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Wednesday, July 26, 2017

More on Energy Imperialism

Literally days after my last post on the changes in US energy policy and its influence on the trajectory of US imperialism, President Donald Trump and his energy secretary proclaimed those changes in their customary blunt and bombastic way. On June 29, Trump declared a US policy of “energy dominance” at a meeting at the Department of Energy. Reuters‘s headline on their coverage perfectly captured the meaning of this policy: “Trump Seeks to Project Global Power through Energy Exports.Bloomberg News’s Gennifer Dlouhy quotes Trump: “We are a top producer of petroleum and the No. 1 producer of natural gas. We have so much more than we ever thought possible. We are really in the driver’s seat.”

Clearly, Russia is a target of the emerging policy. The Administration’s Secretary of Energy, Rick Perry said that “... the entirety of the EU totally get it that if we can lay in American LNG [liquefied natural gas] ... we can be able to have an alternative to Russia…” “The US will be able to clearly create a hell of a lot more friends by being able to deliver them energy and not being held hostage by some countries, Russia in particular.” (Reuters)

Lest anyone fail to get the message, Trump told cheering Polish people in Warsaw on July 6: "We are committed to securing your access to alternate sources of energy, so Poland and its neighbors are never again held hostage to a single supplier of energy.” (CNBC) Instead, they will be held hostage to the US.

Bloomberg’s Dlouhy notes that negotiations have begun to sell more LNG to the Republic of Korea. And Reuters’s Timothy Gardner comments that the US exports more petroleum products to Mexico than does any other country. In fact, according to Gardner, the US is already the world’s largest exporter of refined petroleum products.

Despite the near total neglect of the foreign policy implications of this emerging policy by US commentators and, especially, the left, they have not gone unnoticed in important circles internationally. Writing in the largest circulation UK paper, The Sunday Times, Irwin Stelzer stated on July 2: “LNG has created a new Great Game, with America’s ‘yuge’ reserves of natural gas giving Trump a weapon with which to offset Russia’s early lead.” Talk of “Great Games,” of course, invokes memories of the imperialist rivalries and clashes of the late 19th and early 20th century. While the “Russia-gate” controversies uncritically consume many US observers, even conservative Europeans are identifying the material interests, the imperialist interests standing behind the hysterical anti-Russia campaign.

Further, Stelzer sees the recent Gulf States’ aggression against Qatar for what it is: “... the Saudi royal family believe now is the time to wring a total surrender from Qatar… The implication for the global LNG market of a potential isolation of Qatar [the world’s largest exporter] could not be more consequential.” And it could not be more beneficial to the emerging US LNG shippers.

The recent Trump European trip was a sales trip for US LNG as much as it was participation in the G20 summit.

OPEC ‘Monopoly’ versus US Hegemony

It appears more and more likely that the era of OPEC dominance of energy markets is dwindling, broken by US energy production. Saudi Arabia attempted to reverse the expansion of US production by over producing and driving the price of oil below a level that would allow US shale producers to be profitable. Consequently, US operators lost $130 billion since 2015. But Wall Street has subsidized the shale industry by ploughing $57 billion back into the industry over the last 18 months, a move that shows both no fear of a price war and a determination to dominate the markets. The Wall Street Journal (7-8-2017) likened the investments to the tech boom of the past.

At the same time, the US is using political sanctions to hinder competitors. The recent Senate vote on Russian sanctions is one obvious example. But Iran is another competitor that the US hopes to discourage. The European sanctions are now lifted, but EXXON MOBIL and CHEVRON, as US companies, are still deterred from investing in Iran because of remaining US sanctions. BP is afraid of those sanctions and only French TOTAL has dared to invest, along with CHINA NPC. Where Iran is seeking $92 billion in energy investments, it has only secured $1 billion.

Worldwide, most energy investments have channeled to US shale oil.

The monopoly price-manipulation model enforced by OPEC discipline is eroding. Since competition is intensifying, pricing has become extremely volatile. With Chinese imports of crude oil up 13% this year, the Saudis have sharply cut the price of super light crude to Asia to garner a greater share of this burgeoning market.

The Future

Of course, it is impossible to spell out all of the foreign policy implications of the new energy imperialism. But it appears certain that the US drive toward energy dominance will reshape US imperialist designs and generate a strong international response.

The House of Representatives companion bill on sanctions passed 419-3, demonstrating again the ruling-class consensus on punishing oil and gas producers-- Russia and Iran. The European Union wisely interprets this and its Senate companion as a challenge to existing energy relations. As The New York Times reported (July 25) immediately after the vote: “...the new sanctions have important implications for Europe because they target any company that contributes to the development, maintenance or modernization of Russia’s energy export pipelines.” It notes that: “Jean-Claude Juncker, the president of the European Commission, the bloc’s bureaucratic arm, has called for an urgent review of how the European Union should respond.”

Speaking to the “principles” behind the House bill, Russian “Alexey Pushkov, a legislator and frequent commentator on international relations, wrote on Twitter: ‘The exceptional nation wants to block Russian gas supplies to Europe and to sell expensive shale gas from the U.S. to its European servants. That’s the entire ‘morality’ of Congress,’” as reported by The New York Times (7-25-17)

And the price war between the US and OPEC along with its friends has left OPEC unity in danger and its policies in shambles. At the most recent meeting in St. Petersburg, disputes over production and exports have combined with frustration over the effectiveness of agreements. States are conflicted over protecting prices and earnings or fighting for market share.

Where unbridled competition arises, conflict is soon to follow. With economic interests joining with political maneuvering, as the US-contrived hysteria over Russia and Iran instantiates, the danger of aggression and war grows exponentially.

The new US imperialist “Game” is played to dominate energy markets, an even more perilous project that threatens friend and foe alike.
Zoltan Zigedy

Tuesday, July 11, 2017

The Last Liberal

The year 1989 marked the death of the independent journalist, Isidor Feinstein (I.F.) Stone, the last twentieth century US liberal. Liberalism in the last century combined the liberties of the original Bill of Rights with Roosevelt’s proposed Second Bill of Rights. By mid-century, US liberalism reached its greatest heights, supplementing the historic bourgeois rights that dismantled feudalism and enshrined the right to property with the promise of an entirely new set of economic rights-- rights to employment, housing, medical care, social security, education, among others. The economic rights sought to codify the social democratic gains made in the New Deal era.
By the time of I.F. Stone’s death in 1989, liberalism had nearly shed all of its commitment to the Rooseveltian social justice rights. The bearer of the liberal legacy, the Democratic Party, swiftly retreated from New Deal values in the face of the Reagan attack on social welfare programs. Consequently, the Democratic Party of Bill Clinton, the “third way,” market-obsessed Democrats, eschewed the term “liberal” and appropriated the once-meaningful term “progressive” in its place. Stone would have been appalled.
But the thinness of the US liberal commitment to its own principles were well known to Stone. He well knew of the Alien and Sedition Acts of 1798 that affronted the Bill of Rights before even a decade had past.
He knew of the betrayal of the rights of Blacks granted by the 14th and 15th amendments that closed the Reconstruction era.
He was, of course, familiar with the shameful, tepid response of liberals to the Palmer Raids of 1919-1920, the government repression and deportation of political dissidents.
But Stone was most familiar with the sell-out of classical liberal values by Republicans, Democrats, and nearly all self-described liberals in the late 1940s and 1950s, a repressive time commonly called the McCarthy era.
Stone denounced the “two decades of carefully nurtured nightmare” that began with the Smith Act of 1940, an “era in which the mere allegation of leftist sympathy or affiliation was enough to put a man outside the pale.”
From ACLU secret collaboration with the witch hunt to the establishment of the Americans for Democratic Action as a haven for untainted, anti-Communist liberals, liberalism fared poorly in the Cold War era. The liberals who didn’t think that associating with Communists was necessarily traitorous were banished with the Communists. The liberals who were enthusiastic about anti-Communism saw no contradiction between abrogating the rights of Communists and fervently defending the sanctity and universality of those rights.
Stone could not understand this posture of Cold War liberals. He truly believed that the rights granted in the Bill of rights were absolutely universal and beyond abrogation, just as the celebrated Founding Fathers proclaimed. He didn’t think that they only applied in good times or when it was convenient.
Stone believed the contradiction of Cold War liberalism could be summed up with one example of a Cold War security case. With respect to a specific “security” firing, Stone cites the comment of the era’s arch-liberal, Walter Lippmann, who advocated “to have the charge tried by due process,” a seeming appeal to fairness. But Stone responded with exasperation: “How do you try the ‘charge’ that a man once worked for Armtorg or has two sisters in Russia?”
Stone recognized that it was innuendo and association that propelled a country supposedly built on liberal foundations to qualify, obfuscate, and relinquish those values.
After the 1950s hysteria diminished, Stone continued to serve as a vigilant watchdog over liberalism and its hypocrisies. At the same time, he fervently defended liberal values, especially freedom of speech, the value of an independent press, and freedom of association.
One wonders what he would have thought of liberalism in our era?
Unlike in the McCarthy era, when liberals felt compelled to show their loyalty by following the Republicans on the anti-Communist crusade, today’s liberals have mounted their own, unprompted campaign of innuendo, guilt by association, and fear-mongering.
Where the security services fed the Red scare through reliable media contacts and opinion-makers, the 2017 security services play the same role, feeding some of the same media outlets and many others unsubstantiated, politically charged, and unattributed charges against capitalist Russia. In the latter case, the catalyst for the new hysteria is US liberals.
Portrayed by Democratic Party nobles and liberal-leading lights as a defense of our treasured democratic process, the campaign is, in reality, a stealth mission to solidify an aggressive, dominating US foreign policy. Just as the Red scare really targeted left unity, militant trade unionism, and the more committed New Dealers, the current Russia-baiting targets foreign policy dissidents, anti-imperialists, and the rejection of post-Soviet triumphalism. Under the guise of meeting Trump perfidy, liberals are wittingly or unwittingly shaping an aggressive, imperialist foreign policy consensus.
As for the news media, media conglomerates have used the interminable leaks from the security services as the candy to coax subscribers in the rating wars. So far, several have outmaneuvered the Fox News empire which is trapped in defense of right-wing interests aligned behind the unsavory Donald Trump (MSNBC has narrowed a nearly 46% gap in prime time viewers favoring FOX News at the beginning of the year to 17.5% six months later, an unprecedented gain).
I. F. Stone understood the rank opportunism of the media and its challenge to liberal values decades ago. He warned of the use of anonymous sources as early as 1955: “…[one] cannot come into court and ask for conviction on undisclosed evidence by undisclosed persons on the grounds that to reveal them would endanger its source of information.” But this is precisely what liberals and the media are doing today in the Court of Public Opinion with the so-called Russia-gate.
Though Stone could not have anticipated its further corruption, he fully recognized the deteriorating function of the news media. He wrote in 1963:
...most American newspapers carry very little news. Their main concern is advertising [based on circulation and media ratings]... All the so-called communications industries are primarily concerned not with communications, but with selling. This is obvious on TV and radio but it is only a little less obvious in the newspapers. Most owners of newspapers are businessmen, not newspapermen. The news is something which fills the space left over by the advertisers. The average publisher is not only hostile to dissenting opinion, he is suspicious of any opinion likely to antagonize any reader or consumer.
And today’s handful of giant monopoly, multimedia corporations have far surpassed the commercial imperative identified by Stone. As the uncritical transmission belt of security services’ leaks, the US media have totally abdicated their mission as news sources. They have not only failed to deliver news, but have packaged rumor as news and presented it as entertainment.
Stone was aware of the dynamics of news “management” long before journalists were “embedded.” Writing in 1955:
... it is easy to see why the average Washington correspondent is content to write what he is spoon-fed by the government’s press officers… Why dig up a story which the desk back home will spike?... The private dinner, the special briefing, are all devices for “managing” the news, as are the special organizations of privileged citizens gathered in by State and Defense Departments for those sessions at which highly confidential (and one sided) information is ladled out to a flattered “elite.”
And the reporters and media news readers are not likely to reject the government feeding tube and will, instead, stick with the consensus: “Most of my colleagues agree with the Government and write the accepted thing because that is what they believe; they are indeed-- with honorable exceptions-- as suspicious of the non-conformist as any group in Kiwanis.” Unfortunately, there are few exceptions today, honorable or otherwise.
Stone knew how the media failed to provide the necessary condition for a truly informed, democratic citizenry. Nonetheless, he had an abiding confidence that liberal values would prevail and find a way to reverse, or at least correct, the course of US democracy. He had a faith-like confidence that independent journalists like himself would prevail somehow against the media behemoths. He believed that freedom of speech, freedom of association, and an independent and diverse press would protect citizens from the manipulation of the rich and powerful. Subsequent history shows he was wrong.
In our time, liberals are the key players in the Russian-under-every-bed witch hunts that are boiling over in the media. At all the past critical junctures when liberal values were tested by duress, liberals failed to defend those values. They are failing now.
Perhaps liberalism is philosophically incoherent. Perhaps it’s theoretically flawed and that is what accounts for its failure at critical moments. That’s an argument for another time. But clearly liberals have shown little spine when liberal values would be most useful, times when deliberation and measure should confront mob hysteria and waves of duplicity. Instead they stand knee-deep in hypocrisy.
You know your friends in times of crisis; liberals consistently fail the test.

Zoltan Zigedy