U.S. Cancels Drone Sales to Turkey Over Intel Disclosure to Iran

October 23, 2013
The United States has reportedly cancelled the delivery of 10 unmanned Predator drones to Turkey following Ankara’s disclosure of several Israeli intelligence officials operating in Iran, according to Turkish press reports.

In February 2012, the Wall Street Journal reported that Turkey’s state-owned bank, Halkbank, was processing “payments from third parties for Iranian goods.” This included “payments for Indian refiners unable to pay Tehran for imported oil through their own banking system for fear of retribution from Washington.” Separately, the Journal also reported that the Turkish bank was responsible for many of Turkey’s “gas-for-gold” transactions with Iran despite an executive order issued by the Obama administration prohibiting gold payments to the government of Iran. As Turkey’s Deputy Prime Minister Ali Babacan frankly admitted, Turkey’s “gold exports [to Iran] end up like payments for our natural gas purchases.”

The cancellation of these drones would be another setback for U.S.-Turkey relations, which have cooled in recent months as Ankara grows closer to Hamas and the Iranian regime.

Relations between Turkey and the West hit another speed bump last week when it came to light that Ankara had exposed the identities of up to 10 Iranians working on behalf of the Israelis in 2012.
“This news is particularly concerning in light of Turkey’s ongoing gold exports to Iran and support for the terrorist organization Hamas,” said Roskam, who asked Secretary of State John Kerry in April to sanction a Turkish bank that has reportedly traded gold to Iran in exchange for oil.

Turkey announced late last month that it had awarded a $3.4 billion defense contract to a Chinese firm that has been sanctioned by the United States. The China Precision Machinery Export-Import Corp. (CPMIEC) was selected by Turkish officials to construct an advanced “long-range air and missile defense system,” according to Turkey’s Hurriyet Daily News. Turkey selected CPMIEC over competing bids from U.S. defense firms Raytheon and Lockheed Martin, as well as offers from several Russian and French firms, according to the report. CPMIEC has been sanctioned by the United States for allegedly selling advanced weapons to Iran and Pakistan. It also is believed to have sold chemical weapons to Syria. Terrorism experts said that Turkey is close to qualifying as an official state sponsor of terror.
Washington, which is providing technical and intelligence to Ankara in its fight against autonomy-seeking Kurdish rebels, deployed our Predator drones from Iraq to Turkey.


Turkey and Israel about to change the Cyprus gas game?

March 26, 2013
Turkey and Israel about to change the Cyprus gas game?(CM).By Stefanos Evripidou (other) Apart from removing Turkish objections to Israeli participation in NATO exercises, the prospect of reconciliation has also “removed a big obstacle to collaboration over the development of strategic energy resources in the eastern Mediterranean”, reported the Financial Times (FT) yesterday.

The London-based paper noted that improved ties between Turkey and Israel could also affect Cyprus should greater energy cooperation result in Nicosia getting sidelined. A Turkish official told FT that reconciliation also made a possible gas pipeline from Israel to Turkey a “much more viable” idea.

The latest opinion of an advisory committee of the Israeli government is that if gas should be exported, it will have to go through Israel first. A Cypriot diplomatic source told the Cyprus Mail that reports suggest Turkey is seriously considering a pipeline between Israel and Ceyhan. “This could very well be a game-changer. There is much more (to the apology) than meets the eye,” he said.

Matthew Bryza, a former US ambassador to Azerbaijan, was quoted by FT saying that without Israel to provide economies of scale, “in the short term the Cypriots lose their ability to do a pipeline or an LNG (liquefied natural gas) option”, adding that in the longer run a Cypriot pipeline to Turkey would make most commercial sense.

According to FT, Noble Energy and Delek Energy, who are the main investors in Israel’s large offshore natural gas fields- as well as partners in Cyprus’ Block 12- have in recent weeks “sounded out possible customers in energy-hungry Turkey”. The paper noted that until now, the private sector was eager to proceed with a possible pipeline between Israel and Turkey but that the political rift between the two governments did not allow progress to be made. (MORE)


Egypt making a power play to screw Israel in the Mediterranean?

March 7, 2013

(h/t JE)(EOZ)There was a somewhat cryptic article in Egypt Independent today:

The Shura Council’s legislative committee approved a draft law submitted Wednesday cancelling current maritime borders of an economic zone between Egypt and Cyprus.
The proposed bill was submitted by MP Khaled Abdel Qader Ouda, who said the agreement was signed by Cyprus and Israel in February 2003.
He said this invalidates the deal since Egypt had the right to be present at the signing, according to international agreements.
Ouda argues that the renegotiation could mean billions of dollars for Egypt.
The draft law calls for the creation of new borders surrounding the economic zone in the presence of Turkey as a third party.

Apparently, Ouda is referring to the Egypt/Cyprus EEZ agreement of 2003, which states:

If either of the two Parties is engaged in negotiations aimed at the delimitation of its exclusive economic zone with another State, that Party, before reaching a final agreement with the other State, shall notify and consult the other Party, if such delimitation is in connection with coordinates 1 or 8.

Egypt apparently is claiming that the 2010 Israel/Cyprus EEZ agreement is subject to Egypt’s approval, and Egypt is (retroactively?) disapproving it.
Coordinate 8 in the Egypt/Cyprus agreement happens to be coordinate 12 in the Israel/Cyprus agreement,32º 53′ 20″ latitude and 32º 58′ 20″ longitude, seen here:

Lebanon has also challenged the Israel/Cyprus agreement. 
But if Egypt is trying to bring Turkey into this, to carve up the areas now assigned to Israel and Cyprus, it might really turn into a mess. 
This is worth watching.

How can Egypt retroactively disapprove something three years ago? Throwing financial aid at Egypt when they behave hostile is a very bad idea.


Matt Damon and the Arab oil industry team up to stop fracking

January 15, 2013

(Thinker) It seems like Matt Damon’s new anti-fracking film, “Promised Land” has some secret financers behind it. These financers would love nothing more than to stop fracking in its tracks. Why, you ask? Well because these financers are actually part of Abu Dhabi, an Arab oil emirate.
Supporting the anti-fracking movie is just their way of silencing the competition – American oil and gas producers.

Not only does Image Nation Abu Dhabi finance the “Promise Land,” but the Abu Dhabi government owns the media company that subsidizes Image Nation.

The film’s Abu Dhabi connection is significant, because the UAE is the world’s third largest oil exporter, according to 2011 figures from the U.S. Energy Information Agency. The country also holds the 7th largest proven reserves of crude oil and natural gas in the world. The UAE was ranked 17th in the world in natural gas production in 2010, according to EIA. (Courtesy of CNS news)


The fact that the UAE is one of the major producers of gas and oil is important. US natural gas producers have seen an increase in production thanks to fracking, which allows them to access once unreachable gas reserves and oil wells. This puts US natural gas producers in steep competition with the United Arab Emirates, because fracking is such a lucrative business for the US oil and gas industry.

The more the US oil and gas industry utilizes the method of fracking the more the Arab oil countries feel threatened. Not to mention the UAE loses money, which keeps their country afloat.

Matt Damon’s financers are using his movie to demean fracking. These financers hope that negative public opinion will put an end to their competition. However, one problem with such a plan is that basing something on a lie always comes back to bite you where it hurts the most.


Egypt On the Verge of Bankruptcy

December 31, 2012
Goldman Graph 3
By David P. Goldman, JINSA
“The country is on the verge of bankruptcy,” Egyptian opposition leader and Nobel Laureate Mohamed ElBaradei told the newspaper al-ArabiyaDec. 23. Unable to reduce subsidies that account for most of a budget deficit that now exceeds 14 percent of GDP, and unwilling to raises taxes, it seems most likely that the Muslim Brotherhood government of Mohamed Morsi will instead take the path of least resistance and allow a steady devaluation of the Egyptian pound. During the past two weeks, central bank intervention to support the pound’s value on the foreign exchange market has stopped and the currency has fallen sharply.

Central bank intervention in support of the pound is shown clearly on the chart of daily values for the Egyptian pound’s exchange rate against the U.S. dollar during the year to date. The spikes in the exchange rate reflect central bank activity. The sharp drop in the pound’s exchange rate during the past two weeks reflects an absence of central bank intervention.
In the advent of last week’s referendum on a proposed new Islamist constitution, the Morsi government postponed negotiations for a $4.8 billion loan from the International Monetary Fund, out of fear that the austerity measures required by the IMF would elicit a wave of political opposition. As Andrew Bowman wrote in the Financial Times:
The loan is conditional on some very unpopular tax increases and fuel subsidy cuts to reduce the deficit to 8.5 per cent during the financial year starting July 2013. The government is loathe to take these on at this moment in time with its authority fragile and new elections looming in 2013. Indeed, when it tried to introduce new taxes on consumer goods a few days before the constitutional referendum, it removed them within a few hours following public outcry. Its loan request has been postponed until January and the delay may entail renegotiation.
The Morsi government’s failure to secure the IMF loan also jeopardizes other expected loans, including a $500 million credit from the African Development Bank. This is a crisis of governance, of the sort I analyzed on this site in September. Morsi cannot get a popular mandate without reneging on essential economic reform measures, but he cannot obtain the financing that Egypt requires to avoid bankruptcy if he reneges on reform.
That leaves Egypt’s central bank with cash reserves of just $7.1 billion (out of total reserves including gold of $15 billion), enough to cover just over two months’ worth of the country’s $36 billion annual trade deficit, equivalent to about 16 percent of Egypt’s GDP. Against this enormous trade deficit, Egypt has
1) Tourism revenues that peaked at $12.5 billion in 2010 before falling to only $9 billion in 2011, and now may be running as low as $6 billion a year, according to one estimate in the Egyptian press;
2) Suez Canal revenues of somewhat less than $5 billion a year; and
3) An indeterminate volume of workers’ remittances, estimated at anywhere between $7.7 billion and $18 billion;
4) Whatever Egypt can borrow, which at the moment is essentially nothing.
Remittances almost certainly have risen since 2009, when the central bank estimated the flow at $9.5 billion, although a major source of those remittances-the 2 million Egyptians working in Libya-dropped sharply after the Libyan civil war. 1.7 million Egyptians work in Saudi Arabia, 500,000 in Kuwait, and 500,000 in Jordan. Their repatriated earnings are in many cases the main support of their families at home.
Egypt’s dependence on remittances, though, makes a devaluation of the Egyptian pound an especially dangerous exercise. As long as Egyptians overseas expect the national currency to keep falling, they are likely to delay sending money home as long as possible. That in turn will worsen the central bank’s foreign exchange position and make devaluation more likely, in a vicious circle. It seems clear from the earlier intervention pattern that the Egyptian central bank hoped to prevent devaluation. Since the collapse of the IMF loan negotiations, though, it may have concluded that it has no other alternative.
The position of Egypt’s foreign workers, moreover, is fragile. King Abdullah of Jordan warned at a private meeting (cited by the news siteAI-Monitor) that Jordan might use the 500,000 Egyptians now working in in his country as “bargaining chips” against the Muslim Brotherhood, which he denounced as part of a “new extremist alliance” in the Arab world. Jordan’s monarchy has been under pressure from the Muslim Brotherhood during the past year, and it seems clear that the Hashemites will not sit on their hands. A major Jordanian complaint is the interruption of piped Egyptian natural gas, at an estimate cost to the Jordanian government of 5 billion Jordanian dinars. The same pipeline through which Egypt supplied Israel also met four-fifths of Jordan’s gas requirements.
According to a Dec. 17 report in Egypt’s Official Gazette, cited by theEgypt Independent, Egypt will import gas from international companies in Qatar at a cost of U.S. $14 per million BTUs. Qatar’s government sells gas at $9 per million BTUs, and Egypt is contractually obligated to sell gas to Jordan at $5.50 per million BTUs. The unfavorable terms suggest that something else is at work: Egypt may be overpaying for Qatari gas to amortize Qatar’s $2 billion emergency loan to the country’s central bank last fall. Qatar has given the Morsi government indispensable support. Announcement of this loan Aug. 12 coincided with President Morsi’s dismissal of the old-line Egyptian military leadership, and the funds have allowed Egypt to maintain wheat stockpiles at adequate levels during the past several months. It appears, though, that Qatar’s aid comes with a price tag, and that Egypt’s import costs will rise as a result.
The country’s foreign exchange reserves, meanwhile, are so squeezed that banks are refusing to provide financing for food imports (other than wheat bought directly by the government) because importers have not had access to hard currency to pay their arrears, the Food Industries Association warned Nov. 27. The importers’ association warns that food imports may drop by 40 percent during coming months as a result.
Morsi’s hold on political power is fragile after the mass protests that preceded this month’s constitutional referendum and the opposition’s unwillingness to concede legitimacy to the government’s narrow victory. Prior to the referendum, Morsi showed himself unable to reduce subsidies or raise taxes in order to control a domestic budget deficit and a trade deficit that are both running at close to a sixth of GDP. If he takes the path of least resistance and allows the Egyptian pound to depreciate severely, as the local market evidently expects, it may be difficult for the hard-pressed Egyptian pound to find a stable bottom, for reasons noted earlier: fears of devaluation will delay remittances and provoke capital flight, worsening the central bank’s already dire cash position.
The danger is that Egypt will descend into banana republic-like inflation, but without the bananas. We have witnessed many cycles of devaluation and inflation in Latin American countries, but all of those cases involved food exporters. Egypt by contrast imports half its food.
The government’s likely response will be to employ state controls in a heavy-handed but haphazard fashion: imposing foreign exchange controls, rationing essential items, raiding alleged speculators, and stirring up have-nots against supposed haves. If the opposition is unable to unseat Morsi, he is likely to lead Egypt to an extreme degree of statism-a sort of North Korea on the Nile.
It is not clear where he can turn. President Morsi is at a stalemate in discussions with the international financial organizations. The Gulf States are even more hostile to the Muslim Brotherhood than before Egypt’s political crisis, and less inclined to help. Even Qatar, it appears, is extracting payment for its previous help on a cash-and-carry basis through the energy market. The most likely outcome will be austerity through devaluation rather than tax increases or subsidy cuts, with deleterious consequences for the already-failing Egyptian economy. On the strength of the available evidence, we would have to answer our question of September-”is Egypt governable?”-in the negative.
David P. Goldman, JINSA Fellow, writes the “Spengler” column for Asia Times Online and the “Spengler” blog at PJ Media. He is also a columnist at Tablet, and contributes frequently to numerous other publications. For more information on the JINSA Fellowship program, click here.


Qatar Helps Muslim Brotherhood Come to Power, Muslim Brotherhood Buys Qatari Gas at 3 Times the Price

December 21, 2012
(frontpagemag.com) Egypt is going from a gas exporter to a gas importer and it will be buying Qatari gas at the highest possible price. Whatever money Qatar invested in the Arab Spring is about to be repaid at a very healthy profit.
Egypt has announced that it has changed from a gas-exporting to a gas importing country based on a decision issued by the Petroleum Minister that went into effect on 17 December.
Petroleum expert Medhat Youssef said the decision was “unprecedented,” especially as Egypt would import gas from international companies in Qatar, not the Qatari government. The import price is expected to reach US$14 per 1 million thermal units, whereas the government sells gas to factories for no more than $4.
The Egyptian government exports gas to Jordan at $5.50 per one million units, while Qatar exports it at more than $9, Youssef said, arguing that Egypt administers its petroleum supply poorly and should reconsider prices. (MORE)

Environmentalist Movie Funded by Oil-Rich Royalty

September 28, 2012
Matt Damon / AP
(BY: – image Matt Damon / AP) Matt Damon turned to oil-rich Middle East royalty to finance his film attacking domestically produced natural gas.

The environmentalist screed, Promised Land, received a chunk of its funding from the United Arab Emirates, an oil kingdom known for its lavish spending on man-made islands and the world’s tallest building, according to the Heritage Foundation.

The creators of Promised Land have gone to absurd lengths to vilify oil and gas companies, as Scribe’s Michael Sandoval noted Wednesday. Since recent events have demonstrated the relative environmental soundness of hydraulic fracturing – a technique for extracting oil and gas from shale formations – Promised Land’s script has been altered to make doom-saying environmentalists the tools of oil companies attempting to discredit legitimate “fracking” concerns. …
Promised Land was also produced “in association with” Image Media Abu Dhabi, a subsidiary of Abu Dhabi Media, according to the preview’s list of credits. A spokesperson with DDA Public Relations, which is running PR for the film, confirmed that AD Media is a financier. The company is wholly owned by the government of the UAE.

An ever-growing market for domestic fracking threatens dependence on foreign oil from the likes of UAE and OPEC.

A strong global market presence for American natural gas could also work to the UAE’s disadvantage. The Arab nation ranks seventh worldwide in proven natural gas reserves. For instance, Japan’s energy imports are expected to rise significantly over the next five years. The country is currently a major importer of UAE natural gas. If it decided to import more LNG from the United States to accommodate its increased energy demands, it could deal a blow to the UAE economy. …
All of this suggests a direct financial interest on the UAE’s part in slowing the development of America’s natural gas industry. Pop culture can be a powerful means to sway public opinion. While Promised Land, like anti-fracking documentary Gasland, appears to inflate the dangers of hydraulic fracturing, it may have an impact on the public’s view of the practice.

Matt Damon is a longtime Democratic partisan. Though he has voiced criticisms of Barack Obama, he donated $4,600 in 2008 to then-candidate Obama. Damon also co-hosted a star-studded fundraiser for Massachusetts Democrat Elizabeth Warren in Hollywood that netted the “Native American” candidate $250,000.

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This is the tip of the iceberg when it comes to the Green movement. It isn’t just that the UAE is doing this for biz reasons (there are plenty of places that want to buy energy that don’t care about Green Tech). The reason the UAE is doing this is for public relations reasons. America needs to be autonomous of this public relations culture on the surface that reveals hardline tyranny.
PS: wasn’t it Mother Jones who showcased Carter’s video of Romney? and what totalitarian regimes did Mother Jones Rep? For starters Muammar Kaddaffi. Why are we falling for this? Why is it offensive to shout out the truth?