February 3, 2012
February 3, 2012
In Iraq’s turbulent politics, whoever controls the oil production wields the power. And that might soon be ExxonMobil.
On Dec. 17, two days after the U.S. military cased its colors and formally ended its mission in Iraq, the brain trust of the Iraqi oil sector gathered for a symposium at Baghdad’s Alwiyah Club, a fortified concrete complex of meeting rooms and outdoor gardens. They were officially meeting to discuss “Challenges Facing the Development of the Extractive Industry.” The issues they grappled with held the prospect to transform the global energy marketplace and determine the course of Iraqi democracy.
A few top government officials sat on a dais while members of the audience — about 150 parliamentarians, technocrats, and academics — took turns at a podium, giving short speeches and asking questions of the panelists. Speakers often had to yell to be heard over the objections of audience members. A bit of shouting was to be expected: This was the first time in years that Iraqis were gathering without a foreign military occupation to outline their economic future. And in a country where 95 percent of government revenue comes from oil, any debate about oil is also a struggle for power. They addressed the most fundamental questions: How much oil should Iraq produce? What should happen to the revenue? Who should control the country’s oil strategy? You wouldn’t have known it by the volume of the rhetoric, but a lot of the talk was moot.
Much has already been decided. In 2009, the government started awarding contracts for the country’s largest fields, and the biggest names in oil have signed up. Companies like ExxonMobil and BP have invested billions of dollars, bringing the latest in technology and engineering expertise. Production has rebounded from just over 1 million barrels per day after the invasion to nearly 3 million today. Baghdad’s 11 international oil contracts promise to deliver a total of more than 13 million barrels per day within seven years — a figure that would make Iraq the largest oil producer, ever.
There are good reasons to doubt these projections. For one thing, the current political crisis has underscored Iraq’s failure to build the kinds of institutions — a credible judiciary, non-politicized security forces — that support a stable, functioning, democratic state. Even if Iraq weren’t plagued by daily bombings and political dysfunction, it would be hard-pressed to achieve what would be the most rapid oil expansion in world history.
Yet if the investment bonanza can even partially succeed, it promises to reshape not only Iraq but also the regional balance of power. Falah al-Amri, director of the State Oil Marketing Organization, showed the audience at the Alwiyah Club a PowerPoint presentation with figures that he had quotedto his Gulf counterparts at a recent OPEC meeting. By 2014 or 2015, he said, the country would reach the magic number of 4.5 million barrels per day of oil production, at which point OPEC would start trying to enforce quota restrictions.
Amri vowed that Iraq would negotiate hard for a larger national quota. He also provided a clue to the government’s contracting strategy, which appears to recognize that oil is a source of not only revenue but also geopolitical power.
“Our plan is not to flood international markets. This is not our goal. If we have a spare 2 or 3 million barrels per day, then so be it,” Amri said. He later clarified to me that he thinks Iraq will have this “swing capacity” — that is, the ability to drastically increase production on short notice — by 2017.
Saudi Arabia is currently the world’s only so-called “swing producer,” with an already-developed capacity that far exceeds its current production. This status gives the kingdom enormous power. If any other producer falters — if, say, rebels in the Niger Delta blow up a pipeline or Iranian oil is shut in by an embargo — the world economy depends on the Saudis to open the taps and keep prices from rising too high. This Saudi leverage also keeps its OPEC associates in check: Other cartel members can’t stray too far from their production quotas, lest the Saudis flood the market with a punitive deluge of crude, driving down everyone’s prices and profits.
Amri’s presentation contained the seeds for the disruption of this power dynamic. If Iraq develops 2 million or 3 million barrels per day of swing capacity, which is roughly what Saudi Arabia claims to have, OPEC will suddenly have a second enforcer. That could pave the way for a regional rivalry between Saudi Arabia and the Shiite-led Iraqi government. Relations between the two are already in the doldrums, as Saudi leaders have characterized Prime Minister Nouri al-Maliki as an Iranian puppet and continue to refuse to send an ambassador to Baghdad. Their worries are not unfounded. Maliki is no puppet, but he has taken dramatic steps to consolidate power by pushing aside all his major Sunni-backed rivals; as a result he is increasingly dependent on a Shiite political base with deep ties to Iran.
But though the geopolitical implications of Iraq’s efforts to become an energy giant are dizzying, they will only become a reality if the country can meet Amri’s ambitious projections. And there’s no guarantee that the country can overcome the daunting challenges facing its oil industry…
February 3, 2012
After decades of obstacles hindering the voting process, new laws will allow overseas and military voters to submit their votes in time for the 2012 election.
James Carey was a junior officer on a ship in the South Pacific during the Vietnam War when he was appointed one of the least envious military roles at sea: voting assistance officer. The job — a part-time one, of course — came with a massive three-ring binder of the byzantine rules and regulations for voting absentee in the 50 states, six territories, and thousands of counties back home.
“This was before e-mail,” Carey said, lest we forget that such a time ever existed. “That would mean if you’re on a ship, and you’re trying to register to vote, or to get more information on voting, you have to write a letter that goes to the ship post officer, that goes in a mailbag, which goes on a helicopter. The helo takes it to a carrier, and the carrier takes it ashore to Subic Bay in the Philippines.”
From there, it heads back to the United States and enters the U.S. Postal System, on the other end of which some local election official finally receives it weeks later.
“And maybe they need more information from you!” Carey said. Then he describes the deflating reverse process that second letter must take back across the globe. “If this is anywhere near close to an election,” Carey said, “you can imagine you’re not going to get to vote.”
In retrospect, this sounds like one of those quirky historical anecdotes about the dislocated life of soldiers at war. But the process Carey describes did not change significantly over the following 40 years (although most of the ships moved out of the South Pacific and the base at Subic reverted to the Filipinos). America has sent repeated generations of soldiers to war — including those who’ve gone to Iraq and Afghanistan – with little chance of voting on the politicians who sent them. (During the Civil War, when absentee voting was first allowed, some troops were allowed to return home to make sure their votes — generally pro-Lincoln — were counted.) This year marks the first presidential election when all of this will start to change.
“Everyone understands that it’s important that those serving us overseas have an opportunity to express their voice in our democracy,” said David Becker, who directs the election initiatives at the Pew Center on the States. “But I think many were unaware of the significant obstacles those citizens face. While they’re protecting all of our rights, their most fundamental right is at risk.”
Harry Truman first barked at Congress about this problem 60 years ago during an era, spanning World War II and the Korean War, when more Americans were stationed overseas — and disenfranchised there — than at any point in history. But by 2008, states were still mailing election materials the old-fashioned way, and sometimes even requiring voters to notarize them before sending them back. In 2008, it still took about 18 days for a piece of mail to go from Afghanistan to a stateside election official.
In 2009, Pew published a startling report that found that 25 states and the District of Columbia did not allow enough time for overseas service members to vote. The Election Assistance Commission estimated in 2007 that about 1 million ballots were distributed to overseas American voters (a group in total that’s estimated to include about 6 million people). Only a third of those votes were actually cast or counted. In another survey of military personnel who said they did not vote in the 2004 presidential election, 30 percent said their ballots never arrived or came too late. Another 28 percent were befuddled by the whole process.
Pew’s report — and a powerful accompanying ad campaign — helped spur Congress to finally pass legislation repairing the 1986 Uniformed and Overseas Citizens Absentee Voting Act. That earlier bill reiterated the voting rights of overseas service members but didn’t do much to protect them. The 2009 law, on the other hand, required states to plan for a 45-day window for ballot “round trips” and to provide voter registration and absentee ballot applications electronically. It also eliminated those notary requirements.
“I’m sure some of these county clerks get a ballot back, and it has mud on it, or sand on it, or bugs, and I’m sure they wonder, ‘What’s going on?’” said Carey, who is now a retired rear admiral and a senior adviser to the Pew project. “But you’re not going to the local grade school to cast your ballot. And how many notaries do you think are in foxholes with you? Obviously, nobody was thinking about all of these circumstances.”…
February 3, 2012
In August 2008, a week before Barack Obama went to Denver to collect his nomination, Steven Chu stepped onto a stage in the University of Nevada, Las Vegas’s Cox Pavilion. The 60-year-old physicist was a towering presence in his field, a Nobel Prize winner and the director of Lawrence Berkeley National Laboratory in California. But he was largely unknown to the Washington-centric crowd of several hundred, in town for a clean energy conference co-hosted by Senate Majority Leader Harry Reid and the Center for American Progress (CAP) Action Fund. Trim and bespectacled, with wispy graying hair parted over a high forehead, Chu began his remarks with the nervous throat-clearing of a scientist who had not yet completed the transition to a more public life.
Chu invited the crowd to consider a temperature increase of five degrees Celsius, only slightly beyond what the world is expected to hit by the century’s end in middle-of-the-road climate change forecasts. “Climate change of that scale will cause enormous resource wars,” he said, “over water, arable land, and massive population displacements.” This vision of planet-wide catastrophe was not new, but Chu’s flat cadence, his chilly laboratory demeanor, gave the picture an unsettling crispness. “We’re not talking about ten million people,” he continued. “We’re talking hundreds of millions to billions of people being flooded out, permanently.”
Then Chu pivoted, arguing with the same matter-of-factness that the doomsday scenario he had described was entirely avoidable. Western Europe enjoyed a quality of life comparable to America’s with far greater energy efficiency, he explained; technological innovation had allowed California’s economy to double in size over the past third of a century even as its electricity use remained flat. Tighter regulations had made American refrigerators not just 75 percent more efficient than they were three decades earlier, but 60 percent cheaper and 20 percent larger, too. “Miraculously,” Chu deadpanned, “the manufacturers had to assign the job to the engineers instead of the lobbyists. And this is what you get.” The audience applauded; Chu’s delivery, once hesitant, now had a confidence bordering on swagger.
In conclusion, Chu showed his audience the famous “Earthrise” photograph, taken by the astronaut William Anders from the Apollo 8 command module as it orbited the moon on Christmas Eve 1968. It showed the Earth, a gleaming whorl of blue and white, emerging out of the moon’s shadow into sunlight. “A beautiful planet, a desolate moon,” Chu said. “And focus on the fact that there’s nowhere else to go.”
On the stage with Chu was John Podesta, CAP’s president, who would serve as co-chair of the new president’s transition team after Obama’s victory in November. In Chu, Obama’s team saw the potential to make a statement. “Science had really been abused and belittled in the previous administration,” Podesta told me. “The decision to try to go and get a number of high-profile scientists into the administration was all about telling this story about what the future of innovation could look like. And Steve was at the top of that pyramid.”
Shortly after the election, Obama asked Chu if he would come to Washington as his energy secretary. “I didn’t know him before that,” Chu told me. “He said, ‘A lot of people all over the place are recommending you.’ All I said was, ‘Who are these former friends of mine?’”
It was a good joke, but, by the time Chu told it to me in December, it had acquired some poignancy. The last several months have been the worst of his three years in Washington. Chu had arrived in town as one of Obama’s most celebrated appointees, with one of the new administration’s most ambitious missions: using a backwater of a Cabinet position—one better known as a sleepy sinecure for retired business executives—to reinvent America’s energy system.
Then last September, a California-based solar panel manufacturer named Solyndra filed for bankruptcy, and things suddenly went very sour. Chu’s department had signed off on a $535 million loan to the company two years earlier; it was the highest-profile showpiece for Obama’s campaign promise to kick-start the new green energy economy. Congressional Republicans pounced.
On a cold morning in mid-November, Chu was hauled into a committee room on Capitol Hill. The hearing was the spectacle of the week, and the GOP lawmakers kept Chu—the only witness—in his chair for five and a half hours. “You’re a very bright man—much brighter than I am. I know you didn’t leave your brain at the door,” Virginia freshman Morgan Griffith growled. Chu’s hands shook slightly as he handled the edges of his prepared testimony.
By the time we spoke a month later, Chu seemed to have survived the experience, though not without some bitterness; the hearing, he told me, “was not the high point of what I wanted to do with my time.” Still, the whole affair had cast a harsh light on a scientist turned policymaker for whom things had not gone as planned, even before the Solyndra bankruptcy. The president who brought him to Washington three years ago had promised nothing less than an environmental revolution, and Chu was supposed to be at its center, presiding over the most dramatic expansion of the clean energy industry the federal government had ever attempted. Now Chu may have no choice but to preside over its similarly dramatic retreat.
“OK, SO!” CHU SAID, taking a deep breath before plunging back in. We were sitting in his office, in front of a bank of windows opening out across the National Mall, and Chu was halfway through an impromptu lecture on the economics of converting the long-haul trucking industry to liquefied natural gas. I couldn’t remember how we had arrived here—I had asked a fairly narrow question about his department’s funding—but we were where we were. “You can go six hundred and fifty miles without refueling,” Chu was saying, “so you might want a station every three hundred miles.” He rattled off the cost of liquefied natural gas ($2 per gallon equivalent, give or take), the cost of the machine you use to liquefy the gas ($1 million to $3 million), the typical annual mileage of a long-haul truck (80,000 miles), and, running all these numbers in his head, how many years it would take for a company to recoup its investment on a truck (two).
Several minutes later, Chu’s press secretary reminded us of the time. “I’ll be shorter,” Chu said, a bit apologetically. But he wasn’t—and, honestly, I wasn’t sure that he could be. I had met Chu briefly before, at a reception hosted by a magazine that I worked for at the time. I had asked him then about a trip he’d made to China and ended up listening for several minutes as Chu expounded upon new developments in advanced battery technology. “He doesn’t lose track of the details,” says Holger Müller, a Lawrence Berkeley physicist and longtime collaborator.
This was the one thing that everyone knew about Barack Obama’s energy secretary when he took office in January 2009: that Steven Chu was smart. He was “possibly the smartest man in the federal government,” Washington Post science reporter Joel Achenbach wrote, “if not the known universe.” Obama, when he mentions Chu, rarely fails to bring up his Nobel Prize. “He likes to kid around about the rocket scientist thing when they’re together,” says a veteran Democratic operative who is close to the president. “There’s a little bit in Obama who’s like, ‘Holy shit, I can’t believe I hired this guy!’”…