Opinion: Policing Rogue Allies in the Middle East
By Victoria Toensing
The grotesque murder by torture of Jamal Khashoggi by Saudi Arabian government operatives is the latest example of a U.S. ally in the Middle East resorting to lawlessness. For foreign policy reasons, the United States has long ignored human rights abuses by its allies. President Trump has smartly changed course by applying targeted punitive measures when American interests are negatively affected.
When Turkish authorities jailed American Pastor Andrew Brunson on fabricated charges of plotting against President Recep Tayyip Erdogan, Trump invoked the Global Magnitsky Act, which authorizes him to impose financial sanctions and visa bans on foreign individuals and entities responsible for human rights violations or significant corruption.
The president not only imposed financial sanctions against two Turkish officials responsible for Brunson’s detention but also doubled tariffs on Turkish aluminum and steel, a devastating blow to the country’s already crippled economy. Within a few months, Brunson was miraculously released by a Turkish court, citing his punishment fulfilled by “time served.”
For sure, certain countries continue to flaunt their transgressions. Increasingly, regimes are acting boldly, even crossing international borders to quash political adversaries. In the last year, Iran attempted to assassinate opposition activists in Denmark and France. China sent death threats to 20 activists and journalists living in countries as far afield as the United States, Australia and Canada. North Korea assassinated Kim Jong Un’s half-brother in a Malaysian airport, and Russia launched multiple death-by-poison attempts in the United Kingdom. These countries receive little or no financial assistance from the United States nor do they depend on America for security, providing slight incentive to give up their lawless conduct.
Gulf states such as Saudi Arabia are a different animal. U.S. military protection and access to the U.S. financial system are crucial to the kingdom’s existence. After Khashoggi was murdered in the Saudi Consulate in Turkey, Trump imposed Magnitsky sanctions against 17 Saudis who the kingdom claimed were involved. Although critics wanted him to do more, even penalize the crown prince, the president’s decision was savvy. He punished individuals while not harming American interests. Just as financial sanctions grabbed Turkey’s attention, the Saudis have gotten the message. Humanitarian violations will no longer be ignored.
Turkey and Saudi Arabia are not the only Middle East allies inflicting contrived punitive measures on U.S. interests. Kuwait’s officials and banks also profit handsomely from their engagement with the U.S. financial system and thus are acutely vulnerable to Magnitsky sanctions. Yet, the Kuwaiti government sentenced Marsha Lazareva, a prominent business executive and mother of a 5-year-old U.S. citizen, to 10 years’ hard labor and a $72 million fine based on false charges of fraud. During the so-called trial, the court found her guilty without allowing her to present one iota of evidence, not a witness or a document.
Moreover, another U.S. ally and global financial center, the United Arab Emirates (which recently imprisoned a British academic for life for “spying” after a five-minute trial), appears complicit in the Kuwaiti plot. After a real estate sale by a private equity fund that she started, Lazareva wired $496 million in proceeds to Dubai’s state-run bank. Dubai immediately froze those funds, and continues to hold them at the request of Kuwait’s attorney general.
In the meantime, Kuwait is contriving additional charges against Lazareva as a pretext to seize all her money and stiff the fund’s international investors and stakeholders, including Americans and Brits. Falsely imprisoning the mother of a 5-year-old U.S. citizen, a human rights violation, and stealing a half billion dollars, an act fraught with corruption, fulfill both bases for applying Magnitsky sanctions.
During World War II, Winston Churchill said of Joseph Stalin, “I’d form an alliance with the devil himself if it helped defeat Hitler.” But these Middle Eastern countries are not the devil. The U.S. considers and treats them as allies.
Under Magnitsky, the United States can leverage access to the U.S. financial system and ban bad actors from its shores. Using targeted sanctions when there is abusive conduct can deter “allies” from pursuing brazen authoritarian operations against American interests while allowing the United States to continue the necessary relationships with those countries.
ABOUT THE WRITER
Victoria Toensing is a founding partner in the Washington law firm diGenova & Toensing LLP. She wrote this for InsideSources.com.
The Trump administration is scrapping a collaborative sage grouse protection plan to expand oil and gas drilling
December 10, 2018
Cecil D. Andrus Endowed Chair for Environment and Public Lands and University Distinguished Professor, Boise State University
John Freemuth receives funding from USGS and BLM.
Boise State University provides funding as a member of The Conversation US.
The Trump administration has released plans to open up nine million acres of sage grouse habitat in six western states to oil and gas drilling. This initiative dramatically cuts back an elaborate plan developed under the Obama administration to steer energy development away from sage grouse habitat. Predictably, environmentalists oppose it and the energy industry supports it.
Controversies over protecting sage grouse are part of a continuing struggle over management of Western public lands. Like its Republican predecessors, the Trump administration is prioritizing use of public lands and resources over conservation. The question is whether its revisions will protect sage grouse and their habitat effectively enough to keep the birds off the endangered species list – the outcome that the Obama plan was designed to achieve.
By popping their brightly colored air sacs, male sage grouse create a sound that can carry 3 kilometers to attract females to their display ground.
Sage grouse under siege
The greater sage grouse (Centrocercus urophasianus), which is known for its dramatic mating displays, is found from the Rocky Mountains on the east to the Sierra and Cascade mountain ranges on the west. Before European settlement, sage grouse numbered up to 16 million. Today their population has shrunk to an estimated 200,000 to 500,000. The main cause is habitat loss due to road construction, development and oil and gas leasing.
More frequent wildland fires are also a factor. After wildfires, invasive species like cheatgrass are first to appear and replace the sagebrush that grouse rely on for food and cover. Climate change and drought also contribute to increased fire regimes, and the cycle repeats itself.
Concern over the sage grouse’s decline spurred five petitions to list it for protection under the Endangered Species Act between 1999 and 2005. Listing a species requires federal agencies to ensure that any actions they fund, authorize or carry out – such as awarding mining leases or drilling permits – will not threaten the species or its critical habitat.
In 2005 the U.S. Fish and Wildlife Service declared that listing the sage grouse was “not warranted.” These decisions are supposed to be based on science, but leaks revealed that an agency synthesis of sage grouse research had been edited by a political appointee who deleted scientific references without discussion. In a section that discussed whether grouse could access the types of sagebrush they prefer to feed on in winter, the appointee asserted, “I believe that is an overstatement, as they will eat other stuff if it’s available.”
In 2010 the agency ruled that the sage grouse was at risk of extinction, but declined to list it at that time, although Interior Secretary Ken Salazar pledged to take steps to restore sagebrush habitat. In a court settlement, the agency agreed to issue a listing decision by September 30, 2015.
Negotiating a rescue plan
The Obama administration launched a concerted effort in 2011 to develop enough actions and plans at the federal and state level to avoid listing the sage grouse. California, Colorado, Idaho, Montana, Nevada and Wyoming all developed plans for conserving sage grouse and their habitat. The U.S. Forest Service and Bureau of Land Management revised 98 land use plans in 10 states. And the U.S. Department of Agriculture provided funding for voluntary conservation actions on private lands.
In 2015 Interior Secretary Sally Jewell announced that these actions had reduced threats to sage grouse habitat so effectively that a listing was no longer necessary. A bipartisan group of Western governors joined Jewell for the event. But despite the good feelings, some important value conflicts remained unresolved.
Notably, the plan created zones called Sagebrush Focal Areas – spaces deemed essential for the sage grouse to survive – and proposed to bar mineral development on ten million acres within those areas. Some Western governors were surprised by this provision and felt that officials in Washington, D.C. had dropped it on the states without consultation.
The Interior Department has decided not to create Sagebrush Focal Areas, and will allow mining and energy development in these zones to expand. Agency records show that as officials reevaluated the sage grouse plan in 2017, they worked closely with oil, gas and mining industry representatives, but not with environmental advocates.
A more collaborative approach
Many government officials and Westerners would like to find ways to manage public lands and resources that avoid high-level political decisions followed by endless litigation. Over the past decade, a more collaborative model has been evolving in fits and starts.
In addition to the Obama administration’s sage grouse negotiations, recent examples include a Western Working Lands Forum organized by the Western Governors’ Association in March 2018, and forest collaborations in Idaho that include diverse members and work to balance timber production, jobs and ecological restoration in national forests. At times the West has seemed to be lurching towards some form of collaborative land discussions, where states and similar entities are given more equal standing than simply being classified as “stakeholders,” a term that I know rankles many among them.
For such initiatives to succeed, they must give elected officials and high-level administrative appointees some cover to support locally and regionally crafted solutions. They also have to prevent federal officials from overruling outcomes with which they disagree.
When the U.S. Fish and Wildlife Service announced in 2015 that listing the sage grouse was not warranted, the agency committed to revisit the bird’s status in 2010. To assess how expanded energy production affects sage grouse, federal agencies will need to conduct rigorous monitoring in the affected areas. But the Trump administration has deemphasized use of science to inform decision making, so it is not clear whether such monitoring will take place, or whether federal decision makers will heed its findings.
Under the Trump administration’s plan, states are to take the lead in finding ways to mitigate impacts of energy development on sage grouse. Perhaps the governors of the six affected states – three Republicans and three Democrats – can find more collaborative ways to balance sage grouse protection against resource use.
Editor’s note: This is an updated version of an article originally published on May 31, 2018.
Saudi Arabia is allying with Russia to shore up oil prices as OPEC’s power wanes
December 7, 2018
Postdoctoral Fellow, Center for Presidential History, Southern Methodist University
Gregory Brew writes for Oilprice.com, where he analyzes energy and geopolitics.
The Organization of the Petroleum Exporting Countries likes to look united.
That’s evident when OPEC leaders meet in Vienna at the end of each year to decide how much oil its members will aim to produce the next year. There is always a show of togetherness and the appearance of the quasi-cartel’s ability to move markets.
But the truth is, OPEC is in the midst of a major crisis made more evident by Qatar’s announcement that it would be leaving OPEC, partly to protest Saudi dominance over the group.
My research has taken me through the history of oil, particularly the relationship between oil revenues, economic development and the geopolitical balance of power in the 1960s and 1970s. I believe that rather than the arbiter of global energy, OPEC has often been held back by division, disagreement and divergent interests.
This weakness helps explain why OPEC has struggled to move markets in effective ways since the 2014 collapse of oil prices. The latest production cuts, which were bigger than expected but followed considerable acrimony, are further proof that OPEC’s disunity remains intact.
Early days: Divided and powerless
OPEC was formed from frustration. In the 1950s, the world was awash in oil as small nations in the Middle East and Latin America discovered enormous deposits.
To gain access to those deposits, the major oil companies, known as the “Seven Sisters,” signed concessionary agreements with local governments. This arrangement gave the companies control over the oil – they set production levels and prices – while governments simply collected a check.
In February 1959, amid an oil glut, the Seven Sisters decided that a price correction was necessary. Acting unilaterally, they cut the price of oil, from US$2.08 to $1.80 by August 1960.
That may sound odd today, but back then oil prices didn’t always follow market forces and were typically set by the companies.
The cuts meant a significant loss of revenue for the oil-producing states. In protest, the oil ministers of Iraq, Iran, Venezuela, Saudi Arabia and Kuwait met in Baghdad that September and formed OPEC to achieve a more equitable arrangement with the Seven Sisters. Algeria, Qatar, Indonesia and Libya joined later.
But the big oil exporters like Iran and Saudi Arabia could do little to coerce the companies. Oil was abundant, and the companies could successfully exclude any country from the market, as they did with Iran in 1951. OPEC did not possess enough market share or unity to pressure the companies into surrendering control over price.
A new balance of power
OPEC couldn’t agree on a consistent policy among its members. Saudi Arabia wanted to keep production levels low and prices consistent. Iran wanted prices pushed as high as possible in order to maximize revenue.
According to Ian Skeet, a scholar and an oil consultant, the shah of Iran sought a separate agreement that sabotaged an attempt to extract more favorable terms from the Seven Sisters in 1963.
During the 1960s, OPEC failed to form a united front.
Nevertheless, things were changing. Demand for oil shot up and U.S. production stagnated. The Seven Sisters’ power was undermined by international competitors drilling new fields in North Africa, where Libya’s Muammar Qaddafi threatened to shut off supply if he didn’t get higher prices. Oil giants faced more pressure to deliver better terms to producing governments.
These conditions, while not the result of OPEC’s actions, gave it an opportunity to upset the balance of power.
Embargo, revolution and crisis
This shift accelerated in the 1970s as war broke out between Israel and its Arab neighbors in October 1973.
To punish the U.S. for supporting the Jewish state, Arab oil producers (not all OPEC members, as popularly believed) cut production and declared an embargo against the United States.
OPEC also demanded a higher oil price. After rejecting a small gesture from the Seven Sisters, OPEC announced it would double the price to $5 – then hiked it again to $11.65.
How did the balance of power seem to shift so suddenly? Among other reasons, oil companies could not agree among themselves on a new oil price and they were tempted by the big profits that would result. OPEC seized control of the market largely due to circumstances beyond its control.
Despite its victory, OPEC had come no closer to resolving its internal divisions. This became evident when the next energy crisis hit, in 1979, when Iran’s revolution broke out.
Global oil markets panicked. Iranian production fell. And other OPEC members sold their own oil at costly premiums, sending the price even higher.
Saudi Arabia tried to impose a quota system. Most members ignored their quotas or overproduced.
Meanwhile, oil-importing countries like the U.S. and the U.K. sought improve fuel efficiency and invested in domestic oil production in places like Alaska the North Sea. By 1985, OPEC’s share of the global market had fallen below 30 percent.
By 1986, Saudi Arabia had had enough. Without warning, its production shot up by more than 2 million barrels per day, flooding the market and pushing the average price down to $18 per barrel, about $39 today, according to oil company records.
This move indicated Saudi willingness to use its massive reserves to “correct” the market and push out high-cost producers, even at the cost of its OPEC allies.
Russia’s new role
As OPEC’s fortunes have oscillated with increasing volatility since the 1986 shock, cooperation has remained elusive.
In 2014, oil prices began to decline, due to increasing U.S. production. To squeeze out American drillers, Saudi Arabia pumped more oil, sending prices to historic inflation-adjusted lows in early 2016.
But the move backfired: U.S. producers held on, while OPEC members like Venezuela endured enormous economic pain.
To gain leverage, Saudi Arabia has partnered with Russia, a major oil exporter that doesn’t belong to OPEC, forming what some analysts have called OPEC+. The two countries now coordinate their production cuts to stabilize prices.
OPEC+ minus one
Not all OPEC members are happy about this arrangement, including Qatar, a small Persian Gulf state. It has been at odds with Saudi Arabia since 2017. In December 2018, Qatar announced it would be leaving OPEC to concentrate on liquefied natural gas exports.
Meanwhile, President Donald Trump was imploring OPEC to pump more oil rather than less of it, to keep gasoline prices low.
When OPEC+ met in Vienna it didn’t buckle. But the deal it reached followed considerable disagreement, which laid bare divisions within the group over how much oil output it should cut. In the end, Russia and Saudi Arabia agreed to do most of the cutting required to slash oil production by 1.2 million barrels per day. And Iran did not pledge any cuts at all.
The overall cut was bigger than expected. But Iran’s defiance, Qatar’s departure and the fight over cuts underscores what has been true from the very beginning: OPEC projects unity, but behind the scenes the group struggles with division, disunity and differing interests.
Portions of this article appeared in a related article first published on June 2, 2016.
Chris Saunders: Thanks for this fascinating history of OPEC. And now Iran is intending to accept rupees for its oil traded to India. This may cause a few sparks.
Christopher Anderson, logged in via Google: THE BIG GORILLA in the room is the United States. We have rendered OPEC almost powerless. Oil can reach a low of $44.13 before our fracking industry makes Zero profit. Saudi and most of OPEC needs ~$51.25. so America can undercut the price. IRAN and Venezuela are dragging oil. Now if they were operating at full capacity, gasoline prices would fall 68 cents. Currently in San Antonio, TX Gasoline is under $2.00 a gallon. some stations are at $1.78.