As the civil war in Syria has escalated, American, Saudi Arabian, and Russian interests have played increasingly larger roles. The Obama Administration adopted the stance, shared by the majority of the U.N., that Syrian President Bashar al-Assad was guilty of human rights violations and must be removed from power. Russia, on the other hand, has long been an ally of Syria, and Russian President Vladimir Putin has supported Assad throughout the conflict. This has led to what is in part a proxy war, with Syrian rebels that have been trained and armed by Saudi and American militaries fighting against Assad’s forces, which are armed with Russian weapons and drive Russian tanks. Amid this turmoil has been the growing power of ISIS, opposed in different ways by both the United States and Russia.

As the war has carried on, it has grown increasingly bloody. By the end of 2015, the war had claimed a staggering 470,000 Syrian lives, representing a loss of 11.5 percent of the nation’s population. Even among the survivors, the damage to Syrian national security has been extreme; over half of the nation’s population has been displaced by the war. The Syrian conflict is vast and extremely complicated and both Russia and the U.S. have numerous reasons for their involvement.

However, it’s imperative to analyze one important but under-emphasized element of the war: the role of energy. Both the U.S. and Russia stand to influence the future of the global energy market if their side comes out dominant in this conflict. If the Assad regime maintains control of Syria, it will likely push ahead with current plans to build a natural gas pipeline running from Iran through Syria. The pipeline would be built by the Iranian government in collaboration with Russia’s major gas corporations, and would allow both countries to profit off of the largest gas reserve on earth. On the other hand, the United States and Saudi Arabia have an active interest in preventing this from happening to protect its share in the energy market, as well as the strength of the petrodollar, against Russian and Iranian competition.

President Trump has long denounced America’s anti-Assad position and previously discussed working with Russia, and possibly Assad, against the common enemy of ISIS. However, following the Syrian Air force’s chemical attack in the Idlib Province, Trump at least temporarily reversed his public position on Assad and Russia. Simultaneously, the Trump Administration has grown increasingly closer to Saudi Arabia. Future negotiations will tell whether there is still a possibility for Russia and the U.S. to work together in Syria, and Trump’s ultimate stance on the Assad regime will heavily influence whether the Iranian pipeline is built. We are currently at a critical moment in the future of the Syrian conflict, and for the roles of Russia, Saudi Arabia, and the United States in the global energy market. Read on to see what each side stands to gain and lose as we move forward.

Syria: The Energy Crossroads

The conflict in Syria is fueled by numerous religious and geopolitical divisions within the Middle Eastern Region and energy is far from the only relevant factor in American or Russian involvement. However, the importance of energy within the Middle East and its ever-present role in regional conflict is hard to overstate. Control of the global energy market means being able to exert huge influence on the international economy, and the Middle East’s vast fossil fuel reserves have always attracted the interest of international superpowers. The last two decades of constant regional conflict have been a consistently perilous struggle for power and market control, especially between Saudi Arabia and Iran, the two largest economies in the Middle East.

Syria has attracted international interest because its central location in the Middle East makes it a potential energy crossroads for pipelines that could transport natural gas across the region from the South Pars/North Dome gas field. Because of Syria’s critical position, the results of the war will likely determine who gains access to the gas field, and thus will greatly impact the future of energy sovereignty within the region. The oil and gas trade is very directly related to the strength of the American dollar and both the U.S. and longstanding ally Saudi Arabia are worried that Syria could become the construction site of a pipeline. A new major pipeline could upset the balance of the energy market, and subsequently the power of the dollar and the Saudi Riyal, which is pegged to the dollar.

Saudi Arabia, home to 16 percent of the world’s proven oil reserves and the leader of the Organization of Petroleum Exporting Countries, has long used whatever means are necessary to ensure that its business never shrinks. Recently, as foreign dependence on petroleum in the last few years lessened due to a boost in gas production abroad, the Saudis chose to ignore their 2014 promise to reduce output and actually increased their production up until 2016. This caused international petroleum prices to drop, keeping Middle East petroleum competitive, despite the fact that the price gouge also sent many of the poorer OPEC countries near collapse.

In order to maintain its status as the largest energy producer in the Middle East, Saudi Arabia has also spent the last two decades attempting to block energy infrastructure proposals designed to access the South Pars/North Dome gas field. The South Pars/North Dome Gas Field lies beneath the Persian Gulf, with the northern end of the field in Iranian territory and the Southern edge in Qatari territory. It is the single largest gas reserve on earth, and a pipeline that allowed cross-regional transport of its resources could dramatically change the future of the energy market. The first pipeline was proposed in 2009 and would have carried gas from Qatar through Saudi Arabia, Syria, Jordan, and Turkey, although both the late King Abdullah in Saudi Arabia and Assad in Syria rejected its construction in 2009. It is sometimes falsely claimed that Saudi Arabia supported this pipeline, but the Saudis also opposed its development because a pipeline would have given the E.U. direct access to cheap gas. Saudi Arabia’s relationship with its then ally Qatar had at the time also grown unstable, and the Saudis were skeptical about a large scale business collaboration.

However, in place of the Qatari project, an alternative pipeline was proposed, which would be built avoiding Saudi land and would replace Qatar with Iran as the central supplier of natural gas. Saudi Arabia views Shiite Iran as its primary enemy within the Middle East and is determined to keep it from growing in power in the energy market. However, Assad publicly supported this pipeline, which would give Russian and Iranian business interests primary access to the gas field’s massive resources. Saudi Arabia lacked the veto power it held with the first pipeline, which forced Saudi Prince Bandar Bin Sultan to reach directly out to Putin, promising to ensure that the gas reserve would not be utilized in competition with Russia’s business if Putin abandoned his support of Assad’s regime. Putin refused and Saudi Arabia pushed forward with regime change in Syria by militarizing rebel Sunni groups, including the Free Syrian Army, the Al Nursa Front, and the organization that would become ISIS.

The U.S. and Saudi Arabia

The U.S. alliance with Saudi Arabia is a tense and complicated one. Saudi Arabia has come under international criticism for its human rights record and the Saudis have continuously funded extremist Sunni groups that threaten the Western world. However, the economies of the two nations are tied together through the petrodollar. Petroleum is the most commonly traded substance on earth by volume, and globally, petroleum has been traded almost exclusively in American dollars for the last 40 years. If a country wants to buy oil, it must first purchase U.S. dollars, which increases demand for the dollar and dollar denominated assets. Because of this, the success of the oil industry and cooperation with Saudi Arabia very directly affects our domestic economy. The United States and Saudi Arabia have worked together in coordination for almost three-quarters of a century to influence Middle Eastern geopolitics, from the establishment of the petrodollar system to the Persian Gulf War to both Yemen Civil Wars and the battle against Al Qaeda.

Saudi Arabia has also been a central customer of the U.S. defense industry for decades, although Obama ordered a weapons sales freeze following large-scale civilian casualties from Saudi airstrikes in Yemen. Some have accused this freeze of being largely political theater, since overall the Obama Administration sold over $46 billion in weapons to the Saudis, more than any president in the 71-year alliance. The State Department also went on to grant a pre-planned $3.51 billion initiative to arm and train the Saudi army to defend the Saudi-Yemen border, claiming none of this money would go the actual war it supposedly condemned. While the Obama Administration has been critical of Saudi Arabia, it also continued to support the country and many of its conflicts throughout Obama’s presidency.

While Assad is certainly guilty of human rights violations, the U.S. also has a critical interest in coordinated regime change because the current pipeline proposal would give unfriendly Iran dominant control of the largest source of energy in the Middle East. Furthermore, Russia’s three largest gas companies will play a large part in the development of the pipeline, meaning Russian interests stand to profit directly off the reserve. Russia and Iran are two of the few countries worldwide that refuse to use the petrodollar, so not only does control of the gas field give them a huge business advantage, the greater their share in the market the weaker the U.S. dollar and Saudi Riyal will become. While the United States and Saudi Arabia disagree on many things, the two nations are united geopolitically in their desire to prevent Russia and Iran from gaining greater regional power and control over the energy market through a coordinated business venture.

In 2014, following a meeting between John Kerry and King Abdullah of Jordan, the United States agreed to work with Saudi Arabia on a military offensive in Syria through Operation Timber Sycamore, with Saudi Arabia funding and arming the Free Syrian Army and the CIA training them in preparation for the war. While the stated purpose of U.S. involvement was to counter ISIS, the choice to fund the rebel group looking to overthrow the ruling Baath party reflects the Obama Administration’s consistent desire for regime change.

“Obama/Saudi Ties” courtesy of Tribes of the World; License: (CC BY-SA 2.0)

Russian Involvement

Currently, Syria is Russia’s oldest and strongest ally in the Middle East, although Iran and Russia have grown increasingly closer throughout the last decade. Aside from representing Russia’s foothold in the region, Syria is also the location of Russia’s only Mediterranean naval base. In exchange for this critical regional access, Syria has the support of one of the world’s largest superpowers. The long-standing connection between these countries makes it no surprise that Russia is willing to give political and military support to Assad.

However, Russia also stands to gain significantly moving forward if Assad can suppress the rebel forces. As long as the Assad regime maintains control of Syria, then construction of the Iranian pipeline should move forward as planned. Russia is the second largest producer of fossil fuels globally and recently overtook Saudi Arabia as the world’s top crude oil producer. Together oil and gas exports account for 70 percent of Russia’s $550 billion annual exports. European natural gas imports from Russia dramatically increased from 48 percent in 2010 to 64 percent in 2014, and Putin’s long-term plan is to become an even larger energy superpower, spiking production and exports by 2020 by increasing sales in Europe and expanding into the Asia-Pacific region. It is no secret that the E.U. dreads increasing its dependence upon Russia’s major gas giants. Because of heavy resistance to the Russian energy business in the West, Putin has been continuously looking for new projects in the East, notably in China and the Middle East. Iran has long been looking for international investors in its shale business, and in 2013, the Russian state-controlled gas corporation Gazprom signed a deal with the Iranian government to cooperate in ongoing energy infrastructure development. The infrastructure agreement makes Gazprom the third major Russian corporation to be heavily invested in Iranian energy, following Lukoil and Zarubezneft. The construction of the Iranian pipeline would give these corporations new ability to profit off of huge quantities of natural gas. By ensuring that the field is developed and utilized first by friendly Iran, along with Russian gas corporations, Putin can avoid dangerous new competition in the European energy market as was planned in the original Qatari pipeline, thus maintaining Russia’s position of market dominance.

Fear of Saudi Arabia and increased U.S. support for the Syrian insurgency pushed Assad to request greater assistance from Putin, which resulted in Russia joining the conflict in September 2015, mounting a series of airstrikes both against the Free Syrian Army and ISIS. What followed became an increasingly serious proxy war between the Syrian rebels, backed by the United States, and the Syrian military, backed by Russia. The bloodiest of these conflicts has centered around the City of Aleppo, where over 400,000 have died thus far. The FSA has suffered both massive causalities and the loss of members who have defected to join the more radicalized Al-Nursa Front and Jaysh Army. The Syrian Air Force’s chemical attack on Idlib came shockingly during negotiations that were expected to come out in Assad’s favor. President Trump sided initially with the majority of the Western world and voted in favor of a U.N. resolution to launch an investigation into the attack. The resolution was blocked by Russia and we are currently in a pause, waiting to find out how the conflict will move forward.

“Aleppo, Syria” courtesy of yeowatzup;  License: (CC BY 2.0)

Conclusion: What does the Future Look Like?

While Trump has criticized Saudi Arabia in the past for its own role in funding radical Islam, he seems to have recently made a complete reversal on this stance and has even sided with Saudi Arabia in its dispute with U.S. ally Qatar. The Trump Administration and Saudi Arabia have also recently entered into a $110 billion dollar weapons deal, the largest in U.S.-Saudi history. Following the attack on Idlib, it seemed possible that Trump might decide to align with the anti-Assad stances held by the Obama Administration and the Saudi government. However, since the U.S. airstrike and the failed U.N. Security Resolution, the Trump Administration has not publicly emphasized Assad’s removal.

Currently, it’s uncertain whether Trump will side with reestablished ally Saudi Arabia or if his administration still plans to find a way to work together with Russia in Syria. The U.S. warned the Russians prior to the airstrike on the Shayrat base, allowing them to evacuate without casualty. There have also been accusations that the airstrike was essentially political theater to dispel the notion that Trump is compromised by Russian interests, given the fact that Russia chose not to deploy its anti-missile systems, effectively allowing an attack it knew was coming to take place.

While the future of the South Pars/North Dome gas reserve isn’t certain, at this point Assad has successfully dominated the majority of rebel forces in Syria. As long as the Assad regime is still in place, any major cross-regional energy infrastructure utilizing Syrian land will most likely be to the advantage of Assad and his ally Putin. If the Iranian pipeline does end up being built, the reverberations will be felt throughout the global energy market. Saudi Arabia may lose the upper hand in several markets where it competes with Iran and Russia, especially in East Asia where Saudi Arabia has struggled to maintain active business in the face of Russian competition. Furthermore, it is very unlikely that Europe will ever be able to utilize the gas field as a cheap alternative to lessen its dependence on Russia.

If Iran and Russia become larger figures in the energy market, the petrodollar will weaken as less U.S. dollars are needed for oil transactions, which would affect the economies of both America and Saudi Arabia. How dramatic these effects will be is impossible to say. Saudi Arabia still has massive hydrocarbon reserves and is in no danger of being pushed out of the global fossil fuel trade. While the petrodollar has played a large part in the strength of the American dollar since the end of the Gold Standard, it is only one of many factors that contribute to and decide the strength and stability of the U.S. economy. We will have to wait and see what direction the Trump Administration takes American foreign policy in the Middle East to learn the answers to these questions.

Kyle Downey

Kyle Downey is an Environmental Issues Specialist for Law Street Media. He graduated from Skidmore College with a Bachelor’s degree in Environmental Studies. His main passions are environmentalism and social justice. Contact Kyle at Staff@LawStreetMedia.com.

The post A Tale of Two Pipelines: The Influence of the Energy War in the Middle East appeared first on Law Street.

Since November 2014 when Republicans won control of the Senate and maintained control of the House, there have been promises that many hot topics will get attention. One of the first on the list was the issue of the Keystone XL Pipeline. While the political status of the bill is still up in the air, read on to learn about what the Keystone XL Pipeline is, and the political arguments for and against it.

What is the Keystone XL Pipeline?

The Keystone XL Pipeline is a pipeline transport that is to start in the town of Hardisty in Eastern Alberta, Canada and extend southeast to Steele City, Nebraska. The goal of the pipeline is to help transport crude oil from Canada to the Gulf Coast in Texas, and to help move oil from the Bakkan region in North Dakota and Montana to places where it can be used.

The pipeline would actually be an extension to the current Keystone pipeline that already runs from Hardisty to the town of Patoka, Illinois. That’s the reason that it’s called “XL”–it’s an extension to the current operation. When running at full capacity, the Keystone XL will be able to handle up to 830,000 barrels of crude oil per day. The video below explains the purpose of the Keystone XL Pipeline.

In order for the Keystone XL Pipeline to become a reality, Trans Canada has to receive approval from the President due to the fact that the project crosses into the United States from Canada. But since the Constitution states that the President cannot make the laws, and that Congress has to create a law or bill for the pipeline to be built, the issue has been languishing in Congress.

What is the Keystone XL Pipeline’s current status?

The authority to build the Keystone XL pipeline is currently the focus of two versions of a bill in the House and the Senate. The two versions need to become one bill, which will force members from both houses of Congress to work together. The biggest difference between the two bills are the amendments that have been tacked on, particularly on the Senate side. For example, the Senate, which passed its version of the bill on January 29, 2015, added on amendments that protect landowners from the use of eminent demand. The House version of the bill passed on January 9, 2015.

What is the next step for the Keystone XL Pipeline bill?

The House has said it will pass the Senate version soon, so the bill will go to President Obama’s desk for his signature; however, the White House has stated that Obama will veto the Keystone XL Pipeline Bill if it comes to his desk. If this happens, the bill will go back to Congress where a two-thirds majority will be needed to override the president;s veto. If that majority is reached, the pipeline will become a reality. If majority is not reached, the bill will go back to Congress where they will have to hammer out something else.

What are the arguments in favor of passing the Keystone XL Pipeline?

The Economic Argument

Some proponents who would like to see the Keystone XL Pipeline become reality argue that it will create jobs for Americans. The American Petroleum Institute stated that 42,000 American jobs are at stake. While exactly how many jobs would be gained through the construction, maintenance, and operation of the pipelines is difficult to estimate, it’s certain that manpower would be needed for each of these steps. The United States Chamber of Commerce stated that on its Keystone XL Pipeline Lost Opportunity Tour it encountered numerous business owners, civic leaders, and citizens who will benefit from construction of the pipeline, as the jobs it creates will stimulate other parts of the economy.

The Safety Argument

Trans-Canada, the company that will be building the pipeline, emphasizes the safety benefits. It points to the existing Keystone Pipeline that has safely transported more than 700 million barrels of the same oil to U.S. refineries since 2010 as proof of its commitment to safety and the amount of oil that it has successfully moved already. It argues that a pipeline is the safest way to move oil and natural gas. According to a recent Frasier study, there are fewer accidents with pipeline transport than with trains or trucks. Furthermore it points out that five studies and 20,000 pages of scientific review have led the U.S. State Department to conclude that the project can be built and operated with minimal environmental impact.

Energy Independence

One political concern that has deepened in recent years is the worry that the United States relies too much on outside producers for oil, gas, and other forms of energy. While the amount of oil that we import from OPEC countries has gone down over the years, we still do import significant amounts of oil from the Middle East. While the new pipeline means that we will still be importing oil, it will be from Canada, our consistent ally. Those who emphasize the need for energy independence point out that this development would allow the U.S. to separate its economic relationships from its political relationships in world affairs.

Image courtesy of Tar Sands Blockade via Flickr

What are the arguments against the Keystone XL Pipeline passing?

The Environmental Argument

Those who oppose the Keystone XL Pipeline include environmental groups, such as the Sierra Club, Friends of the Earth, and The National Resources Defense Council. In fact, the National Resources Defense council stated that “this pipeline will lock the United States into a dependence on hard-to-extract oil and generate a massive expansion of the destructive tar sands oil operations in Canada.” Environmentalists worry that “in addition to the damage that would be caused by the increased tar sands extraction, the pipeline threatens to pollute freshwater supplies in America’s agricultural heartland and increase emissions in already-polluted communities of the Gulf Coast.”

Further arguments against the pipeline come from a group of Nobel Peace Prize Laureates including former president Jimmy Carter and Archbishop Desmond Tutu, who state that the tar sands are “among the world’s most polluting oil” and their growth in Northern Alberta has high costs for the climate. They also stress that the Keystone XL pipeline is the “linchpin for tar sands expansion and the increased pollution that will follow.” The result of the increase in pollution will trigger “more climate upheaval with impacts felt around the world.”

Former Vice President Al Gore stated in his blog that the tar sands are the “dirtiest source of liquid fuel on the planet” and this pipeline would be an “enormous mistake.” Those who agree with Gore believe that the “answer to our climate, energy, and economic challenges does not lie in burning more dirty fossil fuels” but in more “rapid development of renewable energy and energy-efficient technologies.”

The Dependency Argument

Senator Bernie Sanders, an Independent Senator from Vermont, made the case back in 2014 that the Keystone XL Pipeline would move America in the wrong direction as instead of making us greener, it would make America more dependent on nonrenewable resources. Proponents of the dependency argument point out that even though we may become less dependent on foreign producers of oil, we would become more dependent on crude oil and natural gas as energy forms. Instead of exploring other energy options, such as solar or wind power, we would continue to rely on nonrenewable resources. Those who are worried about this dependency argue that we could create jobs and energy by focusing on these alternate types of energy.

The Health Argument

Senator Barbara Boxer (D-CA) explained this school of thought well in a recent speech in the Senate. She reminded everyone that the oil being transported would be tar sand oil, not the conventional crude that we are used to hearing about on the news. Tar sand oil contains 11 times more sulfur and nickel, six times more nitrogen, and five times more lead. Sulfur dioxide can penetrate deeply into sensitive parts of the lungs and cause respiratory diseases such as Emphysema and Bronchitis, while an influx of nitrogen dioxide can increase symptoms in people with Asthma. According to this argument, these problems will increase in areas affected by the pipeline.

Conclusion

The Keystone XL Pipeline is a massive pipe that will run from Canada to Nebraska and link up with other pipelines to get oil down to refineries in Texas. Bills have passed the House and Senate; however, the bills will need to be made into one large bill that will pass Congress jointly in order to be sent to President Obama’s desk.This process has been made difficult by the storm of criticism that has come from both sides of the argument on whether or not a pipeline should cross the American heartland.

Resources

Primary

Senate: Keystone Pipeline XL Bill

House of Representatives: Keystone Pipeline XL Bill

Additional 

TransCanada: About the Project

American Petroleum Institute: API Applauds Swift Senate Action on Keystone XL

Institute for 21st Century Energy: U.S. Chamber Statement on Congressional Action to Approve Keystone XL Pipeline

John Hoeven: Statement on Keystone XL

Think Progress: Find Out How Your Senator Voted on the Keystone XL Pipeline 

John Manchin: Statement on Keystone XL

Al Gore: The Dirtiest Fuel on the Planet

Nobel Women’s Initiative: Nobel Laureates Urge Obama to Deny Keystone XL Tar Sands Pipeline

Editor’s Note: This post has been updated to credit certain information to Al Gore’s blog. 

Chris Schultz

Chris Schultz is a Midwestern country boy who is a graduate of Dordt College in Sioux Center, Iowa and holds a bachelors degree in History. He is interested in learning about the various ocean liners that have sailed the world’s waters along with a variety of other topics. Contact Chris at staff@LawStreetMedia.com.

The post The Keystone XL Pipeline: Economic Breakthrough or Environmental Disaster? appeared first on Law Street.

Recently, Governor Andrew Cuomo officially announced that New York State will ban fracking. Hydraulic fracturing, or fracking, is a process of extracting natural gas that involves injecting water, sand, and a combination of chemicals underground on site in order to fracture the shale rock and release the gas. A highly controversial topic, Cuomo’s decision was controversial as well–he was met with both praise and criticism from a highly divided demographic. However, the move to ban fracking is a strongly defensible choice, and the arguments against the ban do not hold up well under scrutiny.

For example, natural gas has been lauded as a solution to American foreign oil dependence. In the wake of ongoing turbulent relationships with the Middle East and oil rich nations therein, many suggest that the large deposits of natural gas within the borders of the United States is a possible means of alleviating the country’s need to import oil from them. But is such a complex plan of developing an elaborate and brand new energy industry the most logical solution to problems in international relations? Rather than go about this process in order to avoid dealing with these tense situations, why not attempt more diplomacy in hopes of alleviating them? Oil and natural gas aside, it would not be such a bad thing to genuinely pursue better relationships with Middle East countries. Hiding behind the energy industry as an excuse is not a sustainable argument.

Others argue that natural gas is cleaner than oil. Natural gas emissions byproducts are lower and less damaging than those of oil, and it is of a substantial energy density so as to sufficiently provide power to our machines and devices. However we should not be tempted by the quick, convenient, and immediate solution. It will still cause problems and will run out eventually. This argument comes back to renewable energy. There is plenty of potential and increased economic accessibility to renewable energy, which is cleaner than natural gas and will not run out. Thinking purely in terms of energy requirements, we do not need natural gas.

Aside from geopolitics and national scale energy needs, some tie natural gas and fracking directly to the benefit of people on the ground. There is an American cultural identity tied into coal and mining towns. It is a widely applicable occupation, providing employment to individuals and income for families. Coal mining is a means of asserting ones identity, and has often been passed down through generations. Fracking is a technology intensive process demanding expertise and consequently cannot be undertaken by anybody. Arguments that fracking provides economic opportunities for towns in which shale is located are shaky. Unlike coal, where the industry arrives on site and hires locals to pursue the mining, fracking companies often bring in outside workers to extract the gas; the residents of the town rarely benefit from the boom.

A fracking site. Courtesy of Casey Hugelfink via Flickr.

Some people of a financially minded nature have suggested that the moratorium represents a transfer of economic resources from farmers to environmentalists. Residents of southern New York State are now unable to receive royalties from resource development and gas mining. Tim Worstall, the author of a fiscally conservative Forbes Magazine article on the topic, suggests that the environmentalists are being granted their desires and benefits at a cost which is the loss of acquisition of desires and benefits for the people who could receive money for fracking on their land. He proposes a hypothetical situation that in order to maintain a balanced public policy, environmentalists should literally pay homeowners their losses for not fracking. He is of strong opinion that this would be met with high resistance, in demonstration of his point that this process is unfair.

No doubt this scenario represents a substantial portion of the controversy over fracking. However the author is thinking of benefits and losses purely from an economic standpoint. On the one occasion that he might be considering the state of the environment, he refers to environmentalists’ interest in preventing fracking in “the fair state of New York”. In this sense it is an aesthetic issue. Interestingly enough, there is little in the way of aesthetic damage when it comes to fracking, although it does turn small farm towns into industrial sties. Then there is the catastrophic side effect of increased likelihood of earthquakes. However, environmentalists’ resistance to fracking is very much motivated by human health concerns. The primary problem with fracking is that the myriad of chemicals injected into the rock seeps into the groundwater. This can be damaging to the human body when consumed, potentially causing neurological disorders, birth defects and cancers, and is most visibly linked to flaming faucets. The volume of chemicals is so high that water can literally catch fire. The documentary Gasland delves further into these issues and additional dangers of the industry and refineries. Here is a trailer:

Flaming faucets and contaminated drinking water are most common for homeowners in close proximity to the fracking site. Namely, those on whose land the fracking will take place. Here is a major cost for which the author of the Forbes article does not account.

Produced water is the mix of chemicals, metals, and carcinogens that comes up during the fracking process. In some New York counties, produced water has been used as a de-icer, sprinkled across roadways throughout the winter. Then it runs off into streams and waterways. This is dangerous for fish and local wildlife that live nearby, as well as for humans who drink that water. This increases the range of contamination from near to the fracking site to across the entire state. It is a misuse of a substance that should not exist in the first place.

Considering the long list of potential alternatives for meeting our energy needs, we do not need natural gas. Furthermore, considering all the problems associated with the current method of extracting it, we certainly do not need fracking.

Franklin R. Halprin

Franklin R. Halprin holds an MA in History & Environmental Politics from Rutgers University where he studied human-environmental relationships and settlement patterns in the nineteenth century Southwest. His research focuses on the influences of social and cultural factors on the development of environmental policy. Contact Frank at staff@LawStreetMedia.com.

The post Is the New York Fracking Moratorium a Good Thing? appeared first on Law Street.

As a world, we’re constantly on the lookout for new ways to obtain our non-renewable resources. Some of the new areas that have been discussed as possible drilling areas include the Arctic and Antarctic. Read on to learn about what drilling in those regions would mean, and the arguments for and the against expanding drilling to the Arctic and Antarctic.

Why would we want to drill in the Arctic and Antarctic?

The Earth’s poles, comprised of the Arctic at its northern pole and the Antarctic in the south, are held in a precarious geopolitical and environmental situation as melting ice at the fringes of the poles reveals reservoirs of valuable resources that are easier to extract than ever before. In September 2012, it was found that arctic ice levels were at their lowest on record, dating back to 1979. Aside from a myriad of environmental effects, these lower ice levels have also revealed the treasures they have held for millions of years: vital natural resources, and plenty of them.

Some have estimated that the Arctic holds roughly 30 percent of the world’s undiscovered natural gas and 15 percent of its oil, while others have quantified the amount at around 40 billion barrels of technically recoverable oil and 200 trillion cubic feet of natural gas. In addition to natural gas and oil, the Arctic and Antarctic contain large deposits of coal, lead, iron, chromium, copper, gold, nickel, platinum, uranium, and silver, which become increasingly valuable in an industrialized world. Figures such as these have many eager to begin extracting these materials for market, but they are held in restraint by grave environmental concerns over the economic and environmental future of the Arctic and Antarctic, and by international organizations that attempt to balance these concerns with the global need for fuel.

The Arctic is governed by the Arctic Council, a collection of eight countries whose international borders lie directly within the Arctic Circle. The Antarctic, on the other hand, has no territorial claims and is therefore governed by an international council of countries that conduct scientific experiments on the continent and who have a vested interests in its security and/or resources. As these resources grow steadily within our grasp during a time of economic stagnation, these groups must decide whether to make the Arctic and Antarctic off limits to resource exploration and exploitation, or to begin devising plans for environmentally sound exploitation of these regions.

Resource extraction in the Arctic has occurred since the 1970s, with both the US and Russia successfully drilling for oil north of the Arctic Circle. Since then, technological innovation has made oil drilling more profitable and environmentally sound than it has been in the past, which has advocates calling for an expansion of drilling projects currently occurring in the Arctic. Resource extraction, many argue, is currently ideal due a number of factors.

1. The melting pack ice surrounding both the Arctic and Antarctic is gradually melting, making it easier to reach natural resources with less environmental impact.
2. While the Arctic has territorial claims on its southern fringes, the majority of the Arctic and the entirety of the Antarctic have no political ownership and have no indigenous populations to stand in the way of these natural resources. Extraction would not displace or steal land away from any native population, and no one country or group of countries can monopolize the reserves of carbon-based and mineral resources there, making the polar regions a vital economic opportunity for all nations. Drilling has been taking place in Russia, Norway, and parts of Greenland and Canada with few negative environmental repercussions while providing these countries with vital natural resources, and advocates argue that as technology progresses, the positive potential for resource exploitation in the Arctic only increases. Oil drilling efforts have, in fact, brought economic prosperity to several northern towns and cities that would otherwise have been remote, forgotten villages on the political as well as geographical fringes of their respective countries. During the current economic recession, advocates argue, an influx of natural resources and raw materials would help to kick start manufacturing and consumption that would benefit the economy on a global scale.
3. As climate change progresses, it will be come even easier and more cost effective to access these areas to drill.

What’s the argument against drilling in the Arctic and the Antarctic?

Opponents, led by environmental groups, argue that resource extraction in the Arctic and Antarctic will only exacerbate the current rate of global warming, strengthen our addiction to fossil fuels, and risk destroying one of the last untouched wildernesses on Earth. While melting pack ice on the fringes of the Arctic and Antarctic helps to uncover these stored resources, opponents of oil drilling and resource extraction point out that the reason why the pack ice is melting in the first place is because of global warming due to irreversible exploitation of resources and the burning of fossil fuels.

The “opportunity” that tantalizes advocates of exploitation, opponents argue, is merely an unfortunate side effect of that same opportunity. Achim Steiner, the United Nations Environmental Program’s Executive Director, said, “What we are seeing is that the melting of the ice is prompting a rush for exactly the fossil fuel resources that caused the melt in the first place.” The polar caps of the Earth are, in fact, a vast wilderness teeming with biodiversity and an area yet to be fully understood by scientists and naturalists. Because of its remote location and harsh environment, it has remained largely unchanged throughout the course of human industrialization. As technological innovation provides greater access to these regions and makes the exploitation of its resources easier, environmentalists are worried that the relentless search for energy will permanently ruin one of the last pristine wild areas on the planet.

Allowing resources such as oil, natural gas, and minerals to be extracted from the Arctic and Antarctic increases the risk of oil spills, Arctic pollution, and the destruction of natural habitats. While the Arctic and Antarctic may contain vast reservoirs of fossil fuels and natural resources and the combination of current technology and melting pack ice is making these resources easier to reach, many are fighting to keep the Arctic and the Antarctic the way they are: untouched by man.

Case Study: The Arctic National Wildlife Refuge

The Arctic National Wildlife Refuge (ANWR) was established in 1960 for the purpose of preserving a 19.6 million acre area of wilderness and the accompanying wildlife in northeastern Alaska bordering northern coastline. ANWR, operated by the US Fish and Wildlife Service, is home to a variety of ecosystems as well as a variety of wildlife such as caribou, polar bears, grizzly bears, and muskoxen. The rest of Alaska’s northern coast, including Prudhoe Bay and much of the North Slope, have been opened to oil exploration and drilling, has delivered billions of barrels of oil to American markets since the 1970s. Since its formation there has been debate on whether to allow oil exploration and drilling to take place in ANWR. It is well known that Alaska sits on large oil reserves.

Advocates claim that oil drilling in ANWR would benefit the American economy with minimal environmental impact. Through land leasing, bids, and taxation the oil in Alaska’s wilderness is estimated to add billions of dollars in revenue to state and federal treasuries. The oil found here would be an alternative to costly imported oil, and the extraction of oil in ANWR is also estimated to create 250-735 thousand new jobs, further stimulating the economy. Advocates of drilling also argue that the environmental impact of oil exploration and drilling would be minimal, citing advanced drilling technology and the fact that only eight percent of the wildlife refuge would be used for exploration and drilling. Additionally, supporters cite polls that show a majority of Alaskan citizens favor drilling for oil in the refuge. Proponents of oil drilling say that the economic benefits would far outweigh the minimal environmental impact in the Arctic National Wildlife Refuge.

Opponents argue that the proposed economic benefits of oil drilling in the Arctic are minimal, and that the drilling severely harms local ecosystems and species. Given that oil prices are based upon world supply and are largely dictated by OPEC, drilling at ANWR would have little impact on oil prices for everyday consumers. This oil reserve would only account for one to four percent of daily consumption in the U.S., and if approved the oil would not reach markets for another ten years due to the exploration, construction, and production involved in creating a new oil field. Opponents cite a report written by the Environmental Information Agency claiming that at peak production in 2030 ANWR oil would only reduce foreign oil imports by three percent. Opponents of drilling also questions oil companies’ desire to find oil in ANWR when it was reported in 2010 by the Bureau of Land Management that oil companies were developing less than 30 percent of the federal land they had already leased or owned for the purpose of oil drilling. Citing these figures, opponents argue that access to oil inside ANWR would have little economic benefit to the United States.

Opponents also dispute the drilling advocates’ claim that the environmental impact of drilling would be much greater than proponents estimate. They disagree on the claim that exploration and drilling would use only eight percent of ANWR land. The oil in this area is scattered in several small pockets instead of one large reservoir, requiring much more land to explore and access these oil reserves. These lands would include birthing areas, migratory routes, and natural habitats of numerous wild species and a variety of ecosystems. Many opponents accept that advanced technology reduces the risk of oil spills and other disasters, but they argue that even the presence of heavy machinery and human interference will have adverse effects on these ecosystems and on the flora and fauna that live there. Environmentalists are also worried that allowing oil drilling in ANWR would open the floodgates to more corporate control over federally protected wildlife areas, thus nullifying the point of creating national parks and wildlife refuges in the first place.

Conclusion

It’s clear that there’s pressure to find new and reliable sources of natural gas and oil, but many opponents pose the important question: at what cost? There are both incentives and huge downsides to drilling the Arctic and Antarctic poles. As the options for where to get non-renewable resources continue to narrow, it’s an important debate to keep an eye on.

 Resources

Primary 

Secretariat of the Antarctic Treaty: The Antarctic Treaty

Additional

Moscow Times: Russia Pushes For Further Arctic Exploitation

CNN: It’s Time to Develop Our Arctic Resources

Earth Sky: Robert Blaauw on Oil Exploration and Development in the Arctic

Arctic: Towards An Agenda For Arctic Sustainable Development

Minnesota Daily: ANWR Drilling Benefits Americans

Committee on Natural Resources: ANWR: Producing American Energy and Creating American Jobs

CNSnews.com: ANWR Drilling Would Ease Energy Crisis, Create Economic Boon, Supporters Say

Cool Antarctica: Human Impacts on Antarctica and Threats to the Environment– Mining and Oil

Climate Science Watch: U.S. Arctic Strategy Aims to Exploit Oil and Gas For ‘National Security’

Reuters: Arctic Needs Protection From Resource Rush as Ice Melts

Grid Arendal: The Arctic–A New Victim of Global Development?

National Wildlife Refuge Association: Protecting the Arctic National Wildlife Refuge

Record: Oil is the New Gold in Arctic ‘Cold Rush’

Globe and Mail: The North’s Resource Boom: Is it Prosperity or Exploitation?

SciDev: Developing Nations Seek a Share of Antarctica’s Spoils

CBN News: The ANWR Debate: To Drill or Not to Drill

National Geographic: Arctic Oil Drilling Debate Escalates

Heritage Foundation: Opening ANWR: Long Overdue

Alaska Dispatch News: Drilling ANWR is Not the Answer to U.S. Energy Challenges

Joseph Palmisano

Joseph Palmisano is a graduate of The College of New Jersey with a degree in History and Education. He has a background in historical preservation, public education, freelance writing, and business. While currently employed as an insurance underwriter, he maintains an interest in environmental and educational reform. Contact Joseph at staff@LawStreetMedia.com.

The post Debating Resource Exploitation in the Arctic and Antarctic appeared first on Law Street.

On December 18, 2013, Senate Finance Committee Chairman Max Baucus unveiled a discussion draft for an energy tax reform plan intended to make progress in the federal government’s current system of corporate tax incentives for the production of clean energy. The old system was criticized as being too complicated and too decentralized. Read on to learn about Baucus’ energy plan, the arguments in favor of it, and the arguments against it.

What was Baucus’ plan?

There are forty separate tax incentives offered to corporations for a variety of forms of energy including fossil fuels, wind, solar, and nuclear power; however, many of these are short-term incentives set to expire every two years or so until they are re-authorized by Congress, often leaving companies unsure of which tax incentives would still be in effect in the future. These incentives are also often specific in a way that does not provide for new and emerging technologies that may contribute to reducing emissions.

Senator Baucus’ plan aims to make energy tax incentives “more predictable, rational, and tech-neutral” by consolidating some of these incentives and eliminating others to form two broader and simpler tax incentives, one focused on clean production of electricity and one focused on clean production of transportation fuel. These incentives are granted after a particular plant is using a method that produces emissions intensity 25 percent cleaner than average energy production methods (“emissions intensity” is measured as the amount of emissions released per amount of energy produced, and is used to compare the environmental effect of different methods of energy production).

Baucus’ plan also calls for using the federal money saved through this tax reform to lower the corporate tax rate, which currently stands at 35 percent. Baucus, however, was confirmed in January as the next US Ambassador to China, and though leadership of the Senate Finance Commission will transfer to Senator Ron Wyden, who has worked closely with Baucus on this reform plan, many expect the plan to become stalled as its leader moves overseas. Despite this uncertain future, Baucus’ reform plan is seen as an indicator of impending reform to the current energy tax system in the United States.

What is the argument for Baucus’ plan?

Supporters of the reform say Baucus’ plan is an effective way to simplify the tax incentive structure while supporting clean energy. Companies would not have to waiting on their toes to see whether the particular incentives that apply to them would be renewed, and knowing that these incentives will have more longevity would promote more investment into clean energy production technology projects in the future. Most importantly, this reform plan is tech-neutral, meaning that it does not favor certain technologies over others and in fact does not specify any technologies in its incentives.

Supporters argue that this aspect of the plan will benefit newer and cleaner technologies that may not necessarily fit into the rigid outlines of our current tax incentives, thus paving the way for further innovation and investment into energy-producing technology. Additionally, many of the incentives that are to be eliminated and not included in the broader transportation fuel incentive are tax breaks that benefit Big Oil, a move hailed by many supporters who do not see the point of offering tax breaks to companies in an industry that has shown record profits year after year [cite]. Lastly, with the federal revenue gained from simplifying the tax incentive structure and removing breaks for big oil companies, Senator Baucus’ plan intends to lower corporate tax rates, which supporters hope will provide impetus for further economic growth.

What is the argument against Baucus’ plan?

Others are strongly opposed to this reform plan due to its emphasis only on energy producers (companies that use coal, fossil fuels, wind, solar and other methods to produce energy) and not energy users (all other private citizens and companies that use electricity, gasoline, etc.), and because the emissions reduction quotas of the incentives are, as one critic put it, “unambitious”, and would have little effect on improving the environment.

The two main tax incentives of Baucus’ plan target producers of electricity and transportation fuel, with no mention of companies that use energy in a cleaner way. This means that companies that make their buildings more energy efficient, companies that manufacture environmentally-friendly appliances and cars, and the individuals who use these greener manufactured goods would no longer receive the tax incentives they currently receive. Many opponents see this as being counter-productive in the struggle to promote cleaner energy technologies.

And while this plan does target energy production, many opponents point out that this plan would actually reduce incentives provided to areas such as solar and wind power. Whereas currently producers of solar power receive an investment tax credit of 30 percent, under this new plan they would only be entitled to either a production tax credit of $0.023 per kilowatt or an investment tax credit of 20 percent. Therefore, despite favoring carbon-free methods of energy production, many opponents feel this plan will do little to help area such as solar, wind, and other green energy production.

There has also been a backlash from the oil and natural gas industry, as well as from areas such as Montana and North Dakota who have a fledgling oil industry, arguing that by favoring carbon-free technologies the plan would be stifling job opportunities and economic growth brought about by the oil industry. Lastly, some opponents of the plan argue that the reduction quotas are too low. One critic points out that a 25% reduction in emissions “intensity”, which is the wording used in the discussion draft, is vastly different from a concrete measurement of emissions, and depending upon economic growth and the relative amount of energy these companies are producing, companies could meet this quota without any serious reduction in emissions. On a broader scale, some oppose tax incentives for alternative energy production altogether, arguing that global warming is, as indicated by its name, a global phenomenon, and that any reduction in emissions in the US is offset by emissions due to economic growth in developing countries, where environmental legislation is often more lax.

Conclusion

It’s clear that something needs to be done to fix the very confusing and red-tape-littered energy tax process. While there are certainly tangible benefits to Baucus’ plan, opponents worry that it would do more harm than good.

Resources

Primary

U.S. Senate Committee on Finance: Baucus Unveils Proposal For Energy Tax Reform

U.S. Senate Committee on Finance: Energy Tax Reform Discussion Draft

Additional

American Progress: Baucus Tax Reform Cuts $46 Billion in Oil Breaks

Domestic Fuel: Senator Max Baucus Unveils Energy Tax Reform

EE News: Baucus Proposal Replaces Dozens of Energy Breaks with Credits for ‘Clean’ Fuel, Electricity

BioMass Magazine: Sen. Baucus Releases Proposal To Overhaul Energy Tax Incentives

BillingsGazette: Baucus’ Tax Reform Must Be Fair To Energy Industry

ThinkProgress: Max Baucus’ Renewable Energy Tax Break Reform: The Good, The Bad, and The Ugly

Daily Caller: Analysis: Baucus Energy Tax Plan Comes With Dubious Benefits

Breaking Energy: Are Subsidies the Answer to Energy Sector Tax Reform?

Solar Industry: Baucus Energy Tax Reform Plan Reduces Solar Investment Credit

Washington Post: The Way Congress Funds Clean Energy Is A Mess. Max Baucus Thinks There’s A Better Idea

Politico: Baucus Proposes To Overhaul for Clean-Energy Tax Breaks

Lexology: US Teax Reform Update: Senate Finance Chairman Baucus Issues Energy Tax Reform Proposal

Hill: Baucus Proposes Dumping Energy Breaks

Tax Reform Law: Baucus Proposes Major Overhaul To Energy Incentives

Joseph Palmisano

Joseph Palmisano is a graduate of The College of New Jersey with a degree in History and Education. He has a background in historical preservation, public education, freelance writing, and business. While currently employed as an insurance underwriter, he maintains an interest in environmental and educational reform. Contact Joseph at staff@LawStreetMedia.com.

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