Oil Rises and Spills

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Oil prices creep to $100 a barrel is “fueling one of the biggest transfers of wealth in history” reports the Washington Post. And the cash windfall, which is estimated at $4 to $5 billion more than five years ago is filling the coffers of oil export nations, while threatening social unrest, high prices, inflation, and economic stagnation in consumer nations. All of this signals that there is “no end in sight to the redistribution of more than 1 percent of the world’s gross domestic product.” And who is getting a slice of this 1 percent? None other than the ruling elites of international cankers like Iran and Venezuela, US outpost Saudi Arabia, and of course Russia, among others. The increase in cash into the first two have certainly increased the challenges to the US. The flush of oil revenue will inevitably allow Iran to defy American efforts to curb the former’s nuclear ambitions and growing hegemony in Mesopotamia. The rising prices has give Hugo Chavez more muscle in promoting his “Bolivarian Revolution” in his own country and dole out patronage to his Latin American compadres.

The final results even higher oil prices for Russia remains unclear, especially as the country faces Duma and Presidential elections. But Russia’s oil wealth has already allowed it  to bounce back from its dismal years of financial crisis. Oil has allowed Russia to move from a debtor nation to possessing “the third largest gold and hard currency reserves in the world, about $425 billion” says the Post. If there is one fundamental key to Vladislav Surkov’s concept of “sovereign democracy”, it is the bubblin’ crude.

Russia dependency on oil exports can have its long term economic, political, and ecological consequences. The consolidation of the oil industry under the Kremlin is already well known. And some see its economic dependency on crude as an omen for Russia’s future deterioration.

Less talked about, however, are the ecological costs. Especially considering today’s news. First is a report of how five meter high waves smashed the Volgoneft-139 oil tanker in half outside the Kerch Strait. 1,300 tons of oil are now spilling into the Azov and Black Seas. Two crew members were rescued. Fifteen remain missing.

Second is sinking of a dry cargo ship near the Port of Kavkaz. It was carrying 2000 tons of sulfur. The nine crew members abandoned ship on the life raft and are safe. We can’t say the same for the environment around both accidents.

Oleg Mitvol, the head of Russia’s environmental agency Rosprirodnadzor, tacitly admitted that the spills are “a serious environmental accident that will require a large amount of work.” Russian environmental activists were more forthcoming. Vladimir Slivyak of Ekozashchita said that the spill was “a major ecological catastrophe,” adding that “the pollution that has taken place will have to be cleaned up for a long time to come and the consequences will be felt for a year or even more.” Other Russian environmentalists echoed his sentiment.

The Kerch spill pales in comparison to the Exxon Valdez spill of 1989, which released 34,000 tons of oil into waters off of Alaska. Or to the 287.000 ton spill when the Atlantic Empress collided with another ship in 1979. And nothing compares to the 800,000 tons Saddam Hussein deliberately released 800,000 tons of oil in the Persian Gulf in 1991 as a war tactic. Still, the Kerch oil spill and the Kavkaz oil dump are signs of more long term costs of being economically dependent on natural resource exports.