(Reuters) – Iraq sees production from its southern oilfields reaching 2.75 million barrels per day (bpd) by the end of the year as the country, expected to be the world’s biggest source of new oil supplies over the next few years, pushes to increase output.

Iraq’s biggest field Rumaila, operated by BP, is currently producing 1.316 million bpd and is expected to boost output by 250,000 bpd in the second half of this year, Dhiya Jaffar, head of the state-run South Oil Co. said on Friday.

“We expect production from Basra oilfields will increase from 2.15 million barrels per day to 2.75 million barrels per day by the end of this year,” he told a news conference in the southern oil-rich city of Basra.

Iraq aims to double its output over the next three years as it recovers after years of sanctions and war. Last month, the country’s oil production rose above 3 million bpd for the first time in more than three decades.

Jaffar said output at West Qurna One, currently at 406,000 bpd, was seen increasing by 100,000 bpd in the next six months while Zubair oilfield, also in the south, was producing 254,000 bpd and expected to increase by 100,000 bpd by the end of 2012.

West Qurna One is run by Exxon Mobil and Italy’s ENI is in charge of Zubair field.

SECOND FLOATING PLATFORM

South Oil Company sources told Reuters on Thursday Iraq was ready to begin loading oil from the second new Single Point Mooring (SPM) floating platform in a bid to further boost exports.

Iraq’s oil exports rose to their highest level since 2003 in March thanks to the first new offshore export terminal, which began exporting at a capacity of 300,000 bpd last month.

A ship with a capacity of two million barrels had docked at the second SPM and loading oil onto it would be completed by around 12 p.m. (0900 GMT), Jaffar said.

“The export capacity of the 2nd floating platform is 900 thousand barrels, and the first floating platform is also 900, so the total will be 1.8 million barrels,” Jaffar said.

Iraq’s oil exports have been held back by a lack of loading capacity in the Gulf after decades of neglect of infrastructure due to war and economic sanctions, but it is expected to provide the world’s largest expansion in oil export capacity in 2012 as new outlets open.

Iraq has planned for four new SPM terminals which are being built by Australian construction firm Leighton and are expected to help it in doubling output in the next few years.

Original Article

Jan 19 (Reuters) – A Chinese-built drilling rig to be used in the first major exploration for oil in Cuba’s offshore waters arrived on Thursday off the coast of the communist-ruled island’s capital.

The rig, known as Scarabeo 9, could be seen as it sailed slowly westward, miles off the north coast and Havana’s famed Malecon seaside boulevard.

Its arrival went mostly unnoticed by people in the capital, but it was a long-awaited and landmark day for the island’s oil industry, which believes the platform will tap into rich oil fields in Cuba’s part of the Gulf of Mexico.

Starting next week, Spanish oil giant Repsol YPF, working in partnership with Norway’s Statoil and ONGC Videsh, a unit of India’s Oil and Natural Gas Corp, is expected to drill at least two wells in Cuban waters about 70 miles from the Florida Keys.

Malaysia’s Petronas, in partnership with Russia’s Gazprom Neft, will also drill a well using the Scarabeo 9. The rig has been contracted from its owner Saipem, a unit of Italian oil company Eni.

All the wells will be in water at least a mile deep, like that of the BP well that blew out and spilled millions of gallons of oil in the U.S. part of the Gulf of Mexico in 2010.

Cuba has said it may have 20 billion barrels of oil in its parts of the Gulf, but the U.S. Geological Survey has estimated about 5 billion.

Repsol drilled the only previous offshore well in Cuba in 2004 and said it found oil, but said it was not “commercial.”

It has been trying for several years to bring another rig for more drilling, a task that was complicated by the longstanding U.S. trade embargo against Cuba and the limits it places on the amount of U.S. technology that can be used.

The Scarabeo 9, a semi-submersible rig that floats on four giant pontoon legs and has living quarters for more than 200 crewmembers, was built in China, then sent to Singapore in late 2010 for completion.

The only part of the rig said to be American-made is the blowout preventer, the part that failed in the BP disaster.

Cuba is hoping oil will ease its chronic economic woes and bring energy independence. It currently receives 115,000 barrels a day from its oil-rich socialist ally Venezuela.

Cuban exile leaders in the United States fear that oil could help the communist government stay in power for years to come. They have filed several pieces of legislation trying to scuttle the offshore project.

Floridians have worried that Cuba could suffer a BP-style blowout that would send oil into the Straits of Florida and stain the coast and coral reefs of both the island and the U.S. state 90 miles to the north.

Drillers in Cuban waters could get within about 45 miles of Florida, more than twice as close as they can in U.S. waters, where no oil exploration is permitted with 125 miles of the Florida coast.

At Repsol’s invitation, a team from the U.S. Bureau of Safety and Environmental Enforcement and the U.S. Coast Guard inspected the Scarabeo 9 last month in Trinidad and Tobago and found it to “generally comply with existing international and U.S. standards.”

Original Article

Jan. 18 (Bloomberg) — Bulgarian lawmakers banned hydraulic fracturing and established a 100 million-lev ($65 million) fine for offenders, thwarting Chevron Corp.’s plans to explore for natural-gas deposits in the Balkan country.

Lawmakers voted 166-6 to prohibit the drilling technique known as fracking. That makes Bulgaria the second country in the European Union after France to ban the process, which uses a mixture of water, sand and chemicals to open fissures in shale rocks and release gas and oil.

The prohibition will “seriously impair” Bulgaria’s efforts to reduce its reliance on Russian gas, Ivan Kostov, the leader of the opposition Democrats for Strong Bulgaria, said in parliament. Bulgaria may hold 300 billion to 1 trillion cubic meters of shale gas, the Energy & Economy Ministry has estimated. The country consumes about 4 billion cubic meters of gas a year.

“Chevron is confident that a considered review of the issues of concern in Bulgaria, using reputable scientific information, will do much to allay the concerns of the Bulgarian people and demonstrate that exploration and development can be done while protecting people and the environment,” Kurt Glaubitz, a spokesman for the San Ramon, California-based company, said today in an e-mailed statement.

In the U.S., where fracking and new horizontal drilling practices enabled the nation to surpass Russia as the world’s biggest gas producer in 2010, fracking has drawn criticism from regulators and landowners concerned about potential water contamination.

License Withdrawn

Shale formations that were impervious to drilling a decade ago are fueling a renaissance in U.S. gas output that surged a record 7.4 percent in 2011, the Energy Department in Washington said in a Jan. 10 report. Chevron’s Glaubitz didn’t say what the company’s next step will be in Bulgaria.

Chevron’s Bulgarian exploration license was withdrawn yesterday after hundreds of protesters marched in central Sofia last week to oppose fracking, fearing it will pollute the water and soil in Bulgaria’s most fertile farm region of Dobrudja where Chevron was planning to drill.

Chevron, the world’s fourth-largest energy company by market value, won a tender in May to explore for gas in shale deposits in northeastern Bulgaria, pledging to pay the government 30 million euros ($38 million). The company estimated it could extract as much as 25 billion cubic meters of gas in the region, six times Bulgaria’s annual consumption.

‘No Other Interests’

“Chevron could provide millions in investments in Bulgaria and create jobs,” U.S. Ambassador to Bulgaria James Warlick said in an interview with Nova television in Sofia today. “Chevron has no other interests in Bulgaria besides shale gas and would be forced to leave the country if its opportunities are curbed.”

While fracking has made the U.S the world’s largest gas producer, it has also raised concerns that the technique pollutes drinking water and causes earthquakes. The ban halts the process of issuing permits to Texas-based Integrity Towers Inc. and Denver-based oil producer Direct Petroleum Exploration Inc., which were interested in shale-gas exploration in Bulgaria.

“The ban is for an indefinite period of time and is valid for the whole territory of the country, including the Black Sea territorial waters,” Valentin Nikolov, a lawmaker in the ruling Gerb party, said in parliament today.

France was the first country in the world to outlaw hydraulic fracturing of shale rocks last July. Last year exploration was suspended in the German state of North Rhine- Westphalia as well as in northwest England, where fracturing gas wells caused two tremors.

In eastern Europe, particularly Poland and the Ukraine, fracking has been hailed as a means to reduce the countries’ dependence on Russian gas imports.

Original Article

The unique structure of the US natural gas industry enabled development and rapid deployment of new shale gas technology, and the lack of that structure is complicating efforts of other countries to follow suit.

That’s according to Laszlo Varro, head of the Gas, Coal & Power Division at the International Energy Agency, speaking at the Center for Strategic & International Studies recently.

He pointed to shale exploration done by his own country, Hungary, with ExxonMobil. All drilling equipment had to be shipped in from Houston, he said. While Europeans are experienced in off-shore oil and gas production, as there is virtually no on-shore upstream capability.

Varro contrasted that with Texas, where the hydraulic fracturing and horizontal drilling technologies were married to tap shales, and land-based natural gas and oil drilling have been going on for a century. Texas producers could tap both skilled labor and a full supplier chain, he said.

Supply Side Capacity

Developing shale plays requires “intense” activity and expertise, and companies or countries undertaking it must build “supply side capacity,” Varro said.

Didier Houssin, IEA Director of Energy Markets & Security, said shale exploration in many countries is being undertaken by governments that see energy security advantages to finding domestic shale supplies. In the US, shale development was carried out on private land by private entrepreneurs who saw profit in the new resource.

However, if large fossil importers like China and Poland can develop domestic shale and displace liquefied natural gas and coal imports, it would shift world strategic balances, Houssin said.

Also shifting the balance would be entry of the US and Canada as “significant” LNG exporters, Houssin said. Right now, he noted, natural gas is “very cheap” in the US, more expensive in Europe, and most costly in Asian countries where it is imported as LNG at up to five times the US price.

For more on the potential of LNG exports from the US and the risks to consumers, read an analysis from AOL Energy here.

The Energy Information Administration this week lowered its 2012 average US domestic price forecast to $3.53/mmBtu, a drop of nearly 50 cents from a year ago, as shale wells continue to be highly productive. With prices so depressed, US shale producers are seeking permits for liquefaction facilities so they can export their surplus to more rewarding markets.

And, Houssin noted, fracking faces public resistance elsewhere over environmental fears. France has pre-emptively banned it.

Director of the CSIS Energy & National Security Program Frank Verrastro asked whether, if shale production were slowed by such concerns in the US, the country would swing back to more reliance on coal.

Varro said such a change could mean the oldest coal plants keep operating a bit longer, but the differential between gas and coal prices is now so large that gas prices have considerable room to rise before new coal plants would be economic.

The IEA is planning to report on the five-year global outlook for natural gas in June.

Original Article

* Saudi Arabia now pumping just under 10 mln bpd

* On paper should be able to reach 12.5 mln bpd

* Riyadh traditionally sets aside 1.5 mln bpd

DUBAI/RIYADH, Jan 10 (Reuters) – Top oil exporter Saudi Arabia is nearing its comfortable operational production limits and may struggle to do much to make up for shortages that arise from new sanctions imposed on Iran by the West, Gulf-based sources said.

The kingdom, now pumping just under record rates of 10 million barrels per day, has poured billions of dollars into its vast oil fields, which on paper should ensure it has the ability to ramp up to 12.5 million bpd.

Long-standing oil policy by Riyadh, the heavyweight in the Organization of the Petroleum Exporting Countries (OPEC), sets aside some 1.5 million bpd as protective spare capacity.

But industry sources said pumping anywhere near the declared production capacity might involve extracting heavy crudes the market might not want. It would also be difficult to sustain higher rates for lengthy periods.

“There is very little unused capacity in the Gulf,” said an oil official in the region. “Saudi Arabia could comfortably manage an extra 500,000 barrels a day or so and, if pushed, could go up to 11 million (barrels a day).”

A steady rate beyond 10 million bpd would offer immediate relief to world oil markets, but it would take the kingdom’s production to untested levels.

Saudi officials are confident, however, of achieving higher flows.

“Saudi Arabia can easily make 1 million to 1.5 million (barrels per day) available,” a Saudi source said about output beyond current volumes.

Since June of last year, Saudi Arabia and its Gulf allies Kuwait and the United Arab Emirates have been cranking oil out after failing to convince Iran and other OPEC members to agree a coordinated increase to cover the supply disruption from Libya’s civil war.

The trio has kept up the higher pace, despite the return of Libyan crude, to supply rising demand from Asia and in effort to bring oil prices below $100 a barrel to help nurture global economic growth. Increased deliveries have left Kuwait and the United Arab Emirates producing nearly flat out.

That will make it a stretch to fill a sizeable gap left by any punitive cuts in Iran’s oil exports of about 2.5 million bpd.

After spending huge amounts on fortifying their production, the Gulf countries are now reluctant to push output to the very brink and leave them bereft of a supply cushion.

CHINA LOOKING AROUND

The United States and its allies in Europe and elsewhere are trying to put pressure on Iran to curb its nuclear programme, worried that Tehran is attempting to develop its own atom bomb.

Iranian oil officials said shipments from the Islamic Republic are continuing as normal. There are, however, reports that some traditional buyers of Iranian crude, such as China, may be looking elsewhere. This may be part of a negotiating ploy over contract renewals.

The European Union has brought forward a ministerial meeting that is likely to match new U.S. measures to tighten the financial screws on Tehran. At stake are roughly 500,000 bpd of Iranian exports to EU members.

The U.S. has long embargoed Iranian crude, but the new sanctions target institutions that deal with Iran’s central bank.

Asia’s big consumers of Iran’s oil – Japan, China and India – are already taking precautions. Tokyo has asked Saudi Arabia and the UAE to help it to plug any gap.

And China’s Premier Wen Jiabao is set to visit Saudi, the UAE and Qatar amid signs that Beijing wants to expand its options as the U.S. ratchets up measures against Iran.

Despite the diplomatic efforts, there have been no hard requests from buyers.

“So far, there are no extra orders (from buyers) that would require Saudi to increase production,” a Gulf industry source told Reuters. He repeated Riyadh’s vow to meet any extra demand. (Additional reporting by Peg Mackey; Editing by Anthony Barker)

Original ARticle

Jan. 5 (Bloomberg) — The latest warning by Iran, that a U.S. aircraft carrier that recently transited through the Strait of Hormuz should not do so again, is a sign to the West that should be well-observed. It tells us the regime in Tehran is ready for a fight.

Tensions between Iran and the U.S. are so high, a conflagration could be tripped off without either country intending it. This latest spiral of hostility began after the U.S. and its European allies responded to the International Atomic Energy Agency’s report on Iran’s nuclear activities by imposing and threatening additional, tougher sanctions. New U.S. measures may drastically cut Iran’s oil revenue.

That, in turn, may threaten the Iranian regime’s hold on power. Predictably, then, the ruling clerics are responding with shows of strength to boost solidarity at home. And they can be counted on to accelerate Iran’s nuclear program, which they see as a deterrent to foreign intervention.

To escape this self-defeating outcome, the Western powers should imagine how the situation looks from Tehran.

In recent months, Iranian protesters have brazenly attacked the U.K. Embassy in Tehran. Iran has claimed to have downed a U.S. drone, put on 10-day war games simulating attacks on U.S. ships, and threatened to push oil prices to $250 a barrel and to close the Strait of Hormuz, through which about 20 percent of all oil trade passes.

Changed Stance

This defiance marks a change. Until recently, Iran had absorbed economic pressure from abroad. It had remained silent in the face of covert operations aimed at slowing the progress of its nuclear program, brushing off the destructive Stuxnet computer worm, apparently a joint U.S.-Israeli project. But the government has been embarrassed and unnerved by multiple assassinations of its scientists and by suspicious explosions at its military facilities. One blast killed the general charged with developing Iran’s missile program. The attacks have shaken the country’s security forces.

The ruling clerics are also worried about the impact of economic sanctions, which have greatly reduced Iran’s access to global financial markets, created shortages of imported items, and increased inflation and unemployment. The rial has fallen to its lowest point against the dollar, and capital is fleeing the country at an alarming rate. The government has been forced to scrap numerous infrastructure projects, especially in the oil- and-gas sector.

These hardships have caused popular discontent. The next set of sanctions may bring street protests. Iran’s rulers fear a repeat of the demonstrations of 2009. They now see the U.S. policy on Iran — of toughening sanctions and also, at the United Nations, addressing Iran’s human-rights record and support for terrorism — as one aimed at regime change.

That makes attaining nuclear weapons of critical importance to the clerics. Without such weapons, Iran could face the Libya scenario: economic pressure causing political unrest that invites intervention by foreign powers that feel safe enough to interfere in the affairs of a non-nuclear-armed state. The more sanctions threaten Iran’s internal stability, the more likely the ruling regime will be to pursue nuclear deterrence and to confront the West to win the time Iran needs to reach that goal.

It wasn’t preordained that Iran would opt for battle. For much of the past year, its leaders have debated how best to deal with Western pressure. The alleged plot to assassinate the Saudi ambassador in Washington, which U.S. officials uncovered in October and blamed on Iran, suggests a faction has been making the case for direct confrontation with the West. But President Mahmoud Ahmadinejad had hoped the September release of two Americans, hikers arrested by Iranian authorities and charged as spies, would shield Iran from further pressure and even create a diplomatic opening with the U.S. on the eve of his trip to the UN. Instead, Ahmadinejad went home empty-handed.

‘Serious Concerns’ Articulated

Subsequent events seem to have settled the policy debate in Tehran. They included the accusations by the U.S. in the Washington plot; a UN report critical of Iran’s record on human rights; the IAEA report articulating “serious concerns” about a possible Iranian nuclear-weapons program; and the ensuing fresh sanctions.

By a remarkable unanimous vote, the U.S. Senate passed a bill imposing sanctions on foreign financial institutions engaged in oil-related transactions with Iran’s central bank, which would greatly hinder that country’s ability to sell its oil. Reluctant to go that far, President Barack Obama opposed the bill and instead signed a slightly amended measure that gave the U.S. administration six months to enforce the sanctions if it judges they could cause oil prices to soar. Iran has interpreted sanctions that hurt its oil exports, which account for about half of government revenue, as acts of war. If there are new, mysterious attacks on Iranian scientists or military facilities, the climate for conflict will be that much hotter.

Obama administration officials think Iran is weak and isolated. They focus on the country’s shambolic economy, its faltering relations with Europe, and the effect the Arab Spring has had in turning public opinion in the Middle East against Iran.

But Iran’s rulers have a different outlook. Here’s what they see: The U.S. and Europe are economically weak and extremely vulnerable to high oil prices. China and Russia have broken with the U.S. and Europe over Iran. The U.S. is hastily leaving Iraq and abandoning the war in Afghanistan. U.S. relations with Pakistan are unraveling.

Iran’s rulers believe the new Middle East is a greater strategic challenge to the U.S. than to Iran. For the U.S., the region will be far less pliable under rising Islamists than it was under secular dictators. As those Islamists take control of governments from Morocco to Egypt, new opportunities arise for Tehran to forge diplomatic and economic ties.

Consequently, the Iranian regime thinks it can counter international pressure on its nuclear activities long enough to get to a point of no return on a weapons program.

Rather than discourage this aggressive Iranian position, U.S. policy is encouraging it, making a dangerous military confrontation more likely. There are no easy options for dealing with Iran, but not persisting in a failing strategy is a good place to start.

Original Article

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Written by Bob Adelmann

Thursday, 03 November 2011 16:40

The September 15 report from the National Petroleum Council expressed surprise at how much has changed just since their “Hard Truths” report of 2007 that domestic energy development was falling behind escalating demand.

The “Hard Truths” report stated that although “the world is not running out of energy resources … there are accumulating risks to continuing expansion of oil and natural gas production … [which] create significant challenges to meeting projected total energy demand.” As a result, the concept of “Energy Independence” is “not realistic in the foreseeable future” and therefore “the United States must moderate the growing demand for energy.”

In NPC’s letter to Secretary of Energy Steven Chu introducing the latest study, chairman James Hackett said

Extraordinary events have affected energy markets in the years since the NPC reported on the “Hard Truths” about energy in 2007. That study concluded that the world would need increased energy efficiency and all economic forms of energy supply.

This is still true today, but since then, significant technology advances have unlocked abundant natural gas and oil resources. These greatly expanded resources have already benefited our country economically. Increased supplies of natural gas have resulted in lower prices and helped revitalize many U.S. industries.

The study announced several conclusions:

First, the potential supply of North American natural gas is far bigger than previously thought. It is now understood that the natural gas resource base is enormous and that its development … is potentially transformative for the American economy….

Second — and surprising to many — North America’s oil resources are also much larger than previously thought. These oil resources offer substantial supply for decades and could help the United States reduce, though not eliminate, its reliance on imported oil.

As noted by Clay Bretches of Anadarko Petroleum, a contributor to the NPC report, “It’s amazing how far we have come in just four short years. And we’re just seeing the beginning of it.”

These conclusions are rocking the establishment’s reliance on such now-disproven myths as “peak oil” and the necessity to “go green” in order to reduce reliance on liquid hydrocarbons. “Peak Oil” is the point when, according to Wikipedia, “the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline.” This theory was developed by geologist M. King Hubbert in 1956 to predict that production of oil in the US would peak between 1965 and 1970, with negative repercussions resulting: the price of oil would skyrocket, driving the economies of the world into depression, major changes would be needed in the transportation habits of American citizens, and so on. At the introduction to this topic, Wikipedia noted: “This article is outdated. Please update this article to reflect recent events or newly available information.”

As Ed Crooke noted in the Financial Times, “For three decades, it seemed [Hubbert] was right. Production peaked in 1971 and fell relentlessly for more than 30 years.” But then the convergence of opportunity and technology just after the publication of “Hard Truths” in 2007 took form as exploration and development of the Bakken Formation in North Dakota, and the oil sands near Alberta, Canada, began and the discovery of the “pre-salt” oil resources off the coast of Brazil happened.

These were in addition to the Eagle Ford shale and Permian basin in Texas, and the Utica shale in Ohio and Pennsylvania. As noted in the Financial Times, Canada could double its production from the Alberta oil sands in the near future, having already overtaken Saudi Arabia as the largest exporter of oil to the United States. So vast are the newly discovered reserves and so powerful are the new technologies in discovering and exploiting them that some are estimating total energy independence for North America by 2035.

This has the potential of upsetting the OPEC cartel which currently holds 79 percent of the world’s crude oil reserves and 44 percent of the world’s crude oil production. By shifting the “oil map” to the western hemisphere, OPEC would find its influence over oil prices waning substantially. The increasing domestic production of oil and other liquid hydrocarbons is already reducing the United States’ oil imports. Based on data supplied by the Energy Information Agency, Professor Mark Perry has created a graph that illustrates the point precisely.

The surprise resurgence of domestic energy production has made nonsense of the predictions made by politicians of imminent danger of running out of oil. In President George Bush’s State of the Union speech in 2006, he said,

We have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. [We need] to change how we power our homes and offices…. We must also change how we power our automobiles…. [We need] to replace more than 75 percent of our oil imports from the Middle East by 2025 … [and] move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.

Perhaps the biggest benefit of this convergence of technology with opportunity has little to do with where the energy comes from to drive the American economy but more with the perception of America’s role in the future. Edward Morse, head of commodities research at Citigroup, believes that it will be possible for the United States to cut its imports further in the coming years, from about 10 million barrels a day currently to less than 3 million by the early 2020s. He stated, “The two vulnerabilities of the US as a global superpower have been dependence upon imported oil and its current account deficit. Now it may be in the process of resolving both of those.”

The notion that the US was a superpower in the 20th century but won’t be in the 21st doesn’t hold up so well now. Compare it to a country such as China, which is going to be overwhelmingly dependent on energy imports. The US is in a much stronger position.

The lesson is that the power of the market to respond to the needs of customers and consumers continues to overwhelm the hubris of politicians seeking to redirect the economy to serve their own statist ends.

Original Article

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By THOMAS L. FRIEDMAN

What’s unfolding in the Arab world today is the mother of all wake-up calls. And what the voice on the other end of the line is telling us is clear as a bell:

“America, you have built your house at the foot of a volcano. That volcano is now spewing lava from different cracks and is rumbling like it’s going to blow. Move your house!” In this case, “move your house” means “end your addiction to oil.”

No one is rooting harder for the democracy movements in the Arab world to succeed than I am. But even if things go well, this will be a long and rocky road. The smart thing for us to do right now is to impose a $1-a-gallon gasoline tax, to be phased in at 5 cents a month beginning in 2012, with all the money going to pay down the deficit. Legislating a higher energy price today that takes effect in the future, notes the Princeton economist Alan Blinder, would trigger a shift in buying and investment well before the tax kicks in. With one little gasoline tax, we can make ourselves more economically and strategically secure, help sell more Chevy Volts and free ourselves to openly push for democratic values in the Middle East without worrying anymore that it will harm our oil interests. Yes, it will mean higher gas prices, but prices are going up anyway, folks. Let’s capture some it for ourselves.

It is about time. For the last 50 years, America (and Europe and Asia) have treated the Middle East as if it were just a collection of big gas stations: Saudi station, Iran station, Kuwait station, Bahrain station, Egypt station, Libya station, Iraq station, United Arab Emirates station, etc. Our message to the region has been very consistent: “Guys (it was only guys we spoke with), here’s the deal. Keep your pumps open, your oil prices low, don’t bother the Israelis too much and, as far as we’re concerned, you can do whatever you want out back. You can deprive your people of whatever civil rights you like. You can engage in however much corruption you like. You can preach whatever intolerance from your mosques that you like. You can print whatever conspiracy theories about us in your newspapers that you like. You can keep your women as illiterate as you like. You can create whatever vast welfare-state economies, without any innovative capacity, that you like. You can undereducate your youth as much as you like. Just keep your pumps open, your oil prices low, don’t hassle the Jews too much — and you can do whatever you want out back.”

It was that attitude that enabled the Arab world to be insulated from history for the last 50 years — to be ruled for decades by the same kings and dictators. Well, history is back. The combination of rising food prices, huge bulges of unemployed youth and social networks that are enabling those youths to organize against their leaders is breaking down all the barriers of fear that kept these kleptocracies in power.

But fasten your seat belts. This is not going to be a joy ride because the lid is being blown off an entire region with frail institutions, scant civil society and virtually no democratic traditions or culture of innovation. The United Nations’ Arab Human Development Report 2002 warned us about all of this, but the Arab League made sure that that report was ignored in the Arab world and the West turned a blind eye. But that report — compiled by a group of Arab intellectuals led by Nader Fergany, an Egyptian statistician — was prophetic. It merits re-reading today to appreciate just how hard this democratic transition will be.

The report stated that the Arab world is suffering from three huge deficits — a deficit of education, a deficit of freedom and a deficit of women’s empowerment. A summary of the report in Middle East Quarterly in the Fall of 2002 detailed the key evidence: the gross domestic product of the entire Arab world combined was less than that of Spain. Per capita expenditure on education in Arab countries dropped from 20 percent of that in industrialized countries in 1980 to 10 percent in the mid-1990s. In terms of the number of scientific papers per unit of population, the average output of the Arab world per million inhabitants was roughly 2 percent of that of an industrialized country.

When the report was compiled, the Arab world translated about 330 books annually, one-fifth of the number that Greece did. Out of seven world regions, the Arab countries had the lowest freedom score in the late 1990s in the rankings of Freedom House. At the dawn of the 21st century, the Arab world had more than 60 million illiterate adults, the majority of whom were women. Yemen could be the first country in the world to run out of water within 10 years.

This is the vaunted “stability” all these dictators provided — the stability of societies frozen in time.

Seeing the Arab democracy movements in Egypt and elsewhere succeed in modernizing their countries would be hugely beneficial to them and to the world. We must do whatever we can to help. But no one should have any illusions about how difficult and convulsive the Arabs’ return to history is going to be. Let’s root for it, without being in the middle of it.

Original Article