Petrodollar/OPEC end times

DIE HARD III / Herman Tiu Laurel / May 26, 2014 / Daily Tribune


Last week Russia’s President Vladimir Putin signed the “Holy Grail” deal with China’s President Xi Jing Ping, to supply Siberian natural gas to China for the next 30 years. The deal is worth $400 billion.

Part of the deal is a pre-payment from China of up to $50 billion for Russia to construct the direct pipeline to China. But that is not all. The two countries are constructing the $60 billion Pacific Ocean Oil Pipeline from Russia’s Skovorodino to China’s Mohe to delivery for 25 years $270 billion of 360.3 million tons of crude for the Chinese National Petroleum Corp. Russia is accepting Chinese Yuan for all these while China will in turn accept Roubles for what Russia will import in return. The next move, as one apt headline put it: “Russia Prepares Mega-Deal with India after locking up China with ‘Holy Grail’ Gas Deal.”

India as of May 1, 2014, according to the World Bank, overtook Japan as the third largest economy in the World in purchasing power parity terms. Talks of construction of a $30 billion Russia to India, through Northeast China, oil pipeline project are expected to conclude by mid-2014, says India’s Oil and Natural Gas Corp. The trade will be done in the national currencies. China supports the pipeline project while India has expressed interest in joining the Shanghai Cooperation Organization which includes Russia and the Central Asian states.

As the 21st Century turns, the World is turning from the West to East in a momentous shift marked by the “pivot” of oil, gas and energy supply away from the Organization of Petroleum Exporting Countries (OPEC) and the Petrodollar. OPEC, organized in 1960, was controlled by Western big oil behind the five founding members Saudi Arabia, Iran, Iraq, Venezuela and Kuwait.

In 1971 as the US dollar collapsed on the weight of its Vietnam War debts, US State Secretary Henry Kissinger arranged with the largest oil producer, Saudi Arabia to accept only US dollar for its oil in exchange for security guarantees. This gave birth to the Petrodollar and subjected the oil-dependent World to its tender mercies.

The Petrodollar was the US Big Stick to compel countries to bend to US whims, like the Philippines, which hocked everything it had to get US dollars to buy oil and energy indispensible for economic sustainability and growth. The US manipulated the supply of the Petrodollar and caused currencies of other nations to rise and fall , like the devaluations of the Philippine peso from two-to-one in the early 50s up to over 50-to-1 at its nadir during the Asian Financial Crisis of 1998 and during the destabilization of Presidents Marcos 1983 to 1986 and Estrada in 2000 to 2001. The Petrodollar was the power then, but today even Saudi Arabia is striking direct deals with China, et al. OPEC and the Petrodollar are dying.

Ironically, OPEC and the US Petrodollar’s end were ushered in by the US itself. Hubris overtook the US after the Soviet Union collapsed in 1991. For nearly 25 years of US and Nato push that now threatens Russia at its borders with Ukraine, the US has treated Russia as a second class nation, insulting it with promises unkept, like the pledge not to expand Nato and such projects as the US-Nato missile defense system surrounding Russia claiming it is to defend itself against Iranian missiles (which can’t even cross Turkey). Now, Russia responds and shakes the foundation of US power over the World — the erosion and demise of the Petrodollar.

Where does the Philippines stand in the face of the radically shifting global oil, gas and energy supply scenario for the coming years? Under BS Aquino and the current ruling class (the Yellows) beholden to the Royal Dutch Shell, Saudi-Aramco/Chevron Texaco (and fronts) energy-finance enslavement to high-oil and energy prices of the Western energy transnationals and vassalage to their geopolitical foibles reign. Low cost energy from Russia, Iran and Venezuela awaits, but there will be no action. Vietnam, RP’s new ally on the China Sea issues, is into joint exploration and development of oil resources in the China Sea with Russia and India in its energy development projects.


The World is celebrating the end of times of the Petrodollar and the OPEC, and the Philippines should be celebrating with it and starting steps to join the emerging new world order led by the leading countries of BRICS (Brazil, Russia, India, China and South Africa) — but Philippines is being left behind, to the Filipino people’s great present and future loss. Let’s ensure the Filipino people are enlightened about these changes in the World and prepare a leadership to take the new direction in 2016.


(Tune to 1098AM, Tues. to Fri. 5 p.m. to 6 p.m. “Sulo,” watch GNN TNT with HTL on Destiny Cable channel 8 and Skycable channel 213 Sat. 8 p.m. and Sun. 8 a.m., www.gnntv.asia.com or YouTube “Talk News TV (and date)” — this week “The Promise of BRICS’ New World Order ” with Hiro Vaswani, Richard Javad Jaydarian and Dr. Benito Lim; visit www.thenewkatipunero.blogspot.com)

Raging currents

DIE HARD III / Herman Tiu Laurel / May 21, 2014 / Daily Tribune


Russian President Vladimir Putin will be in China May 20 for a historic meeting with President Xi JingPing, Russia’s own “Asia Pivot,” a positive and more tangible one historically than the US whimper in Obama’s visit last month. Russia and China will sign the “Holy Grail” Russian gas supply to China of 32/bcm (billion cubic meter) per year for 30 years, equivalent to 30 percent of Russia’s supply to Europe per annum. US and Nato threats of boycotting Russian energy supply can only elicit laughs now. The deal will be made in Rouble and Yuan, shunning the use of the US dollar. Beyond this, Russia will similarly deal with India and other nations of the East.

The icing for China is a go-signal from Putin for the sale of S-400 anti-aircraft system to China. The S-400 can detect and track 37 targets simultaneously 600-km distance and hit targets 400 kms away. The deals will be a major wallop to US power and prestige over the world’s geopolitical situation, another tectonic tremor toward the collapse of the violent Pax Americana’s reign across the globe, and the dawn of multi-polar global harmony. It is in this light that Asia must see the tempests in areas of the China Sea currently roiling waters between China and Vietnam, and to a lesser degree with the Philippines.

China reckons its claim where it sent its oil rig in the Xisha islands where it has historical claims. Vietnam reckons it from its nearest shore where its EEZ, or Exclusive Economic Zone emanates. Both are valid and that’s the problem. Despite the violent civilian Vietnamese actions causing two Chinese deaths, three thousand evacuees, another thousand fleeing via Cambodian border exits and a continuing stand-off around the oil rig, the window for dialog is not closed. Hard bargaining lies ahead and both countries are tough players. China is moving troops to Vietnam’s border and the latter will not budge from the disputed oil rig area.

Vietnam arrested 1,400 violent protesters and Vietnam News reports “China, Viet Nam FMs hold phone talks on E. Sea issue.” The US scores points rapping China and dishing disinformation, like New York Times reporting 21 Chinese killed. Philip Bowring in South China Morning Post misleadingly writes “… it (China) has now succeeded in shifting Indonesia from a position of trying to act as a moderator …to opponent.” But the Jakarta Globe on May 15 reported that Indonesia’s Foreign Minister Marty Natalegawa had been communicating with both the Chinese and Vietnamese and added that Indonesia would continue with efforts to mediate the conflict.

The report cites Indonesian foreign affairs expert Teuku Rezasyah calling on Indonesia to mediate the conflict and warning “… the US may get involved because it has a base in Darwin (Australia)… We cannot rely on Malaysia or the Philippines to mediate because they have their own interests in the South China Sea, and so does America (with its opposition to China)… I hope Indonesia can get involved with shuttle diplomacy. As a senior member of the Association of Southeast Asian Nations, Indonesia can talk face-to-face with China.”

While the US takes advantage of tensions, it hankers for Chinese investments. New York Post’s Diane Francis asks US policy makers, “Why are we letting China buy American companies?” Filipino commentators doubt the US “ironclad” security guarantees to the Philippine because the US is afraid of its $3-trillion debt to China. These financial fears are simplistic. The US has reneged on its debt (last time 1971 by Nixon), and time and again it has used war to resolve such problems. It will try again with China. What the US fears now is its not being prepared against its ultimate target, China; it tries to buy time while expanding US bases — in the Philippines, Japan, Jeju Island in South Korea and in Australia.

We can only speculate on what China’s reclamation at the Spratly’s Johnson or Mabini Reef is for, but we surmise that China is moving to expand its perimeter defense too; before the time the US completes its transfer of 60 percent of its military forces to Asia by 2020. China cannot allow the inevitable use of a US ally in the China Sea rim to stop it from setting up its defense position. The US EDCA with the Philippines and 2,500 troops, radar and missiles sites Australia — all point to the “Offshore Control” strategic doctrine, proposed by US Marine (retired) Col. T.X. Hammes to cut China’s oil supply routes through the China Sea.
Last May 18, Ambrose Evans-Pritchard in The Telegraph wrote, “China steps up speed of oil stockpiling … an unprecedented’ build up of oil reserves as West prepares for possible oil sanctions against Russia.” Raging currents set off from the faraway black Sea churning up the China Sea.

(Tune to 1098AM, Tuesday to Friday 5 to 6 p.m. “Sulo,” watch GNN TNT with HTL on Destiny Cable channel 8 and Skycable channel 213 Saturday 8 p.m. and Sunday 8 a.m., www.gnntv.asia.com or YouTube “Talk News TV (and date)”; visit www.thenewkatipunero.blogspot.com)

Fourteen years of Epira

DIE HARD III / Herman Tiu Laurel / May 19, 2014 / Daily Tribune


Last week I touched base with Alain Pascua who is a “bird watcher” and conservationist nowadays, frequently disseminating social media posts on the bird species observed at the last surviving marsh down in Parañaque that some oligarchs want to bulldoze. Alain is also a leading member of Liling Briones’ NGO renowned for exposing the Disbursement Acceleration Program (DAP) or presidential pork, an issue seemingly buried now.

Back in 2001, Alain was a lead organizer of the anti-Electric Power Industry Reform Act (Epira) protests, whose members, who wore T-shirts that said, “I signed against the PPA,” emblazoned in red, for which I’m organizing a reunion. The PPA is the Power Purchase Agreements signed by Cory Aquino, FVR, and GMA with IPPs (Independent Power Producers) since the 1990s.

Such PPAs catapulted the Philippines’ power rates into the “highest in Asia.” And this was even before the Epira became law in June 2001. Epira, known as the Omnibus Power Bill in the late 1990s, did not become law under the Joseph Estrada administration despite intense lobbying from Big Business and their hatchet man in Congress then, Butch Abad. Estrada, advised by Sen. Juan Ponce-Enrile and Trade Secretary Jose Pardo, was skeptical of the proposed government guarantees to the power industry. Thus, Abad and company waited for Edsa II to fast break the Epira in less than five months by a lame duck Congress, before being swiftly signed into law by Gloria Arroyo in record time.

Amid numerous radio and TV ads in 2001 and 2002 promising an era of abundant, cheap household electricity, the public waited for the boon while the anti-PPA movement advanced to anti-Epira protests. These protests then culminated in a march from Bo. Kapitolyo’s Three Sisters restaurant, where Alain Pascua, Enrile, Rep. Boying Remulla, and hundreds more (myself included) signed the petition, to the Pasig Regional Trial Court, where we filed the historic case questioning the constitutionality of the Epira.

Despite our protests, the public continued to be lulled by the false promises of Epira. By late 2003, however, skepticism grew as power rates zoomed; and this disenchantment became so serious that someone had to cheat in the 2004 elections just to return to her usurped throne.

Two decades after the first PPAs were signed and 14 years since the Epira became law, the Philippines not only has the highest power rates in Asia, and sometimes the highest in the world — as in December 2013 and January 2014 when the Wholesale Electricity Spot Market manipulation added P4.17 per kilowatt-hour to the already highest in Asia P13/kWh, but it is also the only Association of Southeast Asian Nations country with major cities suffering from rolling brownouts and a major southern island (Mindanao) suffering up to 15-hour blackouts.

The power crisis in the Philippines from the supposed lack of electricity supply leads to tens of billions of pesos of losses to the domestic economy each year; yet for 10 whole years, the Philippine government, the elite “civil society,” and mainstream media allowed this crisis to go unresolved while devoting endless hours to comparatively trivial issues, such as the P10-billion “pork” anomaly.

And to take the monotony off such constant issues as “pork,” government and mainstream media belabor the China Sea disputes. Lately, a Chinese reclamation project in one of the Spratly islets drew vociferous protests from the Philippines that can do nothing to stop it. But the aggravating power crisis in the country, which is certainly within the powers of government to keep a lid on, gets only double-talk or short-lived attention and then endless procrastination from Malacañang.
One simple act that government could have done the past decade was to require private power companies earning billions in the Philippines to invest in new power plants here. But, clearly, with the way things are going, we shouldn’t be holding our breath.

Gathering the remaining members of the anti-PPA and anti-Epira movement to wear their “I signed against the PPA” T-shirts again should be an even prouder moment than before. It is a reminder that certain Filipinos were not sleeping when the thief crept in, and further evidence that perspicacious and visionary ordinary Filipinos saw through the veil of Philippine politics.

It will be a call to all citizens to exercise critical thinking whenever faced with foreign and local Big Business, their captured government agencies and politicians, as well as their controlled mainstream media and “civil society.”

(Tune in to “Sulo ng Pilipino” on 1098 AM, dwAD, Tuesday to Friday, 5 p.m.; catch GNN’s Talk News TV with HTL on Destiny Cable Channel 8, SkyCable Channel 213, and www.gnntv-asia.com, Saturday, 8:00 p.m. and replay Sunday, 8 a.m., this week on “The true list: People’s Grievances;” search Talk News TV and date of showing on YouTube; visit http://newkatipunero.blogspot.com; and text reactions to 0917-8658664)