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***TOPICALITY***
***DISAD WORK***
oil link
Increased production threatens China economy and position
Obel 2013. Mike Obel. US Oil Boom May Spell Danger For Import-Dependent China: Germany's BND Spy Agency
http://www.ibtimes.com/us-oil-boom-may-spell-danger-import-dependent-china-germanys-bnd-spy-agency-1030550
The boom in U.S. crude oil production could threaten Chinas access to as much as half the crude oil needed to support its economic
growth, according to a published report. Germanys BND, the nations Bundesnachrichtendienst spy agency as its known, has leaked a
confidential report concluding that soaring U.S. crude oil production could -- in less than a decade -- sharply lessen the U.S. need
for imported oil, particularly Arabian oil that has to be shipped out of the volatile Persian Gulf and through the treacherous Strait of
Hormuz, website Testosterone Pit reported Sunday. The web site did not disclose details of how or when it obtained the BND report.
Whether the crude oil production boom in the worlds No. 1 economy will make the U.S. the worlds top oil producer, as the
International Energy Agency recently predicted would happen by 2020, or simply mean that the U.S. will no longer need OPEC oil,
the consequences for China could be severe. Chinas growing economy will force the nation to import as much as 50 percent of its
crude oil from Persian Gulf producers, including Iran and the Arab states, the BND report states. Chinas maritime access to that
source has been secured by U.S. military forces, at massive expense expense to U.S. taxpayers. But if the U.S. no longer depends on
OPEC crude oil, it would have no reason to spend billions on naval and Air Force assets to guarantee the free flow of oil from the
Persian Gulf at market prices. Without U.S. military protection, Chinas oil imports suddenly become vulnerable along their 10,000plus mile maritime route from the Persian Gulf to Chinese ports. Further, Chinas military has no current ability to take the U.S.
militarys place in securing the sea lanes that must remain undisturbed for China to sustain its economic growth. Further, Chinas
vulnerability to disruptions of its seaborne oil imports would give the U.S. leverage in dealing with the worlds most populous nation,
particularly as U.S. allies clash with China in the eastern Pacific.
***CANADA DISAD***
canada da 1nc
continuing massive imports from Canada is key to keeping them as our ally and away from other investors
KELLY 4/28/2014 former U.S. diplomat in Canada and Mexico and is the associate director of Canadian Studies at Duke University
(Kelly, Stephen R. Saying no to Keystone XL is saying yes to uglier alternatives, http://www.theglobeandmail.com/globedebate/saying-no-to-keystone-xl-is-saying-yes-to-uglier-alternatives/article18297849/)
TransCanada Corporation applied for a permit to build Keystone XL nearly six years ago, the pipeline was supposed to move 830,000
barrels of crude oil a day from the Alberta oil sands to the U.S. Gulf Coast. There it would supply U.S. refineries originally built to
handle heavy, sour crudes from Venezuela and Mexico, countries whose oil output has dropped sharply in recent years . Given that
Canada has become the United States largest foreign oil provider by far, and that the surge in Canadian crude , also
heavy and sour, has overwhelmed the existing network of north-south pipelines, Keystone XL made good business and energy security sense. After all, would you rather
import oil from a known America hater like Venezuela, or from a reliable ally right next door that is also our
largest overall trading partner? This logic, however, has failed to sway many environmentalists, who have opposed Keystone XL for three main reasons. First, they worry the
For those who can barely remember why the
pipeline could leak, as other pipelines carrying Canadian crude have recently done. They also object to the kind of oil the pipeline would carry. The extraction of oil sands bitumen is more energy intensive, and therefore more
view cheap
Canadian crude, which sells at a sharp discount to other crudes due to its low quality and oversupply, as an enabler to an oilpolluting, than the average crude produced in the United States. If the U.S. would import less of it, they argue, Canada would produce less of it, reducing the global environmental damage. Finally, they
. If getting an oil fix werent so easy, goes this thinking, perhaps we would find renewables more attractive. But on all three counts, killing Keystone will have either no effect, or
make matters worse. Pipelines are by far the safest and most environmentally friendly way to move oil. A badly managed leak of Canadian crude from a pipeline near Kalamazoo, Mich., in 2010 released roughly 20,000
barrels of oil into a local stream, the largest inland oil spill in U.S. history. But this pales by comparison with the 257,000 barrels of crude the shipwrecked Exxon Valdez poured into Prince William Sound in 1989, or the five
million barrels the Deep Water Horizon blowout pumped into the Gulf of Mexico in 2010. Perhaps more important, inadequate pipeline capacity aggravated by Keystone XLs delay has led Canadian and American energy
companies to move more oil by train. From just 2012 to 2013, rail shipments of crude oil in the U.S. jumped 74 per cent. Canada has announced plans to expand its rail transport capacity for crude oil by an amount that would
more than replace Keystone XL. Over this same period, three major derailments have demonstrated the dangers of this new mode of oil movement, especially the 2013 Lac-Mgantic, Que., explosion that left 47 dead. Crude
shunning Canadian imports hurts their economy and theyll pivot away from the US to China, crushing US-Canadian
relations
Morris 12 Professor at University of Alabama,
An energy policy that shuns Canadian oil will push America's best ally into the arms of China,
http://juneauempire.com/opinion/2012-06-08/energy-policy-shuns-canadian-oil-will-push-americas-best-ally-armschina#.UVB2rTeRcmz
Or ask Canadian Natural Resources Minister Joe Oliver, who told the Canadian Broadcasting Corp. that same month that we currently have one customer (the
U.S.) for our energy exports. That customer has said that it doesnt want to expand at the moment . So it certainly intensifies the broad strategic objective of
the government to diversify to Asia. Will China want to buy Canadian oil? Absolutely! Chinas hunger for petroleum products will continue to grow. Chinese car
ownership is still below U.S. levels in 1920. Even if all future car sales in China are hybrids and even if Chinas frenetic economic growth slows, as Chinese car ownership rises, the demand for petroleum
will soar over the next two decades. And India is also developing a taste for automobiles. If we dont want Canadas oil, there are many who do. This is a major mistake for three reasons. First, domestic oil production is insufficient to
meet U.S. needs. According to the Energy Information Administration, oil provides 94 percent of our transportation energy and 37 percent of our total energy. But domestic production met only 45 percent of our 2011 oil needs. Oil also is a key raw material for the U.S.
Our
Canada imports key to crushes Chavez --- solves terrorism and Venezuela/iran alliance
Ogrady 2012, Mary, The Wall Street Journal, February 17, 2012.
http://online.wsj.com/article/SB10001424052970204792404577229533441470866.html
Numerous sources in Venezuela say Mr. Lugar has this problem backward. His logic, which has dominated thinking in Washington since Chvez first came to power, is
that Chvez has an "oil weapon" that he can use against the U.S. by cutting off supplies. But the Venezuelan strongman needs the U.S. more than it
needs him. He is heavily dependent on the greenbacks he receives for his oil, and the authoritarian populist is unlikely to walk away from them in an election year in
Venezuela. That doesn't mean Venezuela is not a threat. As Mr. Lugar rightly points out, Iran has shown that it is eager to practice terrorism in the West
if given the chance, and Venezuela provides a trampoline to plan and launch attacks from nearby. With this in mind, the U.S. should be
seeking to defund the Chvez machine, and there is no better way to do that than with approval of the Keystone XL. The Alberta crude that
will travel through the XL is of a similar quality to Venezuelan oil, and the U.S. could begin buying from Canada instead of from Venezuela if a pipeline
were put in place. There is one thing that Mr. Lugar and Venezuelans who don't believe that Chvez has an oil weapon agree on, and that is the Venezuelan dictator's
vulnerability. "Divisions in Venezuela's Russian-armed military, an inflation rate over 30 percent, a dilapidated oil infrastructure,
widespread food and energy shortages, and soaring crime rates are all putting heavy pressure on [him]," the senator writes. Losing a
customer like the U.S. might just push him over and with him, Iran's strongest base of support in the hemisphere.
Nuclear terrorism causes extinction
Ayson 10 - Professor of Strategic Studies and Director of the Centre for Strategic Studies: New Zealand at the Victoria University of
Wellington (Robert, July. After a Terrorist Nuclear Attack: Envisaging Catalytic Effects. Studies in Conflict & Terrorism, Vol. 33,
Issue 7. InformaWorld.)
But these two nuclear worldsa non-state actor nuclear attack and a catastrophic interstate nuclear exchangeare not necessarily separable. It is just possible that
some sort of terrorist attack, and especially an act of nuclear terrorism, could precipitate a chain of events leading to a massive exchange
of nuclear weapons between two or more of the states that possess them. In this context, todays and tomorrows terrorist groups might assume the place
allotted during the early Cold War years to new state possessors of small nuclear arsenals who were seen as raising the risks of a catalytic nuclear war
between the superpowers started by third parties. These risks were considered in the late 1950s and early 1960s as concerns grew about nuclear
proliferation, the so-called n+1 problem. It may require a considerable amount of imagination to depict an especially plausible situation where an act of nuclear
terrorism could lead to such a massive inter-state nuclear war. For example, in the event of a terrorist nuclear attack on the United States, it might well be wondered just
how Russia and/or China could plausibly be brought into the picture, not least because they seem unlikely to be fingered as the most obvious state sponsors or
encouragers of terrorist groups. They would seem far too responsible to be involved in supporting that sort of terrorist behavior that could just as easily threaten them as
well. Some possibilities, however remote, do suggest themselves. For example, how might the United States react if it was thought or discovered that the fissile material
used in the act of nuclear terrorism had come from Russian stocks,40 and if for some reason Moscow denied any responsibility for nuclear laxity? The correct
attribution of that nuclear material to a particular country might not be a case of science fiction given the observation by Michael May et al. that while the debris
resulting from a nuclear explosion would be spread over a wide area in tiny fragments, its radioactivity makes it detectable, identifiable and collectable, and a wealth
of information can be obtained from its analysis: the efficiency of the explosion, the materials used and, most important some indication of where the nuclear
material came from.41 Alternatively, if the act of nuclear terrorism came as a complete surprise, and American officials refused to believe that a terrorist group was
fully responsible (or responsible at all) suspicion would shift immediately to state possessors. Ruling out Western ally countries like the United Kingdom and France,
and probably Israel and India as well, authorities in Washington would be left with a very short list consisting of North Korea, perhaps Iran if its program continues, and
possibly Pakistan. But at what stage would Russia and China be definitely ruled out in this high stakes game of nuclear Cluedo? In particular, if the act
of nuclear terrorism occurred against a backdrop of existing tension in Washingtons relations with Russia and/or China, and at a time when threats
had already been traded between these major powers, would officials and political leaders not be tempted to assume the worst ? Of course, the
chances of this occurring would only seem to increase if the United States was already involved in some sort of limited armed conflict with Russia and/or China, or if
they were confronting each other from a distance in a proxy war, as unlikely as these developments may seem at the present time. The reverse might well apply too:
should a nuclear terrorist attack occur in Russia or China during a period of heightened tension or even limited conflict with the United States, could Moscow and
Beijing resist the pressures that might rise domestically to consider the United States as a possible perpetrator or encourager of the attack? Washingtons early
response to a terrorist nuclear attack on its own soil might also raise the possibility of an unwanted (and nuclear aided) confrontation with Russia and/or
China. For example, in the noise and confusion during the immediate aftermath of the terrorist nuclear attack, the U.S. president might be expected to place
the countrys armed forces, including its nuclear arsenal, on a higher stage of alert. In such a tense environment, when careful planning runs up against the
friction of reality, it is just possible that Moscow and/or China might mistakenly read this as a sign of U.S. intentions to use force (and
possibly nuclear force) against them. In 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. As part of its initial response to the act of nuclear terrorism (as discussed earlier) Washington might decide to
order a significant conventional (or nuclear) retaliatory or disarming attack against the leadership of the terrorist group and/or states seen to support that group.
Depending on the identity and especially the location of these targets, Russia and/or China might interpret such action as being far too close for their comfort, and
potentially as an infringement on their spheres of influence and even on their sovereignty. One far-fetched but perhaps not impossible scenario might stem from a
judgment in Washington that some of the main aiders and abetters of the terrorist action resided somewhere such as Chechnya, perhaps in connection with what Allison
claims is the Chechen insurgents long-standing interest in all things nuclear.42 American pressure on that part of the world would almost certainly raise alarms in
Moscow that might require a degree of advanced consultation from Washington that the latter found itself unable or unwilling to provide. There is also the question of
how other nuclear-armed states respond to the act of nuclear terrorism on another member of that special club. It could reasonably be expected that following a nuclear
terrorist attack on the United States, bothRussia and China would extend immediate sympathy and support to Washington and would work alongside the United States
in the Security Council. But there is just a chance, albeit a slim one, where the support of Russia and/or China is less automatic in some cases than in others. For
example, what would happen if the United States wished to discuss its right to retaliate against groups based in their territory? If, for some reason, Washington found
the responses of Russia and China deeply underwhelming, (neither for us or against us) might it also suspect that they secretly were in cahoots with the group,
increasing (again perhaps ever so slightly) the chances of a major exchange. If the terrorist group had some connections to groups in Russia and China, or existed in
areas of the world over which Russia and China held sway, and if Washington felt that Moscow or Beijing were placing a curiously modest level of pressure on them,
what conclusions might it then draw about their culpability
bite. But its use is both inaccurate and misleading, and without a seismic shift in Americans attitude towards transport, it is fundamentally unachievable. Although the US now sources the
majority of its oil imports from the Western Hemisphere, the perception amongst the American public that the US still imports most of its oil from the Middle East persists, along with the
belief that the US main strategic priority in the region is securing its own oil imports. The United States has a broad and complex relationship with the Middle East and its energy priorities do
not solely determine its strategy and presence within the region, as the US also has other non energy priorities in the region that will remain important regardless of the amount of oil that it
itself imports from the region. The conclusion that America can finally pack up and leave the Middle East because they have entered a shale energy revolution is too simplistic and any longterm major changes in US strategy towards the Middle East must be considered against the increasing presence and influence of China in the region, with America not wanting to be
Both the ongoing shale gas revolution and the more recent shale oil surge
have dramatically changed the US domestic energy landscape, but the country is still, and will remain, far from
energy independent . Over the next two decades, even as shale oil production peaks, the US will still import over 25 per cent of its total oil consumption. The shale oil surge and
reduced oil consumption have reduced US oil import dependence significantly over the last five years, from 56 per cent in 2008 to 32 per cent in 2013. Although the huge increase in Canadian
oil imports from 16 per cent in 2004 to 32 per cent in 2013 has significantly altered the composition of the US imports portfolio, Saudi Arabia and the wider Persian Gulf today still
contribute around 20 per cent. Increased
shale oil output coupled with higher imports from both Canada and Mexico will see the relative
contribution of the Persian Gulf decline in the medium-term, but as the shale oil surge tapers off in the second half of the next decade
this contribution will rebound. Even during this medium-term downturn the Persian Gulf will remain one of Americas top three oil sources. The cost advantage that Persian Gulf
suppliers enjoy means that there will always be a significant market for their oil in the US.
status quo imports from Canada will increase, but the plan kills it --- our ev is future predictive
Koring et al 12 - International Affairs and Security Correspondent (Nathan VanderKlippe and Paul Koring, U.S. boom in oil
production spells peril for Canadian crude, Sep. 10 2012, http://www.theglobeandmail.com/report-on-business/us-boom-in-oilproduction-spells-peril-for-canadian-crude/article4535525/)
A torrent
of oil pumped from new wells across the U.S. is setting in motion a decade of dramatic change that promises to wean the
country off OPEC, and threatens the growth of energy imports from Canada. The U.S. is now staring at an energy future awash
with its own crude, with far-reaching consequences for Canadas oil sands, the U.S. economy and global geopolitics. This massive shift has been
sparked by changing political sentiment and technological advances that have allowed crude to be tapped in new places from North Dakota to Oklahoma, Colorado, Michigan, and even
Florida. The United States, according to new data released Monday by Bentek, a U.S. energy analysis firm, will see its oil production rise nearly five million barrels a day, or 74 per cent, in the
next decade. In that time, reliance on countries outside Canada will largely disappear . The U.S. today imports 45 per cent of its petroleum, half from OPEC countries. But
by 2022, Bentek projects, only a million barrels per day will be delivered to U.S. shores by tanker down from 6.7 million in 2011 and just 5 per cent of total demand and at least some of
those wont come from OPEC, but from countries like Mexico and Brazil. The coming change, according to Bentek, is startling: By 2016, the U.S. will surpass its 1970 oil production peak of
9.6 million barrels a day; by 2022, it will have leapt to 11.6 million barrels a day. For Canada, the news is both good and grim: Canadian
the
Canadian oilpatch expects U.S. growth to be substantially slower than Bentek suggests, in part because of the difficulty in building the new pipelines and rail cars
to move that much new oil. Plus, U.S. companies are in the midst of a boom, and may need to take a break . I think there will be a pause or at least a partial
slowdown over the next two or three years to drive costs down. So the growth profile wont be as strong, said Scott Saxberg, the chief executive of Crescent Point
expectations of the federal U.S. Energy Information Administration by a full five million barrels per day, although the EIA forecast is in the midst of an upward revision. And
Energy, a Calgary company with wells in North Dakota that provides it a window on U.S. activity. As a result, Mr. Saxberg and the Canadian Association of Petroleum Producers believe
Canada will have little trouble sending oil to the U.S. in coming years . No one, however, questions the U.S. oil boom, which has come amid a
drilling frenzy. Three years ago, 288 U.S. rigs were drilling for oil. Last week, according to data tracked by energy services firm Baker Hughes, 1,409 rigs were chasing oil, a nearly fivefold
increase. The eruption of local oil is a tremendous boon. Producing an additional 5 million barrels a day will require an investment, conservatively, of at least $125-billion, based on current
costs. And it portends substantial change in a global military-strategic arena that has long been driven by the need to move oil to the thirsty U.S. At least one, and often two, U.S. naval carrier
battle groups still prowl the Persian Gulf. Keeping open the Iran-threatened Straits of Hormuz through which a stream of tankers move a staggering 17 million barrels daily, or one-third of all
seaborne oil remains a vital American military role. Ending all, or nearly all, U.S.
imports from the volatile Middle East might fundamentally change the geo-
political view from the Oval Office, although broader threats to global economic disruption would remain.
domestic shale production in the squo is light crude --- were importing heavy crude
Phillips 13 Oil Business Analyst, Bloomberg; Matthew Phillips, Falling U.S. Oil Imports Will Reshape the World Crude Market,
http://www.businessweek.com/articles/2013-01-16/falling-u-dot-s-dot-oil-imports-will-reshape-the-world-crude-market
Most of Americas new shale production is light, sweet crude that can be easily refined into gasoline and that is prized around the world. Light,
sweet crude is less viscous than heavy, sour crude, which has more sulfur. But heavy, sour crude tends to be a few dollars per barrel cheaper than
light, sweet crude, and the Canadians and Venezuelans have vast reserves of it. Thats why in the years before the U.S. shale boom hit, some
of the biggest U.S. refiners spent more than $20 billion upgrading their refineries so they could process the gunky stuff into gasoline,
asphalt, and other products.
demand for heavy, sour oil from abroad will be high in the years to come. For those
reasons Canada will remain Americas biggest supplier. Not only is Canada close and able to pipe its oil over the border, but its heavy, sour crude is also what U.S. refiners want.
Thus, despite the abundance of high-quality crude,
Canadian pipeline operator TransCanada (TRP) is trying to get U.S. approval of its Keystone XL pipeline, which would eventually move 1.5 million barrels a day of heavy, sour Canadian crude to Gulf Coast refineries. The
pipeline would lower shipping costs for the Canadians and make their oil even cheaper than the crude sold to the U.S. by Mexico (it sells 1 million barrels a day to the U.S.), Saudi Arabia (1.2 million), and Venezuela
The Gulf Coast markets not big enough to take new Canadian crude and maintain current imports
(950,000).
, says Edward Morse, head of commodities
research at Citigroup Global Markets. Something has to give. While the demand for heavy, sour crude will be good news for Canada, the shale oil revolution in the U.S. will likely result in a steep drop in oil imports from
Africa, mainly from OPECs biggest West African members, Nigeria and Angola. Both are suppliers of light, sweet crude. Since July 2010, the U.S. has cut its Nigerian imports by half, from more than 1 million barrels a day
to 543,000 as of October 2012, according to the most recent data available through the EIA. Imports from Angola have dipped below 200,000 barrels a day, from an average of 513,000 in 2008. By the second quarter of this
Sometime before mid-2014, he says the U.S. and Canada will stop importing crude
from West Africa altogether. Those barrels will have to find another home. The surplus African oil could end up competing with Mideast suppliers for customers in India, China, Europe, and Korea. As the
year, we will stop importing West African light, sweet crude into the Gulf, Morse predicts.
global competition heats up, oil prices the world over will probably drop. Morse says that $90 will be the new ceiling for oil prices rather than the floor its been in recent years, a transition he anticipates will be highly
The geopolitical fallout from this shift in the global oil trade could be disruptive too. Angola, Nigeria, and Venezuela are heavily dependent on oil revenues to keep their
governments afloat and maintain popular subsidies that lower the price of food and fuel for their citizens. If Morse is right and the average global price of oil drifts below $90 a barrel, the pressure on the weaker
disruptive.
Xt - uq Canada growing
canadas energy infrastructure good
FP 12, http://business.financialpost.com/2012/07/19/13-ways-to-make-canada-worlds-most-energy-productive-nation/?__lsa=3050e892
The Standing Senate Committee on Energy, the Environment and Natural Resources has launched a new blueprint outlining 13 priorities to ensure
Canada will be the most energy productive nation in the world with the highest level of environmental performance. The committee sat
through hundreds of meetings, spoke to 250 stakeholders and solicited public advice over three years to outline 13 key focus areas for the country. We see
Canadas potential as the most productive energy nation in the world, with the highest levels of environmental performance , said
Senator David Angus, Committee Chair. But we also conclude that there is a great sense of urgency and we need an energy literacy that
includes a profound recognition that energy pervades all aspects of our lives, and is a key element of our social fabric . The future is fraught
with peril if we dont get it right.
of that infrastructure has been forced into use long past its
expected and efficient lifespan, the group says, and its gearing up to ask Congress for some major funding over the next two decades to replace and/or improve a number of
decaying locks and dams that are causing, well, logjams in the system. So how does Central America factor into the discussion? In coming years the Panama Canal will be
greatly expanded, allowing for more and larger ship traffic. Volume through the canal is expected to nearly double by 2025. That
increase will make New Orleans and other Gulf/Atlantic ports more economical for shippers to and from the Pacific Rim whose
countries happen to be some of the largest consumers of Montana grain and coal. But making it easier to get Montanas goods
to the Pacific isnt worth much if its not made easier to get those goods to the coasts in the first place. Improving shipping efficiency
on the Mississippi River will make for a new path to market for Montana raw materials. And thats where the Waterways Council comes in, with its efforts
to improve the inland nautical infrastructure. One 15-barge tow can move as much material as 216 rail cars, or 1,050 semi tractor-trailers, the council says, and the industrys claim of being
able to move a ton of freight 576 miles on a gallon of fuel makes it more efficient than rail or road. Those modes are absolutely necessary too, but without barge traffic, our railroads and
highways would be overwhelmed with the additional demand. The council says an annual appropriation of $380 million from Congress, coupled with improvements in the way the Army Corps
of Engineers gets projects done, will allow 20 major jobs to be completed within the next 20 years versus the six that stand to be finished under the status quo. Shippers are putting their
money on the line as well. They already pay a tax of 20 cents per gallon of diesel into a trust fund that pays for half of each project, and theyre willing to pay another 6 to 9 cents more per
gallon, although that self-tax notion isnt gaining traction with the no-new-tax crowd in Washington. Congress i.e., the American people typically spends billions a year on highway
projects, and railroads too were heavily funded by the public. The country showed great foresight in building its system of locks and dams on many of our major rivers but that investing was
done close to a century ago, and the system needs repair. We dont know whether $380 million a year is the right number, but we do urge Congress to do all it can to improve the efficiency of
the nations interior shipping channels.
US Trade leadership is critical to multilateral trade which solves all global problems
Panitchpakdi 4 (Supachai Panitchpakdi, secretary-general of the UN Conference on Trade and Development, 2/26/2004, American
Leadership and the World Trade Organization, p. http://www.wto.org/english/news_e/spsp_e/spsp22_e.htm
strengthening the world trading system is essential to America's wider global objectives. Fighting terrorism,
reducing poverty, improving health, integrating China and other countries in the global economy all of these issues are linked, in
one way or another, to world trade. This is not to say that trade is the answer to all America's economic concerns; only that meaningful solutions
are inconceivable without it. The world trading system is the linchpin of today's global order underpinning its security as well as
its prosperity. A successful WTO is an example of how multilateralism can work. Conversely, if it weakens or fails, much else could fail with it. This is
The second point is that
something which the US at the epicentre of a more interdependent world cannot afford to ignore. These priorities must continue to guide US policy as they
have done since the Second World War. America has been the main driving force behind eight rounds of multilateral trade negotiations, including the successful
conclusion of the Uruguay Round and the creation of the WTO. The US together with the EU was instrumental in launching the latest Doha Round two years ago.
Likewise, the recent initiative, spearheaded by Ambassador Zoellick, to re-energize the negotiations and move them towards a successful conclusion is yet another
example of how essential the US is to the multilateral process signalling that the US remains committed to further liberalization, that the Round is moving, and that
other countries have a tangible reason to get on board. The reality is this: when the US leads the system can move forward; when it withdraws, the
system drifts. The fact that US leadership is essential, does not mean it is easy. As WTO rules have expanded, so too has as the complexity of the issues the WTO
deals with everything from agriculture and accounting, to tariffs and telecommunication. The WTO is also exerting huge gravitational pull on countries to join
and participate actively in the system. The WTO now has 146 Members up from just 23 in 1947 and this could easily rise to 170 or more within a decade.
Emerging powers like China, Brazil, and India rightly demand a greater say in an institution in which they have a growing stake. So too do a rising number of voices
outside the system as well. More and more people recognize that the WTO matters. More non-state actors businesses, unions, environmentalists, development NGOs
want the multilateral system to reflect their causes and concerns. A decade ago, few people had even heard of the GATT. Today the WTO is front page news. A more
visible WTO has inevitably become a more politicized WTO. The sound and fury surrounding the WTO's recent Ministerial Meeting in Cancun let alone Seattle
underline how challenging managing the WTO can be. But these challenges can be exaggerated. They exist precisely because so many countries have embraced a
common vision. Countries the world over have turned to open trade and a rules-based system as the key to their growth and development .
They agreed to the Doha Round because they believed their interests lay in freer trade, stronger rules, a more effective WTO. Even in Cancun the great debate
was whether the multilateral trading system was moving fast and far enough not whether it should be rolled back . Indeed, it is
critically important that we draw the right conclusions from Cancun which are only now becoming clearer. The disappointment was that ministers were unable to
reach agreement. The achievement was that they exposed the risks of failure, highlighted the need for North-South collaboration, and after a period of introspection
acknowledged the inescapable logic of negotiation. Cancun showed that, if the challenges have increased, it is because the stakes are higher. The bigger challenge to
American leadership comes from inside not outside the United States. In America's current debate about trade, jobs and globalization we have heard a lot about
the costs of liberalization. We need to hear more about the opportunities. We need to be reminded of the advantages of America's openness and its trade with the world
about the economic growth tied to exports; the inflation-fighting role of imports, the innovative stimulus of global competition. We need to explain that freer trade
works precisely because it involves positive change better products, better job opportunities, better ways of doing things, better standards of living. While it is true
that change can be threatening for people and societies, it is equally true that the vulnerable are not helped by resisting change by putting up barriers and shutting out
competition. They are helped by training, education, new and better opportunities that with the right support policies can flow from a globalized economy. The
fact is that for every job in the US threatened by imports there is a growing number of high-paid, high skill jobs created by exports. Exports supported 7 million workers
a decade ago; that number is approaching around 12 million today. And these new jobs in aerospace, finance, information technology pay 10 per cent more than
the average American wage. We especially need to inject some clarity and facts into the current debate over the outsourcing of services jobs. Over the next
decade, the US is projected to create an average of more than 2 million new services jobs a year compared to roughly 200,000 services jobs that will be outsourced. I
am well aware that this issue is the source of much anxiety in America today. Many Americans worry about the potential job losses that might arise from foreign
competition in services sectors. But its worth remembering that concerns about the impact of foreign competition are not new. Many of the reservations people are
expressing today are echoes of what we heard in the 1970s and 1980s. But people at that time didnt fully appreciate the power of American ingenuity. Remarkable
advances in technology and productivity laid the foundation for unprecedented job creation in the 1990s and there is no reason to doubt that this country, which has
shown time and again such remarkable potential for competing in the global economy, will not soon embark again on such a burst of job-creation. America's openness
to service-sector trade combined with the high skills of its workforce will lead to more growth, stronger industries, and a shift towards higher value-added,
higher-paying employment. Conversely, closing the door to service trade is a strategy for killing jobs, not saving them . Americans have never run from a
challenge and have never been defeatist in the face of strong competition. Part of this challenge is to create the conditions for global growth and job creation here and
around the world. I believe Americans realize what is at stake. The process of opening to global trade can be disruptive, but they recognize that the US
economy cannot grow and prosper any other way. They recognize the importance of finding global solutions to shared global problems. Besides, what
is the alternative to the WTO? Some argue that the world's only superpower need not be tied down by the constraints of the
multilateral system. They claim that US sovereignty is compromised by international rules, and that multilateral institutions limit
rather than expand US influence . Americans should be deeply sceptical about these claims. Almost none of the trade issues facing the US today
are any easier to solve unilaterally, bilaterally or regionally . The reality is probably just the opposite. What sense does it make for example
to negotiate e-commerce rules bilaterally? Who would be interested in disciplining agricultural subsidies in a regional agreement but not globally? How
can bilateral deals even dozens of them come close to matching the economic impact of agreeing to global free trade among 146
countries? Bilateral and regional deals can sometimes be a complement to the multilateral system, but they can never be a substitute .
There is a bigger danger. By treating some countries preferentially, bilateral and regional deals exclude others fragmenting global trade
and distorting the world economy. Instead of liberalizing trade and widening growth they carve it up. Worse, they have a domino effect :
bilateral deals inevitably beget more bilateral deals, as countries left outside are forced to seek their own preferential arrangements, or
risk further marginalization. This is precisely what we see happening today. There are already over two hundred bilateral and regional agreements in existence, and
each month we hear of a new or expanded deal. There is a basic contradiction in the assumption that bilateral approaches serve to strengthen the multilateral, rulesbased system. Even when intended to spur free trade, they can ultimately risk undermining it. This is in no one's interest, least of all the United
States. America led in the creation of the multilateral system after 1945 precisely to avoid a return to hostile blocs blocs that had done so
much to fuel interwar instability and conflict . America's vision, in the words of Cordell Hull, was that enduring peace and the welfare of nations was
indissolubly connected with the friendliness, fairness and freedom of world trade. Trade would bind nations together, making another war
unthinkable. Non-discriminatory rules would prevent a return to preferential deals and closed alliances. A network of multilateral initiatives and
organizations the Marshal Plan, the IMF, the World Bank, and the GATT, now the WTO would provide the institutional bedrock for the
international rule of law, not power. Underpinning all this was the idea that freedom free trade, free democracies, the free exchange of ideas was essential to
peace and prosperity, a more just world. It is a vision that has emerged pre-eminent a half century later. Trade has expanded twenty-fold since 1950. Millions in Asia,
Latin America, and Africa are being lifted out of poverty, and millions more have new hope for the future. All the great powers the US, Europe, Japan,
India, China and soon Russia are part of a rules-based multilateral trading system, greatly increasing the chances for world
prosperity and peace. There is a growing realization that in our interdependent world sovereignty is constrained, not by multilateral rules, but by the
absence of rules.
intermediaries, such as Canada, which offers a huge backdoor into the U.S. computer networks. Much of the infrastructure of the two
nationsfrom railroads to aviation to pipelines and electrical systems is inextricably intertwined. Canada is also Americas largest trading
partner, accounting for many links in U.S. supply chains. NORAD and NORTHCOM have partnered with a number of agenciesincluding the U.S.
Defense Security Cooperation Agency, U.S. Department of Homeland Security, and U.S. Strategic Command to protect U.S. networks. This cooperation will help
functioning cyberspace. Computer systems and infrastructure in both countries are linked and a substantial amount of bilateral trade is
conducted through the Internet. Since cyber terrorists and criminals can operate from anywhere, integration of cyber-security efforts is
essential to protect computer infrastructure. Integration is especially necessary for Canada because its 200 law enforcement and 2,500 military personnel
dedicated to cyber security are insufficient to prevent cyber attacks effectively. Through NORAD, Canada and the United States could coordinate
cyber security with the various military commands and civilian agencies.[24] Cooperation with Mexico as its economy and cyber infrastructure
develop is also vital, as the U.S. and Mexican governments acknowledged by creating the Working Group on Cyber-Security in 2004.[25]
Cyber attack would destroy critical infrastructure and ensure US retaliation --- expands arid lands and ag collapse
Habiger, 2/1/2010 (Eugue Retired Air Force General, Cyberwarfare and Cyberterrorism, The Cyber Security Institute, p. 13-15)
There is strong evidence to suggest that al Qaeda has the ability to conduct cyberterror attacks against the United States and its allies. Al Qaeda
and other terrorist organizations are extremely active in cyberspace, using these technologies to communicate among themselves and others, carry out logistics, recruit
members, and wage information warfare. For example, al Qaeda leaders used email to communicate with the 911 terrorists and the 911 terrorists used the Internet to
make travel plans and book flights. Osama bin Laden and other al Qaeda members routinely post videos and other messages to online sites to communicate. Moreover,
there is evidence of efforts that al Qaeda and other terrorist organizations are actively developing cyberterrorism capabilities and
seeking to carry out cyberterrorist attacks. For example, the Washington Post has reported that U.S. investigators have found evidence in the logs that mark a
browser's path through the Internet that al Qaeda operators spent time on sites that offer software and programming instructions for the digital switches that
run power, water, transport and communications grids. In some interrogations . . . al Qaeda prisoners have described intentions, in general terms, to use those tools.25 Similarly, a 2002
CIA report on the cyberterror threat to a member of the Senate stated that al Qaeda and Hezbollah have become "more adept at using the internet and computer technologies.26 The FBI has issued bulletins stating that, U. S.
law enforcement and intelligence agencies have received indications that Al Qaeda members have sought information on Supervisory Control And Data Acquisition (SCADA) systems available on multiple SCADArelated
web sites.27 In addition a number of jihadist websites, such as 7hj.7hj.com, teach computer attack and hacking skills in the service of Islam.28 While al Qaeda may lack the cyberattack capability of nations like Russia and
China, there is every reason to believe its operatives, and those of its ilk, are as capable as the cyber criminals and hackers who routinely effect great harm on the worlds digital infrastructure generally and American assets
specifically. In fact, perhaps, the most troubling indication of the level of the cyberterrorist threat is the countless, serious nonterrorist cyberattacks routinely carried out by criminals, hackers, disgruntled insiders, crime
If runofthemill criminals and hackers can threaten powergrids, hack vital military networks, steal vast sums of money,
take down a citys of traffic lights, compromise the Federal Aviation Administrations air traffic control systems, among other attacks, it is overwhelmingly
likely that terrorists can carry out similar, if not more malicious attacks. Moreover, even if the worlds terrorists are unable to breed these skills, they can
certainly buy them. There are untold numbers of cybermercenaries around the worldsophisticated hackers with advanced training who would be willing to offer their
services for the right price. Finally, given the nature of our understanding of cyber threats, there is always the possibility that we have already been the victim or a
cyberterrorist attack, or such an attack has already been set but not yet effectuated, and we dont know it yet. Instead, a welldesigned cyberattack has the
capacity cause widespread chaos, sow societal unrest, undermine national governments, spread paralyzing fear and anxiety, and create a state of
utter turmoil, all without taking a single life. A sophisticated cyberattack could throw a nations banking and finance system into chaos causing
markets to crash, prompting runs on banks, degrading confidence in markets, perhaps even putting the nations currency in play and making the government
look helpless and hapless. In todays difficult economy, imagine how Americans would react if vast sums of money were taken from their accounts
and their supporting financial records were destroyed. A truly nefarious cyberattacker could carry out an attack in such a way (akin to Robin Hood) as to engender
populist support and deepen rifts within our society, thereby making efforts to restore the system all the more difficult. A modestly advanced enemy could use
a cyberattack to shut down (if not physically damage) one or more regional power grids. An entire region could be cast into total darkness, powerdependent
systems could be shutdown. An attack on one or more regional power grids could also cause cascading effects that could jeopardize our entire
national grid. When word leaks that the blackout was caused by a cyberattack, the specter of a foreign enemy capable of sending the entire
nation into darkness would only increase the fear, turmoil and unrest. While the finance and energy sectors are considered prime targets for a
cyberattack, an attack on any of the 17 delineated critical infrastructure sectors could have a major impact on the United States. For example, our healthcare system is
already technologically driven and the Obama Administrations ehealth efforts will only increase that dependency. A cyberattack on the U.S. ehealth infrastructure
could send our healthcare system into chaos and put countless of lives at risk. Imagine if emergency room physicians and surgeons were suddenly no longer able to
access vital patient information. A cyberattack on our nations water systems could likewise cause widespread disruption. An attack on the control
systems for one or more dams could put entire communities at risk of being inundated, and could create ripple effects across the water, agriculture,
and energy sectors. Similar water control system attacks could be used to at least temporarily deny water to otherwise arid regions, impacting
everything from the quality of life in these areas to agriculture. In 2007, the U.S. Cyber Consequences Unit determined that the destruction from a single wave of cyberattacks on critical infrastructures could exceed $700 billion,
syndicates and the like.
which would be the rough equivalent of 50 Katrinaesque hurricanes hitting the United States all at the same time.29 Similarly, one IT security source has estimated that the impact of a single day cyberwar attack that focused on and disrupted U.S. credit and debit card
transactions would be approximately $35 billion.30 Another way to gauge the potential for harm is in comparison to other similar noncyberattack infrastructure failures. For example, the August 2003 regional power grid blackout is estimated to have cost the U.S.
economy up to $10 billion, or roughly .1 percent of the nations GDP. 31 That said, a cyberattack of the exact same magnitude would most certainly have a much larger impact. The origin of the 2003 blackout was almost immediately disclosed as an atypical system
failure having nothing to do with terrorism. This made the event both less threatening and likely a single time occurrence. Had it been disclosed that the event was the result of an attack that could readily be repeated the impacts would likely have grown substantially, if
Such an
enemy might be convinced that it could win a warconventional or even nuclear against the U nited S tates. The effect of this would be
to undermine our deterrencebased defenses, making us significantly more at risk of a major war .
kinetic attacks, or both, significantly increases the potential harms from a cyberattack. Consider the gravity of the threat and risk if an enemy, rightly or wrongly, believed that it could use a cyberattack to degrade our strategic weapons capabilities.
that was a crucial step toward building a paid professional police force and improving
stability and security because it is widely acknowledged that the Afghan national police force is rife with corruption and
incompetence. The $10 million builds upon $7 million previously committed by the Canadian International Development Agency and comes at a time when Canada
Still, in a deeply-troubled state like Afghanistan,
is poised to double its cadre of civilian RCMP police trainers in Afghanistan from five to 10 in March 2007. Now the bad news: Largely ignored were announcements
made at roughly the same time that Canada would be providing $1.75 million to UNICEF for Afghan womens health and literacy and
another $11.5 million over two years for provincial reconstruction. International Co-operation Minister Jose Vernier and Pubic Works and Government
Services Minister Michael Fortier made the announcements in Montreal. The $11.5-million contribution to the Accelerated District Reconstruction program is part of a
nearly $1billion 10-year Canadian commitment to stabilization, reconstruction, poverty reduction and improving Afghanistans governance. Unfortunately, the good
news about Canada contributing to health and education programs, the building of roads, aqueducts, sanitation infrastructure, schools and clinics throughout Kandahar
has been juxtaposed with reports based on excerpts from the Jan/Feb 2007 edition the America-centric journal Foreign Affairs. The article "Saving Afghanistan" by
Barnett Rubin, a long-time critic of the American militarys conduct in Afghanistan, was seized upon as background context for an argument that Afghanistan is sliding
into chaos and that a bad end looms over Canadas Afghan mission. In fact, what U.S. scholar Rubin wrote about is what it would take to save
Afghanistan and a key point he made was that the United States all but abandoned Afghanistan after it drove al-Qaeda and Taliban
core leadership into Pakistan and failed to consolidate that tactical advance . NATO countries, including Canada, have leapt in to the breach,
but Rubin argued that if America is to succeed in its war on terrorism, it must refocus its attention on securing Afghanistan and
stabilizing it through reconstruction. Obviously Canada is not America and Canadians have different aims in Afghanistan, but that is
precisely what the Canadian Forces are doing there. Rather than the American aim of destroying poppy fields that supply U.S. drug
users with 14 per cent of their opium, for example, the Canadian Forces are involved in not only defeating the Taliban and its alQaeda
supporters in the interest of security, but in infrastructure reconstruction that will enable the growth of alternative crops such
as grapes and their delivery to markets.
Afghanistan instability will cascade to nuclear war
Nuclear
Risk,
While now a professor of history and international relations at Boston University, Andrew Bacevich is also a West Point graduate and
retired Army Colonel with service in Vietnam and the Persian Gulf. Bacevich 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. In this post, I recommend his most recent
OpEd , which appeared today in the LA Times. In it, he relates Afghanistan to Kennedys disastrous 1961 Bay of Pigs invasion an event
that helped lay a foundation for 1962s Cuban Missile Crisis. While the linkage between Afghanistan and nuclear war is
not the point of Bacevichs OpEd, the danger should be obvious in light of what transpired in those fateful thirteen days of
October 1962. But, just as almost no one saw how supporting the overthrow of Castro could lead to a nuclear war, almost no one today is concerned
that the war in Afghanistan has a similar potential . The risk analysis approach that I have been advocating is helpful for illuminating that danger. Last
May, as part of my Defusing the Nuclear Threat series at Stanford, former Director of Los Alamos Dr. Siegfried Hecker spoke on The Greatest Nuclear Risks. In that
talk, he explained why he saw Pakistan as the greatest nuclear risk we face. The war in Afghanistan adds to an already unstable situation in
nuclear-armed Pakistan. If that instability should lead to a coup by Taliban sympathizers within the Pakistani military,
the risk becomes much clearer . To avoid disaster, we need to stop seeing dangers only in hindsight. We need to start thinking through the possible
consequences of our actions, before they occur. If we do that, we can not only avert a nuclear disaster, but also build a better, safer world.
***ADVANTAGE ANSWERS***
A2 solvency 1nc
production will slow ---- OPEC will take over
REUTERS 1/7/2014 (UPDATE 2-U.S. oil output growth to slow in 2015; OPEC to pump more EIA,
http://www.reuters.com/article/2014/01/07/energy-data-eia-idUSL2N0KH1HR20140107)
The pace
of U.S. oil production growth will begin to slow in 2015 , even as global demand continues to rise, allowing OPEC to
pump more crude for the first time in three years, U.S. government forecasts showed on Tuesday. In its first projections for 2015, the U.S. Energy
Information Administration said U.S. output will rise by 9 percent or 750,000 barrels per day next year to reach 9.3 million bpd, the highest in 43 years. That rate may seem heady but is
less than the breakneck 1 million bpd growth seen last year and forecast for 2014, the result of the biggest oil boom in a generation as fracking and horizontal drilling
technologies make millions of barrels in domestic on-shore oil reserves more accessible. The data arm of the U.S. Department of Energy, like many other
analysts, has consistently underestimated the scale of the U.S. shale oil boom and these estimates may yet prove low, analysts said. "I
think the EIA recognizes that they have been too conservative and is marking to market now," said Katherine Spector, with Canadian bank CIBC in New York. Spector noted Tuesday's
forecasts follow revisions in the Annual Energy Outlook that boosted estimates for output through 2019, some 22 percent higher than previous forecasts. The EIA's latest report also suggests
the administration is taking a slightly brighter outlook on supplies from the Organization of the Petroleum Exporting Countries, which is struggling to come to grips with the shale revolution.
World oil demand will rise 1.5 percent to 92.96 million bpd next year, a record high and the fastest growth rate since 2010, the
agency said. It also raised its forecast for this year's demand growth by 60,000 bpd. That will allow OPEC to boost supply by 0.4 percent to 35.6 million bpd
next year after it fell 1 percent this year, the EIA said. But that extra oil comes at a cost - lower prices. The agency forecast global benchmark Brent crude oil prices at an average $101.58 a
barrel in 2015, down from $105.42 a barrel this year. "EIA expects
the downward trend in Brent crude oil prices to continue over the next two years as
growing non-OPEC oil supply continues to outpace world consumption," administrator Adam Sieminski said in a statement.
production is likely to be soon over and then decline, as the oil companies are not bringing new fields on line as fast as the old ones are running out. Saudi Arabia, as the current posts are in the process of explaining, is
unlikely to increase production much beyond 10 mbd, since Ghawar, the major field on which its current production level is built, is reaching the end of its major contribution, though it will continue to produce at a lower rate
there
now comes an Energy Study from Harvard which boldly states that this is rubbish - that by 2020, global production will be at 110.6 mbd and these concerns that most of
us have at The Oil Drum (inter alia) are chimeras of the imagination. It is therefore pertinent to begin with examining where the study (which was prepared with
BP assistance) anticipates that the growth in supply will come from. That too is shown as a plot: [omitted in original URL] It is instructive, in reading this plot, to first recognize
into the future. The bottom line, at least to date, is that there is no evidence from the top three producers that their production will be even close, in total, to current levels by the end of the decade. So, (h/t Leanan)
that it is a plot of anticipated production capacity rather than projected actual production. The reason for this can perhaps be illustrated by an example. Within the current production capacity that Saudi Arabia claims adds up
line (and sustain) at least 500 kbd per year of new production. While it is likely that it can do this for a year or two more, betting that it will be able to do this plus raise production 2 mbd or more in 2020 is on the far side of
optimistic. Just because a reserve exists does not mean that it can be brought on line without the physical facilities in place to produce it. It is interesting, however, to note the reports view on field declines in production:
***THEIR EVIDENCE*** Throughout recent history, there is empirical evidence of depletion overestimation. From 2000 on, for example, crude oil depletion rates gauged by most forecasters have ranged between 6 and 10
percent: yet even the lower end of this range would involve the almost complete loss of the worlds old production in 10 years (2000 crude production capacity = about 70 mbd). By converse, crude oil production capacity
in 2010 was more than 80 mbd. To make up for that figure, a new production of 80 mbd or so would have come on-stream over that decade. This is clearly untrue: in 2010, 70 percent of crude oil production came from
oilfields that have been producing oil for decades. As shown in Section 4, my analysis indicates that only four of the current big oil suppliers (big oil supplier = more than 1 mbd of production capacity) will face a net
reduction of their production capacity by 2020: they are Norway, the United Kingdom, Mexico, and Iran. Apart from these countries, I did not find evidence of a global depletion rate of crude production higher than 2-3
Alberta, through constraints on pipeline construction either South or West, are at least as likely to restrict future growth of that deposit as any technical challenge. The four countries that the report sees contributing most to
future oil supplies are (in the ranked order) Iraq. the United States, Canada, and Brazil. For Iraq, he sees production possibly coming from the following fields within the next eight years. I understand that one ought to show
some optimism at some point over Iraq, but it has yet to reach the levels of production that it achieved before the Iran/Iraq War, and that was over some time ago. The EIA has shown that it is possible to get a total of over 13
mbd of production, but it requires investment and time, and some degree of political stability in the country. That is still somewhat lacking. Prior to that war, Iraq was producing at 3.5 mbd, the production curve since then has
not been encouraging: Recognizing that the country has problems, the report still expects that there will be a growth in production of some 5.125 mbd by the end of the decade. This appears to be a guess as to being some 50%
US production, this is tied to increasing production from all the oil shales in the country, which will see spurts in growth
similar to that seen in the Bakken and Eagle Ford. I estimate that additional unrestricted production from shale/tight oil might reach 6.6 mbd by 2020, or an
of the 10.425 mbd that the country could potentially achieve. As for
additional adjusted production of 4.1 mbd after considering risk factors (by comparison, U.S. shale/tight oil production was about 800,000 bd in December 2011). To these figures, I added an unrestricted additional production
of 1 mbd from sources other than shale oil that I reduced by 40 percent considering risks, thus obtaining a 0.6 mbd in terms of additional adjusted production by 2020. In particular, I am more confident than others on the
prospects of a faster-than-expected recovery of offshore drilling in the Gulf of Mexico after the Deepwater Horizon disaster in 2010.
xt long solvency
The plan is woefully insufficient and takes decades to solve
Colagiovanni 2012 Lou, activist, journalist, and political consultant for the Detroit Examiner citing a CBO report, CBO report
finds 'drill baby drill' in practice produces little revenue or oil
It has been confirmed in a new report by the non-partisan Congressional Budget Office that the
operational, which in some areas may take as long as 25 years , the report finds a revenue of $2 billion a year may be
possible but not sustainable . For those who say that any revenue generated is acceptable and desired, they should know that up to 90% of the profits will be
in use. Once
paid to Alaskan residents. The remaining 10% would have nearly no bearing on the federal debt or deficit. This figure is based on the speculation that if new contracts
were to be signed, they would be similar to those already approved, which do pay up to 90% of generated revenue to Alaskans. Finally the CBO report summarizes the
situation succinctly: Production from newly opened areas over the 20232035 period would be far less than the amounts produced by current operations in the Gulf of
Mexico. Therefore, American citizens are left with a decision. Do they wish to proceed allow the destruction of protected lands for a measly $500 million a year, or will
they see the costs far outweigh the benefits. The United States uses between 6.8 - 8.3 billion barrels of oil per year. Today's current oil price is $96.21 per barrel.
Therefore, The United States annually spends $798 billion a year for oil. In other words it would take 1,596 years for these new drilling operations to generate
enough oil or revenue to cover the US for a single year.
xt certainty
History Proves: The plan cant attract investment and uncertainty is inevitable leasing delays magnify our time frame
arguments this is the most credible source
EIA 2009 U.S. Energy Information Administration - Independent statistics and analysis - Impact of Limitations on Access to Oil and
Natural Gas Resources in the Federal Outer Continental Shelf AEO2009
The U.S. offshore is estimated to contain substantial resources of both crude oil and natural gas, but until recently some of the areas of the lower 48 OCS have been
under leasing moratoria [56]. The Presidential ban on offshore drilling in portions of the lower 48 OCS was lifted in July 2008, and the Congressional ban
was allowed to expire in September 2008, removing regulatory obstacles to development of the Atlantic and Pacific OCS [57, 58]. Although the Atlantic and Pacific
calling for a reinstatement of the moratoria. Others cite the benefits of drilling in the offshore. Recently, the U.S. Department of the Interior
extended the period for comment on oil and natural gas development on the OCS by 180 days and established other processes to allow more careful evaluation of
potential OCS development. Assuming that leasing actually goes forward on the schedule contemplated by the previous Administration, the leases must then
be
bid on and awarded, and the wining bidders must develop exploration and development plans and have them approved before any
wells can be drilled. Thus, conversion of the newly available OCS resources to production will require considerable time , in
addition to financial investment. Further, because the expected average field size in the Pacific and Atlantic OCS is smaller than the average field size
in the Gulf of Mexico, a portion of the additional OCS resources may not be as economically attractive as available resources
in the Gulf .
Oil boom now squo triggers the impact or impossible to solve because OPEC is too powerful
Hussain 2012 Gulf Business |World Oil Markets: Is US Set To Overtake OPEC? As US crude production rises, is OPECs influence
on global oil markets in danger of waning? By Syed Hussain December 31, 2012
Consider the facts: US oil production has been at its highest level since 1998, while natural gas production reached its highest level ever. Meanwhile, the US became
a net exporter of petroleum products for the first time in 49 years and is now actively looking to export n atural gas to Asian
and European markets. In the north, the Canadian oil sands, considered the third largest crude reserves in the world after deposits in Venezuela and Saudi
Arabia, have ramped up production and aim to be the fourth largest oil producer in the world by 2025. Finally, Mexico, the worlds 8th largest crude
producer, is also ramping up production, making the three friendly states powerful allies against OPEC influence. Combined, North
America oil production is projected to average 16.43 million barrels per day in 2012, larger than the 12-million bpd capacity of top producer Saudi
Arabia. Indeed, North America is expected to have the highest growth among all non-OPEC regions in 2012, as supply growth marks the
highest level in terms of volume since 1970. The forecast calls for healthy growth from the US and Canada, as well as relatively steady supply
from Mexico, noted the latest OPEC report. According to preliminary data, North America oil supply increased by 1.27 million bpd in the first half of 2012
compared to the same period in 2011. On a quarterly basis, North America oil production is expected to average 16.48 million bpd, 16.45 million bpd, 16.33 million
Citibank calls this change in global energy supply chain transformational. With no
signs of this growth trend ending over the next decade, the growing continental surplus of hydrocarbons points to North America effectively becoming the
bpd, and 16.46 million bpd, respectively.
new Middle East by the next decade, Ed Morse, managing director and the head of global commodities research at Citigroup Global Markets, wrote in a report earlier
in the year. The US alone could add 6.6 million bpd to bring crude from nine million bpd at end-2011 to over 15.6 million bpd in 2020- 22. In total, North America as a
whole could add over 11 million bpd of liquids from over 15 million bpd in 2010 to almost 27 million bpd by 2020-22, notes Morse. Global investment data
underlines that trend. North America is expected to attract 26 per cent of the $1.23 trillion being poured into the global energy sector this year, according to energy
consultants IHS International. The brief lull in expenditures in 2009 and 2010 caused by the Great Recession is behind us, said David Hobbs, IHS chief energy
strategist. Robust oil prices and the growth of North American unconventional gas which already accounts for $128 billion in 2012 spending will create new high
water marks for investment in capital expenditure and operational expenditure that surpass pre-recession highs. Meanwhile, Middle East energy companies will spend
$135 billion, or 11 per cent of total global spend. Naturally, Middle East oil and gas companies have been distracted over the past two years due to
the Arab Spring. While Gulf states have ramped up production and made up for the shortfall in OPEC production, there are huge question marks
over the future of other Middle East producers . Irans oil and gas output has been falling due to crippling sanctions, while
Syrian and Yemeni production has been decimated. Iraq and Libya have ambitious plans, but their plans could be derailed by a range of investment issues,
infrastructure challenges and political instability. Hungry Asian consumers are also hedging their supply risks by investing in North America .
Burnt by their dependence on Iranian crude, Chinese, Japanese, South Korean and Indian state-owned companies are seeking investments in North America, Africa,
thereby accelerating
non-OPEC production. Another key reason for the rise of non-OPEC production is OPECs own rising
domestic expenditures and consumption. Arab Petroleum Investments Corporation (Apicorp) data shows Saudi Arabias fiscal breakeven oil price stands at
$94, while OPECs median fiscal breakeven price stands between $90-100. In the past, OPECs low-breakeven fiscal price meant that many reserves
such as the Canadian oil sands, Gulf of Mexico and Brazilian deepwater reserves, and Arctic resources were economically unviable. But market observers
are certain most OPEC producers will act to ensure oil prices remain high, making the more expensive non-OPEC production
possible. Those whose fiscal break-even prices are higher than market price should not be expected to be comfortable with the status quo, wrote Ali Aissaoui, senior
consultant at Apicpro, in a research report. They would try and persuade the opposite side to lower the aggregate production ceiling and individual output quotas either
Dont
expect the Saudis and other OPEC countries to give up their influence on global oil markets easily. As other OPEC
pro-rata or otherwise. The expectation would be for market prices to increase to meet their higher break- even prices, even if that means losing some volume.
countries faltered during the Arab Spring revolution, Saudi Arabia played the soothing role of the responsible and influential global supplier of crude to world markets
and has earned global praise for ensuring oil prices dont spiral out of control and derail fragile global economic recovery. Saudi, and other influential suppliers
such as Kuwait, UAE and Qatar, are securing long-term contracts with Asian customers to ensure demand security. Earlier this year, South
Koreas Korea National Corporations took a 40 per cent stake in three oil production blocks in Abu Dhabi at a cost of $2 billion, which gives it access to 43,000 bpd.
Saudi Arabia is trying to invest in solar energy for domestic use to free up more crude for export purposes. It has also begun tapping its
shale gas reserves in the Red Sea. Oil services giant Baker Hughes estimates Saudi Arabia may hold the fifth-largest deposits of shale gas, after China, the US,
Argentina and Mexico, with as much as 645 trillion cubic feet of recoverable reserves. Crucially, Saudi Aramco owns half of Motiva Enterprises, which operates the
United States largest refinery. The move has reversed the decline of Saudi oil exports in the US and gives the Kingdom a foothold in the burgeoning energy centre.
Kuwait, meanwhile, is looking to ramp up its oil production once the political climate improves, and is reportedly in talks with a Canadian company to take a stake in an
oil sands project. BERNSTEINS RESEARCH Not everybody believes the North American production surge is a fait accompli. A Harvard University Belfer Centre
research notes that the biggest threat to North America output is a collapse in oil prices, especially as production surpasses demand during
economic fragility.
Increased US production doesnt threaten OPEC
Jahn 2012 OPEC not concerned about US pickup in oil output| GEORGE JAHN | December 13, 2012 10:16 AM EST | The
Huffington Post
VIENNA OPEC does not see increased U.S. oil output as a threat to its interests but is skeptical about current forecasts on the
boom of American shale oil production, a senior official of the 12-nation cartel said Thursday. OPEC Secretary General Abdullah AlBadry also said that figures supplied by Iran show it producing around 3.7 million barrels a day. That is the same amount as Tehran
pumped before international embargos on its crude that took effect this year and is estimated to have cost it hundreds of thousands of
barrels a day in sales. Al-Badry spoke to reporters a day after OPEC ministers agreed to keep their daily crude production target
unchanged at 30 million barrels. They also extended his term for a year after failing to agree on a successor for the post because of
rivalries among Saudi Arabia, Iran and Iraq, which nominated candidates. OPEC, which accounts for about a third of the world's oil
production, is projecting a slight fall in demand for its crude next year, and world inventories are well stocked, in part because of
resurgent production by the United States, which is tapping into oil extraction from shale. The Paris-based International Energy
Agency is predicting that America will be a net exporter of oil by the next decade and could overtake Saudi Arabia OPEC's
powerhouse as the world's top crude producer by 2020. Analysts have suggested a looming dent in OPEC influence as a result. But
Al-Badry told reporters his organization "is not really concerned" about any increase in world supply due to U.S. shale extraction. He
questioned industry estimates that U.S. shale extraction could amount to an extra 3 million barrels of oil a day within 20 years as well
as forecasts of U.S. energy independence. At the same time, he said any extra supply was welcome. "It's fine with us, it's another
source of energy and the world really needs this oil, I don't see it as a threat to OPEC" he said.
xt production high
of
suppliers outside the unstable Middle East, chiefly Canada and Mexico which sell America more oil than do either Saudi Arabia or
Hugo Chavezs Venezuela. Second, the net benefits of importing less oil as a share of total consumption and using less oil in total are unclear. 20 The oil market
is global. Even if Americans purchased none from abroad, they would remain vulnerable to any perturbation in the
international market because they would still have to pay the worlds price. In addition, the key inefficiencies from oil dependence
derive from macroeconomic disruptions and market power by oil exporters. Policies that drive down oil consumption in
periods without disruptions or significant monopoly pricing could burden consumers while not directly correcting market failures .
and relationship with the U.S. Generally, the longer the marine shipment and the more unstable or hostile an export government is
towards the U.S., the lower the reliability or higher the security risk of the imported supply. Today the U.S. imports crude and petroleum oil from
over 90 countries. The largest import volumes come from OPEC and seven non-OPEC countries. Refer to the following table. The most secure and the largest
import volumes come from North America. Canada, the U.S.s largest and most important trade partner is also the largest supplier of
U.S. oil imports. Mexico is the second largest supplier. Canadian and Mexican oil imports are essentially as reliable and secure
Due to Irans threats to shutdown the Strait of Hormuz, the OPEC Persian Gulf imports have the highest risk
Will take decades to solve and multiple alt causes to the aff
(import oil from other countries, need natural gas, reduce consumption)
MILLER 12 - Energy Consultant and Professional Engineer; 35 years experience in petroleum & clean energy businesses; MBA from Saint Mary's College/U.C.
Berkley. (Miller, John. U.S. Energy Security and the Next Energy Crisis. July 16, 2012. http://theenergycollective.com/node/93716)
million barrels a day by the close of this decade and 15 million before the end of the next. In
greater. As of 2009, Americans burned through nearly 19 million barrels of oil-based liquid fuels each day to power their cars, trucks, and factories, and although
that figure has edged down over the past couple of years, domestic supply is still a long way from matching U.S. demand. That said, U.S.
demand for oil appears to have peaked. While part of the recent fall can be chalked up to slow economic growth, sustained high oil prices and improving automobile
technology are also at work. New fuel- economy standards, if they stick, could drive U.S. consumption down much further. Ultimately, though, it's
stretch to think the United States will eliminate the gap between oil supply and demand anytime soon.
a massive
of its oil from the Middle East persists, along with the belief that the US main strategic priority in the region is securing its own oil imports.
conclusion that America can finally pack up and leave the Middle East because they
have entered a shale energy revolution is too simplistic and any long-term major changes in US strategy towards the Middle East
must be considered against the increasing presence and influence of China in the region, with America not wanting to be significantly
displaced in the region over the coming decades. Both the ongoing shale gas revolution and the more recent shale oil
surge have dramatically changed the US domestic energy landscape, but the country is still, and will remain, far
from energy independent . Over the next two decades, even as shale oil production peaks, the US will still import over 25 per cent of its total oil
consumption. The shale oil surge and reduced oil consumption have reduced US oil import dependence significantly over the last five years, from 56 per cent in 2008 to
32 per cent in 2013. Although the huge increase in Canadian oil imports from 16 per cent in 2004 to 32 per cent in 2013 has significantly altered the composition
of the US imports portfolio, Saudi Arabia and the wider Persian Gulf today still contribute around 20 per cent. Increased shale oil output coupled with higher imports
from both Canada and Mexico will see the relative contribution of the Persian Gulf decline in the medium-term, but as the shale oil surge tapers off in the second half of
the next decade this contribution will rebound. Even during this medium-term downturn the Persian Gulf will remain one of Americas top three oil sources. The cost
advantage that Persian Gulf suppliers enjoy means that there will always be a significant market for their oil in the US. Regardless of the actual amount of oil
that the US imports from the Middle East, there are still broader economic goals that it will pursue in the region. The US understands
stable oil and gas exports from the Middle East to the world economy are critical. And it demonstrates this understanding by its
continued policing of the Straits of Hormuz the worlds most important oil chokepoint, with 20 per cent of all oil traded passing
through it. Even though the US contributes the majority of military assets that allow the free flow of ships through the Straits, almost
85 per cent of this oil travels to Asian markets, while only about 10 per cent actually travels to the US. As long as the US perceives threats to energy supply
routes in the Middle East it will contribute its available security assets to the region. On top of its economic goals in the region there are also significant
non-energy priorities that the US will continue to pursue into the future. Blocking Iran from developing a nuclear weapon and the
continued support of Israel are both examples of US priorities which can trump its energy priorities, with past US actions in relation
to these issues (US-led sanctions against Iran, the Arab oil embargo) directly and significantly reducing the supply of oil to the world
market. Additionally, any future US strategy in the Middle East must consider China. China is the worlds largest energy consumer and
currently imports the majority of its oil from the Middle East. To secure its increasing energy needs China will need to increase its presence and
influence in the region. As Chinas blue water naval capabilities expand in the future, it will want to increase protection of its energy supply routes especially those
in the Middle East. It will also seek to strengthen its relationship with Saudi Arabia. Chinas future long-term strategy for the Middle East will increasingly threaten
reduced
future US oil import dependence on the Middle East will not directly result in a wholesale shift in strategy towards
the region , it will give the US slightly more flexibility in the medium-term when dealing with specific crises or countries, generally improving Washingtons
Americas role as the dominant exterior power in the region, which is a strong incentive for the US to maintain its position in the region. Although
decrease in American oil imports from the Middle East will not result in the US redeploying
one its aircraft carriers from the Persian Gulf to the Pacific, or encourage a future US Administration to lecture Saudi Arabia about the
rights of women in the State Of The Union. America has broad long-term strategic goals in the Middle East and will have to pursue them carefully in the
future as China strengthens its position in the region.
stability, the rest of the world would have to expect reward for good behavior and fear punishment for bad. Since the end of the Cold War, the United States has not always proven to be
especially eager to engage in humanitarian interventions abroad. Even rather incontrovertible evidence of genocide has not been sufficient to inspire action. Hegemonic
stability can
only take credit for influence those decisions that would have ended in war without the presence, whether physical or psychological , of
the United States. Ethiopia and Eritrea are hardly the only states that could go to war without the slightest threat of U.S. intervention. Since
most of the world today is free to fight without U.S. involvement, something else must be at work. Stability exists in many places
where no hegemony is present. Second, the limited empirical evidence we have suggests that there is little connection between the relative
level of U.S. activism and international stability. During the 1990s the United States cut back on its defense spending fairly substantially, By
1998 the United States was spending $100 billion less on defense in real terms than it had in 1990. To internationalists, defense hawks, and other believers in hegemonic stability this
irresponsible "peace dividend" endangered both national and global security "No serious analyst of American military capabilities," argued Kristol and Kagan, "doubts that the defense budget
has been cut much too far to meet Americas responsibilities to itself and to world peace."" If the pacific
this type of danger during the Cold War, U.S. planning to protect its sea
lanes of communication with the Persian Gulf was motivated partly by the importance of insuring the steady flow of oil that was necessary to enable the United States
to fight a long war against the Soviet Union in Europe. During the Second World War, Japans vulnerability to a U.S. oil embargo played an important role in destroying Japans ability
to fight.3 This type of threat to the U.S. military capabilities is not a serious danger today because the United States does not face a
major power capable of severely interrupting its access to key supplies of oil. In contrast, China does face this type of danger because its oil imports are
vulnerable to disruption by the U.S. Navy.
United States does not currently face this type of danger; this is largely because the military
status quo currently favors the United States, which relieves it from having to take provocative actions. In contrast, Chinas efforts to protect its access to oil
could be more provocative and generate military competition with the United States.
1 For a full analysis of the when and how oil dependence leaves states vulnerable to coercion, see Rosemary A. Kelanic, Black Gold
and Blackmail: The Politics of International Oil Coercion (PhD dissertation, University of Chicago, 2011).
2 For important exceptions, see Kelanic, Black Gold and Blackmail.
3 Jerome B. Cohen, Japans Economy in War and Reconstruction (Minneapolis: University of Minnesota, 1949).
4 On the security dilemma see Robert Jervis, Cooperation Under the Security Dilemma, World Politics, Vol. 30, No. 2 (January
1978), pp. 167-214; and Charles L. Glaser, The Security Dilemma Revisited, World Politics, Vol. 50, No. 1 (October 1997), pp. 171201.
decades shows that easily the most effective policy to reduce potential macroeconomic social costs from periodic oil supply
shocks is the Federal Reserves determination to respond promptly to any current or prospective inflationary threat. This means
that even fairly large oil price increases are now much less likely to set off a wage price spirals.
The thesis to this advantage is wrong 3 warrants
MORRIS et al 12 Adjunct Professor @ Georgetown; fellow and the policy director for Brookings Climate and Energy Economics Project (Morris, Adele C.
Pietro S. Nivola. Charles L. Schultze. CLEAN ENERGY: REVISITING THE CHALLENGES OF INDUSTRIAL POLICY. June 4, 2012.
http://www.brookings.edu/~/media/research/files/papers/2012/6/04%20clean%20energy%20morris%20nivola%20schultze/04_clean_energy_morris_nivola_schultze)
The only fuel the U.S imports in vast quantities is oil, so energy security as it relates to imports is really about oil. The degree to which oil dependence justifies
government investments in clean energy technology is debatable. First, nearly 90 percent of U.S. oil demand is met by domestic wells and those
of
suppliers outside the unstable Middle East, chiefly Canada and Mexico which sell America more oil than do either Saudi Arabia or
Hugo Chavezs Venezuela. Second, the net benefits of importing less oil as a share of total consumption and using less oil in total are unclear. 20 The oil market
is global. Even if Americans purchased none from abroad, they would remain vulnerable to any perturbation in the
international market because they would still have to pay the worlds price. In addition, the key inefficiencies from oil dependence
derive from macroeconomic disruptions and market power by oil exporters. Policies that drive down oil consumption in
periods without disruptions or significant monopoly pricing could burden consumers while not directly correcting market failures .
freight costs. Construction in the Arctic costs, as a rule of thumb, three to five times more than comparable infrastructure in lower
latitudes. Another challenge to bear in mind is the risk to existing infrastructure posed by thawing permafrost. As the permafrost thaws, it loses strength
and volume, leading to failure of foundations and piling. The warming climate will also accelerate the erosion of shorelines and riverbanks, threatening infrastructure
located on eroding shorelines.
xt drilling fails
Arctic drilling is too unpredictable for companies- long history of empirics proves the plan fails
Beinecke 2013 [Frances, President, Natural Resources Defense Council, A Pattern of Failure,
http://energy.nationaljournal.com/2013/01/are-arctic-oildrilling-challen.php?comments=expandall#comments]
Shells repeated failures in the Arctic Ocean prove that neither the company nor offshore drilling belong in these wild, remote, and
rugged waters. The companys drilling rig, for instance, ran aground when four tug engines failed in a storm. Yet the North is region of
mishaps mechanical, human, and natural. It is home to churning seas, punishing winds, frigid temperatures, unpredictable ice, and
months of prolonged darkness. Shells inability to prepare for and cope with these punishing conditions makes it vividly clear: we
have no business letting the oil industry drill in the Arctic Ocean. The grounding of Shells drilling rig is not an isolated incident. It is
part of a larger pattern in which Shell has proven no match for the elements. Last July, another of the companys drill rigs nearly ran aground in the
Aleutian Islands. Through August, Shell couldnt move its spill response bargea linchpin in its emergency planout of Bellingham, WA because the Coast Guard
wouldnt certify it as seaworthy until the company dealt with more than 400 issues, including wiring and other safety shortcomings. Then, when Shell started
preliminary drilling without the spill response barge in place, within 24 hours its rig had to turn tail and flee from a 30-mile long iceberg that bore
down on the drill site. And in September, Shells containment domeused to capture oil in the event of spillwas crushed like a beer can during pre-deployment
testing. Shell has poured billions of dollars into offshore Arctic drilling, but no matter how much it spends, it cannot make the effort anything
but a terrifying gamble. And if Shell, the most profitable company on Earth, cant buy its way to safety in Alaska , nobody can. That is
why the administration should halt all drilling in the Arctic Ocean. Neither the oil industry nor our government is prepared to respond to
a spill in a region where the closest Coast Guard base is 1,000 miles away from the leasing sites, no proven technology exists to
collect oil, and winter ice makes spill response impossible . Nor do we even know all the damage a spill and clean-up efforts would do to Arctic
ecosystems. Very little research has been done yet in these waters and we have only a narrow body of research focusing on just a few species. Until these gaps in
emergency response and research are filled, federal agencies cannot responsibly even weigh whether drilling in the Arctic Ocean could ever be safe.
xt leadership fails
Failure to ratify LOST is the single greatest factor in US Arctic influence
Smith 2011 [Colonel Reginald R. Smith, USAF, is Professor of National Security Affairs and Senior Developmental Education
Student (Strategy and Policy) at the Naval War College, The Arctic: A New Partnership Paradigm or the Next "Cold War"?
http://www.ndu.edu/press/lib/images/jfq-62/JFQ62_117-124_Smith.pdf]
The significance of the declaration is paramount to cooperation in that UNCLOS provides the international rallying point for
the Arctic states. 78 Similarly important, by virtue of the unanimous and strong affirmation of UNCLOS, the declaration effectively
delegitimized the notion to administer the Arctic along the lines of an Antarctic-like treaty preserving the notions of
sovereignty and resource exploitation in the region. 79 With U.S. participation and declaration of support for UNCLOS in these venues, failure to
ratify the treaty suggests that U.S. credibility and legitimacy, and hence the ability to build cohesive multilateral partnerships,
are appreciably degraded. This conclusion is illustrated in Malaysias and Indonesias refusal to join the Proliferation Security Initiative using the U.S. refusal
to accede to UNCLOS as their main argument. 80 Accession to the treaty appears to be a key first step to preserving U.S. vital interests in
the Arctic and building necessary credibility for regional and global partnerships in the political spectrum . Equally important
to political partnerships in the region are those available through military collaboration of the Arctic nations .
sees the ease with which China undervalues the yuan by pegging it to the dollar as proof of the country's strength, but hiding
economic might. He forecasts that China in 2030 will have an economy that is one-third larger than the United States', yet he admits that it will remain only half as wealthy. These are
notable trends, to be sure, but not ones that indicate China will attain anything close to the position the United States has held over the past 60 years. The biggest flaw in Subramanian's index of
dominance is the importance he assigns to China's status as a net creditor. Based on this alone, he is prepared to say that China's economic strength is already comparable to that of the United
States. But China's
creditor status does not make up for the fact that its economy is presently less than half the size of the United States' and
its people are barely one-tenth as wealthy as Americans. Creditor status is also a misleading metric by which to judge China because it
is usually used to describe financially open economies, and China is largely closed . Countries with open economies can invest their money in many places.
Beijing, because it cannot spend its foreign reserves at home, is forced to keep buying U.S. Treasury bonds. China's creditor status
arises largely from its weaknesses, not its strengths . The country's $3.2 trillion worth of foreign currency holdings represents an imbalance
between investment and consumption. Instead of loaning money to rich countries, China should be importing capital in order to speed its domestic
development and meet its sizable needs, starting with properly capitalized pension and financial systems. China's financial books are strictly divided, with huge assets in foreign currency
(primarily dollars) on one side and huge liabilities in local currency on the other. Local governments have incurred high debts by spending heavily on programs such as railroad expansion and
by borrowing to fund the 2009 stimulus (which came mostly from local, not national, government coffers). Beijing should be paying down this debt and addressing other domestic shortfalls
with its mountain of foreign currency, but it cannot do so under its present balance-of-payments rules, which are designed to keep foreign currency in the hands of the national monetary
authorities. Due to a closed capital account, domestic holders cannot send money overseas, and foreign currency can be converted to yuan only through the state financial system. The Chinese
government has not let money flow freely because doing so would undermine its control of domestic interest rates, reducing its ability to influence economic cycles, and it would expose the
domestic banking sector to devastating competition. If domestic entities were allowed to send money abroad, hundreds of billions of dollars would flee the country for financial institutions that
operate commercially, unlike Chinese banks. Such a stark fear of competition does not suggest a country ready to exert dominance anytime soon. Lastly, Subramanian inflates China's financial
ideal, but it has driven down the Chinese share of U.S. debt while keeping interest rates historically low. In contrast, Beijing, despite its best efforts to diversify, still holds 70 percent of its
foreign currency reserves in dollars. The reason is simple: those reserves are so large and growing so quickly that there is no alternative. The United States needs China to keep U.S. interest
rates below historic norms; China needs the United States to maintain its entire balance-of-payments system. Even if Subramanian acknowledges that China's lopsided financial system is
holding the country back now, he assumes that Beijing will soon rewrite its balance-of-payments rules and become an open economy. This assumption underestimates the Communist Party's
antipathy to change. In fact, the principal advocate for such reforms has been Washington, which hopes to encourage China's transformation from an investment-led to a consumption-led
economy. Such a transition would undermine China's net creditor status--what Subramanian sees as its main claim to dominance. But implementing market reforms would also allow China to
by debt, the United States faces a period of stagnation. If the overall economy remains sluggish, a lack of import growth will cause trade to lag and further reduce the United States' global
influence. Still, the
Chinese dragon will not fly forward indefinitely, as Subramanian suggests; it may even crash. For the foreseeable future, China
will not attain the kind of dominance the United States has long held. The world should not expect to crown a new global leader but
prepare for the absence of one.
the Arctic
Five have quickened their efforts to extend their sovereignty over extended continental shelves (ECSs)2 where some of the most promising deposits are
worlds undiscovered but technically recoverable hydrocarbon reserves, the development of which will become increasingly feasible and cost-effective over the next decade. Indeed, for this reason alone,
believed to be located, while other countries with a strong interest (but no territorial claim) in the Arctic and its resource riches including distant, but energy-hungry economic powerhouses like China, Japan, and South
Smithsonian Books, 2009); David Fairhall, Cold Front: Conflict Ahead in Arctic Waters (London and New York: I. B. Tauris, 2010); Roger Howard, The Arctic Gold Rush: The New Race for Tomorrows Natural Resources
The
exclusive economic zone is the offshore zone where coastal states have jurisdiction over economic and resource management , including
(London and New York: Continuum, 2009); and Richard Sale and Eugene Potapov, The Scramble for the Arctic: Ownership, Exploitation and Conflict in the Far North (London: Frances Lincoln, 2010). 4
sovereign rights for the purpose of exploring, exploiting, conserving, and managing natural resources, whether living or nonliving, of the seabed, subsoil, and the superjacent waters. Typically, the EEZ includes waters three to
two hundred nautical miles offshore. See National Oceanic and Atmospheric Administration, U.S. Department of Commerce, What is the EEZ? http:// agreement between Norway and Russia over how best to divide a
sector they both claimed in the Barents Sea, together with a commitment by the Arctic Five in 2008 to abide by procedures set forth in the UN Convention on the Law of the Sea (UNCLOS) for determining the dimensions of
Third, and finally, the sheer expense and technical challenges involved in
extracting oil, gas, and other strategic resources from the Arctic ocean floor argue for a joint, collaborative effort among interested
parties, Arctic and non-Arctic alike, as opposed to a go it alone, unilateralist approach. These and similar considerations are likely to
preserve the Arctic as a High North, low tension arena, to borrow a phrase popularized by Norways foreign minister, for some years to come. This is not to suggest, however, that the
each countrys ECS, suggests that a peaceful settlement of any territorial dispute is more likely than not.
Arctic promises to remain trouble-free as its resources and sea lanes become increasingly accessible. For one thing, it remains unclear what would happen if an Artic Five country whose ECS claim was rejected under
UNCLOS procedures refused to abide by the ruling. Given the resource wealth that could be at stake, the resulting standoff could indeed lead to disputes and military posturing by rival claimants that could trigger, in turn, a
crisis in the Arctic that might even end up with shots being fired. As for seaborne trade through the Arctic, smugglers and others involved in illicit commerce (possibly including terrorist elements) could eventually seek to
take advantage just as legitimate shippers would of the shorter routes and transit times offered by Arctic sea lanes, benefits that may seem especially attractive in those areas (likely to be extensive in the wide-open,
sparsely populated expanses of the High North) where transit routes are poorly policed. In addition, as its scale and importance grow, transarctic maritime traffic may be viewed as an attractive target for attack by various
disaffected groups, especially when ships pass through narrow choke points such as the Bering Strait along the way. Such scenarios may seem far-fetched at the moment, but they cannot be dismissed in the event that a
bustling trade in strategic commodities takes hold in the Arctic. This would be especially true were the Arctic to become the locus of a global trade in oil and gas, given all the vulnerabilities associated with offshore
production facilities and the supporting infrastructure required to bring supplies to market, as well as the economic costs that could be imposed if important energy flows were disrupted. At the same time, whatever the level of
regional tension at any particular time, the Arctic, situated atop three continents, has been and will continue to be, in geostrategic terms, an extremely valuable piece of real estate. Since the late 1950s, for example, the United
States has viewed the Arctic Ocean as an ideal location for ballistic missile submarine patrols, and its importance for the strategic mobility of American naval forces, including surface as well as subsurface platforms, will
almost certainly grow as Arctic waterways expand and become more navigable. In a similar vein, modern airlift and fighter/bomber aircraft based in Alaska are closer to Japan, South Korea, and China than they would be if
they operated from the west coast of the United States, and no more than eight hours flight time from anywhere in the Northern Hemisphere, all of which significantly enhances Americas crisis response and power projection
capabilities. Moreover, given that the Arctic would be an optimal vector for ballistic missile attacks against the United States originating from Russia, China, North Korea, or even Iran, it is also an ideal location for missile
defense and early warning systems designed to handle current and emerging threats, perhaps to include someday in view of the Arctics largely maritime character sea-based platforms, such as the U.S. Navys Aegisequipped cruisers. The ways in which these and other strategic advantages associated with the Arctic have influenced (and continue to influence) the national security perspectives of the United States, the other Arctic Five
countries, and rising global powers (such as China) are discussed in detail in later chapters of this report, but the key point to be made here is that such advantages are real and growing, and that this will remain the case,
whether or not the Arctics oil and gas deposits are effectively tapped, or its utility as a passageway for seaborne trade is fully exploited. Finally, developments in the Arctic may hold useful lessons for other resource-rich
regions where territorial claims remain unsettled and freedom of the seas could be challenged. More specifically, if the Arctic states and other key stakeholders are able to develop a framework for regional collaboration that
also respects and protects the national interests of the Arctic Five, a similar approach may also be tried (and eventually prove successful) in, for example, disputed maritime zones like the South China Sea. The geopolitical
dynamics of the Arctic and South China Sea regions, of course, are not entirely similar, but there is enough overlap with regard to such issues as ensuring unimpeded maritime passage through international waters, agreeing
on procedures for defining the ECSs of neighboring states, and developing cooperative plans for drilling offshore oil and gas deposits, to warrant some degree of investigation into how well Arctic models of cooperation
might apply, and the same may be true with regard to other areas of the globe of rising strategic importance where multiple national, regional, and international interests intersect. While the jury is still out on the best system
current trends suggest that a patchwork of relevant private, public, intergovernmental, and
nongovernmental organizations, rather than one overarching structure, is the best approach, centered perhaps around a core group of interested parties,
which, in the case of the Arctic, would be the Arctic Council.5 As this approach matures, moreover, the Arctic could serve as a valuable laboratory for testing how best to establish and maintain a safe, stable, and
of governance for the Arctic region as a whole,
secure environment in regions where a diversity of interests, ambitions, and expectations could easily clash, possibly in a violent manner, absent an effective mechanism for multinational and multilateral governance. With
these observations in mind, the analysis that follows aims to paint a comprehensive picture of the new strategic map just now emerging in the Arctic, to examine what that portends with regard to the potential for conflict or
cooperation within the region, and, on that basis, to determine as clearly as possible the likely policies and priorities of the Arctic Five and other key regional stakeholders, and the skills and capabilities to operate in the Arctic
that they will require as a result. Chapter 2 sets the overall stage insofar as major region-wide dynamics are concerned, focusing in particular on the emergence of more navigable Arctic sea lanes, the scale and accessibility of
the 5 Formally established in 1996, the Arctic Council is a high-level intergovernmental forum whose aim is to promote cooperation, coordination, and interaction among the Arctic states (which includes the Arctic Five plus
Iceland, Sweden, and Finland), with involvement of Arctic indigenous communities and other key stakeholders that may be granted permanent observer status. Traditionally, the council has focused on issues of sustainable
development and environmental protection in the Arctic, but, as the Arctic becomes more accessible, the council has branched out to address search and rescue, oil spill response at sea, and other civil emergency requirements.
Now that the council has set up a permanent secretariat in Troms, Norway (following the 2011 ministerial in Nuuk, Greenland), it is poised to play a more catalytic role in future debates over how best to manage the Arctic
region. See the Arctic Council website, http://www. arctic-council.org/index.php/en/about-us. Arctics strategic resources, and ongoing challenges with regard to Arctic governance. Chapter 3 explores in depth the strategic
interests of the Arctic Five countries and the steps they are taking to safeguard those interests, while chapter 4 analyzes the priorities and programs of the other national and institutional stakeholders in the future of the Arctic,
including the non-coastal Arctic states (Iceland, Sweden, and Finland) and the major Asian powers noted above (China, Japan, and South Korea), as well as NATO and the EU. Finally, chapter 5 offers some summary
conclusions and policy recommendations, with an emphasis on what the United States needs to do to assert its leadership as this new Arctic described at the outset continues to take shape.
scientists in order to help map Arctic mineral deposits. In addition to being more heavily armed than most foreign boats, U.S.
submarines generally have superior quieting and combat systems, better-trained crewmen, and much more rigorous maintenance
standards, Bob Work wrote in 2008, before becoming Navy undersecretary. As a result, the U.S. submarine force has generally been confident that it could defeat
any potential undersea opponent, even if significantly outnumbered. But in the Arctic, facing only the Canadians, Russians, Danes and Norwegians
none of whom have large or healthy sub fleets the U.S. Navys 50 Los Angeles-, Seawolf- and Virginia-class subs would be
more numerous as well as more powerful. And besides, an Arctic war is highly unlikely, at best. Militarized conflict over the Arctic is
unlikely, and regional disputes are unlikely to cause an overall deterioration in relations between or among polar nations , the
Carnegie Endowment for International Peace concluded in a 2009 conference. Security issues should not be sensationalized in order
to attract attention towards the Arctic. But its rare anyone writes stories about how weve got enough weapons and dont really need them, besides. After
all, its the sensational stories about shortages and looming disaster that sell newspapers.