The Age has an article on oil spills in Nigeria - Large oil spills are old news in the Niger Delta.

BIG oil spills are no longer news in the Niger Delta, where the wealth underground is out of all proportion with the poverty on the surface. This once-verdant area has endured the equivalent of the Exxon Valdez spill every year for 50 years by some estimates. The oil pours out nearly every week, and some swamps are lifeless.

Perhaps no place on earth has been as battered by oil, experts say, leaving residents here astonished at the non-stop attention paid to the gusher half a world away in the Gulf of Mexico. It was only a few weeks ago, they say, that a burst pipe, belonging to Shell, was finally shut after flowing for two months. Now nothing living moves in a black-and-brown world once teeming with shrimp and crab.

Not far away, there is still black crude on Gio Creek from an April spill, and just across the state line in Akwa Ibom the fishermen curse their oil-blackened nets, doubly useless in a barren sea buffeted by a spill from an offshore Exxon Mobil pipe in May that lasted for weeks.

The oil spews from rusted and ageing pipes, unchecked by what analysts say is ineffectual or collusive regulation, and abetted by deficient maintenance and sabotage. In the face of this black tide is an infrequent protest - soldiers guarding an Exxon Mobil facility beat women who were demonstrating last month, according to witnesses - but mostly resentful resignation.

Small children swim in the polluted estuary here, fishermen take their skiffs out ever further - ''There's nothing we can catch here,'' said Pius Doron, perched anxiously over his boat - and market women trudge through oily streams.

''There is Shell oil on my body,'' said Hannah Baage, emerging from Gio Creek with a machete to cut the cassava stalks balanced on her head.

That the Gulf of Mexico disaster has transfixed a country and president they so admire is a matter of wonder for people here, living among the palm-fringed estuaries in conditions as abject as any in Nigeria, according to the United Nations. Although their region contributes nearly 80 per cent of the government's revenue, they have hardly benefited from it; life expectancy is the lowest in Nigeria.

''President Obama is worried about that one,'' Claytus Kanyie, a local official, said of the Gulf spill, standing among dead mangroves in the soft oily muck outside Bodo. ''Nobody is worried about this one.''

In the distance, smoke rose from what Mr Kanyie and environmental activists said was an illegal refining business run by local oil thieves and protected, they said, by Nigerian security forces.

The Niger Delta has suddenly become a cautionary tale for the US. As many as 546 million gallons of oil spilled into the Niger Delta over the past five decades, or nearly 11 million gallons a year, a team of experts for the Nigerian government and international and local environmental groups concluded in a 2006 report. By comparison, the Exxon Valdez spill in 1989 dumped an estimated 10.8 million gallons of oil into the waters off Alaska.

The spills here are all the more devastating because this ecologically sensitive wetland region, the source of 10 per cent of US oil imports, has most of Africa's mangroves and, like the Louisiana coast, has fed the interior for generations with its abundance of fish and crops.

AFP reports that Shell has declared force majeure on oil exports from Nigeria as MEND steps up its attacks to achieve their goal of reducing exports to nothing - Shell extends force majeure at Nigerian terminal.

Anglo-Dutch oil giant Shell Saturday said it had declared force majeure on Nigerian light crude oil exports from its Bonny terminal after a slew of attacks on its pipelines. "We have declared force majeure as a result of the recent attacks on our facilities," spokesman Precious Okolobo told AFP. Force majeure allows Shell to cite exceptional circumstances which enable it to suspend its contractual obligations.

Nigeria's main armed militant group Saturday said it had destroyed a key pipeline run by Royal Dutch Shell in the sixth attack in nearly as many days and vowed to reduce oil exports to "zero."

The Australian has a report on a conservative terror campaign in Bolivia aimed at seizing control of the gas fields - Morales warns on Bolivian violence. Bob Morris has some background on recent events in Bolivia.

President Evo Morales struggled to assert control over Bolivia yesterday as right-wing demonstrators set fire to a town hall and blockaded highways in four opposition-controlled provinces, causing shortages of food and petrol. At least 30 people have been killed in the Andean nation this week, Interior Minister Alfredo Rada said.

All the deaths occurred in Pando province, where Mr Morales declared martial law on Friday, dispatching troops and accusing right-wingers of killing his poor peasant supporters.

The governor of gas-rich Tarija, representing the four eastern provinces that are in rebellion against the Government, said before beginning talks with Mr Morales over the weekend that half the country was blockaded by opposition barricades along 35 highways. "Also paralysed are borders with Argentina, Brazil and Paraguay," said Governor Mario Cossio, who said he hoped to lay the groundwork for a truce. ...

Mr Morales's spokesman, Ivan Canelas, said an armed group set fire to the town hall in Filadelfia, a municipality near Cobija, early on Sunday. "There are people who want to continue sowing pain across the region," he said.

The gravest challenge to Mr Morales in his tenure of nearly three years as Bolivia's first indigenous president stems from his struggle with the four lowland provinces where Bolivia's natural gas riches are concentrated and where his Government has all but lost control. Right-wing saboteurs last week briefly cut the natural gas flow to Brazil, which depends on Bolivia for about half its gas consumption.

The rulers of the rich provinces are seeking greater autonomy from Mr Morales's left-wing government and are insisting he cancel the referendum due on January 25 on a new constitution that would help him to centralise power, run for a second consecutive term and transfer unused land to the landless peasants. Mr Morales says the new charter is needed to empower Bolivia's poor indigenous majority.

Mr Morales and his ally, President Hugo Chavez of Venezuela, expelled the US ambassadors from their countries last week to protest at what they called Washington's incitement of the right-wing protesters.

The Oz also reports that MEND militants in Nigeria's delta region have declared an "oil war" - Shell attacked in Nigerian oil war.

Militants yesterday attacked a Shell facility in Nigeria's restive southern Delta region, a day after an armed group declared an "oil war", a military official said. The Movement for the Emancipation of the Niger Delta (MEND), the most prominent armed group in the region, which had declared the "oil war", said it was responsible for the attack in Rivers State, claiming to have destroyed the Anglo-Dutch group's Alakiri station.

The facility was attacked and set alight just after midnight with "dynamite and other explosives", but "the attack was beaten back", Lieutenant-Colonel Moussa Sagir said. Colonel Sagir said an exchange of gunfire pitted armed men who arrived on a dozen or so speedboats against a joint military taskforce. MEND said in an email to the media that an operation code-named Hurricane Barbarossa had "razed the station to the ground". ...

MEND has changed the security paradigm in oil-rich southern Nigeria since its emergence in early 2006 - multiplying attacks, kidnappings of foreign oil workers and sabotage on land and offshore. It has caused Nigeria to lose one-quarter of its oil production, costing Lagos its place as the biggest crude oil producer in Africa, with Angola recently taking that title.

The group says that it is fighting fora larger share of Nigeria's oil revenue to go to local populations. In June, it attacked Bonga, the flagship deepwater field of Anglo-Dutch giant Royal Dutch Shell. Sited 120km from Nigeria's coast, Bonga had, until that attack, been seen as safely out of the reach of militant raids.

Jeff Vail has the next installment of his series on geolpolitical feedback loops and oil supply disruptions - Geopolitical Disruptions #2: Identifying the Feedback Loops.

This post, the second in a series on Geopolitical Feedback Loops (see part 1 here), will outline the various geopolitical feedback loops that operate to disrupt oil and resource production. I've tried to link most of these feedback loops around a common theme of ownership dispute, illustrated below. There are several examples for each feedback loop, but in the interest of time I've just listed them and linked to further information--each could be a post in its own right.

Figure 1: Does the state own oil reserves or the nation? When the two are contiguous it makes little difference, but as they become increasingly dissimilar the dispute drives conflict. While I haven't divided the feedback loops explicitly along ownership lines, this graphic may help conceptualize these processes as a single system.

GFL1: "Nation"/State Conflict

Explanation: Who owns the oil, the state or its constituent nation(s)? Throughout the 20th Century, the international order was defined by the Nation-State system that developed out of the Peace of Westphalia. As Philip Bobbitt explained in his seminal work, The Shield of Achilles, the constitutional basis of the modern Nation-State is that the State provides for its constituent Nation. For this system to work, there must be close overlap between the State and the Nation.

This, of course, has always been a fiction to some degree as States have generally cobbled together numerous national and affinity groups with less than total exclusivity and attempted to mold a "national character" out of them that is contiguous with the boundaries of the State. Today, for a variety of reasons, this order is rapidly falling apart. As a result, nations and states are increasingly in conflict over self-determination and, critically, resource control.

When a Nation (or any other non-state group such as a religion, issue group, or affinity group--I am using the broad term "Nation" here only for simplicity) has a dispute with a controlling state over control or use of a resource such as oil, gas, etc., the importance and motivation to escalate to violence in pursuit of resource control is, at least partially, a function of the value of the resource in dispute. Because these conflicts have the tendency to increase the scarcity, and therefore value, of the resource, this type of conflict forms a positive feedback loop. In addition to this positive feedback nature, this process also expands in scope as it intensifies: resource ownership that was minimally relevant a few decades ago (e.g the Arctic, or Canada's tar sands) is now becoming an important source of conflict (this tendency towards scope-expansion also runs though many of the feedback loops identified below).

In the interest of brevity, for a more in-depth look at the fundamentals behind this feedback loop see my paper The New Map. I list this feedback loop first because I think it may be the least understood, and has the potential to mushroom into one of the largest sources of supply disruption within a decade or two. It serves as the foundation of the concept of resource ownership disputes illustrated in the headline graphic. As with all the opposing pairs illustrated above, when the two overlap perfectly (e.g. "nation" and "state" or "legal owner" and "moral owner") there is no problem, but as these opposing notions begin to diverge the foundation for sustained conflict is created.

Examples (Oil & Gas): Nigeria (Ijaw/Igbo/etc.), Iraq (Kurd, Shia, Sunni), Canada (First Nations), Iran (Awhaz, Baloch), Angola (Cabinda), Mexico (Zapatistas/EPR), Saudi Arabia (Islamists), Yemen (al-Qa'ida, tribes), Sudan/Chad (SLA, Darfur), Ethiopia (Ogaden), UK (Scotland). Other resources: Morocco (Sahrawi Rebels - Rock Phosphate), Indonesia (Iriyan Jaya - various metals), Democratic Republic of Congo (LRA - diamonds & other minerals), Israel/Palestine (aquifers & surface water), American West (surface water compacts). ...

GFL8: Export Land Model (ELM)

Explanation: Rising oil prices increase revenues for oil exporting countries. These rising revenues generally drive consumption in exporting countries (e.g. more wealth means more people can drive larger cars, more food security means rising populations, etc.), which in turn reduces exports. In some circumstances (generally where the exporter is a major player such as Saudi Arabia or Russia) declining exports may increase price enough to keep net export revenues rising--in these situations this forms a positive feedback loop. In other cases, where rising consumption results in lower overall export revenues, a negative feedback loop is created. Westexas, Khebab, and others have already done outstanding work on this topic--I have included this feedback loop at the end of this list not because it is least important (it is probably most important, at least in the near term), but because it has been most exhaustively covered previously.

Example: Real world examples of ELM in action include Indonesia, Egypt, Malaysia, and Mexico. In the near future, its impact in major exporting states like Saudi Arabia and Russia may be most significant.

Quantifiable Disruptions in Nigeria & Iraq

The EIA estimates that, as of April 2007, Nigeria had 587,000 barrles per day of production shut in by violence--primarily the Nation/State, Priavateering, Corruption, and Targeting/ROI feedback loops. However, the EIA also estimates that Nigeria has 3.2 million barrels per day of production capacity. A single attack has shut in as much as 345,000 barrels per day for a brief period, and the amount shut in at any given time is highly variable. Recently, Nigerian production has been hovering just below 2 million barrels per day, and has even dropped briefly below 1 million barrels per day, suggesting the actual shut-in figure is far higher.

In Iraq, oil production is just now nearing pre-war production levels of 2.6+ mbpd. While some officials claim Iraq could surpass 3 mbpd in 2008, critical political compromises splitting resource ownership between the federal governments and Iraq's three main ethnic/sectarian groups have not been reached. The oil shut in since the invasion (and the oil that future violence may shut in) can be attributed to various feedback loops: military adventurism driven by resource insecurity, nation/state violence, corruption, and targeting/ROI.

Conclusion

Here, I've listed the examples that I can think of for each feedback loop. If readers have additions, changes, etc., please add these in the comments. The links are not intended to be definitive sources of information about each feedback loop in action, but rather a jumping-off point for research and discussion.

The next and final post in this series will discuss the interrelationships between these feedback loops and prospects for solving, or at least mitigating, their impact.

AFP has a report on grim predictions about the future of coastal regions in West Africa - West Africa's coastline redrawn by climate change: experts (via Idleworm who gets a special award for the first time I've seen the word "doomerverse" used).

Rising sea levels caused by climate change will brutally redraw a 4,000-kilometre (2500-mile) stretch of west African coastline from Senegal to Cameroon by century's end, experts told AFP Friday. "The cost of Guinea will cease to exist by the end of this century," said Stefan Cramer, a marine geologist and head of German green group Heinrich Boll Stiftung's operations in Nigeria. The countries most threatened by this looming environmental disaster are Gambia, Nigeria, Burkina Fasso and Ghana," he told AFP on the sidelines of a major UN climate conference in the Ghanaian capital Accra.

Cramer said sea levels were set to rise up to two centimetres (0.8 inches) per year, enough to devastate large swathes of fragile coastline, especially in low-lying and densely populated deltas.

Last year UN climate change experts initially predicted more modest rises of 18 to 59 centimetres (7.2 to 23.2 inches), but in a final version of their report left the upper limit open-ended due to mounting scientific evidence that levels might climb much higher.

The Intergovernmental Panel on Climate Change (IPCC) had not taken into account the potential impact of runoff from the 3,000-metre (1.9 mile) thick Greenland ice cap, which covers an areas three times the size of Nigeria. Recent studies have suggested the continent-sized ice block could be melting far more quickly than once thought.

Among the cities worst hit would be the Gambian capital Banjul and Lagos, Nigeria's economic capital and home to 15 million. Some parts of Lagos lie below sea-level today and it is already subject to frequent flooding. The Niger delta's income-generating oil fields are especially vulnerable, Cramer said.

In Ghana, "up to 1,000 kilometres of land may be lost in the Volta Delta owing to sea-level rise and inundation," Yvo de Boer, head of the UN Framework Convention on Climate Change, said at the meeting.

The devastation wrought by rising sea levels is amplified by increasingly violent tropical storms, which can create sea surges up to three metres (10 feet) high.

In August 2007 a storm 5,000 kilometres off the coast of Lagos destroyed protective beach barriers, highlighting the vulnerability of the entire African west coast.

The SMH reports that Iraq has restarted oil exploration. My prediction is that they will find quite a lot of oil - Iraq resumes oil exploration after 20-year break.

Iraq said today it was resuming exploration of its immense oil reserves after a break of nearly 20 years due to crippling UN sanctions, saying it hopes to double its proven deposits of crude. "Today the Iraqi oil ministry celebrates a return to work by Iraqi oil exploration teams after 20 years of interruption," ministry spokesman Assim Jihad told AFP. Oil Minister Hussein al-Shahristani attended a ceremony to mark the event at the Al-Garraf field near Nasiriyah, 350 km south of Baghdad. Jihad said the ministry would deploy three exploration teams trained abroad in the latest techniques.

OPEC member Iraq hopes the exploration squads will uncover deposits that will enable it to double its proven oil reserves, currently at 115 billion barrels of crude. "The ministry has begun to build new refineries in the country, in the provinces of Dhiqar, Kirkuk, Karbala and Misan while renovating other refineries in Baghdad, Basra and Diwaniyah," said Shahristani. In the province of Dhiqar alone the oil ministry hopes to draw on reserves estimated at four billion barrels of crude.

The SMH also reports that the Chinese are interested in buying this oil - Iraq and China revisit major oil deal.

Iraq's oil ministry said Sunday it plans to resurrect a major oil deal with China that fell apart amid crippling United Nations sanctions and the aftermath of the 2003 US-led invasion. Oil minister Hussein Al-Shahristani met with Chinese ambassador Chang Yi to revive the 1997 contract that granted China exploration rights to the Al-Ahdab oil field in the province of Wassit, just south of Baghdad. "Iraq and China are concerned with completing the agreement to develop Ahdab oil field," a statement from the Iraqi oil ministry said on Sunday.

The construction of a power station in the province's Al-Najibia was also discussed, Assim Jihad, a spokesman for the ministry told AFP, adding that an Iraqi delegation would travel to China in the next few days to work on the terms. After China won exploration rights to the al-Ahdab field in 1997, in a deal then valued at $US700 million ($A773.4 million) over 23 years, activities were suspended due to UN sanctions and postwar security problems.

Planned oil production was 90,000 barrels per day. State-run China National Petroleum Corp had been expected to win the new exploration rights. The meeting in Baghdad came after Iraq announced on Friday that it was resuming exploration of its immense oil reserves after a break of nearly 20 years. Iraq wants to ramp up output by 500,000 barrels per day (bpd) from the current average production of 2.5 million bpd, about equal to the amount being pumped before the US-led invasion of March 2003.

Another SMH report says that Nigerian oil reserves are also increasing - Nigeria's oil reserves hit 33.6 bln barrels.

Crude oil reserves in Nigeria, the world's eighth largest exporter, have increased by 12 percent over the past year to 33.6 billion barrels, a top oil official said Friday. "As at today, we have an oil reserve base of 33.6 billion barrels," Abubakar Yar'Adua chief of the state-run oil company, Nigerian National Petroleum Corporation (NNPC) told reporters.

The reserves in the OPEC member state stood at 30 billion barrels a year ago. Nigeria, until recently Africa's leading oil producer and exporter before it was overtaken by Angola, is aiming to build a reserve base of 40 billion barrels by 2010.

The SMH also has a report from Paul McGeogh on the disastrous Georgian offensive in South Ossetia - Trigger happy and oil mad.

Dig deep enough and you come to oil and gas. The war this week between Russia and the headstrong former Soviet republic of Georgia prompted hand-wringing about another awkward demonstration of the limits of American power. But what sounded like a stiff breeze in the capitals of Europe was a collective sigh of relief as leaders recalled their own good sense in resisting an American push back in April for the North Atlantic Treaty Organisation to clasp Georgia to its ample bosom.

Were Georgia a member of NATO, as are more than half a dozen other former Soviet republics and satellites, the US and Canada and their 24 European allies now would be, technically at least, at war with Russia. In the NATO charter, a strike at one is a strike at all.

Put to one side European squeamishness about war. In Afghanistan the German, Italian, French and Spanish contingents refuse to actually fight. But much of the gas that heats their homes, the oil that fuels their factories and the petrol that drives their cars are delivered through a spaghetti-like tangle of pipelines controlled by Moscow.

All, that is, except the one that Washington sponsored. Running through Georgia, it was seen by the US as a way to undermine Russian power in what was one of Moscow's key spheres of influence in the old Soviet days.

I haven't bothered reading whatever nonsense the neoconservative press has babbling away about this event, but I thought this Moscow Times article is worth reading - when you look at propaganda from the other side of the fence the structure is much easier to observe, watching a parade of tame thinktankologists all vigourously spouting the party line - War Casts Cloud Over Pipeline Route. They seem to be quite keen on blocking the long awaiting Nabucco pipeline development (though personally I reckon that one will end up carrying Iraqi gas to Europe one day).

Any plans to use Georgia as a bridge for more energy supplies to Europe are likely set to gather dust now that the tiny country's fierce armed conflict with Russia has exposed the insecurity of the route, analysts said.

Georgia has been a key conduit of oil and gas from Central Asia to the West that bypasses Russia, and Europe has been hoping to build another pipeline to bring more gas from the area. That pipeline project, called Nabucco, has long been on the drawing board, but potential investors had trouble contracting enough gas for it from Azerbaijan or Turkmenistan.

Shipping the gas from Turkmenistan would require building a separate pipeline across the Caspian Sea bed, which has yet to be divided by the sea's five littoral states, Russia, Azerbaijan, Kazakhstan, Turkmenistan and Iran.

Now, Georgia's vulnerability may have dealt a lethal blow to Nabucco and plans for a trans-Caspian pipeline. "A trans-Caspian gas pipeline can be considered a forever buried chimera," said Pavel Baev, an energy expert at the International Peace Research Institute in Oslo. "It became clear for all the participants of these energy games that nothing will go through the Caspian Sea."

Europe was "shocked" by the instability and realized that "hardly anyone would invest money in new projects" associated with Georgia, said Konstantin Simonov, director of the Fund for National Energy Security.

When asked about the impact of the war on Nabucco prospects, European Commission energy spokesman, Martin Selmayr, said none of the pipelines going through Georgia was affected. The commission was in regular contact with energy companies in the region, he said.

Russian air strikes did not hit any of the three international oil and gas pipelines crossing the country or any oil ports, but they forced BP, which is an operator of Azerbaijan's two biggest energy projects, to stop oil and gas shipments through Georgia as a precautionary measure Tuesday.

The BP-operated Baku-Tbilisi-Ceyhan pipeline, which carries oil from Azerbaijan to the Turkish Mediterranean, was already out of commission because of an explosion in Turkey last week that Kurdish separatists claimed responsibility for.

Jeff Vail has an interesting look at the significance of the newly emerging capability of MEND to hit offshore oil platforms in Nigeria, which they recently demonstrated by attacking Shell's Bonga platform, 120km off the coast (also at The Oil Drum).

Overnight on June 19th, militants from the Movement for the Emancipation of the Niger Delta (MEND) struck Shell’s offshore Bonga facility, resulting in Shell declaring force majeure for deliveries of 225,000 barrels per day in June and July. Bonga, the first and largest Nigerian offshore facility, is 120km offshore. Then, on June 20th, militants destroyed a key Chevron pipeline near Escravos, Nigeria, forcing Chevron to shut-in and declare force majeure on 120,000 barrels per day. This article will analyze the significance of the Bonga attack in light of Nigeria's efforts to grow its offshore oil production.

What is at Stake?

This recent attack is particularly troubling in Nigeria, where a February, 2006 Citigroup report noted that "clearly most of the (oil production) growth near-term looks to be in the Nigerian deepwater and as such should be less subject to current disruptions." While offshore production currently only accounts for 16% of Nigeria’s oil production, it is expected to account for 90% of future growth. MEND has already demonstrated its capability to shut in significant portions of Nigeria’s onshore oil production, and now it is threatening to re-attack offshore facilities, urging expatriate workers to abandon them immediately. Significantly, Nigeria’s onshore production is already mature, and government hopes of raising total production to 4 million barrels per day are entirely dependent on the success of the offshore sector. If MEND can continue to interrupt offshore production, the prospects for any increase in production from Nigeria look dim. The situation in Nigeria is particularly important as Nigeria is one of the few states with the potential to significantly increase both production and exports. The megaproject list on WikiPedia shows 345,000 bpd of offshore production set to come online in 2008 (Agbami field, Oso field); 220,000 bpd of offshore production in 2009 (Akpo field, Oyo field); 220,000 bpd of offshore production in 2010 (Bonga North, Bonga Ullage fields); 285,000 bpd of offshore production in 2011 (Bosi, Ukot, Usan fields); 250,000 pbd of offshore production in 2012 (Bonga SW, Nsiko fields); and 150,000 bpd of offshore production in 2013 (Egina field).

That’s 1.25 million barrels per day of new offshore production planned in the next 6 years. None of it was previously considered vulnerable to attack. Now it all appears to be within the demonstrated reach of MEND.

MEND: Potential for Innovation & Improved Capabilities

This most recent offshore attack also highlights significant development in MEND’s capabilities. Comments as early as 2006 noted that MEND’s offshore capabilities are continuously improving, and that facilities as far as 50-60 km offshore may be at risk. Bonga is twice that far offshore, at 120km.

I predicted a year ago that MEND would increasingly focus on Nigeria’s offshore facilities for two reasons: to differentiate their ideologically-grounded struggle from the privateers and criminal bunkering that is also interrupting Nigerian production; and as a result of the innovation that naturally results from their decentralized structure. While this most recent attack demonstrates MEND’s ability to operate in the deepwater environment, it also shows significant room for improvement. MEND’s press release stated that their goal was to gain access to and destroy the facility's main control room, but that they were unable to do so. Their failure, however, most likely provided MEND with the specifics of what capabilities, training, and equipment they will need to succeed in the future, suggesting that the improvements in capability demonstrated in this attack are part of a larger cycle of capability improvements (an OODA Loop).