Storm Season?

Just a few brief comments... with the leisurely start to this year's Atlantic Hurricane Season, one could almost be forgiven for thinking that things are looking up. Iraqi oil exports reached a post-Saddam peak at 2.5 MMBPD, but scratch a bit below the surface and storm season really is just around the corner:

- Krazy Kim and his band of North Koreans are on the verge of launching a Taepo-dong 2 missile. You never can tell what Kim will do, and despite how fun (and easy) it is to hold up his antics as proof that Darwin was wrong (Kim Il-Sung, his father, was actually quite the historical "Great Man" in many ways), there is a cool rationality behind it. The imminent launch is significant because, if you listen to the Chosen Soren (NK 5th Column in Japan) propaganda, this won't be a "ballistic missile" test, but rather a launch of a "civilian" satellite. A Kim-Chee Sputnik, if you will--significant because a satellite launched into polar orbit is also a demonstration of a nation's ability to deliver a similar sized nuclear device ANYWHERE on Earth (not just "Alaska or Hawaii"), but with plausible "peaceful" deniability. It is, after all, party of that theory of sovereignity that nations have the right to peacefully explore and utilize space. North Korea is quite critical for two reasons: first, it is the rationale for US influence in South Korea, which is really what maintains a buffer between China and Japan and prevents an increasingly nationalistic Japan from re-arming. Kick the US out of the picture (which is exactly what the South will do if the US launches strikes against North Korea in retaliation for a missile launch) and suddenly Korea becomes a contest of Chinese and Japanese influence. Korea is also significant as it relates to Iran:

- The Iranians are playing a quite rational game of procrastination--they can't, of course, accept the EU3+3 (France, Britain, Germany, China, Russia, US) proposed package of incentives to abandon nuclear enrichment. The hard-liners who are currently in nominal charge of the situation can't turn away from nuclear weapon development at this point--they have galvanized their base around this very issue. And quite frankly, it makes perfect sense for them--given the surrounding circumstances--to pursue a nuclear weapon. So instead they will give it an "honest" consideration--with honest being "signaled" by way of a delay in responding until August or September. When, of course, they will say no, as they have already decided. Better yet, they will probably offer a quite reasoned and superficially reasonable counter-offer, which of course will be immedately rejected. Time is on their side, not on the side of the EU3+3. Can someone please come up with a better naming convention for groups of countries?? "Axis" and "Allies" just has so much nicer a ring to it. But in the mean time they will continue "secret" enrichment at their Esfahan facility. The only puzzle remaining is exactly how closely the actions of North Korea and Iran are coordinated at this point. There is clearly a coordination of brinksmanship and rhetoric here--after all, the US military's foundational strategy of "two major theater wars simultaneously" is somewhat hamstringed by the "one permanent major theater war" currently underway in Iraq. I guess the only real question, then, is 'to what degree is there conscious coordination, or is it just simultaneous and independent opportunism?'

- But amidst this backdrop of unsettled seas (not to mention the escalating crisis in Palestine, among other pots about to boil over) is some "real" news: Looks like Saudi Arabia really has peaked in Oil production. Down to steadily over the past year from 9.52 Million Barrels per Day in June '05 to 9.05 Million Barrels pe Day in May '06. And Russia, Norway, and Iran are all beginning to experience significant declines as well. Matt Simmons, who's predictions on Saudi production were largely ridiculed until quite recently (he was invited to address the Department of Defense "tiger team" on this topic last week) is now largely vindicated, and he is now predicting that oil production in the Middle East will decline by 50% within 12 years. Despite recent increases, he doesn't hold much hope that Iraq will make up for any significant portion of this shortfall.

So while there are no major hurricanes at the moment, don't despair--this is the kind of foreshadowing that is necessary in the opening pages of any great story...