"It's all about the price of oil," lamented Billy Bragg. The oil men in the White House didn't give a damn, but one in particular gave enough of a damn to give the appearance of a justified, non-oil-driven adventure by bringing along whichever ally, irrelevant or not, he could. José María Aznar was such an ally. If he was then mocked for being "Tony's little friend", he must have been Bush's very tiny friend. All about the price of oil.
In 2002, a royal decree of the government of José María Aznar was finally approved and published in the Official Bulletin. It paved the way for oil prospecting off the coasts of Fuerteventura and Lanzarote in the Canary Islands. It was a decree with the backing of Aznar, the then vice-premier, Mariano Rajoy, and the environment minister at the time, the now disgraced ex-president of the Balearics, Jaume Matas.
For various reasons, this prospecting didn't happen. One was that the Spanish Supreme Court blocked Repsol's attempts to start exploration in 2004. This was after the government had changed and Aznar was no longer prime minister. But while the arguments over the exploration centred on the environmental impact, in the background were international political issues.
Following 9/11, the American Government moved to strengthen its relations with Morocco, and a free trade treaty was signed between the two countries. Morocco became the first African country to have such a treaty. This, however, was problematic for Spain. And the reason why was oil. Or the possibility of oil and to which country it might actually belong.
If you look at a map you will see that the Canaries lie off the coast of Morocco. Only a comparatively short distance to the south is the disputed territory of Western Sahara. Morocco claims sovereignty over Western Sahara, a territory which, under US-led pressure at the United Nations, Spain was forced to give up in 1975; the UN doesn't recognise Morocco's sovereignty claims. Exploration for oil off Western Sahara started, at the behest of the Moroccan Government, in 2002. It has since come to a halt, partly because of the lack of clarity over legal status. But the point is that oil fields which may or not exist off the Canaries could extend into territorial waters that are not Spanish and are either Moroccan or Western Saharan.
The trade agreement and cosier relationship between the US and Morocco were problematic for Spain because it needed (or would need) US support in any dispute over rights to oil. Was it all about the price of oil? Well, there are those who would argue that the only reason Aznar and Spain sided so strongly with Bush against Saddam wasn't so much to do with oil in Iraq but to do with oil in the Atlantic.
The international politics may have shifted since then, but the arguments are still the same, and they have been boiling up in the Canaries. An oil platform belonging to Cairn Energy sits in readiness for drilling work on behalf of Repsol to start this year. Aznar is no longer prime minister, but his one-time second-in-command is, and the Partido Popular administration has given the go-ahead to prospect for what could amount to 38 million barrels of oil a year.
Opposition in the Canaries has come from hoteliers and others in the tourism industry, from environmentalists and from local politicians in the regional government and at island councils. It is only really the Canaries business confederation that supports the national government in undertaking a venture which, for some in the Canaries, amounts to the islands being treated "like a colony" and being exploited against their wishes.
There is a much more tangled web surrounding the exploration off the Canaries than that to do with a subterranean sea mountain which runs from a location some 70 kilometres from the mainland at Cabo de la Nao to 45 kilometres off Ibiza. It is this mountain that has been designated for oil exploration. At one end is rare seaweed; at the other, in the waters near Ibiza, is posidonia sea grass, which is not unique to the Balearics but is otherwise also rare. The opposition to the exploration is as unified in the Balearics as it is in the Canaries, but it has a notable difference; the political leadership in the Canaries is not Partido Popular.
So, one has a situation in which the regional PP in the Balearics opposes the national PP. President Bauzá is against the exploration because of the potential harm that could be caused to tourism. Whether the opposition, in more general economic terms, is right is another matter. At least in the Balearics, though, there are no international politics to be concerned with other than those of a European Commission nature. And the EC, for one, needs convincing as to environmental safeguards.
Showing posts with label Repsol. Show all posts
Showing posts with label Repsol. Show all posts
Sunday, February 02, 2014
Monday, March 26, 2012
From Canary Yellow To Black Gold
Sixty kilometres from the coasts of Lanzarote and Fuerteventura, the Spanish energy company Repsol is to start prospecting for oil. The arguments that have raged over oil exploration off the Balearics (further away than in the case of the Canaries) are being repeated but are creating more of a fuss and more by way of potentially bad publicity.
The arguments do, though, put into perspective the situation with regard to prospecting in the seas between the Balearics and the peninsula. While concerns for the environment and for tourism are as pronounced in the Canaries as in the Balearics, the potential economic benefits are being expressed far more strongly.
Repsol believes that there is a high probability of discovering oil (if you accept that a 20% probability is high) and that exploitation of these "probable" oil beds would eventually realise the equivalent of 10% of Spain's total oil and gas consumption for at least 20 years. (How such a calculation can be made based on a 20% probability I'm not entirely sure, but then I am neither a geologist nor an oil expert.)
Were such production of oil to come to pass, then there would be a clear economic benefit. And there is another strong economic case for Repsol's activities, that of employment. The Canaries, despite an all-year-round tourism industry and despite, like the Balearics, having enjoyed a record tourism summer in 2011, suffer the second highest level of unemployment in Spain - 31%. A light has gone on in the head of José Manuel Soria who has said that this unemployment demonstrates that tourism is not sufficient and that more industry is needed. Soria, if you need reminding, is the national minister for industry and energy and also for tourism. He also just so happens to be a former president of the Canaries.
You might think that industry and energy should not be combined with a portfolio for tourism as well, as they have competing demands. There will doubtless be many who disagree, but I believe that in Soria, especially as he knows full well from his Canaries experience what tourism means in terms of real employment prospects, here is a minister ideally placed to balance these competing demands. Tourism does not exist in an island all by itself; it is part of the total economy, and that economy would be partially transformed by oil.
There is a further economic factor that has influenced national government's authorisation of the Repsol prospecting. The oil beds lie not far from the imaginary line between Spanish and Moroccan waters; indeed they probably cut across this line. The Moroccans are in favour of exploration, and the fear has been that if Spain doesn't seek to exploit what oil there may be, then Morocco could nab it all for itself. There may yet, at some time in the future, be some almighty row over who owns the oil, but for now there is accord. This political dimension distinguishes the Balearics argument from that in the Canaries; there is no argument about who owns what may lie in the bay of Valencia and towards the Balearic Islands. But the politics make it more urgent that Spain (and Repsol) get a move on.
The politics within Spain are another matter. It is a curiosity that the Partido Popular in the Canaries, the Balearics and Valencia have all voiced their opposition to exploration; curious, as you might believe that the PP would be more disposed to display economic and business pragmatism than other parties. The PP in the Canaries are none too impressed by national government having gone over their heads, but someone has to, and the oil would be in the national interest (and also in the interests of the Canaries if their diabolical unemployment rate could be tackled).
The prominence being given to the prospecting is where the bad publicity comes in, and it is bad publicity fairly and squarely of a tourist style. TUI, for one, has expressed its concern, and the bad publicity has mainly surfaced in Germany, causing fears that the Canaries will acquire a different sort of reputation, i.e. for oil, and one that runs counter to a general culture in Germany of environmental concern and for clean energy.
Notwithstanding these admittedly legitimate fears, I would reiterate a point I have made previously in the context of prospecting off Balearic waters, and this is that oil and tourism can co-exist, as they do in the likes of Trinidad and Tobago. National government is right to press ahead, and for this we have to thank the existence of a minister who "gets it" where a combination of industry, energy and tourism is concerned.
Any comments to andrew@thealcudiaguide.com please.
The arguments do, though, put into perspective the situation with regard to prospecting in the seas between the Balearics and the peninsula. While concerns for the environment and for tourism are as pronounced in the Canaries as in the Balearics, the potential economic benefits are being expressed far more strongly.
Repsol believes that there is a high probability of discovering oil (if you accept that a 20% probability is high) and that exploitation of these "probable" oil beds would eventually realise the equivalent of 10% of Spain's total oil and gas consumption for at least 20 years. (How such a calculation can be made based on a 20% probability I'm not entirely sure, but then I am neither a geologist nor an oil expert.)
Were such production of oil to come to pass, then there would be a clear economic benefit. And there is another strong economic case for Repsol's activities, that of employment. The Canaries, despite an all-year-round tourism industry and despite, like the Balearics, having enjoyed a record tourism summer in 2011, suffer the second highest level of unemployment in Spain - 31%. A light has gone on in the head of José Manuel Soria who has said that this unemployment demonstrates that tourism is not sufficient and that more industry is needed. Soria, if you need reminding, is the national minister for industry and energy and also for tourism. He also just so happens to be a former president of the Canaries.
You might think that industry and energy should not be combined with a portfolio for tourism as well, as they have competing demands. There will doubtless be many who disagree, but I believe that in Soria, especially as he knows full well from his Canaries experience what tourism means in terms of real employment prospects, here is a minister ideally placed to balance these competing demands. Tourism does not exist in an island all by itself; it is part of the total economy, and that economy would be partially transformed by oil.
There is a further economic factor that has influenced national government's authorisation of the Repsol prospecting. The oil beds lie not far from the imaginary line between Spanish and Moroccan waters; indeed they probably cut across this line. The Moroccans are in favour of exploration, and the fear has been that if Spain doesn't seek to exploit what oil there may be, then Morocco could nab it all for itself. There may yet, at some time in the future, be some almighty row over who owns the oil, but for now there is accord. This political dimension distinguishes the Balearics argument from that in the Canaries; there is no argument about who owns what may lie in the bay of Valencia and towards the Balearic Islands. But the politics make it more urgent that Spain (and Repsol) get a move on.
The politics within Spain are another matter. It is a curiosity that the Partido Popular in the Canaries, the Balearics and Valencia have all voiced their opposition to exploration; curious, as you might believe that the PP would be more disposed to display economic and business pragmatism than other parties. The PP in the Canaries are none too impressed by national government having gone over their heads, but someone has to, and the oil would be in the national interest (and also in the interests of the Canaries if their diabolical unemployment rate could be tackled).
The prominence being given to the prospecting is where the bad publicity comes in, and it is bad publicity fairly and squarely of a tourist style. TUI, for one, has expressed its concern, and the bad publicity has mainly surfaced in Germany, causing fears that the Canaries will acquire a different sort of reputation, i.e. for oil, and one that runs counter to a general culture in Germany of environmental concern and for clean energy.
Notwithstanding these admittedly legitimate fears, I would reiterate a point I have made previously in the context of prospecting off Balearic waters, and this is that oil and tourism can co-exist, as they do in the likes of Trinidad and Tobago. National government is right to press ahead, and for this we have to thank the existence of a minister who "gets it" where a combination of industry, energy and tourism is concerned.
Any comments to andrew@thealcudiaguide.com please.
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