No Iraq No-bid

The proposed no-bid contracts for six western oil companies in Iraq has been withdrawn, since the window of opportunity is fast closing:

AN IRAQI plan to award six no-bid contracts to Western oil companies has been withdrawn, those involved in the negotiations say.

Iraq’s Oil Minister, Hussain al-Shahristani, told reporters at an OPEC summit meeting in Vienna on Tuesday that talks for one-year deals, which were announced in June and subsequently delayed, had dragged on for so long that the companies could not now fulfil the work within that time frame.

I still think that the western oil and gas companies will find a way to get a foothold in Iraq production. There is still no national hydrocarbon law in Iraq. Still, the Chinese are not waiting around:

Since that time, however, Iraq’s central government has moved on with other energy deals. In August, the Oil Ministry signed its first major post-Saddam contract with China’s National Petroleum Corporation.

Bolivia Unrest

The US ambassador in Bolivia has been expelled, accused of “conspiring” with protesters who have stormed government buildings and damaged a natural gas pipeline, reducing exports to Brazil. I have not been following the lead up to this latest wave of protests, but this article states that the announcement of a referendum by Morales on a new constitution that would give him greater powers was the trigger point. It is hard to read between the lines and deduce if there is any outside influence in these latest protests, but that would not be too surprising. Naturally, that was the conclusion of Venezuela’s Hugo Chavez.

Morales’ opponents concentrated in resource-rich eastern regions have stepped up protests against his leftist reforms in recent days, storming public buildings and attacking facilities linked to the impoverished nation’s key natural gas industry.

Protesters occupied public buildings for a second day on Wednesday in the eastern city of Santa Cruz, an opposition stronghold and Bolivia’s economic hub.

They want a bigger share of state energy revenues to stay in their region, Bolivia’s richest, as well as greater autonomy from the central government in La Paz.

I am not sure of the details of this article, but it mentions right-wing mobs beating indigneous people on national tv, so it seems these statements should be verifiable. Makes it sound more like a home-grown movement rather than something that would be easily concocted by agent provocateurs. Sounds very serious too; the federal government losing control of several regions of the country. Not sure if the army is not powerful enough to hold many of the sites, or if they are not trying.

After registering astonishing levels of support in the referendum, the MAS government declared that it was going to bring forward for popular referendum the draft of a new constitution approved by the Constituent Assembly in Oruro several months ago.

In celebration, indigenous peasant and working-class supporters of the government set off on August 29 for a peaceful march to the Plaza 24 de Septiembre, in the centre of the city of Santa Cruz. A gathering of autonomists, organized in part by the Unión Juvenil Cruceñista (Cruceño Youth Union, UJC), were there to greet them.

According to the mainstream daily La Prensa, one UJC speaker at the autonomist rally declared: “We are not going to permit [the entrance of the masistas] into the Plaza. When we go to their communities, they treat us like dogs. We want independence. We don’t want this damned race in our territory.” Other chants and phrases used that day, according to the vociferously anti-Morales La Razón newspaper, included: “shitty collas,” (colla is a racial epithet used in Santa Cruz to refer to indigenous people from the western highlands), and, “Indians return to your lands.”

After the speeches, the racists when on a rampage against the unarmed trade unionists and peasants, as well as any visibly indigenous person in proximity of the plaza. Indigenous women wearing the traditional pollera, or gathered skirt, were particularly vulnerable to beatings and racist taunts. One autonomist youth leader, Amelia Dimitri, was captured in video footage and photographs whipping an indigenous woman wearing a pollera. This occurred immediately after Dimitri addressed the crowd of autonomist thugs in a rousing speech. She’s only the latest face of hatred on the autonomist right.

On national television, Bolivians watched as racist teenagers wielded clubs, whips, and two-by-fours against unarmed indigenous workers and peasants. Images of men and women with broken noses and shirts literally drenched in blood quickly made their way to You Tube, private and national state media, and the front pages of the local newspapers. These are the “democracy supporters” supported by imperialism against the “dictatorship” of Evo Morales.

The author proposes that Evo Morales declare a state of emergency and fight back with more authority. Apparently that is something the government has said it would not be “provoked” into doing. The energy production of the country is under threat by these uprisings:

In Tarija, where road blockades have persisted for the last 16 days in the Chaco region, the right-wing autonomist forces took over government tax offices (SIN), the offices of the National Agrarian Institute (INRA), and the border state’s migration offices. Perhaps most importantly, they also managed to occupy the offices of the Superintendent of Hydrocarbons. Given that roughly 82 percent of natural gas production occurs in the department of Tarija, this is of major concern.

Elsewhere, in the city of Villamontes, the Civic Committee took illegal control of a natural gas station, giving it the capacity to turn off supplies to the Yacuiba-Río Grande Gas Pipeline (GASYRG), the main natural gas source for Brazil.

Brazil has recently announced another large oil and gas find in the GOM:

Just this week, Petrobras estimated that another nearby deep-sea field holds between 3 billion and 4 billion barrels of oil and natural gas. Together, the two finds could lift Brazil’s proven reserves by 85 percent, and that may be just the tip of the iceberg.

Still, they use natural gas for a lot of things, and Bolivia is currently a major supplier. Their statement about the disruption was stronger than Bolivia’s:

“The situation is dire,” said Sao Paulo state Sanitation and Energy Secretary Dilma Pena. “Exports of gas to Brazil have been reduced more than 50%, to 14 million cubic meters a day.”

The Brazilian military conducted exercises near their new finds.  Seems like the idea of resource wars is on everyone’s mind.

Toyota to assemble hybrid batteries in North America

As a cost-savings move, Toyota announced that they would begin assembling batteries for their hybrids in North America in the future. Prius production will begin in Mississippi in 2010. Not sure if this will be the plug-in version:

In addition to increasing production of the current hybrid, Toyota also is moving forward the launch of a plug-in version of the Prius.

The automaker aims to to make it available to fleet operators, such as government agencies and universities, at the end of 2009. It had earlier set a roll-out date of 2010.

Unlike traditional hybrids which twin battery power and combustion engines, plug-ins will be powered entirely by an electric motor and have a battery that can be charged through an ordinary power socket.

Okamoto said that Toyota’s plug-in Prius prototypes have shown an initial all-electric cruising range of 13 kilometers (8 miles). To improve that range requires larger batteries but that means less cargo space and higher prices, he said.

Volt unvieled

Photos of the final Volt design were released a week earlier than planned. Quite a change from the prototype design, so I am sure there will be many fanboys that are disappointed. Still, if they can deliver on the 40 mile all electric range, at something under $40k, they should have no problems with a lack of customers.

California woes

Well, it appears that even the Governator might not be able to survive a $14 billion dollar deficit. The Legislature cannot overcome partisan divisions to pass a budget so far this fiscal year. Also, the unemployment fund apparently is broke:

With joblessness at a 12-year high and expected to head higher, California’s fund for paying unemployment benefits is about to go broke.

The fund, sustained mainly by taxes on employers, is projected to be deeply in the red as soon as March.

There is talk of the prison guard’s union trying to start a recall effort against Ahhhhrrneeeee. That would be some irony.

And there is always the issue of water. Apparently, a recommendation has been revived to bypass part of the San Joaquin-Sacramento delta with a canal. Part of a plan to “restore” the delta and improve leevee safety, this is seen by many as a first step for a water grab by the big cities of the south. This article has some interesting information.

Secret Iraq operations

As an aside to the new Woodward book about Iraq is the revelation that SAS/Delta Force operations in Iraq that have “taken out” up to 3500 supposed al-Qaeda operatives in Iraq in the past 18 months.  A comment from a senior British official:

“You could say it was a very successful period. But the butcher’s bill was high.”

Rather tough talk.  I hope that these special forces are more judicious in the use of force than those trigger-happy Blackwater guys that opened fire on the local populace.

Winning the War(s)

Even though the violence in Iraq has been drastically reduced of late, Iraq and Afghanistan ranked 5 and 7th on the “Failed States Index 2008″ list in Foreign Policy recently. Violence in Afghanistan is on the rise, along with the issue of increased cross-border forays by the US military into Pakistan. However, the FP report is rather negative (or perhaps just realistic) on the situation in Iraq:

The height of the U.S. military surge in Iraq was a key factor in this year’s analysis of that country. And though Iraq’s score improved slightly, the gains that one might hope for—those that reflect fundamental, long-term changes—did not occur. The desperate predicament of nearly 4 million people driven from their homes, the abysmal state of public services, and the discord among sectarian factions have shown no real improvement. The incremental security and economic progress that has occurred are dependent on tenuous, short-term factors that could unravel at any time. Eager to cobble together a fragile peace, the U.S. military has armed dozens of new Sunni militia groups that could later turn their guns on the Iraqi government, their Shiite rivals, or the Americans many still regard as occupiers. Similarly, Iraq’s economy has improved only moderately, thanks largely to the spike in global oil prices, not Iraqi production. In short, progress in Iraq last year was negligible at best and deeply susceptible to reversal should the country suffer the kind of shock—a food shortage, a high-level assassination, an attack that unleashes ethnic hatreds—that has exposed so many states’ deep vulnerabilities in recent months.

Mexico sinking further

Seeking alpha had an interesting post that discusses not only falling oil production in Mexico, but the increase in drug trafficking and related crime there. The crime seems to be pretty horrific, especially up near the US border, with many daylight gunfights and killings of police. As government revenue drops further with declining oil revenues, it can only get worse.

There are two pressing issues that are putting intolerable stresses on the Mexican economy and society; the first is the huge escalation in drug related violence and corruption, as US support for the Colombian war on drugs has displaced Cartel activity into Mexico, now the primary base for cocaine shipments in the region. The revenues involved are estimated by the DEA to have reached over $40bn a year (or about 25% of all official exports), financing very effective private armies, and rampant high level corruption.