Oil Neg Earliest Bird Min

7/23/2019 Oil Neg Earliest Bird Min

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NEG



***TOPICALITY***



topicality – “its” – 1nc

(A) violation: t! a"" as a #i""!$!nt acto$ %!si#!s t! &nit!# 'tat!s Gov!$n!nt #o t! oc!an !plo$ation an# #!v!lop!nt

1 “Its” #!not!s poss!ssion

Glossa$y o" En+lis ,- (http://www.usingenglish.com/glossary/possessive-pronoun.html)

Mine, yours, his, hers, its, ours, theirs are the possessive pronoun s used to substitute a noun and to show possession or ownership . EG.his is your dis! and that"s mine. (Mine substitutes the word dis! and shows that it belongs to me.)

. Poss!ssion !ans cont$ol ov!$

O"o$# /ictiona$i!s 11. http://o#$orddictionaries.com/de$inition/possession

%ossession %ronunciation:/p&ˈ'ɛʃ (&)n/ noun mass noun* the state o$ having , owning, or controlling something: she had ta!en possession o$ the so$a the boo! came into my possession he remains in $ull possession o$ his sanity

(0) Tis is a vot!$:

1 np$!#icta%l! $!s!a$c %$#!n 2222 can3t p$!#ict t! “cont$y o$ copany o" t! 4!!5” 5in# o" a""i$ativ!s

. !t$a2topical a#vanta+!s6 4ic is in#!p!n#!ntly a vot!$ %!cas! tis +iv!s t! a"" an n"ai$ s!t o" lit!$at$! %as! 4ic t!ycan acc!ss "o$ all 5in#s o" n!"a$ios p$pos!s6 4ic a5!s s av! to +o "o$ T to 7st +!t %ac5 to s8a$! on!



***/I'A/ 9O;***



politics lin5 – 1nc

t! plan t$i++!$s political "i$!sto$s "o$ O%aa

E'T&CCIA 31. + energy reporter $or %olitico, previous energy reporter $or the ill (estuccia, ndrew. igh 0.1. oil productionleads to partisan debate2. 3une 4, 454. http://www.politico.com/news/stories/564/77896.html)

0.1. oil production reached its highest level since ; in the $irst three months o$ 454, providing "o##!$ $or more political 4$an+lin+

a%ot 4o sol# +!t t! c$!#it . <ast wee!=s Energy >n$ormation dministration data came as welcome news $or the ?bama

administration, which has been wor!ing $or months to co%at epublican allegations that the president is bloc!ing e#panded oil and

gas production. @ut some e#perts say the credit largely belongs to the private sector. >n the end, the president and Aongress can=t ta!e credit $or what price and

technology have delivered,2 om Blo'a, chie$ oil analyst at the ?il %rice >n$ormation 1ervice, said in an email. >t would be a!in to ta!ing credit $or the i%ad.2 Blo'asaid high oil prices have created incentives $or e#panded e#ploration o$ unconventional oil plays li!e the @a!!en 1hale in Corth Da!ota and the Eagle ord 1hale ine#as. here, he noted, advancements in hori'ontal drilling and hydraulic $racturing have led to a land rush.2 0nless there is a price collapse, or a true scienti$icindictment o$ $rac!ing, one can e#pect to see plenti$ul growth in light sweet crude coming $rom the oc!ies, Corth Da!ota and even ?hio or Fest irginia,2 Blo'a said.

ichard Cewell, who served as head o$ the E> $rom 455 to 45, agreed. >n a political y!a$ , di$$erent parties would li!e to ta!e credit $or

positive news in the energy sector , and > thin! here the credit largely goes to technology,2 said Cewell, who is also a pro$essor o$ energy economicsat Du!e 0niversity. e added that high crude oil prices are also a maHor $actor. E>=s 3une 9 monthly petroleum supply report said domestic oil production this year

went above 6 million barrels a day in the $irst Iuarter $or the $irst time since ?ctober-December ;. he report said the increase is a result o$ higher output $rom Corth Da!ota, e#as and $ederal leases in the Gul$ o$ Me#ico.2 my Myers 3a$$e, an energy $ellow at ice 0niversity, said shale production in Corth Da!ota and e#asis largely on private land outside the control o$ the $ederal government and that increases in production in the Gul$ are a result o$ the actions o$ previous presidents.@oth points echo common arguments $rom G?% and oil industry critics o$ %resident @arac! ?bama. %roduction rises $rom Gul$ o$ Me#ico would have been in thehopper way be$ore %resident ?bama too! o$$ice,2 she wrote in an email. Department o$ Energy spo!esman Damien <aera touted the data Monday on witter, the latese$$ort by the Fhite ouse to counter G?% criticism o$ the president on drilling. Cew JE>gov report: >n $irst Iuarter o$ 454 domestic Koil production at highest

level in L years. Kll?$hebove,2 he wrote. @ut epublicans 8ic5ly ps!# %ac5 . >t=s the private and state lands that have really

helped !eep production moving,2 obert Dillon, spo!esman $or 1enate Energy and Catural esources ran!ing member <isa Mur!ows!i (-las!a), said when

as!ed about the new data. Fe thin! more could easily be done i$ the president lived up to his all o$ the above= energy strategy.2 dministration o$$icials haveaggressively de$ended ?bama=s energy record, pointing to e$$orts to e#pand oil leasing in the Gul$ and an ongoing review o$ 1hell=s permit to drill in the

rctic, among other things.

http://www.politico.com/news/stories/0612/77356.html

http://www.politico.com/news/stories/0612/77356.html



oil lin5

Inc$!as!# p$o#ction t$!at!ns Cina !conoy an# position

O%!l .,1<. Mi!e ?bel. 01 ?il @oom May 1pell Danger or >mport-Dependent Ahina: Germany"s @CD 1py gencyhttp://www.ibtimes.com/us-oil-boom-may-spell-danger-import-dependent-china-germanys-bnd-spy-agency-585995he boom in 0.1. crude oil production could threaten Ahina=s access to as much as hal$ the crude oil needed to support its economic

growth, according to a published report. Germany=s @CD, the nation=s @undesnachrichtendienst spy agency as its !nown, has lea!ed acon$idential2 report concluding that soaring 0.1. crude oil production could -- in less than a decade -- sharply lessen the 0.1. need$or imported oil, particularly rabian oil that has to be shipped out o$ the volatile %ersian Gul$ and through the treacherous 1trait o$ormu', website estosterone %it reported 1unday. he web site did not disclose details o$ how or when it obtained the @CD report.Fhether the crude oil production boom in the world=s Co. economy will ma!e the 0.1. the world=s top oil producer, as the>nternational Energy gency recently predicted would happen by 4545, or simply mean that the 0.1. will no longer need ?%EA oil,the conseIuences $or Ahina could be severe. Ahina=s growing economy will $orce the nation to import as much as 95 percent o$ itscrude oil $rom %ersian Gul$ producers, including >ran and the rab states, the @CD report states. Ahina=s maritime access to thatsource has been secured by 0.1. military $orces, at massive e#pense e#pense to 0.1. ta#payers. @ut i$ the 0.1. no longer depends on?%EA crude oil, it would have no reason to spend billions on naval and ir orce assets to guarantee the $ree $low o$ oil $rom the%ersian Gul$ at mar!et prices. Fithout 0.1. military protection, Ahina=s oil imports suddenly become vulnerable along their 5,555- plus mile maritime route $rom the %ersian Gul$ to Ahinese ports. urther, Ahina=s military has no current ability to ta!e the 0.1.military=s place in securing the sea lanes that must remain undisturbed $or Ahina to sustain its economic growth. urther, Ahina=svulnerability to disruptions o$ its seaborne oil imports would give the 0.1. leverage in dealing with the world=s most populous nation, particularly as 0.1. allies clash with Ahina in the eastern %aci$ic.

http://www.ibtimes.com/us-oil-boom-may-spell-danger-import-dependent-china-germanys-bnd-spy-agency-1030550

















***CANA/A /I'A/***



cana#a #a – 1nc

continin+ assiv! ipo$ts "$o Cana#a is 5!y to 5!!pin+ t! as o$ ally an# a4ay "$o ot!$ inv!sto$s

;ELLY =>.?>.,1= + $ormer 0.1. diplomat in Aanada and Me#ico and is the associate director o$ Aanadian 1tudies at Du!e 0niversity(Belly, 1tephen . 1aying no to Beystone N< is saying yes to uglier alternatives, http://www.theglobeandmail.com/globe-debate/saying-no-to-!eystone-#l-is-saying-yes-to-uglier-alternatives/article;47;L/)

or those who can barely remember why the ransAanada Aorporation applied $or a permit to build Beystone N< nearly si# years ago, the pipeline was supposed to ov! ?<,6,,,

%a$$!ls o$ crude oil a #ay $rom the lberta oil sands to the 0.1 . Gul$ Aoast. here it would supply 0.1. re$ineries originally built to

handle heavy, sour crudes $rom ene'uela and Me#ico, countries whose oil output has dropped sharply in recent years. Giv!n tat

Cana#a as %!co! t! &nit!# 'tat!s3 la$+!st "o$!i+n oil p$ovi#!$ %y "a$6 an# tat t! s$+! in Cana#ian c$#! 6 also

heavy and sour, has overwhelmed the e#isting networ! o$ north-south pipelines, Beystone N< made good business and energy security sense. $ter all, 4ol# yo $at!$

ipo$t oil "$o a 5no4n A!$ica at!$ li5! @!n!!la6 o$ "$o a $!lia%l! ally $i+t n!t #oo$ tat is also o$

la$+!st ov!$all t$a#in+ pa$tn!$B his logic, however, has $ailed to sway many environmentalists, who have opposed Beystone N< $or three main reasons. irst, they worry the

pipeline could lea!, as other pipelines carrying Aanadian crude have recently done. hey also obHect to the !ind o$ oil the pipeline would carry. he e#traction o$ oil sands bitumen is more energy intensive, and there$ore more

polluting, than the average crude produced in the 0nited 1tates. >$ the 0.1. would import less o$ it, they argue, Aanada would produce less o$ it, reducing the global environmental damage. inally, they view cheap

Aanadian crude, which sells at a sharp discount to other crudes due to its low Iuality and oversupply, as an !na%l!$ to an oil2

a##ict!# &' !conoy . >$ getting an oil $i# weren=t so easy, goes this thin!ing, perhaps we would $ind renewables more attractive. @ut on all three counts, ! illing Beystone will have either no e$$ect, or

ma!e matters worse. %ipelines are by $ar the sa$est and most environmentally $riendly way to move oil. badly managed lea! o$ Aanadian crude $rom a pipeline near Balama'oo, Mich., in 455 released roughly 45,555 barrels o$ oil into a local stream, the largest inland oil spill in 0.1. history. @ut this pales by comparison with the 497,555 barrels o$ crude the shipwrec!ed E##on alde' poured into %rince Filliam 1ound in ;, or the $ivemillion barrels the Deep Fater ori'on blowout pumped into the Gul$ o $ Me#ico in 455. %erhaps more important, inadeIuate pipeline capacity aggravated by Beystone N<=s delay has led Aanadian and merican energycompanies to move more oil by train. rom Hust 454 to 458, rail shipments o$ crude oil in the 0.1. Humped 7L per cent. Aanada has announced plans t o e#pand its rail transport capacity $or crude oil by an amount that wouldmore than replace Beystone N<. ?ver this same period, th ree maHor derailments have demonstrated the dangers o$ this new mode o$ oil movement, especially the 458 <ac-MOgantic, Pue., e#plosion t hat le$t L7 dead. Arude

oil pipelines aren=t per$ect. @ut unli!e locomotives, they don=t emit greenhouse gases. nd they rarely blow up. s $or !eeping Aanadian oil in the ground i$ Beystone N< is !illed, $oreigninvestment, surging demand $or energy in Ahina and >ndia, and new pipelines in Aanada will provide su$$icient impetus to produceAanadian oil and alternate ways to get it to world mar!ets .

snnin+ Cana#ian ipo$ts $ts t!i$ !conoy an# t!y3ll pivot a4ay "$o t! &' to Cina6 c$sin+ &'2Cana#ian

$!lations

o$$is 31. + %ro$essor at 0niversity o$ labama,

n !n!$+y policy that shuns Aanadian oil will ps merica"s best ally into the a$s o" Cina2,

http://Huneauempire.com/opinion/454-56-5;/energy-policy-shuns-canadian-oil-will-push-americas-best-ally-arms-chinaK.0@4recm'

?r as! Aanadian Catural esources Minister 3oe ?liver , who told the Aanadian@roadcastingAorp. that same month that we currently have on! csto!$ (t!

&') $or our energy e#ports. hat customer has said that it #o!sn3t 4ant to !pan# at t! o!nt . 1o it certainly intensi$ies the broad strategic obHective o$

the government to diversi$y to sia.2Fill Ahina want to buy Aanadian oilQ bsolutelyR Ahina=s hunger $or petroleum products will continue to grow . Ahinese car

ownership is still below 0.1. levels in 45. Even i$ all $uture car sales in Ahina are hybrids and even i$ Ahina=s $renetic economic growth slows, as Ahinese car ownership rises, the demand $or petroleumwill soar over the ne#t two decades. nd >ndia is also developing a taste $or automobiles. >$ we don=t want Aanada=s oil, there are many who do. his is a maHor mista!e $or t hree reasons. irst, domestic oil production is insu$$icient to

meet 0.1. needs. ccording to the Energy >n$ormation dministration, oil provides L percent o$ our transportation energy and 87 percent o$ our total energy. @ut domestic production met only L9 percent o$ our 45 oil needs. ?il also is a !ey raw material $or t he 0.1.

chemical, plastics, and pharmaceutical industries. >t is impossible to avoid importing oil. ?ur three largest $oreign suppliers are Aanada (4 percent), 1audi rabia (L percent) and ene'uela ( percent). ?$ those, only Aanada

both respects human rights and shares our commitment to democratic government. >n short, Aanadian oil is what Aanadian Hournalist E'ra <evant terms ethical oil2 S oil that does not undermine our values by $unding corrupt and hostile regimes. 1econd, buyingAanadian oil puts dollars in the hands o$ one o$ our best trading partners. >n 455, Aanadians invested T46.8 billion here. Aanada is the Co. e#port mar!et $or 8L 0.1. statesU T.6 billion in goods and services cross the 0.1.-Aanada border daily. @y contrast, sendingdollars to 1audi rabia and ene'uela does little $or the 0.1. economy. hird, Aanada is a reliable energy supplier. Fith appro#imately 4 percent o$ total world reserves, Aanada ran!s third in t he world. nd Aanadian oil largely comes to us via pipeline,environmentally sa$er and militarily more secure than ocean transportation. Fhy is the ?bama administration so set on delaying a decision on a secure source o$ et hical oilQ crucial $inancial element in ?bama=s re-election strategy is the support o$ environmentalistssuch as ollywood=s obert ed$ord and <aurie David. hese activists don=t mind i$ oil prices go up as t hey can a$$ord higher gas prices. @ut they are passionately committed to reducing other mericans= use o$ oil and so obHect to any e$$orts to tap into Aanadian oil.nd S at least until recently S the administration=s top energy policyma!er e#plicitly $ocused on raising gasoline prices. >n 455; Energy 1ecretary 1teven Ahu said his goal was to raise the price o$ gasoline to European levels S about T; a gallon. lthough Ahu has

since said he no longer holds that view, the Cational 3ournal notes that Ahu seemed to eIuivocate, pause, and stumble over his words2 when bac!trac!ing, ma!ing his disavowal less than credible. Aanada is one o$ our oldest allies

and best trading partners. /!"$i!n#in+” Cana#a on energy is not in our national interest S ilita$ily6 !conoically o$

!nvi$on!ntally.

Cana#a ipo$ts 5!y to c$s!s Cav! 222 solv!s t!$$o$is an# @!n!!la>i$an allianc!

O3+$a#y .,1., Mary, he Fall 1treet 3ournal, ebruary 7, 454.http://online.wsH.com/article/1@555L4L5947545L74L5L97744988LLL75;66.html

Cumerous sources in ene'uela say Mr. <ugar has this problem bac!ward. is logic, which has dominated thin!ing in Fashington since AhVve' $irst came to power, is

that AhVve' has an Woil weaponW that he can use against the 0.1. by cutting o$$ supplies . @ut the ene'uelan strongman needs the 0.1. more than it

needs him. e is heavily dependent on the greenbac!s he receives $or his oil, and the authoritarian populist is unli!ely to wal! away $rom them in an election year in

ene'uela. X hat doesn"t mean ene'uela is not a threat. s Mr. <ugar rightly points out, >ran has shown that it is eager to practice terrorism in the Fest

i$ given the chance, and ene'uela provides a t$apolin! to plan and launch attac!s $rom nearby. X Fith this in mind, the 0.1. should be

see!ing to de$und the AhVve' machine, and t!$! is no %!tt!$ 4ay to do that than with approval o$ the Beystone N<. he lberta crude that

http://www.theglobeandmail.com/globe-debate/saying-no-to-keystone-xl-is-saying-yes-to-uglier-alternatives/article18297849/


http://juneauempire.com/opinion/2012-06-08/energy-policy-shuns-canadian-oil-will-push-americas-best-ally-arms-china#.UVB2rTeRcmz


http://online.wsj.com/article/SB10001424052970204792404577229533441470866.html





http://online.wsj.com/article/SB10001424052970204792404577229533441470866.html



will travel through the N< is o$ a similar Iuality to ene'uelan oil, and the 0.1. could begin %yin+ "$o Cana#a instead o$ $rom ene'uela i$ a pipeline

were put in place. X here is one thing that Mr. <ugar and ene'uelans who don"t believe that AhVve' has an oil weapon agree on, and that is the ene'uelan dictator"s

vulnerability. WDivisions in ene'uela"s ussian-armed military, an in$lation rate over 85 percent, a dilapidated oil in$rastructure ,widespread $ood and energy shortages, and soaring crime rates are all putting heavy pressure on him*,W the senator writes. <osing acustomer li!e the 0.1. might Hust push him over and with him, >ran"s strongest base o$ support in the hemisphere.

Ncl!a$ t!$$o$is cas!s !tinction

Ayson 1, - %ro$essor o$ 1trategic 1tudies and Director o$ the Aentre $or 1trategic 1tudies: Cew Yealand at the ictoria 0niversity o$

Fellington (obert, 3uly. $ter a errorist Cuclear ttac!: Envisaging Aatalytic E$$ects.2 1tudies in Aon$lict Z errorism, ol. 88,>ssue 7. >n$ormaForld.)

@ut these two nuclear worldsSa non-state actor nuclear attac! and a catastrophic interstate nuclear e#changeSare not necessarily separable. >t is Hust possible that

some sort o$ terrorist attac! , and especially an act o$ nuclear terrorism, could precipitate a chain o$ events leading to a massive e#changeo$ nuclear weapons between two or more o$ the states that possess them. >n this conte#t, today=s and tomorrow=s terrorist groups might assume the place

allotted during the early Aold Far years to new state possessors o$ small nuclear arsenals who were seen as raising the ris!s o$ a catalytic ncl!a$ 4a$ between the superpowers started by third parties. hese ris!s were considered in the late 95s and early 65s as concerns grew about nuclear

proli$eration, the so-called n[ problem. >t may reIuire a considerable amount o$ imagination to depict an especially plausible situation where an act o$ nuclearterrorism could lead to such a massive inter-state nuclear war. or e#ample, in the event o$ a terrorist nuclear attac! on the 0nited 1tates, it might well be wondered Husthow ussia and/or Ahina could plausibly be brought into the picture, not least because they seem unli!ely to be $ingered as the most obvious state sponsors orencouragers o$ terrorist groups. hey would seem $ar too responsible to be involved in supporting that sort o$ terrorist behavior that could Hust as easily threaten them aswell. 1ome possibilities, however remote, do suggest themselves. or e#ample, how might the 0nited 1tates react i$ it was thought or discovered that the $issile materialused in the act o$ nuclear terrorism had come $rom ussian stoc!s,L5 and i$ $or some reason Moscow denied any responsibility $or nuclear la#ityQ he correctattribution o$ that nuclear material to a particular country might not be a case o$ science $iction given the observation by Michael May et al. that while the debris

resulting $rom a nuclear e#plosion would be spread over a wide area in tiny $ragments, its radioactivity ma!es it detectable, identi$iable and collectable, and a wealtho$ in$ormation can be obtained $rom its analysis: the e$$iciency o$ the e#plosion, the materials used and, most important \ some indication o$ where the nuclearmaterial came $rom.2L lternatively, i$ the act o$ nuclear terrorism came as a complete surprise, and merican o$$icials re$used to believe that a terrorist group was$ully responsible (or responsible at all) suspicion would shi$t immediately to state possessors. uling out Festern ally countries li!e the 0nited Bingdom and rance,and probably >srael and >ndia as well, authorities in Fashington would be le$t with a very short list consisting o$ Corth Borea, perhaps >ran i$ its program continues, and

possibly %a!istan. @ut at what stage would ussia and Ahina be de$initely ruled out in this high sta!es game o$ nuclear AluedoQ >n particular , i$ the acto$ nuclear terrorism occurred against a bac!drop o$ e#isting tension in Fashington=s relations with ussia and/ or Ahina, and at a time when threats

had already been traded between these maHor powers, would o$$icials and political leaders not be tempted to ass! t! 4o$stQ ?$ course, the

chances o$ this occurring would only seem to increase i$ the 0nited 1tates was already involved in some sort o$ limited armed con$lict with ussia and/or Ahina, or i$they were con$ronting each other $rom a distance in a pro#y war, as unli!ely as these developments may seem at the present time. he reverse might well apply too:should a nuclear terrorist attac! occur in ussia or Ahina during a period o$ heightened tension or even limited con$lict with the 0nited 1tates, could Moscow and

@eiHing resist the pressures that might rise domestically to consider the 0nited 1tates as a possible perpetrator or encourager o$ the attac!Q Fashington=s earlyresponse to a terrorist nuclear attac! on its own soil might also raise the possibility o$ an unwanted (and nuclear aided) con$rontation with ussia and/or

Ahina. or e#ample, in the noise and con$usion during the immediate a$termath o$ the terrorist nuclear attac!, the 0.1. president might be e#pected to place

the country=s armed $orces, including its

nuclear arsenal, on a higher stage o$ alert. >n such a tense environment, when care$ul planning runs up against the

$riction o$ reality, it is Hust possible that Moscow and/ or Ahina might mista!enly read this as a sign o$ 0.1. intentions to use $orce (and

possibly nuclear $orce) against them. >n that situation, the temptations to preempt such actions might grow, although it must be admitted that any preemption

would probably still meet with a devastating response. s part o$ its initial response to the act o$ nuclear terrorism (as discussed earlier) Fashington might decide toorder a signi$icant conventional (or nuclear) retaliatory or disarming attac! against the leadership o$ the terrorist group and/or states seen to support that group.Depending on the identity and especially the location o$ these targets, ussia and/or Ahina might interpret such action as being $ar too close $or their com$ort, and

potentially as an in$ringement on their spheres o$ in$luence and even on their sovereignty. ?ne $ar-$etched but perhaps not impossible scenario might stem $rom a Hudgment in Fashington that some o$ the main aiders and abetters o$ the terrorist action resided somewhere such as Ahechnya, perhaps in connection with what llisonclaims is the Ahechen insurgents= \ long-standing interest in all things nuclear.2L4 merican pressure on that part o$ the world would almost certainly raise alarms inMoscow that might reIuire a degree o$ advanced consultation $rom Fashington that the latter $ound itsel$ unable or unwilling to provide. here is also the Iuestion o$how other nuclear-armed states respond to the act o$ nuclear terrorism on another member o$ that special club. >t could reasonably be e#pected that $ollowing a nuclearterrorist attac! on the 0nited 1tates, bothussia and Ahina would e#tend immediate sympathy and support to Fashington and would wor! alongside the 0nited 1tatesin the 1ecurity Aouncil. @ut there is Hust a chance, albeit a slim one, where the support o$ ussia and/or Ahina is less automatic in some cases than in others. ore#ample, what would happen i$ the 0nited 1tates wished to discuss its right to retaliate against groups based in their territoryQ >$, $or some reason, Fashington $oundthe responses o$ ussia and Ahina deeply underwhelming, (neither $or us or against us2) might it also suspect that they secretly were in cahoots with the group,increasing (again perhaps ever so slightly) the chances o$ a maHor e#change. >$ the terrorist group had some connections to groups in ussia and Ahina, or e#isted inareas o$ the world over which ussia and Ahina held sway, and i$ Fashington $elt that Moscow or @eiHing were placing a curiously modest level o$ pressure on them,what conclusions might it then draw about their culpability



***nts an# %olts***



&8>lin5 – .nc 4all

plan can+!s p!$c!ptions o" #!cisiona5!$s in cana#a %y s%stantially !pan#in+ #o!stic oil p$o#ction 222 tat3s 1nc o$$is

an# ;!lly 222 it3s "t$! p$!#ictiv! Ev!n 4it 5!yston!6 t! plan can+!s t! policyl!v!l a5!p o" o4 c oil 4! can

ipo$t "$o cana#a

p$!"!$ "t$! p$!#ictiv! !vi#!nc! 222 o$ #isa# ass!s t!i$ a#vanta+! %!cas! Cana#a is p$o#cin+ as c as t! &' isipo$tin+ "$o t!

ANNING =>.D>.,1= - Energy Economist wor!ing $or the sia %aci$ic oundation o$ Aanada in ancouver. he views e#pressedhere are those o$ the author, and do not necessarily represent the views o$ the sia %aci$ic oundation o$ Aanada (Manning, Ced, 01dreams o$ energy independence, 47 pril 45L, http://www.eastasia$orum.org/45L/5L/47/us-dreams-o$-energy-independence/)

Fhen mericans tal! about energy independence= they are tal!ing about oil and the Middle East. orecasts that the 01 may become

close to energy sel$-su$$icient in net terms by 4589 have once a+ain a#! tis v!$%al icon o" &' !n!$+y policy a popla$ son#

%it!3. @ut its use is both inaccurate and misleading, and without a seismic shi$t in merican=s attitude towards transport, it is $undamentally unachievable. lthough the 01 now sources the

maHority o$ its oil imports $ rom the Festern emisphere=, the perception amongst the merican public that the 01 still imports most o$ its oil $rom the Middle East persists, along with the belie$ that the 01 main strategic priority in the region is securing its own oil imports. he 0nited 1tates has a broad and comple# relationship with the Middle East and its energy priorities donot solely determine its strategy and presence within the region, as the 01 also has other non energy priorities in the region that will remain important regardless o$ the amount o$ oil that ititsel$ imports $rom the region. he conclusion that merica can $inally pac! up and leave= the Middle East because they have entered a shale energy revolution= is too simplistic and any long-term maHor changes in 01 strategy towards the Middle East must be considered against the increasing presence and in$luence o$ Ahina in the region, with merica not wanting to be

signi$icantly displaced in the region over the coming decades. 0ot t! on+oin+ sal! +as $!voltion3 an# t! o$! $!c!nt sal! oil s$+!3av! #$aatically can+!# t! &' #o!stic !n!$+y lan#scap!6 %t t! cont$y is still6 an# 4ill $!ain6 "a$ "$o

!n!$+y in#!p!n#!nt3. ?ver the ne#t two decades, even as shale oil production pea!s, the 01 will still import over 49 per cent o$ its total oil consumption. he shale oil surge and

reduced oil consumption have reduced 01 oil import dependence signi$icantly over the last $ive years, $ rom 96 per cent in 455; to 84 per cent in 458. lthough the huge increase in Aanadianoil imports S $rom 6 per cent in 455L to 84 per cent in 458 S has signi$icantly altered the composition o$ the 01 imports port$olio, 1audi rabia and the wider %ersian Gul$ today still

contribute around 45 per cent. >ncreased shale oil output coupled with higher imports $rom both Aanada and Me#ico will see the relativecontribution o$ the %ersian Gul$ decline in the medium-term, but as the shale oil surge tapers o$$ in the second hal$ o$ the ne#t decadethis contribution will rebound. Even during this medium-term downturn the %ersian Gul$ will remain one o$ merica=s top three oil sources. he cost advantage that %ersian Gul$

suppliers enHoy means that there will always be a signi$icant mar!et $or their oil in the 01.

stats 8o ipo$ts "$o Cana#a 4ill inc$!as!6 %t t! plan 5ills it 222 o$ !v is "t$! p$!#ictiv!

;o$in+ !t al 1. - >nternational $$airs and 1ecurity Aorrespondent (Cathan anderBlippe and %aul Boring, 0.1. boom in oil production spells peril $or Aanadian crude2, 1ep. 5 454, http://www.theglobeandmail.com/report-on-business/us-boom-in-oil- production-spells-peril-$or-canadian-crude/articleL989949/)

torrent o$ oil pumped $rom new wells across the 0.1. is s!ttin+ in otion a decade o$ dramatic change that promises to wean the

country o$$ ?%EA, and threatens t! +$o4t o" !n!$+y ipo$ts $rom Aanada . he 0.1. is now staring at an energy $uture awash

with its own crude, with $ar-reaching conseIuences $or Aanada=s oil sands, the 0.1. economy and global geopolitics. his massive shi$t has been

spar!ed by changing political sentiment and technological advances that have allowed crude to be tapped in new places + $rom Corth Da!ota to ?!lahoma, Aolorado, Michigan, and evenlorida. he 0nited 1tates, according to new data released Monday by @ente!, a 0.1. energy ana lysis $irm, will see its oil production rise nearly $ive million barrels a day, or 7L per cent, in the

ne#t decade. >n that time, reliance on countries outside Aanada will largely #isapp!a$. he 0.1. today imports L9 per cent o$ its petroleum, hal$ $rom ?%EA countries. @ut

by 4544, @ente! proHects, only a million barrels per day will be delivered to 0.1. shores by tan!er + down $rom 6.7 million in 45 and Hust 9 per cent o$ total demand + and at least some o$those won=t come $rom ?%EA, but $rom countries li!e Me#ico and @ra'il. he coming change, according to @ente!, is startling: @y 456, the 0.1. will surpass its 75 oil production pea! o$

.6 million barrels a dayU by 4544, it will have leapt to .6 million barrels a day. or Aanada, the news is both good and grim: Aanadian crude, $lowing by pipeline, will continue

to be a substantial source o$ 0.1. energy. @ut growth in Aanadian e#ports south o$ the border col# "ac! a 4all in 45;, when the

combination o$ 0.1. oil output and pipeline constraints raise the possibility $or new Aanadian production to get pushed out,2 said 3odi Puinnell, one o$

the @ente! report authors. Fhat comes in to the 0.1. will slow and basically remain $lat $rom 45; to 4549.2 hat proHection suggests the coming hal$-decade will seeAanada, and its $ast-growing oil sands, struggle against the tide o$ 0.1. oil. >t also substantially raises the sta!es $or a country in the midst o$ two contentious applications to

carry Aanadian crude to the @ritish Aolumbia coast $or e#port to %aci$ic mar!ets. >t should cause us to, even more than we are today, reali'e the importance o$ creating additional channels tothe world,2 said Fayne Ahod'ic!i, the Aalgary-based global head o$ oil and gas $or consulting $irm B%MG. he @ente! proHection is, however, an ambitious one, surpassing the 4544

e#pectations o$ the $ederal 0.1. Energy >n$ormation dministration by a $ull $ive million barrels per day, although the E> $orecast is in the midst o$ an upward revision. nd theAanadian oilpatch e#pects &' +$o4t to %! s%stantially slo4!$ than @ente! suggests, in part because o$ the di$$iculty in building the new pipelines and rail cars

to move that much new oil. %lus, 0.1. companies are in the midst o$ a boom, and ay n!!# to ta5! a %$!a5 . > thin! there will be a pause or at least a partial

slowdown over the ne#t two or three years to drive costs down. 1o the growth pro$ile won=t be as strong,2 said 1cott 1a#berg, the chie$ e#ecutive o$ Arescent %oin

Energy, a Aalgary company with wells in Corth Da!ota that provides it a window on 0.1. activity. s a result, Mr. 1a#berg and the Aanadian ssociation o$ %etroleum %roducers believe

Cana#a 4ill av! littl! t$o%l! s!n#in+ oil to t! &' in coin+ y!a$s. Co one, however, Iuestions the 0.1. oil boom, which has come amid a

drilling $ren'y. hree years ago, 4;; 0.1. rigs were drilling $or oil. <ast wee!, according to data trac!ed by energy services $irm @a!er ughes, ,L5 rigs were chasing oil, a nearly $ive$oldincrease. he eruption o$ local oil is a tremendous boon. %roducing an additional 9 million barrels a day will reIuire an investment, conservatively, o$ at least T49-billion, based on currentcosts. nd it portends substantial change in a global military-strategic arena that has long been driven by the need to move oil to the thirsty 0.1. t least one, and o$ten two, 0.1. naval carr ier



battle groups still prowl the %ersian Gul$. Beeping open the >ran-threatened 1traits o$ ormu' + through which a stream o$ tan!ers move a staggering 7 million barrels daily, or one-third o$ al

seaborne oil + remains a vital merican military role. Ending all, or nearly all, 0.1. imports $rom the volatile Middle East might "n#a!ntally can+! t! +!o2

political vi!4 $rom the ?val ?$$ice, although broader threats to global economic disruption would remain.

#o!stic sal! p$o#ction in t! s8o is li+t c$#! 222 4!3$! ipo$tin+ !avy c$#!

Pillips 31< + ?il @usiness nalyst, @loombergU Matthew %hillips, alling 0.1. ?il >mports Fill eshape the Forld Arude Mar!et,http://www.businesswee!.com/articles/458-5-6/$alling-u-dot-s-dot-oil-imports-will-reshape-the-world-crude-mar!et

Most o$ merica=s new shale production is light, sweet crude that can be easily re$ined into gasoline and that is pri'ed around the world. <ight,

sweet crude is less viscous than heavy, sour crude, which has more sul$ur. @ut heavy , sour crude tends to be a $ew dollars per barrel cheaper than

light, sweet crude, and the Aanadians and ene'uelans have vast $!s!$v!s o$ it. hat=s why in the years be$ore the 0.1. shale boom hit, some

o$ the biggest 0.1. re$iners spent more than T45 billion upgrading their re$ineries so they could process the gun!y stu$$ into gasoline,

asphalt, and other products.

tat a5!s Cana#a o$ %i++!st sppli!$ in t! s8o

Pillips 31< + ?il @usiness nalyst, @loombergU Matthew %hillips, alling 0.1. ?il >mports Fill eshape the Forld Arude Mar!et,http://www.businesswee!.com/articles/458-5-6/$alling-u-dot-s-dot-oil-imports-will-reshape-the-world-crude-mar!et

hus, despite the abundance o$ high-Iuality crude, #!an# "o$ !avy 6 so$ oil "$o a%$oa# 4ill %! i+ in the years to come. or those

reasons Aanada will remain A!$ica3s %i++!st sppli!$ Cot only is Aanada close and able to pipe its oil over the border, but its heavy, sour crude is also what 0.1. re$iners want.

Aanadian pipeline operator ransAanada (%) is trying to get 0.1. approval o$ i ts Beystone N< pipeline, which would eventually move .9 million barrels a day o$ heavy, sour Aanadian crude to Gul$ Aoast re$ineries. he pipeline would lower shipping costs $or the Aanadians and ma!e their oil even cheaper than the crude sold to the 0.1. by Me#ico (it sells million barrels a day to the 0.1.), 1audi rabia (.4 million), and ene'uela

(95,555). he Gul$ Aoast mar!et=s not big enough to ta!e new Aanadian crude and maintain current imports ,2 says Edward Morse, head o$ commodities

research at Aitigroup Global Mar!ets. 1omething has to give.2 Fhile the demand $or heavy, sour crude will be good news $or Aanada, the shale oil revolution in the 0.1. will li!ely result in a steep drop in oil imports $rom$rica, mainly $rom ?%EA=s biggest Fest $rican members, Cigeria and ngola. @oth are suppliers o$ light, sweet crude. 1ince 3uly 455, the 0.1. has cut its Cigerian imports by hal$, $rom more than million barrels a dayto 9L8,555 as o$ ?ctober 454, according to the most recent data available through the E>. >mports $rom ngola have dipped below 455,555 barrels a day, $rom an average o$ 98,555 in 455;. @y the second Iuarter o$ this

year, we will stop importing Fest $rican light, sweet crude into the Gul$,2 Morse predicts. 'o!ti! be$ore mid-45L, he says the 0.1. and Aanada will stop importing crude$rom Fest $rica altogether . hose barrels will have to $ind another home. he surplus $rican oil could end up competing with Mideast suppliers $or customers in >ndia, Ahina, Europe, and Borea. s the

global competition heats up, oil prices the world over will probably drop. Morse says that T5 will be the new ceiling $or oil pri ces rather than the $loor it=s been in recent years, a transiti on he anticipates will be highly

disruptive.2 he geopolitical $allout $rom this shi$t in the global oil trade could be disruptive too. ngola, Cigeria, and ene'uela are heavily dependent on oil revenues to !eep their

governments a$loat and maintain popular subsidies that lower the price o$ $ood and $uel $or their citi'ens. >$ Morse is right and the average global price o$ oil dri $ts below T5 a barrel, the pressure on the wea!er

oil states could become intense.



Ft 2 8 – Cana#a +$o4in+

cana#a3s !n!$+y in"$ast$ct$! +oo#

P 31., http://business.$inancialpost.com/454/57//8-ways-to-ma!e-canada-worlds-most-energy-productive-nation/Q]]lsa^8595-e;4

he 1tanding 1enate Aommittee on Energy, the Environment and Catural esources has launched a new blueprint outlining 8 priorities to !ns$!Cana#a 4ill %! t! ost !n!$+y p$o#ctiv! nation in t! 4o$l# with the highest level o$ environmental per$ormance.= he committee sat

through hundreds o$ meetings, spo!e to 495 sta!eholders and solicited public advice over three years to outline 8 !ey $ocus areas $or the country. Fe seeAanada=s potential as the most productive energy nation in the world, with the highest levels o$ environmental per$ormance,2 said

1enator David ngus, Aommittee Ahair. @ut we also conclude that there is a +$!at s!ns! o" $+!ncy S and we need an energy literacy thatincludes a pro$ound recognition that energy pervades all aspects o$ our lives, and is a !ey element o$ our social $abric. he $uture is $raugh

with peril i$ we don=t get it right.2

http://business.financialpost.com/2012/07/19/13-ways-to-make-canada-worlds-most-energy-productive-nation/?__lsa=3050-e892







***cana#a $!lations>ipo$ts ipacts***



Cana#a $!lations – 4at!$ in"$ast$ct$! Ht$a#! l!a#!$sip

En!$+y ti!s 5!y to coop ov!$ %o$#!$ 4at!$4ays

E5 an# !$+sson 451. + 1pecialist in >nternational elations and 1pecialist in >nternational rade and inance at the Aongressionalesearch 1ervice (Aarl and >an, Aanada-0.1. elations,2 http://www.$as.org/sgp/crs/row/6-87.pd$ )he 0nited 1tates and Aanada maintain the world=s largest bilateral trading relationship, one that has been strengthened over the past two decades by

the approval o$ two maHor $ree trade agreements. lthough commercial disputes may not be Iuite as prominent now as they have been in the past, the two countries in recent years have engaged in di$$icult negotiations over items in several trade sectors, including natural

resources, agricultural commodities, and intellectual property rights . he most recent clash centered around the @uy merica provision o$ the 455economic stimulus law. owever, these disputes a$$ect but a small percentage o$ the total goods and services e#changed. >n recent years, energy has increasinglyemerged as a !ey component o$ the trade relationship . >n addition, the 0nited 1tates and Aanada wor! together closely on environmentalmatters, including monitoring air Iuality and solid waste trans$ers, and protecting and maintaining the Iuality o$ border waterways .

9at!$4ay in"$ast$ct$! ip$ov!!nts a$! 5!y to %oost !po$ts no4 2 !sta%lis!s t$a#! l!a#!$sip

In#!p!n#!nt !co$#6 1. (3anuary 4, 454, >ndependent ecords, elenair- Montana Daily Cews, E$$icient waterways !ey to e#ports,2

http://m.helenair.com/mobile/article]644a54e-8ced-e-a96-55;7e8ce6c.html ) maHor in$rastructure proHect near the bottom o$ Aentral merica could have maHor repercussions $or Montana mining and agriculture S but only i$ the 0.1. !eeps pace with in$rastructureinvestment o$ its own. his wee! our editorial board visited with a pair o$ o$$icials $rom the Faterways Aouncil, the Fashington-based industry group that represents producers and shippers

who depend on the country=s inland waterways and its system o$ rivers, canals, loc!s and dams. Much o$ that in$rastructure has been $orced into use long past itse#pected and e$$icient li$espan , the group says, and it=s gearing up to as! Aongress $or some maHor $unding over the ne#t two decades to replace and/or improve a number o$

decaying loc!s and dams that are causing, well, logHams in the system. 1o how does Aentral merica $actor into the discussionQ >n coming years the %anama Aanal will begreatly e#panded, allowing $or more and larger ship tra$$ic . olume through the canal is e#pected to nearly double by 4549. hat

increase will ma!e Cew ?rleans and other Gul$/tlantic ports more economical $or shippers to and $rom the %aci$ic im S 4os!

cont$i!s app!n to %! so! o" t! la$+!st cons!$s o$ Montana grain and coal. @ut ma!ing it easier to get Montana=s good

to the %aci$ic isn=t worth much i$ it=s not made easier to get those goods to the coasts in the $irst place. >mproving shipping e$$iciencyon the Mississippi iver will ma!e $or a new path to mar!et $or Montana raw materials. nd that=s where the Faterways Aouncil comes in, with its e$$ort

to improve the inland nautical in$rastructure. ?ne 9-barge tow can move as much material as 46 rail cars, or ,595 semi tractor-trailers, the council says, and the industry=s claim o$ beingable to move a ton o$ $reight 976 miles on a gallon o$ $uel ma!es it more e$$icient than rail or road. hose modes are absolutely necessary too, but without barge tra$$ic, our railroads andhighways would be overwhelmed with the additional demand. he council says an annual appropriation o$ T8;5 million $rom Aongress, coupled with improvements in the way the rmy Aorpso$ Engineers gets proHects done, will allow 45 maHor Hobs to be completed within the ne#t 45 years S versus the s i# that stand to be $inished under the status Iuo. 1hippers are putting theirmoney on the line as well. hey already pay a ta# o$ 45 cents per gallon o$ diesel into a trust $und that pays $or hal$ o$ each proHect, and they=re willing to pay another 6 to cents more pergallon, although that sel$-ta# notion isn=t gaining traction with the no-new-ta# crowd in Fashington. Aongress S i.e., the merican people S typically spends billions a year on highway proHects, and railroads too were heavily $unded by the public. he country showed great $oresight in building its system o$ loc!s and dams on many o$ our maHor rivers S but that investing wadone close to a century ago, and the system needs repair. Fe don=t !now whether T8;5 million a year is the right number, but we do urge Aongress to do all it can to improve the e$$iciency o$

the nation=s interior shipping channels. T! a%ility to +$o4 o$ cont$y3s !po$ts #!p!n#s pon it.

&' T$a#! l!a#!$sip is c$itical to ltilat!$al t$a#! – 4ic solv!s all +lo%al p$o%l!s

Panitcpa5#i = (1upachai %anitchpa!di, secretary-general o$ the 0C Aon$erence on rade and Development, 4/46/455L, merican<eadership and the Forld rade ?rgani'ation, p. http://www.wto.org/english/news]e/spsp]e/spsp44]e.htm

he second point is that strengthening the world trading system is essential to merica"s wider global obHectives. ighting terrorismreducing poverty, improving health, integrating Ahina and other countries in the global economy S all o" t!s! iss!s a$! lin5!#, in

one way or another, to 4o$l# t$a#! . his is not to say that trade is the answer to all merica"s economic concernsU only that meaning$ul solutions

are inconc!iva%l! 4itot it . he world trading system is the lincpin o$ today"s global order S underpinning its security as well as

its prosperity. success$ul F? is an e#ample o$ how multilateralism can wor!. Aonversely, i$ it wea!ens or $ails, c !ls! col# "ail 4it it. his i

something which the 01 S at the epicentre o$ a more interdependent world S cannot a$$ord to ignore. hese priorities must continue to guide 01 policy S as theyhave done since the 1econd Forld Far. merica has been the main driving $orce behind eight rounds o$ multilateral trade negotiations, including the success$ulconclusion o$ the 0ruguay ound and the creation o$ the F?. he 01 S together with the E0 S was instrumental in launching the latest Doha ound two years ago.<i!ewise, the recent initiative, spearheaded by mbassador Yoellic!, to re-energi'e the negotiations and move them towards a success$ul conclusion is yet another

e#ample o$ how essential the 01 is to the multilateral process S signalling that the 01 remains committed to $urther liberali'ation, that the ound is moving, and thaother countries have a tangible reason to get on board. he reality is this: when the 01 leads the system can move $orwardU when it withdraws, t!

syst! #$i"ts. he $act that 01 leadership is essential, does not mean it is easy. s F? rules have e#panded, so too has as the comple#ity o$ the issues the F?

deals with S everything $rom agriculture and accounting, to tari$$s and telecommunication. he F? is also e#erting huge gravitational pull on countries to Hoin Sand participate actively S in the system. he F? now has L6 Members S up $rom Hust 48 in L7 S and this could easily rise to 75 or more within a decade.Emerging powers li!e Ahina, @ra'il, and >ndia rightly demand a greater say in an institution in which they have a growing sta!e. 1o too do a rising number o$ voicesoutside the system as well. More and more people recogni'e that the F? matters. More non-state actors S businesses, unions, environmentalists, development CG?s

S want the multilateral system to re$lect their causes and concerns. decade ago, $ew people had even heard o$ the G. oday the F? is $ront page news. morevisible F? has inevitably become a more politici'ed F?. he sound and $ury surrounding the F?"s recent Ministerial Meeting in Aancun S let alone 1eattle Sunderline how challenging managing the F? can be. @ut these challenges can be e#aggerated. hey e#ist precisely because so many countries have embraced a

common vision. Aountries the world over have turned to open trade S and a rules-based system S as the !ey to their growth and developmenthey agreed to the Doha ound because they believed their interests lay in $reer trade, stronger rules, a more e$$ective F?. Even in Aancun the great debatewas whether the multilateral trading system was moving $ast and $ar enough S not 4!t!$ it sol# %! $oll!# %ac5 . >ndeed, it i

critically important that we draw the right conclusions $rom Aancun S which are only now becoming clearer. he disappointment was that ministers were unable toreach agreement. he achievement was that they e#posed the ris!s o$ $ailure, highlighted the need $or Corth-1outh collaboration, and S a$ter a period o$ introspection

http://www.fas.org/sgp/crs/row/96-397.pdf

http://m.helenair.com/mobile/article_622a021e-3ced-11e1-9a56-001871e3ce6c.html

http://www.fas.org/sgp/crs/row/96-397.pdf

http://m.helenair.com/mobile/article_622a021e-3ced-11e1-9a56-001871e3ce6c.html



S ac!nowledged the inescapable logic o$ negotiation. Aancun showed that, i$ the challenges have increased, it is because the sta!es are higher. he bigger challenge tomerican leadership comes $rom inside S not outside S the 0nited 1tates. >n merica"s current debate about trade, Hobs and globali'ation we have heard a lot aboutthe costs o$ liberali'ation. Fe need to hear more about the opportunities. Fe need to be reminded o$ the advantages o$ merica"s openness and its trade with the world

S about the economic growth tied to e#portsU the in$lation-$ighting role o$ imports, the innovative stimulus o$ global competition. Fe need to e#plain that $reer tradewor!s precisely because it involves positive change S better products, better Hob opportunities, better ways o$ doing things, better standards o$ living. Fhile it is truethat change can be threatening $or people and societies, it is eIually true that the vulnerable are not helped by resisting change S by putting up barriers and shutting oucompetition. hey are helped by training, education, new and better opportunities that S with the right support policies S can $low $rom a globali'ed economy. he$act is that $or every Hob in the 01 threatened by imports there is a growing number o$ high-paid, high s!ill Hobs created by e#ports. E#ports supported 7 million wor!ersa decade agoU that number is approaching around 4 million today. nd these new Hobs S in aerospace, $inance, in$ormation technology S pay 5 per cent more thanthe average merican wage. Fe especially need to inHect some clarity S and $acts S into the current debate over the outsourcing o$ services Hobs. ?ver the ne#tdecade, the 01 is proHected to create an average o$ more than 4 million new services Hobs a year S compared to roughly 455,555 services Hobs that will be outsourced. >am well aware that this issue is the source o$ much an#iety in merica today. Many mericans worry about the potential Hob losses that might arise $rom $oreign

competition in services sectors. @ut it=s worth remembering that concerns about the impact o$ $oreign competition are not new. Many o$ the reservations people aree#pressing today are echoes o$ what we heard in the 75s and ;5s. @ut people at that time didn=t $ully appreciate the power o$ merican ingenuity. emar!ableadvances in technology and productivity laid the $oundation $or unprecedented Hob creation in the 5s and there is no reason to doubt that this country, which hasshown time and again such remar!able potential $or competing in the global economy, will not soon embar! again on such a burst o$ Hob-creation. merica"s opennessto service-sector trade S combined with the high s!ills o$ its wor!$orce S will lead to more growth, stronger industries, and a shi$t towards higher value-added,

higher-paying employment. Aonversely, closing the door to service trade is a strategy $or !illing Hobs, not saving them . mericans have never run $rom a

challenge and have never been de$eatist in the $ace o$ strong competition. %art o$ this challenge is to create the conditions $or global growth and Hob creation here and

around the world. > believe mericans reali'e what is at sta!e. he process o$ opening to global trade can be disruptive, but they recogni'e that the 01economy cannot +$o4 an# p$osp!$ any ot!$ 4ay. hey recogni'e the importance o$ $inding global solutions to shared global problems. @esides, 4a

is t! alt!$nativ! to t! 9TO B 1ome argue that the world"s only superpower need not be tied down by the constraints o$ themultilateral system. hey claim that 01 sovereignty is compromised by international rules, and that multilateral institutions limitrather than e#pand 01 in$luence. mericans should be deeply sceptical about these claims. lmost none o$ the trade issues $acing the 01 todayare any !asi!$ to solv! nilat!$ally6 %ilat!$ally o$ $!+ionally. he reality is probably Hust the opposite. Fhat sense does it ma!e S $or e#ampl

S to negotiate e-commerce rules bilaterallyQ Fho would be interested in disciplining agricultural subsidies in a regional agreement but not globallyQ owcan bilateral deals S even do'ens o$ them S co! clos! to matching the economic impact o$ agreeing to global $ree trade among L6

countriesQ @ilateral and regional deals can sometimes be a copl!!nt to the multilateral system, but they can n!v!$ %! a s%stitt!here is a bigger danger. @y treating some countries pre$erentially, bilateral and regional deals e#clude others S "$a+!ntin+ +lo%al t$a#!

and distorting the world economy. >nstead o$ liberali'ing trade S and widening growth S they carve it up. Forse, t!y av! a #oino !""!ct bilateral deals inevitably beget more bilateral deals, as countries le$t outside are $orced to see! their own pre$erential arrangements, orris! $urther marginali'ation. his is precisely what we see happening today. here are already over two hundred bilateral and regional agreements in e#istence, and

each month we hear o$ a new or e#panded deal. here is a basic contradiction in the assumption that bilateral approaches serve to strengthen the multilateral, rules-

based system. Even when intended to spur $ree trade, they can ltiat!ly $is5 n#!$inin+ it. his is in no one"s interest, least o$ all the 0nited

1tates. merica led in the creation o$ the multilateral system a$ter L9 precisely to avoid a $!t$n to ostil! %locs S blocs that had done so

much to "!l int!$4a$ insta%ility an# con"lict. merica"s vision, in the words o$ Aordell ull, was that enduring peace and the wel$are o$ nations was

indissolubly connected with the $riendliness, $airness and $reedom o$ world trade2. rade would bind nations together, a5in+ anot!$ 4a$

ntin5a%l!. Con-discriminatory rules would prevent a return to pre$erential deals and closed alliances. networ! o$ multilateral initiatives and

organi'ations S the Marshal %lan, the >M, the Forld @an!, and the G, now the F? S would provide the institutional bedroc! $or theinternational rule o$ law, not power. 0nderpinning all this was the idea that $reedom S $ree trade, $ree democracies, the $ree e#change o$ ideas S was essential to

peace and prosperity, a more Hust world. >t is a vision that has emerged pre-eminent a hal$ century later. rade has e#panded twenty-$old since 95. Millions in sia

<atin merica, and $rica are being li$ted out o$ poverty, and millions more have new hope $or the $uture. ll the great powers S the 01, Europe, 3apan>ndia, Ahina and soon ussia S are part o$ a rules-based multilateral trading system, +$!atly inc$!asin+ t! canc!s "o$ 4o$l#

p$osp!$ity an# p!ac!. here is a growing reali'ation that S in our interdependent world S sovereignty is constrained, not by multilateral rules, but by the

absence o$ rules.



Cana#a $!lations – cy%!$ s!c$ity

Coop!$ation 4it Cana#a 5!y to cy%!$2s!c$ity

Ca$a"ano !t al 451, + 3ames 3ay Aara$ano, %h.D., is Deputy Director o$ the Bathryn and 1helby Aullom Davis >nstitute $or>nternational 1tudies and Director o$ the Douglas and 1arah llison Aenter $or oreign %olicy 1tudies, a division o$ the Davis>nstitute, at he eritage oundation. 3ena @a!er McCeill is %olicy nalyst $or omeland 1ecurity and ay Falser, %h.D., is 1enior%olicy nalyst $or <atin merica in the llison Aenter at he eritage oundation. ichard Feit', %h.D., is 1enior ellow andDirector o$ the Aenter $or %olitical+Military nalysis at udson >nstitute (E#pand C?D to >mprove 1ecurity in Corth merica,2

http://www.heritage.org/research/reports/455/57/e#pand-norad-to-improve-security-in-north-america)ddressing the wide range o$ threat s con$ronting merica=s security interests in Corth merica will reIuire C?D =s involvement

0mar arou! bdulmutallab=s $ailed attempt to blow up a 0.1.-bound Hetliner was al-Paeda=s most recent e$$ort to cause mass casualties in merica.44* >n addition

threats to energy, communication, and computer networ!s persist . Malicious third parties can attac! the 0nited 1tates through vulnerableintermediaries, such as Aanada, which o$$ers a huge bac!door into the 0.1. computer networ!s. Much o$ the in$rastructure o$ the two

nations S$rom railroads to aviation to pipelines and electrical systemsS is in!t$ica%ly int!$t4in!# . Aanada is also merica=s largest trading

partner, accounting $or many lin!s in 0.1. supply chains. C?D and C?A?M have partnered with a number o$ agenciesSincluding the 0.1

De$ense 1ecurity Aooperation gency, 0.1. Department o$ omeland 1ecurity, and 0.1. 1trategic AommandS to protect 0.1. networ!s. his cooperation will help

C?D to secure 0.1. systems against potential attac!, but C?D does not currently have a lead cyber-security role.48* he 0nited 1tates needs to #!!p!n

coop!$ation with its Corth merican partners on cyber security. @oth the Aanadian and 0.1. economies depend on a secure and

$unctioning cyberspace. Aomputer systems and in$rastructure in both countries are lin!ed and a substantial amount o$ bilateral trade isconducted through the >nternet. 1ince cyber terrorists and criminals can operate $rom anywhere, integration o$ cyber-security e$$orts isessential to protect computer in$rastructure . >ntegration is especially necessary $or Aanada because its 455 law en$orcement and 4,955 military personnel

dedicated to cyber security are insu$$icient to prevent cyber attac!s e$$ectively. hrough C?D , Aanada and the 0nited 1tates could coordinatecyber security with the various military commands and civilian agencies .4L* Aooperation with Me#ico as its economy and cyber in$rastructure

develop is also vital, as the 0.1. and Me#ican governments ac!nowledged by creating the For!ing Group on Ayber-1ecurity in 455L.49*

Cy%!$ attac5 4ol# #!st$oy c$itical in"$ast$ct$! an# !ns$! &' $!taliation 222 !pan#s a$i# lan#s an# a+ collaps!

Ja%i+!$, 4//.,1, (Eugue + etired ir orce General, Ayberwar$are and Ayberterrorism, he Ayber 1ecurity >nstitute, p. 8-9)here is st$on+ !vi#!nc! to suggest that al Paeda has the ability to conduct cyberterror attac!s against the 0nited 1tates and its allies. l Paeda

and other terrorist organi'ations are e#tremely active in cyberspace, using these technologies to communicate among themselves and others, carry out logistics, recruitmembers, and wage in$ormation war$are. or e#ample, al Paeda leaders used email to communicate with the ‐ terrorists and the ‐ terrorists used the >nternet toma!e travel plans and boo! $lights. ?sama bin <aden and other al Paeda members routinely post videos and other messages to online sites to communicate. Moreover,

there is evidence o$ e$$orts that al Paeda and other terrorist organi'ations are activ!ly #!v!lopin+ cy%!$t!$$o$is capa%iliti!s and

see!ing to carry out cyberterrorist attac!s. or e#ample, the Fashington %ost has reported that 0.1. investigators have $ound evidence in the logs that mar! a

browser"s path through the >nternet that al Paeda operators spent time on sites that o$$er so$tware and programming instructions $or the digital switches thatrun power, water, transport and communications grids . >n some interrogations . . . al Paeda prisoners have described intentions, in general terms, to use those tools.249 1imilarly, a 4554

A> report on the cyberterror threat to a member o$ the 1enate stated that al Paeda and e'bollah have become Wmore adept at using the internet and computer technologies.246 he @> has issued bulletins stating that, 0. 1

law en$orcement and intelligence agencies have received indications that l Paeda members have sought in$ormation on 1upervisory Aontrol nd Data cIuisition (1AD) systems available on multiple 1AD ‐relatedweb sites.247 >n addition a number o$ Hihadist websites, such as 7hH .7hH.com, teach computer attac! and hac!ing s!ills in the service o$ >slam.4; Fhile al Paeda may lac! the cyber ‐attac! capability o$ nations li!e ussia andAhina, there is every reason to believe its operatives, and those o$ its il!, are as capable as the cyber criminals and hac!ers who routinely e$$ect great harm on the world=s digital in$rastructure generally and merican assetsspeci$ically. >n $act, perhaps, the most troubling indication o$ the level o$ the cyberterrorist threat is the countless, serious non ‐terrorist cyberattac!s routinely carried out by criminals, hac!ers, disgruntled insiders, crime

syndicates and the li!e. >$ run‐o$‐the ‐mill criminals and hac!ers can threaten powergrids, hac! vital military networ!s, steal vast sums o$ money,

ta!e down a city=s o$ tra$$ic lights, compromise the ederal viation dministration=s air tra$$ic control systems, among other attac!s, it is ov!$4!lin+ly

li5!ly that terrorists can carry out similar , i$ not more malicious attac!s. Moreover, even i$ the world=s terrorists are unable to breed these s!ills, they can

certainly buy them. here are untold numbers o$ cybermercenaries around the worldSsophisticated hac!ers with advanced training who would be willing to o$$er theirservices $or the right price. inally, given the nature o$ our understanding o$ cyber threats, there is always the possibility that we have already been the victim or a

cyberterrorist attac!, or such an attac! has already been set but not yet e$$ectuated, and we don=t !now it yet. >nstead, a well‐designed cyberattac! has thecapacity cas! 4i#!sp$!a# caos, sow societal unrest, undermine national governments, spread paraly'ing $ear and an#iety, and create a state o$utter turmoil, all without ta!ing a single li$e. sophisticated cyberattac! could throw a nation=s ban!ing and $inance system into chaos causingmar!ets to crash, prompting runs on ban!s, degrading con$idence in mar!ets, perhaps even putting the nation=s currency in play and ma!ing the governmen

loo! helpless and hapless. >n today=s di$$icult economy, imagine how mericans would react i$ vast sums o$ money were ta!en $rom their accounts

and their supporting $inancial records were destroyed. truly ne$arious cyberattac!er could carry out an attac! in such a way (a!in to obin ood) as to engender

populist support and deepen ri$ts within our society, thereby ma!ing e$$orts to restore the system all the more di$$icult. modestly advanced enemy could usea cyberattac! to shut down (i$ not physically damage) one or more regional power grids. n entire region could be cast into total dar!ness, power ‐dependent

systems could be shutdown. n attac! on one or more regional power grids could also cause casca#in+ !""!cts tat col# 7!opa$#i! o$ !nti$!

national +$i# . Fhen word lea!s that the blac!out was caused by a cyberattac!, the specter o$ a $oreign enemy capable o$ sending the entire

nation into dar!ness would only inc$!as! t! "!a$6 t$oil an# n$!st. Fhile the $inance and energy sectors are considered prime targets $or a

cyberattac!, an attac! on any o$ the 7 delineated critical in$rastructure sectors could have a maHor impact on the 0nited 1tates. or e#ample, our healthcare system isalready technologically driven and the ?bama dministration=s e‐health e$$orts will only increase that dependency. cyberattac! on the 0.1. e ‐health in$rastructurecould send our healthcare system into chaos and put countless o$ lives at ris!. >magine i$ emergency room physicians and surgeons were suddenly no longer able to

access vital patient in$ormation. cyberattac! on our nation=s water systems could li!ewise cause 4i#!sp$!a# #is$ption. n attac! on the control

systems $or one or more dams could put entire communities at ris! o$ being inundated, and could c$!at! $ippl! !""!cts ac$oss t! 4at!$6 a+$iclt$!6

an# !n!$+y s!cto$s. 1imilar water control system attac!s could be used to at least temporarily #!ny 4at!$ to otherwise a$i# $!+ions, impactingeverything $rom the Iuality o$ li$e in these areas to agriculture. >n 4557, the 0.1. Ayber AonseIuences 0nit determined that the destruction $rom a single wave o$ cyberattac!s on critical in$rastructures could e#ceed T755 billion

which would be the rough eIuivalent o$ 95 Batrina‐esIue hurricanes hitting the 0nited 1tates all at t he same time.4 1imilarly, one > security source has estimated that the impact o$ a single day cyberwar attac! that $ocused on and disrupted 0.1. credit and debit cardtransactions would be appro#imately T89 billion.85 nother way to gauge the potential $or harm is in comparison to other similar noncyberattac! in$rastructure $ailures. or e#ample, the ugust 4558 regional power grid blac!out is estimated to have cost the 0.1.economy up to T5 billion, or roughly . percent o$ the nation=s GD%. 8 hat said, a cyberattac! o$ the e#act same magnitude would most certainly have a much larger impact. he origin o$ the 4558 blac!out was almost immediately disclosed as an atypical system$ailure having nothing to do with terrorism. his made the event both less threatening and li!ely a single time o ccurrence. ad it been disclosed that the event was the result o$ an attac! that could readily be repeated the impacts would li!ely have grown substantially, i$



not e#ponentially. dditionally, a cyberattac! could also be used to disrupt our nation=s de$enses or distract our national leaders in advance o$ a more tr aditional conventional or strategic attac!. Many military leaders actually believe that such a disruptive cyber pre ‐

o$$ensive is the most e$$ective use o$ o$$ensive cyber capabilities. his is, in $act, the way ussia utili'ed cyberattac!ersSwhether government assets, governmentdirected/ coordinated assets, or allied cyber irregularsSin advance o$ t he invasion o$ Georgia. Fidespreaddistributed denial o$ service (DD?1) attac!s were launched on the Georgian governments > systems. oughly a day later ussian armor rolled into Georgian territory. he cyberattac!s were used to prepare the battle$ieldU they denied the Georgian government a criticacommunications tool isolating it $rom its citi'ens and degrading its command and control capabilities precisely at the time o $ attac!. >n this way, these attac!s were the $unctional eIuivalent o$ conventional air and/or missile stri!es on a nation=s communicationsin$rastructure.84 ?ne interesting element o$ t he Georgian cyberattac!s has been generally overloo!ed: ?n 3uly 45th, wee!s be$ore the ugust cyberattac!, the website o$ Georgian %resident Mi!heil 1aa!ashvili was overwhelmed by a more narrowly $ocused, buttechnologically similar DD?1 attac!.88 his should be particularly chilling to merican national security e#perts as our systems undergo the same sorts o$ $ocused, probing attac!s on a constant basis. he ability o$ an enemy to use a cyberattac! to counter our o$$ensivcapabilities or so$ten our de$enses $or a wider o$$ensive against the 0nited 1tates is much more than mere speculation. >n $act, in >r aI it is already happening. >raI insurgents are now using o$$ ‐the‐shel$ so$tware (costing Hust T46) to hac! 0.1. drones (costing TL.9 mil lio

each), allowing them to intercept the video $eed $rom these drones.8L @y hac!ing these drones the insurgents have succeeded in greatly reducing one o$ our most valuable sources o$ real ‐time intelligence and situational awareness. >$ our enemies in >raI are capable o$such an e$$ective cyberattac! against one o$ our more sophisticated systems, consider what a more technologically advanced enemy could do. t the strategic level, in 455;, as t he 0nited 1tates Aentral Aommand was leading wars in both >raI and $ghanistan, a cyberintruder compromised the security o$ the Aommand and sat within its > systems, monitoring everything the Aommand was doing. 89 his time the attac!er simply gathered vast amounts o$ intelligence. owever, it is clear t hat the attac!er could have used this access towage cyberwarSaltering in$ormation, disrupting the $low o$ in$ormation, destroying in$ormation, ta!ing down systemsSagainst the 0nited 1tates $orces already at war. 1imilarly, during 4558 as t he 0nited 1tates prepared $or and began the Far in >raI, the > networ!so$ the Department o$ De$ense were hac!ed 4L times.86 @y ugust o$ 455L, with merica at war, these ongoing attac!s compelled then‐Deputy 1ecretary o$ De$ense %aul Fol$owit' to write in a memo that, Wecent e#ploits have reduced operational capabilities on ournetwor!s.W87 his wasn=t the $irst time that our national security > in$rastructure was penetrated immediately in advance o$ a 0.1. military option.8; >n ebruary o$ ; the 1olar 1unrise attac!s systematically compromised a series o$ Department o$ De$ensenetwor!s. Fhat is o$ten overloo!ed is that these attac!s occurred during the ramp up period ahead o$ potential military action against >raI. he attac!ers were able to obtain vast amounts o$ sensitive in$ormationSin$ormation that would have certainly been o$ value t oan enemy=s military leaders. here is no way to prove that t hese actions were purpose$ully launched with the speci$ic intent to distract merican military assets or degrade our capabilities. owever, such ambiguitiesSthe inability to speci$ically attribute actions andmotives to actorsSare the very nature o$ cyberspace. %erhaps, these repeated patterns o$ behavior were mere coincidence, or perhaps they weren=t. he potential that an enemy might use a cyberattac! to so$ten physical de$enses, increase the gravity o$ harms $rom

!inetic attac!s, or both, signi$icantly increases the potential harms $rom a cyberattac!. Aonsider the gravity o$ t he threat and ris! i$ an enemy, rightly or wrongly, believed that it could use a cyberattac! to degrade our strategic weapons capabilities. 1uch an

enemy might be convinced that it col# 4in a 4a$ Sconventional or !v!n ncl!a$ S against the 0nited 1tates. he e$$ect o$ this would beto n#!$in! o$ #!t!$$!nc!‐ based de$enses, ma!ing us si+ni"icantly o$! at $is5 o" a a7o$ 4a$.



Cana#a $!lations – A"+anistan

Cana#ian cont$i%tions to A"+anistan a$! vital to t! lon+2t!$ +$o4t an# sta%ility o" t! stat!

0!$+!n 31. + research $ellow at the ADG>(@ob, Aanada=s $ghan contribution needs to be seen in proper conte#t, Aanadian De$ence and Global $$airs >nstitute, 454,http://www.cd$ai.org/bergenarticles/Aanadas_45$ghan_45contribution_45needs_45to_45be_45seen_45in_45proper _45conte#t.pd$)

MacBay announced $rom $ghanistan where he was visiting Aanadian troops and $ghan %resident amid Bar'ai that Aanada will contribute T5million toward the salaries o$ $ghan police o$$icers through the <aw and ?rder rust und $or $ghanistan. he enabling o$ o$$icers= salaries to be paid to

them by <? directly through ban!s would not be remar!able to Aanadians to whom direct ban! deposits are routine and the announcement made $ew headlines

1till, in a deeply-troubled state li!e $ghanistan, that was a c$cial st!p toward building a paid pro$essional police $orce and improving

stability and security because it is widely ac!nowledged that the $ghan national police $orce is ri$e with corruption andincompetence. he T5 million builds upon T7 million previously committed by the Aanadian >nternational Development gency and comes at a time when Aanada

is poised to double its cadre o$ civilian AM% police trainers in $ghanistan $rom $ive to 5 in March 4557. Cow the bad news: <argely ignored were announcements

made at roughly the same time that Aanada would be providing T.79 million to 0C>AE $or $ghan women=s health and literacy andanother T.9 million over two years $or provincial reconstruction. >nternational Ao-operation Minister 3osOe ernier and %ubic For!s and Government

1ervices Minister Michael ortier made the announcements in Montreal. he T.9-million contribution to the ccelerated District econstruction program is part o$ anearly Tbillion 5-year Aanadian commitment to stabili'ation, reconstruction, poverty reduction and improving $ghanistan=s governance. 0n$ortunately, the goodnews about Aanada contributing to health and education programs, the building o$ roads, aIueducts, sanitation in$rastructure, schools and clinics throughout Bandaharhas been Hu#taposed with reports based on e#cerpts $rom the 3an/eb 4557 edition the merica-centric Hournal oreign $$airs. he article W1aving $ghanistanW by@arnett ubin, a long-time critic o$ the merican military=s conduct in $ghanistan, was sei'ed upon as bac!ground conte#t $or an argument that $ghanistan is sliding

into chaos2 and that a bad end looms over Aanada=s $ghan mission. >n $act, what 0.1. scholar ubin wrote about is what it would ta!e to save$ghanistan and a !ey point he made was that the 0 nited 1 tates all but abandoned $ghanistan a$ter it drove al-Paeda and alibancore leadership into %a!istan and $ailed to consolidate that tactical advance. C? countries, including Aanada, have leapt in to the breach

but ubin argued that i" A!$ica is to scc!!# in its war on terrorism, it must re$ocus its attention on securing $ghanistan and

stabili'ing it through reconstruction. ?bviously Aanada is not merica and Aanadians have di$$erent aims in $ghanistan, but that is precisely what the Aanadian orces are doing there. ather than the merican aim o$ destroying poppy $ields that supply 0.1. drugusers with L per cent o$ their opium, $or e#ample, the Aanadian orces are involved in not only de$eating the aliban and its alPaeda

supporters in the interest o$ security, but in in"$ast$ct$! $!const$ction that will enable the growth o$ alternative crops such

as grapes and their delivery to mar!ets.

$ghanistan instability will cascade to nuclear war

J!llan 1, – pro$essor at 1tan$ord 0niversityMartin ellman, Aould $ghanistan <ead to a Cuclear DisasterQ2, Cuclear is!

http://nuclearris!.wordpress.com/455/5;//could-a$ghanistan-lead-to-a-nuclear-disaster/*Fhile now a pro$essor o$ history and international relations at @oston 0niversity, ndrew @acevich is also a Fest %oint graduate andretired rmy Aolonel with service in ietnam and the %ersian Gul$. @acevich has an uncanny ability to combine his academic and military

perspectives to produce a brilliant, common sense approach to international issues, especially those involving war and peace. >n this post, > recommend his most recen

?pEd , which appeared today in the < imes. >n it, he relates $ghanistan to Bennedy=s disastrous 6 @ay o$ %igs invasion + an eventthat helped lay a $oundation $or 64=s Auba n Missile Arisis. Fhile the lin!age between $ghanistan and nuclear war isnot the point o$ @acevich=s ?pEd, the danger should be obvious in light o$ what transpired in those $ate$ul thirteen days o$?ctober 64. @ut, Hust as almost no one saw how supporting the overthrow o$ Aastro could lead to a nuclear war, almost no one today is concernedthat the war in $ghanistan has a similar potential . he ris! analysis approach that > have been advocating is help$ul $or illuminating that danger. <ast

May, as part o$ my De$using the Cuclear hreat series at 1tan$ord, $ormer Director o$ <os lamos Dr. 1ieg$ried ec!er spo!e on he Greatest Cuclear is!s.2 >n that

tal!, he e#plained why he saw %a!istan as the greatest nuclear ris! we $ace. he war in $ghanistan adds to an already unstable situation innuclear-armed %a!istan . I" tat insta%ility sol# l!a# to a cop %y Tali%an sypati!$s within the %a!istani militarythe ris! becomes much clearer . o avoid disaster, we need to stop seeing dangers only in hindsight. Fe need to start thin!ing through the possible

conseIuences o$ our actions, be$ore they occur. >$ we do that, we can not only avert a nuclear disaster, but also build a better, sa$er world.



***A/@ANTAGE AN'9E'***



A. solv!ncy – 1nc

p$o#ction 4ill slo4 2222 OPEC 4ill ta5! ov!$

E&TE' 1>D>.,1= + (0%DE 4-0.1. oil output growth to slow in 459U ?%EA to pump more +E>,http://www.reuters.com/article/45L/5/57/energy-data-eia-id01<4C5B45L557)

he pac! o" &' oil p$o#ction +$o4t 4ill %!+in to slo4 in .,1- , even as global demand continues to rise, allowing ?%EA to pump more crude $or the $irst time in three years, 0.1. government $orecasts showed on uesday. >n its $irst proHections $or 459, the 0.1. Energy

>n$ormation dministration said 0.1. output will rise by percent or 795,555 barrels per day ne#t year to reach .8 million bpd, the highest in L8 years. hat rate may seem heady but isless than the brea!nec! million bpd growth seen last year and $orecast $or 45L, the result o$ the biggest oil boom in a generation as $rac!ing and hori'ontal drilling

technologies ma!e millions o$ barrels in domestic on-shore oil reserves more accessible. he data arm o$ the 0.1. Department o$ Energy, li!e many otheranalysts, has consistently underestimated the scale o$ the 0.1. shale oil boom and these estimates may yet prove low, analysts said. W>

thin! the E> recogni'es that they have been too conservative and is mar!ing to mar!et now,W said Batherine 1pector, with Aanadian ban! A>@A in Cew ̀ or!. 1pector noted uesday"s$orecasts $ollow revisions in the nnual Energy ?utloo! that boosted estimates $or output through 45, some 44 percent higher than previous $orecasts. he E>"s latest report also suggeststhe administration is ta!ing a slightly brighter outloo! on supplies $rom the ?rgani'ation o$ the %etroleum E#porting Aountries, which is struggling to come to grips with the shale revolution.

Forld oil demand will rise .9 percent to 4.6 million bpd ne#t year, a $!co$# i+ and the $astest growth rate since 455, the

agency said. >t also raised its $orecast $or this year"s demand growth by 65,555 bpd . hat will allow ?%EA to boost supply by 5.L percent to 89.6 million bpd

ne#t year a$ter it $ell percent this year, the E> said. @ut that e#tra oil comes at a cost - lower prices. he agency $orecast global benchmar! @rent crude oil prices at an average T5.9; a

barrel in 459, down $rom T59.L4 a barrel this year. WE> e#pects the downward trend in @rent crude oil prices to continue over the ne#t two years asgrowing non-?%EA oil supply continues to outpace world consumption,W administrator dam 1iemins!i said in a statement.

No solv!ncy – #o!stic p$o#ction is nsstaina%l! an# ta5!s too lon+

TO/ 31. (he ?il Drum. ech al! - Cew Energy eport $rom arvard Ma!es 0nsupportable ssumptions2. 3uly , 454.http://www.theoildrum.com/node/44Qutm]source^$eedburnerZutm]medium^$eedZutm]campaignêed_8[theoildrum[_4;he[?il[Drum_4Zutm]content^Google[eader)

he ech al!s o$ the last $ew months have $ollowed a path o$ loo!ing in a relatively realistic manner at crude oil production with emphasis on that coming $rom the 0nited 1tates and ussia, as well as 1audi rabia, the

current $ocus o$ my wee!ly pieces. n earlier piece loo!ed at a Aitigroup report o$ considerable optimism, and the post e#plained why, in reality, it is ip$actical to anticipat! c

inc$!as! in &' p$o#ction tis #!ca#! . 1ince then, a$ter reviewing the production $rom ussia, several post s have shown why the current l ead in ussian daily crude oil

production is li!ely to be soon over and then decline, as the oil companies are not bringing new $ields on line as $ast as the old ones are running out. 1audi rabia, as the current posts are in the process o$ e#plaining, isunli!ely to increase production much beyond 5 mbd, since Ghawar, the maHor $ield on which it s current production level is built , is reaching the end o$ it s maHor contribution, though it will continue to produce at a lower rate

into the $uture. he bottom line, at least to date, is that there i s no evidence $rom the top three producers t hat their production will be even close, in total, to current levels by the end o$ the decade. 1o, (h/t <eanan) there

now comes an Energy 1tudy $rom arvard which boldly states that this is rubbish - that by 4545, global production will be at 5.6 mbd and these concerns that most o$

us have at he ?il Drum (inter alia) are chimeras o$ the imagination. >t is there$ore pertinent to begin with e#amining where the study (which was prepared with@% assistance) anticipates that the growth in supply will come $rom. hat too is shown as a plot: omitted + in original 0<* >t is instructive, in reading this plot, to $irst recogni'e

that it is a plot o$ anticipated production capacity rather than proHected actual production. he reason $or this can perhaps be illust rated by an e#ample. Fithin the current production capacity that 1audi rabia claims adds up

to 4 mbds, is the 55 !bd that will come $rom Mani$a as it is $urther developed and comes on line within the ne#t $ew years. owever, at that time. the increase in production will, to somedegree, o$$set the declines in e#isting wells and producing $ields that will become more severe as more e#isting hori'ontal wells waterout. Mani$a is not currently in signi$icant production, and is unli!ely to be at such a level $or at least another ; months, with production being tied to the construction o$ the two new re$ineries being built to handle the oil.

>t is not , there$ore, a currently instantaneously available source o$ oil. t a relatively normal 9_ per year decline in production $rom e#isting $ields, 1audi rabia will have to bring on

line (and sustain) at least 955 !bd per year o$ new production. Fhile it is li!ely that it can do this $or a year or two more, betting that it will be able to do this plus raise production 4 mbd or more in 4545 is on the $ar side o$optimistic. 3ust because a reserve e#ists does not mean that it can be brought on line without t he physical $acilities in place to produce it. >t is interesting, however, to note the report=s view on $ield declines in production:E> E>DECAE hroughout recent history, there is empirical evidence o$ depletion overestimation. rom 4555 on, $or e#ample, crude oil depletion rates gauged by most $orecasters have ranged between 6 and 5 percent: yet even the lower end o$ this range would involve the almost complete loss o$ the world=s old2 production in 5 years (4555 crude production capacity ^ about 75 mbd). @y converse, crude oil production capacityin 455 was more than ;5 mbd. o ma!e up $or that $igure, a new production o$ ;5 mbd or so would have come on-stream over that decade. his is clearly untrue: in 455, 75 percent o$ crude oil production came $romoil$ields that have been producing oil $or decades. s shown in 1ection L, my analysis indicates that only $our o$ the current big oil suppliers (big oil supplier ^ more than mbd o$ production capacity) will $ace a netreduction o$ their production capacity by 4545: they are Corway, the 0nited Bingdom, Me#ico, and >ran. part $rom these countries, > did not $ind evidence o$ a global depletion rate o$ crude production higher than 4-8

percent when correctly adHusted $or reserve growth. /E> E>DECAE 1ighR > e#plained last time that with the change in well orientation $rom vertical to hori'ontal , that

there was a change in the apparent decline rates. Fhen the wells run hori'ontally at the top o$ the reservoir, they are no longer reduced in productive length each year as vertical wells are,

because the driving water $lood slowly $ills the reservoir below the oil as it is displaced. his does not mean that because the apparent decline rate $rom the well has $allen that it will ultimately produce more oil. heamount o$ oil in the region tapped by the well is $inite, and when it is gone it is gone, whether $rom a vertical well that shows gradualdecline with time, or $rom the hori'ontal well that holds the production level until the water hits the well and it stops. > am not surethat the author o$ the report understands this. he point concerning support logistics is critical in a number o$ instances. he political di$$iculties in increasing production $rom the oil sands in

lberta, through constraints on pipeline construction either 1outh or Fest, are at least as li!ely to restrict $uture growth o$ that deposit as any technical challenge. he $our countries that the report sees contributing most to$uture oil supplies are (in the ran!ed order) >raI. the 0nited 1tates, Aanada, and @ra'il. or >raI, he sees production possibly coming $rom the $ollowing $ields within the ne#t eight years. > understand that one ought to showsome optimism at some point over >raI, but it has yet to reach the levels o$ production that it achieved be$ore the >ran/>raI Far, and that was over some time ago. he E > has shown that it is possibl e to get a total o$ over 8mbd o$ production, but it reIuires investment and time, and some degree o$ political st ability in the country. hat is still somewhat lac!ing. %rior to that war, >raI was producing at 8.9 mbd, the production curve since then hasnot been encouraging: ecogni'ing that the countr y has problems, the report still e#pects that there will be a growth in production o$ some 9.49 mbd by the end o$ the decade. his appears to be a guess as to being some 95_

o$ the 5.L49 mbd that the country could potentially achieve. s $or 01 production, this is tied to increasing production $rom all the oil shales in the country, which will see sp$ts in +$o4t

similar to that seen in the @a!!en and Eagle ord. > estimate that additional unrestricted production $rom shale/tight oil might reach KK %# %y .,.,, or an

additional adHusted production o$ L. mbd a$ter considering ris! $actors (by comparison, 0.1. shale/tight oil production was about ;55,555 bd in December 45). o these $igures, > added an unrestricted additional productiono$ mbd $rom sources other than shale oi l that > reduced by L5 percent considering ris!s, thus obtaining a 5.6 mbd in terms o$ additional adHusted production by 4545. >n particular, > am more con$ident than others on the prospects o$ a $aster-than-e#pected recovery o$ o$$shore drilling in the Gul$ o$ Me#ico a$ter the Deepwater ori'on disaster in 455.

http://www.reuters.com/article/2014/01/07/energy-data-eia-idUSL2N0KH1HR20140107

http://www.reuters.com/article/2014/01/07/energy-data-eia-idUSL2N0KH1HR20140107





t – lon+ solv!ncy

T! plan is 4o!"lly ins""ici!nt an# ta5!s #!ca#!s to solv!

Cola+iovanni .,1. <ou, activist, Hournalist, and political consultant $or the Detroit E#aminer + citing a A@? report, A@? report$inds "drill baby drill" in practice produces little revenue or oil2

>t has been con$irmed in a new report by the non-partisan Aongressional @udget ?$$ice that the bene$its o$ opening up and leasing protected $ederal lands

$or the development o$ oil and natural gas a$! n!t to notin+ he estimated pro$it would be as little as T955 million a year which is only ,D o$ the totagross ta!e o$ revenue o$ T95 billion that is e#pected to be generated over the ne#t decade $rom leases already in place. $avorite cheer o$ the epublican party has

been W#$ill %a%y #$ill.W 1ome would now say that tal!ing point as %!!n p$ov!n ipot!nt . he analy'ed issue was the opening o$ CF, he rctic

Cational Fildli$e e$uge, and o$$-shore drilling sites between 9 and 455 miles away $rom both coasts. Aertain parts o$ the ?uter Aontinental 1hel$ were also included inthe analysis. he 0nited 1tates allows individual corporations and private businesses to bid on leases $or resource development already, with 75_ o$ these areas already

in use. ?nce operational, which in some areas may ta5! as lon+ as .- y!a$s , the report $inds a $!v!n! o$ T4 billion a year may be

possible but not sstaina%l! . or those who say that any revenue generated is acceptable and desired, they should !now that up to 5_ o$ the pro$its will be

paid to las!an residents. he remaining 5_ would have nearly no bearing on the $ederal debt or de$icit. his $igure is based on the speculation that i$ new contractswere to be signed, they would be similar to those already approved, which do pay up to 5_ o$ generated revenue to las!ans. inally the A@? report summari'es thesituation succinctly: %roduction $rom newly opened areas over the 4548+4589 period would be $ar less than the amounts produced by current operations in the Gul$ o$Me#ico. here$ore, merican citi'ens are le$t with a decision. Do they wish to proceed allow the destruction o$ protected lands $or a measly T955 million a year, or willthey see the costs $ar outweigh the bene$its. he 0nited 1tates uses between 6.; - ;.8 billion barrels o$ oil per year. oday"s current oil price is T6.4 per barrel.

here$ore, he 0nited 1tates annually spends T7; billion a year $or oil . >n other words it would ta!e ,96 years $or these new drilling operations to generate

enough oil or revenue to cover the 01 $or a single year.



t – c!$tainty

Jisto$y P$ov!s: T! plan can3t att$act inv!st!nt an# nc!$tainty is in!vita%l! –l!asin+ #!lays a+ni"y o$ ti! "$a!

a$+!nts – tis is t! ost c$!#i%l! so$c!

EIA .,,M 0.1. Energy >n$ormation dministration - >ndependent statistics and analysis - >mpact o$ <imitations on ccess to ?il and Catural Gas esources in the ederal ?uter Aontinental 1hel$2 E?455 he 0.1. o$$shore is estimated to contain substantial resources o$ both crude oil and natural gas, but until recently some o$ the areas o$ the lower L; ?A1 have been

under leasing moratoria 96*. he %residential ban on o$$shore drilling in portions o$ the lower L; ?A1 was li$ted in 3uly 455;, and the Aongressional ban

was allowed to e#pire in 1eptember 455;, removing regulatory obstacles to development o$ the tlantic and %aci$ic ?A1 97, 9;*. lthough the tlantic and %aci$ic

lower L; ?A1 regions are open $or e#ploration and development in the E?455 re$erence case, tiin+ iss!s const$ain t! n!a$2t!$ ipacts o"

inc$!as!# acc!ss. he 0.1. Department o$ >nterior, MM1, is in the process o$ developing a leasing program that includes selected tracts in those areas, with the

$irst leases to be o$$ered in 455 9*U however, t!$! is nc!$tainty a%ot t! "t$! o" OC' #!v!lop!nt . Environmentalists are

calling $or a reinstatement o$ the moratoria. ?thers cite the bene$its o$ drilling in the o$$shore. ecently, the 0.1. Department o$ the >nterior

e#tended the period $or comment on oil and natural gas development on the ?A1 by ;5 days and established other processes to allow more care$ul evaluation o$

potential ?A1 development. ssuming that leasing actually goes $orward on the schedule contemplated by the previous dministration, the leases must then be bid on and awarded, and the wining bidders must develop e#ploration and development plans and have them approved be$ore any

wells can be drilled. hus, conv!$sion o$ the newly available ?A1 resources to p$o#ction 4ill $!8i$! consi#!$a%l! ti! , in

addition to $inancial investment. urther, because the e#pected average $ield si'e in the %aci$ic and tlantic ?A1 is smaller than the average $ield si'e

in the Gul$ o$ Me#ico, a portion o$ the additional OC' $!so$c!s ay not %! as !conoically att$activ! as availa%l! $!so$c!s

in t! Gl" .



A. !po$ts a#vanta+! – no int!$nal lin5

Oil %oo no4 –s8o t$i++!$s t! ipact o$ ipossi%l! to solv! %!cas! OPEC is too po4!$"l

Jssain .,1. Gul$ @usiness Forld ?il Mar!ets: >s 01 1et o ?verta!e ?%EAQ s 01 crude production rises, is ?%EA=s in$luenceon global oil mar!ets in danger o$ waningQ @y 1yed ussain December 8, 454

Aonsider the $acts: 01 oil production has been at its highest level since ;, while natural gas production reached its highest level ever. Meanwhile, the 01 becamea n!t !po$t!$ o$ petroleum products $or the $irst time in L years and is now activ!ly loo5in+ to !po$t n atural gas to Asian

and E$op!an mar!ets. >n the north, the Aanadian oil sands, considered the third largest crude reserves in the world a$ter deposits in ene'uela and 1audi

rabia, have ramped up production and aim to be the $ourth largest oil producer in the world by 4549. inally, Me#ico, the world=s ;th largest crude

producer, is also ramping up production, ma!ing the three $riendly states power$ul allies against ?%EA in$luence. Aombined, Corthmerica oil production is proHected to average 6.L8 million barrels per day in 454, larger than the 4-million bpd capacity o$ top producer 1audi

rabia. >ndeed, Corth merica is e#pected to have the highest growth among all non-?%EA regions in 454, as supply growth mar!s the

highest level in terms o$ volume since 75. he $orecast calls $or healthy growth $rom the 01 and Aanada, as well as relatively steady supply$rom Me#ico,2 noted the latest ?%EA report. ccording to preliminary data, Corth merica oil supply increased by .47 million bpd in the $irst hal$ o$ 454

compared to the same period in 45. ?n a Iuarterly basis, Corth merica oil production is e#pected to average 6.L; million bpd, 6.L9 million bpd, 6.88 million

bpd, and 6.L6 million bpd, respectively.2 Citi%an5 calls tis can+! in +lo%al !n!$+y spply cain t$ans"o$ational3 Fith no

signs o$ this growth trend ending over the ne#t decade, the growing continental surplus o$ hydrocarbons points to Corth merica e$$ectively becoming the

new Middle East by the ne#t decade,2 Ed Morse, managing director and the head o$ global commodities research at Aitigroup Global Mar!ets, wrote in a report earlierin the year. he 01 alone could add 6.6 million bpd to bring crude $rom nine million bpd at end-45 to over 9.6 million bpd in 4545- 44. >n total, Corth merica as a

whole could add over million bpd o$ liIuids $rom over 9 million bpd in 455 to almost 47 million bpd by 4545-44, notes Morse. Global investment dataunderlines that trend. Corth merica is e#pected to attract 46 per cent o$ the T.48 trillion being poured into the global energy sector this year, according to energy

consultants >1 >nternational. he brie$ lull in e#penditures in 455 and 455 caused by the Great ecession is behind us,2 said David obbs, >1 chie$ energystrategist. obust oil prices and the growth o$ Corth merican unconventional gas + which already accounts $or T4; billion in 454 spending + will create new highwater mar!s $or investment in capital e#penditure and operational e#penditure that surpass pre-recession highs.2 Meanwhile, Middle East energy companies will spend

T89 billion, or per cent o$ total global spend. Caturally, Middle East oil and gas companies have been distracted over the past two years due to

the rab 1pring. Fhile Gul$ states have ramped up production and made up $or the short$all in ?%EA production, t!$! a$! +! 8!stion a$5s

ov!$ t! "t$! o" ot!$ i##l! East p$o#c!$s. >ran=s oil and gas output has been $alling due to crippling sanctions, while

1yrian and èmeni production has been decimated. >raI and <ibya have ambitious plans, but their plans could be derailed by a range o$ investment issues,

in$rastructure challenges and political instability. ungry sian consumers are also hedging their supply ris!s by investing in Corth merica.

@urnt by their dependence on >ranian crude, Ahinese, 3apanese, 1outh Borean and >ndian state-owned companies are see!ing investments in Corth merica, $rica,

thereby acc!l!$atin+ non2OPEC p$o#ction nother !ey reason $or the rise o$ non-?%EA production is ?%EA=s own rising

domestic e#penditures and consumption. rab %etroleum >nvestments Aorporation (picorp) data shows 1audi rabia=s $iscal brea!even oil price stands at

TL, while ?%EA=s median $iscal brea!even price stands between T5-55. >n the past, ?%EA=s low-brea!even $iscal price meant that many reserves such as the Aanadian oil sands, Gul$ o$ Me#ico and @ra'ilian deepwater reserves, and rctic resources were economically unviable. @ut mar!et observersare certain most ?%EA producers will act to ensure oil prices remain high, ma!ing the more e#pensive non-?%EA production possible. hose whose $iscal brea!-even prices are higher than mar!et price should not be e#pected to be com$ortable with the status Iuo,2 wrote li issaoui, senior

consultant at picpro, in a research report. hey would try and persuade the opposite side to lower the aggregate production ceiling and individual output Iuotas either

pro-rata or otherwise. he e#pectation would be $or mar!et prices to increase to meet their higher brea!- even prices, even i$ that means losing some volume.2 /on3t

!p!ct t! 'a#is an# ot!$ OPEC cont$i!s to +iv! p t!i$ in"l!nc! on +lo%al oil a$5!ts !asily s other ?%EA

countries $altered during the rab 1pring revolution, 1audi rabia played the soothing role o$ the responsible and in$luential global supplier o$ crude to world mar!ets

and has earned global praise $or ensuring oil prices don=t spiral out o$ control and derail $ragile global economic recovery. 1audi, and other in$luential supplierssuch as Buwait, 0E and Patar, are securing long-term contracts with sian customers to ensure demand security. Earlier this year, 1outh

Borea=s Borea Cational Aorporation=s too! a L5 per cent sta!e in three oil production bloc!s in bu Dhabi at a cost o$ T4 billion, which gives it access to L8,555 bpd.

1audi rabia is trying to invest in solar energy $or domestic use to $ree up more crude $or e#port purposes. >t has also begun tapping itsshale gas reserves in the ed 1ea. ?il services giant @a!er ughes estimates 1audi rabia may hold the $i$th-largest deposits o$ shale gas, a$ter Ahina, the 01,

rgentina and Me#ico, with as much as 6L9 trillion cubic $eet o$ recoverable reserves. Arucially, 1audi ramco owns hal$ o$ Motiva Enterprises, which operates the

0nited 1tates largest re$inery. he move has reversed the decline o$ 1audi oil e#ports in the 01 and gives the Bingdom a $oothold in the burgeoning energy centre.Buwait, meanwhile, is loo!ing to ramp up its oil production once the political climate improves, and is reportedly in tal!s with a Aanadian company to ta!e a sta!e in anoil sands= proHect. @EC1E>C=1 E1EA Cot everybody believes the Corth merican production surge is a $ait accompli. arvard 0niversity @el$er Aentre

research notes that the biggest threat to Corth merica output is a collapse in oil prices, especially as production surpasses demand duringeconomic $ragility.

Inc$!as!# &' p$o#ction #o!sn3t t$!at!n OPEC

an .,1. ?%EA not concerned about 01 pic!up in oil output GE?GE 3C December 8, 454 5:6 M E1 heu$$ington %ost

>ECC S ?%EA does not see increased 0.1. oil output as a threat to its interests but is s!eptical about current $orecasts on the boom o$ merican shale oil production, a senior o$$icial o$ the 4-nation cartel said hursday. ?%EA 1ecretary General bdullah l-@adry also said that $igures supplied by >ran show it producing around 8.7 million barrels a day. hat is the same amount as ehran



pumped be$ore international embargos on its crude that too! e$$ect this year and is estimated to have cost it hundreds o$ thousands o$ barrels a day in sales. l-@adry spo!e to reporters a day a$ter ?%EA ministers agreed to !eep their daily crude production targetunchanged at 85 million barrels. hey also e#tended his term $or a year a$ter $ailing to agree on a successor $or the post because o$rivalries among 1audi rabia, >ran and >raI, which nominated candidates. ?%EA, which accounts $or about a third o$ the world"s oil production, is proHecting a slight $all in demand $or its crude ne#t year, and world inventories are well stoc!ed, in part because o$resurgent production by the 0nited 1tates, which is tapping into oil e#traction $rom shale. he %aris-based >nternational Energygency is predicting that merica will be a net e#porter o$ oil by the ne#t decade and could overta!e 1audi rabia + ?%EA"s powerhouse + as the world"s top crude producer by 4545. nalysts have suggested a looming dent in ?%EA in$luence as a result. @utl-@adry told reporters his organi'ation Wis not really concernedW about any increase in world supply due to 0.1. shale e#traction. eIuestioned industry estimates that 0.1. shale e#traction could amount to an e#tra 8 million barrels o$ oil a day within 45 years as wellas $orecasts o$ 0.1. energy independence. t the same time, he said any e#tra supply was welcome. W>t"s $ine with us, it"s another

source o$ energy and the world really needs this oil, > #ont s!! it as a t$!at to OPEC he said.



t – p$o#ction i+

0oo no4 solv!s #!p!n#!nc!

9illias .,1<. C merica 1hale ?il @oom o %ut %ressure ?n ?%EA. %ublished 3anuary 6, 458. Dow 3ones Cewswires.

http://www.$o#business.com/news/458/5/6/n-america-shale-oil-boom-to-put-pressure-on-opec/Ki#''4>!0p$o'@oom now solves dependence@%"s $orecasts illustrate the e#tent to which the Corth merican boom, $irst in shale gas production and now in shale oil, has redrawn theglobal energy map. owever, the company doesn"t e#pect the shale revolution to spread by 4585 on any great scale to sia or Europe, where conditions $or

investment in unconventional oil and gas $all short o$ those in Corth merica, @% said. >n the 0.1. alone, shale oil production is e#pected to growaround 9 million barrels a day by 4585, said @%"s chie$ economist Ahristo$ uehl. his is li!ely to be o$$set by reductions in supply $rom the? rgani'ation o$ the % etroleum E #porting A ountries, which has been pumping at historical highs in recent years to compensate $oroutput losses in <ibya due to the civil war there and more recently to compensate $or >ranian sanctions, he added. Whis will generatespare capacity o$ around 6 million barrels a day , and there"s a $aultline i$ there is higher shale production* then the conseIuenceswould be even stronger,W he said. ?%EA spare oil production capacity last e#ceeded 6 million barrels a day in ebruary 4554, when the price o$ 0.1. crude

benchmar! Fest e#as >ntermediate averaged Hust under T4 a barrel, according to data $rom the >nternational Energy gency. @ut the shale revolution will remain

largely a Corth merican phenomenon, Mr. uehl said. WCo other country outside the 0.1. and Aanada has yet succeeded in combining these$actors to support production growth. Fhile we e#pect other regions will adapt over time to develop their resources, by 4585 we e#pect Corth merica still to

dominate production o$ these resources,W said Mr. uehl. he growth in shale oil and gas production is e#pected to remain concentrated in Corth

merica over the ne#t two decades than!s to $avorable investment conditions, technological advances, a competitive services industry and a nimble $inancial

sector able to $und the large numbers o$ drilling rigs reIuired, said Mr. uehl. Growing production $rom unconventional sources o$ oil, including tightoil, oil sands and bio$uels, is e#pected to provide all o$ the net growth in global oil supply to 4545, and over 75_ o$ growth to 4585,

the @% report said. >ncreasing production $rom new tight oil resources will result in the 0.1. overta!ing 1audi rabia to become theworld"s largest producer o$ liIuids in 458. @y 4585, the 0.1. will be _ sel$-su$$icient in net energy, compared to 75_ in 4559. his comes

as maHor emerging economies such as Ahina and >ndia will become increasingly reliant on energy imports.

http://www.foxbusiness.com/news/2013/01/16/n-america-shale-oil-boom-to-put-pressure-on-opec/#ixzz2IkUp9foz

http://www.foxbusiness.com/news/2013/01/16/n-america-shale-oil-boom-to-put-pressure-on-opec/#ixzz2IkUp9foz



t – op!c still top #o+

&' oil $!st$ictions #on3t ipact !n!$+y in#!p!n#!nc!

!n!n%$+ .,1. aron graduate student in international relations at he Ma#well 1chool o$ 1yracuse 0niversity. W<et=s Get eal:Energy >ndependence is an 0nrealistic and Misleading MythW http://www.economonitor.com/policieso$scale/454/5/56/lets-get-real-energy-independence-is-a-unrealistic-and-misleading-myth/@y 4585, the world is e#pected to consume over 55 million barrels o$ oil per day, and it is $ar $rom conclusive that the impact o$ the

additional 5_ o$ supply achieved by producing Corth merica=s near-$ull capacity would have any meaning$ul e$$ect on oil pricesgiven the continued rise in demand up to and beyond 4589 e#pected by every proHection, especially when 01 proven oil reserves areonly the twel$th largest in the world.7* Getting every little bit o$ additional supply $rom domestic reserves will reIuire increasinglyelaborate operations, many o$ which may be prohibitively e#pensive i$ proper environmental sa$eguards are $actored in and i$ world prices sag, as they have repeatedly in the past 9 years . >n a global mar!et, it is hard to see how such proHects could compete withvarious $oreign sources where production costs are much lower. Most o$ the oil e#tracted by ?%EA countries costs less than T9 per barrel to produce;* with total upstream costs o$ Middle Eastern crude at T6.8 per barrel.* Aonversely, the Department o$Energy reports 01 average upstream costs o$ T7L.45 per barrel between 4556 and 455;, which is a good re$erence point $or current production costs given recent dynamics in global oil production costs.45* Ev!n i" all +ov!$n!nt $!+lations on oil p$o#ction

an# $!"inin+ 4!$! $!ov!#6 t! cost o" #o!stic p$o#ction 4ol# %! o$! !p!nsiv! tan OPEC p$o#ction %y ltipl!s

Yo$ ato$s #on3t ass! a +lo%al a$5!t – &' p$o#ction can3t solv!

!n!n%$+ .,1. aron graduate student in international relations at he Ma#well 1chool o$ 1yracuse 0niversity. W<et=s Get eal:

Energy >ndependence is an 0nrealistic and Misleading MythW http://www.economonitor.com/policieso$scale/454/5/56/lets-get-real-energy-independence-is-a-unrealistic-and-misleading-myth/

?il is a global mar!et and there$ore a globally priced commodity, and so long as merica consumes oil and abstains $rom protectionist policies, sel$-su$$iciency o$ oil would still mean buying and selling oil at the world price. @ecause oil is available $rom do'ens o$countries and hundreds o$ companies, and because it is relatively easily shippable, there is only a single global mar!et $or oil no matterwhere the consumer is located. ?il prices are set in open commodity mar!ets, and oil is traded globally, which means that prices area$$ected by events around the world and decisions made by countries and companies unassociated with the 0nited 1tates. he way theoil production supply chain $unctions means it would be impossible to separate domestic and $oreign gasoline. Filliam Cordhaus o$àle 0niversity illustrates the globally integrated oil mar!et nicely as a bathtub2 that: \contains the world inventory o$ oil that has been e#tracted and is available $or purchase. here are spigots $rom 1audi rabia, ussia, the 0nited 1tates, and other producers thatintroduce oil into the inventoryU and there are drains $rom which the 0nited 1tates, 3apan, Denmar!, and other consumers draw oil$rom the inventory. Cevertheless, the price and Iuantity dynamics are determined by the sum o$ these demands and supplies and the

level o$ total inventory, and are independent o$ whether the $aucets and drains are labeled 0.1.,2 ussia,2 or Denmar!.28* use$ue#ample o$ how oil consumers are beholden to the global oil mar!et is Europe=s e#perience in the a$termath o$ urricane Batrina .$ter Batrina, gas prices in Europe soared as a result o$ the damage to 01 re$ineries even though those $acilities sent very little gas toEurope. Even i$ the 01 does not import one barrel o$ oil $rom the Middle East or any other region, the price 01 consumers pay at the pump would still be a $unction o$ worldwide supply and demand, Hust as it was $or Europeans a$ter Batrina.L* he e#tent o$ ourvulnerability is not a $unction o$ how much oil we produce domestically. @ritain produces more oil than it needs, but its sel$-su$$iciency does nothing to alter its gasoline prices or its vulnerability to global price volatility.9* <i!ewise, the 01, so long as it usessigni$icant amounts o$ oil, will be susceptible to the global oil mar!et no matter how much o$ our consumption comes $romdomestically produced oil.

T! t!sis to tis a#vanta+! is 4$on+ – < 4a$$ants

OI' !t al 31. + dHunct %ro$essor J GeorgetownU $ellow and the policy director $or @roo!ings Alimate and Energy Economics %roHect (Morris, dele A.

%ietro 1. Civola. Aharles <. 1chult'e. A<EC ECEG`: E>1>>CG E A<<ECGE1 ? >CD01>< %?<>A`2. 3une L, 454.http://www.broo!ings.edu//media/research/$iles/papers/454/6/5L_45clean_45energy_45morris_45nivola_45schult'e/5L]clean]energy]morris]nivola]schult'e)

he only $uel the 0.1 imports in vast Iuantities is oil, so energy security as it relates to imports is really about oil. he degree to which oil dependence Husti$ies

government investments in clean energy technology is debatable. irst, nearly 5 percent o$ 0.1. oil demand is met by domestic wells and those o$suppliers outside the unstable Middle East, chie$ly Aanada and Me#ico which sell merica more oil than do either 1audi rabia or ugo Ahave'=s ene'uela. 1econd, the net bene$its o$ importing less oil as a share o$ total consumption and using less oil in total are unclear. 45 he oil mar!et

is global. Even i$ mericans purchased non! $rom a%$oa# , they would remain vulnerable to any p!$t$%ation in the

international mar!et because they would still have to pay the world=s price. >n addition, the 5!y in!""ici!nci!s $rom oil dependence

derive $rom ac$o!conoic #is$ptions an# a$5!t po4!$ by oil e#porters. %olicies that drive down oil consumption in

periods without disruptions or signi$icant monopoly pricing could burden consumers while not directly correcting mar!et $ailures.

http://www.economonitor.com/policiesofscale/2012/09/06/lets-get-real-energy-independence-is-a-unrealistic-and-misleading-myth/












OPEC not 5!y to ipo$ts

ILLE 31. - Energy Aonsultant and %ro$essional EngineerU 89 years e#perience in petroleum Z clean energy businessesU M@ $rom 1aint Mary"s Aollege/0.A.

@er!ley. (Miller, 3ohn. 0.1. Energy 1ecurity and the Ce#t Energy Arisis2. 3uly 6, 454. http://theenergycollective.com/node/876)

0.1. Arude and %etroleum ?il >mports + he 0.1. imports are supplied by ?%EA and non-?%EA countries. he security or ris! o$ oil imports $romdi$$erent countries varies due to logistics reliability (pipeline vs. marine, shipment distance, etc.), and the e#port country=s government stabilityand relationship with the 0.1. Generally, the longer the marine shipment and the more unstable or hostile an e#port government istowards the 0.1., the lower the reliability or higher the security ris! o$ the imported supply . oday the 0.1. imports crude and petroleum oil $rom

over 5 countries. he largest import volumes come $rom ?%EA and seven non-?%EA countries. e$er to the $ollowing table. he most secure and the largest

import volumes come $rom Corth merica. Aanada, the 0.1.=s largest and most important trade partner is also the largest supplier o$0.1. oil imports. Me#ico is the second largest supplier. Aanadian and Me#ican oil imports are essentially as $!lia%l! an# s!c$!

as av!$a+! &' #o!stic p$o#ction. Due to >ran=s threats to shutdown the 1trait o$ ormu', the ?%EA %ersian Gul$ imports have the highest ris!

o$ disruption and lowest security level.

9ill ta5! #!ca#!s to solv! an# ltipl! alt cas!s to t! a"" (import oil $rom other countries, need natural gas, reduce consumption)

ILLE 31. - Energy Aonsultant and %ro$essional EngineerU 89 years e#perience in petroleum Z clean energy businessesU M@ $rom 1aint Mary"s Aollege/0.A.

@er!ley. (Miller, 3ohn. 0.1. Energy 1ecurity and the Ce#t Energy Arisis2. 3uly 6, 454. http://theenergycollective.com/node/876)

>mmediate 1olutions to 0.1. Energy 1ecurity + 75_ o$ all 0.1. petroleum is consumed by the ransportation 1ector. he ultimate solution to 0.1. energy

security is reducing the need $or petroleum by ma!ing all $orms o$ t$anspo$tation substantially o$! !""ici!nt (AE),

replacing most private/commercial vehicles with hybrids and electric vehicles (E/E=s), replacing petroleum use with alternative$ueled vehicles (=s), increased renewable bio$uels and possibly encouraging esidents to signi$icantly reduce annual miles traveled

(M). @ased on the progress made in all these areas over the past 85 years, the 0.1. will realistically reIuire well over another 30 years to

accoplisin+ some o$ these envisioned improvements. During the interim the 0.1. must continue to use petroleum $uels to support the economy

and the current average esident=s standard o$ living. E$$ective and immediate 0.1. energy security improvement in the interim will reIuire eliminating the need

$or the highest ris! oil imports $rom all ?%EA and possibly some non-?%EA countries. his can be reasonably accomplished by ma#imi'ing oil imports$rom the most secure non-?%EA countries , $urther e#panding domestic oil production, replacing petroleum with commercially provenalternative $uels such as natural gas, and more signi$icantly reducing consumption.

Tis a#vanta+! is a yt

LE@I 31. - David M. ubenstein senior $ellow $or energy and the environment at the Aouncil on oreign elations and director o$ its %rogram on Energy 1ecurity

and Alimate Ahange (<evi, Michael. hin! gain: he merican Energy @oom2. ugust, 454.http://www.$oreignpolicy.com/articles/454/56/;/thin!]again]the]american]energy]boom)

WT! &nit!# 'tat!s Col# 0! En!$+y In#!p!n#!nt.W

No. his massive new 0.1. oil and gas output has brought tal! o$ merican energy independence bac! into vogue . Energy economist dam

1iemins!i, the new E> administrator, captured the shi$t in a ebruary interview: Wor L5 years, only politicians and the occasional author in %opular Mechanicsmaga'ine tal!ed about achieving energy independence,W he observed. WCow it doesn"t seem such an outlandish idea.W he numbers would appear to bac! up thissentiment. 3ust $ive years ago, the e#perts were bracing $or the 0nited 1tates to become dependent on imported liIue$ied natural gas, with uncertain geopoliticalconseIuences, such as dependence on vulnerable Middle Eastern suppliers and entanglement in a global gas mar!et in which Moscow plays a troubling role. hat nowseems li!e ancient history, as record gas production has spared the 0nited 1tates the need $or large-scale imports. ccording to one only somewhat hyperbolic headline,

WFe"ve rac!ed 1o Much Gas Fe"ve Got Co %lace to %ut >t.W he math is sha!ier when it comes to oil. he most bullish proHections $oresee around 9 million

barrels a day o$ 0.1. liIuid $uels production by 4545, while the consultancy Food MacBen'ie claims that 0.1. production could rise to about 5

million barrels a day by the close o$ this decade and 9 million be$ore the end o$ the ne#t. In any case , 0.1. consption is vastly

+$!at!$. s o$ 455, mericans burned through nearly million barrels o$ oil-based liIuid $uels each day to power their cars, truc!s, and $actories, and although

that $igure has edged down over the past couple o$ years, domestic supply is still a lon+ 4ay "$o atcin+ &' #!an# . hat said, 0.1.demand $or oil appears to have pea!ed. Fhile part o$ the recent $all can be chal!ed up to slow economic growth, sustained high oil prices and improving automobile

technology are also at wor!. Cew $uel- economy standards, i$ they stic!, could drive 0.1. consumption down much $urther. 0ltimately, though, it"s a assiv!

st$!tc to thin! the 0nited 1tates will eliminate the gap between oil supply and demand anytime soon.



A. !po$ts a#vanta+! – no !+ int!$nal lin5

ANNING =>.D>.,1= - Energy Economist wor!ing $or the sia %aci$ic oundation o$ Aanada in ancouver. he views e#pressedhere are those o$ the author, and do not necessarily represent the views o$ the sia %aci$ic oundation o$ Aanada (Manning, Ced, 01dreams o$ energy independence, 47 pril 45L, http://www.eastasia$orum.org/45L/5L/47/us-dreams-o$-energy-independence/)

lthough the 01 now sources the maHority o$ its oil imports $rom the Festern emisphere=, the perception amongst the merican public that the 01 still imports mosto$ its oil $rom the Middle East persists, along with the belie$ that the 01 main strategic priority in the region is securing its own oil imports. T! &nit!# 'tat!s

as a %$oa# an# copl! $!lationsip 4it t! i##l! East an# its !n!$+y p$io$iti!s #o not sol!ly #!t!$in! its

st$at!+y an# p$!s!nc! 4itin t! $!+ion , as the 01 also has other non energy priorities in the region that will remain important regardless o$ the

amount o$ oil that it itsel$ imports $rom the region. he conclusion that merica can $inally pac! up and leave= the Middle East because they

have entered a shale energy revolution= is too siplistic and any long-term maHor changes in 01 strategy towards the Middle East

must be considered against the increasing presence and in$luence o$ Ahina in the region, with merica not wanting to be signi$icantly

displaced in the region over the coming decades. 0ot t! on+oin+ sal! +as $!voltion3 an# t! o$! $!c!nt sal! oil

s$+!3 av! #$aatically can+!# t! &' #o!stic !n!$+y lan#scap!6 %t t! cont$y is still6 an# 4ill $!ain6 "a$

"$o !n!$+y in#!p!n#!nt3. ?ver the ne#t two decades, even as shale oil production pea!s, the 01 will still import over 49 per cent o$ its total oil

consumption. he shale oil surge and reduced oil consumption have reduced 01 oil import dependence signi$icantly over the last $ive years, $rom 96 per cent in 455; to84 per cent in 458. lthough the huge increase in Aanadian oil imports S $rom 6 per cent in 455L to 84 per cent in 458 S has signi$icantly altered the compositiono$ the 01 imports port$olio, 1audi rabia and the wider %ersian Gul$ today still contribute around 45 per cent. >ncreased shale oil output coupled with higher imports

$rom both Aanada and Me#ico will see the relative contribution o$ the %ersian Gul$ decline in the medium-term, but as the shale oil surge tapers o$$ in the second hal$ o$ the ne#t decade this contribution will rebound. Even during this medium-term downturn the %ersian Gul$ will remain one o$ merica=s top three oil sources. he cost

advantage that %ersian Gul$ suppliers enHoy means that there will always be a signi$icant mar!et $or their oil in the 01. egardless o$ the actual amount o$ oilthat the 01 imports $rom the Middle East, there are still broader economic goals that it will pursue in the region. he 01 understandsstable oil and gas e#ports $rom the Middle East to the world economy are critical. nd it demonstrates this understanding by itscontinued policing= o$ the 1traits o$ ormu' S the world=s most important oil cho!epoint=, with 45 per cent o$ all oil traded passingthrough it. Even though the 01 contributes the maHority o$ military assets that allow the $ree $low o$ ships through the 1traits, almost;9 per cent o$ this oil travels to sian mar!ets, while only about 5 per cent actually travels to the 01. s long as the 01 perceives threats to energy supply

routes in the Middle East it will contribute its available security assets to the region. ?n top o$ its economic goals in the region there are also signi$icantnon-energy priorities that the 01 will continue to pursue into the $uture. @loc!ing >ran $rom developing a nuclear weapon and thecontinued support o$ >srael are both e#amples o$ 01 priorities which can trump= its energy priorities, with past 01 actions in relationto these issues (01-led sanctions against >ran, the rab oil embargo) directly and signi$icantly reducing the supply o$ oil to the worldmar!et. dditionally, any $uture 01 strategy in the Middle East must consider Ahina. Ahina is the world=s largest energy consumer andcurrently imports the maHority o$ its oil $rom the Middle East. o secure its increasing energy needs Ahina will need to increase its presence and

in$luence in the region. s Ahina=s blue water= naval capabilities e#pand in the $uture, it will want to increase protection o$ its energy supply routes S especially thosein the Middle East. >t will also see! to strengthen its relationship with 1audi rabia. Ahina=s $uture long-term strategy $or the Middle East will increasingly threaten

merica=s role as the dominant e#terior power in the region, which is a strong incentive $or the 01 to maintain its position in the region. lthough $!#c!#

"t$! &' oil ipo$t #!p!n#!nc! on t! i##l! East 4ill not #i$!ctly $!slt in a 4ol!sal! si"t in st$at!+y to4a$#s

t! $!+ion, it will give the 01 slightly more $le#ibility in the medium-term when dealing with speci$ic crises or countries, generally improving Fashington=s

relative negotiating positions. medium-term decrease in merican oil imports $rom the Middle East will not result in the 01 redeployingone its aircra$t carriers $rom the %ersian Gul$ to the %aci$ic , or encourage a $uture 01 dministration to lecture 1audi rabia about therights o$ women in the 1tate ?$ he 0nion. merica has broad long-term strategic goals in the Middle East and will have to pursue them care$ully in the

$uture as Ahina strengthens its position in the region.



A. !po$ts a#vanta+! – no !+ ipact

'ta%ility 4ill s$viv! 4itot &' !+!ony

!tt4!is 1, (Ahris ettweis, %ro$essor o$ national security a$$airs J 0.1. Caval Far Aollege, Georgetown 0niversity %ress, Dangerous timesQ: the international

politics o$ great power peace2 Google @oo!s)

1imply stated, the hegemonic stability theory proposes that international peace is only possible when there is one country strong enough to ma!e and en$orce a set o$ rules. t the height o$ %a#

omana between 47 @A and ;5 D, $or e#ample, ome was able to bring unprecedented peace and security to the Mediterranean. he %a# @ritannica o$ the nineteenth century brought a leveo$ stability to the high seas. %erhaps the current era is peace$ul because the 0nited 1tates has established a de $acto %a# mericana where no power is strong enough to challenge its dominanceand because it has established a set o$ rules that a generally in the interests o$ all countries to $ollow. Fithout a benevolent hegemony, some strategists $ear, instability may brea! out around theglobe. 0nchec!ed con$licts could cause humanitarian disaster and, in today=s interconnected world economic turmoil that would ripple throughout global $inancial mar!ets. >$ the 0nited 1tateswere to abandon its commitments abroad, argued rt, the world would become a more dangerous place2 and, sooner or later, that would rebound to merica=s detriment.2 >$ the massive

spending that the 0nited 1tates engages in actually produces stability in the international political and economic systems, then perhaps internationalism is worthwhile. here are goodtheoretical and empirical reasons, however, the belie$ that 0.1. hegemony is not the primary cause o$ the current era o$ stability . irst o$

all, the hegemonic stability argument overstates the role that the 0 nited 1 tates plays in the system. Co country is strong enough to policethe world on its own. he only way there can be stability in the community o$ great powers is i$ sel$-policing occurs, i$s states havedecided that their interest are served by peace. >$ no paci$ic normative shi$t had occurred among the great powers that was $iltering down through the

system, then no amount o$ international constabulary wor! by the 0nited 1tates could maintain stability . <i!ewise, i$ it is true that such a shi$t has

occurred, then most o$ what the hegemon spends to bring stability would be wasted. he 9 percent o$ the world=s population that live in the 0nited 1tatessimple could not $orce peace upon an unwilling 9. t the ris! o$ beating the metaphor to death, the 0 nited 1 tates may be patrolling a neighborhood

that has already rid itsel$ o$ crime. 1tability and unipolarity may be simply coinci#!ntal . >n order $or 0.1. hegemony to be the reason $or global

stability, the rest o$ the world would have to e#pect reward $or good behavior and $ear punishment $or bad. 1ince the end o$ the Aold Far, the 0nited 1tates has not always proven to be

especially eager to engage in humanitarian interventions abroad. Even rather incontrovertible evidence o$ genocide has not been su$$icient to inspire action. egemonic stability canonly ta!e credit $or in$luence those decisions that would have ended in war without the presence, whether physical or psychological , o$

the 0nited 1tates. Ethiopia and Eritrea are hardly the only states that could go to war without the slightest threat o$ 0.1. intervention. 1incemost o$ the world today is $ree to $ight without 0.1. involvement, something else must be at wor!. 1tability e#ists in many placeswhere no hegemony is present. 1econd, the limited empirical evidence we have suggests that there is little connection between the relativelevel o$ 0.1. activism and international stability. During the 5s the 0 nited 1 tates cut bac! on its de$ense spending $airly substantially, @y

; the 0nited 1tates was spending T55 billion less on de$ense in real terms than it had in 5. o internationalists, de$ense haw!s, and other believers in hegemonic stability thisirresponsible Wpeace dividendW endangered both national and global security WCo serious analyst o$ merican military capabilities,W argued Bristol and Bagan, Wdoubts that the de$ense budget

has been cut much too $ar to meet mericas responsibilities to itsel$ and to world peace.WW >$ the paci$ic trends were due not to 0.1. hegemony but a strengtheningnorm against interstate war , however, one would not have e#pected an increase in global instability and violence. he verdict $rom the past two decades is $airly plain: he world grew more peace$ul while the 0 nited 1 tates cut its $orces . Co state seemed to believe thatits security was endangered by a less-capable %entagon, or at least none too! any action that would suggest such a belie$. Co militaries were

enhanced to address power vacuumsU no security dilemmas drove mistrust and arms races U no regional balancing occurred once the stabili'ing presence o$ the 0.1. military was diminished. he rest o$ the world acted as i$ the threat o$international war was not a pressing concern,

despite the reduction in 0.1. capabilities. he incidence and magnitude o$ global con$lict declined while the 0nited 1tates cut its military spending under %resident Alinton,

and it !ept declining as the @ush dministration ramped spending bac! up. Co comple# statistical analysis should be necessary to reach the conclusion thatthe two are unrelated. >t is also worth noting $or our purposes that the 0nited 1tates was no less sa$e.



A. !po$ts a#vanta+! – no oil 4a$s

No $is5 o" acc!ss loss an# no co!$cion

GLA'E .,11 (%ro$essor o$ %olitical 1cience and >nternational elations Elliot 1chool o$ >nternational $$airs he George Fashington 0niversity, e$raming Energy 1ecurity: ow

?il Dependence >n$luences 0.1. Cational 1ecurity,2 ugust 45, http://depts.washington.edu/polsadvc/@log_45<in!s/Glaser]-]Energy1ecurity-0G01-45.doc#, )?il dependence could reduce a state=s security i$ its access to oil is vulnerable to disruption and i$ oil is necessary $or operating the state=s military $orces. ulnerable energy supplies can leave astate open to coercionSrecogni'ing that it is more li!ely to lose a war, the state has a wea!er bargaining position and is more li!ely to ma!e concessions. Alosely related, i$ war occurs thestate is more li!ely to lose. Aon$lict that is in$luenced by this mechanism is not $undamentally over the oilU4 rather, when states already have incentives $or con$lict, the oil vulnerability

in$luences their assessment o$ military capabilities and in turn the path to war. ecogni'ing this type o$ danger during the Aold Far, 0.1. planning to protect its sealanes o$ communication with the %ersian Gul$ was motivated partly by the importance o$ insuring the steady $low o$ oil that was necessary to enable the 0nited 1tates

to $ight a long war against the 1oviet 0nion in Europe. During the 1econd Forld Far, 3apan=s vulnerability to a 0.1. oil embargo played an important role in destroying 3apan=s ability

to $ight.8 Tis typ! o" t$!at to t! &' ilita$y capa%iliti!s is not a s!$ios #an+!$ to#ay %!cas! t! &nited 'tates #o!s not "ac! a

a7o$ po4!$ capa%l! o" s!v!$!ly int!$$ptin+ its acc!ss to 5!y sppli!s o" oil >n contrast, Ahina does $ace this type o$ danger because its oil imports are

vulnerable to disruption by the 0.1. Cavy.

No n!!# "o$ p$ovocativ! actions – no $is5 o" 4a$

GLA'E .,11 (%ro$essor o$ %olitical 1cience and >nternational elations Elliot 1chool o$ >nternational $$airs he George Fashington 0niversity, e$raming Energy 1ecurity: ow

?il Dependence >n$luences 0.1. Cational 1ecurity,2 ugust 45, http://depts.washington.edu/polsadvc/@log_45<in!s/Glaser]-]Energy1ecurity-0G01-45.doc#, )he vulnerability o$ a state=s access to oil supplies could reduce its security via a second, more complicated mechanismSi$ the state=s e$$orts to protect its access to oil threaten another state=ssecurity, then this reduced security could in turn reduce the state=s own security. he danger would $ollow standard security-dilemma logic, but with the de$ense o$ oil supply lines replacing thestandard $ocus on protection o$ territory. >n the most e#treme case, a state could try to solve its import vulnerability through territorial e#pansion. >n less e#treme cases, the state could deal withits vulnerability by building up military $orces reIuired to protect its access to oil, which has the unintended conseIuence o$ decreasing its adversary=s military capability and signaling that thestate=s motives are malign, which decreases the adversary=s security, which leads the adversary to build up its own military $orces.L 3ust as protecting a distant ally can reIuire a state to adopt ano$$ensive capability, protecting access to oil can reIuire o$$ensive power-proHection capabilities. hus, a state=s need to protect its access to oil could create a security dilemma that would nototherwise e#ist. Aon$lict $ueled by this security dilemma need not be over oil or access to oilU by damaging political relations the security dilemma could prevent the states $rom resolving

political disputes and avoiding the escalation o$ crises. ere again, the 0nited 1tates does not currently $ace this type o$ danger U this is largely because the military

status Iuo currently $avors the 0nited 1tates, which relieves it $rom having to ta!e provocative actions. >n contrast, Ahina=s e$$orts to protect its access to oil

could be more provocative and generate military competition with the 0nited 1tates.

or a $ull analysis o$ the when and how oil dependence leaves states vulnerable to coercion, see osemary . Belanic, @lac! Goldand @lac!mail: he %olitics o$ >nternational ?il Aoercion2 (%hD dissertation, 0niversity o$ Ahicago, 45).

4 or important e#ceptions, see Belanic, @lac! Gold and @lac!mail.2

8 3erome @. Aohen, Japan’s Economy in War and Reconstruction (Minneapolis: 0niversity o$ Minnesota, L).

L ?n the security dilemma see obert 3ervis, Aooperation 0nder the 1ecurity Dilemma,2 World Politics, ol. 85, Co. 4 (3anuary7;), pp. 67-4LU and Aharles <. Glaser, he 1ecurity Dilemma evisited,2 World Politics, ol. 95, Co. (?ctober 7), pp. 7-45.



A. !po$ts a#vanta+! – no oil soc5s

!# !s!$v! solv!s



hird, the vulnerability o$ the 0.1. economy to oil price $luctuations depends critically on policies outside the energy sector. wo !inds o$ signi$icant macroeconomiccosts arise $rom oil price spi!es: () the simple loss o$ national income $rom a large Hump in oil prices sustained $or any length o$ timeU and (4) the e$$ects o$ large oil

price shoc!s on in$lation and output arising $rom imper$ections2 and rigidities o$ the macroeconomic system. Ep!$i!nc! "$o t! past "o$

#!ca#!s shows that !asily the ost !""!ctiv! policy to reduce potential macroeconomic social costs $rom periodic oil supply

shoc!s is the ederal eserve=s determination to $!spon# p$optly to any current or prospective in$lationary threat. his means

that !v!n $airly la$+! oil price increases are now much less li!ely to set o$$ a wage price spirals.

T! t!sis to tis a#vanta+! is 4$on+ – < 4a$$ants



he only $uel the 0.1 imports in vast Iuantities is oil, so energy security as it relates to imports is really about oil. he degree to which oil dependence Husti$ies

government investments in clean energy technology is debatable. irst, nearly 5 percent o$ 0.1. oil demand is met by domestic wells and those o$suppliers outside the unstable Middle East, chie$ly Aanada and Me#ico which sell merica more oil than do either 1audi rabia or ugo Ahave'=s ene'uela. 1econd, the net bene$its o$ importing less oil as a share o$ total consumption and using less oil in total are unclear. 45 he oil mar!et

is global. Even i$ mericans purchased non! $rom a%$oa# , they would remain vulnerable to any p!$t$%ation in the

international mar!et because they would still have to pay the world=s price. >n addition, the 5!y in!""ici!nci!s $rom oil dependence

derive $rom ac$o!conoic #is$ptions an# a$5!t po4!$ by oil e#porters. %olicies that drive down oil consumption in

periods without disruptions or signi$icant monopoly pricing could burden consumers while not directly correcting mar!et $ailures.



A. otspots a#vanta+! – no int!$nal lin5

No A$ctic in"$ast$ct$! "o$ t! plan2 ltipl! $!asons

/o/ .,11 01 Department o$ De$ense, eport to Aongress on rctic ?perations and the Corthwest %assage2 May 45U http://www.de$ense.gov/pubs/pd$s/ab]]rctic]eport]%ublic.pd$ *

Aonstruction in the rctic is seasonal and s!illed labor is usually in short supplyU there$ore, costs $or both construction andmaintenance are high . he need to provide room and board at remote locations, decreased e$$iciency o$ wor!ers and machinery in e#tremeenvironmental conditions, and the di$$iculties, costs, and ris!s in shipping materials and eIuipment add to the challenge. @ecause o$ the

short construction season, outside wor! must be accomplished Iuic!ly, dictating a high degree o$ e#pensive pre$abricated construction. During ice-

$ree periods, the most economical means o$ transportation is by barge. During the winter, transportation over $ro'en rivers and la!es may be more economical than air

transportation. @ut delays in shipping eIuipment due to weather can result in prolonged construction times and e#pensive emergency air$reight costs. Aonstruction in the rctic costs , as a rule o$ thumb, three to $ive times more than comparable in$rastructure in lowerlatitudes . nother challenge to bear in mind is the ris! to e#isting in$rastructure posed by thawing perma$rost. s the perma$rost thaws, it loses strength

and volume, leading to $ailure o$ $oundations and piling. he warming climate will also accelerate the erosion o$ shorelines and riverban!s, threatening in$rastructurelocated on eroding shorelines.

&nilat!$al !""o$ts can3t solv! A$ctic l!a#!$sip

'it .,11 Aolonel eginald . 1mith, 01, is %ro$essor o$ Cational 1ecurity $$airs and 1enior Developmental Education

1tudent (1trategy and %olicy) at the Caval Far Aollege, he rctic: Cew %artnership %aradigm or the Ce#t WAold FarWQ2http://www.ndu.edu/press/lib/images/H$I-64/3P64]7-4L]1mith.pd$ *

T! &nit!# 'tat!s st ov! otsi#! t! const$ct o" nilat!$al action in o$#!$ to p$!s!$v! its sov!$!i+n $i+ts in t! A$ctic,

capitali'e on the opportunities available, and sa$eguard vital national interests in the region. In to#ays %#+!t2const$ain!# !nvi$on!nt an# as a

Nation at 4a$ 4it i+!$ $!so$c! p$io$iti!s in I$a8 an# A"+anistan tan in t! A$ctic6 it is n$!alistic to %!li!v! tat any

si+ni"icant allocation 4ill %! p$o+$a!# "o$ a##$!ssin+ tis iss!.8 'inc! t! & nit!# ' tat!s is too "a$ %!in# in actions

n!c!ssa$y to p$!s!$v! its c$itical int!$!sts as copa$!# to t! ot!$ A$ctic cont$i!s6 t! Nation st ta5! t! l!a# to cltivat!

a n!4 ltilat!$al pa$tn!$sip pa$a#i+ in t! $!+ion.

http://www.defense.gov/pubs/pdfs/Tab_A_Arctic_Report_Public.pdf

http://www.ndu.edu/press/lib/images/jfq-62/JFQ62_117-124_Smith.pdf

http://www.defense.gov/pubs/pdfs/Tab_A_Arctic_Report_Public.pdf




t – #$illin+ "ails

A$ctic #$illin+ is too np$!#icta%l! "o$ copani!s2 lon+ isto$y o" !pi$ics p$ov!s t! plan "ails

0!in!c5! .,1< rances, %resident, Catural esources De$ense Aouncil, %attern o$ ailure,2http://energy.nationalHournal.com/458/5/are-arctic-oildrilling-challen.phpQcommentsê#pandallKcomments*

1hell=s repeated $ailures in the rctic ?cean prove that neither the company nor o$$shore drilling belong in these wild, remote, and

rugged waters. he company=s drilling rig, $or instance, ran aground when $our tug engines $ailed in a storm. èt the Corth is region o$mishaps + mechanical, human, and natural. >t is home to churning seas, punishing winds, $rigid temperatures, unpredictable ice, andmonths o$ prolonged dar!ness . 1hell=s inability to prepare $or and cope with these punishing conditions ma!es it vividly clear: wehave no business letting the oil industry drill in the rctic ?cean. X he grounding o$ 1hell=s drilling rig is not an isolated incident. >t is part o$ a larger pattern in which 1hell has proven no match $or the elements. X <ast 3uly, another o$ the company=s drill rigs nearly ran aground in the

leutian >slands. hrough ugust, 1hell couldn=t move its spill response bargeSa linchpin in its emergency planSout o$ @ellingham, F because the Aoast Guard

wouldn=t certi$y it as seaworthy until the company dealt with more than L55 issues, including wiring and other sa$ety shortcomings. hen, when 1hell started preliminary drilling without the spill response barge in place, within 4L hours its rig had to turn tail and $lee $rom a 85-mile long iceberg that bore

down on the drill site. nd in 1eptember, 1hell=s containment domeSused to capture oil in the event o$ spillSwas crushed li!e a beer can2 during pre-deployment

testing. X 1hell has poured billions o$ dollars into o$$shore rctic drilling, but no matter how much it spends, it cannot ma!e the e$$ort anything

but a terri$ying gamble. nd i$ 1hell, the most pro$itable company on Earth, can3t %y its 4ay to sa"!ty in las!a 6 no%o#y can. X hat is

why the administration should halt all drilling in the rctic ?cean. Ceither the oil industry nor our government is prepared to respond toa spill in a region where the closest Aoast Guard base is ,555 miles away $rom the leasing sites, no proven tech nology e#ists tocollect oil, and winter ice ma!es spill response impossible. Cor do we even !now all the damage a spill and clean-up e$$orts would do to rctic

ecosystems. ery little research has been done yet in these waters and we have only a narrow body o$ research $ocusing on Hust a $ew species. 0ntil these gaps inemergency response and research are $illed, $ederal agencies cannot responsibly even weigh whether drilling in the rctic ?cean could ever be sa$e. X

/$illin+ is ipossi%l!2 no p$ov!n t!c6 $!so$c!s6 o$ sa"!ty !as$!s

Cla$5 .,1< 3amie appaport Alar!, %resident and AE? o$ De$enders o$ Fildli$e, Fhat 1hell as %roven,2http://energy.nationalHournal.com/458/5/are-arctic-oildrilling-challen.phpQcommentsê#pandallKcomments*

he series o$ $ailures in both Hudgment and technology that resulted in 1hell=s Bullu! drill rig crashing into las!a=s 1it!alida! >sland on Cew èar

Eve has put wildli$e and human li$e at increasing and unacceptable ris!. larmingly only the latest in a series o$ problems with 1hell=s drilling season, it should also

put an end to drilling in the rctic . X he list o$ problems that 1hell=s drilling program has had is well documented and very disturbing S$rom losing control o$ the Coble Discovery drill ship, to the oil containment dome that was crushed li!e a can2 by arctic ice, tovioloations o$ air sa$ety permits, and now the grounding o$ the Bullu!. @ut, in this most recent incident alone, there are three things that stand out as indicative

o$ 1hell=s problems and as reasons why the $ate o$ the rctic drilling program should be sealed once and $or all. X irst, the Bullu! was hauled out to sea in dangerously

unpredictable weather putting human lives and wildli$e at ris! so 1hell could avoid paying ta# on the vessel to the state o$ las!a. 1hell=s willingness to put pro$it abovehuman sa$ety and the environment is consistent with the sa$ety commission=s warnings that the poor sa$ety culture at @% was really an industry+wide problem, and not

the outlier that 1hell and others tried to suggest. X 1econd, it too! 755 people and a $leet o$ Aoast Guard vessels to respond to the grounding o$ theBullu! . @ut i$ this incident, let alone a maHor oil spill or other catastrophe, had happened in the deep rctic there would not be anywhere near 755 people to respond. >t is clear that 1hell was simply not eIuipped to respond when the Bullu! ran aground. ow can we e#pect them to be prepared i$ something

happened in an even more remote areaQ X hird, the grounding o$ the Bullu! demonstrated that despite all the promises to the contrary, the industry Hustdoes not have the technology to $unction sa$ely in the rctic environment. he iviI tug is a multimillion dollar ice crusher designed speci$ically to handle

high seas and bad weather. >t=s been presented as a symbol o$ why we should $eel sa$e about 1hell=s drilling in the rugged and remote rctic. @ut in its $irst maHorstorm, the iviI not only lost control o$ the Bullu!, it also lost power in all $our o$ its engines and was itsel$ at the whim o$ the rough seas.

ccording to reports, a$ter the iviI restored its connection to the Bullu! the Aoast Guard had it drop its line and cut the Bullu! loose again, in order to protect the liveso$ iviI crew because o$ the harsh weather conditions. X >$ the ?bama administration wants to be credible when it spea!s about pursuing sa$e o$$shore drilling, then the

grounding o$ the Bullu! must be the last straw. he lac! o$ a demonstrated culture o$ sa$ety, the obvious lac! o$ response resources, and thelac! o$ proven technology capable o$ avoiding or addressing a crisis should be a loud and clear signal that the administration needs toend drilling in the rctic.



t – l!a#!$sip "ails

ail$! to $ati"y LO'T is t! sin+l! +$!at!st "acto$ in &' A$ctic in"l!nc!

'it .,11 Aolonel eginald . 1mith, 01, is %ro$essor o$ Cational 1ecurity $$airs and 1enior Developmental Education1tudent (1trategy and %olicy) at the Caval Far Aollege, he rctic: Cew %artnership %aradigm or the Ce#t WAold FarWQ2http://www.ndu.edu/press/lib/images/H$I-64/3P64]7-4L]1mith.pd$ *

T! si+ni"icanc! o" t! #!cla$ation is pa$aont to coop!$ation in tat &NCLO' p$ovi#!s t! int!$national $allyin+ point "o$

t! A$ctic stat!s. 7; 1imilarly important, %y vi$t! o" t! nanios an# st$on+ a""i$ation o" &NCLO'6 t! #!cla$ation !""!ctiv!ly#!l!+itii!# t! notion to a#inist!$ t! A$ctic alon+ t! lin!s o" an Anta$ctic2li5! t$!aty p$!s!$vin+ t! notions o"

sov!$!i+nty an# $!so$c! !ploitation in t! $!+ion. 7 Fith 0.1. participation and declaration o$ support $or 0CA<?1 in these venues, "ail$! to

$ati"y t! t$!aty s++!sts tat &' c$!#i%ility an# l!+itiacy6 an# !nc! t! a%ility to %il# co!siv! ltilat!$al pa$tn!$sips6

a$! app$!cia%ly #!+$a#!#. his conclusion is illustrated in Malaysia=s and >ndonesia=s re$usal to Hoin the %roli$eration 1ecurity >nitiative using the 0.1. re$usal

to accede to 0CA<?1 as their main argument. ;5 Acc!ssion to t! t$!aty app!a$s to %! a 5!y "i$st st!p to p$!s!$vin+ &' vital int!$!sts in

t! A$ctic an# %il#in+ n!c!ssa$y c$!#i%ility "o$ $!+ional an# +lo%al pa$tn!$sips in t! political sp!ct$ E8ally ipo$tant

to political pa$tn!$sips in t! $!+ion a$! tos! availa%l! t$o+ ilita$y colla%o$ation o" t! A$ctic nations.





A. cina a##on ipact

!con +$o4t is too 4!a5 222 cina3s not a t$!at

'cisso$s 1. + esearch ellow in Economics at the sian 1tudies Aenter o$ the eritage oundation and dHunct %ro$essor o$Economics at George Fashington (Dere!, he Fobbly Dragon2, oreign $$airs, 3anuary/ebruary)

rvind 1ubramanian claims that Ahina will unIuestionably replace the 0nited 1tates as the dominant global power in the ne#t two decades (Whe >nevitable 1uperpower,W 1eptember/?ctober45). e is right that i$ the 0.1. economy continues on its current traHectory, the 0nited 1tates will not be able to maintain its position o$ global leadership. @ut he is $ar too bullish on Ahina.

1ubramanian overloo!s Ahinese policies that will complicate the country"s economic rise and ignores the possibility that Ahinese growth will simply stop. nd he

uses a de$inition o$ WdominanceW that bears little resemblance to the 0.1.-style preeminence he sees Ahina assuming. Aonsider how 1ubramanian measures Ahina"s growing power. e cites the

ability o$ @eiHing to convince $rican countries to recogni'e it instead o$ aipei, but out-muscling aiwan diplomatically is hardly a sign o$ global leadership. e

sees the ease with which Ahina undervalues the yuan by pegging it to the dollar as proo$ o$ the country"s strength, but hiding behind a $oreign currency is not a sign o$economic might. e $orecasts that Ahina in 4585 will have an economy that is one-third larger than the 0nited 1tates", yet he admits that it will remain only hal$ as wealthy. hese are

notable trends, to be sure, but not ones that indicate Ahina will attain anything close to the position the 0nited 1tates has held over the past 65 years. he biggest $law in 1ubramanian"s inde# o$dominance is the importance he assigns to Ahina"s status as a net creditor. @ased on this alone, he is prepared to say that Ahina"s economic strength is already comparable to that o$ the 0nited

1tates. @ut Ahina"s creditor status does not ma!e up $or the $act that its economy is presently l!ss tan al" the si'e o$ the 0nited 1tates" andits people are barely one-tenth as wealthy as mericans. Areditor status is also a misleading metric by which to Hudge Ahina because itis usually used to describe $inancially open economies, and Ahina is largely closed . Aountries with open economies can invest their money in many places.

@eiHing , because it cannot spend its $oreign reserves at home, is $orced to !eep buying 0.1. reasury bonds. Ahina"s creditor statusarises largely $rom its wea!nesses, not its strengths . he country"s T8.4 trillion worth o$ $oreign currency holdings represents an imbalance

between investment and consumption. >nstead o$ loaning money to rich countries, Ahina should be importing capital in order to speed its domesticdevelopment and meet its si'able needs, starting with properly capitali'ed pension and $inancial systems. Ahina"s $inancial boo!s are strictly divided, with huge assets in $oreign currency(primarily dollars) on one side and huge liabilities in local currency on the other. <ocal governments have incurred high debts by spending heavily on programs such as railroad e#pansion and by borrowing to $und the 455 stimulus (which came mostly $rom local, not national, government co$$ers). @eiHing should be paying down this debt and addressing other domestic short$allswith its mountain o$ $oreign currency, but it cannot do so under its present balance-o$-payments rules, which are designed to !eep $oreign currency in the hands o$ the national monetaryauthorities. Due to a closed capital account, domestic holders cannot send money overseas, and $oreign currency can be converted to yuan only through the state $inancial system. he Ahinesegovernment has not let money $low $reely because doing so would undermine its control o$ domestic interest rates, reducing its ability to in$luence economic cycles, and it would e#pose thedomestic ban!ing sector to devastating competition. >$ domestic entities were allowed to send money abroad, hundreds o$ billions o$ dollars would $lee the country $or $inancial institutions thatoperate commercially, unli!e Ahinese ban!s. 1uch a star! $ear o$ competition does not suggest a country ready to e#ert dominance anytime soon. <astly, 1ubramanian in$lates Ahina"s $inancial

in$luence over the 0nited 1tates, $orgetting that in$luence in a buyer-seller relationship is determined not by what-i$ scenarios but by who has better alternatives. he 0nited 1tates hasalready diversi$ied away $rom Ahinese debt by having the ederal eserve $lood the 0.1. $inancial system with liIuidity . his is hardly

ideal, but it has driven down the Ahinese share o$ 0.1. debt while !eeping interest rates historically low. >n contrast, @eiHing, despite its best e$$orts to diversi$y, still holds 75 percent o$ its$oreign currency reserves in dollars. he reason is simple: those reserves are so large and growing so Iuic!ly that there is no alternative. he 0nited 1tates needs Ahina to !eep 0.1. interestrates below historic normsU Ahina needs the 0nited 1tates to maintain its entire balance-o$-payments system. Even i$ 1ubramanian ac!nowledges that Ahina"s lopsided $inancial system isholding the country bac! now, he assumes that @eiHing will soon rewrite its balance-o$-payments rules and become an open economy. his assumption underestimates the Aommunist %arty"santipathy to change. >n $act, the principal advocate $or such re$orms has been Fashington, which hopes to encourage Ahina"s trans$ormation $rom an investment-led to a consumption-ledeconomy. 1uch a transition would undermine Ahina"s net creditor status--what 1ubramanian sees as its main claim to dominance. @ut implementing mar!et re$orms would also allow Ahina to

!eep growing at its blistering pace and surpass the 0nited 1tates in GD%. >$ Ahina insists on maintaining government control over development, on the other hand, its long-term growth prospects will be dim. 1alvatore @abones (Whe Middling Bingdom,W 1eptember/?ctober 45) warns against drawing conclusions about Ahina"s traHectory by simply proHecting its

growth rates $orward. >ndeed, it is entirely possible that Ahinese GD% growth will siply stop. Growth depends on land, labor, capital, and innovation. Ahina has

depleted its ecology, its labor surplus will soon begin to erode, and vast overspending has driven down the return on capital--alldiscouraging trends $rom the standpoint o$ growth . s $or innovation, 1ubramanian praises Ahina"s growing technology sector and its ability to absorb new advances. @ut

a true economic leader must create, not absorb, and @eiHing"s $avoritism toward large state $irms will hinder innovation. Moreover, the Iuality o$ theAhinese higher-education system is poor and not necessarily improving . no-growth scenario is a genuine danger --Hust as! the 3apanese. @yunderemphasi'ing or ignoring Ahina"s various wea!nesses, 1ubramanian underestimates the 0nited 1tates" ability to in$luence thecompetition with Ahina. hat said, his criticisms o$ the 0nited 1tates are validU indeed, his baseline prediction o$ 0.1. growth at 4.9 percent annually may be too optimistic. Arippled

by debt, the 0nited 1tates $aces a period o$ stagnation. >$ the overall economy remains sluggish, a lac! o$ import growth will cause trade to lag and $urther reduce the 0nited 1tates" global

in$luence. 1till, the Ahinese dragon will not $ly $orward inde$initely, as 1ubramanian suggestsU it may even crash. or the $oreseeable $uture, Ahinawill not attain the !ind o$ dominance the 0nited 1tates has long held. he world should not e#pect to crown a new global leader but prepare $or the absence o$ one.



A. otspots a#vanta+! – no a$ctic 4a$

No A$ctic con"lict

P!$$y an# An#!$s!n .,1. Aharles M. %erry and @obby ndersen. Dr. %erry is vice president and director o$ studies at the >nstitute$or oreign %olicy nalysis, >nc., and vice president o$ Cational 1ecurity %lanning ssociates, >nc. Dr. %erry also directs and/orcontributes to a number o$ >nstitute studies that $ocus on speci$ic aspects o$ 0.1. de$ense re$orm and military trans$ormation to meet post-/ security challenges. Dr. %erry holds an M.. in international a$$airs, an M.. in law and diplomacy, and a %h.D. ininternational politics $rom the letcher 1chool o$ <aw and Diplomacy, u$ts 0niversity. e has served as an o$$icer in the 0nited

1tates rmy eserve, and is a member o$ the >nternational >nstitute o$ 1trategic 1tudies (>>11). @obby nderson is a researchassociate at the >nstitute $or oreign %olicy nalysis. 1he $ocuses on Cordic a$$airs, C? and European security issues, 0.1. de$ensestrategy, regional security developments in the sia-%aci$ic, changing security dynamics in the rctic region, Cew 1trategicDynamics in the rctic egion: >mplications $or Cational 1ecurity and >nternational Aollaboration,2 ebruary,http://www.i$pa.org/pd$/1trategicDynamicsrcticegion.pd$ *

s the polar ice cap continues to melt, giving way to new and ever larger waterways in the rctic, the world is witnessing nothing less than the opening o$ a new ocean, something that has not occurred on Earth since the endo$ the >ce ge. s i$ its creation were not newsworthy enough, this new, $i$th ocean + which will essentially be an e#panded and more navigable version o$ the rctic ?cean that now e#ists + holds out the promise as well o$new seaways lin!ing Europe and sia via the igh Corth that could, in the view o$ numerous maritime e#perts, substantially reduce travel distances, t ransit times, and overall transportation costs by the 4585+89 time$rame.dding to the rctic=s importance even be$ore then is the prospective e#traction o$ si gni$icant strategic mineral supplies $rom the northernmost territories + especially those o$$shore in the rctic seabed + o$ Corway, ussia,Denmar!, Aanada, and the 0nited 1tates, commonly re$erred to as the rctic ive. Most prominent in this conte#t are the rctic=s oil and gas supplies that are currently proHected to account $or upwards o$ 44 percent o$ the

world=s undiscovered but technically recoverable hydrocarbon reserves, the development o$ which will become increasingly $easible and cost-e$$ective over the ne#t decade. >ndeed, $or this reason alone, the rcticive have Iuic!ened their e$$orts to e#tend their sovereignty over e#tended continental shelves (EA1=s)4 where some o$ the most promising deposits are

believed to be located, while other countries with a strong interest (but no territorial claim) in the rctic and its resource riches + including distant, but energy-hungry economic powerhouses li!e Ahina, 3apan, and 1outh

Borea + do their best to retain access to the rctic and to avoid being marginali'ed in policy debates over its $uture. hat said, time, cost, and technology constraints appear to bewor!ing against any competitive rush to the rctic 2 $ueled in part by the lure o$ an oil and gas bonan'a beyond compare along the lines suggested by a number o$ the more popular studies

on rctic dynamics published in recent years.8 ar more li!ely is a slow and methodical push into the igh Corth, not the least because there is so muchyet to learn (or, in some cases, to relearn) about operating sa$ely in the harsh rctic landscape, so little in$rastructure already (or soon to be) in place to support

such operations, and such limited capacity even among the rctic ive to underta!e and sustain rctic operations o$ any !ind, be they commercial or

military in nature. Moreover, while access to + i$ not control over + o$$shore rctic resources remains a strategic goal shared by Iuite a $ew in$luential countries located both within and beyond the rctic region, the probability o$ serious interstate rivalry or, in the worst case, open con$lic t in pursuit o$ this obHective seems Iuite low, at least in the near- to mid-term $uture. >n the

$irst place, the vast maHority o$ hydrocarbon deposits loc!ed in the rctic seabed are concentrated within the sovereign territory o$ one or another o$ therctic ive, where ownership is clear and undisputed. 1econdly, while there are disagreements over who owns various resourcerichareas where two or more e#clusive economic 'ones (EEYs)L and potential EA1=s appear to overlap, the 455 8 1ee, $or e#ample, lun nderson, $ter the >ce: <i$e, Death, and Geopolitics in the Cew rctic (Cew òr!:

1mithsonian @oo!s, 455)U David airhall, Aold ront : Aon$lict head in rctic Faters (<ondon and Cew ̀ or!: >. @. auris, 455)U oger oward, he rctic Gold ush: he Cew ace $or omorrow=s Catural esources

(<ondon and Cew òr!: Aontinuum, 455)U and ichard 1ale and Eugene %otapov, he 1cramble $or the rctic: ?wnership, E#ploitation and Aon$lict in t he ar Corth (<ondon: rances <incoln, 455). L hee#clusive economic 'one is the o$$shore 'one where coastal states have Hurisdiction over economic and resource management, including

sovereign rights $or the purpose o$ e#ploring, e#ploiting, conserving, and managing natural resources, whether living or nonliving, o $ the seabed, subsoil, and the superHacent waters. ypically, the EEY includes waters three totwo hundred nautical miles o$$shore. 1ee Cational ?ceanic and tmospheric dministration, 0.1. Department o$ Aommerce, Fhat is the EEYQ2 http:// a greement between Corway and ussia over how best to divide asector they both claimed in the @arents 1ea, together with a commitment by the rctic ive in 455; to abide by procedures set $orth in the 0C Aonvention on the <aw o$ t he 1ea (0CA<?1) $or determining the dimensions o$

each country=s EA1, suggests that a peace$ul settlement o$ any territorial dispute is more li!ely than not. hird, and $inally, the sheer e#pense and technical challenges involved in

e#tracting oil, gas, and other strategic resources $rom the rctic ocean $loor argue $or a Hoint, collaborative e$$ort among interested parties, rctic and non-rctic ali!e, as opposed to a go it alone,2 unilateralist approach. hese and similar considerations are li!ely to preserve the rctic as a igh Corth, low tension2 arena, to borrow a phrase populari'ed by Corway=s $oreign minister, $or some years to come. his is not to suggest, however, that the

rctic promises to remain trouble-$ree as its resources and sea lanes become increasingly accessible. or one thing, it remains unclear what would happen i$ an rtic ive country whose EA1 claim was reHected under0CA<?1 procedures re$used to abide by the ruling. Given the resource wealth that could be at sta!e, the resulting stando$$ could indeed lead to disputes and military posturing by rival claimants that could trigger, in turn, acrisis in the rctic that might even end up with shots being $ired. s $or seaborne trade through the rctic, smugglers and others involved in illicit commerce (possibly including terrorist elements) could eventually see! tota!e advantage + Hust as legitimate shippers would + o$ the shorter routes and transit times o$$ered by rctic sea lanes, bene$its that may seem especially attractive in those areas (li!ely to be e#tensive in the wide-open,sparsely populated e#panses o$ the igh Corth) where transit routes are poorly policed. >n addition, as its scale and importance grow, transarctic maritime tra$$ic may be viewed as an attractive target $or attac! by variousdisa$$ected groups, especially when ships pass through narrow cho!e points such as the @ering 1trait along the way. 1uch scenarios may seem $ar-$etched at the moment, but they cannot be di smissed in the event that a bustling trade in strategic commodities ta!es hold in the rctic. his would be especially true were the rctic to become the locus o$ a global trade in oil and gas, given all the vulnerabilities associated with o$$shore production $acilities and the supporting in$rastructure reIuired to bring supplies to mar!et, as well as the economic costs that could be imposed i$ important energy $lows were disrupted. t the same time, whatever the level oregional tension at any particular time, the rctic, situated atop three continents, has been and will continue to be, in geostrategic terms, an e#tremely valuable piece o$ real estate. 1ince the late 95s, $or e#ample, the 0nited1tates has viewed the rctic ?cean as an ideal location $or balli stic missile submarine patrols, and its importance $or the strategic mobility o$ merican naval $orces, including sur$ace as well as subsur$ace plat$orms, willalmost certainly grow as rctic waterways e#pand and become more navigable. >n a similar vein, modern airli$t and $ighter/bomber aircra$t based in las!a are closer to 3apan, 1outh Borea, and Ahina than they would be i$they operated $rom the west coast o$ the 0nited 1tates, and no more than eight hours= $light time $rom anywhere in the Corthern emisphere, all o$ which signi$icantly enhances merica=s crisis response and power proHectioncapabilities. Moreover, given that the rctic would be an optimal vector $or ballisti c missile attac!s against the 0nited 1tates originating $rom ussia, Ahina, Corth Borea, or even >ran, it is also an ideal location $or missilede$ense and early warning systems designed to handle current and emerging threats, perhaps to include someday + in view o$ the rctic=s largely maritime character + sea-based plat$orms, such as the 0.1. Cavy=s egis-eIuipped cruisers. he ways in which these and other strategic advantages associated with the rctic have in$luenced (and continue to in$luence) the national security perspectives o$ the 0nited 1tates, the other rctic ivecountries, and rising global powers (such as Ahina) are discussed in detail in later chapters o$ this report, but the !ey point to be made here is that such advantages are real and growing, and that this will remain the case,whether or not the rctic=s oil and gas deposits are e$$ectively tapped, or it s utility as a passageway $or seaborne trade is $ully e#ploited. inally, developments in the rctic may hold use$ul lessons $or other resource-rich

regions where territorial claims remain unsettled and $reedom o$ the seas could be challenged. More speci$ically, i$ the rctic states and other !ey sta!eholders are able to develop a $ramewor! $or regional collaboration thatalso respects and protects the national interests o$ the rctic ive, a similar approach may also be tried (and eventually prove success$ul) in, $or e#ample, disputed maritime 'ones l i!e the 1outh Ahina 1ea. he geopoliticaldynamics o$ the rctic and 1outh Ahina 1ea regions, o$ course, are not entirely similar, but there is enough overlap with regard to such issues as ensuring unimpeded maritime passage through international waters, agreeingon procedures $or de$ining the EA1=s o$ neighboring states, and developing cooperative plans $or drilling o$$shore oil and gas deposits, to warrant some degree o$ investigation into how well rctic models o$ cooperationmight apply, and the same may be true with regard to other areas o$ the globe o$ rising st rategic importance where multiple national, regional, and international int erests intersect. Fhile the Hury is sti ll out on the best system

o$ governance $or the rctic region as a whole, current trends suggest that a patchwor! o$ relevant private, public, intergovernmental, andnongovernmental organi'ations, rather than one overarching structure, is the best approach, centered perhaps around a core group o$ interested parties,

which, in the case o$ the rctic, would be the rctic Aouncil.9 s this approach matures, moreover, the rctic could serve as a valuable laboratory $or testing how best to establish and maintain a sa$e, stable, and

secure environment in regions where a diversity o$ interests, ambitions, and e#pectations could easil y clash, possibly in a viol ent manner, absent an e$$ective mechanism $or multinational and multilateral governance. Fiththese observations in mind, the analysis that $ollows aims to paint a comprehensive picture o$ the new strategic map Hust now emerging in the rctic, to e#amine what that portends with regard to the potential $or con$lict orcooperation within the region, and, on that basis, to determine as clearly as possible the li!ely policies and priorities o$ the rctic ive and other !ey regional sta!eholders, and the s!ills and capabilities to operate in the rcticthat they will reIuire as a result. Ahapter 4 sets the overall stage inso$ar as maHor region-wide dynamics are concerned, $ocusing in particular on the emergence o$ more navigable rctic sea lanes, the scale and accessibility o$the 9 ormally established in 6, the rctic Aouncil is a high-level intergovernmental $orum whose aim is to promote cooperation, coordination, and interaction among the rctic states (which includes the rctic ive plus>celand, 1weden, and inland), with involvement o$ rctic indigenous communities and other !ey sta!eholders that may be granted permanent observer status. raditionally, the council has $ocused on issues o$ sustainabledevelopment and environmental protection in the rctic, but, as the rctic becomes more accessible, the council has branched out to address search and rescue, oil spill response at sea, and other civil emergency reIuirements Cow that the council has set up a permanent secretariat in roms, Corway ($ollowing the 45 ministerial in Cuu!, Greenland), it is poised to play a more catalytic role in $uture debates over how best to manage the rcticregion. 1ee the rctic Aouncil website, http://www. arctic-council.org/inde#.php/en/about-us. rctic=s strategic resources, and ongoing challenges with regard to rctic governance. Ahapter 8 e#plores in depth t he strategicinterests o$ the rctic ive countries and the steps they are ta!ing to sa$eguard those interests, while chapter L analy'es the priorities and programs o$ the other national and institutional sta!eholders in the $uture o$ the rctic,

http://www.ifpa.org/pdf/StrategicDynamicsArcticRegion.pdf

http://www.ifpa.org/pdf/StrategicDynamicsArcticRegion.pdf



including the non-coastal rctic states (>celand, 1weden, and inland) and the maHor sian powers noted above (Ahina, 3apan, and 1outh Borea), as well as C? and the E0. inally, chapter 9 o$$ers some summaryconclusions and policy recommendations, with an emphasis on what the 0nited 1tates needs to do to assert its leadership as this new rctic2 described at the outset continues to ta!e shape.

'% #oinanc! &' 4ol# #!cisiv!ly 4in an A$ctic 4a$2 no !scalation

A! .,11 David, Military correspondent and contributor or editor to the Fashington imes, A-1%C, Fired, Forld %olitics eview, and more, ow the 0.1. Fins

the Aoming rctic Far2, Fired, //, http://www.wired.com/dangerroom/45/5/how-the-u-s-wins-the-coming-arctic-war/*

@ut these tales, my versions included, usually omit two vital points: that rctic con$lict is unli!ely to occur at allU and even i$ it does, the 0.1. willhave an overwhelming advantage over any rival. T! 9asin+ton Post was the latest to repeat the rctic-war theme, in a story published yesterday. he

rctic is believed to hold nearly a Iuarter o$ the world=s untapped natural resources and a new passage could shave as much as L5 percent o$ the time it ta!es $or

commercial shippers to travel $rom the tlantic to the %aci$ic,2 3acIuelyn yan wrote. @ut, she added, government and military o$$icials are concerned the 0nited1tates is not moving Iuic!ly enough to protect merican interests in this vulnerable and $ast-changing region.2 1peci$ically, the 0.1. does not have enough icebrea!ersor permanent bases on the las!an north slope. Aanada andussia, by contrast, are buying ice-hardened rctic ships and building new $acilities to en$orce their rctic

claims, yan pointed out. he thing is, it=s not icebrea!ers and patches o$ wind-blasted tarmac that would really matter in some $uture Corth%ole showdown. >n the rctic , as in any sea battle, merican nuclear attac! submarines S Iuiet, versatile and lethal S would ma!e all thedi$$erence. 0.1. subs have been snea!ing around under the rctic ice, and occasionally sur$acing, $or decades. oday , they even carry geologists and otherscientists in order to help map rctic mineral deposits. >n addition to being more heavily armed than most $oreign boats, 0.1.submarines generally have superior Iuieting and combat systems, better-trained crewmen, and much more rigorous maintenancestandards,2 @ob For! wrote in 455;, be$ore becoming Cavy undersecretary. s a result, the 0.1. submarine $orce has generally been con$ident that it could de$eat

any potential undersea opponent, even i$ signi$icantly outnumbered.2 @ut in the rctic, $acing only the Aanadians, ussians, Danes and Corwegians S none o$ whom have large or healthy sub $leets S the 0.1. Cavy=s 95 Los An+!l!s-, '!a4ol" - and @i$+inia -class subs would bemore numerous as well as more power$ul . nd besides, an rctic war is highly unli!ely, at best . Militari'ed con$lict over the rctic isunli!ely, and regional disputes are unli!ely to cause an overall deterioration in relations between or among polar nations ,2 theAarnegie Endowment $or >nternational %eace concluded in a 455 con$erence . 1ecurity issues should not be sensationali'ed in order

to attract attention towards the rctic .2 @ut it=s rare anyone writes stories about how we=ve got enough weapons S and don=t really need them, besides. $terall, it=s the sensational stories about shortages and looming disaster that sell newspapers.

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