Chavez Not Fooling Around With Oil

Hugo Chavez, Venezuela’s president, is treated in the American media as the political equivalent of Ronald McDonald.

If he’s mentioned, and he rarely is, it’s as a clownish boor. He attracted attention in 2006 when he called Bush a “devil” before the UN General Assembly.  Or in 2007 when Spanish King Juan Carlos told him to “shut up.”

But oil prices have tumbled and Chavez is no fool, as the Wall Street Journal shrewdly notes today on its back pages.

In the “Heard on the Street” column, John Lyons points out that fears that Chavez will nationalize Venezuela’s banks are overblown and Venezeula’s dollar-denominated bonds may rate a “buy.”

In fact, President Chavez has recently been loosening some terms for the international oil majors operating in the country in an apparent sign of the government’s need to keep attracting foreign capital.

(In my paper edition, the headline is “Venezuela’s Bank Nationalization Fears Are Overblown.”  The headline in the online edition is a more subdued “Banking on Venezuela.”)

Venezuela cannot afford to see the flow of dollars dry up. Oil accounts for 80 percent of Venezuela’s export revenue and there are signs that production is dropping.

The country’s need for foreign capital “perversely” might provide reassurance for international investors, the Journal notes.

Barclays Capital likes the 2027 bonds of the state-owned oil company, PDVSA, trading at 41.77 cents on the dollar and yielding 14.73 percent. The 2027 bonds are one of the emerging market’s most-traded bonds, Reuters reports; Credit Suisse likes the 2017 bonds, which are among the emerging market’s most traded debt securities.

The United States also relies on Venezuela. Mr. Chavez’s government supplies 11 percent of our imported oil and PDVSA owns five U.S. refineries.

If that oil suddenly stopped flowing, prices would shoot up. In the time it took to rebalance global supplies, the U.S. GDP would shrink by about $23 billion, according to a 2006 GAO study.

Chavez may say he doesn’t like the free market, but it’s U.S. petro-dollars that are keeping his “revolution” alive.

John O. Brennan, counterterrorism czar

The Bergen Record ran a profile this weekend of John O. Brennan, assistant to the president for homeland security and counterterrorism aka Obama’s counterterrorism czar.

He meets with the president several times a day, he said. He is Obama’s point man, for example, monitoring the military and law enforcement investigation into the shootings at Fort Hood, Texas. He’s also been dispatched to Yemen to deliver private administration messages to leaders.

“My job is to make sure that the White House is doing everything possible … to prevent any type of catastrophe,” Brennan said in the interview, which took place before the Fort Hood shootings. “The president’s priority, first and foremost, is to save lives.”

Other crises that command Brennan’s attention include the H1N1 flu, the arrest of terror suspect Najibullah Zazi

The Record doesn’t say it, but Brennan has one of the most critical jobs in the national security apparatus.

Brennan is the “national continuity coordinator,” which means he’s responsible for agency-wide policy planning to ensure that the U.S. government survives a major catastrophe like a nuclear attack.

In the event of another 9/11, Brennan would be the White House point man. He has “direct and immediate” access to the president.

A 2007 presidential directive defines the kind of events Brennan must prepare for: “any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions.”

Brennan spent 25 years in the CIA, including a stint as station chief in Riyadh in the 1990s and George Tenet’s chief of staff. He left the agency in 2005 and became a principal intelligence advisor to Obama.

Brennan withdrew his name from consideration as Obama’s CIA director after he was attacked for public statements in support of interrogation.  In a speech in August, however, Brennan said tactics such as waterboarding “were not in keeping with our values as Americans, and these practices have been rightly terminated and should not, and will not, happen again.”

Who was Anton Surikov? (Updated)

Several publications are reporting the passing of a former Russian intelligence officer named Anton Surikov, who died at the age of 48.

Axisglobe identifies Surikov as a shareholder of Far West LLC — reportedly a shadowy intelligence/military consulting group. Kavkaz Center, a Chechen website, reports that he was poisoned. Numerous reports link him to the CIA.

Surikov, born 1961 in Moscow, was the son of  Victor Surikov, a designer of Soviet ICBMs. Anton Surikov was a man who at one time was apparently trusted by both sides in Russia’s bitter conflict with separatist rebels in Cechnya.

In the early 1990s, Surikov and Chechen rebel leader Shamil Basayev met when they both fought on behalf of separatists battling the Georgian government. Surikov commanded a detatchment of special forces for Russian military intelligence (GRU).

From 1990-1996, Surikov worked at the Institute of USA and Canada Academy of Sciences of the USSR (ISKRAN), a Russian think tank, according to an archived (Russian) copy of his bio.

In 1994, he was seconded to Department of Defense Studies at King’s College, London University, which published two of his books on various aspects of Russia’s domestic and defense policies. One of Surikov’s books, Crime in Russia: International Implications is based on documents collected by Russia’s Federal Counterintelligence Service (FSK). 

While at the institute, Surikov become an advisor in 1995 for the Institute of Defense Studies.

In September 1996, Yuri Maslyukov, president of the Duma’s Committee on Economic Policy, hired Surikov as his assistant. When Maslyukov became first deputy prime minister two years later, Surikov went to work in the Kremlin. 

In 1999, Surikov used his contacts with Basayev to arrange a meeting between the Chechen rebel leader and a top Russian official, Alexander Voloshin.

Surikov and the two men met in the south of France at the villa of Iran-Contra figure Adnan Khashoggi, a wealthy Saudi arms merchant.

The meeting was secretly recorded by French intelligence and later leaked to the press and been the subject of much speculation ever since. (See this 2004 paper (.pdf) from the Johns Hopkins School of Advanced International Studies.)

When Putin took over as president, Surikov briefly worked into Russia’s Aircraft Corporation, MiG and then became chief of staff to the Duma committee on industry, construction and high technology.

In 2001, Surikov accused Russian military officials of colluding with Afghan drug lords:

In an interview published last week (dated 29 May) in the “Moscow News” (“Moskovskie Novosti”) weekly, former Russian military intelligence officer Anton Surikov charged that a substantial portion of the drugs produced in Afghanistan had been directly shipped from the Tajik capital Dushanbe on board Russian military planes, helicopters, and trains.

Surikov said: “You can come to an arrangement [with custom officials] so that the search of military transport planes remains purely formal. The same goes for train convoys carrying military cargo [to Russia from Tajikistan].”

According to his account, Afghan opium producers usually sold drugs to Tajik citizens who smuggled them into Tajikistan with the active complicity of Russian border guards. The drugs were then put on board military planes or trains en route to Russia, where they were sold to local criminal gangs.

Surikov retired from government service in 2002, according to his bio. He was affiliated with the Institute for Globalisation Studies, a think tank headed by a leftist professor.

He also served on the board of the Swiss firm Far West Ltd., which was closely affiliated with the Internet news site, Pravda-info. Far West said it “specializes in consulting work on questions of security in conducting business in regions of the world with unstable environments and hiring personnel for foreign private military companies.” The company said it had offices in Dubai, Afghanistan, Colombia, Kosovo, Georgia, and Russia.

Most recently, Surikov was providing informed speculation to the Financial Times on the mystery the Arctic Sea, a cargo ship that vanished off the coast of Portugal:

But Anton Surikov, a Russian security expert and former military intelligence officer, advances the theory that smugglers, with the backing of elements in Russia’s security services, may have loaded ammunition and anti-tank missiles bound for Hizbollah in Lebanon, and four Kh-55 cruise missiles to be fitted to Sukhoi-24 bombers for Iran, on to the ship as it underwent repairs in Kaliningrad.

Mr Surikov says he believes that when the the ship was boarded in the dead of night on July 24 off Sweden, the attackers found the weapons cache, photographed it as evidence and left.

His scenario fits with initial reports conveyed by police in Sweden that the crew reported being attacked by about 10 men posing as Swedish policemen who searched the ship and departed in an inflatable dinghy.

The photos were then shown, thinks Mr Surikov, to the UK and US security services – which arranged a second incursion as the Arctic Sea disappeared on August 1. “A behind-the-scenes trade between state powers then began,” he says.

Detecting Border Tunnels

Authorities in San Diego have found a tunnel under construction beneath the U.S.-Mexico border:

SAN DIEGO – Mexican authorities, acting on information provided by federal investigators from the multi-agency San Diego Tunnel Task Force, conducted enforcement actions Wednesday targeting a sophisticated, but still incomplete underground passageway that originates in Tijuana, Mexico, and extends more than 860 feet into the United States.

The tunnel, which measures just under 1,000 feet in length overall and reaches a depth of 90 to 100 feet, did not have an entry point in the United States. The passageway has lighting, electrical and ventilation systems and is equipped with an elevator. When Mexican authorities entered the passageway Wednesday morning on the Mexican side, they encountered more than a dozen individuals who were subsequently taken into custody. All of those arrested are believed to be Mexican citizens.

Initial reports indicate the tunnel has been under construction for approximately two years. So far, there have been no arrests in the United States, but the investigation is ongoing.

The press release credits the inter-agency San Diego Tunnel Task Force, which “uses an array of high-tech equipment and intelligence information to pinpoint the location of underground passageways along the border in the region.”

To date, federal authorities have discovered more than 120 cross-border tunnels along the Southwest border. (The photo above is from 2007)

Truth is, these discoveries are typically the result of good, old-fashioned police work, not technology, according to a recent Science Daily story:

“All of them have been found by accident or human intelligence,” said Ed Turner, a project manager with the U.S. Department of Homeland Security (DHS) Science and Technology Directorate (S&T). “None by technology.”

The problem of detecting underground tunnels has frustrated geologists since the 1960s when the Vietcong used them to devastating effect during the Vietnam War. In the 1970s, tunnels were discovered (through intelligence) in Korea’s DMZ. In the 1990s, the Southwest border kept the problem alive, although not a priority.

The terrorist threat, however, has opened the floodgates of money for tunnel detection.

Among the groups at work today on the problem include major defense contractors, the intelligence community, the Department of Homeland Security, numerous components of the Defense Department and unspecified “international partners.”

Technologies under development include a seismic acoustic sensors, infrared sensors and robotics.  Tunnel detection systems are being tested on the ground and the air — aboard helicopters and unmanned drones.

The military’s Joint Task Force North conducted nine tactical missions last year to find underground tunnels using some of these technologies.

Sandia National Laboratories in New Mexico and NORTHCOM worked with the San Diego Tunnel Task Force to test advanced acoustic technologies in Otay Mesa in 2006 and 2007, according to this PowerPoint presentation.

As even a cursory look at PowerPoint makes clear, the sensor data is extremely difficult for the layperson to understand, a problem that was underscored last year when the Department of Homeland Security put out a call for a tunnel detection system that is “simple to understand.”

Lockheed Martin is testing ground-penetrating radar in a trailer towed by a truck as part of DHS’  Tunnel Technologies Detection Project.

DARPA, the Defense Advanced Research Projects Agency, has a Cross-Border Tunnel program to root out underground hiding places that can be exploited by terrorists.

An even spook-ier effort is the Counter Tunnel Operations Working Group, which included the Joint Chiefs of Staff, the Office of the Secretary of Defense, and intelligence community. The group is under the rubric of the inter-agency, anti-terrorism Technical Support Working Group.

At a 2006 Army seminar on tunnel detention, one researcher summed up the state of affairs:

Despite the longstanding effort in the geophysical community under heavy public funding, there is a dearth of success stories where geophysicists can actually claim to have found hitherto unknown tunnels.

From the Middle East to the Middle West

Leave it to a bunch of Somali pirates to underscore how what happens on the west coast of Africa directly affects people in the United States.

The Greek-owned supertanker hijacked by Somali pirates over the weekend was headed for a deepwater port known as LOOP.

Most crude oil from the Middle East comes via massive tankers too large for New Orleans to offload oil. The hijacked Maran Centaurus is a 300,000-ton vessel, holding 2 million barrels of oil. 

LOOP (Lousiana Offshore Oil Port) can handle ships more than twice as big.

About 1 million barrels of foreign crude — 10 percent of all U.S. imports — flow through LOOP every day.

Here’s how the oil flows from the Middle East to the Middle West:

  1. Tankers connect to a buoy 18 miles off the coast of Louisiana.
  2. An underwater pipeline moves oil a mile and a half to an offshore terminal.
  3. Four 7,000 horsepower pumps send oil ashore.
  4. At Fourchon, Louisiana, another massive pumping station sends the oil another 25 miles inland.
  5. The oil arrives at a network of underground salt caverns that can hold 50 million barrels of oil.
  6. From the caverns, the Locap pipeline channels oil 53 miles to St. James, Lousiana.
  7. At St. James, there’s a link to Capline which moves oil to Patoka, Illinois.
  8. The Chicap pipeline runs from Patoka to the Chicago suburbs.
  9. From there or at several points along the way, it’s refined and trucked to you!