Professional Documents
Culture Documents
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1. High oil prices are inevitable and won’t go down – strong demand from China and India
Associated Press, July 6 2008 OPEC chief: Strong demand will keep oil prices up Sun Jul 6, 1:27 PM ET
OPEC chief Chakib Khelil says the world's surging oil prices are not likely to fall.
He says strong market demand, especially from China and India, is one reason prices will stay as high as they are.
But Khelil told a conference on energy in Algiers on Sunday that the steady increases of late "have nothing to do with supply and
demand." Khelil, who serves as Algeria's energy minister, blames the rise on the weak U.S. dollar, the currency that oil is sold in.
2. Oil producers will keep prices high regardless—increased supply won’t depress prices
Seeking Alpha 12-30-2007, (Jim Kingsdale), http://seekingalpha.com/article/58567-what-the-fundamentals-say-
about-future-oil-prices
All this looks right on paper and it may well happen, but I wouldn’t bet on it. I would bet that if prices do fall sometime soon, maybe after the peak winter demand season, exporters will cut back fairly quickly to try tokeep the
price above $80 or so. Further, when prices eventually begin to rise again, perhaps in the Spring or Fall of 2008, exporters will then be slow to raise production, having just experienced lower prices. So I think a possible
hoarding mindset that now dominates the oil market and is hardly ever discussed. Exporters (read OPEC,
particularly KSA, UAE, Kuwait, and Venezuela) are now addicted to high and rising oil prices. Their ever increasing cash
flows from oil have led to their making huge future capital commitments; they are not willing to see falling oil prices endanger those commitments. They also know that due to tight
global supplies relatively minor production cuts are sufficient to raise prices. Finally they now believe that oil in the out years will only get more expensive. Thus near term production cuts will also be rewarded because the oil
, exporters today have their hands on a hair-trigger for raising the oil price and they will not
not sold now can be sold later for more money. In summary
at an historically high level but still does not seem to be able to satisfy demand. The Saudis and the Iraqis have both managed to increase
production by roughly 500,000 b/d helping to cause the 85 mb/d global production plateau that has existed for nearly two years to be eclipsed during the past few months; production now seems to be running in excess of 87
the price of oil refuses to sink. Each time oil goes into the high $80s it seems to bounce right
mb/d as shown in this chart: Yet
back in the face of tight inventories. U.S. crude oil inventories keep sinking – they are now the lowest in nearly three years. This is a chart that indicates the tightness of U.S. oil supplies measured in days of inventory:
3. Oil supplies won’t keep pace with demand growth, ensuring oil prices rise towards $200
a barrel—this will break the back of the global economy
Sato and Okada 6/25/08 (Shigeru and Yuji, Columnists @ Bloomberg, "Oil at US$200 would trigger global
recession, Deutsche Bank warns," Financial Post, http://www.financialpost.com/reports/oil-
watch/story.html?id=612878)
The global economy would collapse if oil hit US$200 a barrel, said the top energy analyst at Germany's largest bank.
"Two-hundred dollar oil would break the back of the global economy," Deutsche Bank AG's chief energy economist
Adam Sieminski said in an interview on Wednesday in Tokyo. "Next step after US$200 would be global recession
and bad news for everybody." Mr. Sieminski's comments come after Goldman Sachs Group Inc. forecast oil may
rise to between US$150 and US$200 within two years as supply growth, especially from producers outside the
Organization of Petroleum Exporting Countries, fails to keep pace with demand. Deutsche Bank is due to release its
oil-price forecast on June 27.
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THE recent oil price jump is due to rising demand in developing countries and the lack of spare supply capacity.
That means that even small disruptions to oil output drive prices higher.
Given the slow growth in oil supply, in prospect, only a world recession that cuts demand will bring oil prices down sharply.
Unfortunately, a world recession is looking increasingly likely.
The oil price is not just being driven by speculators. The underlying demand and supply balance is tight. There is very little spare
capacity, with only around two million barrels a day of spare capacity available, while demand is around 86 million barrels a
day. Most of this spare capacity is heavy crudes and refiners want lighter crudes to produce diesel where demand is
booming.
3. Oil price drop would have no effect on the Russian economy. Prices could get as low as
$55 a barrel and the effect would still be insignificant
Russia & CIS Banking & Finance Weekly June 20, 2008 headline: russia does not fear drop in oil prices - kudrin
Russia should be prepared for both further growth as well as a rapid drop in oil prices, he said. It is better for Russia when oil prices are
high, he said, but these prices must be utilized soundly and oil windfalls should not be wasted. "If oil prices are higher and is spent
immediately, the ruble's exchange rate will strengthen," he said, stressing that the appreciation of the ruble would have a negative effect on
Russian industry. A decline in the price of oil will not have a significant impact on the Russian budget, Kudrin said.
"Russia is not afraid of a price drop," Kudrin said in an interview with Vesti 24 TV while in Osaka following the meeting of the G8
finance chiefs. "Our budget would not have a deficit at a price of $55 per barrel. The tax system for our oil companies is set up
so that as the price of oil declines, taxation declines. So no substantial changes will take place. It will have some effect on
our GDP growth, but an insignificant one compared with the earlier period. I repeat, the effect will be
insignificant," he said.
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THE recent oil price jump is due to rising demand in developing countries and the lack of spare supply capacity.
That means that even small disruptions to oil output drive prices higher.
Given the slow growth in oil supply, in prospect, only a world recession that cuts demand will bring oil prices down sharply.
Unfortunately, a world recession is looking increasingly likely.
The oil price is not just being driven by speculators. The underlying demand and supply balance is tight. There is very little spare
capacity, with only around two million barrels a day of spare capacity available, while demand is around 86 million barrels a
day. Most of this spare capacity is heavy crudes and refiners want lighter crudes to produce diesel where demand is
booming.
3. Saudi Arabia has diversified their economy and can stay on a growth path even if oil
prices decline.
Arsene Aka Global Insight August 2, 2007 HEADLINE: Fitch Raises Outlook for Saudi Arabia's Sovereign Foreign Currency
Significance: A sharp decrease in international oil prices remains the main risk facing the kingdom. However, during the current oil boom,
Saudi Arabia has used part of its oil-revenue windfall to build up assets overseas, which could be drawn upon if
global energy prices falter in the future. With global oil demand expected to remain strong over the next two years, the sovereign's
creditworthiness seems relatively secure. Meanwhile, Saudi Arabia has made good progress in promoting the non-oil sector.
Despite a fall in oil production in 2006, the economy expanded robustly, on the back of strong growth in the non-
oil sector.
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4. Turn / High oil prices have allowed Saudi Arabia to reform its economy which is key to
their stability
Erlend Paasche Saudi Arabia's economic liberalization Wednesday, December 12, 2007
http://www.speroforum.com/site/article.asp?id=12974
According to conventional wisdom, high oil prices would render economic reform in oil-rich countries a poor
chance of success with increases in state income lessening the pressure for such change. In a time of sky-high oil
prices, Saudi Arabia proves that conventional wisdom sometimes misses the mark.
Saudi oil export revenues constituted a meager US$34.3 billion in 1998, but rose to US$46.8 billion in 1999 and
US$65.5 billion in 2002. SABB, one of the kingdom's largest banks, projects oil revenues of US$165 billion this
year. Even though the Saudi state has thus gradually gained access to a greatly increased volume of external rent, it
has somewhat paradoxically loosened its tight grip on the economy, opened up its markets for privatization and
foreign investment and actively strengthened its private sector.
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THE recent oil price jump is due to rising demand in developing countries and the lack of spare supply capacity.
That means that even small disruptions to oil output drive prices higher.
Given the slow growth in oil supply, in prospect, only a world recession that cuts demand will bring oil prices down sharply.
Unfortunately, a world recession is looking increasingly likely.
The oil price is not just being driven by speculators. The underlying demand and supply balance is tight. There is very little spare
capacity, with only around two million barrels a day of spare capacity available, while demand is around 86 million barrels a
day. Most of this spare capacity is heavy crudes and refiners want lighter crudes to produce diesel where demand is
booming.
3. The disad doesn’t turn the case. We don’t argue an increase in renewables is good or
even a decrease in emissions is good Our advantage is hegemony and this disad doesn’t
turn that advantage.
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4. foreign oil dependence and resource competition is the root of African instability
Klare 8 (Micheal T. Klare, The Nation’s defense correspondent, is professor of peace and world security studies at Hampshire
College. “The New Geopolitics of Energy” The Nation. New York: May 19, 2008. Vol. 286, Iss. 19; pg. 18)
This risk is made all the greater because intensified production of oil, natural gas, uranium and minerals is itself a
source of instability, acting as a magnet for arms deliveries and outside intervention. The nations involved are
largely poor, so whoever controls the resources controls the one sure source of abundant wealth. This is an invitation
for the monopolization of power by greedy elites who use control over military and police to suppress rivals. The
result, more often than not, is a wealthy strata of crony capitalists kept in power by brutal security forces and
surrounded by disaffected and impoverished masses, often belonging to a different ethnic group--a recipe for unrest
and insurgency. This is the situation today in the Niger Delta region of Nigeria, in Darfur and southern Sudan, in the
uranium-producing areas of Niger, in Zimbabwe, in the Cabinda province of Angola (where most of that country's
oil lies) and in numerous other areas suffering from what's been called the "resource curse."
Angola emerged from more than three decades of civil war in 2002. President Jose Eduardo dos Santos leads a notionally Marxist
government busily engaged in stealing and squandering the oil revenues. Angola's cabinet, steeped in corruption,
is filled with Marxist millionaires. Mr dos Santos himself is believed to rank among Africa's richest men. Experience suggests that
oil bonanzas inflict nothing but harm on African countries. A tiny elite seizes the chance to enrich itself - and virtually nothing
trickles down to the poor. Meanwhile, oil revenues distort the entire economy, discouraging genuine
entrepreneurs and undermining every state institution. Civil war becomes more likely because the incentive to take over the
country and steal its resources is all the greater.
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.
time as many as 96 percent of the life-forms on Earth fell extinct If you believe the current ordering of nature gloried and
worthy of reverence, then you must believe the Permian extinction was a splendorous event. Without it the species and ecological
wonders we now seek to preserve would never have come into being. Some other set of creatures and wonders would exist, to be sure. But
.
there might be, say, no dolphins or whales: the Permian extinction was particularly hard on aquatic life There might be
no bear, no frogs, no otter, no songbirds, no flowering plants, no old-growth forests, no taiga, no Madagascan lemur.
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1. Oil price drop would have no effect on the Russian economy. Prices could get as low as
$55 a barrel and the effect would still be insignificant
Russia & CIS Banking & Finance Weekly June 20, 2008 headline: russia does not fear drop in oil prices - kudrin
Russia should be prepared for both further growth as well as a rapid drop in oil prices, he said. It is better for Russia when oil prices are
high, he said, but these prices must be utilized soundly and oil windfalls should not be wasted. "If oil prices are higher and is spent
immediately, the ruble's exchange rate will strengthen," he said, stressing that the appreciation of the ruble would have a negative effect on
Russian industry. A decline in the price of oil will not have a significant impact on the Russian budget, Kudrin said.
"Russia is not afraid of a price drop," Kudrin said in an interview with Vesti 24 TV while in Osaka following the meeting of the G8
finance chiefs. "Our budget would not have a deficit at a price of $55 per barrel. The tax system for our oil companies is set up
so that as the price of oil declines, taxation declines. So no substantial changes will take place. It will have some effect on
our GDP growth, but an insignificant one compared with the earlier period. I repeat, the effect will be
insignificant," he said.
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A little less than a year ago, August 17 to be precise, the post-Cold War Russian economic experiment imploded. The ruble
collapsed and debt payments to foreigners were frozen. Wall Street lost billions of dollars. Long Term Capital Management, one of the world's
biggest hedge funds, had to be taken over by its bankers. Once burned, international investors yanked their capital out of all emerging markets
— from Latin America to East Asia— causing world interest rates to spike. The global economy teetered on the edge of
depression. But, much to the surprise of most economic pundits, international markets quickly righted
themselves. The Russian economy proved far more resilient than anticipated. And, in retrospect, the events of August,
1998 were little more than a very large bump in the road. The lessons of this "crisis that wasn't" are now clear: Russia is not
too big to fail (the volume of its debts do not dictate special treatment by its creditors); the financial world can cope with such
failure; and the Russian economy can bounce back without much overt help from the West. But the impending $4.5
billion loan to Russia by the International Monetary Fund— reflecting Washington's gratitude for Moscow's help in Kosovo, continued fear of
Russian nuclear proliferation and concern about Russia's internal political stability— demonstrates that Russia still remains too
important for the world to ignore. This contradiction— not too big to fail, but still too big to flounder— highlights the friction
inherent when economic policy is used to further geo-political goals. Up until a year ago, the Clinton Administration argued that aid to Russia
was needed, in part, to avoid global economic collapse. August, 1998 exposed that rationale as a charade. Now American support for assistance
to Russia can only be justified for two reasons: to reinforce Russia's transition to a market economy or as ransom in Moscow's continued
strategic blackmail of the West. Evidence to justify the former is dubious. Its time to own up to the latter. Last summer's fleeting economic
fright reflected Russia's staggering economic collapse. The ruble fell by more than 70 per cent in a couple of weeks. The
economy shrank by 4.3 per cent. Real wages fell 41 per cent. But the crisis was cathartic. "The shock accomplished what
reform was intended to achieve," said Anders Aslund, a senior associate at the Carnegie Endowment for International Peace in
Washington. The banking system now functions better. Barter is declining. Most important, there has been no reversion to
central planning, government-directed lending, industrial subsidies or government reliance on simply printing money.
5. High oil prices are collapsing democracy and creating increased authoritarianism in
Russia
States News Service June 24, 2008 HEADLINE: AS OIL WEALTH RISES IN EURASIA, DEMOCRACY DECLINES
SIGNIFICANTLY
To coincide with today's release of the Freedom House Nations in Transit 2008 report, three of the study's authors gathered at RFE/RL's
Washington, DC headquarters to discuss one of its key findings - that, as oil and natural gas revenues surge in Russia and
Central Asia, democratic institutions in these countries are eroding significantly. [Read more about the Nations in Transit
2008 Report] "The resource curse is taking root," Freedom House Director of Studies Christopher Walker told the group. "The
growing authoritarianism in oil and natural gas-rich countries such as Russia, Kazakhstan and Azerbaijan is severely
restricting the ability of democratic institutions to operate." According to the report, the regression in Azerbaijan, Kazakhstan
and Russia has occurred systematically and across sectors, including in the areas of electoral process, civil society, independent media and
judicial independence. "Russia's decline in all of the report's categories over the past eight years is dramatic," said Robert
Orttung, the author of the section on Russia and a Senior Fellow at the Jefferson Institute. "For years, Vladimir Putin has been
using oil and natural gas revenues to build up his police forces and consolidate power in such a way that there is no space for
democracy to grow."
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Muravchik 2001 (Joshua- Resident Scholar at the AEI, “Democracy and Nuclear Peace” July 14,
http://www.npec-web.org/Syllabus/Muravchik.pdf, Date Accessed 7/29/2006)
That this momentum has slackened somewhat since its pinnacle in 1989, destined to be remembered as one of the most revolutionary years in all
history, was inevitable. So many peoples were swept up in the democratic tide that there was certain to be some backsliding. Most countries'
democratic evolution has included some fits and starts rather than a smooth progression. So it must be for the world as a whole. Nonetheless, the
overall trend remains powerful and clear. Despite the backsliding, the number and proportion of democracies stands higher
today than ever before. This progress offers a source of hope for enduring nuclear peace. The danger of nuclear war was
radically reduced almost overnight when Russia abandoned Communism and turned to democracy. For other
ominous corners of the world, we may be in a kind of race between the emergence or growth of nuclear arsenals and
the advent of democratization. If this is so, the greatest cause for worry may rest with the Moslem Middle East where nuclear arsenals do
not yet exist but where the prospects for democracy may be still more remote.
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Fridl 7/11/08 (Daniella, "The Balkan Saga Continues," recipient of a six-month fellowship from IREX
(International Research & Exchanges Board), http://www.nationalinterest.org/Article.aspx?id=19374)
With U.S.-Russia relations continuing to deteriorate in the wake of the G8 summit and America’s continuing efforts to build a missile-defense
system in Eastern Europe, we now have another nail to add to the coffin. In the United States and the European Union, there is a widely
held belief that Kosovo’s independence was the last missing piece in achieving stability in the Balkans. Having just
returned from Kosovo, I would have to disagree. My observations lead me to conclude that there remains serious
potential for instability in Kosovo—with broad implications for U.S.-Russia relations and beyond.
Serbia paid a high price for the mistakes that were made during Slobodan Milsovic’s regime. Former Finnish President and the key mediator in
the Kosovo negotiations, Martti Ahtisaari, explained to me that the Serbs lost Kosovo in 1999. This is not to say that Belgrade did not have a
chance to negotiate a more favorable agreement between 2005 and 2007. However, it was almost impossible for any constructive Serbian policy
to develop, given the fragile structure of the governing coalition and the intense rivalries between nationalist Prime Minister Vojislav Kostunica
and pro-European President Boris Tadic.
Hence, it was politically more expedient and safe to exploit the nationalist sentiment in the country and settle on the lowest common
denominator: claiming that historically Kosovo was and remains part of Serbia. Instead of sitting back in denial, hoping for a miraculous turn of
events, Belgrade could have been more effective in using Russia’s support and UN Security Council Resolution 1244, which protects the
territorial integrity of Serbia, as leverage in securing some level of sovereignty for the Serbs living in Kosovo. Opportunities were there, but the
political will, wisdom and effectiveness that were required to achieve this outcome were lacking.
Although Kosovo is making slow progress toward obtaining international recognition, this new European state has many
other far-more-pressing challenges. They include a still-lagging economy, high levels of organized crime and
corruption, an unemployment rate close to 50 percent, a population of about two million—half under the age of twenty-five, and
most importantly the unresolved question of Kosovo Serbs. Some of these issues will improve, especially considering the resources and funding
that the European Union and the United States are putting in Kosovo. At the upcoming donors’ conference, the international community is
expected to raise over one billion dollars to help boost Kosovo’s economy. Regrettably, the northern part of the country remains completely
isolated and is not likely to reap any benefits from this aid. Mitrovica is an ethnically divided city, with the majority of Serbs living on the
northern side of the Ibar River and Albanians on the southern side. Ironically, the white bridge over the river symbolizes the division between the
two ethnic groups, which is evident in the UN checkpoints and barbed-wire barricades set up on both sides. Crossing into the opposite side of the
bridge at nighttime is not advisable for security reasons.
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3. The pipeline is inevitable – construction has already started, the agreement is signed and
operation will begin in 2011
4. Pipeline will lead to an oil spill in the Aegean because of the concentration of oil tankers
Parent 06 (Jason, associate with the Law Offices of Beauregard, Burke & Franco in New Bedford, Massachusets,
Fall, 14 Buff. Envt'l. L.J. 117, lexis)
Pollution is an on-going and increasing problem in our oceans. 94 Oil spills can have deadly impacts on marine life,
as evidenced by the Exxon Valdez incident. 95 That incident was particularly detrimental because on the coast of
Alaska and in other colder areas, oil takes longer to breakdown and can get trapped in the ice, making clean up more
difficult. 96 Additionally, toxic contaminants, such as mirex and PCBs, often from unknown sources, can impact marine mammals much in the
same manner that contaminants in our drinking water can affect us. 97 Impacts on mammals can be severe because "they bio-
accumulate many of the toxic chemicals in their bodies, resulting in the release of more concentrated doses further
along the food chain when they are preyed or scavenged upon." 98 Finally, ocean dumping continues to [*136] take the lives of many
marine animals." 99 According to the House Merchant Marine and Fisheries Committee, "the most pervasive 'threat to marine
mammals is the degradation of the environment upon which they depend.'" 100 A wide variety of materials are intentionally or
negligently dumped into the oceans. 101 Much of the debris can have detrimental impacts on marine life, causing asphyxiation, strangulation,
entanglement, contamination, and a host of other potential hazards. 102
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Gabon is now
Gabon is one of the most politically stable countries in Africa and the country's petroleum industry has insured prosperity.
starting to diversify its economy and intends on maximizing the overlooked potential of
its mining sector which offers upside from various commodities. SearchGold and its partner Managem are developing
Gabon's most advanced gold project, the Bakoudou-Magnima Project. The Booue-Mimongo Project complements the Bakoudou-Magnima
Project by strengthening SearchGold's position in Gabon with access to 10,000 km2 of under-explored greenstone belts.
2. No impact - Congo deforestation being solved now. New Congo Basin Forest fund will
solve deforestation
Africa News June 23, 2008 HEADLINE: Central Africa; New Fund Launched for Congo Basin BYLINE: Inter Press Service
The prime ministers of Norway and Britain have launched a 200 million dollar fund to tackle deforestation in the
Congo Basin, the world's second largest tropical forest.
Launched in London last week, the Congo Basin Forest Fund will support initiatives from governments, civil society
and the private sector that aim to reduce logging.
The fund will sponsor livelihood projects that seek to make it more profitable for local communities to preserve the forest than to cut it down,
as well as the development of new and innovative approaches. This includes a new satellite system that will monitor the forest -- which is twice
the size of France and covers an area of more than a million square kilometres.
3. Non-unique. Deforestation of the Congo is rampant now and oil prices are high.
Law & Health Weekly December 22, 2007 HEADLINE: BURNESS COMMUNICATIONS;
Report finds deforestation offers very little money compared to potential financial benefits
Developing new incentives for reducing carbon emissions stemming from deforestation is high on the agenda in Bali. Deforestation is
rampant in places like Indonesia, the Amazon and the Congo. Currently, confusion over how to value and monitor the large
amounts of carbon stored in tropical forests has prevented the inclusion of forests in the carbon offset market that is mainly
dominated by reductions achieved in the industrial sector, even though deforestation is responsible for some 20 percent of the world 's carbon
emissions.
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2AC – Secessionism DA
1. Impact is not specific and empirically denied. They provide no explanation of which
states might all of a sudden engage in secessionist conflicts, which of these states might have
access to weapons of mass destruction, and what the time frame would be for the conflicts.
No recent secessionist conflict have gone nuclear. Prefer our case advantage.
3. Oil revenues spark secessionist conflicts and civil wars in oil-producing states
Ross May/June 08 (Michael, Associate Professor of Political Science at the University of California, Los Angeles, "Blood Barrels:
Why Oil Wealth Fuels Conflict," http://fullaccess.foreignaffairs.org/20080501faessay87301/michael-l-ross/blood-barrels.html?mode=print)
For new oil and gas producers, the gravest danger is the possibility of armed conflict.
Among developing countries, an oil-producing
country is twice as likely to suffer internal rebellion as a non-oil-producing one. The conflicts range in magnitude
from low-level secessionist struggles, such as those occurring in the Niger Delta and southern Thailand, to full-blown civil wars,
such as in Algeria, Colombia, Sudan, and, of course, Iraq. Oil wealth can trigger conflict in three ways. First, it can cause
economic instability, which then leads to political instability. When people lose their jobs, they become more frustrated with their
government and more vulnerable to being recruited by rebel armies that challenge the cash-starved government. A sudden drop in income can
result in internal strife in any country, but because oil prices are unusually volatile, oil-producing countries tend to be
battered by cycles of booms and busts. And the more dependent a government is on its oil revenues, the more likely it is to face turmoil
when prices go south. Second, oil wealth often helps support insurgencies. Rebellions in many countries fail when their instigators
run out of funds. But raising money in petroleum-rich countries is relatively easy: insurgents can steal oil and sell it on
the black market (as has happened in Iraq and Nigeria), extort money from oil companies working in remote areas (as in Colombia
and Sudan), or find business partners to fund them in exchange for future consideration in the event they seize power
(as in Equatorial Guinea and the Republic of the Congo). Third, oil wealth encourages separatism. Oil and gas are usually produced in
self-contained economic enclaves that yield a lot of revenue for the central government but provide few jobs for locals -- who also often
bear the costs of petroleum development, such as lost property rights and environmental damage. To reverse the
imbalance, some locals seek autonomy from the central government, as have the people in the petroleum-rich
regions of Bolivia, Indonesia, Iran, Iraq, Nigeria, and Sudan. This is not to say that petroleum is the only source of such conflicts
or that it inevitably breeds violence. In fact, almost half of all the states that have produced oil since 1970 have been conflict-free. Oil alone
cannot create conflict, but it both exacerbates latent tensions and gives governments and their more militant opponents the
means to fight them out. Governments that limit corruption and put their windfalls to good use rarely face unrest. Unfortunately, oil
production is now rising precisely in those countries where wise leadership is often in short supply. Most of the new
energy-rich states are in Africa (Chad, Côte d'Ivoire, Mauritania, Namibia, and São Tomé and Príncipe), the Caspian
basin (Azerbaijan, Kazakhstan, and Turkmenistan), or Southeast Asia (Cambodia, East Timor, Myanmar, and
Vietnam). Almost all are undemocratic. The majority are very poor and ill equipped to manage a sudden and large
influx of revenues. And many also have limited petroleum reserves -- just enough to yield large revenues for a decade or two -- which means
that if they succumb to civil war, they will squander whatever chance they had of using their oil windfalls to escape from poverty.
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Oil is also linked to conflict and violence through its role in generating immense wealth for those who receive the
royalties and other rewards derived from the exploitation of a nation's petroleum reserves. Petroleum production and
distribution is one of the world's most lucrative industries, producing vast profits for the giant oil companies and
also channeling enormous riches to the elites and ruling dynasties that own the oil fields or control the disbursement
of the royalties (or "rents") paid by companies for the right to tap into these fields. These riches, in turn, have
inspired efforts by rival elites and clans to gain control over the oil fields-in some cases through the use of force. The
concentration of so much affluence in the hands of so few has also produced resentment for those members of
society who have received little or no benefit from oil production, thus providing the tinder for revolutionary and
extremist movements aimed at the redistribution of wealth.
5. There is no risk that major powers will get drawn into ethnic civil wars
Roland Dannreuther. “European Union Foreign and Security Policy: Towards a neighbourhood Strategy.” New
York, Routledge. 2004 p. 195-6
The global setting is thus primed for a continuance of the transatlantic partnership, but with ongoing and sometimes
fractious policy bargaining that is frequently stoked by status dissonance. What are the implications for policy cooperation in
the EU's neighbourhood? It is important to stress that the unipolar structure paradoxically increases the salience of regional
international politics across the globe for two reasons. First is the declining pole-to-state ratio. The nineteenth-century
international system was composed of six or eight polar states out of a total of roughly 30 significant powers. In the early Cold War there were
two poles, but the number of states had doubled to just over 70. Today there is one pole in a system whose population has
trebled to nearly 200 states. As a simple matter of numbers, there is bound to be more going on in regional inter-
national relations in today's system. Not only are the numbers of lesser powers growing, so are their aggregate capabilities. By one
measure, the conventionally defined Great Powers comprised over 80 per cent of global capabilities in the mid-nineteenth century, 65 per cent
in the early Cold War, but only around 55 per cent today.15 Second, many regional dynamics are measurably less constrained by
Great Power politics than they were in the Cold War for purely structural reasons. The current international
structure is looser than Cold War bipolarity, even though it is more unequal. The gap between the most powerful
state and the rest is much larger now than under bipolarity, but the system is less constraining on many important
regions. This comparative looseness does not mean that the system is not unipolar. On the contrary, it is a result of the
fact that unipolarity limits the very intense Great Power contradictions that tend to force lesser powers to choose
sides. The contemporary international system, in short, is characterized by unprecedented US hegemony within the
Great Power club, and a novel proliferation of lesser states outside that club. The likelihood that regional dynamics
will fall outside the limits of a polar state's national interest or capability is thus greater than in preceding systems.
Because there are now far more, and more capable, states relative to poles than in prior eras, and because the
abeyance of intense security rivalries among Great Powers increases the latitude for regional interstate dynamics,
there is a heightened demand for inter-state cooperation at the regional level. Notwithstanding US primacy, today's
international system puts a premium on the ability of the United States and the EU to coordinate policy in the regions.
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2. Rising oil prices are causing the dollar to decline against the euro
Gulf News July 20, 2008 HEADLINE: CITIGROUP TONIC GIVES STRENGTH TO DOLLAR
The dollar commenced the week initially supported by announcements of US Treasury and Federal Reserve of emergency measures to restore
investor confidence in Fannie Mae and Freddie Mac, which together directly or indirectly
control almost half the US mortgage market. It, however, fell to a record low against the euro as the markets later
interpreted the support as indicating the extreme severity of the credit market problems.
With rising oil prices hurting US growth, there was little incentive seen to buy dollars. Concerns about the US
economy and financial sector overshadowed a series-low reading of the German ZEW investor sentiment.
3. No impact – even if OPEC did switch the market value is too small to change the
currency markets. The dollar wouldn’t really take a hit.
Steve Hargreaves, CNNMoney.com staff writer November 20 2007: 6:04 AM EST Some OPEC mavericks want to switch to the
euro as oil's pricing basis. But analysts say there are several factors keeping the greenback in the game.
http://money.cnn.com/2007/11/19/news/international/oil_opec/index.htm?postversion=2007112006
And even if OPEC did switch its oil pricing to another currency, some doubt whether the dollar would really take a
hit. The amount of oil OPEC sells on the world market is somewhere around $1.5 billion per day, said Jeffrey
Currie, the head of commodity research at Goldman Sachs in London. Compare that, he said, to the more than $3
trillion that change hands in currency markets every day. "You're talking about a value that's just too small to show
up on the radar screen," said Currie. "It isn't enough to materially change the currency markets.
4. OPEC would never want to switch. They get too many benefits from the dollar
including direct access to large markets, simple commodity trading, flexible export revenue
generation and freedom to use export earnings without currency conversion
Theodore w. Boll senior economist july 2008 the dollar and oil
http://www.house.gov/jec/studies/2008/dollar%20and%20oil.pdf a joint economic committee republican staff study
The large oil exporters derive great benefit from the ability to sell their resource for a currency—the dollar—that
gives them direct access to large markets with few limitations. In addition to simplifying commodity trading (no
exchange rate arbitrage), it does not constrain export revenue generation (given the dollar’s liquidity compared to
other reserve currencies), and it enhances their freedom to use the export earnings in many places around the world
without the need for currency conversions (enhancing purchasing power).
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5. No impact - Saudis won’t ever agree to the switch. They have an agreement to support
the US and make sure crude stays priced in dollars
Steve Hargreaves, CNNMoney.com staff writer November 20 2007: 6:04 AM EST Some OPEC mavericks want to switch to the euro
as oil's pricing basis. But analysts say there are several factors keeping the greenback in the game.
http://money.cnn.com/2007/11/19/news/international/oil_opec/index.htm?postversion=2007112006
That could be because oil OPEC heavyweight Saudi Arabia is known for keeping the interests of the United States
in mind. Talk abounds of the tight relationship between the Saudi royal family and the U.S. government. Some say
the United States, in an unwritten agreement dating back to the early days of Saudi oil, promised to guarantee the
security of the desert kingdom in exchange for the Saudis making sure crude stays priced in U.S. dollars.
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Theodore w. Boll senior economist july 2008 the dollar and oil
http://www.house.gov/jec/studies/2008/dollar%20and%20oil.pdf a joint economic committee republican staff study
The oil business started in the United States. For a long time, the U.S. was the largest oil producer in the world and it
remains the largest oil consumer today. When oil began to trade in volume internationally after World War II, it
would have been highly impractical to quote the market price in anything but dollars. But in addition, oil producers
have specific reasons for continuing to price their commodity in dollars and preferring payment in dollars. Outside
of North America, governments mostly own oil fields and sell oil through national oil companies. The state may not
be able to spend or invest all of the revenue at home without bidding up the domestic price level. Governments of oil
exporting countries thus often accumulate cash they want to deploy outside the country. Major oil exporters receive
tens of billions of dollars in oil revenue per year (Saudi Arabia collects the most, $194 billion in 2007, according to
the EIA). Their first concern is how to keep the cash secure. There is only one place in the world to safely “park”
this much money and that is the U.S. Treasury bond market. These bonds have as close to zero default risk as there
is in the financial world. They are readily tradable in a secondary market, and the market is so large that even the
streams of oil money do not destabilize it. The only other economy that is large enough to support a comparable
product in comparable volume is the euro zone—but it does not offer one. Euro-zone member countries issue bonds
only individually.
OPEC won’t switch. Exchange risks would threaten the value of their oil revenue
Theodore w. Boll senior economist july 2008 the dollar and oil
http://www.house.gov/jec/studies/2008/dollar%20and%20oil.pdf a joint economic committee republican staff study
Exchange risk also could threaten the value of the oil revenue. However, the U.S. market for goods and services is
vast and the opportunities for investment abundant; moreover, dollars are accepted as a direct form of payment in
many places around the world. Hence, there is no pressing need to convert dollars to other currencies for
consumption or profitable investment. In the U.S., property rights are well protected, capital movement is easier, and
political obstacles are fewer than elsewhere. Receiving oil payments in dollars gives oil exporters the option to
exchange or not to exchange them for another currency; they do not need another currency to put their cash to use.
Oil exporters won’t switch they know it would reduce their purchasing power and destroy
their assets.
Theodore w. Boll senior economist july 2008 the dollar and oil
http://www.house.gov/jec/studies/2008/dollar%20and%20oil.pdf a joint economic committee republican staff study
For these reasons, the European Central Bank will not enlarge the money supply unilaterally in an attempt to
position the euro as a replacement for the dollar. A group of oil exporters suddenly adopting the euro as “their”
currency would not constitute representative global sentiment with respect to the euro’s prospects and would not
negate reservations to further openness that various euro-zone members still harbor. It would produce the effect
described in the Swiss franc illustration and drive up the euro’s foreign exchange value. The exporters themselves,
who have been receiving dollars as payment for their oil all along, would face further, accelerating depreciation of
their dollar-denominated assets relative to the surging euro. Any uncoordinated attempt to force a conversion from
the dollar to another currency would reduce the purchasing power of their past as well as future earnings.
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Alterman: There are two issues. First I don’t think people appreciate how much we do with Saudi Arabia. It’s just not
understanding the importance of Saudi Arabia to the U.S. in a myriad of ways. It’s not just energy. It’s not just security. It comes to
economic issues, counterterrorism issues, regional diplomacy issues. There’s a centrality and importance to Saudi Arabia that I
think most Americans don’t have an appreciation for.
We can sense growing suspicion in the asymmetric relationship between the US and the six Gulf Cooperation Council
(GCC) states due to America's divergent view and position on GCC issues, which the member states - collectively
and individually - deem as either unfriendly or interfering in their domestic affairs. The GCC states are frustrated at
Washington's lack of gratitude and appreciation for their invaluable contribution to stability and security in the region and for pursuing the
path of moderation in the Middle East. As part of the axis of moderation, the GCC plays a major role in Iraq, ensures energy security and
generates sovereign wealth. But it was all ignored by the US Congress when the US House of Representatives approved a legislation that would
allow the United States to sue the Organisation of Petroleum Exporting Countries (Opec) under its antitrust laws. New York Times columnist,
Thomas Evan, too joined the fray and wrote an opinion article titled "Sue OPEC". With the unprecedented increase in oil prices
which is now hovering around $140 per barrel, only the GCC states can calm the world's fears of rising oil prices.
Saudi Arabia took the initiative and increased its daily oil output by 200,000 barrels and also held a conference to address
the significant relationship between the oil producing and oil consuming countries.
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4. middle east conflict won’t escalate – leaders won’t get involved; self preservation and
lack of national interest
Maloney, Cook and Takeyh 6-28-2007. International Herald Tribune, “Why the Iraq War Won’t Engulf the Mideast.”
Yet, the Saudis, Iranians, Jordanians, Syrians, and others are very unlikely to go to war either to protect their own sect or
ethnic group or to prevent one country from gaining the upper hand in Iraq.
The reasons are fairly straightforward. First, Middle Eastern leaders, like politicians everywhere, are primarily
interested in one thing: self-preservation. Committing forces to Iraq is an inherently risky proposition, which, if the conflict went badly,
could threaten domestic political stability. Moreover, most Arab armies are geared toward regime protection rather than
projecting power and thus have little capability for sending troops to Iraq. Second, there is cause for concern about the so-called blowback
scenario in which jihadis returning from Iraq destabilize their home countries, plunging the region into conflict.
Middle Eastern leaders are preparing for this possibility. Unlike in the 1990s, when Arab fighters in the Afghan jihad against the Soviet Union
returned to Algeria, Egypt and Saudi Arabia and became a source of instability, Arab security services are being vigilant about who is coming in
and going from their countries. In the last month, the Saudi government has arrested approximately 200 people suspected of ties with militants.
Riyadh is also building a 700 kilometer wall along part of its frontier with Iraq in order to keep militants out of the
kingdom. Finally, there is no precedent for Arab leaders to commit forces to conflicts in which they are not directly
involved. The Iraqis and the Saudis did send small contingents to fight the Israelis in 1948 and 1967, but they were either
ineffective or never made it. In the 1970s and 1980s, Arab countries other than Syria, which had a compelling interest in establishing its
hegemony over Lebanon, never committed forces either to protect the Lebanese from the Israelis from other Lebanese. The civil war in Lebanon
was regarded as someone else's fight.
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The US State Department's Eighth Annual Trafficking in Persons Report (TIP) or modern day slavery, published in early June
was deemed offensive by the GCC states. The US insists that the report is "dedicated to ending human trafficking, a deeply
dehumanising form of exploitation. In virtually every country around the world, including the United States, men, women and children are held in
domestic servitude, exploited for commercial sex, coerced into work in factories and sweatshops. In some, children are forcibly recruited as
soldiers". Mark Lagon, the US State Department's senior adviser on human-trafficking elaborated: "For the last four years, the weak performance
of several nations in the Gulf has been the matter of great concern and disappointment." But he added that he was "happy to report that the UAE
and Bahrain continued to make significant improvements, notably the UAE. It is a model in the region." The report kept the other four
GCC states in the blacklist with threat of sanctions against Kuwait, Oman, Qatar and Saudi Arabia because their
governments have taken serious steps to deal with "trafficking in people".
CBC News 5/16/08 ("Saudi Arabia announces small boost in oil production,"
http://www.cbc.ca/world/story/2008/05/16/bush-saudi.html)
Bush's Saudi stop was intended, in part, to celebrate 75 years of formal U.S.-Saudi relations and strengthen ties that,
once strong, have frayed over the perception Washington favours Israel too much in the dispute with the
Palestinians, the Iraq war and the Sept. 11, 2001 attacks. Fifteen of the 19 airline hijackers were Saudis, and Americans blamed
Saudis for allowing the religious extremism that gave rise to them.
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A simple, one-sentence Russian language news item published by Russia's Interfax on July 14 seemingly signals yet another tectonic shift in the
Middle East's volatile mixture of oil, religion and weaponry. The item read, "An agreement about military-technical collaboration
(VTS) between Russia and Saudi Arabia was signed Monday evening, reports an Interfaks [sic] correspondent; the agreement was
signed in the presence of RF Prime Minister Vladimir Putin by Federal agency on VTS head Mikhail Dmitriev and National Security Council of
Saudi Arabia Secretary General Prince Bandar bin Sultan bin Abdulaziz" (Interfax, July 14). The next day the Saudi Press Agency provided more
details, differing from the Interfax bulletin by noting that it was actually Bandar and Putin who signed the agreement, adding that "Bandar
reiterated the keenness of the Custodian of the two Holy Mosques King Abdullah bin Abdulaziz on further cementing Saudi-Russian relations in
the political, military, security, cultural and technological domains" (Saudi Press Agency, July 15). While no text of the agreement was published,
the news apparently represents a major potential realignment of the Middle East's geopolitical realities, made all the
more extraordinary by the fact that, beginning 29 years ago and continuing through the entire Soviet occupation of
Afghanistan, Saudi Arabia matched, dollar for dollar, the United States' covert assistance to the Mujahideen. Saudi
Ambassador to Russia Ali bin Hassan Jaafar commented that the event reflected the two nations' "sincere" desire to develop not only military-technical cooperation, but also broader joint
endeavors in other fields, adding, "It will be one more bridge linking our countries" (Vedomosti, July 16). Russian sources remarked that the Saudi military was particularly interested in Mi-17
transport and Mi-35 (NATO designation--"Hind-E") attack/transport helicopters. Ironically, an earlier variant of the Mi-35, the Mi-24, was used extensively during the Soviet invasion of
Afghanistan to strafe Mujahideen, operating with complete air superiority until July 1985, when the United States began to supply the Mujahideen with hundreds of FIM-92A Stinger anti-aircraft
missiles. Riyadh's shopping list apparently is not limited to transporters and helicopters, as the source also stated that Saudi Arabia also was interested in purchasing Russia's most advanced
aircraft and air defense systems, as well as T-90S main battle tanks, and was considering purchasing and integrating Russian-built S-300 and S-400 air defense systems with their U.S. Patriot
systems (Vremya Novostei, July 16). Discussions between Riyadh and Moscow have been underway since then President Putin visited Saudi Arabia in February 2007, when he met not only with
King Abdullah but also with Sultan, former ambassador to the United States, who was appointed NSC head in October 2005, and Sultan's father, Crown Prince Sultan bin Abdul Aziz Al Saud,
half-brother of King Abdallah and currently Saudi Arabia's minister of defense and aviation (Rossiiskaya Gazeta, February 16, 2007). Obviously impressing his host, Abdullah awarded Putin the
Order of King Abdul Aziz, Saudi Arabia's highest governmental award. Extending his trip to call on other U.S. regional allies, Putin also visited Qatar and Jordan. Following up on Putin's
2007sojourn, Defense Minister Sultan subsequently visited Moscow in November, while last February Saudi Foreign Minister Prince Saud al-Faisal visited Moscow for discussions with then
President Putin (Kommersant, February 15). Putin said of the agreement, "Our relations are developing well; trade turnover is growing, though in absolute terms it still looks modest, but
considering our good ties, we have good prospects and a good basis" (Interfax, July 14). Speculation immediately flared in the Russian press that Riyadh was using the agreement and dangling
large potential weapons contracts in front of Russia in an effort to woo Moscow away from Iran (Kommersant, July 15). Dmitry Peskov, Prime Minister Vladimir Putin's spokesman, was forced
to deny the reports, saying, "Any allegations to the effect that Russia's relations with Saudi Arabia with regard to military technological cooperation may in any way be linked to the Russian-
Iranian dialogue are out of place and untrue" (Interfax, July 15). If the allegations are true, they provide yet another hidden aspect to the West's efforts to cajole and pressure Tehran into
The news is unpleasant for the U.S., as from 1999 to 2006, Saudi Arabia received $6.5 billion under
abandoning its uranium enrichment program.
arms transfer agreements with the United States, an annual average of $815 million in inflation-adjusted fiscal year 2006 dollars; and in July 2007
Washington announced the sale of $20 billion in advanced weaponry to Saudi Arabia and its neighbors in the Gulf Cooperation Council. For
Russia, to enter such a lucrative arms market, which for years was the exclusive purview of the EU and the U.S., is potentially worth billions of
dollars. While Saudi Arabia has yet to express an interest in such top-end (and expensive) items as fighters, Riyadh's potential shopping list
reportedly includes not only the items mentioned earlier, but also 150 advanced T-90S tanks, over 100 helicopters including the Mi-35, Mi-17 and
Mi-28NE variants, the Buk-M2E medium range air defense systems and several hundred BMP-3 armored personnel carriers; and the wish list
could grow, according to a Russian defense industry source (Interfax-AVN, July 15). For Washington, perhaps the most surprising
aspect of the agreement is the deep involvement of Bandar, who appears to be the driving agent behind Saudi
Arabia's growing military cooperation with Russia. During his time in Washington, Bandar by dint of seniority became
the unofficial dean of the diplomatic corps and was so close to the Bush family that he earned the sobriquet, "Bandar Bush."
Obviously Bandar's loyalties may be more malleable than Washington previously thought.
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The world is far more peaceful today than it was 15 years ago. There were 17 major civil wars -- with "major" meaning the kind
that kill more than a thousand people a year -- going on at the end of the Cold War; by 2006, there were just five. During that
period, the number of smaller conflicts also fell, from 33 to 27. Despite this trend, there has been no drop in the number of wars
in countries that produce oil. The main reason is that oil wealth often wreaks havoc on a country's economy and
politics, makes it easier for insurgents to fund their rebellions, and aggravates ethnic grievances. Today, with
violence falling in general, oil-producing states make up a growing fraction of the world's conflict-ridden
countries. They now host about a third of the world's civil wars, both large and small, up from one-fifth in 1992.
According to some, the U.S.-led invasion of Iraq shows that oil breeds conflict between countries, but the
more widespread problem is that it breeds conflict within them. The number of oil-producer-based
conflicts is likely to grow in the future as stratospheric prices of crude oil push more countries in the
developing world to produce oil and gas. In 2001, the Bush administration's energy task force hailed the emergence of
new producers as a chance for the United States to diversify the sources of its energy imports and reduce its reliance on oil from
the Persian Gulf. More than a dozen countries in Africa, the Caspian basin, and Southeast Asia have recently
become, or will soon become, significant oil and gas exporters. Some of these countries, including Chad, East
Timor, and Myanmar, have already suffered internal strife. Most of the rest are poor, undemocratic, and badly
governed, which means that they are likely to experience violence as well. On top of that, record oil prices
will yield the kind of economic windfalls that typically produce further unrest. Oil is not unique; diamonds and
other minerals produce similar problems. But as the world's most sought-after commodity, and with more
countries dependent on it than on gold, copper, or any other resource, oil has an impact more pronounced
and more widespread.
Oil wealth triggers conflict – 3 ways. Economic instability, support for insurgency and
separatism
Ross, Associate Professor of Political Science, UCLA, ’08 [Michael L., Chairman of the International
Development Studies program, and Acting Director of the Center for Southeast Asian Studies. Ph.D in Politics from Princeton, “Blood Barrels:
Why Oil Wealth Fuels Conflict,” May/June, Foreign Affairs, http://fullaccess.foreignaffairs.org/20080501faessay87301/michael-l-ross/blood-
barrels.html
For new oil and gas producers, the gravest danger is the possibility of armed conflict. Among developing countries,
an oil-producing country is twice as likely to suffer internal rebellion as a non-oil-producing one. The conflicts range
in magnitude from low-level secessionist struggles, such as those occurring in the Niger Delta and southern Thailand, to full-
blown civil wars, such as in Algeria, Colombia, Sudan, and, of course, Iraq. Oil wealth can trigger conflict in three ways.
First, it can cause economic instability, which then leads to political instability. When people lose their jobs, they
become more frustrated with their government and more vulnerable to being recruited by rebel armies that challenge
the cash-starved government. A sudden drop in income can result in internal strife in any country, but because oil prices are
unusually volatile, oil-producing countries tend to be battered by cycles of booms and busts. And the more
dependent a government is on its oil revenues, the more likely it is to face turmoil when prices go south.
Second, oil wealth often helps support insurgencies. Rebellions in many countries fail when their instigators run out
of funds. But raising money in petroleum-rich countries is relatively easy: insurgents can steal oil and sell it on the
black market (as has happened in Iraq and Nigeria), extort money from oil companies working in remote areas (as in
Colombia and Sudan), or find business partners to fund them in exchange for future consideration in the event they
seize power (as in Equatorial Guinea and the Republic of the Congo). Third, oil wealth encourages separatism. Oil and gas
are usually produced in self-contained economic enclaves that yield a lot of revenue for the central government but
provide few jobs for locals -- who also often bear the costs of petroleum development, such as lost property rights and
environmental damage. To reverse the imbalance, some locals seek autonomy from the central government, as have the
people in the petroleum-rich regions of Bolivia, Indonesia, Iran, Iraq, Nigeria, and Sudan.
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Ross, Associate Professor of Political Science, UCLA, ’08 [Michael L., Chairman of the International
Development Studies program, and Acting Director of the Center for Southeast Asian Studies. Ph.D in Politics from Princeton, “Blood Barrels:
Why Oil Wealth Fuels Conflict,” May/June, Foreign Affairs, http://fullaccess.foreignaffairs.org/20080501faessay87301/michael-l-ross/blood-
barrels.html
The oil booms of the 1970s brought great wealth -- and later great anguish -- to many petroleum-rich countries in the developing
world. In the 1970s, oil-producing states enjoyed fast economic growth. But in the following three decades, many suffered
crushing debt, high unemployment, and sluggish or declining economies. At least half of the members of OPEC (the
Organization of Petroleum Exporting Countries) were poorer in 2005 than they had been 30 years earlier. Oil-rich
countries that once held great promise, such as Algeria and Nigeria, have unraveled as a result of decades of internal conflict.
These states were plagued by the so-called oil curse. One aspect of the problem is an economic syndrome
known as Dutch disease, named after the troubles that beset the Netherlands in the 1960s after it discovered natural gas in
the North Sea. The affliction hits when a country becomes a significant producer and exporter of natural resources. Rising
resource exports push up the value of the country's currency, which makes its other exports, such as
manufactured and agricultural goods, less competitive abroad. Export figures for those products then decline,
depriving the country of the benefits of dynamic manufacturing and agricultural bases and leaving it
dependent on its resource sector and so at the mercy of often volatile international markets. In Nigeria, for
example, the oil boom of the early 1970s caused agricultural exports to drop from 11.2 percent of GDP in 1968 to 2.8 percent of
GDP in 1972; the country has yet to recover.
Another facet of the oil curse is the sudden glut of revenues. Few oil-rich countries have the fiscal
discipline to invest the windfalls prudently; most squander them on wasteful projects. The governments of
Kazakhstan and Nigeria, for example, have spent their petroleum incomes on building new capital cities while failing to bring
running water to the many villages throughout their countries that lack it. Well-governed states with highly educated populations
and diverse economies, such as Canada and Norway, have avoided these ill effects. But many more oil-rich countries have low
incomes and less effective governments and so are more susceptible to the oil curse.
Oil wealth also has political downsides, and those are often worse than the economic ones. Oil revenues tend to increase
corruption, strengthen the hands of dictators, and weaken new democracies. The more money the governments of Iran, Russia,
and Venezuela have received from oil and gas exports, the less accountable they have become to their own citizens -- and the
easier it has been for them to shut up or buy off their opponents. A major boom in oil prices, such as the one that took the price of
a barrel from less than $10 in February 1999 to over $100 in March 2008, only heightens the danger.
For new oil and gas producers, the gravest danger is the possibility of armed conflict. Among developing
countries, an oil-producing country is twice as likely to suffer internal rebellion as a non-oil-producing
one.
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Ross, Associate Professor of Political Science, UCLA, ’08 [Michael L., Chairman of the International
Development Studies program, and Acting Director of the Center for Southeast Asian Studies. Ph.D in Politics from Princeton, “Blood Barrels:
Why Oil Wealth Fuels Conflict,” May/June, Foreign Affairs, http://fullaccess.foreignaffairs.org/20080501faessay87301/michael-l-ross/blood-
barrels.html
Oil wealth also has political downsides, and those are often worse than the economic ones. Oil revenues
tend to increase corruption, strengthen the hands of dictators, and weaken new democracies. The more
money the governments of Iran, Russia, and Venezuela have received from oil and gas exports, the less
accountable they have become to their own citizens -- and the easier it has been for them to shut up or buy
off their opponents. A major boom in oil prices, such as the one that took the price of a barrel from less than $10 in
February 1999 to over $100 in March 2008, only heightens the danger.
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TURN: Lower oil prices prevent shift to Double Hull tankers. Those are the best solution
to preventing oil spills
Kizzia '99
[By TOM KIZZIA, Daily News reporter, "Exxon Valdez - Legacy of a Spill: Double-hull tankers face slow going,"
Anchorage Daily News, May 13, 1999, http://www.adn.com/evos/stories/T99032456.htm download date: 7-20-08]
Ten years after the Exxon Valdez spill, new tankers have yet to be added to the aging fleet sailing through Prince William Sound.
Now oil companies are pressing for further delays to a congressional deadline for bringing safer double-hull ships to Alaska.
Citing economic reasons, Alaska's oil shippers in January asked the Coast Guard to let them extend the life of existing tankers an
additional five years. They say the Oil Pollution Act of 1990, which set a schedule for phasing out older single-hull tankers from
U.S. ports, intended to allow such extensions if the older tankers are retrofitted with "double sides."
Existing tankers could provide the same double-hull-type protection against spills from collisions, oil companies say, if the ships
were modified to carry water in wing tanks exposed to the sea.
Environmentalists are outraged, saying government officials have repeatedly reneged on promises dating from before the trans-
Alaska pipeline to bring safer, double-hull tankers to Prince William Sound.
"The Alaska fleet is now substantially older than the international fleet serving places like Rotterdam and Japan," said Walt
Parker, former chairman of the state's Alaska Oil Spill Commission, one of many groups that have recommended tough double-
hull standards.
But the Knowles administration said it is willing to defer to the Coast Guard and accept reconfigured "double-sided" tankers, as
long as the ships have double bottoms to protect against groundings in Prince William Sound.
The Coast Guard expects to rule on the oil industry's request in the next few months, said Bob Gauvin, a project manager for the
Coast Guard's national office of operating and environmental standards.
While great strides have been made since the Exxon Valdez spill in setting up an oil-spill prevention
system in Prince William Sound, the question of double-hull tankers remains a major battleground.
"We are still missing the biggest prevention tool that everybody knows about, and that's double hulls," said
Cordova biologist Riki Ott, a longtime industry critic.
Atlantic Richfield announced in January it had slowed production of its new "Millennium Class" double-hull tankers, while
British Petroleum says it has not gone beyond initial design work.
Exxon, responsible for the spill that led to the double-hull law, is going further than its Prudhoe Bay partners - it now says
it
may never build double-hull ships for the Alaska trade. With oil prices low and North Slope production
declining, investment in expensive U.S.-built tankers for Alaska may no longer make sense, said SeaRiver
Maritime Inc., Exxon's tanker subsidiary.
Studies have shown that a second steel skin on a tanker would prevent some spills after accidents and
reduce others. A Coast Guard study estimated the Exxon Valdez spill would have lost 60 percent less oil
with a double hull.
Interior Department officials who were promoting construction of the trans-Alaska pipeline during the Nixon administration
promised double hulls would be required for the tanker fleet. The state of Alaska adopted strong incentives for double hulls under
a 1976 tanker safety law that was thrown out in 1978 in federal court. Oil companies had sued the state, arguing that the tough
state law was an infringement on interstate commerce.
Several double-hull tankers were built for Alaska while that law was in effect. After it was thrown out, those tankers began
carrying oil in the protective outer tanks, wiping out the margin of safety that was designed into them, Parker said.
The 1990 law, passed while the Prince William Sound spill was still fresh in the minds of Americans, required double-hulls for all
U.S. ports. But the law gave oil companies a long phaseout period, depending on each tanker's age, with the last prespill tankers
going out of service in 2015. Environmentalists had fought the long phaseout period, calling it excessive.
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Green '08
[Hank Green, "10 Largest Oil Spills (The Valdez Doesn't Make the List)," February 28, 2008.
http://envirowonk.com/content/view/68/1/ download date: 7-21-08]
The Exxon Valdez, the tanker responsible for the worst oil spill in American history, has come back into the news this week, as
the Supreme Court finally decides the price that Exxon will pay for ruining the fishing industry in Alaska. But it will likely
surprise you to know that the Valdez spill was actually only the 34th largest oil spill in history.
These ten oil spills, all massively larger than the Exxon Valdez, were all smaller new stories, either because the ships were
offshore, or dropped their toxic loads in less developed parts of the world. The Valdez spilled 10 million gallons off the
coast of Alaska, the smallest spill in the top ten was four times larger.
1. Kuwait - 1991 - 520 million gallons
Iraqi forces opened the valves of several oil tankers in order to slow the invasion of American troops. The oil slick was four
inches thick and covered 4000 square miles of ocean.
2. Mexico - 1980 - 100 million gallons
An accident in an oil well caused an explosion which then caused the well to collapse. The well remained open, spilling
30,000 gallons a day into the ocean for a full year.
3. Trinidad and Tobago - 1979 - 90 million
During a tropical storm off the coast of Trinidad and Tobago, a Greek oil tanker collided with another ship, and lost nearly its
entire cargo.
4. Russia - 1994 - 84 million gallons
A broken pipeline in Russia leaked for eight months before it was noticed and repaired.
5. Persian Gulf - 1983 - 80 million gallons
A tanker collided with a drilling platform which, eventually, collapsed into the sea. The well continued to spill oil into the
ocean for seven months before it was repaired.
6. South Africa - 1983 - 79 million gallons
A tanker cought fire and was abandoned before sinking 25 miles off the coast of Saldanha Bay.
7. France - 1978 - 69 million gallons
A tanker's rudder was broken in a severe storm, despite several ships responding to its distress call, the ship ran aground and
broke in two. It's entire payload was dumped into the English Channel.
8. Angola - 1991 - more than 51 million gallons
The tanker expolded, exact quantity of spill unknown
9. Italy - 1991 - 45 million gallons
The tanker exploded and sank off the coast of Italy and continued leaking it's oil into the ocean for 12 years.
10. Odyssey Oil Spill - 1988 - 40 million gallons
700 nautical miles off the cost of Nova Scotia.
The Exxon Valdez oil spill was a disaster, but so were the 33 oil spills that were, in fact, worse. Spills have slowed down
in recent years, due to advances in logistics and tanker hulls.
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Oil wastes that enter the ocean come from many sources, some being accidental spills or leaks, and some being
the results of chronic and careless habits in the use of oil and oil products. Most waste oil in the ocean
consists of oily stormwater drainage from cities and farms, untreated waste disposal from factories and
industrial facilities, and unregulated recreational boating.
It is estimated that approximately 706 million gallons of waste oil enter the ocean every year, with over
half coming from land drainage and waste disposal; for example, from the improper disposal of used
motor oil. Offshore drilling and production operations and spills or leaks from ships or tankers typically
contribute less than 8 percent of the total.
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Scientists in Europe have sequenced the genome for an oil-eating bacterium, a move that could pave the
way for faster and more efficient ways to clean up oil spills.
With a complete blueprint for Alcanivorax borkumensis, researchers hope to better understand the specialized
physiological mechanisms that enable the bacteria to live almost exclusively on hydrocarbons, says Vitor
Martins dos Santos of the Helmholtz Centre for Infection Research (formerly the German Research Centre for Biotechnology) in
Braunschweig, Germany, who co-led the international project. The sequencing of the 2,755-gene organism is described in the
journal Nature Biotechnology. The findings could reveal how to optimize the conditions for these bugs and thus
enable them to help mop up the hundreds of millions of liters of oil that enter the sea each year, says Martins
dos Santos.
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Bioremediation is an economical and safe method for cleaning up oil spills and bioremediating soils
contaminated with petroleum hydrocarbons and dangerous organic compounds. The bioremediation
process utilizes beneficial microbes, surfactants, micronutrients and bio-stimulants to decompose contaminants
transforming them into harmless byproducts, i.e. water and carbon dioxide.
The bioremediation process can be performed insitu or exsitu. The insitu process is adopted where excavation is impractical and involves either
bio-stimulation or bio-augmentation.
Biostimulation involves aeration and the application of selected micronutrients and bio-stimulants. Bio-stimulation is only effective when
indigenous microbial populations, present in the substrate, are high enough to degrade the contaminants and when these microbes can readily
adapt to foreign contaminants.
Bioaugmentation involves the application of beneficial microbes, that have an affinity towards a specific contaminant. Typically, these microbes
are suspended by a stabilizing agent and lie dormant in a spore until activated in solution and applied together with micronutrients and bio
stimulants.
BIOREMEDIATION can effectively degrade the following contaminants:
• Hydrocarbons with carbon chains ranging from C-5 to C-40
• Benzene, xylene and toluene
• TCE
• PAH
• PCB and other chlorinated compounds
• Fuel oils
• Fossil fuels - gasoline, diesel, aviation gas
• Condensate - leakage from pipelines
• Glycols
BIOREMEDIATION BENEFITS
• Thorough degradation in a relatively narrow time window.
• Simultaneous multiple activity
• Toxin resistant
• Reduced risk / higher degree of safety
• Reduced labor and equipment costs
DATA required to develop a proper bioremediation protocol
• Age of the spill
• Localization
• Soil Type
• Spoil porosity
• Soil pH
• Soil temperature
• TPH
• Viscosity and volatility of contaminants
• Depth of contamination
• Soil moisture level
• Oxygen availability
CASE HISTORY
DNF (hazardous waste) Spill
High levels of aromatics could not access the affected area without protective equipment. In order to suppress toxic vapours, a microbial
formulation, together with surfactants, biostimulants and nutrients was applied to the soil. An analysis, revealed that the benzene level dropped
from 60 to 10 ppm in approximately 5 minutes. After a second application the concentration of the aromatic contaminants were below the
detection limit within another 5 minutes.
MTBE CONTAMINATED SOIL
Vapors, resulting from this spill, created an explosion and respiratory hazard. A microbial formulation was applied to the affected area. The
vapors were suppressed immediately upon application and, in a relatively short period, the contaminant was digested. Subsequent cleanup was
not necessary.
PIPE AND SURROUNDING SOIL CONTAMINATED WITH DIESEL
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The free diesel was pumped out of the pipe and a microbial formulation was applied to digest the residual contaminants. The same product,
together with bio-stimulants and micronutrients, was applied to the soil. Twenty-eight days after the initial treatment, TPH levels dropped from
low thousands to low hundreds. In one case TPH levels dropped to 43 ppm.
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2. The trade deficit provides foreign capital that is key to continued US economic growth
Daniel T. Griswold, associate director of the Cato Institute's Center for Trade Policy Studies, 4-20-1998,
http://www.freetrade.org/pubs/pas/tpa-002.html
Without a trade deficit, Americans would need to finance domestic investment exclusively from domestic savings.
To bring investment in line with savings, domestic interest rates would need to rise, reducing investment and
economic growth. As the Council of Economic Advisers recently concluded, the trade deficit has been a "safety
valve" for the expanding U.S. economy. "Imports of goods have kept inflation low, while imports of capital have
kept interest rates low, helping to sustain rapid income growth. In the strongly expanding full-employment
economy that the United States now enjoys, it should be easier for Americans to see that trade deficits do not
necessarily reduce output and employment."(42) The United States ran trade deficits throughout much of the 19th
century during a period of dynamic growth and expansion. From independence until the 1880s, America was a net
importer of capital from the rest of the world, in particular Great Britain. Foreign investors provided the capital to
build the railroads and canals America needed for a continentwide economy. "In the 19th century, especially after
the cotton boom of the 1830s, it was the current account that went into the red in order to balance the heavy inflow
of funds to finance American enterprise. The United States had more profitable investment opportunities than it
had domestic savings to finance them. The British, Germans, Dutch, and French stepped in and made themselves
(and our American forebears) richer.”
3. The trade deficit is an indispensable source of liquidity for global economic growth
The Economist, 9-14-2002
In the days of the gold standard, the volume of money and credit in circulation was tied to the amount of gold in a
country's vaults. Economies laboured under the "tyranny" of the gold regime, booming when gold was abundant,
deflating when it was scarce. The dollar standard is a more liberal system. Central banks retain the right to expand
the volume of domestic credit to keep pace with the growth of the home economy. Eventually, however, growth in
the world's economies translates into a growing demand for dollar assets. The more money central banks print, the
more dollars they like to hold in reserve to underpin their currency. The more business is done across borders, the
more dollars traders need to cover their transactions. If the greenback is the new gold, Alan Greenspan, the Federal
Reserve chairman, is the world's alchemist, responsible for concocting enough liquidity to keep world trade
bubbling along nicely. But America can play this role only if it is happy to allow foreigners to build up a huge
mass of claims on its assets--and if foreigners are happy to go along. Some economists watch with consternation as
the rest of the world's claims on America outstrip America's claims on the rest of the world. As they point out, even
a dollar bill is an American liability, a promise of ultimate payment by the US Treasury. Can America keep making
these promises to foreigners, without eventually emptying them of value? According to Mr Davidson, the world
cannot risk America stopping. America's external deficit means an extra $500 billion is going into circulation in
the world economy each year. If America reined in its current account, international commerce would suffer a
liquidity crunch, as it did periodically under the gold standard. Hence America's deficit is neither a "meaningless
concept" nor a lamentable drain on world savings. It is an indispensable fount of liquidity for world trade.
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4. The trade deficit is sustainable: investor confidence is stable and the dollar won’t
collapse
Daniel T. Griswold, associate director, Center for Trade Policy Studies, Cato Institute, May 2001, USA Today
Magazine, http://www.findarticles.com/p/articles/mi_m1272/is_2672_129/ai_74572239
The "hard-landing" scenario. A third looming worry about the trade deficit is that it will eventually undermine the
confidence of foreign investors. According to this scenario, the rising trade deficit spooks foreign investors into
withdrawing funds, starting a downward economic spiral. Most international investors are savvy enough to
understand that America's trade deficit is a reflection of underlying strength, not weakness, for all the reasons
outlined above. The U.S. trade deficit, by accommodating an inflow of foreign capital, actually encourages lower
interest rates and thus promotes economic growth. As for exchange rates, the trade deficit is not the cause of a
weaker dollar, but is associated with a stronger dollar. Since 1980, the trade deficit as a percentage of GDP has
closely tracked the real value of the dollar on the foreign exchange market. When the dollar rises, so does the trade
deficit, and vice versa. The real value of the dollar trended upward in the 1990s along with the size of the trade
deficit. A strong dollar and a rising trade deficit are not in conflict. While the trade deficit does increase the supply
of dollars abroad, which by itself would put downward pressure on the dollar, the demand by foreign investors for
dollars to buy U.S. assets has been even greater, resulting in a net appreciation of the dollar. As long as foreign
demand for U.S. assets remains strong, the dollar will remain high, and so will the current account deficit. Foreign
investors could reach a point where they believed their portfolios had become overweighted with investments in
the U.S., but there is no reason to think that point has arrived, or will anytime soon. The U.S. remains the world's
largest economy, and among the freest and most dynamic. The amount of net foreign investment that flows into the
U.S. each year is not out of proportion to the American economy's size in the global economy.
5. The trade deficit doesn’t reflect slowed growth and economic activity
Daniel T. Griswold, associate director of the Cato Institute's Center for Trade Policy Studies, 4-20-1998,
http://www.freetrade.org/pubs/pas/tpa-002.html
The balance of payments accounts capture two sides of an equation: the current account and the capital account. The
current account side of the ledger covers the flow of goods, services, investment income, and uncompensated
transfers such as foreign aid and remittances across borders by private citizens. Within the current account, the trade
balance includes goods and services only, and the merchandise trade balance reflects goods only. On the other side,
the capital account includes the buying and selling of investment assets such as real estate, stocks, bonds, and
government securities. If a country runs a capital account surplus of $100 billion, it will run a current account
deficit of $100 billion to balance its payments. As economist Douglas Irwin explains, "If a country is buying more
goods and services from the rest of the world than it is selling, the country must also be selling more assets to the
rest of the world than it is buying."(17) The necessary balance between the current account and the capital account
implies a direct connection between the trade balance on the one hand and the savings and investment balance on the
other. That relationship is captured in the simple formula: Savings - Investment = Exports - Imports Thus, a nation
that saves more than it invests, such as Japan, will export its excess savings in the form of net foreign investment. In
other words, it must run a capital account deficit. The money sent abroad as investment will return to the country to
purchase exports in excess of what the country imports, creating a corresponding trade surplus. A nation that invests
more than it saves--the United States, for example--must import capital from abroad. In other words, it must run a
capital account surplus. The imported capital allows the nation's citizens to consume more goods and services than
they produce, importing the difference through a trade deficit.
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Containing china is key to avoid world war three – the longer the u.s. Waits, the greater the
chances that they will gain mass appeal and cause a cold war or build up their military to
fuel a hot war.
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