What is Sykes-Picot, and why does it lead to dangerous oil dependence?

The Middle East is a mess. ISIS continues to be a very real threat to its neighbors and to the West. Yet only the United States seems pressured both internally and externally to put boots on the ground. Iraq’s boots appear to be shredded, rendering its troops incapable of fighting the good fight. The country’s Shiite leadership is unable or unwilling to forge strong ties with its moderate Sunni population and create a stronger military force.

Sykes-Picot2Turkey, once considered seriously for European Union membership and a member of NATO, threatens to invade northern Syria and Iraq to protect its border — not from ISIS, but from the most effective U.S. ally in the area, the Kurds. Indeed, the Kurds in northern Iraq, now being armed by the U.S., are the only boots on the ground that appear to be able to go head-to-head against ISIS.

It gets even more bizarre: The U.S. and five other world powers appear close to making a deal to slow down Iran’s path to nuclear weapons. Iran hints at the possibility that if sanctions are ended, it could become a trusted ally of the U.S. and join it with troops in fighting ISIS (perhaps even a commitment to help end the Syrian debacle). The U.S., fearing Iran’s real aim is to gain power (hegemony) in the area, likely will turn down Iran’s offer. That decision, while understandable, would in turn increase pressure on the U.S. to send in troops to contain ISIS.

Let’s keep going. Israel and Saudi Arabia, not exactly friends, likely will oppose any concord between the U.S. and Iran, based on the March framework document, fearing that the negotiated trade-offs will hurt their long-term security. In this context, Israel, probably and understandably, prefers to have President Assad in Syria near its border on the Golan Heights than ISIS, despite the fact that Assad is also supported by Iran and Iran’s proxy, Hezbollah. While some in the White House apparently are ambivalent about the strategy, the U.S. has begun arming so-called moderate rebels in Syria, some of whom are aligned with al-Qaeda spin offs, to fight ISIS, knowing in advance that many of the groups will use the weapons to fight Assad. In this context, because Assad is against ISIS, the U.S. has seemed in recent months to have abandoned any meaningful effort to depose him.

Are you confused? Don’t go away yet! The U.S. alliance against ISIS includes countries that are not beacons of democracy, the rule of law, or freedom for all their people. But they do have oil, or the wealth to secure oil. Qatar, Bahrain, the Emirates, the Egyptians and the Saudis – our friends – have treated minorities and women as second-class citizens. All of them have archaic, sometimes cruel, justice systems. Charges have been made that some of them fund terrorism directly or through fundamentalist religious groups. They do not even meet the basic threshold of human rights standards.

Our Middle East allies also have illustrated unpredictable foreign policy commitments, sometimes inimical to U.S. interests and, in some, instability rests just below the surface.

U.S. policies at the present time are less than coherent. To begin to set a more strategic set of policies toward the Middle East, the nation needs to ask itself why it became so involved in the first place. Simplicity here is a virtue. Oil remains one common thread seeming to link most U.S. initiatives.

Let’s go back to early last century. History books will tell you that Britain and France, in 1916, secretly negotiated the Sykes-Picot Agreement. It carved up the Ottoman Empire into nation-states that purposely blunted the sectarian and nationalistic visions of the area’s residents. Britain’s and France’s efforts were driven to a large degree by a desire to capture and access oil reserves. Deals were cut with some pliant Arab leaders, and spheres of influence were established. Promises were made and soon forgotten. Tensions were always visible.

At the time, the U.S. was generally critical of Britain and France for drawing these boundaries. But the boundaries were agreed upon by the League of Nations.

Fast-forward to today: Historical, religious and nationalistic divisions within each nation, and between Middle Eastern nations, remain deep. They are often exacerbated by growing disappointment and anger, particularly among the young, concerning economic, social and civic opportunities that seem lost because of corruption and mismanagement. To the extent that oil is abundant, authoritarian regimes use oil money to buy peace among their populations and sometimes subsidize their neighbors to mute the possibilities of importing the Arab Spring.

Here, the U.S. is no stranger to Middle East skullduggery. Around the turn of the century, American oil companies began wheeling and dealing for desert land, presumed to be rich with oil. During and after World War II, the U.S. government made stability in the Middle East — and American need for Middle East oil and safe oil transit from Middle East nations to its allies and itself — a foreign policy priority, sometimes defined in terms of military action and government replacement. It wasn’t always pretty.

So what are we to do? I will leave the development of foreign policy to the White House and the U.S. State Department, except for one key element – dependency on oil. Oil is traded on a global market. Even if U.S. oil shale continues to expand and reduces our need for Middle East oil, U.S. oil will continue to be traded on the world markets. Oil producers and distributors are not eleemosynary. They are compelled by shareholders to make the largest dollar return possible. Even with oil now selling at a relatively low price, the U.S. still gets about 20 percent of its oil imports from the Middle East, and OPEC nations provide about one-third of our gross crude oil imports. If you add our total imports from the Middle East to the imports of our allies, imports from OPEC are much higher. I bet a red light goes off in the Pentagon whenever there are threats to oil shipping-areas like the Strait of Hormuz and the Persian Gulf.

President Obama has said that we need to wean ourselves off oil and its derivative, gasoline. It’s time we develop a national strategy to wean, and wean in a big way. Borrowing some words from The New York Times on another issue, “It has been said that America is a country that does the right thing, after trying everything else first.” Well, we really haven’t tried much weaning, only rhetoric. Maybe we can make a great leap forward (sorry, Mao) and reach an agreement on an alternative fuel strategy. Let’s increase the use of existing fuels like ethanol now and move to open competitive markets at fuel stations.

When ready for prime market time, let’s foster the sale of natural gas-based ethanol, a range of biofuels, electricity and hydrogen-based fuels. Using alternative fuels will reduce the negative impact of Sykes-Picot on the United States. It will also lower, if not eliminate, the need to engage in conflicts to assure the flow of oil. Nothing is perfect, but increased use of alternative fuels will not only be good for our military budget and take U.S. soldiers out of harm’s way, it will be good for the environment. It will reduce GHG emissions, and likely help expand the job market. May Sykes-Picot rest in peace! Peace!

(Map credit: Stars & Stripes)

How should we transport oil, by pipeline or rail?

The Obama administration on Friday issued new rules intended to make oil-by-rail safer. But environmental groups rejected the reforms, saying a methodical program to remove aging train cars from service all but guarantees further catastrophic accidents.

The Department of Transportation’s new rules would phase out the DOT-111 rail cars, still in use since the 1960s, by 2018. Newer CPC-1232 cars, which still aren’t perfect, would have to be replaced by 2020 with a new-and-improved DOT-117 model.

According to The New York Times:

All cars built under the DOT-117 standard after Oct. 1, 2015, will have a thicker nine-sixteenths-inch tank shell, a one-half-inch shield running the full height of the front and back of a tank car, thermal protection and improved pressure-relief valves and bottom outlet valves.

Last month DOT issued new standards designed to reduce speeds traveled by oil trains in residential areas.

A coalition of activist groups, including the Sierra Club and the NRDC, said Friday’s announcement didn’t go nearly far enough. Earthjustice released a statement saying:

The groups continue to call for an immediate ban on these cars, citing the federal agencies’ own projections that 15 derailments on mainlines are likely every year. DOT’s phase-out period allows the crude oil fleet to more than double before these tank cars are taken out of service, knowingly exposing communities daily to unacceptable risks.

As NRDC notes, the increase in U.S. oil production — mostly in shale-rock formations in Texas and North Dakota — has caused the oil industry to step up transport of its product by rail. In 2009, U.S. crude “filled a mere 8,000 rail tanker cars,” NRDC notes. In 2013, it filled 400,000.

A series of fiery accidents have spurred calls for increased safety: In July 2013, an oil train went out of control, crashed and exploded in the Quebec city of Lac-Megantic, killing 47 people. Earlier this year oil trains derailed in West Virginia, Illinois and Ontario.

It’s no coincidence that, when a train full of less volatile ethanol fuel derailed in North Dakota in February, the damage was much less severe.

The accidents have put the spotlight on how U.S. and Canadian-produced oil is transported around North America. Environmentalists also are strongly opposed to extending the Keystone XL pipeline through the U.S. to the Gulf of Mexico, and so far that project has been shelved as the State Department considers whether to approve it. President Obama has indicated his disapproval. But the debate hasn’t made Americans much more informed about it. The University of Texas at Austin conducted a poll and found that only 42 percent of adults were even aware of the project.

What do you think is the safest, most efficient way to move oil around?




U.S. allows export of some oil, loosening four-decade ban

The U.S. Department of Commerce has relaxed, somewhat, the nation’s four-decade-long ban on oil exports, put in place after the 1973 oil crisis that caused widespread shortages around the United States.

The Obama administration’s move will allow the sale of up to 1 million barrels a day of ultra-light crude. The decision likely will please U.S. drillers and many politicians who have said the U.S. export ban is a relic of an outdated policy.

Reuters reported specifics:

The latest measures were wrapped in regulatory jargon and couched by some as a basic clarification of existing rules, but analysts said the message was unambiguous: a green light for any company willing and able to process their light condensate crude through a distillation tower, a simple piece of oilfield kit.

“In practice this long-awaited move can open up the floodgates to substantial increases in exports by end 2015,” Ed Morse, global head of commodities research at Citigroup in New York said in a research note.

BusinessWeek: Ethanol just avoided a death blow

BusinessWeek’s Matthew Phillips reflects on the EPA’s decision to delay proposed changes to the renewable fuel standard, a revision that was expected to reduce the amount of corn-based ethanol to be blended into the nation’s gasoline supply.

Now that the new RFS standards have been put off until sometime in 2015, ethanol producers have the chance to regroup and fight another day, Phillips writes.

The ethanol industry just avoided a death blow. Rather than deciding to permanently lower the amount of renewable fuels that have to be blended into the U.S. gasoline supply, as it first proposed a year ago, the Environmental Protection Agency last week opted to wait until next year to decide. The delay (official notice here) means this year’s ethanol quotas won’t be set until 2015 and ensures they will be lower than the original mandate envisioned. That’s not great news for ethanol producers, but it gives them more time to fight and avoids an outcome that could have been far worse.

Ethanol industry leaders pretended to be angry at the EPA’s decision to delay on Friday: “Deciding not to decide is not a decision,” Bob Dinneen, chief executive of the Renewable Fuels Association, said in a written statement. But the reality is that they’re relieved the White House didn’t choose a more aggressive plan pushed by refining and oil companies.