Nigeria: Shell demands government spending to end gas flaring," Business Day, May 9, 2008.

[Something for Canadians with natural gas furnaces to remember next time there is a rate increase. Let's also keep in mind that this "need" for additional funds from its government partner in order to stop poisoning the land and the people with a process that wastes a valuable natural resource violates three important neoliberal principles--capital account liberalization, de-regulation, and the reliance on voluntary compliance with principles of corporate social responsibility instead of regulation. Can't do it. Need more money. Canadians will also recall that oil company representatives have indicated that they will need huge injections of cash in order to pursue the carbon capture will o' the wisp. -jlt]

Nigeria is second to Russia in flaring gas. This country was among more than 160 nations that met in Kyoto, Japan, from December 1 to 11 1997, to negotiate binding limitations on emission of gases for the developed nations, pursuant to the objectives of the United Nations Framework Convention on Climate Change of 1992.

Shell says it requires an additional $3 billion (N375 billion) and the resolution of the Niger Delta crisis to be able to end gas flaring in the country, insisting that it will be unable to meet the December 2008 deadline due to insecurity in the oil-rich region and funding shortfalls.

The oil giant said in a report on “The elusive goal to stop flares” released during the week that its major challenge in the country was to gather gas from more than 1,000 wells scattered over the Niger Delta which, it said, is larger than Portugal.

According to the company, this means building gas collection facilities at the oilfields and constructing an extensive pipeline network to carry the gas to an industrial facility where it is turned into a liquid for transport.

“Recent experience at Shell illustrates the challenges companies face as they try to put out flares. Shell reduced the amount of gas burned in oilfields by almost 60 percent between 2001 and 2007 as part of a decade-old commitment to halt the practice of continuous flaring by 2008. Shell, however, has struggled to meet that deadline, mainly due to security issues and funding difficulties with its main partners in Nigeria,” the company said.

The company also said that Shell Petroleum Development Company (SPDC), a joint venture being operated by Shell and owned 55 percent by the NNPC, 30 percent by Shell and 15 percent by two other partners has invested around $3 billion to reduce flaring.

It however, stated that work had been interrupted by attacks on oil workers and installations.

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Shell-headquarters in the Netherlands is held liable by Friends of the Earth Netherlands/Nigeria and four Nigerians, for the massive damage that oil spills are causing to villages in the Niger Delta of Nigeria. Last Friday, Dutch lawyers representing the plaintiffs summoned Shell to clarify its role concerning oil spills. In early June, based on Shell-headquarters' response, the plaintiffs will decide whether to proceed with the lawsuit.

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Somali fighters seize southern town

Al Jazeera reports that fighters affiliated with the Islamic Courts' Union have taken control of the southern Somali city of Jilib after clashing with a government-backed militia group.

Witnesses said the fighters seized weapons and four armoured trucks from the tribal militia members in overnight clashes and continued to patrol the town on Saturday.

The transitional government has struggled to defeat remnant Islamic Courts' Union fighters after the Ethiopian army wrested control of Mogadishu from the group in December 2006.

On Thursday, the UN Security Council on passed a resolution calling for a UN political presence in the country - the first since the catastrophic Somalia Affair during the Mulroney years - and said it would consider deploying peacekeepers to replace a small African Union force, if security improves and political reconciliation is achieved.

Peace talks that ended in Djibouti on Friday with no more than an agreement to meet again on May 31.

The Alliance for the Re-Liberation of Somalia, the main opposition alliance, which includes the Islamic Courts' Union, has said it would not be involved in direct talks until the government agrees to a timetable for Ethiopian troops to withdraw.

On Friday, May 2, a US air strike killed Aden Hashi Ayro, the leader of the al-Shabaab group. Al-Shabaab, which was formerly the military wing of the Islamic Courts movement, is now labelled a terrorist group by Washington.

Witnesses who spoke to Al Jazeera said that the attack also killed another 24 people, five in the targeted house and the rest in nearby homes.

Somalia is important to the west because of its geographical location, situated near oil wells in the Persian Gulf and along the shipping routes from the Indian Ocean to the Red Sea.

The Islamic Courts Union emerged after the collapse of the Siad Barre government and the flight of US- and Canadian- backed UN peacekeepers in 1991. They gained credibility among the population when they set up schools and hospitals as well as resolving legal disputes and taking a strong stance on law and order.

In June 2006, they drove a coaliation of US-backed warlords from the capital city of Mogadishu. They were defeated when the Ethiopian Army invaded to "protect" the conflict-ridden Transitional Federal Government (TFG).

The TFG has since collapsed, but the Ethiopian Army still occupies Somalia. PINR reports that "the opposition has begun to coalesce around a more militant line emphasizing armed resistance" (Weinstein PINR Dec 27 07).

Somalia seemed, in 2006, an "opportunity to engage non-state actors on a diplomatic level" but that has not materialized.

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Thomas Friedman, The democratic recession, NYT, May 7, 2008.

The term “democratic recession” was coined by Larry Diamond, a Stanford University political scientist, in his new book “The Spirit of Democracy.” And the numbers tell the story. At the end of last year, Freedom House, which tracks democratic trends and elections around the globe, noted that 2007 was by far the worst year for freedom in the world since the end of the cold war. Almost four times as many states — 38 — declined in their freedom scores as improved — 10.

What explains this? A big part of this reversal is being driven by the rise of petro-authoritarianism. I’ve long argued that the price of oil and the pace of freedom operate in an inverse correlation — which I call: “The First Law of Petro-Politics.” As the price of oil goes up, the pace of freedom goes down. As the price of oil goes down, the pace of freedom goes up.

“There are 23 countries in the world that derive at least 60 percent of their exports from oil and gas and not a single one is a real democracy,” explains Diamond. “Russia, Venezuela, Iran and Nigeria are the poster children” for this trend, where leaders grab the oil tap to ensconce themselves in power.

Bourque calls this "High Oil Fosters Petro Dictators." This is not "market failure." It's market dysfunction, i.e., the market operates according to principles which make it, far from an "invisible hand" that inevitably guides us in directions we need to go; on the contrary, we may need for the market's invisble hand to be slapped from time to time. Left alone, the market will provide all the motivation necessary for corruption and other forms of criminal behaviour.

There are some other caveats that need to be made here. Several NGOs employ very subjective methodology without the kind of challenge that once was traditional in academic circles. Freedom House is one; Transparency International, another.

Amnesty International was once open to the criticism that they directed their campaigns against say non-OECD countries. That has changed. But a similar systemic criticism of TI's bias against small time corruption compared to the blind eye it turns toward multi-billion dollar corrption in the US raises questions about where else.

I call these "methodological" because they are pervasive. Like attitudes, they reproduce themselves in human organizations where they are then able to grow like compound interest.

Definitions of democracy remain contested, all the more since the critical US/EU sabotage of the Hamas election (2006). Much remains to be seen in the wake of the Maoist victory in Nepal. Liberal (capitalist, shock) democracy is clearly just one kind. Freedom is great, but greed is not good.

So identifying Russia, Venezuela, Iran and Nigeria as dictatorships while the US, UK, Israel and Turkey are lauded as democracies raises serious questions among the spectators who stand to lose the most from these prejudices--not because we own them but because we are subjected to them. All the signs indicate that our grand children will bleed to preserve them.

Meanwhile, what about Kazakhstan? Equatorial Guinea? Saudi Arabia? Turkmenistan is about gas more than oil, but then so is Russia.

Americans like to be able to say things like "there is no more disgusting leader in the world today than Mugabe." But what does that give you? It provides one of the chief apologists for Abu Ghraib, Guantanamo and the Iraq disaster (to mention just a few) with some undeserved moral altitude.

Welcome to the ditch, Thomas. The time may be coming for the US to learn a little humility. It has never been an American virtue. It may just be that the world needs humility from the US even more than it needs democracy.

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Exxon loses court decision, Center for Economic and Policy Research.

A British court ruled against Exxon Mobil in its dispute with Venezuela's state-owned oil company PDVSA today, tossing out a $12 billion asset freeze Exxon Mobil had requested. Exxon Mobil claimed it had sought the injunction to ensure that funds would be available should it win its dispute with Venezuela over compensation for its stake in a project in the Orinoco basin.

Judge Paul Walker summarized the ruling by saying Exxon Mobil failed to show that there was an urgent case for freezing PDVSA's assets, and said he would explain his reasons in full on Thursday. Exxon Mobil, which also pushed asset freezes in courts in the U.S. and the Netherlands, has said it will not appeal the ruling. The court also ordered Exxon Mobil to pay PDVSA $765,300 to cover legal costs within 21 days and lawyers for PDVSA announced plans to seek damages related to the freeze from Exxon Mobil.

"This ruling makes sense, since there is a case pending before the World Bank's arbitration court (ICSID), so there is no reason for a national court to resort to injunctive relief until the arbitration is complete," Mark Weisbrot, Co-Director of the Center for Economic and Policy Research, said. "The purpose of injunctive relief is to prevent irreparable harm to the plaintiff. There is no evidence that PDVSA would refuse to pay Exxon just compensation for its assets in Venezuela."

Weisbrot also said, "Exxon's legal actions therefore appear to be more of a political strategy of harassment to strengthen its bargaining position, which the London high court rejected."

Mark Weisbrot is the author of numerous papers and articles on Venezuela and Latin America available at www.cepr.net, including "The Venezuelan Economy in the Chavez Years" and "Latin America: The End of An Era" and he frequently appears in the media to discuss economic and political changes in the region.Recommend this Post

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