.comment-link {margin-left:.6em;}

Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

My Photo
Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

22 May 2006

Jailed for a kiss

According to the BBC, 10,000 people marched in Jakarta, Indonesia to support a bill before parliament that would, among other things, ban public kissing and erotic dancing. The BBC reports that: "The bill would make organising erotic dancing punishable by up to 10 years in prison and public kissing on the mouth punishable by five years or a fine." (link)

09 May 2006

The Year of Energy that was

(This is an article I wrote for the SAIS Observer, my school's monthly newspaper; it summarizes nicely some of the ideas and events that have marked the year.)
This was the year of energy at SAIS: a year full of energy drama during which our sense of insecurity only increased. As SAIS began its year, oil cost $60/barrel; at year’s end, prices were over $72. In these nine months, SAIS grappled with the energy world—its limits and its implications, its present and future, its promise and its perils. The world was moving fast, and so was SAIS’ attempt to make sense of it all.

Our year began with Nick Butler, Vice President of Strategy and Policy Development for British Petroleum. This inaugural event in September laid the foundation for the year of energy. Mr. Butler made the case for energy - why it matters for students in international affairs. Implicit in his vision was the need to take an interdisciplinary approach to understanding energy, and the need to study the energy component of political issues as well.

In November, as Mahmoud Ahmadinejad called for Israel to be “wiped off the map,” Fatih Birol, chief economist at the International Energy Agency (IEA), presented the World Energy Outlook 2005 at SAIS. Focusing on the Middle East and North Africa, his concern was that insufficient investment could dramatically affect future prices. As Dr. Birol spoke, only Saudi Arabia had any spare production capacity—markets were tight, and incremental demand was outpacing incremental supply. Dr. Birol’s speech was meant to alert us to a looming shortfall - to highlight the topic with the hope to change it too.

As SAIS went to exams, out came SAISphere, our annual magazine. Energy was the theme, and our faculty probed the various issues that make up our energy world. SAIS students were pleased to read the profiles of SAIS alums and to see that many energy analysts come from SAIS. The publication reminded us why this is a great place to study energy - to probe interdisciplinary topics, to converse intelligently about derivatives as well as internal politics, to understand the energy side of China’s rise, as well as how regulation affects the price at the pump.

As we prepared to return from winter break in January, Gazprom – the fourth largest publicly traded company in the world and half-owned by the Russian government - cut off gas to Ukraine, an unkind new year’s gift from the country on whose energy we will become increasingly more dependent in the future. In the same month, George W. Bush declared that America is “addicted to oil,” refocusing the country’s dialogue on energy.

March was a busy month. The number of attacks against oil targets in Iraq reached 300 since the war began, extremists tried to blow up the Abqaiq facility in Saudi Arabia, the internal situation in Nigeria deteriorated, and America signed a nuclear deal with India. Meanwhile, SAIS hosted Claude Mandil, executive director of the International Energy Agency. His cautioned that energy use is unsustainable. At the same time, most solutions are unrealistic: there is no silver bullet and no single energy source will make the arduous transition painless. Gains will be made, but on the margin; serious tradeoffs are involved, between domestic and international politics, between the current generation and the next.

Over Spring Break, twenty-one students traveled to Houston for a first-hand look at the industry and to meet with its leaders. As they returned, the energy year was reaching its peak: a gala dinner with Pulitzer-Prize winner Daniel Yergin, one of the foremost authorities on oil. His vision was somber, commenting that we need to rethink energy security. The whole supply chain should be our focal point, not just foreign threats; we need a better way to integrate India and China, not just fear their ascent; and we need to remember that markets are part of the solution, not of the problem.

Ever looming this year has been the specter of a nuclear Iran. It is fitting then that the this year’s graduation speaker will be Nobel Prize winner Mohamed El-Baradei, director general of the International Atomic Energy Agency (IAEA), fresh off his return from Tehran. As the world commemorates the 20th anniversary of the Chernobyl accident, nuclear power is in the headlines, as are the fears of nuclear proliferation. Next year’s IEA World Energy Outlook will be devoted to the topic, showing the atom’s role in our energy future.

On the anniversary of Chernobyl, here is what the scientific journal Nature opined:

“The true lesson of Chernobyl … is not that nuclear power is unsafe, but that it is unsafe in the hands of a corrupt, unaccountable, irresponsible political system that fails to take reasonable measures to protect its citizens. The future of nuclear energy does not hinge primarily on the development of a safer reactor or a more geologically reliable waste repository, but on the ability of states to build public trust in their ability to safely implement and manage the technology.”

Therein lies the message of the year of energy: geology and technology impose physical limits; but everything else is for us to make. Our edge as students comes from our education here at SAIS - our ability to think deeply and widely, to probe within and connect between issues. The past nine months have made us think creatively about energy, and they have prompted us to engage with the world beyond. A good cause this is, and a year well spent.


07 May 2006

Adventurism in the Andes

(This is a letter that the Christian Science Monitor published on May 8. Link to the letter and to the original story)

Your May 4 editorial, “Adventurism in the Andes,” captures the perils which accompany the momentum toward nationalization in resource-rich countries. Most distressing, however, is the thought that the trend is hard to reverse. Kuwait has been discussing Project Kuwait, a bill to invite foreign investment, for a decade now, to no avail. Iran has struggled to find a formula to bring back foreign investors, a task made harder by the country's isolation. Even Mexico's debate is colored by the country's nationalization of the oil industry in 1938.

As we follow the likes of Hugo Chávez and Evo Morales, it is worth recalling not only that they are harming their own hydrocarbon industries, but that the popular expectations on which their policies feed are likely to be with us many years after their own stint in power is over. A pity to think how much harm can be done in so little time - harm that will prove very hard to reverse.

Nikos Tsafos


Cheney at Vilnius

Vice President Dick Cheney delivered a sharp rebuke to Russia while in Vilnius, Lithuania; “No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempts to monopolize transportation,” the vice president said. The Russians found the speech “incomprehensible.”

Put aside that America, once again, mocks the European desire for solidarity and pan-European unity; that America is standing up to Russia’s energy “blackmail” more forcefully than Europe is a painful reminder that the mutterings about a coherent European policy on energy remain a joke.

A few months ago, I speculated that America might be called to fill the vacuum and insecurity in Eastern Europe that Western Europe seemed unable or unwilling to attend to (“Energy cold war,” 13 Feb 06). Cheney’s speech can be understood neatly in that light. Ironic that during the 1980s, as the Soviet Union was building an infrastructure to supply natural gas to Europe, America resisted the encroachment because the Soviet Union would gain undue leverage over Europe. America proved wrong then, the Soviet Union played no energy politics. But today that reality haunts America and Europe: Europe for the sense of insecurity it entails, America for the fear that Europe is too dependent on Russia to play tough. Worse still is the fear that a transatlantic divergence over Russia may emerge; with gas flowing from Russia to Europe, is there still a common Western front towards Russia?

Labels: ,

05 May 2006

Wither the state?

For the prophesiers of withering state power comes this simple photograph of the Bolivian army guarding a refinery operated by Brazilian oil company Petrobras (photo from Reuters). Our shifting focus has made us forget the debates we were having until recently—that the state is gone, that corporations are on the rise, and that the people and their institutions were slaves to international capital and companies. This image should remind us otherwise—that the state has the guns and that the legitimacy to use them is unmatched by any group of corporate executives, however rich and influential.


04 May 2006

Killing Moussaoui?

The Wall Street Journal opines today: “Then there are the ‘mitigating factors’ that led the jury to reject death. According to news reports, three of the 12 jurors agreed that Moussaoui, of Moroccan ethnicity, ‘was subject to racism as a child’ in his native France. Nine jurors agreed that ‘Moussaoui's father had a violent temper and physically and emotionally abused his family.’ America is at war with a relentless enemy, which observes no rules of war and wantonly murders innocent civilians. Fretting over whether enemy agents had dysfunctional childhoods is no way to win that war.”

I find the Journal to be wrong on this one. Reasonable people may disagree on whether a criminal’s childhood should have any bearing on the decision meted out by a jury. But to think that killing Moussaoui, rather than sentencing him to life imprisonment, is a more appropriate way to fight the war on terror is a different story altogether. The “relentless enemy” that America is fighting will not be deterred by the death penalty; nor, I suspect, will it be emboldened by thinking that America is too “feeble” to kill a terrorist after trial. In the grand scheme of things, whether Moussaoui was executed soon or died in jail later will not make a huge difference in this war.

“Moussaoui loses,” Wall Street Journal, 4 May 06

03 May 2006

Distracted students

The Christian Science Monitor reports that professors increasingly want their classrooms to be unwired—computers in the classroom, they believe, distract students who spend time checking email or chatting with friends online. Don Herzog, a law professor at University of Michigan, experimentally banned computers in the classroom for a day; the result was a dream discussion with students, he said.

Forgive my incredulity but a boring class is a boring class. It cannot be salvaged by banning computers. The student who is interested will remain interested, whether notes are taken in a computer, on paper, or not at all. And the student who has lost interest in the class will find ways to avoid paying attention: look around at the cute classmates that occupy the room, peek outside the window and anticipate the moment of freedom that is to come, scribble odd cartoons in the book’s margins, or, in the old-fashioned way, daydream away from whatever the professor is sharing that day. At least catching up on email or doing internet shopping is time better spent than the traditional class-avoidance schemes that students resort to as a way to cope with boring classes.

Maia Ridberg, “Professors want their classes 'unwired',” Christian Science Monitor, 4 May 06 (link)

01 May 2006

Bolivia nationalizes gas industry

There is much to say about Bolivia’s decision to nationalize its natural gas industry (link). That big oil and gas companies are regarded as predators and abusive of the national interest is an idea that has resonance even in America, even if the reaction is for more political oversight, not nationalization. Bolivia’s story reminds us that hydrocarbons are both a symbol of sovereignty and an instrument for its exercise: political legitimacy comes from targeting foreign companies, credibility from a successful attack.

The more subtle message, however, is that a large group of people, under appropriate leadership, can delude itself so easily into thinking nationalization is a good idea. Witness Kuwait and Iran, two countries which nationalized their oil industries decades ago, struggle to find terms to re-invite foreign capital. Mexico, too, suffers from the same problem: the political impossibility of allowing foreign ownership is contrasted sharply with the attention and expertise that the oil wells require so desperately.

Evo Morales may celebrate a political victory today. He rejoices, no doubt, that he joins his friends from Caracas and Havana to form a regional alternative to American hegemony (link). His shortsightedness in signing a trade deal with his two neighbors is just that—shortsighted. But the energy decision he sealed today will linger on, and it will be long before any politician will be able to pick up the pieces and revitalize a gas industry that is certain to make less gas and deliver less money to those who Morales pretends to defend.