Rather surprisingly, the most read post from this blog this week is an old one from 2013 - East Timor Complains About Australian Spying On Oil And Gas Negotiations / Australia Detains Whistleblower.

Presumably interest has been piqued by East Timor's recent decision to abandon an earlier agreement on oil and gas revenue sharing from Timor Sea fields - East Timor tears up oil and gas treaty with Australia after Hague dispute. The SMH has an article outlining the case for a better deal for the Timorese - Australia's unscrupulous pursuit of East Timor's oil needs to stop.

East Timor will tear up an oil and gas treaty with Australia that has been at the centre of espionage allegations, international arbitration and a bitter diplomatic dispute. The 2006 treaty relates to a temporary maritime border in the Timor Sea, and access to oil and gas deposits worth an estimated $40 billion. The agreement had outlined a 50-year freeze on negotiations for a permanent border.

But East Timor, also known as Timor-Leste, had claimed the treaty was invalid given Australian intelligence operations in 2004. Diplomatic relations have been tense since East Timorese officials accused Australia of spying on cabinet ministers amid negotiations on the treaty to divide the oil and gas fields.

It seems there is a social media campaign to try to pressure Australia into negotiating a fairer agreement with East Timor over oil and gas rights in the Timor sea - Message To Australia: 'Hands Off Timor's Oil'.

I'm sure the government will eventually agree to such a thing once there are no significant fields left in the area.

I recently read John Le Carre's latest book, "A Delicate Truth", and today's news stories about Australian intelligence agencies spying on East Timor's government as it negotiated with Australia over oil and gas resources in the Timor Sea did leave a similar bitter taste in the mouth.

The SMH has a report on the case - ASIO raids office of lawyer Bernard Collaery over East Timor spy claim

ASIO officers have allegedly detained a man and raided the office of a lawyer who claims that Australian spies bugged the cabinet room of East Timor's government during negotiations over oil and gas deposits. Attorney-General George Brandis confirmed last night that he had issued a search warrant for a Canberra address and that ASIO had executed it, seizing a number of documents "on the grounds that [they] contained intelligence related to security matters". The current director general of ASIO, David Irvine, was head of ASIS when the alleged bugging operation against East Timor took place.

Lawyer Bernard Collaery is representing the East Timorese government in the Hague as it seeks arbitration over a treaty it signed with Australia over the lucrative deposits, which it has since declared invalid. East Timor, also known as Timor Leste, will tender evidence of the eavesdropping as part of its case.

Mr Collaery, who has just arrived in the Hague, told Fairfax Media the raids were a "disgrace". He said the man ASIO had detained in Australia was a whistleblower who had led the Australian Secret Intelligence Serice operation to bug the cabinet room in East Timor. ...

East Timor alleges that former foreign minister Alexander Downer dispatched a team of ASIS officers to East Timor's capital, Dili, to bug the government's cabinet room and Prime Minister's office in 2004. ... At the time of the alleged ASIS operation, the two countries were negotiating a treaty covering the Greater Sunrise oil and gas deposits, worth many billions of dollars and the fledgling country's major source of revenue. ...

The negotiations over the Greater Sunrise were tense and Mr Downer was eventually forced to give East Timor a greater share of the deposits after public outrage here and in East Timor.

The SBS report on the subject notes that the Australian foreign minister at the time, Alexander Downer, went on to become a lobbyist for Woodside after he left politics - PM defends ASIO raid on Timor lawyer's office.

Lawyers for the tiny nation argue the Howard government used the Australian Secret Intelligence Service (ASIS) to spy on the East Timorese government to give Australia an unfair advantage in talks over the resources deal and a benefit to Woodside.

On Wednesday, officers from Australia's domestic intelligence agency, ASIO - on the orders of Senator Brandis - raided the Canberra office of lawyer Bernard Collaery, who is in the Netherlands preparing for the case. ASIO officers also reportedly interviewed a former senior ASIS agent who was expected to give evidence at The Hague, and cancelled his passport.

Mr Collaery says the ASIS agent had decided to blow the whistle on the 2004 operation because former foreign minister Alexander Downer had, after leaving politics, become a lobbyist for Woodside.

Crikey's Bernard Keane notes that US style tactic for suppressing whistleblowers are being adopted here (it's worth noting these revelations aren't part of the endless series of information dumpes coming from Edward Snowden) - The war on whistleblowers — it’s come to Australia.

To the extent that it hadn’t before, the war on whistleblowers and journalists that has been waged in the United States and the United Kingdom for the past several years has now been opened in Australia in the past 24 hours.

The Prime Minister’s attack yesterday on the ABC, Communications Minister Malcolm Turnbull’s unusual direct intervention with the ABC managing director Mark Scott, the smear campaign directed at Scott and The Guardian by loyalist media and then the remarkable news that ASIO had raided a Canberra lawyer’s office to seize information relating to an action brought by Timor-Leste in the International Court of Justice, are all profoundly concerning and all very familiar.

The Timor-Leste matter is entirely separate from the the ongoing Snowden revelations. The information was seized by ASIO agents in a raid on the office of Bernard Collaery, who was ACT attorney-general in the Kaine Liberal government in the late 1980s, authorised by current Attorney-General George Brandis under a remarkably wide warrant. It reveals that the Australian Secret Intelligence Service used Australia’s aid program to Timor-Leste as a cover for bugging the East Timorese cabinet to advantage the Howard government in commercial negotiations. The whistleblower who revealed this particularly shabby and highly damaging operation was also detained.

That whistleblower, said to be a former senior ASIS official, has not approached the media but is instead providing evidence in the legal action brought by Timor-Leste. In a crude attempt to prevent the former official from giving evidence in The Hague, his passport has now been cancelled. This particular dirty laundry goes back nearly a decade: the current head of ASIO, David Irvine, headed ASIS when it undertook this commercial espionage for the Howard government in 2004.

We’ve seen such tactics before, time and again, almost to the point of ritual, from the Obama administration in response to leaks by national security whistleblowers and their reporting by journalists: distract from the information revealed by attacking media outlets and journalists, suggest they are harming national security and should be prosecuted, attempt to discredit the revelations and use whatever legal measures are possible to harass whistleblowers and journalists, including, if necessary, anti-terrorism legislation.

The behaviour of the Abbott government in relation to the Indonesian phone-tapping story perfectly fits this pattern. While admitting that the revelations were a genuine story, both Tony Abbott and Malcolm Turnbull have attacked the ABC, which partnered with The Guardian in breaking the story. In a remarkable statement yesterday, Abbott suggested the ABC had breached its own act by “advertising a left-wing British newspaper”. When Katharine Murphy of The Guardian asked him whether the ABC’s partnering with Fairfax or News Corp to break stories was also “advertising”, Abbott refused to answer.

The ABC has a look at the legality of the events - Would spying on East Timor by the Australian Secret Intelligence Service be illegal?.

The location of the sea boundaries between Australia and East Timor has been an issue of contention between the two countries since East Timor attained independence in 2002. Their differing positions matter because there are major oil and gas reserves lying beneath the Timor Sea, known as the Sunrise and Troubadour deposits.

Following a series of negotiations, Australia and East Timor signed the CMATS treaty on January 12, 2006 and it came into force on February 23, 2007. The purpose of the CMATS treaty was "to allow the exploitation of the Greater Sunrise gas and oil resources" by providing for "equal sharing of the upstream government revenues flowing from the project". It was also agreed that Australia and East Timor would not make further claims over territory in the Timor Sea for 50 years.

The Sunrise project was to be developed by private oil and gas companies including Woodside, Shell and ConocoPhillips.

Both the Australian and East Timorese governments supported the treaty at the time it was signed, although Dr Clive Schofield of the Australian National Centre for Ocean Resources Security at the University of Wollongong notes some have argued that "the treaty is inequitable, favouring Australia at East Timor's expense and that it is the consequence of an unfair bargaining process"

The Age has some commentary recommending a fair border be established - Heed law of the sea and set a fair Timor border.

Indonesia isn't the only country in our region upset about Australia's spying. East Timor has accused Australia not just of spying on it, but of doing so for economic gain. Earlier this year, East Timor launched an arbitration process arguing that a key treaty concerning lucrative oil and gas resources in the Timor Sea was not valid because Australia had spied on Timor's negotiating team and bugged the Timorese cabinet room. ...

Many hoped the Australian-led peacekeeping mission in 1999 would not only be a great redeeming act, but would mark the beginning of a new era in which Australia would finally and unreservedly respect the sovereignty of its tiny neighbour. However, three years later, in 2002, two months before East Timor's independence, Australia made a decision that set a very different tone. It withdrew its recognition of the maritime boundary jurisdiction of the International Court of Justice and the International Tribunal for the Law of the Sea.

By turning its back on the independent umpire, Australia knew East Timor would have no legal avenue to stop Australia from unilaterally depleting contested oil and gas resources in the Timor Sea. This gave Australia an immense advantage when it begrudgingly agreed to sit down at the negotiating table in 2005.

East Timor, understandably, like any sovereign country, wanted to establish permanent maritime boundaries and it wanted to do so in accordance with international law. Australia had other ideas and successfully jostled Timor into yet another temporary resource-sharing agreement that required the establishment of permanent boundaries to be postponed for 50 years.

At the beginning of 2006 the two countries signed the Treaty on Certain Maritime Arrangements in the Timor Sea, which would split 50-50 the upstream revenues to be generated by the massive Greater Sunrise gas field.

The field, which is expected to generate about $40 billion in government revenues, lies just over 100 kilometres from East Timor's coastline. If permanent maritime boundaries were established in accordance with current international law the field would lie entirely within East Timor's exclusive economic zone.

Since the 1982 United Nations Convention on the Law of the Sea, international law has strongly favoured median line boundaries between countries less than 400 nautical miles apart - that is, draw a line halfway between the two countries' coastlines. While there are 80 examples of the median line resolving such claims, there is only one exception; the 1972 Australian-Indonesian seabed boundary.

The ABC has a report on the long running dispute over oil and gas revenue between East Timor and oil companies operating from Australia - Timor Sea hides fight for taxes and royalties.

LEIGH SALES, PRESENTER: Australians have long had an emotional attachment to East Timor. The images of violence when the Timorese forged their independence from Indonesia more than a decade ago are hard to forget.

Now East Timor has a new battle on its hands. It's fighting some of the world's biggest oil and gas companies for back taxes that could run into the billions.

In the lead-up to the country's general election this weekend, Stephen Long prepared this report.

STEPHEN LONG, REPORTER: It waged a long struggle for independence and won. Now the little country to our north has a new fight on its hands.

ALFREDO PIRES, EAST TIMOR SECRETARY OF STATE OF NATURAL RESOURCES: It is a David and Goliath fight.

STEPHEN LONG: A battle between big oil and a poor, fledgling nation.

ALFREDO PIRES: The importance of the petroleum revenue in general is vital for Timor-Leste.

STEPHEN LONG: A decade after independence, the country is still struggling to lift its people out of poverty.

The Timor Sea holds a bounty of oil and gas and that's a blessing and a curse for Timor-Leste. Its generated $10 billion dollars in royalties and taxes, invested in a sovereign wealth fund.

PIERRE-RICHARD PROSPER, LEGAL ADVISOR: It is the monies that will help stabilise the country. It is the monies that will help educate the people, feed people, give health care to those that are in need.

STEPHEN LONG: But its fragile economy is almost completely dependent on that petroleum revenue. 90 per cent of its taxes come from a handful of foreign resources companies. For years they got away without paying all that was due. Authorities in Timor-Leste didn't even audit them, taking the corporate giants at their word. But that changed about 18 months ago with audits going back as far as 2005.

PIERRE-RICHARD PROSPER: And as part of that auditing process they are discovering that there are areas where there were some discrepancies and they're beginning to look at that more closely. And as they already discovered that the tax officials from Timor are raising those issues with the various corporations, operators and are beginning to say, "We believe that there are taxes due. Please pay them. If you have an objection, please state why."

STEPHEN LONG: Millions of dollars in back taxes have already been paid after 28 adverse assessments. But that may be just a drop in the ocean.

The SMH has an interesting headline for their article on the impasse between the East Timorese government and Woodside (and partners) over the location of the LNG plant to process gas from the Sunrise field in the Timor Sea - Impasse on deal to plunder Timor's gas riches. Unfortunately for the Timorese, there is still plenty of Australian security in the country and, if what happened to Mari Alkatiri is any guide, regime change is always an option.

A serious dispute has broken out between Australian oil company Woodside and the East Timorese government over the processing of gas from the Greater Sunrise field in the Timor Sea. The dispute looks set to lock up one of the richest gas fields in the region and cost Woodside hundreds of millions of dollars already spent on research and development.

At the heart of the dispute is East Timor's claim for natural gas taken from the joint Australian-East Timorese field to be processed into LNG in East Timor. Woodside has rejected that option, saying it wants to process the gas on a floating platform in the Timor Sea. The East Timorese government has said, however, that its position is not negotiable and that without an agreement on refining in East Timor there will be no deal to proceed with drilling.

Both the floating platform and on-shore processing is likely to cost about $5 billion to develop, which is the equivalent of East Timor's current financial reserves from which it derives interest to, in effect, run the country. The profit from the project, however, is expected to run into tens of billions of dollars.

East Timor's claim to have processing undertaken on-shore is similar, in essence, to the Australian government's extended tax on mining companies. It wants its people to receive greater benefit from national resources that will otherwise enrich a foreign-owned company. It also says that Australia already benefits from an earlier processing agreement and that it is now East Timor's turn to benefit.

East Timor sees its economic future built upon the oil and gas reserves in the Timor Sea. An on-shore processing plant would mean not just the initial massive investment, but will further require establishing related infrastructure, meaning significant secondary economic benefits, as well as technology transfers and the training of local workers.

This, the East Timorese government believes, would herald the start of East Timor's own petrochemical industry and its chance to leap-frog the development cycle from little more than subsistence to industrialised status.

The ABC reports that Woodside are looking to build a floating LNG production platform for the Sunrise field between Darwin and East Timor (with the East Timorese continuing to lobby vigorously for the plant to be built there) - Floating LNG plant to be built near East Timor

After years of speculation, the Sunrise Joint Venture has finally announced it will build a floating liquefied natural gas processing plant in the Timor Sea. The Greater Sunrise field is in both Australian and Timorese waters, about 700 kilometres north-west of Darwin, and the two countries will have an equal share of royalties.

The floating rig means Darwin will miss out on having a multi-billion dollar plant built there. Operator Woodside Petroleum says after considering on-shore LNG processing in both Darwin and East Timor, the joint venture partners, which include Osaka Gas, Shell and ConocoPhillips, decided a floating plant was the most viable.

Woodside CEO Don Voelte says the decision is a boon for the new but impoverished democracy. "We expect that the selection of a floating LNG processing option will, in addition to generating significant long-term petroleum revenue, provide a broad range of social investment, employment and training opportunities for Timor-Leste."

The Australian has a report on progress on the Sunrise LNG project in the Timor Sea. Unsurprisingly, operator Woodisde has decided not to build an LNG plant in East Timor (much to the outrage of the Timorese) and instead is favouring a world first floating LNG platform - Darwin beats Timor for site of LNG plant.

WOODSIDE Petroleum has ruled out a $15 billion East Timor liquefied natural gas export plant to process output from its Greater Sunrise fields. East Timor's natural resource secretary of state said the decision would be a "major problem" for the Government.

A Woodside spokeswoman said yesterday that the Perth company had told East Timorese authorities a local plant was not commercially attractive and it would instead focus on piping gas to Darwin or building a floating LNG plant. East Timor Natural Resources State Secretary Alfredo Pires said he had not been informed of the decision and the Government, which had to approve the Sunrise project, would still push hard to for an East Timor plant.

"If there is a decision of that nature it will be a major problem for us," Mr Pires said yesterday after being informed of Woodside's statements. "To my understanding we have an agreement that no decision on a site shall be made until early next year."

Mr Pires said he was more than just hopeful an LNG plant would be built in East Timor. When asked if he was instead demanding, he said "yes". "We think it is only fair that the gas pipeline comes to Timor Leste," he said. "Timor Leste's needs have to be taken into account this time round."

After delaying the project since 2004 until fiscal and legal certainty could be obtained from East Timor, Woodside late last year restaffed the project.

That was done after East Timor ratified a treaty splitting royalties from the project 50:50 with Australia, an improvement for the smaller nation on a previous agreement. The Greater Sunrise fields straddle the boundary of the Joint Petroleum Development Area of the Timor Sea. Woodside had previously said the East Timor plant was the least preferred of the three options and yesterday said it was no longer being considered.

"Floating LNG is the most attractive in-field option and Darwin is the most commercially attractive onshore option for Sunrise," a Woodside spokeswoman said.

Very straight bat from the SMH with this story about the incident in East Timor which left the Prime Minister wounded and Alfredo Reinado dead.

East Timorese rebel leader Alfredo Reinado was involved in 47 telephone calls to or from Australia in the hours before he was shot dead at the home of the country's president, Jose Ramos-Horta, investigators have found. Authorities in Dili want Australian agencies to tell them the names of the telephone subscribers, Fairfax has reported.

The investigators are focusing their inquiries on calls Reinado and his men made before and after the attacks in Dili on February 11. They also want Australian intelligence agencies to send them any telephone conversations they recorded that relate to the attacks on Mr Ramos-Horta and East Timor's Prime Minister, Xanana Gusmao. East Timor's Prosecutor-General, Longuinhos Monteiro, who heads the investigation, told Fairfax on Monday he had been unable to establish the identities of the subscribers in Australia.

Another East Timor story from The Age - Timor rebels deny assassination plot.

In Darwin, Mr Ramos Horta told CNN there was "increasing evidence pointing a finger at external elements" that were supporting Reinado. "These are elements interested in destabilising East Timor, plunging it into an endless civil war so it could be declared a failed state," he said.

Energy Current has a brief report about an enormous (but highly theoretical at this stage) oil and gas find offshore from Indonesia's semi-autonomous Aceh province. The only other source with a report on this seems to be the Jakarta Post.

I vaguely recall some of the (very dodgy) tinfoil theories that washed ashore in the wake of the 2004 tsunami claimed that it was deliberately triggered as part of a grab for the regions' resources. I wonder if any of the foreign forces that landed to help in the clean up and reconstruction are still there ?

Indonesian and German research agencies claimed a massive find of subsea hydrocarbons holding between 107 billion to 320 billion barrels of oil and gas reserves in a basin off the western shore of Aceh Nangroe Darussalam, Indonesia, according to a Jakarta Post report.

Research vessel Sonne encountered the underwater basin while performing a survey to map the geological construction of the surrounding sea in Aceh after the 2004 Indian Ocean tsunami, Indonesia's Agency for the Assessment and Application of Technology (BPPT) and Germany's Bundesanstalt fur Geowissenschaften und Rohstoffe (BGR) said in a statement.

The research and preliminary finding remains subject to further tests to determine the actual reserve size of the basin. Further information is required before energy companies would be able to feasibly explore for oil or gas. If the hydrocarbon potential of the basin is proven, the area may well be among the largest oil and gas reservoirs in the world.

The Wall Street Journal has a look at the Matt Simmons vs Aramco debate in "Peak Oil: Simmons v. Saudis, Round Two". I'll note the comments thread has more kooks than most tinfoil sites could muster - where do these people come from - isn't the WSJ supposed to be for respectable people...

Both Nansen Saleri, former chief of reservoir management at Saudi Aramco, and Houston-based investment banker Matthew Simmons are feeling good these days about the famous–and weighty–debate they held four years ago at Washington’s Center for Strategic and International Studies. Are Saudi Arabia’s massive oil fields in great shape—or falling apart? Can Saudi Aramco help slake the globe’s soaring energy thirst far into the century—or has that ability already peaked?

Simmons, in his book “Twilight in the Desert” argued that several big Saudi fields, including the massive Ghawar field, were showing signs of serious strain. Their debate before a packed house at CSIS marked an unprecedented moment of openness for the secretive Aramco.

Saleri now says in an interview that time has proven Aramco right. Simmons “was saying four years ago that Ghawar was going to collapse and that Saudi Aramco was going to go into decline….[But] that precipitous decline never occurred,” he says. Saleri, who left Aramco last year to create his own Houston-based reservoir-management company, insists Ghawar will keep pumping five million barrels a day far into the future. Aramco also managed to revive some other behemoths, like Abqaiq. “Abqaiq became a renaissance story for Aramco,” he says, insisting that the field’s pressure remains strong and its water content is going down even after more than 60 years in production. Abqaiq “is doing fantastically,” Saleri says.

Simmons, reached by phone in Houston, says he feels equally vindicated—and increasingly alarmed. He based his book largely on information dug up in old technical journals. In recent weeks he has hit the archives again, with thoughts of writing a second book. What he has found, he says, “is so unbelievably scary you can’t believe it.” He claims that there is mounting technical evidence that Aramco is struggling to deal with increasing volumes of water at its hugest fields. With water production going up, he says, oil production is going down. “It is absolutely clear as a bell now that all of those fields are heading toward being another Cantarell,” referring to the massive Mexican offshore field, which is now in rapid decline.

More on Simmons at The Rude Awakening, looking at "Empty Holes and Black Swans".

It may be blasphemous to ponder in a region that produces a good deal of the world's hydrocarbon-based energy, but what if Peak Oil has already occurred?

"My opinion is that it's increasingly likely that we actually set an all-time record in May 2005 of 74,252,000 barrels per day," states Matt Simmons, founder and chairman of the world's largest energy investment banking company, Simmons & Co. International.

"And for the first three months of 2007," Simmons continues, "we were almost a million barrels per day behind that, and we're dropping fast. If that record still holds a year from now, I'll bet someone ten-to-one that we set peak oil in May 2005 and it's now past tense."

Not one to shy away from a bet, Bud Conrad, chief economist at Casey Energy Speculator and fellow Peak Oil enthusiast, plotted the following slightly more inclusive chart to give us an idea of where we stand today.

As the graph clearly illustrates, world production has been on a rather unimpressive plateau for the past couple of years. Part of this stagnation in global output growth stems from the coughing, spluttering "chokepoints" that we read about in the news every other day.

Just this past weekend we saw crude shoot up about four bucks on the back of threats made by Venezuela's head honcho, Hugo Chavez, that he may sever export lines to the thirsty U.S. Then there was a decline in production in Nigeria...troubles in the North Sea...ongoing issues in Iran...the "problem with Putin"...the list goes on.

The thumbscrews are tightening for net oil importers. As we explained in yesterday's Rude, "The American SUV driver was a tad sluggish in his gait this morning. Once again his pocketbook has been pinched. The hefty drive from his suburban McMansion to work in the city and the heating in his Connecticut vacation home just became a little more expensive."

But the issues that face net-importing nations around the world may soon be felt by the net-exporting nations too. Oil, as a finite commodity, will one day dry up. The impetus for economies with a heavy oil hand to diversify, therefore, is rather serious.

Consider that Abu Dhabi, capital of the UAE and one of the Middle East's largest crude exporters, has just pumped $15 billion into their Masdar Green City initiative and one begins to understand just how seriously even the crude rich nations are taking the issue of ultimate depletion.

In the following column, Bud sits down with Matt Simmons to root out some of the grim realities emerging at the tail end of our petroleum age. This may hurt a little...but we hope it also helps. Enjoy...

Energy Bulletin has an interesting article on the "Pakistan problem: Washington's perspective", outlining a theory that the US would like to see Pakistan broken up and then merged back into India. The idea of merging Pakistan into India seems pretty far-fetched (I really can't imagine it being possible under any circumstances) but the idea that US policy involves making sure there are no functioning states within the middle east that could pose any threat to US control of the oil seems more plausible.

The Bush administration has persistently supported Pakistan’s military dictator, General Musharraf, despite widespread criticism of this policy at home and abroad. With the likely induction of the Democrats in to the White House, should one anticipate a different U.S policy towards Pakistan? This question is best answered when placed within the framework of Washington’s long term objectives in South Asia.

The neocon vision of national security is described by President Bush in the 2006 edition of the official document titled the “National Security Strategy of the United States of America” in the following words:

“We seek to shape the world, not merely be shaped by it; to influence events for the better, instead of being at their mercy”.

This preemptive foreign policy is driven by “Peak Oil” related anxiety. Cognizant of the fact that the world is headed towards a new type of international rivalry that will entail a scramble for world’s diminishing supply of fossil fuel, and encouraged by the U.S’s unrivaled status, the necocons embarked upon a policy to establish greater control over the world’s energy resources. As a functional prerequisite of this control, Washington has set out to establish alliances that will strengthen its created “energy order”, prevent China from emerging as a competitor of the U.S, and prevent major Asian countries from forming a multi polar power bloc against the U.S.

The Middle East is at the heart of this policy, where Washington is pursuing the following objectives.

1. Middle Eastern countries that produce fossil fuel and those through which vital pipelines transit (called the “strategic core” of the Middle East), should not be allowed to develop or retain, state-of-the-art military. U.S protected Gulf kingdoms are deemed harmless and therefore allowed the purchase of military hardware.
2. No Middle Eastern state (except Israel) should be allowed to develop or retain nuclear weapons.
3. The concept of modern “nationhood” encompassing large states overriding ethnic loyalties should be discouraged in the “strategic core” of the Middle East as a preemptive strategy against pan-Islamic revolutions such as the '79 revolution in Iran.

U.S policy in these areas is aimed at scuttling the “sources” of modern nationalism, i.e. a large, multiethnic nation state equipped with an equally large military. (These two ingredients serve simultaneously as the symbol and the source of modern nationalism as it evolved in Europe out of the Napoleonic wars). This explains the Bush administration’s bid to petrol the high seas under the “Proliferation Security Initiative”, its itch to attack Iran, the result of its engagement in Iraq, its post Cold War policy in Afghanistan and its current policy in Pakistan.

The imperatives of the above objectives negate the institutional strengthening of Pakistani state and society and require, above all, the dismantling of Pakistan’s nuclear arsenal. Furthermore, for reasons elaborated below, an altogether end to Pakistan as an entity, rather then its continuity, serves long term interests of the U.S better. Events in Pakistan, it seems, are being influenced in that direction.

For Washington, the strategic importance of Pakistan has been replaced by India and Afghanistan, in that order. Afghanistan’s long term relevance to U.S energy policy lies in its proximity to resource rich Central Asian republics and Russia. Its short term importance lies in its 800 mile long border with Pakistan, a proximity which is being utilized for destabilizing the latter. The fact that Pakistan is a nuclear Islamic state is a significant negativity in the neocons’ envisaged world order. Pakistan’s size and its nuclear arsenal discourages overt military engagement to neutralize this negativity. The long standing, entrenched CIA presence in the country, on the other hand, facilitates the deployment of covert means, pivotal to which is the spill over into Pakistan of terrorism caused by U.S invasion and occupation of Afghanistan. As a “terror inflicted, failed state”, Pakistan becomes vulnerable to international pressure to disarm its nuclear arsenal.

As a transit route for Central Asian fossil fuel, Afghanistan circumvents Russia, China and Iran. It establishes an alternative route which passes through the Afghan-Pakistan territory to the Indian Ocean. To stabilize this route, the neocons plan to break Afghanistan into smaller, ethnically contiguous states capable of ensuring the safety of pipelines as they transit through the area into India. Washington does not envisage a unified Afghanistan, otherwise it would have used King Zahir Shah and his family to rally disparate Afghans, instead of the ineffective Hamid Karzai. That is why in the 2003 budget proposal, the Bush administration did not request any reconstruction aid for Afghanistan, a state it declared central to the war on terror. The Bush administration slashed reconstruction aid to Afghanistan from one billion dollars in 2005 to $623 million in 2006. Washington’s monetary commitment to the reconstruction of Afghanistan is paltry and is executed with blatant insincerity. Similarly, Washington did not engage in de-radicalization of Pakistan after the end of Soviet Afghan war, like its post Camp David engagement with Egypt. Pakistan, the only nuclear Islamic state, is too important a country to have suffered such neglect simply due to policy oversight. Washington did not commit its resources to de-radicalizing Pakistan because it does not envision a stable Pakistan as a long term U.S ally. ...

During the 1971 Indo-Pak war, when Pakistan’s defeat in the Eastern sector became imminent and the fear that New Delhi would invade West Pakistan increased, U.S sent its nuclear armed USS Enterprise to the Indian Ocean to prevent India from dismembering Pakistan. In response, the Soviet navy dispatched its nuclear submarines to ward off the U.S threat to India. The imperatives of the Cold War, thus, saved Pakistan. The new alignment of international political forces and the imperatives of Peak Oil politics are both fatefully arrayed against Pakistan. The forces with a plausible interest in destabilizing Pakistan include groups as diverse as the Indian RAW, the American CIA, the global Al Qaeda and the regional Taliban. Pakistani military dictators have failed to enter into a system of alliance that would serve Pakistan well in the post Cold War era. Their continued alliance with the U.S has enriched them personally, but it has augured ill for their country. Under the current circumstances, Pakistan’s nukes, instead of serving as its strategic asset, have become a liability. Instead of being able to dyke the flood of instability that is engulfing Pakistan, Musharraf is drowning in it more and more by the day. This, above all, explains why the neocons are so pleased with him.

The above analysis by no means entails that Washington’s policy in Pakistan will alter radically with the induction of the Democrats in to the White House. Although the current U.S energy policy, and its offshoot “the new South Asia policy” was “envisioned” by the neocons, the Democrats have already embraced it publicly during Bill Clinton’s historic visit to India in March 2000. Pakistan is not only of no use to Washington any more, it is a thorn in its side. Washington hopes to manipulate a new military rivalry in Asia to its advantage. It wants the Indo-Pak rivalry replaced by the Sino-Indian rivalry. With India as its ally, Washington hopes to gain much out of this rivalry. There is every likelihood, therefore, that the neocon policy of covertly engineering Pakistan’s dismemberment will continue under the Democrats till such time as the policy objectives have been met.

Idleworm also points to a story (what it calls "a socialist analysis of Obama") that mentions the goal of dominating the middle east and central asia.

Obama is not, however, the product of the civil rights struggles against racial oppression, nor is he associated with any popular movement from below. His career has far more in common with those of Condoleezza Rice and Colin Powell, individuals selected and groomed by the American ruling class to carry out its policies. Like them, he is being used to put a new face on fundamentally reactionary policies and institutions...

Important sections of the ruling elite have concluded that, particularly for the overseas interests of American imperialism, a President Obama would provided important advantages. He would at one stroke put a “new face” on American foreign policy, and make it more likely that Washington could overcome the international isolation and global hostility created by the arrogant unilateralism of the Bush White House and its failed intervention in Iraq. And it may well require a Democrat in the White House to reinstate the draft and provide the manpower required to sustain and expand the US drive for military domination of the oil-rich Middle East and Central Asia...

An Obama presidency (or a Clinton presidency, should her campaign ultimately prevail), would thus represent a fine-tuning or adjustment in American foreign policy, but no let-up in American imperialism’s drive to war and conquest, which arises not out of the brains of George W. Bush and Richard Cheney, but out of the historical crisis of American and world capitalism.

Heading back to the fringes of the Indonesian archipelago, Crikey has some comments ("More questions than answers in East Timor") on the recent assassination attempts on the East Timorese Prime Minister and President. There's something very fishy about this whole affair, though not as obviously dodgy as the original set of events kicked off by the now-deceased Major Reinado that resulted in the downfall of previous Prime Minster Mari Alkatiri, who I suspect paid the price for trying to be too assertive about East Timorese independence. For what its worth, the Green Left Weekly probably had the most accurate take on that one.

The power plays in East Timor (with Australia, Indonesia, China and Portugal all jostling for control of the country's energy resources) are murky, and whowever who was behind this latest outbreak of violence is beyond me.

If you'd heard that East Timor president Jose Ramos Horta had been shot, and Prime Minister Gusmao shot at, you'd immediately suspect the hand of rebel leader Alfredo Reinado. Ipso facto.

But there's muddying of the waters in the press and across blogs today, as people try to come to grips with what's happened. Reinado himself was killed in the shoot-out at the President's residence.

Timor-Leste radio has been reporting that Reinado was actually staying with Ramos Horta, according to one blogger. This is directly contradicted by Gusmao in today's Australian: "Some people have said that President Ramos Horta had called Alfredo Reinado to come to Dili. But this is not true. Before taking any action, the President always contacts me and the President of the national parliament to co-ordinate activities. I would have known if he had contacted Alfredo."

What does seem clear is that the threat wasn't taken seriously enough, either by East Timor's leaders or the ADF and the UN. (In fact, UN forces apparently stayed 300 metres away from Ramos Horta after he was shot, ABC's PM was told last night.)

Tough questions must be asked over the security role of the ADF in East Timor, writes Patrick Walters in today's Australian:

Why, amid renewed threats last week from Reinado against East Timor's leaders, did the ADF and the UN-sponsored International Stabilisation Force not lift security around Jose Ramos Horta and Xanana Gusmao? While both leaders have declined the offer of Australian personal bodyguards in recent months, why, given the heightened threats, did the ADF and UN authorities not move to lift the overall level of surveillance protection and perimeter security provided to both men?

And if yesterday's attacks really were an attempted coup, some are asking why security hasn't been more significantly stepped up since.

Conspicuous by their absence yesterday were "extra security at the TV and radio station (if this was a coup attempt these places should both have extra guards)", writes Xanana Republic's English blogger.

Perhaps it's just with Reinado gone, the threat seems diminished. As Tom Allard writes in today's SMH, "there is no-one to replace him".

Below are a couple of the blog posts that digest the situation, trying to untangle the half-based truths and jumbled facts. In East Timor, unconfirmed stories need to be taken with a grain of salt. As one of the bloggers says, they're "about 90% correct but that 10% error can affect conclusions by 100%. Some local media were reporting that the President had died which everyone seems to agree is not the case. It is rarely straightforward here."

Eyewitness report and some unanswered questions. I received an email this afternoon from a mate who is the de-facto head of the Dili surf life saving club. This is the 3rd person I know who was in the area at the time but this one is a bit closer to the bone. In fact, TS has had the nervous sh-ts all day - I can understand why. He writes :

I went out for my morning exercise at 0630, and got to the intersection to The President’s house when it all went pear shaped.

I had turned up the road for the hill ride, stopped and started when I heard the gunfire. There was a vehicle straddling the road, some rubbish as well, and I could see what looked like uniformed personnel running around the area. Lots of gunfire, then three rounds went off just beside me, but in the bush. I was still about 400 metres from the house so hopefully they were only shooting quail and not me. But I don’t think so. It was still around dawn, so I couldn’t see exactly what the vehicle was, but it looked familiar.

I turned back, and headed east, and bumped into the President who was with two of his guards. One was on the road, the other with the President on the beach. All this was about 6.40am.

I stopped them and told them what had happened … he said no to the offer of a ride, saying it should be OK...

My old mate FOS over at xananarepublic.blogspot.com also has his acquaintances down the eastern end of town and all I can suggest is you read what his take is. So if Radio Timor-Leste is correct and Alfredo really was staying at the President’s place, which group of people dressed as soldiers attempted to simultaneously (give or take 5 minutes) take out Alfredo, the President and the Prime Minister who lives some 10 kms away? -- Dili-gence

Was Reinado staying with Ramos-Horta? As speculated earlier, it seems that the attack was carried out during JRH's normal morning walk/run. A friend who lives about 300 metres away reported a fire-fight occurring at about 0650 this morning. From various wires/radio sources it appears that two vehicles drove by and then opened fire. Radio Timor Leste is reporting that Alfredo Reinado was indeed killed in the shootout but rather than being an attacker he was in fact a guest at JRH's house and had been there for up to a week and ran out of the house during the attack to try and stop it and was killed in the crossfire. A contact at Dili hospital confirms two dead were brought to the hospital, neither of whom whas Alfredo. The Deputy PM is saying that three people were killed in the attack so maybe Alfredo was among them and not taken to Dili hospital. We are also hearing about an attack on a convoy containing Prime Minister Gusmao roughly 30 minutes after the attack on JRH. I have had a bit of a trawl around Dili in the past few hours and here are some observations:

Conspicuous by their absence: UN police cars outside Castaways and Dili Beach Hotel.

Conspicuous by their absence: Extra security at the TV and radio station (if this was a coup attempt these places should both have extra guards).

Conspicuous by their absence: Malae in Dili centre, apart from security forces.

Conspicuous by the non-absence: Many Timorese on the streets, especially in central Dili but not many people on the street in my area. Maybe the news hasn't filtered down yet. -- Xanana Republic