-Caveat Lector- >From http://www.onlinejournal.com/Special_Reports/Chin072502/chin072502.html
Part 2 of a six-part series The United States in the Philippines: post-9/11 imperatives By Larry Chin Online Journal Contributing Editor Oil and Gas in the South China Sea July 25, 2002�It is a matter of scientific fact that the world will begin running out of oil in less than five years. Awareness of this coming end of the Hydrocarbon Age has driven high-level policy planning for the US government and the oil industry for years. Dwindling world oil and gas supplies, declining oil and gas production, and the nightmarish consequences associated with this imminent scenario, are at the foundation of the 9/11 War. Professor Richard Heinberg, editor of The Museletter writes: "our world is approaching two great historical endings at once: the end of Pax Americana, and the end of cheap energy resources. Most petroleum geologists now agree that�due to geophysical constraints immune to increased exploration, investment, or technological development�we will see a global peak in the production of crude oil some time within the next three or four years. After that "Big Rollover," as one USGS geophysicist has dubbed it, there will be a few percentage points less oil available each year to meet the rising world demand, regardless of what anyone does." This conclusion is echoed in a series of reports in From the Wilderness by geologist and investigative journalist Dale Allen Pfeiffer. Based on the Hubbert Curve (a standard measure of oil production peaks and declines, nationally and globally), "within five years, we will no longer be able to produce enough oil to meet the needs of our oil civilization." In this unfolding scenario, according to Pfeiffer and others, oil elites will seek to grab the remaining supplies�and dictate their use. Simply put, the 9/11 War is an oil coup. The oil- and gas-rich South China Sea, and the Philippines, are undoubtedly targets of the oil coup. The South China Sea has proven oil reserves estimated at 7.5 billion barrels, with oil production of approximately 1.3 million barrels per day. For years, there has been speculation that the Spratly and Paracel Islands hold significant untapped oil deposits. According to a 1994 US Geological Survey estimate, the total sum of undiscovered reserves is around 28 billion barrels. A more conservative US Department of Energy report, puts the total oil resources of the Spratly Islands at 1 to 2 billion. Meanwhile, some Chinese estimates of the total potential of the Spratly and Paracel Islands run as high as 213 billion barrels. China's Ministry of Geology and Mineral Resources reported that the South China Sea holds as much as 130 million barrels of oil�-an amount greater than the combined reserves of Europe and Latin America combined. Access and control over significant untapped oil and gas reserves in the South China Sea have been at the core of intense territorial, diplomatic and military confrontations between surrounding nations seeking to claim the sea and its bounty for themselves. In the past two decades, some 13 military skirmishes have occurred, arising from competing claims. The Philippines is one of the claimants of the Spratlys, along with China, Vietnam, Malaysia, Taiwan, Brunei. At least five nations have established military bases in the area. China claims most if not all of the South China Sea. Sparked by conflicts with China over Mischief Reef (1995), the Campones Island (1996) and Scarborough Shoal (1997), the Philippine government has invoked its mutual defense treaty with the US to obtain US assistance in repelling Chinese forces from islands claimed by the Philippines. In 1999, officials of the Association of Southeast Asian Nations (ASEAN) drafted a regional code of conduct to prevent conflicts over the Spratlys. Manila drafted much of the code, which was rejected by China. Today, simmering territorial issues remain unresolved. Even while the US has nurtured an economic alliance with China (simultaneously engaging and containing the emerging superpower), it has continuously supported Philippine defense programs with military and intelligence aid and training, and a variety of diplomatic measures aimed at sending a "strong message" to Beijing. The message sent by the current US intervention, and the Operation Balikatan- related military buildup has no doubt registered in Beijing. As noted by Michael Klare, "the US is bound by treaty to defend the Philippines; even if Washington does not include the (disputed) Spratly Islands in its understanding of Philippine territory; a future clash between China and the Philippines could escalate to the point where the United States would become involved." Recent events such as the admission of China to the World Trade Organization (after years of unsuccessful lobbying) and China's "assistance in the 'war on terrorism'" suggest that in the short-and intermediate-term, China's political and economic stake in the 9/11 War is congruent with those of the US. The elite "players" on the world stage such as Henry Kissinger and Zbigniew Brezezinski, and the heads of the Carlyle Group (to name just a few) have vested interests in playing all sides of the 9/11 War. Kissinger, for instance, has been a consultant for Unocal and a central figure in the 1990s pipeline politics of Afghanistan, as well as a consultant of China National Offshore Oil Company�which was involved in some of the Spratly Island clashes years ago (prior to Kissinger's hire in 2001). In the future, however, as the superpower rivalry (real as well as fabricated) between the US and China escalates, conflict over who controls the South China Sea could break out again. Oil and Gas in the Philippines The Philippines are rich in natural gas, oil and geothermal supplies. Multinational energy companies have significant projects underway, as reported by Bobby Tuazon in Bulatlat.com, as well as by other well-placed Filipino journalists and analysts. In addition to a Philippine leadership that is "accommodating" to foreign investment, the oil and gas industries were deregulated and privatized in 1998. Foreign investment shot up 171 percent to $3.4 billion in 2001. Six new offshore explorations have begun in Malampaya basin, led by Unocal, Nido Petroleum, Philippines National Oil Company Exploration Corporation, Trans-Asia Oil, and Philodril. Chevron-Texaco, through its subsidiary Caltex-Philippines, operates a major refinery, two terminals, and more than 1,000 gas stations throughout the Philippines, and commands a 24 percent share of the Philippine market. BP Amoco runs a $48 million power solar power project in Mindanao. Other companies with major Philippine stakes include Phillips Petroleum, Conoco, Nuevo Energy, and Globex Energy. The Philippines is estimated to have 3.7 trillion cubic feet of proven natural gas reserves. The impetus for renewed interest in the southern Philippines is Malampaya offshore field, the largest natural gas development in Philippine history, discovered by Shell Philippines Exploration. Proven reserves are estimated at 2.6 trillion cubic feet. It may not be a coincidence that the deal struck between Bush and Arroyo followed on the heels of the inauguration of the Malampaya field, which also holds an estimated 85 million barrels of oil. Malampaya is located in the South China Sea, off of the northern island of Palawan, and contains 2.7 trillion cubic feet of natural gas. A 312-mile pipeline is one of the longest deep-water pipelines in the world, and links the field to power plants in Batangas. Shell Philippines Petroleum has committed $4.5 billion to Malampaya and anticipates potential crude oil production of up to 50,000 barrels by 2003. Chevron-Texaco also has a large stake in Malampaya. There are plans for an $80 million joint venture to expand the pipeline to other power plants, as well as other pipelines to a developing ASEAN power grid. One of the largest-ever foreign consortiums in the country, the Malampaya Deepwater Gas To Power Project, involves Chevron- Texaco, Shell and Philippine National Oil Company Malampaya is not the only area of foreign interest. A number of firms are exploring the areas off of Luzon and Fuga Island. San Isidoro and East Visayan contain as much as 60 million barrels of oil. Philippines National Oil is drilling in Lagao, Lambayong province in July 2002, where an estimated 561 million barrels of oil are untapped . The Philippine government estimates reserves up to 246 million barrels of oil in northwestern Palawan, and 37.4 million barrels in the Minduro-Cuyo basin. Approximately $93 million of the $4.6 billion of aid pledged by Bush is earmarked as economic assistance to Mindanao. According to the United Secretariat of the Fourth International, "the importance of Mindanao for the success of the neoliberal project of capitalist globalization in the Philippines is the main reason for the US intervention. Mindanao, Minsupala, Sulu and Palawan are now "confirmed oil country." Discoveries of oil and gas in Palawan and Cotabato in turn reinforce the satellite findings of the National Space Agency that the largest deposits of oil and gas in Asia could lie in the area covered by Minsupala." The report goes so far as to call Minsupala "the Middle East of the near future." Finally, the Philippines is also the world's second largest producer of geothermal power. Unocal is involved in offshore oil, gas and geothermal projects for the US Department of Energy, and geothermal projects in Davao and Tiwi. Securing the Eastern Oil Transit Route Since the early 1990s, major US and multinational oil companies, including Chevron- Texaco, ExxonMobil, Unocal, BP-Amoco, Shell, and energy-related companies such as Enron and Halliburton, have invested billions of dollars to exploit the untapped oil and gas in the Caspian Sea/Central Asian/ Caucasus region. Capturing the region's oil wealth and carving out territory, in order to build a network of transit routes, was a primary objective of US military interventions throughout the 1990s in the Balkans, the Caucasus and Caspian Sea. To date, these investments remain unrequited due to geographical, political and technological difficulty of transporting the oil and gas via pipelines out of the region. Nearly all of Asia's energy imported from the Middle East and Africa travels from the Arabian Sea (where pipelines from the Caspian and the Caucasus would be loaded to tankers) and the Indian Ocean, through the Strait of Malacca and then through the South China Sea. As stated earlier in this report, a South China Sea that is "managed and controlled by the US-led world oil oligarchy remains critical as part of the transportation route from Central Asia oil and gas from its source to its ultimate markets in Asia. Next: Drugs and the Philippines Larry Chin is a freelance journalist and an Online Journal Contributing Editor. Download a printable version. For a free copy of Adobe Acrobat Reader, click here. The views expressed herein are the writers' own and do not necessarily reflect those of Online Journal. Email [EMAIL PROTECTED] Copyright � 1998-2002 Online Journal�. All rights reserved. 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