Yesterday, new U.S. sanctions kicked-in barring global financial institutions from doing oil business through Iran’s central bank. On Sunday, a total European Union embargo on Iranian oil comes into effect. The world has, more or less, lined up behind these measures.
Now, economists are saying that these latest rounds of international sanctions could gut Iran’s oil-revenue-based economy. Jamie Webster, a senior manager of the Markets and Country Strategies Group at PFC Energy, told RFE/RL’s Golnaz Esfandiari:
A lot of these countries have already started to back out and essentially completed the backing out of that crude. So that’s around 600,000 barrels a day. Previously, before all of this latest rash of sanctions, Iran was exporting around 2.2 million barrels a day, so that is affecting them…
Another energy economist, Robin Mills, told Esfandiari that European firms’ refusal to insure Iranian oil tankers will also hurt Iranian oil sales to Eastern countries such as Japan and China, perhaps costing Iran another 400,000 barrels a day of exports. With prices of crude oil falling, that could mean Iran’s oil revenues fall by half, Mills said:
[O]il prices, which were very high in March, have fallen back quite significantly, so that’s a kind of a double impact.
So it could be that Iran’s oil revenues which were perhaps something like $100 billion to $110 billion during the last Iranian year, in this year they could be down to $45 billion to $50 billion, so the oil revenues could be cut in half overall with the combination of lower exports and lower prices.
Iran hawks in the U.S. calling for confrontation won’t even acknowledge that exports are down. Forget that the U.N.’s energy agency says Iran’s exports are down 40 percent, the stance that sanctions have no teeth willfully ignores even pronouncements by an Iranian official that exports are down between 20 and 30 percent. (The Iranians rarely acknowledge any economic pain at all, let alone from sanctions.)
The dual-track of pressure and diplomacy pursued by the Obama administration is based on the notion that a potential Iranian nuclear weapon is widely considered a threat to both the security of the U.S. and its allies in the region, as well as the nuclear non-proliferation regime. U.S., U.N. and Israeli intelligence estimates give the West time to pursue an approach other than war. Questions about the efficacy and potential consequences of a strike have led U.S. officials to declare that diplomacy is the “best and most permanent way” to resolve the crisis.
CAP’s Ken Sofer has more analysis on the sanctions and negotiations on Iran’s nuclear program
Analysis: Cutting Red Tape In Transportation Bill Means Cutting You Out Of The Environmental Review Process
By Christy Goldfuss
Stories about the recent House transportation bill will likely focus on what was not in the package: the Keystone XL pipeline and coal ash regulations.
However, environmentalists, right-to-know advocates, and community organizers need to take a close look at the section that discusses “Accelerated Decision Making.” For the first time, but likely not the last, conservative politicians in the House won a major victory in this small section of the bill by including their “streamlining” language, which simply means curtailing the public’s ability to comment on the impacts of transportation projects for communities — including on water, air, and public safety.
The legislation weakens one of our bedrock environmental laws, the National Environmental Policy Act (NEPA), which guarantees public participation in reviewing government activities that affect the environment. It was signed into law by President Richard Nixon after passing the Senate by unanimous vote and the House by an overwhelming 372-15 vote.
First, the “Accelerated Decision Making” section of the transportation bill does what has never been done before — fining agencies up to 7% of their fiscal year budget if they do not meet established deadlines for environmental analyses. On the one hand, that means taking more money away from financially strapped agencies trying to accelerate their decision making process about the impacts of a project. On the other hand, it gives agencies an incentive to deny permits in order to avoid the fine. Neither of these impacts will lead to getting more transportation projects on line faster.
Next, this section of the law expands the type of projects that do not have to go through a public comment and environmental review process at all. These projects may get less than $5 million in federal funds, but they could still be large in scope. Regardless of the overall size, the public will not be given an opportunity to comment and the public will not have an opportunity to see how the highway, bridge, or other transportation project will impact their community.
Lastly, this is just the beginning of efforts by House Republicans to “streamline” policies that protect the American public’s health and safety. The House Committee on Natural Resources has been an incubator for such policy ideas, mostly around oil and gas development. For example, Rep. Doug Lamborn’s (R-CO), “Streamlining Permitting of American Energy Act” (H.R. 4383) purports to get more oil and gas drilling online by impeding citizens’ ability to exercise their legal right to raise concerns about proposed oil and gas leases by charging $5,000 to do so.
The Transportation Surface Transportation Act is just the first time that House Republicans have been successful in getting this language over the finish line.
Christy Goldfuss is the Director of the Public Lands Project at the Center for American Progress Action Fund.
Cognitive Dissonance: White House Greenlights Arctic Drilling As Congress Sends Billions To Restore Gulf Coast
by Christina DiPasquale and Michael Conathan
As soon as today, Congress and the White House could issue decisions with massive and opposing ramifications for oceans in distant corners of our country.
The House and Senate are expected to pass a sweeping Transportation bill including a provision to send badly needed dollars to the Gulf Coast that will help communities and ecosystems recover from BP’s Deepwater Horizon spill. The money would comprise 80 percent of the civil fines BP and other responsible parties will have to pay as a result of the 2010 catastrophe, a measure recommended in the CAP-Oxfam report “Beyond Recovery.”
Meanwhile, the Department of Interior is on the cusp of issuing permits for Shell for drilling new oil wells in the Arctic Ocean’s Beaufort and Chukchi Seas off the north slope of Alaska. The administration’s justification? As Secretary Salazar stated earlier this week, “I believe there will not be an oil spill.”
The irony of these two actions occurring almost simultaneously proves we are still more inclined to mitigate future disasters than set up the rigorous safeguards that can help prevent them.
Giving Shell the permits needed to commence drilling in the Arctic—an area shown to have extremely limited infrastructure to respond to a potential spill, as detailed in the CAP report “Putting a Freeze on Arctic Ocean Drilling” — is a recipe for yet another disaster for local economies and the environment. The lack of response capabilities in the region becomes clearer when compared to the resources needed in the response to the Deepwater Horizon spill (view CAP’s map here).
So while we’re doling out billions to the Gulf to help mop up, we’re simultaneously setting ourselves up for the possibility of another failure in a region where we have virtually no resources for cleaning up a spill. Admiral Robert Papp, the commandant of the U.S. Coast Guard, explained the situation in a June 2011 Senate hearing:
“Our current Arctic capabilities are very limited…. Imagine if we had to mount a major pollution response—we would have to create our own infrastructure… Although private industry may assert they are adequately prepared for a response to a spill, we must determine what response capability our Coast Guard and Nation needs to have so we can mount an adequate response as exploration advances towards production.”
In addition to Admiral Papp’s warning, businesses have indicated their skittishness about investing in or insuring oil exploration in the region. German bank WestLB announced they would not provide financing to any offshore oil or gas drilling ventures in the area, declaring the “risks and costs are simply too high.” A week earlier, the insurance giant Lloyd’s of London concluded that offshore drilling in the Arctic would “constitute a unique and hard-to-manage risk” and advised companies to “think carefully about the consequences of action.”
With the nearest permanent Coast Guard facility over 1,000 miles away, no major roads, railroads, or ports along the North Slope, and extreme and unpredictable weather patterns, any coordinated response effort would be daunting.
Communities across Alabama, Florida, Louisiana, Mississippi and Texas — all too familiar with the economic and environmental price of insufficient response plans — are close to receiving badly needed funding to rebuild their economy and environment from fines paid by BP and other companies. The money, which could be as much as $16 billion, will then be invested in projects and activities that restore the long-term health of the Gulf Coast ecosystems and coastal economies.
Unfortunately, the transportation bill fails to address the strain put on government funds once the liability limit (or polluter’s ability to pay) has been reached. Though BP will not invoke the set $75 million liability cap for the Gulf disaster, Congress leaves the door open for other polluters to do so in the future, ignoring the Government Accountability Office’s 2007 and 2010 reports which both found “the liability limits for certain vessel types may be disproportionately low compared with their historic spill cost.”
At least now we know that there’s a precedent. If a spill wrecks the pristine Arctic and endangers the environment, culture, and very existence of the North Slope’s Alaska native communities, they may be first in line for a big payout to help clean up. Assuming we can ever figure out exactly how to do it.
Christina DiPasquale is an Associate Director for Press Relations at the Center for American Progress; Michael Conathan is Director of Ocean Policy at the Center for American Progress.