178 BQ Aff Answers to Natural Gas

178 BQ Aff Answers to Natural Gas - AT: Natural Gas DDI...

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Unformatted text preview: AT: Natural Gas DDI 2008 <BQ> Deutsch Index Index..............................................................................................................................................................................1 **Canada**..................................................................................................................................................................3 2AC CANADA..........................................................................................................................................................3 2AC CANADA..........................................................................................................................................................5 **LNG Safety**..........................................................................................................................................................6 2AC LNG SAFETY DA..........................................................................................................................................6 **LNG Econ**............................................................................................................................................................7 2AC LNG ECON......................................................................................................................................................7 2AC LNG ECON......................................................................................................................................................8 AFF Turn: High prices bad....................................................................................................................................9 AFF Impact Turn Booster: LNG Security Costs High....................................................................................10 **Indonesia**............................................................................................................................................................11 2AC INDONESIA..................................................................................................................................................11 2AC INDONESIA..................................................................................................................................................12 2AC INDONESIA .................................................................................................................................................13 AFF US Not Key....................................................................................................................................................14 AFF Wind No-Link................................................................................................................................................15 AFF Ethanol No-Link...........................................................................................................................................16 AFF Transition to Regional Markets Now.........................................................................................................17 AFF Indonesia Declining......................................................................................................................................18 **IPI Pipelines**.......................................................................................................................................................19 2AC IPI PIPELINE...............................................................................................................................................19 2AC IPI PIPELINE...............................................................................................................................................20 2AC IPI PIPELINE...............................................................................................................................................21 AFF Relations Good Now.....................................................................................................................................22 AFF No Pipeline.....................................................................................................................................................23 AFF Nuclear Demand...........................................................................................................................................24 AFF Coal Demand.................................................................................................................................................25 AFF Pipeline Inevitable........................................................................................................................................26 AFF Pipeline Bad Terrorism............................................................................................................................27 1 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Pipeline Bad Energy Security..................................................................................................................28 AFF Pipeline Bad Iran.......................................................................................................................................29 AFF Pipeline Bad Iran.......................................................................................................................................30 AFF Iran Sanctions Bad.......................................................................................................................................31 AFF TAPI Pipeline Better....................................................................................................................................32 **Russia**..................................................................................................................................................................33 2AC RUSSIA..........................................................................................................................................................33 2AC RUSSIA..........................................................................................................................................................34 2AC RUSSIA..........................................................................................................................................................35 2AC RUSSIA..........................................................................................................................................................36 AFF Non-Unique....................................................................................................................................................37 AFF Energy key to Russian Influence................................................................................................................38 AFF Russian Influence Increasing Now.............................................................................................................39 AFF No I/L Too Much U.S. Supply..................................................................................................................40 AFF Empirically Denied Energy Relations....................................................................................................41 AFF I/L Turn Retaliation..................................................................................................................................42 AFF Relations Non-Unique..................................................................................................................................43 **Flaring**................................................................................................................................................................44 2AC FLARING .....................................................................................................................................................44 2AC FLARING......................................................................................................................................................45 **Industries**...........................................................................................................................................................46 2AC Industries.......................................................................................................................................................46 2AC Industries ....................................................................................................................................................48 2AC - Industries........................................................................................................................................................49 2 AT: Natural Gas DDI 2008 <BQ> Deutsch **Canada** 2AC CANADA 1) Nonunique Demand satisfied now Jon Hurdle, a freelance writer who has written for many business publications, 7/14/08, "Pa. invites bids for leases on possible gas field," Reuters, http://uk.reuters.com/article/oilRpt/idUKN1447555220080714 Pennsylvania officials on Monday invited bids to lease land atop a geological formation that may hold enough natural gas to meet total U.S. demand for two years. The state's Department of Conservation and Natural Resources said it will hold a lease sale from pre-qualified bidders for 18 tracts of state forest totaling some 74,000 acres in two north-central Pennsylvania counties. The bidding will be open until Sept. 2. The tracts sit over the Marcellus Shale formation, a natural feature about a mile deep that has been known about for years but which has only recently been suspected of containing massive quantities of natural gas. The formation, which stretches some 600 miles between western New York State and West Virginia, could contain as much as 50 trillion cubic feet of recoverable natural gas, or enough to supply the entire U.S. for two years, at a wellhead value of $1 trillion, according to website geology.com. The recoverable quantity may represent about a tenth of the total gas in the formation, some scientists believe. The estimates came from Pennsylvania State University geoscience professor Terry Englander and New York State University geology professor Gary Lash, the website said. "Given the enormity of the nation's energy demand, making less than an addition 4 percent of our state forest available for drilling is a reasonable decision that protects our forest ecosystem and helps meet energy demands," DCNR Secretary Michael DiBerardinis said in a statement. "This lease sale responds to increased interest in the Marcellus Shale formation, a deep resource thought to contain large quantities of natural gas," the department's statement said. It noted that new technology and increased natural gas prices have made it possible to recover hard-to-reach fuel. 2) NonUnique Demand low now NORVAL SCOTT, correspondent of Dow Jones Newswires, 7/15/08, Reportonbuisiness.com, "With prices high, B.C. gas is hot," http://www.theglobeandmail.com/servlet/story/LAC.20080715.RSHELLBC15/TPStory/Business While B.C. contains huge amounts of natural gas, those assets are mostly locked in tight formations of shale rock that prevent the gas from flowing freely into wells. Recent technological breakthroughs allow the shale to be fractured more easily, enabling the gas to be extracted As a result, companies such as Duvernay, which holds tracts of land in the Montney that could contain over one trillion cubic feet of gas, have seen their share price double over the past twelve months. Montney is estimated to hold 50 trillion cubic feet of reserves - more than in all of Alberta. While Duvernay was keen to continue developing its assets and wasn't looking to sell, Shell approached the company in July with its offer and negotiations proceeded smoothly from that point, Duvernay CEO Mr. Rose said in an interview. "Shell were really interested in us." 3) A decrease in demand would allow Canada to fill its empty reserves 4) Canadian production would not decrease because of the NAFTA proportionality clause 3 AT: Natural Gas DDI 2008 <BQ> Deutsch 5) Canada would stop development of the noneconomical northern tar pits in reponse to a decrease in demand 4 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC CANADA 6) Alternative energies supplement supply, they don't replace natural gas but instead curb market volatility. Progress Energy, St. Petersburg, Florida, 7-15-2008, "Progress Energy gets approval to take next step to secure Florida's energy future." <<http://www.progressenergy.com/aboutus/news/article.asp?id=19062>> [MM] The estimated average annual customer cost increase is expected to be between 3 percent and 4 percent from 2009 to 2018. When the plants begin commercial operation in 2016-17, fuel savings -- a direct cost savings benefit to customers -- is estimated to be approximately $1 billion a year. The prices of oil, natural gas and other fossil fuels have risen dramatically in the last couple of years and continue to be highly volatile. Despite what is expected to be a short-term economic downturn, Progress Energy Florida's service area remains one of the fastestgrowing regions in the country. As the fourth-largest state, Florida ranks third nationally in per-capita energy consumption. Over the past three decades, the size of the average home has grown by 50 percent and uses 30 percent more electricity. Since the Crystal River nuclear plant came online in the mid-1970s, the company's customer base has more than doubled. Fuel diversity is important to ensure a reliable, stable supply of electricity for customers. Progress Energy Florida has the most diverse fuel mix of any utility in the state, and is committed to a balanced mix of power generation alternatives, including natural gas, coal, oil, nuclear and renewable sources. This is the best way to continue to ensure a safe, reliable and economical source of electricity. Nuclear power is one of three critical components of Progress Energy Florida's balanced solution to meet its customers' energy needs over the long term, which also includes the use of renewable energy sources, and one of the nation's best energy-efficiency programs. 7) Empirically Canadian relations are resilient 5 AT: Natural Gas DDI 2008 <BQ> Deutsch **LNG Safety** 2AC LNG SAFETY DA 1. Increased demand elsewhere will keep US LNG imports low. Platts 6/19/08 (http://www.platts.com/Natural%20Gas/News/8821458.xml?src=Natural%20Gasrssheadlines1) Voracious demand in South Korea and Spain will keep liquefied natural gas deliveries in the US low, which will be bullish to US gas prices, analysts at US investment bank Goldman Sachs said. Analysts Samantha Dart and Jeffery Currie expect Henry Hub prices to average $12.80/MMBtu over the summer and peak at $13.80/MMBtu this coming Northern Hemisphere winter--before falling back to $10/MMBtu in June 2009--as Asian and European pulls US prices up. "The higher-than-expected increase in LNG demand from Asia and Europe in the first quarter of 2008 was met by higher-than-expected LNG supplies in the market, likely motivated by high spot LNG prices in the period, and lower-than-expected North American LNG imports," Dart said. "Both Mexico and the United States showed declines in LNG imports earlier this year relative to our expectations." The increased international demand for gas will, Goldman said, bolster US prices as US LNG deliveries will no longer take up the slack for US demand, which the analysts still see as increasing even as the US economy slows. 2. No tradeoff Natural gas demand for heading will be filled by LNG even if energy demands are not. 3. Safety measures are coming now assumes SQ measures 4. Domestic safety reform doesn't solve their evidence assumes ships are hijacked internationally. 5. LNG has an incredible safety record Los Angeles Business Journal, March 27, 2006, Liquid natural gas has an outstanding safety record, http://findarticles.com/p/articles/mi_m5072/is_13_28/ai_n16124228 Truth is, LNG has been safely transported around the world for more than four decades with an outstanding safety record. Terrorism experts have testified that LNG makes a lousy terrorist target because operations are heavily secured and offer few human casualties and little disruption to daily life. Environmental impact reports find almost no damage from proposed terminals, but there are tremendous potential benefits from LNG because it is a clean burning fuel that will seriously cut pollutants as public vehicle fleets are encouraged to switch to natural gas. 6 AT: Natural Gas DDI 2008 <BQ> Deutsch **LNG Econ** 2AC LNG ECON 1. LNG is facing opposition now Sophia Ruester and Anne Neumann, Department of Business and Economics, Dresden University of Technology, Chair of Energy Economics and Public Sector Management, 6-13-08, "The prospects for liquefied natural gas development in the US", Science Direct, [Crystal Xia] Industry, policymakers, and regulators agree that of the more than 40 proposals, a handful will become reality. Frisch et al. (2005) favor 14 terminals "since collective capacity would vastly exceed the total amount of LNG consistent with forecasted demand growth" but some industry watchers predict the amount will be less than ten. Since September 11, the public has grown more aware of risks to national security. Chemical plants and existing and planned nuclear and LNG facilities have come under intense scrutiny. Richard Clarke, a former Clinton administration official, has published several reports on the likelihood of terrorist attacks against on- and offshore facilities and tankers. Given the reluctance of US coastal residents to favor onshore facilities, receiving terminals on both coasts (and in Florida) will likely face prolonged battles for approval. An easily documented example of grassroots resistance is Hess LNG's Weaver's Cove (Fall River, MA). The onshore brownfields site is 4 miles from an existing pipeline. Following the project's announcement in 20002001, it quickly became apparent that the proponents had not done their homework. To offload, tankers would travel many miles through Rhode Island waters to reach the Fall River facility. Rhode Island officials were quick to fault the project, and local Massachusetts politicians joined the fray when it was revealed that existing bridges were too small for tankers to pass under. Fall River, an aging industrial city has struggled to redefine itself; residents and the former mayor made it clear to Massachusetts officials and to FERC early on that a nearby LNG facility would deter new business from relocating. Terrorist and safety concerns also figured in the opposition. News in March 2008 concerning a new plan to construct an offshore facility as part of the original proposal further incensed local officials who claimed that Hess LNG did not notify them before announcing the offshore addition. New LNG must also compete with existing facilities and expansions. A barrier to entry is the lack of available upstream deliveries. In contrast to market entrants, incumbent oil and natural gas majors currently simultaneously construct liquefaction capacities to correspond with regasification capacities (e.g. ExxonMobil in Qatar on the upstream side and in the US and UK parallel on the downstream side of the LNG value chain). At present, only minor non-contracted volumes are available for LNG trade. Spare capacities are likely to evolve only if existing sites are expanded. Finally, fluctuations in the price of oil coupled with continued political instability in the Mideast frequently make it difficult for proponents of new LNG to get their message through to the public and many decision-makers. 7 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC LNG ECON 2. The LNG market is already slowed due to lack of production and international demand. Clifford Krauss, correspondent for the NYT, 5-29-08, "Global Demand Squeezing Natural Gas Supply", New York Times, http://www.nytimes.com/2008/05/29/business/29gas.html, [Crystal Xia] But now L.N.G. shipments to the United States are slowing to a trickle, and Cheniere and other companies have dropped plans to build more terminals. A longstanding assumption of American energy policy has been that natural gas would be plentiful abroad, and therefore readily available for importation, as production falls off in North America, where many fields are tapped out. But some experts are starting to question that idea, saying natural gas could be subject to the same explosion in overseas demand that has made oil so expensive. As it is, the supertankers that were supposed to deliver cargoes of gas from Africa and the Middle East to the United States are taking them to places like Spain and Japan instead, pushing up gas prices and depleting the nation's stockpiles as the hurricane season approaches. "A few years ago people looked at L.N.G. as a solution to North America's gas needs," said Nikos Tsafos, an analyst with PFC Energy, a consulting firm. "But today we see that there is less L.N.G. around than people expected, and there is more competition for that L.N.G. from markets that are willing to pay more than the United States." 3. Gas consumption would increase with renewables due to lower prices. R. Neal Elliot, Anna Monis Shipley, Steven Nadel, and Elizabeth Brown, @ American Council for an EnergyEfficient Economy, 12-03, "Natural gas price effects of energy efficiency and renewable energy practices and policies", pg. 28, http://www.aceee.org/pubs/e032full.pdf, [Crystal Xia] 4. Increased renewable energy leads to increased natural gas demand Wall Street Journal. 04/18/08. "Surge in Natural-Gas Price Stoked by New Global Trade." [Takumi Murayama] In a twist, the effort to build alternative-energy projects like solar arrays and wind farms also boosts construction of gas-fired plants. Because wind is unpredictable, it's often necessary to build back-up generators, and gas-fired plants have an advantage in that they can be started up relatively quickly, says Doug Kimmelman, senior partner with Energy Capital Partners, a private-equity firm focused on the power sector. In addition, regulatory approval and construction times are shorter for gas plants than coal or nuclear. For reasons like these, new gas-fired power plants continue to be built or planned 8 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Turn: High prices bad High gas prices are a drag on the economy. Stephen Brown, Director of Energy Economics and Microeconomic Policy Activity @ the Federal Reserve Bank of Dallas, 6-19-03 "US Natural Gas Markets in Turmoil: Testimony Prepared for a Hearing on The Scientific Inventory of Oil and Gas Resources on Federal Lands", http://www.dallasfed.org/news/speeches/03brown_testimony.pdf, [Crystal Xia] Sustained high natural gas prices are likely a drag on U.S. economic activity. Higher energy prices are indicative of increased scarcity of natural gas which is a basic input to production.6 As such, rising natural gas prices can result in a classic supply-side shock that reduces potential output. Consequently, output and productivity growth are slowed. The decline in productivity growth lessens real wage growth and increases the unemployment rate at which inflation accelerates.7 If market participants expect the near-term effects on output to be greater than the long-term effects, they will attempt to smooth their consumption by saving less or borrowing more, which boosts the interest rate. With slowing output growth and an increase in the real interest rate, the demand for real cash balances falls, and for a given rate of growth in the monetary aggregate, the rate of inflation increases. Therefore, rising natural gas prices reduce GDP growth and boost real interest rates and the measured rate of inflation.8 9 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Impact Turn Booster: LNG Security Costs High Security costs will increase Paul W. Parfomak, CRS Specialist in Science and Technology, 5/24/04 (CRS Report for Congress Liquefied Natural Gas (LNG) in U.S. Energy Policy: Issues and Implications) [S. Page] To protect the public from an LNG accident or terrorist attack, the federal government imposes numerous safety and security requirements on LNG infrastructure. The nature and level of risk associated with LNG is the subject of ongoing debate among industry, government agencies, researchers and local communities. Whatever the specific risk levels are determined to be, they could multiply as the number of LNG terminals and associated tanker shipments grows. Likewise, the costs associated with mitigating these risks are also likely to increase. To the extent these costs are not borne by the LNG industry, they may represent an ongoing burden to public agencies such as the Coast Guard, law enforcement, and emergency response agencies. 10 AT: Natural Gas DDI 2008 <BQ> Deutsch **Indonesia** 2AC INDONESIA 1. Indonesia is shifting to regional markets as they lose out in the global market US Embassy, Jakarta Indonesia, 9/1/03, "Natural Gas Changes in Indonesia," Energy News, http://jakarta.usembassy.gov/econ/natural_gas2003.html 3. The nature of Indonesia's gas industry is changing, however. New LNG producers in Qatar, Australia, Russia, along with Malaysia, now challenge Indonesia's leadership in the LNG market. At the same time, a regional gas transmission network is developing, creating new gas markets and sources of revenue. Domestically, the reduction of fuel subsidies ease fuel price distortions, making natural gas more competitive as a fuel alternative. Gas should also play a significant role in meeting the country's growing power demands. Finally, the Oil and Gas Law of 2001 has streamlined the process for domestic gas supply sales and created a new domestic market obligation (DMO) for gas. These changes create new opportunities in the domestic gas market, even as the global LNG market becomes more diversified. 2. Non-Unique Indonesia is losing its hold on the natural gas market customers are switching away now Grace Nirang, reporter in Jakarta, and Christian Schmollinger, reporter, 8/10/06, "Natural gas running low in Indonesia," International Herald Tribune, http://www.iht.com/articles/2006/08/09/bloomberg/bxgas.php Utilities in Japan, the largest Asian economy, are turning to other markets. Tokyo Electric Power and Tokyo Gas, the largest Japanese power and gas suppliers, have signed up with Royal Dutch Shell's Sakhalin project in Russia to diversify supplies. Osaka Gas is in talks with Inpex, an oil and gas producer based in Tokyo, about joining a $6 billion liquefied natural gas project in Australia. Japan buys 40 percent of the world's liquefied natural gas and depends on Indonesia for a quarter of its imports of the fuel, according to the Japanese Ministry of Finance. The gas is part of a strategy to reduce the country's reliance on Middle East oil. "The Japanese must be pretty worried about what's happening in Indonesia," Andy Flower, a former BP executive who works as an independent consultant, said by telephone. "There's no way they can renew the contracts and fill the pipe." Calls from politicians, including Vice President Jusuf Kalla, to divert Borneo gas to other parts of Indonesia have fanned concern about its reliability as a supplier. Buyers are "already outraged by our failure to meet commitments," said Ari Soemarno, the head of the state oil company, Pertamina, which negotiates Indonesia's liquefied natural gas sales contracts. "We're still studying the impact of Chevron's statement." While buyers are seeking alternatives, suppliers like Chevron in Indonesia have become reluctant to invest in fields that could have to supply markets in Java at lower prices than Japan, said Christopher Newton, the chairman of Indonesian Petroleum Association. All export contracts from the Borneo plant at Bontang, known as Badak NGL, are up for renewal between 2009 and 2011. 11 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC INDONESIA 3. Expanding into the US market might not be beneficial pre-existing competition means selling would be on a spot-term basis Andrew Symon, Visiting Research Fellow at the Institute of South-east Asian Studies, 6/13/04, "Asia-Pacific: Get set for an LNG explosion in the region," Energy Bulletin, http://www.energybulletin.net/node/630 Future supply to the US could force radical change to the industry in the Asia-Pacific region. Producers would sell into what is already a very large and competitive domestic gas market supplied by Canadian and US fields. They would likely have to sell cargoes on short and spot-term basis, accepting US market prices and hedging against risk with various futures and other financial instruments. 4. Other countries have a massive natural gas demand Malaysia proves LOONG TSE MIN, staff writer in Kuala Lumpur, 7/14/08, "Long-term challenge to users of natural gas," The Star Online, http://biz.thestar.com.my/news/story.asp?file=/2008/7/14/business/21813487&sec=business According to Petronas estimates, the demand for gas in Peninsular Malaysia has increased by 97% since 1997, which has put a strain on supply facilities. Petronas had said that its offshore production facilities and the Peninsular Gas Utilisation (PGU) system were running at full capacity to meet increasing demand. "As our production is unable to meet demand, we have increased the purchase of gas from other sources beyond offshore Terengganu," a spokesman said. In 2007, 23% of Peninsular Malaysia's gas demand was met through imports. By Petronas' estimates, demand that already outstrips supply will grow to 4,900mmscf (million standard cubic feet) per day by 2027. Meanwhile, gas supply from offshore Terengganu can only be sustained at 2,000 mmscf per day (see chart). Amirsham, at Friday's announcement, had said the issue was not the subsidy costs to Petronas, which the national petroleum company could afford, but one of economic viability and sustainability. "There is not enough gas in any country that you can point to, so it is important we have economic viability (of industries using the gas)," he said. 12 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC INDONESIA 5. The US isn't heavily invested in Indonesian gas anyway, lack of bidding proves US Embassy, Jakarta Indonesia, 6/23/04, "Indonesia's Natural Gas Opportunities and Challenges," Energy News Archives, http://jakarta.usembassy.gov/download/Natural%20Gas%202003.pdf. Lastly, Indonesia requires new gas production in order to meet the growing regional and domestic demand. Last year's four percent gas production increase falls well short of the GOI's predicted demand growth of 9-11 percent annually. Private investment will be the key to new gas production. Unfortunately, investment in new oil/gas exploration and development averaged $1.2 billion for 2001-2003, down from a peak of $2.1 billion in 1998. Although the GOI awarded 15 new exploration tenders in 2003, up from 1 in 2002 and 6 in 2001, major international and U.S. companies were largely absent from the bidding on these new oil/gas blocks. 6. Demand satisfied now new lease means we won't need gas for 2 years anyway Jon Hurdle, a freelance writer who has written for many business publications, 7/14/08, "Pa. invites bids for leases on possible gas field," Reuters, http://uk.reuters.com/article/oilRpt/idUKN1447555220080714 Pennsylvania officials on Monday invited bids to lease land atop a geological formation that may hold enough natural gas to meet total U.S. demand for two years. The state's Department of Conservation and Natural Resources said it will hold a lease sale from pre-qualified bidders for 18 tracts of state forest totaling some 74,000 acres in two north-central Pennsylvania counties. The bidding will be open until Sept. 2. The tracts sit over the Marcellus Shale formation, a natural feature about a mile deep that has been known about for years but which has only recently been suspected of containing massive quantities of natural gas. The formation, which stretches some 600 miles between western New York State and West Virginia, could contain as much as 50 trillion cubic feet of recoverable natural gas, or enough to supply the entire U.S. for two years, at a wellhead value of $1 trillion, according to website geology.com. The recoverable quantity may represent about a tenth of the total gas in the formation, some scientists believe. The estimates came from Pennsylvania State University geoscience professor Terry Englander and New York State University geology professor Gary Lash, the website said. "Given the enormity of the nation's energy demand, making less than an addition 4 percent of our state forest available for drilling is a reasonable decision that protects our forest ecosystem and helps meet energy demands," DCNR Secretary Michael DiBerardinis said in a statement. "This lease sale responds to increased interest in the Marcellus Shale formation, a deep resource thought to contain large quantities of natural gas," the department's statement said. It noted that new technology and increased natural gas prices have made it possible to recover hard-to-reach fuel. 13 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF US Not Key Other countries are the primary importers of Indonesian natural gas Bill Powers, Editor of Canadian Energy Viewpoint, 7/31/04, "Indonesia and Oman," Energy Bulletin, http://www.energybulletin.net/node/1560 While Indonesia's oil production capacity continues to dwindle, the country's natural gas production has remained flat. The US Department of Energy (DOE) estimates that Indonesia has reserves of 90.5 trillion cubic feet (tcf) and production of 2.5 tcf per year. Since the country consumes only 50% of its gas production per year, Indonesia has been able to maintain the title of the world's leading exporter of liquefied natural gas (LNG). Japan, South Korea and Taiwan are the primary destinations for much of Indonesia's LNG exports. Beginning in 2007, Indonesia will export 2.6 million tons of LNG a year to China. 14 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Wind No-Link Wind turbines don't necessarily trade-off with natural gas demands gas might be reallocated to cars Leonard Doyle, Washington correspondent of 'The Independent', 7/12/08, "The texan oil baron and the winds of change," The Independent, http://www.independent.co.uk/environment/the-texan-oil-baron-and-the-winds-of-change-865830.html Environmentalists are cheering wildly, but the Pickens Plan has little to do with their worries about the catastrophic dangers of global warming. Mr Pickens has a plan that everyone can get their heads around: He simply wants to end America's addiction to imported oil and use the country's abundant wind power and natural gas resources to keep the country rolling. "We're paying $700bn a year for foreign oil," he said. "It's breaking us as a nation, and I want to elevate that question to the presidential debate, to make it the number one issue of the campaign this year. "Neither presidential candidate is talking about solving the oil problem. So we're going to make 'em talk about it. Nixon said in 1970 that we were importing 20 per cent of our oil and that by 1980 it would be 0 per cent. That didn't happen. It went to 42 per cent in 1991 with the Gulf War. It's just under 70 per cent now. Where do you think we're going to be in 10 years when our economy is busted and we're importing 80 per cent of our oil?" Windy as Sweetwater is, there are places further north in the Great Plains which are more suitable for wind farming. Some 250 miles away, Mr Pickens is building what is described as the world's largest wind farm. He has pumped $2bn into the project so far, buying nearly 700 wind turbines from General Electric (GE) and he will spend another $10bn on the project before it starts generating electricity sometime in 2011. Filling the Great Plains with wind turbines to produce electricity is only half of the Pickens Plan. He wants to see America's petrol imports cut back as well by converting cars to run on natural gas. At present most of America's natural gas is used to produce electricity. Generate electricity from the wind and that can be diverted so that as many as a third of the vehicles will be running on natural gas within only a few years, he says. 15 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Ethanol No-Link Ethanol demands natural gas for production doesn't change national demand Wilf Gobert, an independent energy analyst based in Calgary and a senior fellow with the Fraser Institute, 7/14/08, Financial Post, "Energy policy makers' unintended consequences," http://www.financialpost.com/trading_desk/energy/story.html?id=654277 However, the lobby against ethanol subsidies is growing rapidly. In Britain, the government says it will slow the introduction of biofuels to address concerns about the impact on food prices. The World Bank's economist says production of biofuels and the domino effect on grain inventories, export bans, and market speculation is responsible for 75% of the 140% rise in prices since 2002. This is a stunning estimate when the U.S. Administration says the impact has been 2% to 3%, and the U.N. Food and Agriculture Organization estimates up to 30%. In Canada, the C.D. Howe Institute waded in with a report that says Canada's biofuels policies are misguided, and are having unforeseen consequences. More importantly, the report suggests the evidence of the benefit of biofuels on greenhouse gas emissions is inconclusive. You may not realize that ethanol production requires substantial energy consumption, primarily natural gas. 16 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Transition to Regional Markets Now Indonesia is focusing in on domestic and regional markets, global market is squeezing them out US Embassy, Jakarta Indonesia, 9/1/03, "Natural Gas Changes in Indonesia," Energy News, http://jakarta.usembassy.gov/econ/natural_gas2003.html Though LNG exports will remain an important component of Indonesia's gas marketing strategy, gas demand will increasingly shift toward domestic and regional markets. Power needs and cheaper, environmentally-friendly gas will drive this shift. Short-term growth in domestic use, as evidenced by the jump in gas supply agreements, will be relatively easy. However, long-term growth will depend on more complex regulatory, legal and security improvements the overall investment climate. A turnaround in the investment climate is essential, not only to ease financing and encourage gas development, but to improve the country's economic health as well. 17 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Indonesia Declining Indonesia is losing out in the LNG global market now 09/2/2006 Natural Gas Reserves in Indonesia http://www.oilgasarticles.com/articles/434/1/Natural-Gas-Reserves-inIndonesia/Page1.html Indonesia is facing a declining share of global LNG markets, despite its past status as the worlds leading LNG exporter. The decline can be attributed partly to questions over the reliability of Indonesian supply and lower investment in the Indonesian energy sector. Uncertainties over political support for the sanctity of contracts, regulatory transparency, and relatively unfavorable PSC terms have undermined investment support. As a result, Indonesian LNG exports have been partially replaced by exports from Oman, Qatar, Russia, and Australia on world markets. Since early 2005, exports from the export terminal at Arun in Aceh have been cut back below the level of contractual committments, due to continuing production problems in the area, despite the end of the insurgency there. The sector has also faced restructuring under the terms of Indonesias World Bank and IMF lending agreements, with BP Migas taking over the supervisory and management roles formerly filled by Pertamina. 18 AT: Natural Gas DDI 2008 <BQ> Deutsch **IPI Pipelines** 2AC IPI PIPELINE 1. No pipeline now US-Indian agreement Shiv Kumar Verma, Political Geography Division, Center for International Politics, Organization and Disarmament, School of International Studies, Jawaharlal Nehru University, New Delhi. 06-07. "Energy geopolitics and IranPakistanIndia gas pipeline," Energy Policy, Volume 35, Issue 6, pp. 3280-3301. [Takumi Murayama] Iran's proven oil reserves at the end of 2003 were estimated to be 130,700 million barrels, representing 11.4% of world reserves and some 18.0% of those in the Middle East. With proven reserves of 26,690,000 million cubic meters at the end of 2003, Iran is the world's second richest country in natural gas resources after Russia, with some 15% of the global and 37% of the Middle East region total, which is a major discover for Iran (Fisher, 2005). The South Pars offshore fields, which is an extension of Qatar's North Field, are officially the largest natural gas reserves in the world. In the 21st century, the most important factors that will decisively determine the fate of Iran gas pipeline are United States and China in the Persian Gulf. Both are the largest consumers of oil and gas in the world. So a new IranPakistanIndiaChinaRussia scenario begins to emerge, which links global oil and gas security to geopolitics. The question is: can these two issues be reconciled? This paper will endeavor to analyze the importance of Iran as a gas supplier to east, especially, India and China. It will argue that such dependence on a volatile region like Iran and the perception of scarcer energy resources in the South Asian region have the potential to lead to conflict in both regions unless these issues are dealt with geo-economics rather than geo-strategic calculations. However, the recent understanding between the United States and India seems to cancel the whole pipeline project as long as present Iranian regime remains in power. The broad geopolitical conditions that would favor or block the Iran PakistanIndia (IPI) pipeline project and Iran's situation as well as the role of the United States in Asia and the state of relations between India and Pakistan are also pertinent issues that are going to be influential in fructifying the proposed pipeline. The moot question relates to Pakistan's subsidizing the purchases of Iranian gas and how would it finance this commercial juggernaut. Pakistan would not have an interest in the stable flow of gas in transit unless it is to finance some of its own purchases from the fees. There is competition for gas from the Gulf, and from Iran. This is not only a matter of political and military strategies, but as much as question of commercial and financial incentives. China seems to have understood that, as exemplified with the deal with Iran. The question is, to what extent India would be able and willing to offer a competing deal. So far, due to Indian foreign policy changes, Iran seems to have suspended the emerging deal with India. In the midst of such dynamics it is to be seen as to what extent India prefers a close relationship with the United States at the expense of gas trade with Iran. 19 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC IPI PIPELINE 2. The Pipeline fails - Iran is unreliable since its own demand is increasing Ariel Cohen, Ph.D., Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, Lisa Curtis, Senior Research Fellow for South Asia in the Asian Studies Center, and Owen Graham, Research Assistant in the Allison Center at The Heritage Foundation. 05/30/08. "The Proposed Iran-Pakistan-India Gas Pipeline: An Unacceptable Risk to Regional Security," Heritage. [Takumi Murayama] Iran is an important economic power in the nat ural gas and petroleum industry, but numerous deficiencies in its oil and gas sector have caused the overall economy to lag far behind its potential and call into question Iran's future as an oil and gas exporter, including its ability to supply gas to Paki stan and India through the IPI pipeline. Iran has the second-largest gas reserves in the world after Russia and the second-largest petro leum reserves after Saudi Arabia. Iran has an esti mated 974 trillion cubic feet in proven gas reserves and 136 billion barrels in proven oil reserves.[35] Oil provides more than 70 percent of Iranian govern ment revenue. Yet instead of reinvesting this money in the oil and gas sector, the Iranian government has generally spent it on ambitious weapons purchases, its nuclear pro gram, support for terrorism, and economic subsidies. The Iranian regime is investing only about half of the funds necessary just to maintain hydrocarbon pro duction, much less to expand production. Iranian exports are declining by 10 percent to 12 percent annually according to a National Acad emy of Sciences (NAS) study. If current trends con tinue, Iran's oil exports will drop by half in less than five years and disappear entirely by 2015. This projected decline in production would be the result of a lack of investment in the oil sector and a short age of natural gas for reinjection (to enhance oil recovery), caused by continuing massive growth in domestic demand for natural gas due to subsidized consumption.[36] Iran's domestic demand for natural gas is grow ing by nearly 9 percent annually, while its produc tion is growing by 4.5 percent per year.[37] Thus, domestic gas demand has increased at the expense of reinjection, accelerating oil depletion rates. Despite its massive gas reserves, Iran has been forced to import 23 mcm per day from Turkmeni stan. However, on December 31, 2007, Turkmeni stan stopped daily deliveries of gas, forcing Iran to begin importing from Azerbaijan.[38] These trends indicate that Iran will be an unreli able oil and gas supplier and a high political risk. The NAS study concludes that without major changes, Iran will cease to be a net oil exporter by 2014 and will therefore be incapable of supplying gas to Pakistan and India through the IPI.[39] 20 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC IPI PIPELINE 3. IPI Pipeline allows Iran to develop nukes and continue support of terrorism Ariel Cohen, Ph.D., Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, Lisa Curtis, Senior Research Fellow for South Asia in the Asian Studies Center, and Owen Graham, Research Assistant in the Allison Center at The Heritage Foundation. 05/30/08. "The Proposed Iran-Pakistan-India Gas Pipeline: An Unacceptable Risk to Regional Security," Heritage. [Takumi Murayama] Indian support for the IPI undercuts U.S. efforts to isolate Iran economically by challenging U.S. sanctions against Iran's oil and gas industry. Over the long term, pursuing the IPI will increase Iranian influence in South Asia, which could contribute to greater instability in the region, especially if Iran develops a nuclear weapons capability and contin ues to support international terrorism. Iran continues to flout international pressure to cease its uranium-enrichment efforts and discon tinue its nuclear program. In March 2008, the U.N. Security Council took notice and passed Resolution 1803, the third round of sanctions on Iran, adding to the sanctions adopted in 2006 and 2007.[30] Resolution 1803 follows the December 2007 release of the controversial National Intelligence Estimate, which stated that Iran had halted its nuclear weapons program in 2003. While this may be the case, the report also recognizes that Iranian entities are continuing to develop a range of techni cal capabilities that could be applied to producing nuclear weapons and that Iran's uranium enrich ment and ballistic missile programs are continu ing.[31] Both programs are vital for building a nuclear weapons arsenal. Moreover, Iran remains the world's biggest supporter and financer of terrorism. 4. IPI Pipeline Bad: Terrorism, Iran Nukes, and killing US soft power Dr. Anjali Sahay Visiting Assistant Professor,PhD( Old Dominion University) AND Dr. Jalil Roshandel Associate Professor, PhD. (Universite des Science Sociales, Tolouse, France) March 28th 2008 Iran, Pakistan, India Natural Gas Pipeline: Implications and Challenges for the United States In addition, emerging strategic relations between Iran and India could lead to cooperation in the nuclear field. Furthermore, revenues generated by Pakistan could be further used to support terrorist activities, depending on who channels the funding. While the US recognizes the growing energy needs of India and Pakistan, it has repeatedly expressed concerns over international participation in energy projects with Iran. Moreover, the revenues acquired could be used to further Iran's alleged nuclear weapons program, support for terrorism in addition to a concern on Iran's human rights record. It is not clear who will be finally involved in the implementation of the project, but China, Russia, Japan, and some Europeans could potentially fit in the long term. Last but not least, Russian involvement in the building of the pipeline project in addition to their involvement in the Caspian Sea projects can further complicate the situation by reducing US involvement in the region. 5. <Insert terminal impacts> 21 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Relations Good Now Indo-Pakistani Cooperation is better now Bruce Pannier, Radio Free Europe/Radio Liberty. 04/28/08. "Energy: Turkmen, Iranian Presidents Moving Ahead With Rival Pipelines," Payvand. http://www.payvand.com/news/08/apr/1293.html [Takumi Murayama] Reports from Islamabad on April 25 indicated that India and Pakistan were close to finalizing their part of the deal. Ahmadinejad is trying to push the potential partners to sign that deal. For its part, Iran has already started constructing the pipeline on its territory and could have its section to the Pakistani border completed by 2012. The IPI pipeline would be some 2,600 kilometers long and would cost an estimated $7 billion. The IPI pipeline would initially carry some 30 bcm annually, but within three to four years after starting up that amount would increase to 70 bcm. Iran first proposed the pipeline in the 1990s, but tensions between Pakistan and India kept the project on hold until now. In their meetings last week, Pakistani and Indian officials stressed that cooperation between the two nuclear neighbors is better now. 22 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF No Pipeline US will intervene to stop the pipeline Dr. Ali Mostashari, Strategic Initiatives Advisor, UN Development; and Research Affiliate, MIT. 01~03/07. "The Political Economy of the Iran-Pakistan-India Gas Pipeline," Iran Analysis Quarterly Vol. 4 Number 1, p. 31. [Takumi Murayama] While differences on the pricing structure between India and Pakistan are the current official stumbling block (Times of India, March 22, 2007), the U.S. opposition to the IPI project and the potentials of being impacted by U.S. sanctions is also influencing India's current reluctance to go ahead with the project. Not surprisingly, India faces pressures from the United States to isolate Iran and to rely on an alternative route, the Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project, if it wanted to keep its good relations with the U.S (Jamali, 2005). The Financial Times reported in January 2006 that Washington had "warned India that Delhi's own nuclear deal with the US could be ditched if the Indian government did not vote to refer Tehran to the United Nations Security Council ( Financial Times, January 26, 2006). The impact of U.S. pressure was seen in another decision-making venue involving Iran, when India endorsed the referral of Iran to the Security Council during the February meeting of the IAEA. This resulted in Iran's refusal to ratify the previously agreed liquefied natural gas (LNG) deal with India for the time being. More recently, there was a perceived shift in the U.S. rhetoric on the issue when President Bush indicated that the administration may soften its stance on the issue during a visit to Pakistan in March 2006, when he said "our beef with Iran is not the pipeline, our beef with Iran is the fact that they want to develop a nuclear weapon."(India Daily, March 4, 2006). However, the administration openly supports the TAP project and could use economic, strategic and nuclear incentives to Delhi for forsaking the IPI project if it feels that an agreement is near. 23 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Nuclear Demand Nuclear power is a better option for India with increasing gas prices Shiv Kumar Verma, Political Geography Division, Center for International Politics, Organization and Disarmament, School of International Studies, Jawaharlal Nehru University, New Delhi. 06-07. "Energy geopolitics and IranPakistanIndia gas pipeline," Energy Policy, Volume 35, Issue 6, pp. 3280-3301. [Takumi Murayama] Therefore, nuclear power looks like becoming critical to India's economy and long-term energy security. First, India's rise as an economic power means that its energy needs will rise massively. The BRIC report of Goldman Sachs projects India's GDP to rise by 40 times between 2000 and 2050. If energy consumption rises at just half this rate, it means India will need 20 times more energy in 2050. It will be difficult or impossible to meet these needs through conventional fuels. Secondly, the price of fossil fuels has shot up, with oil more than doubling to US$80/barrel and gas more than tripling to US$7/mBtu in the US. Oil prices are notoriously volatile and could fall sharply in a few years. But they will surely rise again later. The emergence of China, India, and other Asian countries as major consumers means that global supplies of fossil fuels will increasingly come under pressure. By contrast, nuclear energy is unconstrained by fuel worries: a small amount of uranium generates many megawatts, and plutonium can be extracted from the spent fuel to yield fresh fuel in mixed-oxide reactors. Nuclear power plants are extremely capital intensive, costing twice as much as thermal plants of comparable output. They need an additional 1015% for de-commissioning when they become too old to operate. But they have the big advantage of very low running costs. By contrast, running costs can be half the total costs in a thermal plant, and keep rising with fuel prices. 24 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Coal Demand Coal demand in India will increase Bill Holland, associate editor for Platts Gas Daily. 11/07/07. "Economics govern future of IPI gas pipeline; Analysts see India's coal resources as more obvious gas source," p. 2. [Takumi Murayama] "The politics are going to be too much for India," said Mark Rowley, oil and gas attorney at the London office of law firm Baker Botts. Rowley is a veteran of cross-border pipeline projects, having been involved with both the Caspian and the BakuTbilisi-Ceyhan oil pipelines. "Pipeline gas is an option [for India] but not the most obvious one," Rowley said. "India has vast coal resourcesthat's much more obvious than putting a pipe through Pakistan." Rowley said there was a high likelihood that the Iran-Pakistan portion of the pipeline would be built, but doubted that India would ever rely on its historic enemy Pakistan to meet its energy needs. "Coal is king," Frost & Sullivan Asian Pacific Energy Practice Director Ravi Krishnaswamy told executives at the Asian Business Forum's Asian Power Conference in Singapore last month. India's coal-fired power generation will increase significantly, particularly if government plans to find developers for 10 ultra-mega power projects between 2012 and 2017 come to fruition. Each UMPP would generate 4,000 MW or more, Krishnaswamy said. India needs gas mainly as feedstock for its petrochemical and fertilizer industries. Gas-fired power plants account for only 8% of the country's 15.4 quadrillion Btus of annual energy consumption, according to the US Energy Information Administration. 25 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Pipeline Inevitable The IPI Pipeline is inevitable Indian demand Bill Holland, associate editor for Platts Gas Daily. 11/07/07. "Economics govern future of IPI gas pipeline; Analysts see India's coal resources as more obvious gas source," p. 2. [Takumi Murayama] India currently produces 996 Bcf/year of gas and consumes 1.1 Tcf/year, importing the difference as LNG through two terminals. But its demand for natural gas has risen faster than that for any other fuel over the last five years, the EIA said. Energy security analyst Gal Luft of the Institute for the Analysis of Global Security, a think-tank based in Washington, DC, believes the pipeline will have to be built. "India doesn't have much of a choice, Iran is the only game in town" for satisfying the subcontinent's growing energy needs, Luft said. "At the end of the day, they need the gas and it will come from Iran." 26 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Pipeline Bad Terrorism Terrorists can attack the IPI Pipeline, jeopardizing the Indian economy. LNG is better. Gurmeet Kanwal, Director, Centre for Land Warfare Studies, New Delhi. 07/06/08. "IPI pipeline a good option - but a security nightmare," IANS, http://feeds.bignewsnetwork.com/index.php?sid=378963 [Takumi Murayama] Though this option through Pakistan is economically the most viable, India must consider whether good economics should be allowed to be jeopardised by bad security. India must not allow the supply of a strategic resource to be held hostage to the machinations of capricious jihadi elements. Also, the Baloch people are concerned that Pakistan will not equitably share with their underdeveloped province the revenues earned from the pipeline. A new wave of vigorous insurgency has engulfed most of Balochistan and the gas pipeline is bound to be targeted. Though the government of Pakistan has stated several times that Pakistan is willing to give a unilateral undertaking that it will not allow the disruption of the supply of gas to India, President Pervez Musharraf had admitted that his government had no control over some jihadi organisations that are responsible for internal instability in Pakistan. Since then, internal instability has deteriorated further. How then will the Pakistan government ensure the physical security of a pipeline that runs for almost 1,500 km through open terrain even if it is inclined to do so? The diameter of the gas pipeline would be 50 to 55 inches. Though such pipelines are mostly buried underground, they are laid just below the surface and their route is well marked to facilitate maintenance, making them prone to easy disruption. The compressor stations that are usually overground are also vulnerable to sabotage, though these are easier to guard. Any terrorist group or disgruntled individual fanatic with a medieval mindset could disrupt the pipeline with a few grams of plastic explosive or a few hundred grams of high explosives that are available in abundance in Pakistan. In fact, explosive charges, detonators and cordite are so freely available in some areas in Pakistan that one can buy the stuff from the neighbourhood grocer. Under such circumstances, ensuring the security of the pipeline would be a challenge for the most committed police or paramilitary force. The entire length of the pipeline would need to be fenced off on both sides to deny easy access to prospective saboteurs. Since wire fencing can be easily cut, it would need to be kept under electro-optical surveillance throughout its length, combined with continuous physical patrolling. All these measures would cost a massive amount to implement and would still not guarantee 100 percent security. A more suitable option may be to form an international consortium of stakeholders to build and operate the pipeline, buy the gas from Iran and deliver it at India's border. Such a consortium will incur heavy costs to ensure the security of the pipeline. Also, higher insurance costs, other opportunity costs and the need to maintain larger strategic reserves might well make the overland option too expensive. Perhaps the best option at present is to continue with LNG while simultaneously exploring the possibility of a secure overland route with unimpeachable international guarantees. If India can get natural gas at the border and has to pay only for what it gets - cash-on-delivery - without sinking its money into capital investment, the Iran-Pakistan-India pipeline might still be a good option. Decisions made today will affect India's energy security and have an impact on the growing economy for decades to come and must, therefore, not be made lightly. 27 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Pipeline Bad Energy Security India still concerned about supplies and security of IPI FARS News Agency. 06/28/08. "Pakistan Steps up Pressure over IPI Pipeline." http://english.farsnews.com/newstext.php?nn=8704080876 [Takumi Murayama] Even though petroleum minister Murli Deora reiterated India's commitment to the pipeline project, the government is concerned over the issue of assured supply of gas and security of the pipeline. New Delhi wants both issues to be negotiated at the trilateral level. Sources said these issues have still not been taken up for discussion till now. Mukherjee, who had earlier discussed the pipeline project during his trip to Islamabad, merely hoped that the outstanding issues would be sorted out. "We are hopeful it will be possible to resolve this technical, commercial and all other aspect so that it can contribute to the problems arising from high energy crisis," he said. 28 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Pipeline Bad Iran The IPI Pipeline is part of an Iranian Energy Strategy to help its economy Kaveh L Afrasiabi, PhD in political science, specializing in Iran's foreign and nuclear affairs at the Center For Strategic Research. 07/10/07. "A blockage in the peace pipeline," Asia Times. http://www.atimes.com/atimes/South_Asia/IG10Df01.html [Takumi Murayama] But broadly speaking, the "external obstacles" to this project pale in comparison with the tangible benefits to all three countries, such as securing a reliable gas supply for energy-strapped India, bringing much-needed cash to the Pakistani government, and helping Iran with its "energy strategy". Concerning the latter, it is noteworthy that Iran has some 15.7% of the world's natural-gas reserves, second only to Russia, although its current share in the global gas market is negligible. That's partly as a result of the lack of adequate (badly needed) investment in the gas sector and partly due to existing external obstacles such as the US sanctions. Iran's planned export of natural gas to India is part of a broader, long-term energy strategy that relies both on pipelines and the more technologically challenging liquefied natural gas (LNG) exported to China, Turkey and Europe. India has already signed a separate $22 billion LNG deal with Iran. Iran plans to increase its gas exports through pipelines to 303.6 million cubic meters per day (mcm/d) by 2025 from some 13mcm/d in 2006. Iran's LNG exports are also expected to grow to 18mcm/d by 2025. Therefore, Iran's total natural gas export will reach around 18 billion cubic meters (bcm) in 2025, assuming that the pipeline does not turn into a pipe dream at the end of the day. Iran will disrupt energy supply if the US interferes Dr. Ali Mostashari, Strategic Initiatives Advisor, UN Development; and Research Affiliate, MIT. 01~03/07. "The Political Economy of the Iran-Pakistan-India Gas Pipeline," Iran Analysis Quarterly Vol. 4 Number 1, p. 27. [Takumi Murayama] The increasing energy needs of China and India at the beginning of the new century and continuous supply disruptions in Iraq and elsewhere have led to an increasing importance of energy as a geopolitical weapon of choice. Many of today's energy resources lie within the control of governments which the United States does not see as allies. Russia, Iran, and Venezuela and Bolivia, while having different relationships to the U.S. and exercising different strengths in the energy market, can affect an already tight energy market the U.S. is quite dependent on. Specifically with regards to Iran, there have been numerous implicit and not-so implicit threats by Tehran that U.S. and Western military or economic measures will be countered by disruptions of the energy supply (Calgary herald, June 5, 2006). Not surprisingly, with increased tension between Iran and the West markets have reacted with even higher energy prices, pushing prices to heights unseen since the late 1970s and that despite the current existence of adequate energy stocks and supplies in the West. 29 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Pipeline Bad Iran IPI Pipeline allows Iran to develop nukes and support terrorism Ariel Cohen, Ph.D., Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, Lisa Curtis, Senior Research Fellow for South Asia in the Asian Studies Center, and Owen Graham, Research Assistant in the Allison Center at The Heritage Foundation. 05/30/08. "The Proposed Iran-Pakistan-India Gas Pipeline: An Unacceptable Risk to Regional Security," Heritage. [Takumi Murayama] This pipeline would give Iran an economic life line and increase its leverage and influence in South Asia. U.S. policymakers argue that allowing the IPI pipeline to proceed would encourage the Iranian regime to defy the will of the international community, develop nuclear weapons, and support terrorism. Furthermore, inadequate investment in Iran's oil and gas industry and increasing domestic demand could render Iran incapable of supplying natural gas through the IPI. U.S. Opposes IPI Pipeline because of Iran, 3 reasons Shiv Kumar Verma, Political Geography Division, Center for International Politics, Organization and Disarmament, School of International Studies, Jawaharlal Nehru University, New Delhi. 06-07. "Energy geopolitics and IranPakistanIndia gas pipeline," Energy Policy, Volume 35, Issue 6, pp. 3280-3301. However, the US opposes the gas-pipeline deal; first, in its perception it would help ease Iran's economic difficulties because of the handsome revenues it would generate. As it is, the US is concerned about the bonanza that oil-rich countries including Iran are reaping due to skyrocketing global oil prices. Secondly, the pipeline would set a dangerous precedent for other countries to follow. Iran is suitably placed as the natural transit corridor for the transport of Caspian Sea oil and gas. The US has, therefore, gone overboard to draw transit routes for Caspian oil that bypass Iranian territory. The prime example of this approach has been the construction of the Baku-Ceyhan oil pipeline. In this case, the US made an extraordinary effort to route the pipeline towards the Turkish port of Ceyhan, so that Iranian territory was avoided. In this politically driven deal, the companies involved had to spend millions in extra costs to construct the pipeline through unfriendly terrain and conflict proven zones. Thirdly, and most important, the pipeline would help anchor friendly ties among Iran, Pakistan, and India. This would greatly undermine US strategic leverage with India and Pakistan against Iran in the future. Therefore, determined to keep Iran as isolated as possible, the US even prior to Mr. Ahmadinejad's emergence had tried to persuade the Europeans and Iran's Arab neighbors to restrict economic and political links with it. The Europeans have largely disregarded Americans exhortations, and Iran's relationship with them has grown over the years. European companies have pumped in billions of dollars in IranLibya Sanctions Act adopted by the US, which bars investments of more than US$40 million into Iran's hydrocarbon sector. Defying US pressure, Japan, Washington's trusted ally, has also decided to put US$2 billion into developing Iran's giant Azadegan oil field, which has estimated deposits of 26 billion barrels. In October 2002, Iran urged Caspian oil producers to ignore US sanctions and to pipe their oil through Iran. The Golden Gate from the Caspian Sea to the Persian Gulf is now open and companies in the Caspian Sea can be sure their resources will be delivered in international markets (Bhadrakumar, 2005). 30 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Iran Sanctions Bad US sanctions on Iran hurt Russo-US relations Shiv Kumar Verma, Political Geography Division, Center for International Politics, Organization and Disarmament, School of International Studies, Jawaharlal Nehru University, New Delhi. 06-07. "Energy geopolitics and IranPakistanIndia gas pipeline," Energy Policy, Volume 35, Issue 6, pp. 3280-3301. Sanctions against Iran have thus far discouraged US oil corporations from accepting the Iranian pipeline offer. The Persian route would be, as even US oil executives concede privately, shorter, cheaper, and safer than any of the other planned pipelines through Russia, the south Caucasus, or Afghanistan. And while European companies active in Iran also face heavy fines in the United States, very few of them feel similarly bound by the US sanctions. The French Prime Minister said that no one accepts that the United States can now impose their laws on the rest of the world. European companies have taken advantage of the absence of US competition on the Iranian oil market. In its efforts to keep the US out of the Caspian region, Iran has found an unexpected ally in Russia. United States activities in this region have led both countries to temporarily set aside their centuries old enmity. Now that they no longer share a common border after the fall of the Soviet Union, their relations have grown almost cordial. Despite sharp criticism from the US, Moscow encourages Russian companies to sell arms to Iran, and to assist the country in building its first civilian nuclear power plant at Bushehr. The US$800 million project, to be completed by 2004, has been a major concern for US officials and non-proliferation experts who fear that Iran could covert nuclear waste from the plant into weapons grade radioactive material, thereby accelerating its efforts to develop its own nuclear weapons. The Russian assistance to Iran has now become the biggest stumbling block in the current USRussian rapprochement (Kleveman, 2003 L. Kleveman, Persian trump card: Iran, The New Great Game: Blood and Oil in Central Asia, Atlantic Books, London (2003).Kleveman, 2003). 31 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF TAPI Pipeline Better ADB and other investors make TAPI a better choice Bruce Pannier, Radio Free Europe/Radio Liberty. 04/28/08. "Energy: Turkmen, Iranian Presidents Moving Ahead With Rival Pipelines," Payvand. http://www.payvand.com/news/08/apr/1293.html [Takumi Murayama] But TAPI enjoys two advantages that the IPI does not -- support from the Asian Development Bank (ADB) and no Iranian participation. The ADB's support gives the project a greater international profile and, since Iran is not involved, TAPI may also find other investors -- including U.S. companies that are forbidden by U.S. law to deal with Iran, and European investors who fear U.S. sanctions if they commit to IPI instead of TAPI. 32 AT: Natural Gas DDI 2008 <BQ> Deutsch **Russia** 2AC RUSSIA 1. Non-unique: Russia relations terrible in status quo. M. K. Bhadrakumar, career diplomat for Indian foreign services, June 19, 2008, "Russia's energy drive leaves reeling", http://www.atimes.com/atimes/Central_Asia/JG19Ag01.html. [T-Jacob] Washington hit back by ensuring that Russian companies are left out in the cold from the 30 contracts for lucrative oil deals that Baghdad is awarding. It is a big blow for Russia. In February, Moscow had written off US$12 billion or 93% of Iraq's debt to Russia in a move that was widely seen as aimed to help Russian oil company LUKoil regain the Saddam Hussein-era rights to develop Iraq's giant West Qurna-2 oil field. But under US pressure, the Iraqi government is now awarding West Qurna-2 to the US's Chevron. The Kremlin didn't show any anger, but coincidence or not, Gazprom chief executive Alexei Miller suddenly arrived in Tehran on Monday and discussed with Iranian President Mahmud Ahmadinejad the setting up of an organization of gas-producing countries. No doubt, with the Russian foothold in Libya (which has estimated natural gas reserves of 1.47 trillion cubic meters), in coordination with Algeria (which currently supplies over 10% of Europe's gas supplies), Qatar (with proven natural gas reserves of 25.8 trillion cubic meters) and Iran (which has the world's second-largest reserves after Russia), the time for a "Gas OPEC" is approaching. The Iranian leader also suggested to Miller a market-sharing arrangement so that Russia and Iran could "collectively meet the demands of Europe, India and China in the gas sector". During the visit, an agreement was signed on the development of Iran's oil and gas fields by Russian companies; on Russian participation in the transfer of Iran's Caspian Sea crude oil to the Oman Sea; cooperation in the development of Iran's fabulous North Azadegan oil field; and, possible participation of Gazprom in the planned Iran-Pakistan-India gas pipeline project. Evidently, Moscow took a deliberate decision to press ahead with Iran in energy cooperation in the full glare of world publicity in complete disregard of US displeasure. Tehran loved it. To quote a US expert, "Russia's strategic interest in Iran implicitly underscores the futility of hopes that Moscow would cooperate with Washington in imposing meaningful sanctions on Iran. While Western European companies are moving out of Iran or suspending agreements for fear of US sanctions (which penalize investments of more than $20 million a year in Iran's oil and gas sector), Gazprom is enlarging the already existing foothold." Conceivably, the danger of losing out on the last energy frontier to Russia (and China) could be a factor in Washington's policy shift on Iran talks. Washington calls the u-turn "a strong signal to the Iranian government that the United States is committed to diplomacy". But according to The New York Times, Rice has decided to "test Iran's willingness to consider an international package of incentives meant to coax Iran into making concessions on its nuclear program". What we do not know is how close the Bush administration may be for involvement in Iran's energy sector, which is an element in the so-called "international package of incentives". (Halliburton, which Vice President Dick Cheney headed, was a very active player in Iran.) 33 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC RUSSIA 2. Non-unique: Russia collapse imminent. Dave Kimble, civil libertarian writer and writer for the centre for research on development, May 21, 2006, "Collapse of Petrodollar Looming", http://www.globalresearch.ca/index.php? context=viewArticle&code=KIM20060521&articleId=2486. [T-Jacob Russia's oil exports represent 15.2% of the world's export trade in oil, making it a much more significant player than Iran, with 5.8% of export volumes. Russia also produces 25.8% of the world's gas exports, while Iran is still only entering this market as an exporter. GlobeAndMail.com is reporting that President Chavez of Venezuela is considering following Iran's move towards pricing oil in Euros. Venezuela has 5.4% of the export market, although since the bulk of his country's exports are of heavy oil to the US, where it needs special facilities to process it, it would be a very brave or foolhardy President that told the US to buy its oil in Euros, or else ... Nevertheless, you can see the attraction for any country wanting to apply some pressure on the world's superpower. And where Venezuela leads, Bolivia may not be far behind. You can see how this could quickly get out of control. While the Iranians have been suffering numerous delays in implementing their bourse, Russia could have their oil market up and running almost as soon as their currency market is ready to take on the work load, which might only be a few months away. Some commentators on the Iranian proposal have suggested that the impact on the US Dollar would not be so great because the greenback is used for all sorts of trade, not just oil, so 5.8% of the international oil trade is really only a small part of the bigger picture. This argument looks a bit weak if both Russia and Iran will be lowering the demand for Dollars to buy oil and gas. In order to counter the reduced demand for US Dollars, the standard control lever available to the Federal Reserve is to increase interest rates, over and above what it was going to be doing. This has the usual unwelcome consequences of dampening the US economy, and squeezing people with mortgages, which in turn leads to rising wages, falling house prices and a slump in the construction industry. At the same time, lower demand for Dollars will weaken its conversion rate, making imports more expensive. With rising wages, fuel bills and debt-servicing feeding through into prices for home-produced goods, the stage is set for either an inflationary spiral or a recession. In the short term, the inflationary route always looks to be the less painful, but it can only lead eventually to a crisis of confidence in US Dollars, when traders abandon the paper and rush for the exit. US-Russian relations slide It cannot have escaped the notice of the Russians that this announcement is a poke in the eye for the US. So its timing can hardly be an accident, coming less than a week after US Vice President Dick Cheney's address to a conference in Vilnius, Lithuania, where he attacked Russian energy policy, in front of an audience of European heads of state. "No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation, or attempts to monopolise transportation", Cheney said, referring to the Ukrainian gas cut-back (that Ukraine provocatively passed on to the downstream customers in western Europe). The next day Russian Foreign Minister Sergei Lavrov fired back "[the] U.S. vice president should be informed that for the last 40 years neither the U.S.S.R. nor the Russian Federation has ever broken a single contract for oil and gas supplies abroad." The antagonism continued to verberate when Lavrov met US Sectretary of State Condoleezza Rice at a foreign ministers' summit in New York on Iran's nuclear programme. As well as criticising Cheney's comments, Lavrov also attacked Rice's number three, Nicholas Burns, for his criticism of Russia's assistance with Iran's Bushehr nuclear facility. "This meeting isn't going anywhere", snarled Rice, perhaps angry that the rebuke of Burns reflected badly on her. Burns himself was probably a bit cranky after his trip to Moscow in April, when he publicly asked Russia not to go ahead with the sale of Tor-M1 mobile anti-missile missiles to Iran, only to be bluntly rebuffed by Russian Chief of Staff, General Yury Baluyevsky. Meanwhile the world looks on, hoping that the great powers really know what they are doing, and that World War 3 won't start because of a subtle miscalculation in brinkmanship. 34 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC RUSSIA 3. Non-Unique: Russia hasn't imported an ounce of LNG to the U.S. 4. No Internal link: Because of large supply, the U.S. will not become dependent on Russia for natural gas Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 7 Equally unusual, even though there are no natural gas pipelines connecting the United States with Russia, Gazprom is also beginning to export LNG (liquified natural gas) to the United States. For the time being, because Gazprom as yet lacks the technology to produce LNG on its own, it is a swap arrangement. These shipments under the Gazprom label actually originate in Algeria (in exchange, Gazprom pipes gas to some of Algeria's customers in Europe), but by 2010, Gazprom anticipates (unrealistically) that it will supply as much as 10 percent of the natural gas the United States needs as LNG directly from its own fields.' Given that the United States has fairly large natural gas reserves of its own and supplements domestic production with imports by pipeline from Canada, it is unlikely that the United States will ever become as beholden to Russia for its energy as Germany or Austria have become. Yet Russia's emergence as an energy superpower will have a long term impact on U.S. and world diplomacy if for no other reason than that our European allies will begin to think twice before saying "no" to Russia. 5. Internal link turn: If Russia uses its influence in the U.S. through energy, the U.S. market will rebel crushing relations Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 206 This implies that U.S. policy should encourage Russian companies to invest in the United States, especially when they provide goods and services that supplement those sold by others. In the same way, the more assets owned by Russian entities outside of Russia, the more Russian firms are likely to feel pressure to conform to international standards. Thus, if Gazprom should for some reason decide to withhold delivery of LNG to its U.S. customers, as a countermeasure those customers might well decide to seize Russian owned assets as a hostage. In the same way, companies like LUXoi1 should be encouraged to compete in U. S. markets by exporting Russian petroleum to the gasoline service stations that it owns here. (This is also a way to diversify oil imports.) 'When Russia is able to act as a monopolist, however, such investments are more problematic building a natural gas pipeline that gives them monopoly power over consumers in the territory served by that pipeline would be an example. 35 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC RUSSIA 6. No link: disadvantage link isn't predicated specifically off of the affirmative case 7. No Impact: Zero chance of war with Russia Noah Shachtman, writer for national security online network database, June 9, 2008, "Moseley: Gates was Right; `Zero Chance' of War with China or Russia", http://blog.wired.com/defense/2008/06/moseley-gatesw.html. [T-Jacob] Defense Secretary Robert Gates fired Air Force Chief of Staff General "Buzz" Moseley after repeatedly accusing the service of being unable to focus on the wars in Iraq and Afghanistan. In a fascinating interview with Air Force Times , conducted right after his removal, Moseley said the critiques were dead-on. It's an eye-opening admission. For years, Moseley's generals have been warning about the dangers of China and a resurgent Russia -- and downplaying today's counterinsurgency conflicts. Now, Moseley is saying there is "an almost zero chance we will fight a nation-state" like Russia or China. Which makes you wonder why the Air Force has been so preoccupied with these countries. 36 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Non-Unique U.S. moving away from Gazprom International Herald Tribune, February 22, 2008, "A U.S. official says Europe needs alternatives to Russian natural gas", http://www.iht.com/bin/printfriendly.php?id=10314070, Accessed July 15, 2008 CM BRUSSELS: A U.S. State Department official said Friday that Europe needed alternatives to Russian natural gas that enriched "shady middlemen," putting forward the idea of Iraq and Azerbaijan as new suppliers. Matthew Bryza, the U.S. deputy assistant secretary of state for southeastern Europe, was critical of Gazprom, the state-controlled Russian national gas behemoth, saying the United States did not like energy monopolies. "We especially don't like them when they threaten at least the economic security of our most important allies," Bryza said. He criticized the company for charging too much and trying to undermine European efforts to seek new sources and routes for more natural gas. He said the U.S. government strongly backed the Nabucco pipeline, sponsored by the European Union and aimed at bringing more natural gas to Europe from the Caspian Sea region. That pipeline could help Iraq earn energy dollars and benefit another U.S. ally, Azerbaijan. Bryza said the United States was concerned that Europeans were paying "gigantic rents" for natural gas that Gazprom buys from supplier nations like Turkmenistan for as little as $100 for 1,000 cubic meters, or 35,000 cubic feet, and sells to Europe for nearly $300. "When you have these gigantic rents generated because of the difference in price between Central Asia and Europe, some not so savory people get involved in the distribution of that money," he said. Bryza was referring to Semyon Mogilevich, a Ukrainian-born Russian citizen accused by the United States of running an organized crime ring in the 1990s. Mogilevich was involved with the Ukrainian gas export company RosUkrEnergo. The United States wants Gazprom to behave more like a Western energy company, by investing most of its profits into producing and transporting more natural gas instead of buying up strategic energy infrastructure in Europe "that's the pattern today," he said . 37 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Energy key to Russian Influence Russia is using its energy dominance as a political weapon Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 3 Russia has not hesitated in the past to cut off the flow of both petroleum and gas to strengthen its side of a political dispute, a practice it inherited from its forebears in the Soviet Union's Ministry of the Gas Industry and Ministry of the Petroleum Industry. Europeans are realizing how dependent on Russia they have become as each year they rely more and more on Russian natural gas imports. Gazprom and, by extension, the Russian government are already beginning to enjoy a power over their European neighbors far beyond the dreams of the former Romanov czars or the Communist Party general secretaries. President Vladimir Putin, with his control of Gazprom as well as another state owned petroleum company, Rosneft, had become a real life Dr. No an archetypal James Bond villain, complete with a yacht and retinue. As President Putin at the time noted in a three hour meeting following our Gazprom visit, Gazprom and Rosneft are very real and each year are accumulating more and more wealth and international influence, which they are using to advance the interests of the Russian state. 38 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Russian Influence Increasing Now The world's dependence on Russia is increasing especially the U.S. Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 3-7 But it is not only Europe that finds itself each day becoming more and more dependent on energy exports from Russia. Although the United States is separated from Russia by oceans, it also is beginning to import and consume more and more Russian energy. As in Europe, the United States is trying to reduce its overreliance on energy imports from the Middle East. As part of this diversification, in 2005 the United States imported dose to $8 billion worth of Russian petroleum. In woO, that jumped by 25 percent to $1o billion. True, that represented only 3 percent of our petroleum imports small, but an increase from the 2.2 percent of 2004 and a hint that we are likely to increase imports in the future.' More than that, in woo, LUKoi1, one of Russia largest private oil companies, purchased nearly 3,000 filling stations in the United States from Getty Oil and Mobil and is now busily converting them into LUKoil outlets. It also should be noted that in woO, Russia became the world's largest producer of petroleum, producing more than Saudi Arabia. This is not the first time Russia has produced more petroleum than anyone else. It also reigned as the world's largest producer in the late 1970s and 198os. Even this was not unprecedented. As Table Intro. r indicates, Czarist Russia from 1898 to 1901 also produced more oil than the United States, until then the leader. 39 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF No I/L Too Much U.S. Supply Because of large supply, the U.S. will not become dependent on Russia for natural gas Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 7 Equally unusual, even though there are no natural gas pipelines connecting the United States with Russia, Gazprom is also beginning to export LNG (liquified natural gas) to the United States. For the time being, because Gazprom as yet lacks the technology to produce LNG on its own, it is a swap arrangement. These shipments under the Gazprom label actually originate in Algeria (in exchange, Gazprom pipes gas to some of Algeria's customers in Europe), but by 2010, Gazprom anticipates (unrealistically) that it will supply as much as 10 percent of the natural gas the United States needs as LNG directly from its own fields.' Given that the United States has fairly large natural gas reserves of its own and supplements domestic production with imports by pipeline from Canada, it is unlikely that the United States will ever become as beholden to Russia for its energy as Germany or Austria have become. Yet Russia's emergence as an energy superpower will have a long term impact on U.S. and world diplomacy if for no other reason than that our European allies will begin to think twice before saying "no" to Russia. 40 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Empirically Denied Energy Relations The U.S. and its allies tried to break the Russian pipeline monopoly Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 7-9 As Russia customers have awakened to how vulnerable they have become to future cuts in their energy supplies, there are signs that this overdependence on Russian gas is already forcing at least some in Europe to have second thoughts about standing up to Russia. Nor are the European consumers the only ones who find themselves very much at the mercy of Gazprom. So far Gazprom also determines the fate of three other large exporters of natural gas. To their dismay, if they want to sell natural gas to Europe, Central Asian gas producers such as Turkmenistan, Kazakhstan, and Uzbekistan have no alternative but to ship it through the Gazprom pipeline. This is a legacy of the Soviet era when it was only logical to consolidate shipments of gas produced within the republics of the Soviet Union through one unified system. After all, what did it matter if the gas to be exported came from Uzbekistan and transited through Russia? They were both parts of the Soviet Union. But when the Soviet Union disintegrated in 1991, Gazprom assumed ownership of the bulk of that pipeline, and the newly independent countries in Central Asia, which were previously republics of the USSR, had no other outlet of their own to the West. As a result, this post 1991 monopoly control of the natural gas pipeline allows Gazprom to hold down the price it pays to the Central Asian producers for their gas. In 2006, for example, Gazprom paid less than $50 per 1,000 cubic meters while selling this same gas to the Europeans at prices averaging $230 per 1,000 cubic meters. Working with energy and government officials in Central Asia, some European countries and the United States have sought to break that monopoly by lining up support for a bypass natural gas pipeline that would be built under the Caspian Sea and link Central Asia to Azerbaijan. There it would parallel an oil pipeline that goes then to Georgia and Turkey. To be called NABUCCO, this pipeline would then run through Bulgaria, Romania, Hungary; and on eventually to Western Europe. 41 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF I/L Turn Retaliation If Russia uses its influence in the U.S. through energy, the U.S. market will rebel crushing relations Marshall I. Goldman, Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College, former associate Director of the Davis Center for Russian Studies at Harvard University from 1975 to 2006, M.A. and Ph.D. degrees in Russian studies and economics from Harvard University, honorary Doctor of Laws degree from the University of Massachusetts, Amherst, Fulbright-Hayes Lecturer at Moscow State University, State Department consultant, May 27, 2008, Petrostate: Putin, Power, and the New Russia, Oxford University Press, Pg. 206 This implies that U.S. policy should encourage Russian companies to invest in the United States, especially when they provide goods and services that supplement those sold by others. In the same way, the more assets owned by Russian entities outside of Russia, the more Russian firms are likely to feel pressure to conform to international standards. Thus, if Gazprom should for some reason decide to withhold delivery of LNG to its U.S. customers, as a countermeasure those customers might well decide to seize Russian owned assets as a hostage. In the same way, companies like LUXoi1 should be encouraged to compete in U. S. markets by exporting Russian petroleum to the gasoline service stations that it owns here. (This is also a way to diversify oil imports.) 'When Russia is able to act as a monopolist, however, such investments are more problematic building a natural gas pipeline that gives them monopoly power over consumers in the territory served by that pipeline would be an example. 42 AT: Natural Gas DDI 2008 <BQ> Deutsch AFF Relations Non-Unique US-Russia relations are low and declining. Council on Foreign Relations , an independent national membership organization with a nonpartisan center for producing future policymakers, May 5, 2005 , "Russia's wrong direction: What the United States Can and Should Do", http://www.cfr.org/publication/10020/ [T-Jacob] March 5, 2006--Fifteen years after the collapse of the Soviet Union, "U.S.-Russia relations are clearly headed in the wrong direction," finds an Independent Task Force on U.S. policy toward Russia sponsored by the Council on Foreign Relations. "Contention is crowding out consensus. The very idea of a `strategic partnership' no longer seems realistic," it concludes. The bipartisan Task Force was chaired by former Senator John Edwards and former Congressman and Housing and Urban Development Secretary Jack Kemp and directed by Council Senior Fellow Stephen Sestanovich. The Task Force notes significant recent economic progress in Russia. "Between 2000 and 2004 the number of Russians living below the government's poverty line dropped from fortytwo million to twenty-six million. The national unemployment rate--over 10 percent in 2000--is now about 7 percent...[and] a middle class appears to be emerging." US-Russia relations are faltering. Gregor Peter Schmitz, director of the Bertelsmann Foundation's Transatlantic in Brussels, October 29, 2007, "Cold War Tensions, Reloaded", http://www.spiegel.de/international/world/0,1518,512464-2,00.html [T-Jacob] Bush had just used unusually hawkish words at this press conference to describe the nuclear tension with Iran. Clearly referring to Putin, Bush had told reporters, "If you're interested in avoiding World War III, it seems like you ought to be interested in preventing Iran from having the knowledge necessary to make a nuclear weapon." That reference to "World War III" was reminiscent of earlier presidential rhetoric like "The Axis of Evil" (Bush, 2002) and "The Evil Empire" (Reagan, 1983). The choice of words reflected a deep chill in US-Russian relations -- and differences over Iran are not the only reason for the falling out. "The relationship is really shaken. Both sides appear determined to verbally assault each other as often as possible over the coming months," says Rose Gottemoeller, Director of the Moscow office of the Carnegie Endowment for International Peace in an interview with SPIEGEL ONLINE. 43 AT: Natural Gas DDI 2008 <BQ> Deutsch **Flaring** 2AC FLARING 1. Lack of infrastructure is the reason for flaring, not low prices. John Donnelly, Globe Staff, 6-21-2007, The Boston Globe, "Russia top offender in gas flaring emissions," [Google Scholar]. <<http://www.boston.com/news/world/europe/articles/2007/06/21/russia_top_offender_in_gas_flare_emissions/>> [MM] WASHINGTON -- A little-known but major contributor to global warming -- gas flaring at oil wells -- has been measured for the first time using satellite imagery and shows that Russia is burning three times more gas than previous estimates, making it the world's worst offender, according to a new US study. At many oil drilling sites around the world, producers ignite excess gas, sending huge balls of fire into the sky. Environmentalists and World Bank analysts say the practice -- called gas flaring -- needlessly harms the environment and wastes a lucrative energy source. When companies drill for oil in underground caverns, their equipment brings to the surface both petroleum and natural gas. Producers burn the gas because they have no infrastructure to use it, or no immediate consumer. In some cases, such as at some of Russia's isolated oil wells, the nearest possible user of natural gas could be more than 1,000 miles away The report was completed by scientists at the US National Oceanic & Atmospheric Administration in Colorado using Air Force meteorological satellite images dating to 1995. It reveals that the amount of carbon dioxide emitted from Russia's gas flaring alone equals the combined emissions from all cars and trucks in New York state and New England. 2. Regulation is key to stopping flaring, Kazakhstan proves. United States Government Accountability Office, Report to the Honorable Jeff Bingaman, Ranking Minority Member, Committee on Energy and Natural Resources, U.S. Senate, July 2004, http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=gao&docid=f:d04809.pdf In addition, the government could investigate the public's perceptions of the risk associated with new infrastructure. For example, some communities have resisted LNG facilities because they are worried abou the safety and security procedures in place to protect them from an accidental explosion or a terrorist attack. Finally, the federal government could continue to work with other countries and corporations to reduce flaring and venting. For example, USAID provided much of the funding for training regulators in Kazakhstan, where improved regulation has virtually eliminated the routine flaring of natural gas. In addition, the United States could continue to support the work of the World Bank's Global Gas Flaring Reduction Partnership (GGFR), which recently issued standards on how to achieve reductions in the flaring and venting of gas worldwide. 44 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC FLARING Increased demand elsewhere will keep US LNG imports low. Platts 6/19/08 (http://www.platts.com/Natural%20Gas/News/8821458.xml?src=Natural%20Gasrssheadlines1) Voracious demand in South Korea and Spain will keep liquefied natural gas deliveries in the US low, which will be bullish to US gas prices, analysts at US investment bank Goldman Sachs said. Analysts Samantha Dart and Jeffery Currie expect Henry Hub prices to average $12.80/MMBtu over the summer and peak at $13.80/MMBtu this coming Northern Hemisphere winter-before falling back to $10/MMBtu in June 2009--as Asian and European pulls US prices up. "The higher-than-expected increase in LNG demand from Asia and Europe in the first quarter of 2008 was met by higher-than-expected LNG supplies in the market, likely motivated by high spot LNG prices in the period, and lower-than-expected North American LNG imports," Dart said. "Both Mexico and the United States showed declines in LNG imports earlier this year relative to our expectations." The increased international demand for gas will, Goldman said, bolster US prices as US LNG deliveries will no longer take up the slack for US demand, which the analysts still see as increasing even as the US economy slows. There's no need for LNG in the US Loren Steffy 5/29/08 (http://www.chron.com/disp/story.mpl/business/steffy/5809026.html) Given the persistent march of oil and natural gas prices, most energy company stocks have done pretty well this year. One glaring exception: Houston's Cheniere Energy. The company's shares are trading at about one-sixth what they were in January, and analysts are talking about bankruptcy. The stock closed Thursday at $5.04, down from $32.64 at the start of the year. Cheniere's troubles reflect changes in the global market for liquefied natural gas. A few years ago, LNG was the next big thing in energy, with rising demand for power generation expected to sop up domestic gas supplies. Hoping to capitalize on a need for imported gas, Cheniere borrowed heavily to build three LNG terminals along the Gulf Coast, including one in Sabine Pass that opened last month. The company also owns natural gas pipelines that connect to the terminals and has a marketing arm to sell gas imported gas. The LNG tankers, though, aren't lining up as Cheniere hoped. "If you believe the ships are going to come and they don't, you're in trouble," said Bernard Picchi, an analyst with Wall Street Access who's had a "sell" rating on Cheniere for most of the year. Demand in other parts of the world outpaced the nascent market in the United States. Japan, for example, turned to LNG to fuel peaking plants after an earthquake last summer shut down most of the country's nuclear power generation. That drove up LNG prices on the world market, and because other countries are willing to pay more than we are for LNG, little is being shipped to our shores. "There's virtually no need for LNG in the United States market at this moment," Picchi said. Other big LNG players, such as Sempra Energy and Exxon Mobil, have the deep pockets to weather the slump, which analysts such as Lasan Johong at RBC Capital Markets believe could ease beginning in early 2010. US LNG imports are down Bloomberg News 7/8/08 (http://www.chron.com/disp/story.mpl/headline/biz/5877203.html) U.S. imports of liquefied natural gas may fall 38 percent this year as demand remains strong in Asia and Europe and projects are delayed, the Energy Department said today. U.S. LNG imports this year may total about 480 billion cubic feet, down from 770 billion cubic feet in 2007, the monthly Short-Term Energy Outlook said. The department last month estimated 2008 LNG imports would total about 530 billion cubic feet, a decline of 31 percent. The volume may climb to 790 billion cubic feet in 2009 as new supply enters the global market, the department said. This is down from June estimates of 850 billion cubic feet. Imports in the first half of 2008 were 60 percent below those of a year earlier. The flow of LNG into the U.S. is averaging about 1.1 billion cubic feet a day so far this month, down from 3.1 billion cubic feet a day a year ago, Stacy Nieuwoudt, an analyst at Tudor, Pickering, Holt & Co. in Houston, said in a note today. LNG is gas that is cooled to a liquid for transport by ship to markets not connected by pipelines. The fuel is received at import terminals and converted back to a gaseous form so it can be piped to users. 45 AT: Natural Gas DDI 2008 <BQ> Deutsch **Industries** 2AC Industries 1. Forecasts for future increases in natural gas prices should be doubled or tripled Global Power Report, 5/17/07, "Congress is under estimating carbon costs by low balling gas forecast, say consultants, pg lexis //EM Energy-intensive industries said this week that Congress is under estimating the cost of a nationwide carbon cap-and-trade program because government forecasts have unrealistic assumptions for future natural gas prices. Current forecasts by the Energy Information Administration and others that long-term gas prices will stabilize at roughly $4.50/MMBtu should assume prices two or three times that figure for two reasons, officials with Industrial Energy Consumers of America told reporters at a briefing. IECA Executive Director Paul Cicio and Andy Weismann, a consultant to the trade group, said most forecasts today under estimate how quickly additional natural gas supplies can be expected from the proposed Alaska natural gas pipeline and new liquefied natural gas terminals. Cicio made his comments as IECA and other trade groups are ramping up a lobbying campaign aimed at getting Congress to lift government barriers to more LNG terminals and expanded domestic gas drilling, he said. Weismann said he does not see the natural gas pipeline project, which would deliver 5 Bcf of natural gas into the Lower-48 states each day, coming online before 2015. That is five years or more beyond what the EIA projects. If there are delays in permitting or funding the project, "that's a 5 Bcf/day hole in US supply, and I don't know how you fill that easily," Weismann said. He also said the projected $25 billion capital cost of the projects could actually be as high as $40 billion because the cost of raw materials such as concrete and steel have risen substantially in light of the construction boom in China and India. "One could easily argue that natural gas price forecasts should be two to three times as high as they are now," Weismann said. 46 AT: Natural Gas DDI 2008 <BQ> Deutsch Natural gas prices will continue to rise this winter, multiple warrants CNN, 7/3/08, "Avista warns of continued natural gas price hikes", CNN money http://money.cnn.com/news/newsfeeds/articles/apwire/919e35e0554e2f663d1af503d11a7862.htm#TOP //EM NEW YORK (Associated Press) - Normally, natural gas prices are low in the summer months and utilities stock up for sale in the winter. This year, though, a spike in energy prices is also hitting natural gas, which likely means higher prices for consumers this winter, Avista Corp. warned Wednesday. Kevin Christie, Avista's director of gas supply, said prices rose from an average of $7.39 per dekatherm in June 2007 to $12.81 per dekatherm last month, a 73 percent increase. A typical home in the utility's service areas in Eastern Washington, northern Idaho and Oregon uses about seven dekatherms a month. "The combination of an unusually long winter and cold spring created higher demand for natural gas, which depleted storage reserves across the country," Christie said in a release. High prices for crude oil, plus lower natural gas imports into the United States, are also pushing prices up, Christie said. The lack of lower spring and summer prices means natural gas rates for customers will likely increase when Avista files its annual "purchase gas cost adjustments" in September, although the amount of the increase remains undetermined, Christie said. 2. Despite natural gas price drop, the commodity's boom isn't over yet. This is only a short term correction Stevenson Jacobs, AP Business Writer, 7/17/08, Associated Press Financial Wire, "Commodities Drop for 3rd day as Oil Keeps Falling" pg lexis //EM Commodities turned lower for a third day Thursday, as steep drops in crude oil and natural gas prices fed beliefs that high energy costs are curbing Americans' fuel consumption and at least temporarily cooling the commodities boom. Crude oil had another day of sharp losses, falling more than $5 a barrel after a big sell-off of natural gas. Oil also fell more than $10 in the previous two sessions. The drop in energy helped send soybeans, silver, corn and other commodities sharply lower. "We're seeing some worries about demand destruction in oil, so I think that's creating some fear among investors and leading them to sell," said Tom Pawlicki, commodities analyst with MF Global Research in Chicago. Worries about the health of the American economy has weighed heavily on commodities this week. Investors are concerned that rising inflation and weak economic growth will slow consumer spending and curb demand for raw materials in the U.S. and overseas. Despite the sharp drop in futures prices in recent days, few analysts predict an end to the white-hot commodities boom of the last year. Pawlicki called this week's sell-off a "short-term correction" and predicted prices would turn higher in coming days and months as investors who have been bearish on stocks shift funds back into commodities. "I think it's too early to call a top to this market," Pawlicki said. The drop in crude prices weighed on agriculture futures Thursday, with corn, wheat and soybeans all dropping sharply. Also pressuring prices was more favorable growing weather in the Midwest and a vote by Argentina's Senate to block a hotly disputed grains-export tax that had prompted weeks of farming strikes and food shortages. Soybeans for November delivery fell 50.5 cents to $14.975 a bushel on the Chicago Board of Trade, after earlier falling to $14.90 a bushel. Corn for December delivery lost 28.75 cents to $6.485 a bushel, while September wheat dropped 24.5 cents to $8.095 a bushel. In energy markets, crude oil fell sharply Thursday, sent lower following the biggest one-day drop in natural gas prices in nearly a year. Light, sweet crude for August delivery fell $5.31 to settle at $129.29 a barrel on the New York Mercantile Exchange. Prices have fallen about $15 in the past three days. Natural gas futures for August delivery fell as much as 8.2 percent in the day, the biggest one-day drop in nearly a year. Natural gas fell 13.8 percent on Aug. 20, 2007, according to Nathan Golz, researcher at Wachovia Securities in St. Louis. 47 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC Industries 3. Chemical industry moving to renewables in status quo M2 Equity Bytes, 6/20/08, "Rentech and UOP enter into an alliance to deploy clean fuels and chemical technologies" pg lexis //EM Rentech Inc(AMEX:RTK), a provider of clean energy solutions, announced on Thursday (19 June) that the company has entered into a non-exclusive agreement with UOP LLC, a Honeywell (NYSE:HON) company, for the deployment of clean fuels and chemical technologies. Under the alliance, both the companies will use their respective technologies for the commercial production of synthetic fuels, specialty waxes and chemicals. The companies said that the agreement aligns Rentech's proprietary process to convert synthesis gas from biomass and fossil resources into hydrocarbons with UOP's hydrocracking and hydrotreating technologies that process and upgrade hydrocarbons into ultra-clean synthetic fuels, specialty waxes and chemicals. Rentech and UOP expect to increase their market reach and jointly offer proven technologies that can produce ultra-clean synthetic fuels, specialty waxes and chemicals that are cleaner than traditional petroleumderived fuels and chemicals. 4. Breakthrough in solar power ensures renewable supply for Chemical industry Business Wire, 7/7/08, "Record-High Petroleum Prices a Boon to BioSolar; Company's Cost-Saving Bio-Based Materials for Photovoltaic Solar Modules Poised to Decrease Industry's oil dependence" A recent article in PlasticsNews underscores how manufacturers are impacted by price increases of commodity chemicals, as well as "almost unprecedented" run-ups in energy and raw materials costs. The June 22, 2008 article notes that companies are impacted not only by rising raw materials costs, but the associated electricity and transportation costs as well. Kevin Swift, chief economist at the American Chemistry Council, says, "Each $1 increase in the price of a barrel of crude oil costs the chemical industry $660 million annually ...For a $1 increase in 1 million BTUs of natural gas, it's $3.3 billion in new costs.""The market for solar power is already in explosive growth mode, and photovoltaic technology has progressed markedly in recent years with advances making the cells more efficient, lighter and less expensive. But BioSolar is singularly positioned to lead the development of truly sustainable and cost-effective solar technology as the first company to introduce a new dimension of cost reduction by replacing petroleum-based plastic solar cell module components with durable non-food, bio-based materials," said Lee. BioSolar is in the process of transitioning into fullscale production of its BioBacksheet(TM) in a 60,000-square-foot state-of-the-art facility operated by its contract manufacturing partner, Rowland Technologies, Inc. By incorporating Rowland Technologies' world-class manufacturing capabilities with BioSolar's unique material engineering, BioSolar is producing an environmentally-friendly product with characteristics that exceed the thermal index requirements of solar module manufacturers. "We expect this breakthrough product to be rapidly accepted as the standard for the backsheet component of both traditional and certain thin-film photovoltaic modules," said Lee. 48 AT: Natural Gas DDI 2008 <BQ> Deutsch 2AC - Industries 5. Economic decline inevitable, no unique impact Xinhua News Service, 7/15/08, World News Economic, "Bernanke says U.S. Economy continues to Face Numerous Difficulties" pg lexis //EM The U.S. economy continues to face "numerous difficulties," include persistent strains in financial markets, declining house prices and rising prices of oil and food, Federal Reserve Chairman Ben Bernanke said on Tuesday. "The U.S. economy and financial system have confronted some significant challenges thus far in 2008," said Bernanke in a written testimony to the Senate Banking Committee. "The effects of the housing contraction and of the financial headwinds on spending and economic activity have been compounded by rapid increases in the prices of energy and other commodities, which have sapped household purchasing power even as they have boosted inflation," he said. 6. No link, transition would be slow enough to not spike the market 49 ...
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