Stability can’t solve corruption on every level of society.
New York Times 4/16/08 “Iraq’s Insurgency Runs on Stolen Oil Profits” http://www.nytimes.com/2008/03/16/world/middleeast/16insurgent.html?_r=1&oref=slogin&pagewanted=print [ev]
Lieutenant Shakir said the more hard-core insurgent groups had a lot of money to pay other fighters, and he grumbled that part of the reason they thrived was that obvious thievery was never prosecuted. Another scheme, he said, involves a trucking company owned by a man tied to the insurgency who is also a relative of Baiji’s mayor. The trucks take fuel from the refinery but are then unloaded just south of Tikrit. Making arrests would be a waste of time, he said, because provincial officials would let the perpetrators go. “What can I do?” he said. “After a half hour, they would be released.” Last year, the Pentagon estimated that as much as 70 percent of the Baiji refinery’s production, or $2 billion in fuels like gasoline, kerosene and diesel, disappeared annually into the black market. Baiji supplies eight provinces.
THEY SAY: NOT KEY FUNDING
Insurgents and officials agree that oil corruption is key.
New York Times 4/16/08 “Iraq’s Insurgency Runs on Stolen Oil Profits” http://www.nytimes.com/2008/03/16/world/middleeast/16insurgent.html?_r=1&oref=slogin&pagewanted=print [ev]
American and Iraqi officials struggle to say exactly how much the insurgency reaps from its domestic financing activities. In the past, Iraqi officials have estimated that insurgents receive as much as half of all profits attributable to oil smuggling. And before the troop buildup began a year ago, an American report estimated that insurgents generated as much as $200 million a year. Nor is the skimming limited to the insurgency; illicit earnings from the Baiji refinery also flow to criminal gangs, tribes, the Iraqi police, local council members and provincial officials who also smuggle fuel, Iraqi officials say. Barham Salih, the Iraqi deputy prime minister, said he believed that the pool of money available to insurgents across Iraq had fallen in the past year, but he declined to provide an estimate himself. He said Iraqi security analysts estimated that Al Qaeda in Mesopotamia received $50,000 to $100,000 per day from swindles related to the Baiji refinery. “It’s a serious problem,” he said. Those amounts are significant given the hard realities of Iraq, especially in Sunni areas where unemployment and discontent with the Shiite-run government run high. Men can be hired to hide roadside bombs for $100, officers say. And while American troops have captured stockpiles of artillery shells from Mr. Hussein’s days, insurgents have adapted, building bombs from cheap materials like fertilizer and cocoa. The insurgents appear to understand how valuable the Baiji refinery is to their operations. “They have not attacked the oil refinery, because they don’t want to damage their cash cow,” said First Lt. Trent Teague, who commands the Third Platoon in Captain Da Silva’s unit, the headquarters company of the First Battalion, 327th Infantry.
Iraqi oil failing.
GAO Reports 6/23/08 Congressional Quarterly “Progress Report: Some Gains Made, Updated Strategy Needed” Lexis [ev]
In May 2008, crude oil production was 2.5 million barrels per day and exports were 1.96 million barrels per day, according to the State Department. Poor security, corruption and smuggling continue to impede the reconstruction of Iraq`s oil sector. For example, according to State Department officials and reports, as of 2006, about 10 to 30 percent of refined fuels was being diverted to the black market or smuggled out of Iraq and sold for a profit. According to DOD, investment in Iraq`s oil sector is below the absolute minimum required to sustain current production and additional foreign and private investment is needed. U.S. officials and industry experts have stated that Iraq would need an estimated $20 billion to $30 billion over the next several years to reach and sustain a crude oil production capacity of 5 mbpd. This production goal is below the level identified in the 2005-2007 National Development Strategy--at least 6 mbpd by 2015.
IRAQ UNSTABLE NOW
IRAQ IS UNSTABLE
America.gov, New U.S. Intelligence Report Focuses on Iraq Instability, 2/2/07 (http://www.america.gov/st/washfile-english/2007/February/200702021705071EJrehsiF0.7114069.html)
The U.S. National Intelligence Estimate of the Iraq situation, released to key policymakers February 2, indicates instability is still the main security challenge facing the fledgling Iraqi government and the U.S.-led coalition forces.
Classified copies of the 2007 NIE, titled Prospects for Iraqi Stability: A Challenging Road Ahead, were provided to senior members of Congress serving on intelligence oversight committees, while a declassified version of its "key judgments" was released to the public. The intelligence estimate was prepared by the CIA's National Intelligence Council with input from the 16-agency U.S. intelligence community.
Among its conclusions was that "Iraqi society's growing polarization, the persistent weakness of the security forces and the state in general, and all sides' ready recourse to violence are collectively driving an increase in communal and insurgent violence and political extremism."
Oil Pipelines Disadvantage 1NC Shell (1/3)
A. UNIQUENESS: INVESTORS ARE CONFIDENT IN PIPELINE INVESTMENTS NOW BUT ANY HINT OF A CRASH IN OIL PRICES WILL CAUSE THEM TO PULL OUT.
MONEY HIGH STREET, JUNE 25, 2008. “WILL OIL PRICES CRASH SOON?” http://www.moneyhighstreet.com/feature/446/
With crude oil currently trading at $136 per barrel and petrol prices nudging $4 per gallon in the USA and more than £5 per gallon in the UK, some people are starting to predict an imminent crash in oil prices.
Oil prices have virtually doubled over the last year and although it has pulled back slightly from their record high set a few weeks ago, oil is still trading near the top of its range.
Some investors are starting to feel concerned about the sustainability of such high prices, and feel that their oil dependent investments may be at risk, should there be a crash in oil prices soon.
We will examine some reasons why oil prices are likely to remain at current levels for some time, however investors should make their own decisions about their investments.
B. ALTERNATIVE ENERGY LOWERS OIL PRICES—CAUSES A TRADEOFF
US Fed News, 5/6/08. “SKYROCKETING GAS PRICES HIGHLIGHT NEED TO USE AMERICAN RESOURCES” http://www.lexis.com/research/retrieve?_m=08d0fc06b2da1455085f3578e4de428d&docnum=6&_fmtstr=FULL&_startdoc=1&wchp=dGLbVtz-zSkAl&_md5=f4756b7493583c302d5375ed8a4b39a8
Despite promises of a "commonsense plan" to lower gas prices, the Democrats have failed to act on the number one issue affecting Kentuckians' pocketbooks since taking over the Majority in Congress. Our country must invest in alternative energy sources in order to reduce our energy dependence and lower fuel costs. It is time Congress works in a bipartisan manner to create a balanced energy solution that promotes conservation efforts and increases energy production on our own soil. Speaker Nancy Pelosi has rejected commonsense solutions that increase production in America and use our own resources.
The law of supply and demand is a staple of economics. It is commonsense that when we increase domestic supply, gas prices will fall. I have voted for and supported a number of proposals that would do just that. For example, the No More Excuses Energy Act (H.R. 3089) would encourage new refinery construction, allow for environmentally responsible exploration of the Arctic National Wildlife Refuge (ANWR) and the Outer Continental Shelf (OCS), and provide tax incentives to encourage the construction of new nuclear power plants.
Oil Pipelines Disadvantage 1NC Shell (2/3)
C. IMPACT
1) LOW OIL PRICES FROM BTC PIPELINE DEVASTATES RUSSIAN ECONOMY
http://www.brookings.edu/articles/2002/spring_russia_hill.aspx
Gas and oil have been the mainstay of the Soviet and now Russian economy for decades. Energy accounts for about half of Russian export earnings. According to Brookings economist Clifford Gaddy, "Every dollar's increase in the price of a barrel of petroleum translates into roughly $1.5-$2.0 billion of additional yearly export revenues." During 1999-2000, energy exports accounted for some 90 percent of Russia's growth in GDP. Thanks to high oil prices, at the end of 2001 the economy had enjoyed its best three-year performance since 1966-69. Russia's oil industry slumped badly during the 1990s. As the economy contracted sharply from 1990 to 1995, domestic demand for oil fell more than 40 percent, causing a glut on the domestic market. Capacity limits in the country's pipeline system kept lucrative oil exports down. Between 1988 and 1998, Russian oil production fell almost in half—from 11 million to around 6 million barrels a day (mbd). Drilling fell off sharply, as did investment. International investors exploring the Russian oil industry were scared away by the uncertain business climate. Russian oil seemed like a money-loser. Russia's August 1998 financial crisis, the devaluation of the ruble, and the subsequent—although entirely unrelated—rise in oil prices revived the industry. The devaluation drastically lowered input costs for Russian energy producers, while sharply higher oil prices boosted revenues even without new investments or production increases.
2) RUSSIAN ECONOMIC COLLAPSE CAUSES EXTINCTION.
Steven R. David, Professor of Political Science at the Johns Hopkins University, January-February, 1999 (Saving America from the Coming Civil Wars. Foreign Affairs. Lexis | SWON)
If internal war does strike Russia, economic deterioration will be a prime cause. From 1989 to the present, the GDP has fallen by 50 percent. In a society where, ten years ago, unemployment scarcely existed, it reached 9.5 percent in 1997 with many economists declaring the true figure to be much higher. Twenty-two percent of Russians live below the official poverty line (earning less than $ 70 a month). Modern Russia can neither collect taxes (it gathers only half the revenue it is due) nor significantly cut spending. Reformers tout privatization as the country's cure-all, but in a land without well-defined property rights or contract law and where subsidies remain a way of life, the prospects for transition to an American-style capitalist economy look remote at best. As the massive devaluation of the ruble and the current political crisis show, Russia's condition is even worse than most analysts feared. If conditions get worse, even the stoic Russian people will soon run out of patience. A future conflict would quickly draw in Russia's military. In the Soviet days civilian rule kept the powerful armed forces in check. But with the Communist Party out of office, what little civilian control remains relies on an exceedingly fragile foundation -- personal friendships between government leaders and military commanders. Meanwhile, the morale of Russian soldiers has fallen to a dangerous low. Drastic cuts in spending mean inadequate pay, housing, and medical care. A new emphasis on domestic missions has created an ideological split between the old and new guard in the military leadership, increasing the risk that disgruntled generals may enter the political fray and feeding the resentment of soldiers who dislike being used as a national police force. Newly enhanced ties between military units and local authorities pose another danger. Soldiers grow ever more dependent on local governments for housing, food, and wages. Draftees serve closer to home, and new laws have increased local control over the armed forces. Were a conflict to emerge between a regional power and Moscow, it is not at all clear which side the military would support. Divining the military's allegiance is crucial, however, since the structure of the Russian Federation makes it virtually certain that regional conflicts will continue to erupt. Russia's 89 republics, krais, and oblasts grow ever more independent in a system that does little to keep them together. As the central government finds itself unable to force its will beyond Moscow (if even that far), power devolves to the periphery. With the economy collapsing, republics feel less and less incentive to pay taxes to Moscow when they receive so little in return. [. Should Russia succumb to internal war, the consequences for the United States and Europe will be severe. A major power like Russia -- even though in decline -- does not suffer civil war quietly or alone. An embattled Russian Federation might provoke opportunistic attacks from enemies such as China. Massive
Continued…
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