispensaries in half the United States,” said Allen St. Pierre, executive director of U.S.-based National Organization for the Reform.

St. Pierre said the move would make Uruguay the only national government in the world selling marijuana. Numerous dispensaries on the local level in the U.S. are allowed to sell marijuana for medical use.

Some drug rehabilitation experts disagreed with the planned bill altogether. Guillermo Castro, head of psychiatry at the Hospital Britanico in Montevideo says marijuana is a gateway to stronger drugs.

“In the long-run, marijuana is still poison,” Castro said adding that marijuana contains 17 times more carcinogens than those in tobacco and that its use is linked to higher rates of depression and suicide.

“If it’s going to be openly legalized, something that is now in the hands of politics, it’s important that they explain to people what it is and what it produces,” he said.

Overburdened by clogged prisons, some Latin American countries have relaxed penalties for drug possession and personal use and distanced themselves from the tough stance pushed by the United States four decades ago when the Richard Nixon administration declared the war on drugs.

“There’s a real human drama where people get swept up in draconian drug laws intended to put major drug traffickers behind bars, but because the way they are implemented in Latin America, they end up putting many marijuana consumers behind bars,” said Coletta Youngers, a senior fellow at the Washington Office on Latin America think tank.

“There’s a growing recognition in the region that marijuana needs to be treated differently than other drugs, because it’s a clear case that the drug laws have a greater negative impact than the use of the drug itself,” Youngers said. “If Uruguay moved in this direction they would be challenging the international drug control system.”

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Associated Press writer Luis Andres Henao in Santiago, Chile, Armando Montano in Mexico City and Belen Bogado in Asuncion, Paraguay contributed to this report.

China Ready To Start South China Sea Deep-Water Drilling

Like it or Not: State Oil Company Becomes ‘Flag’ in South China Sea

CNOOC’s Haiyang Shiyou 981, China’s first deep-water drilling rig.

By Gabe Collins and Andrew Erickson

Sometimes oil companies follow the flag, sometimes the flag follows them — and sometimes they themselves become the flag.

The third scenario has come to pass in the highly contested South China Sea with the recent launch of a new deepwater rig by China’s state-run China National Offshore Oil Corporation (CNOOC) roughly 320 kilometers south of Hong Kong.

On May 9, CNOOC Chairman Wang Yilindescribed the company’s new rig in terms befitting of an aircraft carrier, calling it “mobile sovereign territory” and a “strategic weapon” for developing South China Sea energy resources – a statement that has led many to wonder whether CNOOC is in effect serving as a tool of state policy in the South China Sea.

At the very least, it seems Beijing is permitting CNOOC to increase operations in a maritime arena in which the Chinese government has actively sought to prevent other nations from conducting similar operations—even as close as 70 miles from their own coasts. And it puts CNOOC equipment and personnel in a position in which it would be very difficult for Beijing not to defend them in the event of tensions or crisis.

Beijing probably has not directly ordered CNOOC to drill. That would be redundant given the company’s longstanding plans (pdf) to expand its deepwater production in the South China Sea. That said, the close correlation between China’s official policy stance and national interests and CNOOC’s desire to expand its South China Sea oil & gas production effectively make it a tool of state policy whether or not it sees itself as a private actor.

In addition, tacit state backing could embolden CNOOC to consider pushing deeper into the South China Sea. We do not see this as a high probability at present, but the apparent coincidence of state and corporate interests displayed in the current case suggest that the risk of China deciding to drill outside its internationally-accepted exclusive economic zone has risen.

The new rig, dubbed the Haiyang Shiyou 981, greatly expands CNOOC’s drilling options. China’s old rigs are typically only able to drill in waters less than 200 meters deep. In contrast, the HYSY 981 can drill in up to 3,000 meters of water, giving CNOOC the ability to extract oil and gas virtually anywhere in the South China Sea apart from the deepest parts of the abyssal plain.

Notable locations include deep waters near the Paracel and Spratly islands and other areas within what is known as the “nine-dotted line,” a u-shaped dotted line printed on maps published in China that covers the vast majority of the South China Sea and which Beijing seems to view as a boundary within which China has priority rights of resource development.

CNOOC’s current drilling area clearly lies within Chinese-administered waters, but is close enough to disputed zones that China’s neighbors will likely interpret CNOOC’s actions as the commercial maritime equivalent of a show of force near a disputed border. The new deepwater rig provides a national flag platform that extends Chinese companies’ options for drilling in the South China Sea and has aroused widespread concern among China’s neighbors, who likely fear it represents the first step in China’s unilateral assertion of control over maritime zones and resources in contested portions of the sea.

Like any listed company, CNOOC generally seeks to maximize profits and keep shareholders happy. Beyond East Asia, in fact, CNOOC’s actions appear to be relatively independent of specific Chinese foreign policy objectives. In the South China Sea, however, both direct and indirect factors may cause CNOOC to function effectively as a tool of China’s foreign policy.

Since June 2011 Beijing has tried a more measured approach to managing claims. Yet influential voices affiliated with the People’s Liberation Army continue to express positions at odds with this more peaceful approach. Some—such as senior PLA officer Long Tao—even advocate surgical strikes to reclaim reefs and waters occupied by the Philippines and Vietnam as a means of teaching the smaller nations a lesson. While Long’s hawkish stance, cited recently in an essay by Henry Kissinger, does not represent official Chinese policy, it reveals a significant strain of thought among PLA officers that their civilian leaders are either unwilling or unable to suppress. Against this backdrop, China’s maritime neighbors may well see CNOOC’s new exploration program as a double standard favoring Chinese development at others’ expense.

Chinese oil producers typically behave in a market-oriented, profit-driven manner. However, “typically” does not mean “always.” The timing and wording of CNOOC’s statements about the rig deserve special attention because they take place in a well-armed neighborhood where multiple governments must manage intense nationalist pressures and because the risks of miscalculation that could spark armed conflict are uncomfortably high.

In a commodity market, investors’ risk perceptions (and consequently the market) are often most forcefully moved by surprises and events that represent the exception to the generally-accepted view and spark feelings of fear and uncertainty. Thus, CNOOC’s decision to move its new deepwater drilling rig into an area near an internationally-disputed zone merits a thorough assessment, not a glib dismissal that strategic concerns don’t matter.

A commercial entity can play vital roles in advancing national interests and providing services that the government itself may not be able to provide. Private oil companies based in Western countries often play a substantial, if unstated, role in shaping and advancing national foreign policies, particularly regarding energy security. One example is the close cooperation and communication between the U.S. government and Exxon and Chevron when the Caspian Sea oil reserves opened to outside investors in the early 1990s.

Recent events in China have showed that during a time of crisis the government has the power to press state-controlled companies analogous to CNOOC into national service. In the wake of the massive snowstorms that disrupted coal supplies in early 2008, Premier Wen Jiabao called on transport providers to press all available assets into service. China Ocean Shipping Co. subsequently deployed 34 extra bulk carriers to help replenish dwindling thermal coal stocks.

CNOOC’s actions suggest that the company has the potential to serve as a de facto arm of state policy in a much more direct manner than the China National Petroleum Corporation ever did in Sudan. The recent rig deployment merits careful discussion and analysis because the issue is likely to repeat itself as CNOOC pursues greater production in the South China Sea amidst rising tensions between China and its maritime neighbors.

China’s move raises the likelihood that its maritime neighbors will consider similar assertive moves to assert sovereignty over their claims in disputed zones — moves Beijing is likely to try to shut down. How might China respond if PetroVietnam attempts to initiate a drilling program in the Spratlys or Philippine Department of Energy renew its exploration near Scarborough Shoal (Huangyan Island), where Chinese and Philippine vessels have repeatedly confronted each other since March 2011?

Given the stakes involved, CNOOC will likely find that the South China Sea—however inviting in terms of potential resources—is a politically-complex place in which to operate, and that it will not be able to make decisions on market factors alone.

Erickson

Andrew Erickson is a professor at the U.S. Naval War College and a research associate at Harvard’s Fairbank Center. Co-founder of China SignPost (察中国), he blogs at www.andrewerickson.com

Collins

Gabe Collins is a co-founder of China SignPost and is a J.D. candidate at the University of Michigan Law School.