The Oil and the Glory

The Weekly Wrap: Dec. 31, 2010

Whither Ahmadinejad: Has it been a good or bad year for Iran President Mahmoud Ahmadinejad? A mysterious computer worm called Stuxnet confounded the work of Iran’s nuclear centrifuges; unknown assassins targeted Iranian nuclear scientists; and Iran was forced to slash fuel subsidies in the face of tighter western banking sanctions.  But whether Ahmadinejad’s political power ...

Whither Ahmadinejad: Has it been a good or bad year for Iran President Mahmoud Ahmadinejad? A mysterious computer worm called Stuxnet confounded the work of Iran’s nuclear centrifuges; unknown assassins targeted Iranian nuclear scientists; and Iran was forced to slash fuel subsidies in the face of tighter western banking sanctions.  But whether Ahmadinejad’s political power waned is another matter. As Bruce Walker suggests, history is replete with leaders making hay while crippling their country. Meanwhile, one of the few nations still officially doing business with Iran – India – joined those tightening a financial grip on the country, Lydia Polgreen and Heather Timmons write at the New York Times. India conducts some $11 billion a year in oil and gas trading with Iran, but now India’s central bank has halted the use of a key method of making payments for the fuel, known as the Asian Clearing Union.

The Greenhouse Gas Conundrum: One victim of 2010 was climate science. The second-biggest emitter of CO2 on the planet, the United States, opted out of internationally negotiated mandatory carbon cutbacks, reversing what had appeared to be sure passage of legislation that for the first time would put a price on carbon emissions. As the year wound down, the Obama Administration advanced a detour strategy of which it had warned since it took power two years ago: If Congress would not regulate carbon emissions, the White House would do so administratively through the Environmental Protection Agency.  As John Broder reports in the New York Times, EPA regulation begins to take effect Sunday. Yet, that strategy, too, will face a collision with new U.S. politics – the strengthened potency of the Republican Party, vocally powerful swaths of which question the science underlying climate policy.

The Power of the Energy Market: China, holding a corner on the market for rare-earth elements, in 2010 began to slowly capitalize on that leverage to squeeze technology-based countries around the world. This story – one of the most important economic developments of 2010 – looks likely to overlap into next year, as Japan and South Korea are especially reliant on the rare-earth minerals for their key export industries including advanced batteries, solar and wind. Next year, China will cut exports of the 17 elements by another 11 percent, calling it a move against illegal mining. At the New York Times, Keith Bradsher writes that the folks doing the actual mining are often the victim of gangsters who control China’s rare earths black market.

Gas, Gas, Gas: The most important wild card in global energy is natural gas, as we learned in 2010. A ramp-up in shale gas production in the United States shook Europe, and reduced Russia’s gas-fueled hold over the continent, as this blog reported. Next year looks likely to carry the trend forward. Many analysts think that environmental concerns such as water pollution make it unclear how much shale gas will end up actually produced. But the market thinks otherwise – 2010 was marked by tens of billions dollars in domestic and foreign investment in the U.S. shale gas patch. As Telis Demos reports in the Financial Times, 2011 is shaping up similarly, as BHP Billiton may buy Anadarko Petroleum, one of the biggest shale-gas players in the world. A new venue for the gas frenzy is Israel, Charles Levinson and Guy Chazan report in the Wall Street Journal. This week, Noble Energy confirmed that it had found 16 trillion cubic feet of gas in a field called Leviathan underneath the Mediterranean Sea, "the world’s biggest deepwater gas find in a decade, with enough reserves to supply Israel’s gas needs for 100 years," Levinson and Chazan report.

Happy New Year, Matt Bryza:  Matthew Bryza’s wait has seemed interminable, but this week he got what he had sought patiently: the ambassadorial post in petro-state Azerbaijan. This blog has chronicled Bryza’s woes as he battled State Department intramurals (insiders who thought Bryza’s rise was too fast) and local politics (Armenian groups who thought him too glib on the question of the 1915 massacre of Armenians in Turkey). All that comingled with poisonous election-year politics to confound Bryza’s Senate confirmation, as two senators up for re-election (Barbara Boxer in 2010 and Robert Menendez in 2012) and vulnerable to Armenian politics placed holds on his nomination. But, as James Morrison reports in the Washington Times, President Barack Obama included Bryza on his list of recess appointments. The appointment allows Bryza to serve for a year while the White House attempts to navigate Senate politics.

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