2014 NDI 6WS – Fitzmier, Lundberg,
Abelkop
Oil Prices DA
1NC
1NC Oil Prices DA
Oil prices are high and stable but changes in US production will crash them
Sreekumar 6/29
Arjun, reporter for The Motley Fool financial blog (“Iraq: An Anomaly in an Otherwise Unusually Calm
Global Oil Market”, June 29 2014, http://www.fool.com/investing/general/2014/06/29/iraq-an-anomalyin-an-otherwise-unusually-calm-glo.aspx)//EO
The price of Brent, the global crude oil benchmark, recently jumped to a nine-month high of more than $115 a barrel amid
growing concerns that unrest in Iraq could disrupt that nation's oil exports. While this recent development is a reminder of just how volatile the
price of oil can be, it
is an anomaly, at least over the most recent five-year period. Since 2009, oil prices have
been remarkably stable, with annualized volatility significantly below its long-run average of
around 30%, despite major supply disruptions in key OPEC countries. Why oil prices have been so stable
Since the Arab Spring in 2011, global oil markets have lost cumulative production of 3 million barrels per day,
according to BP (NYSE: BP ) chief economist Christof Ruhl. Normally, a global supply disruption of this magnitude
would have caused wild swings in the price of oil. Yet thanks to U.S. supply growth that almost perfectly offset lost
OPEC production, it hasn't. According to the
International Energy Agency, U.S. crude oil production rose by a record 992,000 barrels a day
last year to reach nearly 7.5 million barrels a day, the highest level of output since 1989. In fact, the U.S. accounted for nearly all of last year's
non-OPEC oil production growth of 1.2 million barrels per day, according to BP's latest annual statistical review. Largely as a result, last
year's volatility in the price of Brent was the lowest it has been since global oil prices were deregulated in
the early 1970s, Ruhl said.
Will oil market stability continue? Going forward, however, there are a number of risks to continued oil
price stability. According to Ruhl, a sharp change in the volumes and timing of U.S. supply growth and/or supply
disruptions in key oil-producing nations could lead to higher volatility. All eyes are currently on Iraq, which supplied
about 3.3 million barrels per day last month and is OPEC's second-largest oil producer. If the violence in the northern part of the country -where insurgents belonging to the Islamic State of Iraq and the Levant, or ISIL, continue to make new territorial gains -- spreads to the
south, where Iraq's major oil fields are located, meaningful volumes of production could be lost. Though most experts don't
expect this to be the case, arguing that southern Iraq is well fortified, a disruption of even a few hundred thousand
barrels could have a meaningful impact on oil prices -- providing a major uplift to oil-levered companies (up to a certain point, beyond which
high oil prices would threaten economic growth).
(insert link)
Low oil prices decimate Iraq’s oil revenues
Al-Khatteeb, 03/19/2014 (Luay Al-Khatteeb, visiting fellow at the Brookings Doha Center, focusing on the geopolitics and
political economy of the GCC and Iraq. He is the founder and director of the Iraq Energy Institute and serves as senior advisor to the Federal
Parliament of Iraq for energy policy and economic reform, “Why the World Oil Prices Should be High and Stable”, Brookings Institute,
03/19/2014, http://www.brookings.edu/research/opinions/2014/03/19-world-oil-price-alkhatteeb)
Despite the low cost of Middle East oil production, only a few of the region’s smaller states could cope
with an extended price drop below $100. Most need an oil price of $90 or greater to cover current
government spending, with the IMF forecasting fiscal deficits in nearly all of the region’s oil-exporters by 2015 in the event of a major
price drop. Even at $100 per barrel, public spending is expected to slow down in the region. These countries have grown dependent
on their high oil rents, spending huge sums on unrealistic energy subsidies to domestic consumers and failing to invest in future
generations. Even Iraq, despite experiencing the region’s largest spike in domestic production, is running up
an ever-mounting deficit as government spending outstrips expanded revenues. Last year’s budget reached
$119 billion, a whopping six-fold increase on 2004 spending levels, while the government is expected to spend upwards
of $150 billion this year. While oil production in Iraq is at its highest level in decades (3.5 million barrels a day in
February, with some 2.8 million destined for export ), increased revenues are entirely dependent on high oil prices.
Any drop in prices means that Iraq’s deficit – perpetually hovering at around 17% would spiral out
of control. Worse, operating costs for Iraq’s oil industry are rising faster than its oil income, leaving fewer
and fewer funds for capital investment, desperately needed for true economic development. A sharp drop in prices threatens
political stability in much of the Middle East while potentially undercutting the growing petroleum industry in the United States. Yet higher
prices are also a threat to world economic stability. In 10 out of the 11 US recessions since World War II, according to a study by economist
James Hamilton, economic downturns were preceded by oil price hikes. Above all, excessive price fluctuations interfere with consumer’s
spending plans and producer’s business strategies alike. Currently, OPEC is attempting serve its economic interests by regulating the market with
its combined 30 million barrels per day in production, with Saudi Arabia taking on the role of swing producer. The question is how long the
Kingdom can sustain this role when faced with increasing demand at home and potential budget deficits. While Iraq has the potential to be a
swing producer of the future,
for the time being it seems the best course of action would be for both the major
producers and consumers to come together to regulate supply and price.
That destroys the lifeblood for Iraqi funding against ISIS takeover- Iraq is already
weak
Nasser, 06/20/2014 (Nicola Nasser, a veteran Arab journalist based in Birzeit, West Bank of the Israeli-occupied Palestinian
territories, “The Battle for Iraq’s Oil Wealth”, Counter Punch, 06/20/2014, http://www.counterpunch.org/2014/06/20/the-battle-for-iraqs-oilwealth/)
Three days on, with the fighting moving on to the gates of Baghdad, “the
most important priority for Baghdad right now is
to secure its capital and oil infrastructure,” a Stratfor analysis on June 11 concluded. The raging war in Iraq now will determine
whether Iraqi hydrocarbons are a national asset or multinational loot. Any U.S. military support to the regime it installed in Baghdad should be
viewed within this context. Meanwhile this national wealth is still being pillaged as spoils of war. Al-Maliki
is not now preoccupied
maintaining a level of oil output sufficient to bring
in enough revenues to finance a defensive war that left his capital besieged and his government with
southern Iraq only to rule, may be not for too long. Even this modest goal is in doubt. Al-Maliki is left with oil
exports from the south only, the disruption of which is highly possible any time now. Worries that fighting would spread to the
even with maintaining Iraq as OPEC’s No. 2 oil producer, but with
southern city of Basra or Baghdad have already sent oil prices to nine-month high on Thursday. Legalizing the de-nationalization of Iraqi
hydrocarbon industry has thus become more elusive than it has ever been since 2003. On June 1 forty two years ago the process of the
nationalization of the hydrocarbon industry kicked off in Iraq. Now Iraq is an open field for looting its only strategic asset. On April 15 last year
the CNN, reviewing “The Iraq war, 10 years on,” reported: “Yes, the Iraq War was a war for oil, and it was a war with winners: Big Oil.”
“Before
the 2003 invasion, Iraq’s domestic oil industry was fully nationalized and closed to Western oil
companies. A decade of war later, it is largely privatized and utterly dominated by foreign firms,” the CNN
report concluded, indicating that, “From ExxonMobil and Chevron to BP and Shell, the West’s largest oil companies have set up shop in Iraq. So
have a slew of American oil service companies, including Halliburton, the Texas-based firm Dick Cheney ran before becoming George W.
Bush’s running mate in 2000. The
international rush for the Iraqi “black gold” by trans-national oil and gas
corporations is at its height with no national law or competent central authority to regulate it. Iraq’s “oil
industry” now “operates, gold rush–style, in an almost complete absence of oversight or regulation,” Greg Muttitt wrote in The Nation on August
23, 2012. Nothing changed since except that the “rush” was accelerating and the de-nationalization process was taking roots, squandering the
bloody sacrifices of the Iraqis over eighty two years to uproot the foreign hold on their major strategic asset. The ongoing fighting is threatening
to cut this process short. Tip
of iceberg
Iraqi collapse will launch a new global terrorist network
Kaplan, 06/23/2014 (Rebecca Kaplan, political reporter for CBSNews, “Iraq likely isn't the last stop for ISIS”, CBS News,
06/23/2014, http://www.cbsnews.com/news/iraq-likely-isnt-the-last-stop-for-isis/)
Islamic State of Iraq and Syria (ISIS) continued its consolidation of power on the Iraq-Syria border over the weekend,
not end its quest for power even if it takes over Iraq.
The group's name also translates to the Islamic State of Iraq and the Levant, a swath of land across the Middle East
that includes Syria, Jordan, Lebanon and Israel - and that's exactly where the militants may be headed. One of the looming
The
but U.S. officials and experts warn that the Sunni Islamic militants may
concerns was that ISIS may capture the Iraqi capital of Baghdad, although CBS News National Security Analyst and former CIA Deputy Director
Michael Morell said that the "blitzkrieg" toward the capital has all but stopped. "I think they're now on a different focus than they were when they
were heading towards Baghdad," he said on CBS News "Face the Nation" Sunday. That new focus could be Iraq's other neighbors in the region.
Once an offshoot of al Qaeda, ISIS became a separate entity in February 2014 when it stopped following orders from al Qaeda leader Ayman alZawahiri. Now, House Intelligence Committee Chairman Mike Rogers, R-Mich., says, the two groups are like "two organized crime families"
fighting for turf. ISIS head Abu Bakr al-Baghdadi
"wants more territory. He wants the Levant. He wants Lebanon. He
wants Jordan. They talk about Israel," Rogers said on "Face the Nation" Sunday. "They want to expand their Islamic caliphate. They
believed that because they have a piece of Syria and a huge piece of Iraq now that they are well underway to do that." Morell echoed those
concerns about ISIS influence in Jordan and Lebanon, citing the group's activity in Lebanon in recent months that includes a suicide bombing just
last week. It wasn't the first attack: back in January, the group claimed responsibility for a car bomb in January aimed at leaders of Hezbollah, a
Shiite militia. Rogers also noted the possibility of al Qaeda sympathizers in Jordan coming into contact with ISIS as it spreads throughout Iraq.
The al-Arabiya news channel has reported that the group hopes to create a state combining territory in Iraq, Syria, Jordan, Kuwait, Lebanon and
Israel. "There
is no question that ISIS presents a regional threat and is forming the platform for a new
global terrorist movement. The antecedents to ISIS envisioned a broader regional and global agenda -- and launched attacks into
Jordan and attempted to influence in Lebanon," said former Bush counterterrorism adviser Juan Zarate, now a CBS News national security
analyst. The Center for Strategic and International Studies' (CSIS) Tom Sanderson, who co-directs the organization's Transnational Threats
Project, said that ISIS' growth in Syria, where it was
able to recruit foreign fighters from 70 to 80 different countries,
makes it uniquely capable of reaching beyond its current base of power along the border with Iraq. "ISIS has networked
with people from dozens, scores of countries," Sanderson told CBS News. "It gives them the potential to travel to and operate in these countries
where they have people they know, they trust, who have the skills to operate." Among the countries that might be susceptible to ISIS influence
are Indonesia, Germany, Canada, Yemen, Algeria and Morocco, among others. "As far as North Africa is concerned I think they would find a lot
of welcoming and open hearts and hands because they're fielding tons and tons of fighters from Morocco and Tunisia in particular as well as
Libya," Sanderson said. At a CSIS panel last week, former CIA Deputy Director Stephen Kappes said the group's ability to bring in
disenfranchised men from countries like Pakistan and Morocco should not be underestimated. "It's a far more successful thing than people realize
here in the United States," he said. The group has also grown wealthier as they have expanded in Iraq, as wealthy Arabs from the Gulf countries
keep the monetary support coming in. "They give their money to the most successful group. And so the success that we're seeing on the ground
today is drawing in more money," Morell said. "The other place they're getting money is from Iraq. When they overrun a city, they gather all the
money that happens to be available in that city. They are a very wealthy terrorist organization." Complex regional politics complicate efforts to
slow ISIS' growth. Secretary of State John Kerry is traveling in the Middle East this week to build support among leaders from Egypt, Saudi
Arabia, and the United Arab Emirates (UAE) to help stabilize Iraq. But many of ISIS' wealthy donors come from within Saudi Arabia and the
UAE, and Kerry will have to pressure them to help cut off the group's funding, CBS News State Department Correspondent Margaret Brennan
reports. The leaders of those states are also very skeptical of Iraqi Prime Minister Nouri al-Maliki and the potential influence Iran has over him.
Iran, a predominantly Shiite country, is similarly concerned about a takeover of Iraq by the militants, who are Sunni Muslims. They have been
working to ensure the Shiite militias inside Iraq are organized and well-armed to battle ISIS. In the meantime, experts are warning that if they go
unchecked, ISIS could become an even bigger threat to the U.S. "To
allow terrorist movements with global aspirations
to fester, regroup, gain resources, and strategize is a prescription for disaster in the 21st century.
That's what we've seen in Syria and Iraq for a few years now," Zarate said. Obama: ISIS poses "medium and long-term" threat to
Americans
Nuclear war
Ayson’10
Robert – Professor of Strategic Studies and Director of the Centre for Strategic Studies: New Zealand at the Victoria University of Wellington –
“After a Terrorist Nuclear Attack: Envisaging Catalytic Effects,” Studies in Conflict & Terrorism, Volume 33, Issue 7, July, obtained via
InformaWorld
A terrorist nuclear attack, and even the use of nuclear weapons in response by the country attacked in the first place, would not necessarily
represent the worst of the nuclear worlds imaginable. Indeed, there are reasons to wonder whether nuclear terrorism should ever be regarded as
belonging in the category of truly existential threats. A contrast can be drawn here with the global catastrophe that would come from a massive
nuclear exchange between two or more of the sovereign states that possess these weapons in significant numbers. Even the worst terrorism that
the twenty-first century might bring would fade into insignificance alongside considerations of what a general nuclear war would have wrought in
the Cold War period. And it must be admitted that as long as the major nuclear weapons states have hundreds and even thousands of nuclear
weapons at their disposal, there is always the possibility of a truly awful nuclear exchange taking place precipitated entirely by state possessors
themselves. But these two
nuclear worlds—a non-state actor nuclear attack and a catastrophic interstate nuclear
exchange—are not necessarily separable. It is just possible that some sort of terrorist attack, and especially an act of nuclear
terrorism, could precipitate a chain of events leading to a massive exchange of nuclear weapons between
two or more of the states that possess them. In this context, today’s and tomorrow’s terrorist groups might assume the place allotted during
the early Cold War years to new state possessors of small nuclear arsenals who were seen as raising the risks of a catalytic nuclear war between
the superpowers started by third parties. These risks were considered in the late 1950s and early 1960s as concerns grew about nuclear
proliferation, the so-called n+1 problem. It may require a considerable amount of imagination to depict an especially plausible situation where an
act of nuclear terrorism could lead to such a massive inter-state nuclear war. For example, in the event of a terrorist nuclear attack on the United
States, it might well be wondered just how Russia and/or China could plausibly be brought into the picture, not least because they seem unlikely
to be fingered as the most obvious state sponsors or encouragers of terrorist groups. They would seem far too responsible to be involved in
supporting that sort of terrorist behavior that could just as easily threaten them as well. Some possibilities, however remote, do suggest
themselves. For example, how
might the United States react if it was thought or discovered that the fissile material used
in the act of nuclear terrorism had come from Russian stocks, FN 40 and if for some reason Moscow denied any
responsibility for nuclear laxity? The correct attribution of that nuclear material to a particular country might not be a case of science fiction
given the observation by Michael May et al. that while the debris resulting from a nuclear explosion would be “spread over a wide area in tiny
fragments, its radioactivity makes it detectable, identifiable and collectable, and a wealth of information can be obtained from its analysis: the
efficiency of the explosion, the materials used and, most important … some indication of where the nuclear material came from.”41
Alternatively, if the act of nuclear terrorism came as a complete surprise, and American officials refused to believe that a terrorist group was fully
responsible (or responsible at all) suspicion would shift immediately to state possessors. Ruling out Western ally countries like the United
Kingdom and France, and probably Israel and India as well, authorities in Washington would be left with a very short list consisting of North
Korea, perhaps Iran if its program continues, and possibly Pakistan. But at what stage would Russia and China be definitely ruled out in this high
stakes game of nuclear Cluedo? In particular,
if the act of nuclear terrorism occurred against a backdrop of existing
tension in Washington’s relations with Russia and/or China, and at a time when threats had already been traded between these
major powers, would officials and political leaders not be tempted to assume the worst? Of course, the chances of this
occurring would only seem to increase if the United States was already involved in some sort of limited armed conflict with Russia and/or China,
or if they were confronting each other from a distance in a proxy war, as unlikely as these developments may seem at the present time. The
reverse might well apply too: should a nuclear terrorist attack occur in Russia or China during a period of heightened tension or even limited
conflict with the United States, could Moscow and Beijing resist the pressures that might rise domestically to consider the United States as a
possible perpetrator or encourager of the attack? Washington’s early response
to a terrorist nuclear attack on its own soil
might also raise the possibility of an unwanted (and nuclear aided) confrontation with Russia and/or China. For
example, in the noise and confusion during the immediate aftermath of the terrorist nuclear attack, the U.S. president might be expected to
place the country’s armed forces, including its nuclear arsenal, on a higher stage of alert. In such a tense environment, when
careful planning runs up against the friction of reality, it is just possible that Moscow and/or China might mistakenly read this
as a sign of U.S. intentions to use force (and possibly nuclear force) against them. In that situation, the temptations to
preempt such actions might grow, although it must be admitted that any preemption would probably still meet with a devastating
response. As part of its initial response to the act of nuclear terrorism (as discussed earlier) Washington might decide to order
a significant conventional (or nuclear) retaliatory or disarming attack against the leadership of the terrorist group and/or states seen to support
that group. Depending on the identity and especially the location of these targets, Russia and/or China might
interpret such action as being far too close for their comfort, and potentially as an infringement on their spheres
of influence and even on their sovereignty. One far-fetched but perhaps not impossible scenario might stem from a judgment in Washington
that some of the main aiders and abetters of the terrorist action resided somewhere such as Chechnya, perhaps in connection with what Allison
claims is the “Chechen insurgents’ … long-standing interest in all things nuclear.”42 American pressure on that part of the world would almost
certainly raise alarms in Moscow that might require a degree of advanced consultation from Washington that the latter found itself unable or
unwilling to provide.There is also the question of how other nuclear-armed states respond to the act of nuclear terrorism on another member of
that special club. It could reasonably be expected that following a nuclear terrorist attack on the United States, both Russia and China would
extend immediate sympathy and support to Washington and would work alongside the United States in the Security Council. But there is just a
chance, albeit a slim one, where the support of Russia and/or China is less automatic in some cases than in others. For example, what would
happen if the United States wished to discuss its right to retaliate against groups based in their territory? If, for some reason, Washington found
the responses of Russia and China deeply underwhelming, (neither “for us or against us”) might it also suspect that they secretly were in cahoots
with the group, increasing (again perhaps ever so slightly) the chances of a major exchange. If the terrorist group had some connections to groups
in Russia and China, or existed in areas of the world over which Russia and China held sway, and if Washington felt that Moscow or Beijing
were placing a curiously modest level of pressure on them, what conclusions might it then draw about their culpability? If Washington decided to
use, or decided to threaten the use of, nuclear weapons, the responses of Russia and China would be crucial to the chances of avoiding a more
serious nuclear exchange. They might surmise, for example, that while the act of nuclear terrorism was especially heinous and demanded a strong
response, the response simply had to remain below the nuclear threshold. It would be one thing for a non-state actor to have broken the nuclear
use taboo, but an entirely different thing for a state actor, and indeed the leading state in the international system, to do so. If Russia and China
felt sufficiently strongly about that prospect, there is then the question of what options would lie open to them to dissuade the United States from
such action: and as has been seen over the last several decades, the central dissuader of the use of nuclear weapons by states has been the threat of
nuclear retaliation. If some readers find this simply too fanciful, and perhaps even offensive to contemplate, it
may be informative to
reverse the tables. Russia, which possesses an arsenal of thousands of nuclear warheads and that has been one of the two most important
trustees of the non-use taboo, is subjected to an attack of nuclear terrorism. In response, Moscow places its nuclear forces very
visibly on a higher state of alert and declares that it is considering the use of nuclear retaliation against the group and any of its state supporters.
How would Washington view such a possibility? Would it really be keen to support Russia’s use of nuclear weapons, including
outside Russia’s traditional sphere of influence? And if not, which seems quite plausible, what options would Washington have to communicate
that displeasure? If China had been the victim of the nuclear terrorism and seemed likely to retaliate in kind, would the United States and Russia
be happy to sit back and let this occur? In
the charged atmosphere immediately after a nuclear terrorist attack, how would the
attacked country respond to pressure from other major nuclear powers not to respond in kind? The phrase “how dare
they tell us what to do” immediately springs to mind. Some might even go so far as to interpret this concern as a tacit form of sympathy or
support for the terrorists. This
probably not eliminating, such
material holdings.
might not help the chances of nuclear restraint. FN 40. One way of reducing, but
a prospect, is further international cooperation on the control of existing fissile
2NC
2NC Uniqueness
Global oil prices are stable now—US production and Middle East losses balance out
Bawden, 06/16/2014 (Tom Bawden, the Independent correspondent, “Long years of oil price stability are at risk, BP’s top
economist warns”, The Independent, 06/16/2014, http://www.independent.co.uk/news/business/news/long-years-of-oil-price-stability-are-at-riskbps-top-economist-warns-9540548.html)
Escalating violence in Iraq threatens to unleash an oil price spike that would put an end to the greatest
period of price stability for nearly half a century, BP’s chief economist has warned. The unusually high level of disruption
to global oil production since the Arab Spring began in 2011 has been matched by a sharp rise in US oil output as a
result of its fracking boom. This has kept supplies constant and prices stable, according to BP’s Christof Rühl. US oil
production soared by 1.1 billion barrels last year – the biggest rise in the country’s history – as the fracking companies
increasingly turned their technology from gas to oil. This balanced out the disruption to supplies in the past three years
in Africa and the Middle East, where outages have been running at 3 million barrels a day, compared with just
100,000 a day in the previous decade, BP figures show. Without the disruptions, the oil prices would have tumbled,
while without the surge in US production they would have soared, says Mr Rühl. “This is the three-year
period which has seen the least price volatility since oil prices were no longer regulated in 1970. If the world had only had these
disruptions which we have seen in the last three years since the beginning of the Arab Spring you would have seen oil prices spiking and a
discussion about strategic reserve release and damage to the economy and all the rest of it.
US production surge is stabilizing oil prices
Elmes, 06/23/2014 (David Elmes, Head, Warwick Business School Global Energy Research & Course Director of the WBS Global
Energy MBA and leads the WBS Global Energy Research Network, “What ISIS insurgency in Iraq could mean for global oil supplies and energy
options”, The Conversation, http://theconversation.com/what-isis-insurgency-in-iraq-could-mean-for-global-oil-supplies-and-energy-options28298)
So what about the broader context? Last week also saw the
release of BP’s annual “Statistical Review of World Energy”.
out that world oil prices have been relatively stable at around the
$110 per barrel level for the past three years. But this apparent calm is on the surface only – underneath there have been two
competing forces working in opposite directions. There have been significant supply disruptions in the
Middle East & Africa, the worst of which have been the military upheaval in Libya and sanctions on Iran. But this has been offset
by a steady increase in US oil production as part of what’s often called the “shale revolution”. The scale of
decline on one side and the rise on the other have been remarkably similar, which explains the stability of
world prices.
The company’s chief economist, Christoph Rühl, pointed
Global oil prices stable now despite Iraqi crisis
Walsh, 06/26/2014 (Bryan Walsh, Time writer, “U.S. Oil Could Rescue Iraq”, TIME, http://time.com/2927922/iraq-oil-us-exports/)
Even though the conflict in Iraq still rages, with forces from the Islamic State of Iraq and Greater Syria (ISIS) just an hour outside
of Baghdad while the Syrian military is reportedly bombing the insurgents, global oil markets have mostly calmed. Prices for
Brent crude on June 26 had fallen below $114 a barrel, and have dropped more than 1% since hitting a nine-month high on June 19.
The violence in Iraq’s north and west—including fighting around the country’s largest refinery in Baiji—hasn’t yet
seriously affected oil production in the Shiite dominated south. Iraq’s Oil Minister Abdul Kareem al-Luaibi even promised in an
interview with Bloomberg that the nation’s oil exports—which have averaged more than 2.5 million barrels a day—will actually
accelerate next month. “Oil exports will witness a big increase, as recent events didn’t reflect negatively on Iraq’s crude
output and exports,” al-Luaibi said. “International oil companies are working normally in Iraq.”
Oil and LNG prices remain stable – US production solves for Middle East and
Ukrainian turmoil
McCracken 6/26
Ross, reporter for The Barrel (esteemed McGraw Hill energy blog) (“Energy Economist: Why do oil and
natural gas markets appear complacent?”, June 26 2014, http://blogs.platts.com/2014/06/26/iraq-ukraineoil-market/)//EO
The energy sector is beset by crises, but the price response has been muted. Two days after the fall of the
northern Iraqi city of Mosul to Islamic Sunni militants, international benchmark Dated Brent was assessed
at $109.77/barrel, more than $1/b less than two weeks earlier. It then rose to $113.25/b June 16, the
highest level since February 2013, but still only about a 3% jump overall. By June 19, it had reached
$115.31/b, falling back to $114.52/b June 20 and to $113.13/b June 23. This despite a major uprising in
Iraq, chaos in Libya, a civil war in Syria, and, somewhat below the radar, the spread of Al-Queda linked
activity in the Sahel. European month-ahead gas prices at the UK’s NBP and Zeebrugge in Belgium have
fallen, despite eastern Ukraine becoming the scene of armed conflict between pro-Russian separatists and
the Ukrainian army. Spot LNG prices have plummeted from around $20/MMBtu at the start of the year to
pre-Fukushima levels below $12/MMBtu. Both the relative calm of the oil markets and the decoupling of
the dynamics of the LNG spot market and European gas prices from oil are notable. But why so calm?
The boom in US oil and gas production is a key element. World oil markets are no longer dependent
on OPEC supply growth to meet additional demand (but they are still dependent on OPEC
production.) European gas stocks are high and demand muted, while both Brussels and Moscow have a
mutual interest in seeing gas flows continue, whatever happens in Ukraine. Asian demand for LNG is also
weak and the supply picture for new LNG capacity good.
Oil production deficit inevitable – Iraq conflict prevents necessary oil infrastructure
construction
McCracken 6/26
Ross, reporter for The Barrel (esteemed McGraw Hill energy blog) (“Energy Economist: Why do oil and
natural gas markets appear complacent?”, June 26 2014, http://blogs.platts.com/2014/06/26/iraq-ukraineoil-market/)//EO
Yet, while the immediate threat to the bulk of Iraqi oil production may be low, it is genuine, and there is
a clear risk that Iraq will now fail to boost production and/or export capacity over the next five years
as planned. Simply needing to combat the insurgency will be a major drain on Baghdad’s resources and a
deterrent to investment in the country. As noted by Statoil Chief Economist Eirik Waerness at the
International Association of Energy Economics conference in New York June 16, the range of outcomes
regarding Iraqi supply is larger in volume terms than the expected increases in US crude production. With
a target of raising crude output capacity to 8.4 million b/d by 2017-18, Iraq is expected to play a key role
in meeting rising international demand for oil. However, exporting that volume depends on alternatives
above and beyond the expansion of the southern export terminals. It would involve the rehabilitation of
the Kirkuk-Ceyhan export route to carry 1 million b/d and the construction of a planned 1 million b/d
pipeline through Jordan, which in turn is contingent on the rehabilitation of the strategic North-South
pipeline within Iraq. None of these projects is feasible in the current security environment.
Russo-European energy relations terminally unsustainable – Russian support for
separatists ensures inevitable collapse
McCracken 6/26
Ross, reporter for The Barrel (esteemed McGraw Hill energy blog) (“Energy Economist: Why do oil and
natural gas markets appear complacent?”, June 26 2014, http://blogs.platts.com/2014/06/26/iraq-ukraineoil-market/)//EO
In Europe, Ukraine’s vast storage tanks are not being filled fast enough to cope with a cold European
winter. Moreover, energy relations between Europe and Russia could hardly be worse. Although Russia
continues to deny its support for the rebels, there appears to be a clear flow of military equipment from
Russia. NATO satellite images show T-64 tanks without markings in Ukraine. The separatists’ weaponry and organization from the start
has been more sophisticated than might be expected for a localized civilian uprising. Their weapons now include anti-aircraft guns and armored
troop carriers. These weapons are entering eastern Ukraine despite a threatening cordon of Russian troops along the Russian/Ukrainian border,
Moscow appears to believe that the “economic realities” of mutual gas dependency
will prevail, hence its support for the separatists and its rash start to construction of South Stream, despite
the lack of EU regulatory approvals. This view has been fostered by the EU’s pragmatic short-termism,
which prioritizes gas flows over a more robust response to Russia’s actions. But a long-term relationship
cannot survive mutual distrust. The argument, or some variant of it, is often put that the “economic
realities” of conflicts will eventually produce rational responses from the parties involved. In other words,
reason will prevail. It is a flawed, reductionist argument and the world is littered with sub-optimal
economic outcomes as a result of politics. Pride, prejudice, principle and nationalism often prove more
powerful forces than immediate economic well-being. The situations in both Ukraine and Iraq remain
volatile and dangerous, suggesting that current market conditions reflect a significant degree of
complacency.
which indicates complicity.
Oil production is sustainable and sufficient to meet demand despite Middle East
instability – prefer our predictive evidence
Kent 6/12
Sarah, reporter for the Wall Street Journal (“Oil Supply Sufficient to Meet Rising Demand, OPEC Says:
Non-OPEC Supply Forecast to Rise by 1.2 Million Barrels a Day in Next Six Months”, June 12 2014,
http://online.wsj.com/articles/oil-supply-sufficient-to-meet-rising-demand-opec-says-1402569845)// EO
LONDON—The Organization of the Petroleum Exporting Countries said Thursday rising non-OPEC oil
production will be sufficient to meet growing demand in the second half of the year, dismissing concerns
over oil supply in the coming months. In its monthly report on the oil market, OPEC—which produces
one in every three barrels of oil consumed globally—forecast non-OPEC oil supply would rise by 1.2
million barrels a day in the next six months. The rate of growth is slightly slower than in previous months
but should still be sufficient to meet growing demand when combined with OPEC output and healthy
stock levels, the oil-producers' group said. In a reflection of its view that the market is balanced, OPEC
decided to maintain its official output quota at 30 million barrels a day at its semiannual meeting in
Vienna on Wednesday. Last month, however, the International Energy Agency warned that OPEC could struggle to keep up with rising
oil demand as many of its member countries contend with significant supply disruptions. Output from Libya has dwindled to less than 200,000
barrels a day this year amid strikes, protests and conflicts between rival factions in the country. Iran's oil production is still hobbled by Western
sanctions, while a growing insurgency in Iraq has cut off exports from its northern oil fields. According to the IEA, OPEC will still need to boost
its output by 800,000 barrels a day in the second half of the year to meet demand .
OPEC's output has hovered below 30 million
barrels a day for most of the year, falling to 29.4 million barrels a day in March. It has since rebounded,
rising to 29.8 million barrels a day last month, but remains below the 30.3 million barrels a day the group
predicts it will need to produce to meet demand in the second half of the year
2NC Internal Link
Changes in Iraqi oil production are already assumed by market but new US exports
would crash prices
Krauss 4/21
Clifford, reporter for The New York Times (“‘Saudi America’: Mirage?: Challenges Lie Ahead for North
American Oil Production”, April 21 2014, http://www.nytimes.com/2014/04/22/business/energyenvironment/challenges-lie-ahead-for-north-american-oil-production.html)//EO
At a time when Russia is saber-rattling and the Middle East is in turmoil, a welcome geopolitical trifecta could be in the making. The United
States is poised to surpass Saudi Arabia and Russia as the world’s top oil producer. Canada’s oil sands have vaulted the country to energy
superpower status. Mexico is embarking on a historic constitutional energy overhaul that its president promises will propel the country’s
economy. And there is no shortage of cheerleaders.
“The North American production outlook is incredibly bright,” said
Jason Bordoff, a former senior energy adviser in President Obama’s White House. “Everything we see on
the ground suggests reasons to be optimistic.” BIG RIG A Petróleos Mexicanos complex in the Gulf of
Mexico. Pending legislation could open exploration and production in Mexico to international oil
companies.Energy Special Section But as bright as the future may appear, energy executives and other
experts say it is time for a reality check before declaring energy independence for the United States
and its continent. Gushing oil and gas give North America hopes of becoming what some call “Saudi America,” but fossil fuels
development is always contentious for its environmental costs. The Keystone XL pipeline, intended to connect Canada’s oil sands to American
refineries, has been tangled in politics and regulatory concerns for years. Grass-roots environmental movements have stopped natural gas drilling
in New York State and Quebec, and they threaten the expansion of oil company operations, pipelines and port terminals in the Western United
States and Canada. Bigger challenges face Mexico, still a fading producer for United States demand. Even as Mexico is pressing ahead with
constitutional changes that promise to open exploration and production to international oil companies for the first time since the 1930s, the fine
print of the legislation to carry this out is still in doubt, while raging drug violence continues to worry investors.
Perhaps most
important, the economics of oil and natural gas extraction on the continent are challenging: Deepwater
Gulf of Mexico oil drilling, oil sands extraction and shale drilling are all expensive and require high
petroleum prices that are far from assured. Most of the easy-to-drill oil is gone. But should North
America produce too much oil too quickly, and exports surge from Iraq (which is already happening)
and Iran (should talks with the West over its nuclear program succeed), global oil prices could soften
considerably. There is also the possibility that the pace of shale drilling in places like Argentina, China and Russia, which have so far
lagged North America, could take off, producing sizable new sources of oil and gas on the world market. As unlikely as it may seem, a price
collapse, like the one that happened to domestically produced natural gas after 2008, is something every oil executive fears.
Current US production has been priced into the oil market – the aff represents an
unexpected horizontal oil boom which would crash prices at steady demand
Churdley 6/9
Jody, reporter for StreetAuthority (Investing advice subsidiary of the NASDAQ corporation) (“High Oil
Prices Are Here To Stay -- Here's How To Profit”, June 9 2014, http://www.nasdaq.com/article/high-oilprices-are-here-to-stay-heres-how-to-profit-cm359902#ixzz36Lm2yTu9)//EO
What EOG sees -- and the market doesn't seem to grasp -- is that for all intents and purposes, the
horizontal oil boom is coming from only two plays: the Bakken Formation in the upper Midwest and the
Eagle Ford Shale in South Texas. A slide from EOG's most recent investor presentation illustrates this
clearly: Fully three-quarters of the horizontal oil being produced in the United States comes from the
Bakken and Eagle Ford. Without these plays, the horizontal boom would be barely noticeable. Equally
important to note is that production growth in both the Bakken and the Eagle Ford is slowing
significantly. The growth of production both by rate and absolute amount in both of these plays
appears to have peaked. During his recent presentation, EOG's Thomas was asked what the next big
horizontal oil play in the United States would be. His answer? There isn't going to be one. EOG has
scoured the United States and hasn't found a new play with anything close to the productive capability of
the Bakken and Eagle Ford. What makes the Bakken and Eagle Ford unique is that they are crude oil
plays. Most of the other large horizontal plays are "combo" plays that have large hydrocarbon
accumulations, but much of those hydrocarbons are in the form of natural gas and natural gas liquids. For
example, in his presentation, Thomas referred to the Permian Basin in West Texas as having lots of
barrels of oil equivalent (BOEs) -- but heavy on the "equivalent" and light on the oil. There is going to be
a lot of production from the Permian in the coming years, but a great deal of it won't be oil. Large,
profitable oil plays are few and far between, and they are getting harder and harder to find. The Bakken
and the Eagle Ford are #1 and #1a, and there is no #2. So what does this mean for investors? In my view,
it means that while oil production in the United States will keep growing for the next several years, the
pace of that growth is going to be greatly reduced. With annual global oil demand growing at roughly 1
million barrels a day and oil production outside of North America not growing at all, oil prices are
going to remain high and perhaps even go higher. The companies in the sweet spot are the ones that have
locked up large land positions in the top horizontal oil plays. EOG is one of those; Continental Resources
(NYSE: CLR ) is another.
Steady growth in US oil production has balanced the market – rapid increases in
expected supply would outstrip demand and crash prices
Johnson 6/12
Christopher, reporter for Reuters (“OPEC sees oil market balanced for rest of 2014”, June 12 2014,
http://www.reuters.com/article/2014/06/12/us-opec-oil-idUSKBN0EN1A120140612)//EO
(Reuters) - Oil markets should be balanced during the second half of this year with extra production
sufficient to meet growing demand, OPEC said on Thursday, suggesting oil prices may be fairly stable
despite worries over lost supply. Oil prices rose sharply on Thursday with Brent crude climbing above
$112 for the first time since March on worries that violence in Iraq could disrupt supplies. But the
Organization of the Petroleum Exporting Countries, which supplies a third of the world's oil, said rising
oil production should be more than sufficient to meet demand. The cartel of 12 exporters said global oil
inventories were comfortable. U.S. stockpiles were high and commercial stocks in the large developed
economies were sufficient at the end of April to meet almost two months of consumption. "Overall, the
ongoing rise in supply would be adequate to satisfy the growth in oil demand in H2 2014, resulting in a
well-balanced market," OPEC said in its monthly market report. OPEC agreed on Wednesday to keep its
oil production target at 30 million barrels per day (bpd) for the second half of this year. The grouping is
happy with oil prices above $100 a barrel and its members are pumping enough oil to cover their
spending needs. The OPEC report said output from the United States and Canada and other non-OPEC
countries would add 1.44 million bpd of extra oil to world markets this year, 60,000 bpd more than
OPEC's previous forecast. This would outstrip its projection of a rise of 1.14 million bpd in global oil demand and mean less demand
overall this year for oil from OPEC. OPEC cut its forecast of demand for its own crude in 2014 to 29.69 million bpd, down 70,000 bpd from its
previous estimate. The report, citing secondary sources, said total OPEC oil production rose 142,000 bpd to 29.76 million bpd in May, led by
increased production in Angola, Iraq and Saudi Arabia.
2NC Turns Renewables
Empirics prove oil price collapses crush movements for renewables
Shwartz 12
Ariel Shwartz – author of numerous articles published in reputable print sources such as Popular Science,
GOOD magazine etc., Senior Editor at Co.Exist (“What Happens To Clean Technology Innovation If Oil
Prices Drop?: Cheaper gas might be nice for your wallet in the short term, but if oil prices plummet (and
it looks like they might) what will that do to the quest for renewable energy?”, July 2 2012,
http://www.fastcoexist.com/1680107/what-happens-to-clean-technology-innovation-if-oil-pricesdrop)//EO
Peak oil, the point where world oil production reaches an apex and then begins an inexorable decline, was
a cult concept until the end of the last decade, when concern about a downward spiral in oil supplies-heightened by high oil prices--reached a fever pitch and the idea that we might run out of oil reached the
mainstream. In many ways, this was a good thing; it created a space for alternative energy innovation to
grow. But surprisingly, a new report (PDF) from Leonard Maugeri, a former oil executive and current
fellow at Harvard’s Belfer Center for Science and International Affairs, warns: "oil supply capacity is
growing worldwide at such an unprecedented level that it might outpace consumption. This could lead to
a glut of overproduction and a steep dip in oil prices." That dip in oil prices would mean cheaper gas,
certainly, but it could put a serious damper on how far we’ve come in the search for non-fossil-fuelbased energy solutions. The U.S. could be the second biggest oil producer after Saudi Arabia by 2020. It’s all thanks to technology and
investment in exploration by oil companies, who are increasingly using "unconventional" oil extraction techniques in shale oil fields, tight oil
fields (oil fields that only make sense to drill when advanced techniques like hydraulic fracturing and horizontal drilling are used), and tar sands.
In fact, says Maugeri, these techniques might allow the U.S. to be the second biggest oil producer after Saudi Arabia by 2020. Good news for our
oil-powered economy? Maybe. But the environmental risks are disturbing. Maugeri admits that hydraulic fracturing, or "fracking," can cause
water and land contamination, though he plays down those risks. And we’re already seeing the potential ramifications of tar sands projects in
Canada. Regardless
of whether or not peak oil will soon be upon us, one thing is clear: A glut in oil will be
dangerous for energy innovation. And even if we have enough oil to last us until the end of time (we
don’t), the climate-related ramifications of continuing to use oil at our current pace will catch up to us in
the near future. This isn’t like the 1970s, where oil shocks got Americans seriously thinking about
alternative energy. When that crisis ended and the country was once again awash in cheap oil after,
energy innovation ground to a halt, and nobody thought twice. But if we find ourselves in a situation
where oil production capacity rises by 17.6 million barrels daily until 2020 (as Maugeri predicts), chances
are that energy innovation will once again slow--and unlike in the 1970s, we don’t have a relatively stable
climate that allows us to delay on implementing these technologies. As MIT Technology Review
explains, there is no real reason why the solar industry should be impacted by oil prices. But some people
may not know that oil isn’t used much to generate electricity, lessening their enthusiasm for alternative
technologies. Electric vehicle rollouts would almost definitely be directly hurt by ultra-cheap oil prices;
who cares about spending tens of thousands on unfamiliar car technology when you can rely on gaspowered cars that are cheap to fill up? Some might argue that electric cars aren’t actually emissions-free
since they plug into electricity sources like coal, but increasing the amount of renewable energy on the
grid (something that could be threatened by an oil-price collapse) would alleviate the problem. A dip in
oil prices might be nice in the short term, but there will probably be major consequences.
A decrease in oil prices would undercut fragile renewables industries despite climate
change awareness and emissions regulations
Bullis 12
Kevin Bullis – Senior editor for MIT Technology Review (“Could New Oil Production Cause Oil
Prices—and Energy Innovation—to Collapse?: A Harvard researcher says unparalleled investment in oil
exploration is creating a boom in supply, and that could hurt the development of oil alternatives, June 26
2012, http://www.technologyreview.com/view/428343/could-new-oil-production-cause-oilprices%E2%80%94and-energy-innovation%E2%80%94to-collapse/)//EO
A new report out of Harvard suggests that a boom in oil exploration and production—driven by a surge
of investment starting in 2003—might lead to a sharp drop in oil prices. If that happens, could that kill
development of alternatives to oil, as happened when oil prices hit bottom in the 1990s? Will solar panels,
electric cars, and advanced biofuels fade from view? Three decades ago, high oil prices spurred
investment in alternatives. But by the time oil prices had bottomed-out in the 1990s, much of that
research had been abandoned, and promising technologies didn’t come to market or weren’t made cheap
enough to catch on widely. With the surge in oil prices in recent years, much of that research has been
taken up again, and the trends look good. Solar power is approaching the cost of conventional fossil-fuel
power, and advanced biofuels seem on the cusp of becoming commercial reality. As new energy startups
proliferated, many alternative energy researchers and companies waved away suggestions that oil might
plummet again, causing these technologies to be abandoned once again. The conventional wisdom has
been that high demand from fast-growing economies will keep oil prices high enough to drive innovation.
And concern about climate change will lead to a price on carbon that will drive new technologies even if
oil prices drop. But interest in climate change seems to have waned, and efforts to put a price on
carbon dioxide emissions have failed in the U.S. and most of the rest of the world. If oil prices also drop
due to overproduction, as the report suggests, what could that mean for technologies such as electric
cars, advanced internal combustion engines, and renewable electricity sources, such as solar power? Taking
solar power first, things are a bit different now than in the 1970s, at least in the United States. The oil crisis spurred investment in solar power in
part because oil was used to generate a substantial amount of electricity in the United States. Now the U.S. hardly uses oil at all for generating
electricity, and installing solar panels doesn’t do anything to decrease oil consumption. Some people don’t know that, and support solar as a way
of reducing oil consumption—their support could fade with high oil prices. Such
public support is critical for the solar
industry now, since it relies heavily on subsidies. More importantly, while the U.S. doesn’t use oil for
electricity, much of the rest of the world does. At current oil prices, solar power is cheaper than
electricity from diesel generators, and that’s creating a new markets for solar panels. A drop in oil
prices could hurt the solar industry. But solar panel prices have been dropping quickly, and some
solar companies, such as First Solar, are staking their business on the prospect that they can soon be
competitive in unsubsidized markets. There’s a race on. If the oil price drops within the next couple
of years, that could be a bad sign for the solar industry. If it drops later, the solar industry may be able
to survive on its own by then, even if it’s hurt some by lower prices. A drop in oil prices could really
hurt advanced biofuels companies, which are struggling to get prices low enough to compete with even
today’s relatively pricey oil. Low oil prices could further deteriorate already strained support for
advanced biofuels. And low oil prices could also hurt attempts to sell electric cars, and cars with costly
efficiency improvements. Automakers have struggled to sell electric cars even with relatively high gas
prices. If oil prices drop, will new fuel economy standards that are driving automakers to sell more
efficient vehicles hold up?
2NC High Prices Solve ISIS
Oil prices are stable now but a large US disruption gives ISIS momentum to
overrun production
Johnson, 06/11/2014 (Keith Johnson, FP Correspondent, “Iraq’s Insurgency and the Threat to Oil”, Foreign Policy, 06/11/2014,
http://www.foreignpolicy.com/articles/2014/06/11/iraqs_insurgency_and_the_threat_to_oil)
Oil markets are finally rattling after militants from the Islamic State of Iraq and the Levant (Isis) took
over a series of key Iraqi cities this week, including the country’s second largest, and reportedly surrounded
Iraq’s biggest oil refinery. The insurgent drive poses little immediate threat to oil production or exports from
Opec’s second-largest producer, which explains why oil prices haven’t exploded. But Iraq’s disarray, coupled with a series of
stubborn crude-supply outages in Libya, Sudan, Nigeria and ongoing sanctions on Iranian exports, portends a summer of high oil prices with
potentially dire effects on the global economy. Depending
on Iraq’s ability to rally its own security forces and
successfully fight the group, the uprising could also upend Baghdad’s plans to increase oil production in
other parts of the country and assert control over exports in the semi-autonomous northern region of Kurdistan. All that
becomes hugely important when global oil markets are looking at growth in Iraqi production as the great hope to keep the world fully supplied.
“Iraq needs to deliver; it’s as simple as that. This is not good, irrespective of whether there’s a short-term impact or not,” said Amrita
Sen, an oil markets analyst at Energy Aspects Ltd, an energy consultancy in London. “You need a lot of incremental supply increase from Iraq,
which the current dynamics are saying is not going to happen,” Sen said. After
initially shrugging off the attacks, oil markets
started to worry a bit this week. Prices for Brent crude traded in London rose slightly, to just under $110 (Dh404) a barrel; crude traded
in New York also inched up to about $105 a barrel in early trading, before slipping a bit in the early afternoon. Oil markets got no relief from
Opec, which concluded its regular meeting in Vienna pledging to keep output the same. If oil
prices haven’t skyrocketed even
higher on news that a group so bad that even Al Qaida fights it has taken over a big chunk of territory in one of the world’s biggest oilproducing nations, that’s because Iraq’s oil production and exports are mostly in the south, far from the offensive. Iraqi
government officials said this week that the state of emergency declared after the Mosul takeover won’t affect Iraqi exports. One reason: The
400,000-barrel-per-day northern oil-export pipeline that snakes past Mosul on its way to Turkey has been out of commission since March because
of terrorist attacks anyway, so the Isis offensive hasn’t taken any additional oil out of the export market yet. In
May, Iraq notched a
near-record level of crude exports out of its Persian Gulf terminal in Basra, though overall Iraqi exports are still below
the 2.8 million barrels a day reached earlier this year because of the damaged northern pipeline. Ongoing repairs on the pipeline have been
disrupted because of the Isis offensive, raising questions over just when that export route will again be safe and operational, despite Iraqi
promises this weekthat repair work continues. But the bigger concerns are two-fold: The
Isis offensive comes at a time when
global oil markets could soon look tight due to supply disruptions in a number of big producers, and it
could have important knock-on effects on Iraqi oil production over the medium term. Although Opec seems
content with global oil supplies, that’s largely because of continued growth in US oil production, which has
risen more than 1 million barrels a day since the beginning of last year. But traditional suppliers are faltering: Libyan oil production has fallen to
about 10 per cent of levels before militants took over eastern areas of that country; South Sudan’s modest oil production has roughly been cut in
half by the civil war there; and Western sanctions are keeping roughly 1 million barrels of Iranian oil off the market.
Sustained oil revenues are key to sustain Iraq’s fight against ISIS- high oil prices
key
Pollack, 06/23/2014 (Kenneth M. Pollack, an expert on Middle Eastern political-military affairs, with particular emphasis on Iraq,
Iran, Saudi Arabia and the other nations of the Persian Gulf region; senior fellow in the Saban Center for Middle East Policy at the Brookings
Institution; served as the director of the Saban Center from 2009 to 2012, and its director of research from 2002 to 2009, “Oil and the Iraqi Civil
War: How Security Dynamics May Affect Oil Production”, Brookings Institute, 06/23/2014, http://www.brookings.edu/blogs/upfront/posts/2014/06/23-oil-iraqi-civil-war-pollack)
Terrorism/Sabotage. ISIS and other Salafi Jihadist groups have
been trying to curtail Iraqi oil production by attacking the
southern Iraqi oil infrastructure for years. As I noted above, they have had considerable success with the northern
infrastructure, but so far have not had the same impact in the south. Now that they are locked in a fullscale, conventional war with their Shi’a adversaries, they are likely to redouble those efforts . After all,
Iraq’s oil production is now the revenue stream funding the Shi’a coalition forces. Just as Baghdad
and Tehran tried to cut each other’s oil exports for the same reason during the Iran-Iraq War, so the Sunni
militants will make the same effort this time around. Moreover, now that they control a huge swath of northern Iraq, their ability to do so
may improve. A Distracted Bureaucracy. Even before the civil war re-ignited, Iraq was experiencing various problems ramping up oil production. The Iraqi
government is inefficient, corrupt and badly overcentralized. Oil companies (and other Western firms) have had problems obtaining visas and licenses, moving
personnel and equipment, and securing resources that the Iraqis were expected to provide. Some huge projects of critical importance to Iraq and its hydrocarbon
industry have encountered numerous bureaucratic SNAFUs that have delayed their completion. These include crucial ventures to capture flared Iraqi natural gas and
bring sea water up for injection into the southern oil fields to substitute for Iraq’s diminishing fresh water flows. With an all-out civil war to fight (as well as what is
likely to be a series of internal challenges), the Iraqi government is going to be even more distracted and probably less efficient than it was before the events of the
past two weeks. Lawlessness. Over the past 6-8 months, the Iraqi government had been pulling Iraqi Army and police formations out of southern Iraq and sending
them west to Anbar to fight the ISIS offensive that had captured Fallujah and threatened Ramadi, Abu Ghraib, and Samarra. The removal of so many security
personnel from the south (for instance, 11 of 17 Iraqi army battalions had already redeployed from Basra province) was already complicating the security situation in
the south. There were increasing reports of tribal violence, expanding organized crime rings, local political violence, and just more criminal activity overall. Since
then, Baghdad
has pulled even more troops and police from the south and sent them north to fight the new
Sunni militant offensive. Over time, it may be able to stand up new security units for the south, but it will
always face competition for more troops along the frontlines as long as the civil war goes on, and historically it is
the latter that gets priority over policing rear areas. All of this will increase the costs of doing business in Iraq for the major
oil companies and make it harder for Iraq to reach its full oil-export potential.
Oil is the only factor keeping revenues afloat
Herring, 06/18/2014 (Jessica Michele Herring, Latin Post Staff Writer, “Iraq News 2014: Nation's Military Prevents ISIS Militants
From Seizing Oil Refinery”, Latin Post, 06/18/2014, http://www.latinpost.com/articles/15102/20140618/iraqi-military-prevents-isis-militantsfrom-seizing-oil-refinery.htm)
The Iraqi military reported Wednesday that it fended off jihadi militants who were trying to seize control
of Iraq's largest oil refinery, which is located in the town of Baiji. Iraqi forces killed 40 militants from the Islamic State in Iraq and Syria,
or ISIS, according to CNN. Baiji, which is 225 miles north of Baghdad, is the latest region that ISIS is trying to seize in their large-scale battle for
control of the country. "The situation in Tal Afar, Samarra, and Baiji is under control," military spokesman Gen. Qasem Atta told CNN. He
said that Iraq's military is "defeating ISIS in the Baiji area" and that "most of the areas" around the northwest
city of Tal Afar have been freed from the militants' control. Tal Afar itself was taken over by the
militants, who are Sunni Muslim, on Sunday. Many residents of the town, which includes ethnic minority Shiite Turkmen,
escaped the fighting by fleeing to Iraq's Kurdish region. Keeping control of the oil refinery is of paramount importance to
the Iraqi government, as Iraq gains most of its revenue from the refinery's production of oil. Iraq has
the world's fourth-largest crude oil reserves, and produces 3.3 million barrels of oil each day.
Oil prices key to Iraq’s economy
Schwartz, 06/24/2014 (Michael Schwartz, Professor of Sociology and Faculty Director of the Undergraduate College of Global
Studies at Stony Brook University, has written extensively on popular protest and insurgency, and on American business and government
dynamics, Mother Jones Correspondent, “In Iraq, It's Always Been About the Oil”, Mother Jones, 06/24/2014,
http://www.motherjones.com/politics/2014/06/isis-iraq-oil-us)
Despite his obvious Shia sectarianism, Sunnis gave Maliki time to fulfill his campaign promises. For some, hopes were increased when service
contracts were auctioned off to international oil firms with the aim of hiking energy production to that six million barrel mark by 2020. (Some,
however, just saw this as the selling off of that national patrimony.) Many Iraqis
were initially reassured when oil production
began to rise: in 2011, the Hussein-era mark of 2.5 million barrels per day was finally reached, and in 2013 production finally
exceeded 3.0 million barrels per day. These increases raised hopes that reconstruction from the invasion
and occupation era would finally begin. With oil prices holding steady at just under $100 per barrel, government
oil revenues more than doubled, from about $50 billion in 2010 to more than $100 billion in 2013. This increase alone, if
distributed to the population, would have constituted a windfall $10,000 subsidy for each of the five
million Iraqi families. It also would have constituted a very promising down payment on restoring the
Iraqi economy and its social services. (The electrical system in itself required tens of billions of dollars in new investment simply to
restore it to inadequate pre-war levels.)
2NC Great Power War Impact
ISIS causes power alliances that trigger WW3
Corre, 06/17/2014 (Addam Corre, Inquisitr writer, “World War 3: Forget Ukraine, Iraq Is The Most Likely Flash Point”, Inquisitr,
06/17/2014, http://www.inquisitr.com/1303680/world-war-3-forget-ukraine-iraq-is-the-most-likely-flash-point/)
Over the past few months speculation has been rife that the events in Ukraine could trigger the next World War. Numerous articles have
proclaimed that to be the most likely scenario. But is it? The actions of the Islamic militant group calling itself ” The Islamic State of Iraq and
ISIS – has created a new situation on the ground which has a far greater potential for setting off a
world conflict than Ukraine could ever have. Despite all the world posturing and tut-tutting about the Crimea, it is, after all,
Syria” – or
simply a piece of land whose ownership is disputed. Viewed objectively, given the demographic structure of the area, the Russians have at least
an arguable case to justify its annexation. Whether the fears of the local Russian speaking population were real or imagined, it’s now a faitaccompli, and no one is going to do anything to change the situation any time soon. Even that the expansion of Russian interests in other parts of
Ukraine have similar elements of justification, which might keep the diplomats busy for a few months, but are unlikely to include any significant
military dimension. But the
situation in the Middle East is completely different. It is far more volatile and
dangerous because it is not really a question of land. What the world is witnessing, not for the first time – and certainly not for
the last – is a clash of ideologies within Islam. Some may feel that while they are busy butchering and beheading each other at least they are not a
threat to the rest of the world. That is mistaken and shortsighted thinking. With every passing year, the theories of Samuel P. Huntington that
people’s cultural and religious identities will be the primary source of conflict in the post-Cold War world, gain even more credence.
Huntington’s concept, which he aptly termed “The Clash of Civilizations” was first proposed in 1992. Since then, the world has witnessed with
growing horror the expansion of ever increasingly radical Islamic groups in almost every corner of the globe. Islamic militant groups are active in
Somalia, Afghanistan, Pakistan, Syria, Nigeria, Kenya, Lebanon, The Palestinian territories, and Gaza, just to list a few. Although Russia
nominally crushed the Islamists of Chechnya, remnants of them still manage the odd bombing atrocity in Russia. Islamic activity in China also
appears to have been suppressed, but facts from there are almost impossible to verify. But Islamic extremism and terrorism is not confined to
countries with mainly Muslim populations. From the attack on the Twin Towers in New York to the London bus bombings to the Madrid train
bombings, Islam carried its war to the rest of the world. And the world cleaned up the sites, mourned – and moved on. Some might argue that the
U.S., and one or two other countries, tried to do something about those atrocities by invading Iraq, toppling Saddam Hussein, fighting the Taliban
in Afghanistan and (eventually) killing their leader, Osama bin-Laden. History will judge whether those tactics succeeded or not; currently, the
legacy is not looking too good. Why could the actions
of ISIS trigger a third world war? It all depends on which
group, or groups, the major powers ally themselves with and support diplomatically, financially, or militarily. We are today
witnessing the truth of the adage that adversity makes strange bedfellows. Even a week ago, who could have envisaged a scenario in which the
U.S. and Iran could share a mutual interest, and possibly support each other in actions against ISIS? Apart
from the fact that Russia,
and sometimes China, have an almost knee-jerk reaction against any direction the U.S. might take in the
international arena, Israel is the wild card in the pack. If it senses that – for whatever reason – the U.S. and
Iran will find themselves allies, it will understand that the U.S. will be constrained in taking further action
against Iran regarding its efforts to manufacture a nuclear bomb. Facing such a situation, The Israeli
government may feel that he window of opportunity to take military action against Iran is rapidly closing.
Although, until now, the prevailing belief has been that Israel could not act alone – and succeed – it could be, and probably is the fact, that
Israel will be left with no alternative. Diplomatic efforts to stop the Iranian nuclear program have palpably
failed. The danger of such a course of action is that it would almost certainly result in the Islamist factions stopping their
mutual bloodletting in order to confront their joint enemy, Israel. From that point, it does not require too
much imagination to project what will be the effect of world and regional governments aligning themselves
with one side or the other. World War 3 starting in the Middle East as an indirect result of the actions of
ISIS is not such a fanciful prediction!
2NC Terrorism Impact
Iraqi collapse makes the Middle East a terrorist hotspot—they’ll strike
Francis, 06/16/2014 (David Francis, Fiscal Times CNBC Correspondent, “How the Collapse of Iraq Would Affect America”,
CNBC, 06/16/2014, http://www.cnbc.com/id/101761553#.)
Here are five ways the
collapse of Iraq could hit here at home. The threat to America and other Western nations
increases dramatically. There have already been documented cases of American citizens fighting with ISIS. If the group were
allowed to control southern Syria and northern Iraq, it would control territory larger than many countries. It could
even form a government to govern the entire area. This would effectively make this part of the world a safe haven for
terrorists, just as Afghanistan was under the Taliban. These terrorists are already holding Western weapons
abandoned by Iraqi troops. Also, because some of ISIS' members hold Western passports, they would be more
able to travel to the United States and Europe. Sooner or later, they would strike here.
Collapses means Iraq will become an exporter of terrorism
Eran & Guzansky, 06/25/2014 (Oded Eran, Yoel Guzansky, “The Collapse of Iraq: Strategic Implications”, The Scoop,
06/25/2014, http://www.scoop.co.nz/stories/HL1406/S00099/the-collapse-of-iraq-strategic-implications.htm)
The fall of major Iraqi cities to Sunni extremists belonging to the Sunni group Islamic State of Iraq and Syria (ISIS) may well have implications
beyond the borders of Iraq. The evolution toward the dissolution of the country, which began following the US invasion in 2003 and the fall of
the Saddam Hussein regime, will intensify. The independent Kurdish region is an established fact, recognized by most of the actors in the region.
If the Sunni takeover of central Iraq is not stopped, it could lead to the establishment of a semi-independent
Sunni area, with southern Iraq falling easily into the hands of Iran. In such a situation, Iraq would become an
exporter of terror, with the various groups that operate there exploiting Syria’s weakness to expand their
operations in the Middle East. All of Iraq’s neighbors, as well as the United States, have cause for major
worry about the immediate and long term implications of the recent developments. The weakening of the central Iraqi
government’s hold on the various parts of the country may serve Iran’s interest in extending its influence and
potentially create an Iranian-controlled land link with Syria and Hizbollah. However, this victory by Sunnis, who did not
rely on Iranian aid, will not be seen as an achievement in Tehran. Indeed the fall of important Shiite cities such as Najaf and Karbala into ISIS
hands would be an Iranian nightmare.
ISIS would become a terror state
Dvorin, 06/13/2014 (Tova Dvorin, Israel International News Reporter, “Defense Experts Warn Israel of Possible ISIS Threat”, Israel
International News, 03/13/2014, http://www.israelnationalnews.com/News/News.aspx/181677#.U7bo_vldWSo)
According to Neriah, the current crisis in the Middle East has made Israel relatively quiet, and could buy the IDF time to prepare. "Everyone
is busy
killing one another in the Arab world - it gives Israel a 'time out' to reorganize and to prepare itself for the long run," Neriah stated. "If Iraq
falls in the hands of ISIS, then we will have a terrorist state - where terrorists will be trained, will be
equipped, will be financed by an [entire] state and not by an organization which is [in] hiding." Analysts have
noted that the real threat to Israel's security would not be a direct assault from ISIS, which would have to overcome the forces of Syrian President Bashar Assad in
Syria, re-mobilize, and then launch an attack from Israel's northern neighbor to succeed. The real
threat from the ISIS stems from its
reputation, as its success could spur increased terror activity from ISIS-affiliated groups in Gaza and the
Sinai desert.
2NC Middle East Instability
ISIS will expand into Jordan after Iraq—incites Middle East War
Lake, 06/27/2014 (Eli Lake, The Daily Beast Correspondent, “Israel Could Get Dragged Into ISIS’s War, Obama Admin Warns”, The
Daily Beast, 06/27/2014, http://www.thedailybeast.com/articles/2014/06/27/israel-could-get-dragged-into-isis-s-war-obama-admin-warns.html)
The terror group that’s taken over major portions of Iraq and Syria won’t be content with roiling those
two countries, senior Obama administration officials told Senators in a classified briefing this week. The Islamic State of Iraq and al-Sham
(ISIS) also has its eyes on Jordan; in fact, its jihadists are already Tweeting out photos and messages
claiming a key southern town in Jordan already belongs to them. An ISIS attack on Jordan could make an
already complex conflict nightmarishly tangled, the officials added in their briefing. If the Jordanians are seriously
threatened by ISIS, they would almost certainly try to enlist Israel and the United States into the war
now engulfing the Middle East. “The concern was that Jordan could not repel a full assault from ISIS on its own at this point,” said
one senator, who spoke on condition of anonymity. Another Senate staff member said the U.S. officials who briefed the members responded to
the question of what Jordan’s leaders would do if they faced a military onslaught from ISIS by saying: “ They
will ask Israel and the
United States for as much help as they can get.” If ISIS were to draw Israel into the regional conflict it
would make the region’s strange politics even stranger. In Iraq and Syria, Israel’s arch nemesis, Iran, is fighting ISIS. Israel,
on the other hand, has used its air force from time to time to bomb Hezbollah positions in Syria and Lebanon, the Lebanese militia aligned with
Iran. If Israel were to fight against ISIS in Jordan, it would become a de facto ally of Iran, a regime dedicated to its destruction. But Jordan
is
also an important ally for Israel. It is one of two countries (along with Egypt) to have a peace treaty with the Jewish state. Jordanian
security forces help patrol the east bank of the Jordan River that borders Israel and both countries share intelligence about terrorist groups in the
region. For now the one thing Iran and Israel do agree on is that U.S. intervention in Iraq is risky. Khamenei has told Obama to just stay out.
Netanyahu was more subtle, warning that Obama should not promise Iran anything in the nuclear negotiations that might entice its cooperation in
Iraq. His advice was for Obama to weaken both sides. But behind the scenes, Israeli diplomats have told their American counterparts that Israel
would be prepared to take military action to save the Hashemite Kingdom. “The concern was that Jordan could not repel a full assault from ISIS
on its own at this point. They will ask Israel and the United States for as much help as they can get.” Thomas Sanderson, the co-director for
transnational threats at the Center for Strategic and International Studies, said Israel and the United States view the survival of the Jordanian
monarchy as a paramount national security objective. “I think Israel and the United States would identify a substantial threat to Jordan as a threat
to themselves and would offer all appropriate assets to the Jordanians,” he said. Sanderson, who is a former contractor for the Defense
Intelligence Agency, said those assets would include air power and intelligence resources, but he stressed that whatever Israel and the United
States offered Jordan would be tailored to the kind of threat ISIS posed. “It’s impossible to rule out boots on the ground from Israel or the United
States, but that is the least likely scenario. Amman would have to be under siege for that to happen,” he said. While the U.S. intelligence
community estimates that ISIS only has 3,000 to 5,000 fighters who are full members of the organization, the group is nonetheless a potent force.
In its military campaigns in Iraq and Syria, ISIS has seized millions of dollars worth of cash and advanced military equipment from bases
abandoned by the Iraqi and Syrian armies. That said, Jordan’s special operations forces are considered by military experts to be professional and
competent. The tiny country that borders Syria, Saudi Arabia, Israel and Iraq has survived terrorism, insurrection and regional war since it gained
independence in 1946. A spokeswoman for the Jordanian embassy in Washington, Dana Daoud, said the country’s military and security forces
were fully capable of meeting the ISIS threat. “We are in full control of our borders and our Jordanian Armed Forces are being very vigilant,” she
said. “We have taken all the precautionary measures. So far, we have not detected any abnormal movement. however, if anything threatens our
security or gets near our borders it will face the full strength of our Jordanian Armed Forces.” Earlier this week, Jordan closed a major border
crossing with Iraq. Rep. Adam Schiff, a Democrat who serves on the House Permanent Select Committee on Intelligence and is a co-chair of the
Congressional Friends of Jordan Caucus, said in an interview that the threat from ISIS could draw the United States into the conflict. But he also
said he had more confidence in Jordan’s military than he did in Iraq’s. “I don’t think there is any sense that the rank and file Jordanian forces will
melt away the way the Iraqis did,” he said. “It’s a different context in Jordan. If the need arises, they will provide more than a match for ISIS.” In
the last two decades Jordan has made a strategic decision to ally closely with America. Today
the country is one of America’s
closest partners in counter-terrorism. After U.S. forces lost access to Iraqi military bases in 2011, Jordan emerged as the most
important base for the CIA in the region. The CIA, for example, trains Syrian rebels from positions inside Jordan. On Thursday, the White House
asked Congress to authorize an additional $500 million for military training and equipment for those opposition forces. At times, the close
partnership with Jordan has resulted in tragedy. A triple agent provided to the CIA by Jordanian intelligence ended up detonating himself and
seven other CIA operatives at one of the agency’s outpost in Khost, Afghanistan in 2009. In the last year, the U.S. military has also positioned
batteries of Patriot missiles and a fleet of F-16s inside Jordan along with a contingency of U.S. soldiers known as Centcom-Forward Jordan. That
group is led Brig. General Dennis McKean, one of whose missions is to help plan for Jordan’s defense in the midst of the chaos that has enflamed
the region. “Jordan
is a very close partner to the United States, and we have shared their concerns about violence spilling
across the border for some time,” said Commander Bill Speaks, a spokesman for the Office of the Secretary of
Defense. “We are committed to supporting Jordan’s security and continually assess the situation and how best to support
our friends in the region.”
Iraqi collapse cuases Middle East instability and war
-advanced weapons in the Middle East
-Iranian nuclear weapons
-Israel conflicts
Eran & Guzansky, 06/25/2014 (Oded Eran, Yoel Guzansky, “The Collapse of Iraq: Strategic Implications”, The Scoop,
06/25/2014, http://www.scoop.co.nz/stories/HL1406/S00099/the-collapse-of-iraq-strategic-implications.htm)
While the United States will need to take the leading role, it must first take some decisions regarding the logic of providing the Iraqi army with
advanced weaponry, given the collapse of Iraqi army units that were facing forces equipped with inferior weapons. The
risk that
advanced weapons will fall into the hands of irregular forces and be used immediately against the central
government in Baghdad cannot be ignored. A different but no less difficult question concerns Iran and the new situation in Iraq. Iran
could attempt to sabotage a joint effort if it is not involved in any way and sees itself as deserving
compensation in the nuclear realm, or at least an easing of the sanctions. Yet involving Iran, regardless of its conduct in Syria
and its close cooperation with Hizbollah, appears impossible, and instead, dealing with Iran solely in the context of Iraq is
highly problematic. An interesting question is whether this issue arose in the recent bilateral talks between the United States and Iran or
whether these talks dwelled only on the nuclear issue. The attitude of the Gulf states on this issue is also unclear, even though they may see the
Iraqi issue as another opportunity to test the possibility of turning over a new leaf in their relations with Iran. T he
achievements by ISIS
are a milestone in the history of the Middle East, even though they are not completely unprecedented. Hizbollah’s success in
becoming a leading political force in Lebanon and the Hamas takeover in the Gaza Strip are important forerunners. The danger that this
will become a permanent situation is clear to all of those directly involved, including the United States .
Therefore, ISIS may see its achievements become something of a Pyrrhic victory: If the states in the region, under the leadership of the United
States, mobilize for the fight against ISIS, even its most zealous fighters will have difficulty withstanding what they will face in the campaign,
both in the quality of the weapons and the steps that will be used to cut off the organization’s supply routes. Israel
naturally has great
interest in the success of the struggle against ISIS entrenchment in any area whatsoever in the Middle East. Even
if the group’s efforts are not directed against Israel at this point, there is no doubt of the ISIS strategic
objectives, and any territorial or other entrenchment by ISIS is a potential security threat to Israel.
2NC Economy
Iraqi oil collapse risks global economic crisis
AP, 06/25/2014 (Associated Press, “Iraq insurgency: Troops repel fresh raid by militants on oil refinery”, Firstpost, 06/25/2014,
http://www.firstpost.com/world/iraq-insurgency-troops-repel-fresh-raid-militants-oil-refinery-1588233.html)
Taking a more Draconian view of the possibilities, what happens if ISIS drives southward and takes over the Iraqi oil fields? What happens if
Iraqi oil production is cut in half for a period of time? Macroeconomic Advisers in St. Louis (a highly respected economic think-tank) modeled
the impact on oil prices and global economic activity if this actually occurs. The data suggests that if
half of the Iraqi oil production
ceases: 1.5 million barrels per day of production would be lost. This makes up roughly 1.7% of global crude
oil consumption. Econometric modeling suggests that this contraction in oil output would potentially raise oil prices
by 45% or about $50 per barrel. If this were to occur, presumably inflation pressures would mount quickly in the
United States. The potential impact on gasoline prices would be a 20% to 25% price increase. GDP growth
in the United States could move toward 0%, threatening a new recession. If the significant upward move in oil prices
turns out to be a spike, a recession would probably be averted.
2NC US Cred Impact
Iraqi collapse decks US credibility
Francis, 06/16/2014 (David Francis, Fiscal Times CNBC Correspondent, “How the Collapse of Iraq Would Affect America”,
CNBC, 06/16/2014, http://www.cnbc.com/id/101761553#.)
It makes the United State look terribly weak. The Obama administration effectively abandoned Iraq in
2011, trusting the Maliki government to protect the gains it made in a long, deadly war. The loss of nearly
half of the country shows that this trust was misplaced. The United States spent more than a trillion
dollars in Iraq, and has provided the Iraqi government with tens of billions of dollars in aid. If the country fails,
it would arguably be one the worst foreign policy disasters in the history of the country. It could
decimate military morale. The importance of the money lost in Iraq pales in comparison to the human cost American soldiers paid.
According to the Pentagon, 4,424 died fighting in Iraq. Nearly 32,000 Americans were injured, some with debilitating wounds like the loss of
limbs. American soldiers also paid a heavy mental price. One in five has been diagnosed posttraumatic stress disorder. There are likely thousands
of other undiagnosed cases. When Fallujah fell, the Marines who fought there were furious that they had sacrificed so much for nothing. If
the
entire country were to collapse and the White House did nothing to stop it, American soldiers would likely
be both devastated and angry.
2NC Kurd Oil Deal Key
Stable Iraqi oil leverage key to Kurd-military assistance deal against ISIS
Unger, 06/12/2014 (David J. Unger, Christian Science Monitor Correspondent, “ISIS advances put Iraq oil rebound on hold
(+video)”, The Christian Science Monitor, 06/12/2014, http://www.csmonitor.com/Environment/Energy-Voices/2014/0612/ISIS-advances-putIraq-oil-rebound-on-hold-video)
"The incidents in northern Iraq have taken zero oil off the global market , considering the exports have been shut in for
months, and before that were no more than 300,000 [barrels per day]," writes Ben Lando, founder and editor-in-chief of Iraq Oil Report, a
Baghdad-based news and analysis service. "The increased risk to the rest of Iraq is surely spooking the market, though," Mr. Lando writes via email. "[C]ontinued
violence and insurgency will stretch Iraqi political, budget, security and planning thin to
the point that development could be impacted, and slowly down the road Iraqi exports too." In the north, forces from the
autonomous region of Kurdistan seized control of the Iraqi oil city of Kirkuk Thursday, after Iraqi troops reportedly retreated. The Iraqi
government and the Kurdish Regional Government (KRG) have long jockeyed for control of the north's
oil exports. Baghdad has attempted to block KRG efforts to independently export oil, but just last month it
loaded its first oil for shipment from a Turkish port. That has further strained relations between the two, but analysts expect
they will have to work together to combat a common enemy. "We will have to see if the Kurds manage to reach a deal with
Baghdad over oil in exchange for [their] military support against ISIS," Robin Mills, head of consulting at the Dubaibased Manaar Energy Consulting, writes in an e-mail
They’re key to fight off an ISIS takover
Bender, 06/17/2014 (Jeremy Bender, Business Insider Correspondent, “The World-Class Kurdish Army That Could Beat Back
Iraq's Jihadists”, Business Insider, 06/17/2014, http://www.businessinsider.com/the-world-class-army-that-could-beat-isis-2014-6?op=1)
As the Islamic State of Iraq and Syria (ISIS) and other Sunni extremist militants quickly gain territory in Iraq, the Kurdish
Security Forces are increasing their own operations in an attempt to shelter Iraqi Kurdistan from war. The
Kurdish forces, known as Peshmerga, have proven themselves to be the most effective bulwark so far
against ISIS's blitz. The Peshmerga, whose name is Kurdish for "those who face death," have helped to limit ISIS's
incursions towards Baghdad from the north. At the same time, the Kurds have also seized oil-rich Kirkuk, known as the "Kurdish
Jerusalem," which is formally outside of the autonomous Kurdish Region in Iraq. The Peshmerga's numbers, dedication, and
discipline make them possibly the strongest fighting force in Iraq.
AT: No ISIS Nukes
ISIS has nuclear weapons and will try to wipe-out Israel if they get the chance
Cefaratti, 06/23/2014 (Todd Cefaratti, TPNN writer, “ISIS Says they Have Nuclear Weapons to Wipe-Out Israel”, TPNN,
06/23/2014, http://www.tpnn.com/2014/06/23/isis-says-they-have-nuclear-weapons-to-wipe-out-israel/)
Israel may one day be a memory as ISIS
access to nuclear weapons and intends to use those weapons to obliterate Israel in order to
secure victory for Palestine. According to a report from the World Net Daily, a source claims that the Islamic State of Iraq and
Syria (ISIS) is working with an organized group whose efforts are focused “exclusively on destroying the
Zionist regime occupying Palestine.” The source quoted an ISIS fighter who said, “Zionists call us masked, sociopathic murderers,
Now, with our stature in freefall thanks to the amateurs running the State Department,
claims to have
but we are much more complicated and representative of those seeking justice than they portray us. “Are we more barbaric than the Zionist
terrorists who massacred at Dier Yassin, Shatila, twice at Qana, and committed dozens of other massacres? History will judge us after we free
Palestine.” The
ISIS fighter claimed to be eager to fight Israel in order to reclaim the land for Palestine.
Acknowledging that Israel has nuclear weapons, the fighter claimed that they, too, had access to such
weapons. “Do you think that we do not have access to nuclear devices?” the ISIS fighter stated. “The Zionists know that we do, and if we
ever believe they are about to use theirs, we will not hesitate. After the Zionists are gone, Palestine will have to be decontaminated and rebuilt just
like areas where there has been radiation released.” As the situation in the Middle East rapidly destabilizes, the Obama Administration is in fullblown damage control mode. In Cairo, Secretary of State John Kerry was quick to claim that the situations in Iraq and Libya were not to be
blamed on Washington. “The United States of America is not responsible for what happened in Libya, nor is it responsible for what is happening
in Iraq today,” Kerry said. Obama announced a departure date for removing troops from Iraq, destabilized Libya and has stumbled into one
foreign policy disaster after another making America appear weaker and weaker and in doing so, has emboldened America’s enemies.
ISIS will destroy Israel if they gain more momentum in IRAQ
Maloof, 06/23/2014 (F. Michael Maloof, WND Correspondnet, “IRAQ INVADERS THREATEN NUKE
ATTACK ON ISRAEL”, WND, 06/23/2014http://www.wnd.com/2014/06/iraq-invaders-threaten-nuke-attack-on-israel/)
WASHINGTON – The
well-organized army of the Islamic State of Iraq and Syria, or ISIS, claims it has access to
nuclear weapons and a will to use them to “liberate” Palestine from Israel as part of its “Islamic Spring,” according to
a WND source in the region. Franklin Lamb, an international lawyer based in Beirut and Damascus, said the move is part of the ISIS aim of
creating a caliphate under strict Islamic law, stretching from the Mediterranean Sea to Iraq. Lamb,
who has access to ISIS fighters
and sympathizers, said ISIS has been working with a “new specialized” unit organized at the beginning of 2013 to
focus “exclusively on destroying the Zionist regime occupying Palestine.” Lamb added that the ISIS “Al-Quds Unit” is
working to broaden its influence in more than 60 Palestinian camps and gatherings from Gaza, across “Occupied Palestine,” or Israel, to Jordan
and from Lebanon up to the north of Syria “seeking to enlist support as it prepares to liberate Palestine.” ISIS is also know as the Islamic State of
Iraq and the Sham. “Sham,” or “Greater Syria,” refers to Cyprus, Palestine, Jordan, Iraq, Syria, Lebanon, Israel and southern Turkey. ISIS also is
known as DAASH, the Arabic acronym for al-Dawlah al-Islamiyah fi al-Iraq wa-al Sham. The Sunni militant group, which has taken over much
of the Sunni region of Iraq, could leave the Shiite-dominated region of the country and head toward Jordan and Turkey. Lamb said that in Iraq
alone, some 6 million Iraqi Sunnis recently have become supportive of the ISIS lightning strikes in the Sunni portion of the country. Some of the
Sunni supporters are secular, such as the Naqshbandia Army of former top officials of executed Iraqi leader Saddam Hussein. As WND reported,
the Sunni group may have given ISIS access to its ongoing sarin production facility in northwestern Iraq. WND also reported ISIS already has
captured towns bordering Iraq and Turkey. The militant group also has steamrolled through the Iraqi desert in the west and taken over the major
al-Walid crossing with Syria and the Turaibil crossing into Jordan. Lamb said ISIS has established a capital for its caliphate in the Syrian city of
Raqqa. “The Islamist organization believes it currently has massive regional support for its rapidly expanding ‘revolution of the oppressed,’”
Lamb said. ISIS estimates it will take 72 months to “liberate” “Occupied Palestine,” or Israel, according to Lamb. Lamb quoted an ISIS member
as saying: “Zionists call us masked, sociopathic murderers, but we are much more complicated and representative of those seeking justice than
they portray us. “Are we more barbaric than the Zionist terrorists who massacred at Dier Yassin, Shatila, twice at Qana, and committed dozens of
other massacres? History will judge us after we free Palestine.” Lamb said ISIS can do what no other Arab, Muslim or Western backers of
resistance have been able to accomplish. He quoted the ISIS member as saying: “All countries in this region are playing the sectarian card just as
they have long played the Palestinian card, but the difference with ISIS is that we are serious about Palestine and they are not. Tel Aviv will fall
as fast as Mosul when the time is right.” The WND source said ISIS
appears “eager” to fight Israeli armed forces “in the
near future despite expectation that the regime will use nuclear weapons.” “Do you think that we do not have access to
nuclear devices?” Lamb quoted the ISIS member as saying. “The Zionists know that we do, and if we ever believe they are
about to use theirs, we will not hesitate. After the Zionists are gone, Palestine will have to be decontaminated and rebuilt just like
areas where there has been radiation released.” ISIS access to nuclear weapons could come from Sunni Pakistan, which is home to more than 30
terrorist groups. Pakistan possibly has transferred nuclear weapons to the chief bankroller of its nuclear development program, Sunni Saudi
Arabia, as WND previously has reported. The Saudis, who also have provided billions of dollars to ISIS, have threatened to acquire nuclear
weapons if Iran were to develop its own. The WND source said ISIS denies any interest in training and directing foreign fighters to attack
Europe, claiming its goals are to establish the al-Sham caliphate and “liberate Palestine.”
ISIS can and will get nuclear weapons
Edwards, 06/25/2014 (David Edwards, served as an editor at Raw Story since 2006, “Iraq War redux: Dick Cheney warns Fox that
nuclear weapons are ‘spreading’ to terrorist”, The Raw Story, 06/25/2014, http://www.rawstory.com/rs/2014/06/25/iraq-war-redux-dick-cheneywarns-fox-that-nuclear-weapons-are-spreading-to-terrorists/)
Former Vice President Dick Cheney showed up on Fox News on Wednesday to make a familiar case for going back to war in Iraq: Nuclear weapons are “spreading”
to extremists across the globe. In recent weeks
the al Qaeda splinter group ISIS has taken advantage of a power vacuum
left after the U.S. invaded Iraq to take over large parts of the country, giving Cheney and other architects of the 2003 invasion an opportunity to use
some of their original talking points for military action. Cheney’s recent op-ed in The Wall Street Journal stopped just short of accusing President Barack Obama of
treason, saying that he had been determined to take the United States “down a notch” before leaving office. “Defeating them will require a strategy—not a fantasy,”
Cheney wrote. “It will require sustained difficult military, intelligence and diplomatic efforts—not empty misleading rhetoric. It will require rebuilding America’s
military capacity—reversing the Obama policies that have weakened our armed forces and reduced our ability to influence events around the world.” After a
campaign of television interviews failed to make his case against Obama, Cheney was back on Fox News on Wednesday to play the same nuclear weapons card that
he used in 2003. “The
focus shouldn’t be just on Iraq,” he insisted. “It’s indicative of a much broader problem. We’ve had
— The Rand Corporation just recently published a study that shows there’s been a 58 percent increase in the number of al
Qaeda-type terrorist groups in the last four years. Fifty-eight percent! Doubling the number of terrorists roughly, and
they’re spreading out from West Africa all across North Africa to East Africa, up through the Middle East, all the way around to
Indonesia.” “And the other problem, of course, is the developing possibility that sooner or later some of them will get their
hands on deadlier weapons,” the former vice president added. While Cheney was taking a breath, Fox News host Elisabeth Hasselbeck tossed him a
softball “Are you indicating that we could be on track for something worse than 9/11?” she asked. “I think that’s a possibility,” he declared. “You know, I can’t say at
this point specifically when something like that might happen. But it
would be foolish of us to ignore the extent to which there are
people who — terrorist-sponsoring states who have in fact tried to provide nuclear technology.” “The
North Koreans, for example, built a nuclear reactor in the Syrian dessert,” Cheney continued. “We’ve also had testimony from the
man who created the Pakistani [nuclear] program publicly, A.Q. Khan, that the North Koreans bribed the Pakistanis for the latest enrichment technology.” “So, it’s
spreading. And access
to those kind of capabilities, I think, is on an increase.”
AT: No ISIS takeover- outnumbered
Numbers don’t matter- Iraq’s economy is a mess
Beauchamp, 06/13/2014 (Zack Beauchamp, VOX correspondent, “11 facts that explain the escalating crisis in Iraq”, VOX,
06/13/2014, http://www.vox.com/2014/6/13/5803712/11-things-iraq-crisis-isis)
But the
Iraqi army is also a total mess, which explains why ISIS has had the success it's had despite being
dramatically outnumbered. Take ISIS' victory in Mosul. 30,000 Iraqi troops ran from 800 ISIS fighters.
Those are 40:1 odds! Yet Iraqi troops ran because they simply didn't want to fight and die for this government.
There had been hundreds of desertions per month for months prior to the events of June 10th. The escalation with ISIS is, of
course, making it worse. Sectarianism also plays a role here. The Iraqi army is mixed Sunni-Shia, and "it appears that the Iraqi
Army is cleaving along sectarian lines," Yale's Jason Lyall said. "The willingness of Sunni soldiers to fight to
retake Mosul appears limited." This makes some sense out of the Mosul rout: some Sunni Muslims don't really want to
fight other Sunnis in the name of a government that oppresses them.
Links
Generic
1NC
Additional US oil production crashes global oil prices
González 12
Ángel González – Reporter for the Wall Street Journal (“Expanded Oil Drilling Helps U.S.Wean Itself
From Mideast”, June 27 2012,
http://online.wsj.com/news/articles/SB10001424052702304441404577480952719124264)//EO
The American energy revolution also is making a splash across the Atlantic. Countries in Eastern Europe,
long dependent on Russia for their energy, are seeking to tap their own shale resources with the help of
U.S. companies. Even Russia, which needs new sources of oil to maintain its status as an energy
superpower, is getting into fracking with the biggest U.S. oil company, Exxon Mobil Corp. This month
Exxon and Russia's state-controlled OAO Rosneft broadened an existing alliance to include the joint
development of tight oil reserves in western Siberia. Milestones for American Oil View Slideshow Crude
oil pipes at the Bryan Mound site near Freeport, Texas Associated Press The prospect that new sources of
supply in the Americas could lead to years of flat or even falling oil prices is a source of great concern
in the Kremlin. Surging oil revenues over his 12 years in power have helped President Vladimir Putin pay
for an eightfold increase in government spending, going to everything from pension and wage hikes to
costly projects like the Sochi Olympics to a major military buildup. Now, his government is scrambling to
find ways to tighten its belt as oil prices—and thus tax revenues—slide. Finding a new driver for Russia's
economy is "a colossal challenge," said economy minister Andrei Belousov. The domestic oil picture has
become part of the presidential campaign this year. President Barack Obama likes to point out that output
has surged during his first term. "We've added enough new oil and gas pipeline to encircle the Earth and
then some," he said in a speech earlier this year. Mitt Romney, the presumed GOP candidate, says the
U.S. must do more to promote domestic exploration and says Mr. Obama is holding back the industry.
Mr. Romney's campaign ads say that on "Day 1" he will give approval for the Keystone XL pipeline, a
project to bring oil from Canada that Mr. Obama's administration has rejected for now. The renaissance of
the U.S. oil patch is pushing down oil prices, giving a boost to the economy at a time when a global
slowdown threatens to crimp demand. Research firm Raymond James lowered its 2013 forecast for U.S.
crude prices this month to $65 per barrel from $83, partly because production in the U.S. has risen much
more quickly than previously expected.
OTEC
1NC
OTEC outcompetes and reduces demand for oil
Huang et al. 3
Joseph C. Huang Senior Scientist for the National Oceanic and Atmospheric Administration, Hans J.
Krock Professor of Ocean &. Resources Engineering, University of Hawaii and Stephen K. Oney, PhD.
and executive vice present of OCEES (“Revisit Ocean Thermal Energy Conversion System”, July 2 2003,
http://www.springerlink.com/content/n864l3217156h045/fulltext.pdf)//EO
The most recent calculation for turnkey construction costs for an OTEC power plant is very
competitive with that of equivalent oil-fired power plants. One cost estimation from a private
company in Hawaii quoted about $0.04 per kilowatt-hour for a 100 MW floating OTEC plant (Krock and
Oney, 2002). This reflects a much improved overall OTEC efficiency afforded by a significant reduction
in the total heating and cooling water flow requirements. In addition, unlike fuel or coal fired power
plants, the OTECenergy resource is automatically replenished by the solar system at no cost. Thus OTEC
will reduce our reliance on imported oil for national and international energy security as well as
eliminate GHG emissions. Due to current advancements in technology as well as the favorable financial
environment, OTEC could prove to be more effective in addressing global en-ergy requirements than any
other currently available renewable energy resources. Renewable energy from wind, geothermal and
photovoltaic, etc, is all good and should be encouraged. However, these are relatively minor in potential
capacity, specific in geographic applicability, and mostly intermittent in power energy gen-erations.
OTEC provides uninterrupted power via the immense resource in the tropical ocean, either as base-load
power to an island community or as a float-ing plant converting its electrical energy into an energy carrier
such as hydrogen for use in fuel cell transportation or power production industries. The main eco-nomic
characteristics of an OTEC system are that it is relatively turn-key capital intensive, but has very low
operation and maintenance costs. The current world economic environment with low interest rate, low
inflation rate, and high oil price, are encouraging conditions for OTEC development.
Offshore Drilling
1NC
Increased US offshore drilling tanks international oil prices – their authors are
environmentalist naysayers
Overholt 5/20
Mark Overholt – President of Tiger General Medina Machine Company (constructs premium oil field
trucks and other relevant transportation vehicles) with five decades of experience in the oil industry,
(“Why The Pros Outweigh The Cons Of Offshore Drilling”, March 20 2014,
http://www.tigergeneral.com/pros-outweigh-cons-offshore-drilling/)//EO
In the US many of the “oil spills” are actually from oil seepage that occurs naturally. Senior policy
analyst at the Heritage Foundation Ben Lieberman explains, “studies have shown that oil drilling reduces
pressure on those seeps and results in less oil pollution. So offshore drilling truly could be a win-win
situation for the American people.” Although this is not a popular idea, Lieberman is onto something with
his theory that oil drilling will actually improve the environment. While less seepage is released due to the
decrease in pressure, the oil rigs themselves act as reefs for marine life that would otherwise remain
unprotected. The misconception that the US will not see a decrease in oil prices no matter where they drill
oil is a ludicrous one. Those that are afraid to drill, who look for disaster at every opportunity, are
maintaining that offshore drilling isn’t going to decrease oil prices in the United States. This
couldn’t be further from the truth. The oil industry is going strong, and the addition of US crude oil
into the international market gives the US some bargaining power. While gas prices haven’t gone down,
the price of gas has remained rather steady over the last few years. With Obama locking down 85% of our
offshore drilling sites, the US will continue to lack the ability to increase energy production. This action
keeps the US from being competitive in the international oil market.
2NC
Accessing huge offshore oil supplies would plunge global oil prices
Lieberman 8
Ben Lieberman – former Senior Fellow in Environmental Policy at the Competitive Research Institute,
author of various celebrated articles published in publications such as The Washington Post,
Businessweek, and National Review, former Senior Policy Analyst in Energy and Environment in the
Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation
(“A Rational Post-Spill Policy That Allows Offshore Drilling”, July 10 2010,
http://www.heritage.org/research/reports/2010/07/a-rational-post-spill-policy-that-allows-offshoredrilling)//EO
Washington must do something about the increasing price of gasoline, now topping $4 per gallon.
One important step would be to tap our own supplies of oil. Yet for decades, overlapping
congressional and presidential restrictions on drilling for energy in the Outer Continental Shelf (OCS)
have stood in the way of lower prices for oil and natural gas. The President took a positive step today
by rescinding the executive moratorium on exploration and production in American waters. However,
Congress still needs to act in order to make this oil available. Congressional Restrictions on Drilling
Many of America's offshore areas are off-limits to energy production. Beginning in 1982, Congress restricted more and
more offshore areas through annual Department of the Interior (DOI) appropriations. The DOI has authority over the OCS, which includes most
areas more than three miles offshore. Through this annual process, Congress chose to deny DOI the funding necessary to conduct leasing of new
offshore areas to oil and natural gas companies. These off-limits areas comprise 85 percent of the OCS-almost everywhere except the central and
Until recent
years, these restrictions were easily renewed with little controversy, but with the dramatic rise in oil and
natural gas prices, as well as the desire to reduce oil imports from unfriendly foreign countries, there
have been several legislative efforts to roll them back. Thus far, none of these efforts has been successful. Most recently,
western Gulf of Mexico-and the congressional moratoria have become a standard feature of each year's DOI appropriations bill.
H.R. 6108, the Deep Ocean Energy Resources (DOER) Act, would allow each coastal state to decide whether and where it wants drilling off its
coast out to 100 miles. Beyond 100 miles from the coast, states would not have veto power; thus, deepwater areas would be open to exploration
and production. The bill also has provisions for revenue sharing between the federal government and each state that allows drilling, similar to
provisions that allow drilling on federal lands. The bill is modeled after the 2006 DOER Act, which passed the House but was never considered in
the Senate. In addition, H.R. 2784, the National Environment and Energy Development Act, would also open up much of America's waters to
energy production. Despite having 171 co-sponsors, it has yet to be allowed to come to a vote. Lifting the White House Opposition to Drilling In
1990, President George H. W. Bush issued a presidential directive restricting new offshore exploration and drilling. In 1998, President Bill
Clinton extended these restrictions through 2012. For his first seven years in office, the current President had not seen fit to lift the moratorium,
and he was unhelpful during debate over the 2006 DOER Act. Now the President has lifted the executive branch restrictions and said that he will
support legislation opening the OCS. If Congress is serious about addressing high energy costs, it should quickly send legislation to the President
that removes restrictions on these vital energy reserves. Tremendous Potential with Little Risk These restrictions effectively banned new offshore
energy production off the Atlantic and Pacific coasts, parts of offshore Alaska, and the eastern Gulf of Mexico. Recent
DOI estimates
put the amount of energy in these off-limits areas at 19.1 billion barrels of oil and 83.9 trillion cubic feet
of natural gas-approximately 30 years' worth of imports from Saudi Arabia and enough natural gas to
power America's homes for 17 years. It should also be noted that these initial estimates tend to be low.
OCS restrictions are a relic of the past. They were put in place at a time when energy was cheap, the need
for additional domestic supplies was not seen as dire, and the political path of least resistance was to give
in to environmentalists. All that has changed, with more than a quadrupling of oil and natural gas prices
since the restrictions were first imposed. Extra energy is badly needed, and the risk of producing it has
been reduced. All new drilling would be subject to strict safeguards and would require state-of-the-art
technology with a proven track record for limiting the risk of spills. One Step Closer By lifting the
executive moratorium against OCS exploration and production, the President has brought America one
step closer to accessing promising sources of domestic oil and natural gas for decades to come. Now,
Congress must show the nation that it is serious about meeting our energy needs by supporting the
production of American energy from American waters.
Demand
1NC
Oil production is stable now – means any reduction in demand sink prices
Conerly 13
Bill Conerly – reporter for Forbes financial news source (“Oil Price Forecast for 2013-2014: Falling
Prices”, May 1 2013, http://www.forbes.com/sites/billconerly/2013/05/01/oil-price-forecast-for-20132014-falling-prices/)//EO
Drilling activity results in oil production, lasting for many years after the drilling is over. Take a look at
the accompanying chart of drilling rigs and total production. Drilling jumped up after the oil price hikes
of 1973 and 1979. By 1986, increased oil production brought prices crashing down. Oil exploration
quickly followed suit. Production, however, continued to grow long after new drilling declined. When
drilling was high, much of the activity was exploratory—trying to find the oil. When prices fell, the
riskiest drilling made no sense. What was left was in-fill. The oil field had been identified, and further
wells were needed to best utilize the resource. These wells are fairly low risk, with high rewards
compared to the cost of the drilling rig. As a result, even low levels of drilling activity led to substantial
increases in global production. Today we’ve had moderately strong drilling activity for several years.
New fields have been identified and delineated. Now we’ll see fairly mild drilling activity but
continually increasing production. In the past year production has been soft, barely growing, but
that’s a reflection of weak demand. In the short run, production can be dialed back to save more oil for the
future. In the long run, though, production capacity rules the roost. What of demand? Demand should
grow a little slower than the global economy. Unless the world starts to boom—an unlikely scenario,
given problems in Europe and the United States—production capacity will grow faster than demand,
pulling prices down.
2NC
Decreases in oil demand tank prices
Timone 14
Anna Timone – reporter for ForexLive foreign market exchange trading news source (“Will the price of
oil increase or decrease?”, February 1 2014, http://www.forexlive.com/blog/2014/02/01/will-the-price-ofoil-increase-or-decrease/)//EO
Very recently, the New York Mercantile Exchange crude oil prices rose during Asian trading hours after
news had revealed that the US economy grew at a reasonable rate during the fourth quarter of 2013.
Specifically, the Commerce Department stated that the gross domestic product increased by 3.2% in the
fourth quarter – corresponding with most analysts’ expectations. Meanwhile, earlier this week, New
York-traded crude oil futures decreased in price due to some concern that the demand for oil will
decrease in the near future. This decrease in price mainly occurred because of a decreased demand
for oil from countries with emerging economies. For instance, in January, the HSBC manufacturing index
decreased to a six month low. This raised concerns that China, the second largest oil consuming nation in
the world, may suffer from an economic slowdown.
Renewables
1NC
Rapid renewables development spooks speculators who preemptively crash the
price of oil
Spectator Business 8
A respected financial media source and investment advice hub (“The Sheikhs Still Call the Shots”, July
2008, http://www.lexisnexis.com.turing.library.northwestern.edu/hottopics/lnacademic/)//EO
The stereotype of indolent sheikhs counting their petrodollars while the industrial world grinds to a halt
should stay where it belongs, back in the 1970s; in today's inter-connected global markets, cause and
effect are far more complex. Speculation has clearly played a bigger part in this price spike than physical
imbalances of supply and demand: Mr Khelil says hedge funds have added $40 to the barrel price, and his
guess is probably as good as anyone's. But speculators are simply trying to anticipate the actions and
reactions of producers - while assuming, on the other side of the equation, a relatively predictable pattern
of rising demand from China, partially offset by faltering demand from the West The speculators are
betting that, at any price north of $100, producer countries will hoard oil in the ground - and so far, they
are absolutely right. But if ever there was a price bubble, this is surely a prime example, so the worldlywise speculator will also be watching for a signal from producers that will precipitate a sell-off.
Whatever Mr Khelil says, Opec could give that signal. Its members should now be considering just how
damaging to the global economy, and therefore to future oil demand, a prolonged oil shock will be. They
should be watching how quickly Western capital investment is switching towards alternative energy
sources that are competitive against $100-plus oil. And they should be calculating the scale and timing of
production increases that might bring about an orderly decline in oil prices back towards a range - entirely
feasible in terms of real- world supply and demand - of $60 to $80 a barrel. Such a fall would drive the
speculators elsewhere, keep the sheikhs in the style to which they are accustomed, and allow the rest of
the world to breathe a sigh of relief. There has rarely been good reason to be confident in Opec' s ability
to reach intelligent, long-term decisions, but the fact remains that the cartel's leaders have more say than
any other single player in the complex game as to which way the oil price goes next, and how fast It is
complacent and cowardly of them to pretend that they do not hold that power.
2NC Offshore Wind Link
Even minor offshore wind programs drastically reduce US oil demand
Mahan et al. 10
Simon Mahan – Renewable Energy Manager at Southern Alliance for Clean Energy, former Vice
President at Acadiana Resource Conservation and Development, former Campaign Analyst for Oceana;
Jacqueline Savitz – Vice President for U.S. Oceans at Oceana with two decades of environmental policy
experience, former Executive Director of Coast Alliance, former environmental policy analyst with
Environmental Working Group, M.S. in environmental science from the University of Maryland
(“Untapped Wealth: Offshore Wind Can Deliver Cleaner, More Affordable Energy and More Jobs than
Offshore Oil”, September 2010, http://oceana.org/sites/default/files/Offshore_Wind_Report__Final_small.pdf)//EO
Despite this apparent disconnect, wind power can directly offset oil consumption in the electricity
generation and home heating sectors. Currently, 43.7 million barrels of oil are consumed annually to
generate electricity across the country.72 This amount of electricity73 could easily be generated by
offshore wind. Approximately 7 gigawatts (GW) of offshore wind power would be needed to replace the
oil currently used in power generation.74 While this may seem like a small amount it would be an
important step in moving away from fossil fuels and cutting down climate change pollution—and it is
clearly achievable. The U.S. already has about 35 GW of onshore wind in place and more on the way.
The U.S. could have 20 GW of offshore by 2020 if it made the commitment to do so—the United
Kingdom, which has made such a commitment, plans to install 33 GW of offshore wind by 2020. The
sooner renewable energies begin to replace oil in the electricity generating sector, the sooner carbon
dioxide emissions and petroleum demand can begin to be reduced. Another immediate way offshore
wind energy can cut oil and natural gas consumption is through heating. Many homes and buildings still
use fuel oil and natural gas for heating purposes such as space heating, cooking, and water heating.75 On
the East Coast, nearly 7 million homes rely on fuel oil as the primary source of heating, representing
about 88 percent of the country’s heating oil demand.76 Switching these homes from fuel oil to electric
heating (nearly 16.6 million homes on the East Coast already use electricity for their primary source of
heating), almost 123 million barrels of oil would be conserved annually. About 5 GW of wind power
would be needed to provide the electricity to heat these 7 million homes, an amount that is well in line
with the projected 20 GW of offshore wind that could be in place by 2020. Installing 20 GW of offshore
wind power with the explicit purpose of offsetting domestic oil consumption would generate enough
energy to eliminate nearly 167 million barrels of oil demand annually—more than is currently used in
home heating and electricity generation.
Offshore wind programs directly trade off with demand for oil in heating and
electricity generation sectors
Mahan et al. 10
Simon Mahan – Renewable Energy Manager at Southern Alliance for Clean Energy, former Vice
President at Acadiana Resource Conservation and Development, former Campaign Analyst for Oceana
(“Oceana Vision 2020: How to Eliminate our Dependence on Offshore and Persian Gulf Oil”, June 2010,
http://oceana.org/sites/default/files/Oceana_Vision_2020.pdf)//EO
Electricity demand will increase from the newly electrified light duty vehicle fleet, newly electrified
home and business heating; meanwhile, additional electricity will need to be generated in stead of the lost
oil-based electric generation. Due to the fact that most electric vehicles would be charged at night, when
electricity demand is already low, has been estimated that no new electric generating power plants would
need to be built in order to power a completely electrified vehicle fleet.12 In order to make up the
increase in demand for electricity from home heating and for replacing oil-based electric generation,
approximately 20 gigawatts of offshore win[d] farms would need to be installed by 2020.13 Offshore
wind energy is an obvious solution for replacing oil in these two sectors, primarily due to geography
and resource availability. Most of the heating-oil demand and oil-based electricity generation is on the
east coast – precisely where offshore wind farms would be situated. As a resource, offshore wind power is
often strongest in the winter and at nights – when demand for home heating oil is highest.
Impacts
Russia Scenario
1NC Russia Impact
The Russian economy is entirely dependent on oil revenues and would collapse in
response to price drops
Butler 14
Nick Butler – Professor and chair of the Kings Policy Institute at Kings College in London, former vice
president for Policy and Strategy Development at BP, former chairman of the Cambridge Centre for
Energy Studies, former special advisor for British Prime Minister Gordon Brown
(“Russia – the weakness of petropower”, March 2 2014, http://blogs.ft.com/nick-butler/2014/03/02/russiathe-weakness-of-petropower/)//EO
Russia’s weakness is its overwhelming dependence on oil and gas export revenues. Russia exports 6m
barrels of crude oil and another million barrels of oil products to Europe every day. Europe also buys a
third of total Russian gas production. Moscow simply cannot afford to lose any significant proportion
of that revenue. Four gas pipelines run through Ukraine. On a short-term basis Europe needs Russian
energy but the dependence is entirely mutual. On a longer-term basis Europe has other options and every
burst of Russian rhetoric must be encouraging European governments to prepare contingency plans.
Russia has no such options. Since coming to power 14 years ago, Mr Putin’s regime has been sustained
by more than a decade of high oil and gas prices. The revenue has allowed the Russian government to
survive and has made a small proportion of the country’s population very rich. This easy stream of
income has, however, enabled the Russians to evade the need for reform and modernisation. Beyond the
energy sector the scientific and technical base of the country is weak and has failed to match the advances
being made elsewhere in the world – not least in China. Too many of the brightest Russians have left the
country. So, of course, has a large proportion of the wealth generated by the energy sector. The Russian
economy is now more dependent on oil and gas than it was when Mr Putin came to power. Oil and
gas account for 70 per cent of Russian exports and over 50 per cent of all state revenue. Even if
exports to Europe are maintained in the short term– as they were throughout even the toughest days of the
cold war – Russia is vulnerable to developments in Europe which undermine the need for imports,
especially of gas. That process is happening already. European gas demand is down by 10 per cent over
the last decade and will fall further as markets such as Germany switch to renewables. Gas to gas
competition is threatening old contracts and will push prices down. Russia has huge resources – not just
of oil and gas but also of shale gas and tight oil. But resources in the ground are of limited value if the
market is saturated. Petroeconomies are inherently unstable precisely because they have minimal
flexibility in responding to external circumstances beyond their control.
Nuclear war
Filger 2009 – Sheldon, author and blogger for the Huffington Post, “Russian Economy Faces Disastrous Free Fall Contraction”
http://www.globaleconomiccrisis.com/blog/archives/356
In Russia historically, economic health and political stability are intertwined to a degree that is rarely
encountered in other major industrialized economies. It was the economic stagnation of the former Soviet Union that led to its
political downfall. Similarly, Medvedev and Putin, both intimately acquainted with their nation’s history, are unquestionably
alarmed at the prospect that Russia’s economic crisis will endanger the nation’s political stability,
achieved at great cost after years of chaos following the demise of the Soviet Union. Already, strikes and protests are occurring among rank
and file workers facing unemployment or non-payment of their salaries. Recent polling demonstrates that the once supreme popularity
ratings of Putin and Medvedev are eroding rapidly. Beyond the political elites are the financial oligarchs, who have been forced to
Should the Russian economy
deteriorate to the point where economic collapse is not out of the question, the impact will go far beyond the obvious
accelerant such an outcome would be for the Global Economic Crisis. There is a geopolitical dimension that is
even more relevant then the economic context. Despite its economic vulnerabilities and perceived decline from superpower status, Russia
remains one of only two nations on earth with a nuclear arsenal of sufficient scope and capability to
destroy the world as we know it. For that reason, it is not only President Medvedev and Prime Minister Putin who will be lying
awake at nights over the prospect that a national economic crisis can transform itself into a virulent and
destabilizing social and political upheaval. It just may be possible that U.S. President Barack Obama’s national security
deleverage, even unloading their yachts and executive jets in a desperate attempt to raise cash.
team has already briefed him about the consequences of a major economic meltdown in Russia for the peace of the world. After all, the most
recent national intelligence estimates put out by the U.S. intelligence community have already concluded that the Global Economic Crisis
represents the greatest national security threat to the United States, due to its facilitating political instability in the world. During the
years Boris Yeltsin ruled Russia, security forces responsible for guarding the nation’s nuclear arsenal went
without pay for months at a time, leading to fears that desperate personnel would illicitly sell nuclear weapons to
terrorist organizations. If the current economic crisis in Russia were to deteriorate much further,
how secure would the Russian nuclear arsenal remain? It may be that the financial impact of the
Global Economic Crisis is its least dangerous consequence.
2NC High prices key to Russian econ
The Russian economy requires high oil prices to survive – even minor price declines
cause complete collapse
Woodhill 14
Louis, reporter for Forbes (“It's Time To Drive Russia Bankrupt -- Again”, March 3 2014,
http://www.forbes.com/sites/louiswoodhill/2014/03/03/its-time-to-drive-russia-bankrupt-again/)//EO
The high oil prices of 1980 were not real, and Reagan knew it. They were being caused by the weakness
of the U.S. dollar, which had lost 94% of its value in terms of gold between 1969 and 1980. Reagan
immediately decontrolled U.S. oil prices, to unleash the supply side of the U.S. economy. Even more
importantly, Reagan backed Federal Reserve Chairman Paul Volcker’s campaign to strengthen and
stabilize the U.S. dollar. By the end of Reagan’s two terms in office, real oil prices had plunged to
$27.88/bbl. As Russia does today, the old USSR depended upon oil exports for most of its foreign
exchange earnings, and much of its government revenue. The 68% reduction in real oil prices during the Reagan years
drove the USSR bankrupt. In May 1990, Gorbachev called German Chancellor Helmut Kohl and begged him for a loan of $12 billion to stave off
financial disaster. Kohl advanced only $3 billion. By August of 1990, Gorbachev was back, pleading for more loans. In December 1991, the
Soviet Union collapsed. President Bill Clinton’s “strong dollar” policy (implemented via Federal Reserve Vice-Chairman Wayne Angell’s secret
commodity price rule system) kept real oil prices low during the 1990s, despite rising world oil demand. Real crude oil prices during Clinton’s
time in office averaged only $27.16/bbl. At real oil price levels like this, Russia is financially incapable of causing much trouble. It was George
W. Bush and Barack Obama’s feckless “weak dollar” policy that let the Russian geopolitical genie out of the bottle. From the end of 2000 to the
end of 2013, the gold value of the dollar fell by 77%, and real oil prices tripled, to $111.76/bbl. It is these artificially high oil prices that are
fueling Putin’s mischief machine. The Russian government has approved a 2014 budget calling for revenues of $409.6 billion, spending of
$419.6 billion, and a deficit of $10.0 billion, or 0.4% of expected GDP of $2.5 trillion. Unlike
the U.S., which has deep financial
markets and prints the world’s reserve currency, Russia cannot run large fiscal deficits without creating
hyperinflation. Given that Russia expects to get about half of its revenue from taxes on its oil and gas
industry, it is clear that it would not take much of a decline in world oil prices to create financial
difficulties for Russia. Assuming year-end 2013 prices for crude oil ($111.76/bbl) and natural gas
($66.00/FOE* bbl) the total revenue of Russia’s petroleum industry is $662.3 billion (26.5% of GDP),
and Russian’s oil and gas export earnings are $362.2 billion, or 14.5% of GDP. Obviously, a decline in
world oil prices would cause the Russian economy and the Russian government significant financial
pain. Over the past 64 years, real gold prices have averaged $544.91/oz (in 4Q2013 dollars), and real crude oil prices have averaged $38.85
bbl. This means that an ounce of gold will typically buy about 14 barrels of oil. If we fully stabilized the dollar today, we could expect gold prices
to fall toward $550/oz, and oil prices to fall toward $40.00/bbl. The huge dollar premiums that gold and oil currently command reflect the value
that these easy-to-store commodities have as hedges against dollar instability. If we reformed our monetary control system to guarantee the real
value of the dollar, we would eliminate this risk. The risk premiums currently enjoyed by oil and gold would then decline toward zero, as the new
monetary system gained credibility. Interestingly enough, even a decline in world oil prices to $40/bbl would not stop the U.S. “fracking” boom
(although it would slow it down). If crude oil were at $40/bbl, residual fuel oil would sell for about $32/bbl. Right now, spot natural gas prices are
only $4.49/MCF, or about $27.00/FOE bbl. In other words, U.S. natural gas prices could rise by 19% from where they are now, before they
would hit a price ceiling imposed by crude oil at $40/bbl. It
would not take $40/bbl oil to put an end to Russian
adventurism. Even assuming no change in natural gas prices, a decline in world oil prices to $80/bbl
would cost the Russian oil industry $120 billion in sales, most of which would have to come out of the
Russian government’s fiscal hide. Russia’s foreign exchange earnings would fall by $83 billion/year. To
deal with a fall in world oil prices to $80/bbl (much less $40/bbl), Russia would have to retrench on
all fronts. If the Russian government were to resort to printing rubles to try to close the yawning fiscal
gap, they would make a difficult situation much, much worse. Capital would flee the country, and their
economy would be disorganized by rampant inflation. Vladimir Putin would have to be lucky, as well
as politically skillful, to survive in a scenario like this.
Saudi Arabia Scenario
1NC Saudi Impact
High oil prices prevent Saudi Arabian instability
Hargreaves 13
Steave, reporter for CNN money (“Falling oil prices could spark global turmoil”, July 18 2013,
http://money.cnn.com/2013/07/18/news/economy/opec-oil/)//EO
Oil producing nations in the Middle East and elsewhere have used bulging oil revenues of the last few
years to placate their people. No place is this more true than Saudi Arabia, which has subsidized
housing, health care, gasoline and a host of other things to the tune of hundreds of billions of dollars
since the Arab Spring protests began in 2010. As a result, Saudi Arabia now needs oil prices close to
$100 a barrel just to balance its budget. If oil prices fall, it may have to cut social spending. In a
country that's been a reliable oil exporter to the global market for over half a century, yet has both a
restless segment clamoring for reform as well as extremists in the ranks, the repercussions could
extend well beyond OPEC. "It's not in the U.S. interest to have a more unstable Middle East, even if we
are importing no oil from that region," said Meghan O'Sullivan, a professor at Harvard's John F. Kennedy
School of Government who specializes in Mideast petro-politics. "Or Russia either," she added, referring
to the world's second largest oil exporter. OPEC in a bind: Thanks to an energy boom in United States, Canada and elsewhere,
plus a slowing of Chinese demand as that economy matures and shifts to less energy-intensive industries, demand for OPEC oil may fall by a
million barrels a day over the next three years, according to the latest projections from the International Energy Agency. Coupled with rising oil
consumption at home and a projected fall in oil prices, OPEC nations could see a 30% cut in revenue by 2018, according to Trevor Houser, an
analyst at the Rhodium Group. The pain won't be evenly spread .
Iran, Venezuela and Nigeria are already thought to be
exceeding spending relative to what oil revenues bring in, and are particularly vulnerable to a fall in oil
prices in the next few years. "In Iran, it could be a factor in regime change," said Steffen Hertog, an
assistant professor of Middle East policy and economy at the London School of Economics. "It could
certainly instigate a wave of popular unrest." In Venezuela, where previous attempts to bring pennies-agallon gas prices closer to market rates preceded deadly riots and the toppling of the government, falling
oil revenue could also bring about a change in regime, according to Hertog -- although he thinks the
change would probably occur at the ballot box instead of the streets.
Saudi protests halt all oil production – infrastructure collapse, lost technicians, and
Iranian intervention
Cohen et al. 12
Dr. Ariel Cohen – Ph. D. from the school of Law and Diplomacy at Tufts, fellow in International Energy
Policy at the Douglas and Allison Center for Foreign and National Security Policy, member of the
Council of the Foreign Relations, Senior Research Fellow at the Heritage Foundation; Dr. David Kruetzer
– Ph. D. in economics from George Mason University, former Director of the International Business
Program at Madison University, featured in various prestigious economic journals, Research Fellow at the
Heritage Foundation; James Phillips – member of the Committee on Present Danger (a prestigious
bipartisan research group committed to ending the war on terror), former Research Fellow at the
Congressional Research Service, Bachelor’s Degree in IR from Brown University, Senior Research
Fellow for Middle Eastern Affairs at the Douglas and Allison Center for Foreign and National Security
Policy, member of the Heritage Foundation; Michaela Dodge – policy analyst specializing in missile
defense, nuclear weapons modernization, and arms control, master of science degree in defense and
strategic studies from Missouri State University, former National Security Fellow, analyst for the
Heritage Foundation
(“Thinking the Unthinkable: Modeling a Collapse of Saudi Oil Production”, April 9 2012,
http://www.heritage.org/research/reports/2012/04/thinking-the-unthinkable-modeling-a-collapse-of-saudioil-production)//EO
In this hypothetical scenario, the same anger, frustration, and pent-up demands for political and economic
reform that has destabilized regimes throughout the Middle East also roils Saudi Arabia, which initially
appeared to be immune from the Arab Spring upheavals. As elsewhere, the initial impetus for protests
comes from liberal reformers working through a grassroots campaign using Facebook and Twitter, calling
for genuine democracy, transparent government, equal rights for women, and greater political, social, and
personal freedoms. Shi’a and Sunni religious radicals quickly join the liberal protesters, swelling the
crowds of protestors. Saudi authorities clamp down on the peaceful protests, and Saudi police fire
at violent demonstrators largely drawn from the Shi’a minority in the oil-rich Eastern Province.[3]
Protesters react by seizing oil facilities and attacking infrastructure. Saudi internal security forces,
augmented by Salafist/Wahhabi zealots, who contemptuously denounce the Shi’a protesters as heretics,
seek to oust the protesters. As Saudi security forces crack down on the protesters in the Eastern Province,
the fighting damages or destroys key energy facilities. Iran stokes the conflict by providing the Saudi
Shi’ites with money, arms, propaganda support, and training. In the ensuing internal strife, the
Saudi dynasty in Riyadh is toppled, and the princes flee, are arrested, or are killed. A loose coalition of
Wahhabi clerics and elements connected to al-Qaeda in the Arabian Peninsula seizes power and expels all
non-Muslim foreign workers. The exodus of skilled technicians and oil workers exacerbates the
situation by significantly delaying repairs of damaged infrastructure and impeding operation of oil
facilities that are not damaged. As a result, nearly all Saudi oil production stops and oil exports are
halted. The new Islamist regime is reluctant to sell oil to the U.S. and European markets, preferring
to sell to China and the Far East. Eventually, Saudi Arabia starts producing oil again at a reduced level of 4 mbd to 5 mbd, similar to
Iran's oil production after the fall of the Shah and the rise of Ayatollah Khomeini. If Saudi production fails to recover fully and global demand for
oil keeps prices high, other oil-producing countries eventually fill the demand. They include suppliers that use new sources and technologies,
such as Canadian oil sands, U.S. oil shale, and so forth.[4]
Even conservative models prove Saudi supply disruptions tank the US economy –
unemployment, petroleum prices, and GDP decline
Cohen et al. 12
Dr. Ariel Cohen – Ph. D. from the school of Law and Diplomacy at Tufts, fellow in International Energy
Policy at the Douglas and Allison Center for Foreign and National Security Policy, member of the
Council of the Foreign Relations, Senior Research Fellow at the Heritage Foundation; Dr. David Kruetzer
– Ph. D. in economics from George Mason University, former Director of the International Business
Program at Madison University, featured in various prestigious economic journals, Research Fellow at the
Heritage Foundation; James Phillips – member of the Committee on Present Danger (a prestigious
bipartisan research group committed to ending the war on terror), former Research Fellow at the
Congressional Research Service, Bachelor’s Degree in IR from Brown University, Senior Research
Fellow for Middle Eastern Affairs at the Douglas and Allison Center for Foreign and National Security
Policy, member of the Heritage Foundation; Michaela Dodge – policy analyst specializing in missile
defense, nuclear weapons modernization, and arms control, master of science degree in defense and
strategic studies from Missouri State University, former National Security Fellow, analyst for the
Heritage Foundation
(“Thinking the Unthinkable: Modeling a Collapse of Saudi Oil Production”, April 9 2012,
http://www.heritage.org/research/reports/2012/04/thinking-the-unthinkable-modeling-a-collapse-of-saudioil-production)//EO
Saudi Revolution: The Economic Impacts The Saudi Kingdom is the largest oil producer in the world—
occasionally surpassed by Russia—and essentially dominates the oil market due to its large excess
production capacity, which it can ramp up to 12 mbd. A prolonged and massive disruption of Saudi oil
production would significantly affect global energy markets and economic activity. However, for this
economic analysis we look only at the effects on the United States. The impact in Asia, a principal
customer of Saudi oil, would likely be much worse. It is difficult to calculate the magnitude of the
panic in the global capital market that such a scenario would cause. We modeled total cessation of Saudi
oil production, an 8.4 million-barrels-per-day reduction, for one year followed by a two-year recovery.
For the purpose of this exercise, we optimistically assumed that repairing destroyed and damaged
facilities and gradually restoring oil exports to the previous level would take approximately two years. In
reality, the repairs and production recovery could take much longer. Even though withdrawals from
strategic petroleum reserves (SPRs)—emergency oil stores in the U.S. and Europe and to a lesser degree
in China and Japan—start immediately, SPRs cannot compensate for such a massive disruption. We
would expect to see the following impacts over the three-year course of production loss and recovery:
Gasoline prices jump to more than $6.50 per gallon, Petroleum prices jump from $100 per barrel to more
than $220 per barrel, Employment losses exceed 1.5 million jobs, and Gross domestic product (GDP)
drops by nearly $450 billion. Daily withdrawal of 3 mbd from the strategic petroleum reserves—half
from the U.S. reserve and half from other countries as coordinated through the International Energy
Agency (IEA)—would offset barely one-third of the lost Saudi production in the first quarter. These
combined SPR withdrawals would drop to 2 mbd in the second quarter, 1 mbd for the third quarter, and
0.5 mbd for the fourth quarter. Saudi production recovers to an average of 2.8 mbd in the second year and
5.6 mbd in the third year. It fully recovers by the fourth year, and petroleum and gasoline prices return to
the baseline. However, the initial shock of the net loss of 5.4 mbd in the petroleum market has a
corresponding impact on the U.S. economy with the greatest impacts occurring in the first two years. Over
the first two years, U.S. GDP loses $214 billion per year. Employment averages 1.1 million jobs below the baseline, bottoming out at more than
1.5 million lost jobs in the second quarter of the second year. Petroleum prices rise more than 120 percent in the first quarter to more than $220
per barrel. At the end of the second year, petroleum prices are still 45 percent above the baseline at $138 per barrel. The gasoline price
immediately rises to over $6.50 per gallon. Although it moderates as the economy adjusts to the shock, it is still 28 percent above the baseline at
the end of the second year. For the entire three-year period of loss and recovery, employment averages 900,000 fewer jobs and GDP losses total
nearly $450 billion, an average loss of $150 billion per year.
History proves that a volatile economic environment risks conflict—radical terrorist
groups and tension over shared energy resources could unintentionally result in a
pre-emptive nuclear strike
Mathew Harris and Jennifer Burrows, National Intelligence Council, in 2009
[Mathew, PhD European History at Cambridge, counselor in the National Intelligence Council (NIC) and
Jennifer, member of the NIC’s Long Range Analysis Unit “Revisiting the Future: Geopolitical Effects of
the Financial Crisis” http://www.ciaonet.org/journals/twq/v32i2/f_0016178_13952.pdf]
Increased Potential for Global Conflict Of course, the report encompasses more than economics and indeed believes the future is likely to be
the result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each with ample Revisiting
the Future opportunity for unintended consequences, there is a growing sense of insecurity. Even so, history
may be more
instructive than ever. While we continue to believe that the Great Depression is not likely to be repeated, the lessons to be
drawn from that period include the harmful effects on fledgling democracies and multiethnic societies (think
Central Europe in 1920s and 1930s) and on the sustainability of multilateral institutions (think League of Nations in the
same period). There is no reason to think that this would not be true in the twenty-first as much as in the
twentieth century. For that reason, the ways in which the potential for greater conflict could grow would seem to be
even more apt in a constantly volatile economic environment as they would be if change would be steadier. In surveying
those risks, the report stressed the likelihood that terrorism and nonproliferation will remain priorities even as resource issues move up on the
international agenda. Terrorism’s
appeal will decline if economic growth continues in the Middle East and
youth unemployment is reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies
and scientific knowledge will place some of the world’s most dangerous capabilities within their reach. Terrorist groups in 2025 will
likely be a combination of descendants of long established groups_inheriting organizational structures, command and control processes, and
training procedures necessary to conduct sophisticated attacks_and newly emergent collections of the angry and disenfranchised that
become self-radicalized, particularly in the absence of economic outlets that would become narrower
in an economic downturn. The most dangerous casualty of any economically-induced drawdown of
U.S. military presence would almost certainly be the Middle East. Although Iran’s acquisition of nuclear weapons is not
inevitable, worries about a nuclear-armed Iran could lead states in the region to develop new security
arrangements with external powers, acquire additional weapons, and consider pursuing their own
nuclear ambitions. It is not clear that the type of stable deterrent relationship that existed between the great powers for most of the
Cold War would emerge naturally in the Middle East with a nuclear Iran. Episodes of low intensity conflict and terrorism
taking place under a nuclear umbrella could lead to an unintended escalation and broader conflict if clear red lines
between those states involved are not well established. The close proximity of potential nuclear rivals combined with
underdeveloped surveillance capabilities and mobile dual-capable Iranian missile systems also will produce inherent difficulties
in achieving reliable indications and warning of an impending nuclear attack. The lack of strategic depth in
neighboring states like Israel, short warning and missile flight times, and uncertainty of Iranian intentions may place
more focus on preemption rather than defense, potentially leading to escalating crises. 36 Types of conflict that
the world continues to experience, such as over resources, could reemerge,particularly if protectionism grows and
there is a resort to neo-mercantilist practices. Perceptions of renewed energy scarcity will drive countries to
take actions to assure their future access to energy supplies. In the worst case, this could result in interstate conflicts if
government leaders deem assured access to energy resources, for example, to be essential for maintaining
domestic stability and the survival of their regime. Even actions short of war, however, will have important
geopolitical implications. Maritime security concerns are providing a rationale for naval buildups and modernization efforts, such as
China’s and India’s development of blue water naval capabilities. If the fiscal stimulus focus for these countries indeed
turns inward, one of the most obvious funding targets may be military. Buildup of regional naval
capabilities could lead to increased tensions, rivalries, and counterbalancing moves, but it also will create
opportunities for multinational cooperation in protecting critical sea lanes. With water also becoming scarcer in Asia and the
Middle East, cooperation to manage changing water resources is likely to be increasingly difficult both
within and between states in a more dog-eat-dog world.
2NC Saudi Collapse Econ !
A collapse of Saudi oil production collapses the world economy and reduces the
threshold for all impacts – energy crises empirically destroy international
cooperation
Cohen et al. 12
Dr. Ariel Cohen – Ph. D. from the school of Law and Diplomacy at Tufts, fellow in International Energy
Policy at the Douglas and Allison Center for Foreign and National Security Policy, member of the
Council of the Foreign Relations, Senior Research Fellow at the Heritage Foundation; Dr. David Kruetzer
– Ph. D. in economics from George Mason University, former Director of the International Business
Program at Madison University, featured in various prestigious economic journals, Research Fellow at the
Heritage Foundation; James Phillips – member of the Committee on Present Danger (a prestigious
bipartisan research group committed to ending the war on terror), former Research Fellow at the
Congressional Research Service, Bachelor’s Degree in IR from Brown University, Senior Research
Fellow for Middle Eastern Affairs at the Douglas and Allison Center for Foreign and National Security
Policy, member of the Heritage Foundation; Michaela Dodge – policy analyst specializing in missile
defense, nuclear weapons modernization, and arms control, master of science degree in defense and
strategic studies from Missouri State University, former National Security Fellow, analyst for the
Heritage Foundation
(“Thinking the Unthinkable: Modeling a Collapse of Saudi Oil Production”, April 9 2012,
http://www.heritage.org/research/reports/2012/04/thinking-the-unthinkable-modeling-a-collapse-of-saudioil-production)//EO
Policy Responses A collapse of Saudi oil production would drastically affect global energy and the
economic situation. The economic performance of national economies around the world would
suffer, with some falling into deep recession. Cooperative responses from main producers and
consumers would be imperative. However, as previous war-gaming of energy crises has demonstrated,
countries pursue their perceived national interests first and worry about international cooperation
later.[5] This section outlines likely policy responses from the most relevant international actors within
the first year. These policy responses share a common pattern: each state focuses on its own national
interests rather than cooperating with others. Cooperation occurs only when the benefits of cooperation
exceed the benefits of unilateral action. These dynamics make it easier for rogue states, such as Iran,
to exploit differences among the other actors to prevent them from forming coalitions directed
against the rogue states.
Middle East Scenario
1NC Middle East Impact
High oil prices key to Middle East stability – prevent regime change and economic
collapse
Hargreaves 13
Steave, reporter for CNN money (“Falling oil prices could spark global turmoil”, July 18 2013,
http://money.cnn.com/2013/07/18/news/economy/opec-oil/)//EO
Oil producing nations in the Middle East and elsewhere have used bulging oil revenues of the last few
years to placate their people. No place is this more true than Saudi Arabia, which has subsidized housing,
health care, gasoline and a host of other things to the tune of hundreds of billions of dollars since the Arab
Spring protests began in 2010. As a result, Saudi Arabia now needs oil prices close to $100 a barrel
just to balance its budget. If oil prices fall, it may have to cut social spending. In a country that's been a
reliable oil exporter to the global market for over half a century, yet has both a restless segment
clamoring for reform as well as extremists in the ranks, the repercussions could extend well beyond
OPEC. "It's not in the U.S. interest to have a more unstable Middle East, even if we are importing no
oil from that region," said Meghan O'Sullivan, a professor at Harvard's John F. Kennedy School of
Government who specializes in Mideast petro-politics. "Or Russia either," she added, referring to the
world's second largest oil exporter. OPEC in a bind: Thanks to an energy boom in United States, Canada and elsewhere, plus a
slowing of Chinese demand as that economy matures and shifts to less energy-intensive industries, demand for OPEC oil may fall by a million
barrels a day over the next three years, according to the latest projections from the International Energy Agency. Coupled with rising oil
consumption at home and a projected fall in oil prices, OPEC nations could see a 30% cut in revenue by 2018, according to Trevor Houser, an
analyst at the Rhodium Group. The pain won't be evenly spread.
Iran, Venezuela and Nigeria are already thought to be
exceeding spending relative to what oil revenues bring in, and are particularly vulnerable to a fall in oil
prices in the next few years. "In Iran, it could be a factor in regime change," said Steffen Hertog, an
assistant professor of Middle East policy and economy at the London School of Economics. "It could
certainly instigate a wave of popular unrest." In Venezuela, where previous attempts to bring penniesa-gallon gas prices closer to market rates preceded deadly riots and the toppling of the government,
falling oil revenue could also bring about a change in regime, according to Hertog -- although he
thinks the change would probably occur at the ballot box instead of the streets.
Asymmetric interests, non-state actors, communications deficiencies, and
preemptive attacks ensure Middle East instability goes nuclear – traditional taboo
doesn’t check the impact
Russell 9
James A. Russell – Senior Lecturer, National Security Affairs, Naval Postgraduate School ("Strategic
Stability Reconsidered: Prospects for Escalation and Nuclear War in the Middle East" IFRI, Proliferation
Papers, ~2326, http://www.ifri.org/downloads/PP26_Russell_2009.pdf)//EO
Strategic stability in the region is thus undermined by various factors: (1) asymmetric interests in the
bargaining framework that can introduce unpredictable behavior from actors; (2) the presence of nonstate actors that introduce unpredictability into relationships between the antagonists; (3) incompatible
assumptions about the structure of the deterrent relationship that makes the bargaining framework
strategically unstable; (4) perceptions by Israel and the United States that its window of opportunity for
military action is closing, which could prompt a preventive attack; (5) the prospect that Iran’s response
to pre-emptive attacks could involve unconventional weapons, which could prompt escalation by Israel
and/or the United States; (6) the lack of a communications framework to build trust and cooperation
among framework participants. These systemic weaknesses in the coercive bargaining framework all
suggest that escalation by any the parties could happen either on purpose or as a result of miscalculation
or the pressures of wartime circumstance. Given these factors, it is disturbingly easy to imagine
scenarios under which a conflict could quickly escalate in which the regional antagonists would consider
the use of chemical, biological, or nuclear weapons. It would be a mistake to believe the nuclear
taboo can somehow magically keep nuclear weapons from being used in the context of an unstable
strategic framework. Systemic asymmetries between actors in fact suggest a certain increase in the
probability of war – a war in which escalation could happen quickly and from a variety of
participants. Once such a war starts, events would likely develop a momentum all their own and
decision-making would consequently be shaped in unpredictable ways. The international community must
take this possibility seriously, and muster every tool at its disposal to prevent such an outcome, which
would be an unprecedented disaster for the peoples of the region, with substantial risk for the entire
world.
Iran Scenario
1NC Iran Impact
High oil prices are key to sustain the state
Mohamedi, 2010 (Fareed Mohamedi, partner and head of oil markets and country strategies at PFC Energy, a Washington DC based
oil and gas consultancy, “The Oil and Gas Industry”, US Institute of Peace, 10/26/2010, http://iranprimer.usip.org/resource/oil-and-gas-industry)
Under Ahmadinejad, the Revolutionary Guards’ influence has grown within NIOC, as well as in the service sector. Khatam ul-Anbia, the
IRGC construction arm, has strengthened its role throughout the Iranian economy, including the oil and
gas sector. In 2006, it won a contract to develop South Pars Phases 15-16. In 2009, it took over the Sadra Yard, a firm that has built many
platforms in the Persian Gulf and the recently completed Alborz semi-submersible rig which will drill in the Caspian Sea. While the
Revolutionary Guards’ profile is growing, it also faces financing difficulties. International sanctions have deterred banks from funding Phases 1516 due to its link with Khatam ul-Anbia. The future International sanctions will slow investment in the oil and gas sector in the next few years,
which could lead to a decline in output. A
sharply lower oil price would destabilize the Iranian economy, since
Iran balances its external accounts around $75 per barrel. Falling oil and gas output and lower oil prices
will weaken the government’s ability to stimulate the economy, which could result in slower economic
growth and higher unemployment.
A collapse of oil revenues forces Iran to invade the Gulf and cut off the Strait of
Hurmuz
Baer 9
Robert Baer – former CIA officer stationed in the Middle East for over two decades, reporter for The
Wall Street Journal, The Washington Post, The National Interest etc. (“Iran’s New Imperialism”, March
30 2014, http://nationalinterest.org/article/irans-new-imperialism-3074)//EO
Iran has made little secret of its strategy: widen its power through proxy warfare and gain control of the
Gulf's oil. It has the means, motive and opportunity to expand its empire across the Persian Gulf. Not only
does Iran intend to become the first hydrocarbon empire, Tehran is painfully aware that oil is its
lifeblood. Given the widening disparity between Iran's real and claimed reserves-and if current levels of
depletion continue-Iran knows that it could be tapped out within ten years. Without energy, or revenues
from energy exports, Iran would become domestically unstable, and obviously any of its greater
international ambitions would die. To satisfy domestic demand, Tehran in the not-too-distant future must
look elsewhere, and Saudi Arabia for one-with its extensive reserves and weak government-is a prime
target for takeover. That may not be as difficult as it seems. Iran's reach is long. On one level, its proxy
Hezbollah has the ability to stir up domestic unrest and sabotage oil fields along the Persian Gulf
(which is 90 percent Shia and where, incidentally, the bulk of Gulf oil sits). The area's Arab Shia are increasingly
susceptible to Iran's gravity, putting the Sunni sheikhdoms in peril without a single missile ever being fired. Since the 2003 invasion, Iran has
moved quickly into Iraq's Shia shrine cities, in particular Najaf, where it has embraced Iraq's Shia clergy. The objective has been to demonstrate
to the Gulf's Shia that Iran dominates all the spiritual centers of Shia Islam. If Iran is as successful in this as it was in exploiting Lebanon, then
most of the Gulf, at least in the sense of sectarian allegiance, will be under Iran's sway. Then, on another level, there's pure military blackmail.
As tension with Washington rose after the invasion of Iraq, the Iranians made a point of going to the
Gulf states to inform them that in the event of a conflict with the United States or Israel, Iran would
either prohibit exports through the Strait of Hormuz or destroy the Arab oil facilities that sit along
the rim of the Gulf-all vulnerable to attacks by surface-to-surface missiles. The Arab sheikhdoms are
militarily weak; there's nothing they can do to fight back. And lest we forget, Iran is the only true local
power in the Gulf. If the United States were to reduce its presence in the region, Iran, without serious
impediment, could intimidate the Gulf Arabs into accepting Iranian suzerainty over the Gulf's waters.
Worst-case scenario, this is where we end up: Bahrain would be the first Arab sheikhdom to fall under
Iran's control, and as Bahrain goes, so goes the Persian Gulf. With its 70 percent Shia population,
gaining control of the country would only be a matter of Iran inciting its Bahraini Shia proxies to declare
the end of the monarchy and then stepping in with armed force to support the new "legitimate"
government. The other sheikhdoms, too, would not take much to topple. They are largely unpopular
regimes and militarily weak. The Shah's Iran already seized three islands from the United Arab Emirates
in the 1970s. A taste of what's to come? If Iran and the United States come to blows, it is almost certain
that Tehran would consider a putsch to take over Dubai, not unlike the Bahrain scenario. In fact, there are
already signs of Iran's arm-twisting. In February 2008, the ruler of Dubai, Mohammed bin Rashid alMaktoum, effectively pledged his loyalty to Iran, stating that Dubai would never join a U.S.-led alliance
in an attack on Iran. Because Iran continues to occupy three islands belonging to the UAE, many Arabs
look at a statement like this as tantamount to capitulation. As for the rest of the Gulf Arabs, the sword of
Damocles is their oil wells. It would only be a matter of sinking a few tankers to stop traffic through
the Strait of Hormuz connecting the Persian Gulf and the Gulf of Oman (as Tehran already often threatens
to do), to take 17 million barrels of oil a day off world markets, driving up the price of gasoline in the
United States to $10-12 a gallon. The UAE is so worried about this scenario that a senior official in Dubai recently proposed building
a canal to bypass Hormuz. The best thing about disaster scenarios is that they rarely come about. But as Iran moves through the Middle East with
its tried-and-successful strategy of imperialism via proxy, of bridging sectarian differences, of blackmailing oil exports, of adapting advanced
weapons to classic guerilla tactics and of thwarting modern armies, we must consider that Tehran could very well succeed in establishing the
virtual empire it seeks.
Critical US energy interests and anti-American sentiment in the gulf create a unique
scenario for worldwide conflict escalation through miscalc – their generic impact
defense doesn’t apply
Khalid 8
Matein Khalid – CIO of the world’s largest Islamic insurance company, MBA and BS in Economics from
the Wharton School, professor of banking and finance at the American College of Dubai, investment
banker with two decades of experience in international markets (“US-Iran showdown in Gulf”, May 7
2008, http://www.jpost.com/Iranian-Threat/Opinion-And-Analysis/Will-the-Islamic-Republic-faceeconomic-collapse-361620)//EO
THE risks of an accidental showdown between the US Navy and Iran in the Gulf have only increased now
that the Pentagon has deployed a second aircraft carrier battle group to the region and replaced Admiral
Fallon with General Petraeus as the new commander of CENTCOM. Defence Secretary Gates pointedly
termed the deployment a "reminder" for the Iranian regime, a reference to the vicious, undeclared US
naval attack in the Gulf that forced Ayatollah Khomeini, in his own words, to swallow "the poisoned
chalice" and accept a negotiated ceasefire with Baathist Iraq in 1988. Both the US and Iranian military
high command acknowledge the primacy of naval power in the event of war in the Gulf. The
American fleet protects the tanker sea-lanes of the Gulf, through which almost half of the world's
oil tanker traffic passes. Last week's incident only highlighted the new rules of engagement sanctioned
by the Pentagon against Iranian vessels. Every day, 16 million barrels of oil laden in the bowels of VLCC
tankers navigate the narrow two-mile wide outbound shipping lane of the Straits of Hormuz, the world's
most sensitive energy chokepoint. Iran has stationed Chinese Silkworm missile batteries in the islands
and coastal towns near the straits. It also has enough submarines, fighter bombers, a flotilla of
speedboats, frigates and guided missile cruisers and martyrdom obsessed Basij militiaman to close
down the Straits of Hormuz, possibly by sinking a couple of oil supertankers in it. A blockade of the
Straits of Hormuz is, of course, the quintessential Armageddon scenario for the international crude
oil market. However, even the merest hint of a shooting war in the Gulf, could have a catastrophic
impact on shipping and insurance rates. Gate's "reminder" referred to Operation Praying Mantis, the bloodiest air sea battle waged
by the US Navy against Khomeini's oil platforms and frigates since World War II. Pentagon strategists concluded that "shock and awe" in the
Gulf was successful because it forced Khomeini to sue for peace, a lesson it reapplied with a vengeance in the opening moments of Desert Storm.
However, not even the Star Wars technological infrastructure of the Pentagon can prevent an undersea mine explosion or a suicide bomb attack.
The naval units of the Pasdaran, who did not hesitate to attack US warships despite suicidal odds in 1988, use "swarming" as a strategic doctrine.
This means Iranian speedboats buzz US naval vessels at high speeds, as happened last week. The US Navy has learnt the naval lessons of the Al
Qaeda's attack on the USS Cole and the French tanker Limburg all too well. If
Iran "swarms" US Navy warships or merchant
marine ships, the risk of a tragic miscalculation soars, as happened when the USS Vincennes shot
down a civilian Iran Air Airbus headed from Bandar Abbas to Dubai after its IFF misidentified it as a
hostile warplane while it was being "swarmed" by Pasdaran gunboats. Iran's anti- ship capabilities are
also perfectly capable of lethal damage to US naval warships and, in the event of war, the Pasdaran
missile units will do their best to target the American aircraft carriers in the Gulf. As the Imperial
Japanese Navy proved in the Pacific war, suicide attacks on the high seas can exact a painful toll. The fate
of the HMS Sheffield, sunk by an Argentine Exocet missile, in the Falkland war, should restrain the most
belligerent Pentagon naval strategists. It is not unnatural that paranoia suffuses Iran's theocratic regime in
its international relations. With an annual defence budget of only $5 billion, one hundredth the military
expenditure of the Pentagon, Iran is surrounded by a constellation of states which host US bases or
are sworn allies of Washington. These include Turkey, Pakistan, Afghanistan, the Gulf monarchies,
Uzbekistan, Jordan, Egypt and Azerbaijan. Iran's sole Arab ally, Baathist Syria, has been ostracised in the Arab diplomatic order,
expelled from Lebanon, forced to engage in secret negotiations with Israel via Turkish diplomatic intermediaries for the return of the Golan
Heights, under Zionist occupation since the June 1967 Six Day War. Hezbollah's missile deterrent against an Israeli assault has been neutralised
with the deployment of 13500 UNIFIL troops in South Lebanon, including contingents of French, Spanish and Italian combat troops. There is
increasing evidence that the CIA has financed sabotage attacks by Iran's ethnic Baluchi, Ahwazi, Kurdish and Arab minorities against the Persian
regime's provincial bastions of power. The Bush White House, to use the laudable but anachronistic metaphor of former Iranian president
Khatami, is definitely not engaged in "a dialogue of civilisations" with the Khomeini — Ahmadinejad regime. With
the sort of
pathological Great Satan-Axis of Evil mutual demonology, it is significant that Iran and the US
have not had diplomatic relations ever since the Shah lost his Peacock Throne nearly three decades
ago. In such a toxic geo-political climate, the risks of miscalculation escalate.
2NC Israel War Impact
An oil price collapse causes Iran to begin a diversionary war with Israel
Raphaeli 8
Dr. Nimrod Raphaeli – Senior Analyst and editor of The Middle East Media Research Institute’s
Economic Blog, Ph. D. in development planning from Michigan University (“Plummeting Oil Prices –
Iran's Options”, October 30 2008, http://www.memri.org/report/en/print3072.htm)//EO
Oil revenues comprise 80% of Iran's foreign exchange. If oil prices continue to plummet in the face
of the world's worsening economic crisis – a crisis which may be just in its early stages – Iran, unlike the
Arab oil-producers with hefty sovereign wealth funds to cushion their national economies, could face
politically destabilizing events that could threaten the survival of the regime. On the economic front,
Iran could resort to terminating oil subsidies and restricting the import of non-essential consumer goods to
conserve foreign currency. In fact, news from Iran last week suggests that both steps are under
consideration. Iran may also seek to reintroduce a 3% value-added tax (VAT) which it was forced to
suspend after shopkeepers in the politically influential bazaars closed shops in protest, arguing that the
VAT would further aggravate inflation which reached 29.6% in October.[2] The price of oil is determined
by the twin factors of economics and psychology. Economic factors are shaped by supply and demand
and when demand plummets the prices quickly follow suit. But oil prices are also sensitive to
psychological factors, such as perceived threats to the sources or routes of oil supply. In the latter case,
Iran may seek to generate a crisis that would bring oil speculators back in droves and cause oil prices to
spike. In this regard, Iran could put into action one of the following options in an attempt to both divert
national discontent outward and make an economic gain at the same time: First, Iran could escalate
the conflict in Iraq to a degree that would deny the market a supply of 1.5-2.0 million b/d of much needed
Basra light crude. The Shi'ite cleric Muqtada Al-Sadr, with his Iran-paid Mahdi Army, is a potent
troublemaker to carry out such a mission in the service of Iran. Iran could use its many agents in southern
Iraq to sabotage the oil pipeline that carries Iraqi oil to Um-Qasr port. In a desperate move, Iran might
cause an incident with one of the U.S. naval ships patrolling Iraq's oil platforms. Second, Iran's
Revolutionary Guards could sabotage an oil tanker in the Gulf of Hormuz on some flimsy argument that
the tanker has violated Iran's territorial waters. Such act would raise the political tensions to high levels
and greatly increase insurance premium to suffocating levels or discourage oil tankers from transporting
Gulf oil. Third, Iran could instigate a conflict between Hizbullah and Israel that could plunge the
Middle East into a new round of a military conflict that might also involve Syria (Iran's strategic ally
in the area). Armed conflicts in the Middle East quickly translate into higher oil prices, with or without
global recession.[3]
Israel-Iran conflict draws in the US and rapidly escalates into World War 3
Avery 13
Dr. John Scales Avery - received a B.Sc. in theoretical physics from MIT and an M.Sc. from the
University of Chicago. He later studied theoretical chemistry at the University of London, and was
awarded a Ph.D. there in 1965. He is now Lektor Emeritus, Associate Professor, at the Department of
Chemistry, University of Copenhagen. Fellowships, memberships in societies: Since 1990 he has been the
Contact Person in Denmark for Pugwash Conferences on Science and World Affairs. In 1995, this group
received the Nobel Peace Prize for their efforts. He was the Member of the Danish Peace Commission of
1998. Technical Advisor, World Health Organization, Regional Office for Europe (1988- 1997).
Chairman of the Danish Peace Academy, April 2004. (“Syria And Iran: Automatic Escalation To World
War III?,” Countercurrents.org, 27 August, 2013,
http://www.countercurrents.org/avery270813.htmME)//EO
"Speaking to an Arabic-language radio station operated by the United States, Syria's Deputy Information
Minister Halaf Al-Maftah said that Israel would face not only Syria in the event that the U.S., Britain, and
France attempted to unseat Bashar al-Assad. A coalition consisting of Iran, Iraq, Lebanon, and Syria
would respond to any attack against Assad with a response against Israel. In addition, terrorist groups in
Syria and Lebanon would attack Israel with full force. "Al-Maftah added that Syria has strategic weapons
that it would use in its attack on Israel. He did not specify what those weapons were. "'Syria is ready to
deal with all scenarios,' said Al-Maftah. 'We consider these declarations of a possible attack as a form of
psychological warfare and pressure on Syria. We are not worried about them. We hope that those
threatening us will listen closely to what we are saying. We believe that the only solution for the Syrian
issue is a political one,' he added. "In recent days, the U.S. has sent warships off Syria's coast, with the
assumption being that they were waiting for word from the White House to attack Syria and remove
Assad from power. Over the weekend, the U.S. Navy expanded its presence in the Mediterranean Sea
with a fourth cruise-missile-armed warship. "Should the conflict spread to Iran, we can recall a
statement by Brigadier General Amir Ali Hajizadeh, who is in charge of the Revolutionary Guards
missile systems. The general told Iran's Arabic-language television network that should Israel and Iran
engage militarily, nothing is predictable... and it will turn into World War III. "He added that Iran
would deem any Israeli strike to be conducted with U.S. authorization, 'so whether the Zionist regime
attacks with or without U.S. knowledge, then we will definitely attack U.S. bases in Bahrain, Qatar and
Afghanistan.' "The first point to notice is that an attack on Iran by Israel would be both criminal and
insane. It would be criminal because it would be a violation of the United Nations Charter and the
Nuremberg Principles. It would be insane because it would initiate a conflict that might escalate in an
unpredictable way. Such a conflict might easily be the start of a Third World War. "Must we allow
the actions of a few power-blinded politicians to start a conflict that could lead to the deaths of
ourselves and our children?"
AT: Oil DA
Non-unique
2AC
Overly aggressive speculation proves short term oil price collapse is inevitable
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
Though the U.S. shale oil boom of the past several years has led to a renewed surge of domestic oil
production as well as an oil glut, crude oil prices have remained stubbornly high. There are a growing
number of reasons, however, why crude oil prices are likely to finally experience a bust in the not-toodistant future. I avoid making firm predictions about the oil market because there are so many
conflicting variables that affect oil prices, from supply and demand, geopolitics (which is inherently
unpredictable), and the global monetary environment, but it is important to be aware of several factors
that have a high probability of pushing crude oil prices lower in the next couple of years. 1) The
unwinding of record speculative bullish bets To prop up the global economy after the 2008 financial
crisis, global central banks dramatically cut interest rates and printed trillions of dollars worth of new
currency via quantitative easing programs. Extremely stimulative monetary environments increase the
desirability of hard assets such as oil and other commodities because they are a hedge against currency
debasement and the associated risk of inflation. For the past half-decade, institutional investors have
clamored into the crude oil market, causing prices to soar 140 percent from their post-financial crisis
lows. The chart below shows that large crude oil futures speculators (green line under chart) are currently
making a record bet of 423,136 net contracts on the continued appreciation of oil prices: The data that I
am citing comes from the U.S. Commodity Futures Trading Commission’s weekly Commitments of
Traders (COT) report that shows the aggregate number of futures and options contracts that are held by
three different categories of futures market participants: large speculators, small speculators, and
commercial hedgers. Large speculators – the group that is placing the record bullish crude oil bet – are
typically investment funds that trade in a trend-following manner, which means that they tend to capture
the middle part of market moves, but are often wrong at important market turning points. The nature
of the large speculators’ trend following trading systems cause them, as a group, to bet most aggressively
right before the trend reverses. As the old Wall Street adage goes, “when everybody gets to one side of
the boat, it usually tips over.” For this reason, large speculators become an effective contrary indicator
when their aggregate trading positions reach extreme levels, either on the upside or the downside.
While extreme aggregate trading positions can persist for quite a while, as is the case in the crude oil
market for the past few years, they are still a reliable indication that a powerful market reversal is
likely to occur when the proper catalyst eventually appears and sends speculators heading for the exits.
So far, no bearish catalyst has presented itself in the crude oil market, but the other points that I’ve listed
in this piece may combine to form a perfect storm that finally causes the oil market to crack.
1AR
And commercial hedgers
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
2) The “smart money” is growing increasingly bearish In the futures market, there is a buyer for every
seller, and a bull for every bear (on a contract-by-contract basis). For every futures contract currently
being held by bullish large speculators in the oil market, there is someone on the opposite side of the
trade. In the current crude oil market, it is the commercial hedgers that are taking the exact opposite
position as the large speculators: Commercial hedgers are the actual producers and users of crude
oil (the Exxons and BPs) who utilize the futures market as a form of insurance against adverse price
moves. Commercial hedgers are considered to be the “smart money” because, after all, they are the
physical crude oil market and have firsthand information about future supply and demand trends.
Commercial hedgers now have a record 445,492 net contract short position in the crude oil futures
market, which indicates that their greatest concern is not an increase in crude oil prices, but a sharp
decline. Commercial crude oil hedgers are aware of many of the bearish points that I am discussing in this
article, which likely explains why they are heavily hedging against a coming crude oil bust.
And tightening global monetary policies
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
3) The global monetary environment is tightening As discussed in point #1, the crude oil price boom of
the past half-decade is due in large part to the incredibly stimulative monetary environment that
has been created by central banks in a desperate attempt to prop up global economy after the financial
crisis. Now that unemployment is falling and the risk of an imminent deflationary crisis has been reduced
in the U.S. and U.K. (two major countries that are running QE “money printing” programs), the current
global economic cycle is moving into a phase in which stimulative central bank policies will be
gradually pared back and eventually reversed. The U.S. Federal Reserve is expected to complete the
tapering or ending of its QE3 program by the end of 2014, while the Fed Funds Rate is expected to start
rising as early as 2015. Similarly, Bank of Japan is now preparing for the eventual ending of its
Abenomics monetary policy now that it is much closer to achieving its 2 percent inflation target. Bank of
England is considering plans to start raising interest rates in the coming years as well, which is a
precursor to the tapering of its QE policy. The European Central Bank, however, is bucking the monetary
tightening trend after cutting its benchmark interest rate last week by 10 basis points to 0.15 percent and
introducing a deposit interest rate of negative 0.10 percent. The ECB is also considering launching its
own quantitative easing program in the future. Unlike the U.S. Federal Reserve’s QE programs, a
European QE is not likely to be as supportive for crude oil prices because even mere rumors regarding it
have weakened the euro and boosted the U.S. dollar in the past month, which has put downward pressure
on commodities prices. Many commodities, including oil, are priced in U.S. dollars, so central bank
policies that are bullish for the dollar are typically bearish for commodities prices. The simultaneous
tightening of U.S. monetary policy and the loosening of European monetary policy could set the stage for
a powerful bull market in the U.S. dollar. The U.S. Federal Reserve’s policies are by far the most
important monetary variable for crude oil prices, so its tightening over the next few years represents the
ending of one of the key driving forces behind crude oil’s bull market of the past half-decade. In
addition, the massive inflation and imminent currency devaluation that many commodities traders had
expected to occur as a result of quantitative easing programs has not materialized and is unlikely to in the
near future.
And drastic increases in US oil production
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
4) The shale oil boom is increasing supply Surging North American oil production, courtesy of the recent
U.S. shale and Canadian oil sand booms, is dramatically reducing U.S. oil imports and has even led to
a glut of light, sweet crude oil in the United States. In the past five years, U.S. oil production experienced
a sharp reversal of its long-term downtrend and recently hit a twenty-five year high: Net U.S. oil imports
fell to a 28-year low in 2013 as a result of the shale oil boom: U.S. oil production is expected to grow to
9.2 million barrels a day in 2015 and 9.6 million by 2016, which would make the U.S. the world’s
largest oil producer, ahead of even Saudi Arabia and Russia. Canada’s oil sand boom is expected to
boost the country’s oil production by 500,000 barrels per day to achieve a total production of 3.9 million
barrels per day in 2015, much of which will be exported to the United States. As the world largest oil
consumer, the United States’ oil boom has significantly decreased the country’s reliance on foreign
sources of oil, particularly from the volatile Middle East. This is one of the main reasons why global oil
prices have remained relatively flat for the past several years despite the Arab Spring revolutions that led
to an 80 percent decrease of Libyan oil production and other disruptions, as well Russia’s recent invasion
of eastern Ukraine. According to oil analyst Lysle Brinker, oil prices may have soared to as high as $150
a barrel without the increase of U.S. oil production. A glut of light, sweet crude oil is even forming in
the United States as a result of rising domestic oil production as well as the U.S. crude oil export ban
that dates back to 1975. Oil companies and oil-producing states such as Texas and North Dakota are
pushing to have the export ban lifted so that the U.S. can export some of its newfound energy bounty to
the global oil market. While shale oil deposits are found throughout the world, other countries face greater
difficulties in their attempts to replicate the U.S. oil shale boom. The same technologies that have enabled
the oil shale boom – fracking and horizontal drilling – have also led to a nearly 40 percent increase in
U.S. natural gas production since 2007. Now one of the lowest cost fuels, natural gas is expected to
further reduce the United States’ reliance on oil, particularly for electricity generation, heating, chemical
manufacturing, and even transportation. The high price of oil in the past decade has been a major driving
force behind the U.S. shale energy boom because it enabled the use of new drilling technologies that
would not have been economically viable at lower prices. The continuation of the U.S. shale energy boom
in the next few years is likely to put pressure on crude oil prices in accordance with the principle,
“the only cure for high prices is high prices.”
And expected growth in oil production from Iran, Libya, Iraq, and Venezuela
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
5) Production is starting up again in many countries Oil production and exports are poised to begin
again in many countries that experienced severe disruptions in recent years: Iran: After Western
economic sanctions were placed on Iran due to its nuclear program caused a near-collapse of its economy
and currency in 2012, the nation appears ready to strike a deal so that it can export its oil to the
West again. Oppenheimer oil analyst Fadel Gheit claims that the Iran-related “supply risk premium”
accounts for 20-30 percent of the price of oil, which would disappear and send prices to the $75-$85
range once a deal is finally struck with the West. 1 million more barrels of oil per day could enter the
market when Iran’s nuclear issue is resolved. Iraq: Iraq’s oil production recently hit a 30-year high as
its oil industry rebuilds after the war and decades of underinvestment. Iraq has the world’s fifth-largest
proven oil reserves, and several hundred thousand more barrels of oil per day are expected to come
online this year alone. Libya: Libya’s oil production plunged by over 80 percent from 1.6 million barrels
a day to just 237,000 barrels a day after the country’s revolution in 2011. While Libya’s oil situation
remains volatile due to protests that have shut down pipelines and ports, an eventual resolution could
double production to 500,000 barrels a day. Venezuela: Despite numerous political challenges that
have reduced Venezuela’s oil production in the past decade, Leo Drollas, the head of the Centre for
Global Energy Studies, expects 250,000 more barrels of oil per day to come online this year. European
energy companies Eni SpA and Repsol SA have signed deals last week to invest up to $500 million each
to develop Venezuela’s Perla oil field, which is considered to be one of the most important discoveries of
the past decade.
And slowing global demand coupled with a lack of OPEC price mediation
capabilities
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
6) OPEC’s limited ability to boost prices by cutting production When oil prices dropped significantly in
the past, OPEC countries would cut their oil production to bolster the price of oil. Growing fiscal deficits
in many OPEC nations in recent years, however, make it far more difficult to cut oil production
because these countries can no longer afford the loss of oil revenues. 7) Global oil demand is slowing
Led by China and other emerging nations, global oil demand spiked in the years following the 2008
financial crisis, which contributed to oil’s bull market. Since 2011, oil demand growth has slowed
significantly to a half-decade low largely due to the ongoing economic slowdown in China and
emerging economies:
And worldwide economic recovery bubbles
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
8) The global economic “recovery” is actually another bubble As discussed in the last point, oil demand
and prices are highly dependent on global economic growth. The financial crisis and subsequent Great
Recession was what popped the 2008 oil bubble after prices reached nearly $150 per barrel. After the
price of oil sank in late-2008, the post-2009 economic recovery helped oil prices to rise 140 percent from
their financial crisis low. Unfortunately, my extensive research has found that the global economic
recovery that has driven oil prices higher is actually an artificial, bubble-driven recovery that I call a
“Bubblecovery.” In a desperate attempt to prevent a deflationary depression, central banks pumped
trillions of dollars worth of liquidity into the global financial system and cut interest rates to virtually zero
percent. In short order, new economic bubbles started ballooning in China, emerging markets, Canada,
Australia, Nordic countries, commodities, tech startups, and U.S. equities and housing prices, to name a
few (read my Bubblecovery article for more information). Property and credit bubbles are inflating once
again all around the world in a pattern that is very similar to the last decade’s bubble that caused the
financial crisis in the first place. This chart shows that Canada’s housing and household debt bubble is
even worse than the U.S.’ bubble last decade: These days, it makes no difference whether you look at the
charts of property prices and debt in Canada, or in Australia, Norway, Hong Kong, China, or Singapore;
the charts all look the same and show the same classic bubble pattern. The world is caught up in an
epidemic of post-2009 bubbles, but the vast majority of people are completely unaware and in denial.
Here are a few terrifying statistics that show how dangerous China’s economic bubble is: China’s total
domestic credit more than doubled to $23 trillion from $9 trillion in 2008, which is equivalent to adding
the entire U.S. commercial banking sector. Borrowing has risen as a share of China’s national income to
more than 200 percent, from 135 percent in 2008. China’s credit growth rate is now faster than Japan’s
before its 1990 bust and America’s before 2008, with half of that growth in the shadow-banking sector.
The post-2009 economic bubbles are the primary reason why the global economy started growing again
because bubbles create temporary growth booms before ending in crises. When the post-2009
bubbles pop, global economic growth is going to sink (and there will not be a quick recovery like last
time), which will reduce demand for oil.
And commodity extraction booms
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
9) The ending of the commodities supercycle As I mentioned in the last point, commodities are one of
the key bubbles that I have identified. Artificial, debt-driven economic growth in China and other
emerging market nations combined with the unprecedented ocean of central bank liquidity caused
commodities prices to triple since 2002: Hundreds of billions of dollars worth of investment capital
clamored into commodities as investors began to treat commodities as a new long-term asset class, similar
to equities and bonds. Many of these investors also viewed commodities as a way to play the China and
emerging markets boom. Record high commodities prices spurred a massive global exploration and
extraction boom that is now leading to growing gluts in numerous commodities, particularly growthsensitive commodities like copper and iron ore, as rising supply is met with slowing demand from China
and emerging markets. As stated earlier, “the only cure for high prices is high prices.” When the post2009 global economic bubble pops, I believe that commodities prices will finally experience a true
bust.
Oil market collapse will occur within a few years even if prices increase in the shortterm
Colombo 6/9
Jesse Colombo – economic analyst and reporter for Forbes financial news source, predictor of the US
housing and credit crash with ten years of experience analyzing economic bubbles (“9 Reasons Why Oil
Prices May Be Headed For A Bust”, May 9 2014,
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-abust/)//EO
A Tactical Take On Crude Oil Crude oil is one of the hardest markets to predict by far because there are
so many conflicting crosscurrents that affect its price including supply and demand, geopolitics, and the
global monetary and regulatory environment. In many ways, analyzing the crude oil market is very much
like playing three-dimensional chess. Though I have listed numerous fundamental reasons why a
correction is likely to occur in the crude oil market, it is important to be aware of some of the potential
upside risks that may override these bearish factors in the shorter-term: Geopolitical risks such as an
escalation of the Russia-Ukraine situation, a flare-up in the Middle East, a worsening of the political
crises in Venezuela or Libya, etc. The risk that inflation picks up significantly in major developed
economies like the U.S. as the “Bubblecovery” or bubble-driven economic recovery matures. A
significant, unexpected economic slowdown in the U.S. causes the Fed to step on the monetary
accelerator again by abandoning or reversing the QE taper. A large-scale downward revision of estimated
U.S. shale oil reserves causes a buying panic. In this scenario, I am questioning whether the recent 96
percent downward revision of estimated recoverable shale oil in California’s Monterey Shale formation is
an isolated case or if it may occur on a larger scale across the country. The potentially bearish factors that
I have listed in this article tend to have more relevance for the intermediate-term future (within the next
few years) of crude oil prices rather than the short-term or long-term future. For shorter-term or tactical
market decisions, I rely less on fundamental analysis and more on technical analysis or analysis of price
and momentum trends.
No link
General
The consensus of oil, economic, and political experts indicates US oil production has
no effect on global oil prices
Fong 12
Jocelyn Fong – reporter for Media Matters for America news source (“20 Experts Who Say Drilling
Won't Lower Gas Prices”, March 22 2012, http://mediamatters.org/blog/2012/03/22/20-experts-who-saydrilling-wont-lower-gas-pric/184040)//EO
In a pretty impressive act of journalism, the Associated Press recently conducted a "statistical analysis of
36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production." The result:
"No statistical correlation between how much oil comes out of U.S. wells and the price at the
pump." It's neat to see math cut through the talking points and get straight to the truth of the matter -which is that expanding drilling is a fundamentally ineffectual response to gas price spikes. Given that
changes in U.S. oil production don't move gasoline prices, it should be clear that U.S. government
policies related to drilling are of even smaller consequence. Indeed, 92 percent of economists
surveyed by the Chicago Booth School of Business agreed this week that "changes in U.S. gasoline
prices over the past 10 years have predominantly been due to market factors rather than U.S.
federal economic or energy policies." Still not convinced? How about another 20 economists and
analysts from across the political spectrum who will tell you the same thing: Ken Green, American
Enterprise Institute, "If the U.S. produced more of its own oil, it would probably reduce imports, but
it's not likely that it would reduce prices ... We probably cannot produce so much oil to exert
downward pressure on prices compared to the world market." Peter Van Doren and Jerry Taylor,
Cato Institute: "Sure, more domestic oil creates the possibility of fewer refined imports tied to the price of
Brent crude, but given that the price of Brent sets the price for crude generally, the result would be more
profit for domestic crude producers rather than significantly lower gasoline prices for Americans (not that
there's anything wrong with that)." Doug Holtz-Eakin, American Action Forum: "Domestic action to
increase production will not lower gas prices set on a global market." Christopher Knittel, MIT
economist: "There are not many markets where the United States can't impose its will on market
outcomes ... This is one we can't, and it's hard for the average American to understand that and it's easy
for politicians to feed off that." Pinelopi Goldberg, Yale economist: "US domestic policy has only tiny
effect on the world price of oil. US foreign policy is probably more relevant than energy policy." Steve
Koonin, Institute for Defense Analyses: "When you hear the international oil companies advocating for
energy independence, it's really about making money, which isn't a bad thing ... If they produce a million
more barrels a day, they're not going to change the global price much. And since they know the global
price is going up, they'll just make more money. There's nothing wrong with that, but it doesn't solve the
price problem or the greenhouse gas problem." Michael Levi, Council on Foreign Relations: "The
amount of oil you produce at home doesn't affect the price ... You can lower your vulnerability to
price by lowering your consumption of oil, but not by increasing your production." Severin Borenstein,
UC Berkeley economist: "Producing more oil domestically will enrich the U.S. economy, particularly
U.S. oil companies and their workers. With oil so valuable, it may be a good idea, though the value must
be weighed against environmental consequences. But it will have no discernible impact on gas prices,
because it will change the world's supply/demand balance for oil by less than 2 or 3 percent over a
decade or more." David Peterson, Duke statistician: "U.S. production and demand have little to do
with the price of gasoline in the U.S." Edward Melnick, NYU statistician: When U.S. production goes
up, the price of gas "is certainly not going down ... The data does not suggest that whatsoever." David
Sandalow, former Brookings fellow: "Drilling offshore to lower oil prices is like walking an extra 20
feet per day to lose weight. ... It's just not going to make much of a difference." Tom Kloza, Oil Price
Information Service: "This drill drill drill thing is tired ... It's a simplistic way of looking for a solution
that doesn't exist." Richard Newell, former Administrator of Energy Information Administration: "We do
not project additional volumes of oil that could flow from greater access to oil resources on Federal
lands to have a large impact on prices given the globally integrated nature of the world oil market."
Dean Baker, Center for Economic and Policy Research: "There is almost no disagreement among
economists that drilling everywhere all the time offshore will have almost no impact on the price of gas
in the United States. The reason is that we have a world market for oil. The additional oil that might
come from offshore drilling is a drop in the bucket in a world oil market of almost 90 million barrels a
day." Lou Crandall, Wrightson ICAP LLC: "Higher oil prices today are a global phenomenon, and the
additional supply from increased drilling by the U.S. would not alter the global balance of supply
and demand greatly. Gasoline prices at the pump would be higher either way. The only difference is that
a somewhat larger share of the revenue would accrue to domestic interests (governmental and private)
rather than to foreign suppliers." Paul Bledsoe, Bipartisan Policy Center: "The notion that somehow we
can produce so much domestically that we will move the global price is incorrect." Tom O'Donnell,
The New School: "The amount of extra oil that the U.S. would produce, as far as affecting the world
price of oil, is almost insignificant."' Deborah Gordon, Carnegie Endowment for International Peace:
"We can drill doggedly in our own backyards, but the price of gasoline will remain more a matter of
speculation over externally-driven factors than tapping new sources of oil at home." Joseph Dukert,
energy analyst: "Americans tend to exaggerate the price effects of fluctuations in domestic
production in relation to the total amount of oil in global trade. On the larger stage, the perception of
geopolitical risks is more important." Phyllis Martin, Energy Information Administration: "In 2009, the
U.S. produced about 7 percent of what was produced in the entire world, so increasing the oil
production in the U.S. is not going to make much of a difference in world markets and world prices
... It just gets lost. It's not that much." Even Fox's John Stossel acknowledged recently that U.S. energy
policy "doesn't make that much of a difference" on gas prices, contrary to what others at Fox News
are claiming. There's simply no excuse for political reporters to tolerate, let alone advance claims that
more U.S. oil production will meaningfully address our gas price woes. (Here's a taste, from the past
week alone, of the type of he-said/she-said reporting that is just not cutting it: CNN, New York Times,
Washington Post, Wall Street Journal, USA Today.) This is crucially important because once we
understand that the U.S. is incapable of holding down the price of gasoline, we can start looking seriously
at the options we do have to make ourselves less vulnerable to these inevitable price spikes.
Offshore drilling
Offshore drilling doesn’t affects global oil prices – US production remains minimal
in a global context
Maass 10
Peter Maass – fellow at the Shorenstein Center on the Press at Harvard’s Kennedy School of Business,
award-winning author of several energy books, awarded a Guggenheim Fellowship in 2012
(“What’s Behind Obama’s Drilling Plan?”, March 31 2010,
http://roomfordebate.blogs.nytimes.com/2010/03/31/whats-behind-obamas-drillingplan/?_php=true&_type=blogs&scp=2&sq=drill%20baby%20drill&st=cse&_r=0)//EO
I consider myself an environmentalist and have written at length about the problems of oil extraction, but
I have a hard time getting upset about the decision to expand offshore drilling. Rather than being a
vindication of the ‘drill, baby, drill’ argument, the new policy will show its shallowness. As a matter of
global justice, why should America exclude its coastlines while coastlines all over the world are drilled
for oil that goes into American gas tanks? Banning oil companies from operating in our waters while
encouraging them to do so in other people’s waters — there’s a whiff of hypocrisy to that, a sort of
outsourcing of oil pollution. Perhaps if we suffer more of the inconvenience of extraction we will
reconsider the merit of continuing down the road of a fossil-fuel based economy. But don’t get me wrong
— drilling to reduce our dependence on foreign oil and reduce gas prices is a charade. President
Obama seems well aware of that, in a sense calling the other side’s bluff. With 2 percent of the world
reserves, there is no way to extract our way to lower prices or energy independence; the impact will
be between “not at all” and “hardly at all.” The new policy, rather than being a vindication of the
“drill, baby, drill” argument, will show its shallowness and hopefully allow us to have a more
constructive debate about our energy future. Paradoxically, drilling a bit more in the short term may help
the effort to drill a lot less in the future.
The most comprehensive studies indicate major offshore drilling projects have
insignificant impacts on prices
Romm 8
Dr. Joesph Romm – Senior Fellow at the Center for American Progress, elected as a Fellow of the
American Association for the Advancement of Science, named one of “The 100 People Who Are
Changing America, former assistant secretary at the U.S. Department of Energy’s Office of Energy
Efficiency and Renewable Energy, Ph. D. in physics from MIT
(“Offshore drilling will have no impact on oil prices through 2030”, June 19 2008,
http://grist.org/article/eia-to-mccain-drop-offshore-drilling/)//EO
McCain has flip-flopped his position on offshore drilling, pandered to the oil companies, and embraced
the exact same strategy endorsed by the man McCain is trying so hard to run away from — President
Bush. He must have a damn good policy reason: “Tomorrow I’ll call for lifting the federal moratorium for
states that choose to permit exploration,” McCain said. “I think that this and perhaps providing additional
incentives for states to permit exploration off their coasts would be very helpful in the short term in
resolving our energy crisis.” Short-term? If only the facts supported that position. If only the man who
wants to be the next president bothered to check the analysis by the current president’s own energy
analysts. The U.S. Energy Information Administration recently did a detailed study of the likely
outcome of offshore drilling for their Annual Energy Outlook 2007, “Impacts of Increased Access to Oil
and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf (OCS).” The sobering
conclusion: The projections in the OCS access case indicate that access to the Pacific, Atlantic, and
eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas
production or prices before 2030. And the impact of the projected 7 percent (!) increase in lower-48 oil
production that might result in 2030 thanks to opening the OCS is … wait for it … “any impact on
average wellhead prices is expected to be insignificant.” Yes, the man who would be president has sold
out his principles to garner support from the oil industry while achieving no benefit to the American
gasoline-consuming public whatsoever even a quarter century from now!
Renewables
Simultaneous increases in demand for renewables and oil prove fossil fuels and
clean energy can coexist without tradeoffs
Assis 6/16
Claudi, reporter for The Wall Street Journal MarketWatch financial news source (“Renewable energy
demand rises to record 2.7% of global consumption”, June 16 2014,
http://blogs.marketwatch.com/energy-ticker/2014/06/16/renewable-energy-demand-rises-to-record-2-7of-global-consumption/)//EO
Renewable power has cut for itself a bigger share of the world’s energy demand pie, but coal, which
remained the fastest growing fossil fuel, and oil, also saw demand grow in 2013, BP PLC said Monday.
Coal consumption increased by 3% in 2013, below its yearly average of 3.9% but enough to put coal’s
share of world energy consumption at 30%, its highest since 1970, BP said in its 63rd annual statistical
review on Monday. The review is an industry benchmark. Demand from renewable energy sources,
including wind and solar, rose to a record 2.7% of global energy consumption, up from 0.8% a decade
ago, the energy company said. Solar power generation rose 33%. Solar’s overall share of global power
generation remains low at 0.5%, “but it is starting to have a noticeable impact in terms of sources of
power generation growth,” BP said. Wind power generation grew more slowly, or 18.5% during the same
period. Overall, the world has become more energy hungry — energy consumption and production
reached records for every fuel type except nuclear power, BP said. For all fossil fuels, global
consumption rose more rapidly than production, BP said. The U.S. oil boom continued — last year, the
U.S. had the world’s largest increase in oil production for the second straight year, up by 1.1 million
barrels a day. U.S. oil production, above 10 million barrels a day last year, reached its highest since 1986.
U.S. demand for oil also rose last year, by 400,000 barrels a day, the fastest of any country last year and
surpassing China’s demand for the first time in 15 years. Oil remains the world’s leading fuel, with 33%
of global energy demand, but lost market share to other fuels for the 14th consecutive year. Global oil
consumption rose 1.4% in 2013, just above its historical average. The U.S. imported fewer barrels of oil a
day — the 6.5 million barrels a day it imported last year is just over half what it imported in 2005. China
surpassed the U.S. as the world’s largest net oil importer, bringing in 7 million barrels a day.
Internal Link non-unique
2AC
Empirics prove no impact to oil price collapse – crude futures more than halved
within a few months in 2008
Mouawad 8
Jad, reporter for The New York Times (“Oil Prices Drop to 20-Month Low”, November 11 2008,
http://www.nytimes.com/2008/11/12/business/worldbusiness/12oil.html)//EO
Oil prices fell to their lowest level in 20 months on Tuesday, despite efforts by the OPEC cartel to
stem the slide, as weak economic growth continued to reduce consumption around the world. Lower
energy prices are providing some welcome relief for struggling consumers, but a 59 percent decline in
oil prices since their summer peak also shows how radically the prospects of the global economy
have darkened in recent months. At an emergency meeting last month, members of the Organization of
the Petroleum Exporting Countries agreed to reduce their output, as of Nov. 1, to slow the price slide.
While there is no official tally of OPEC production, several members — including Algeria, Qatar, the
United Arab Emirates and Kuwait — have signaled in recent days that they had begun paring their
production. Various reports also suggested that Saudi Arabia, the cartel’s kingpin, had warned some
Asian customers that it would pare exports by 5 percent next month. So far, OPEC producers have
announced cuts totaling about 1.1 million barrels a day, less than the 1.5 million barrels a day that the
cartel agreed to last month. According to estimates by PFC Energy, a consulting firm, however, producers
have actually trimmed their production by only about 800,000 barrels a day. Despite these efforts,
slower consumption has continued to weigh on oil markets, pushing prices down on Tuesday to
their lowest level since March 2007. Crude oil futures on the New York Mercantile Exchange settled
at $59.33 a barrel, down 5 percent. Prices have plummeted since hitting a peak of $145.29 a barrel in
July. Producers face the difficult task of seeking to balance oil supplies with slowing demand during one
of the worst economic slowdowns in recent memory. The International Monetary Fund recently warned
that the world faced the prospect of a simultaneous recession in the United States, Europe and Japan for
the first time in more than 60 years. The Chinese economy, long the main engine of growth in oil demand,
is also slowing. As a result, a growing number of oil specialists now expect global demand to drop this
year, which would be the first annual decline since 1983. “In a falling demand environment, it is
extremely difficult to stem a price drop,” said Francisco Blanch, a commodity strategist at Merrill Lynch.
“Global economic growth is still trending down and it will be a few quarters before we see a trough for oil
prices. Until then, OPEC will try to figure out what the right level of production is going to be. That’s a hard thing to do.” After gasoline prices
soared above $4 a gallon earlier this year, oil demand in the United States dropped over the summer. Consumption fell by 1.8 million barrels a
day, or 8 percent, to 19.3 million barrels a day in August, compared with the same period a year ago, according to the latest monthly estimates
from the Energy Department. As a result, refineries ran at their slowest pace in 21 years in August, typically one of the busiest months of the
year. At
the same time, inventories of crude oil kept building at a steady clip, suggesting there was more oil
in the market than needed. Since July 4, gasoline prices have dropped for 17 weeks, to a nationwide
average of about $2.22 a gallon, according to AAA, the automobile club. That is about 90 cents less than
at the same time last year. OPEC, whose members account for 40 percent of the world’s oil exports, is scheduled to meet in Algeria
next month. An Iranian oil official said on Tuesday that the producers might be forced to meet before that if prices continued to slide. OPEC’s
cohesion will probably be tested in coming months if prices keep falling. Some countries, like Saudi Arabia, can afford to see lower prices for a
while, while the price drop is already hurting producers like Iran and Venezuela. Michael Wittner, the global head of oil research at the French
bank Société Générale, in London, said it was probable that OPEC would reduce production by another million barrels a day next month. “OPEC
appears to be taking this very seriously, and they are telling their customers they would be getting less crude,” Mr. Wittner said. “But
prices
keep falling because despite all that, the markets have been down-shifting to a lower economic growth
and slower oil demand.” David Kirsch, an oil analyst at PFC Energy, said OPEC producers knew they
could not alter the market’s short-term view. But by starting to trim their output, they were trying to set
the stage for a rebound in prices next year. “What OPEC is looking for is managing the fundamentals so
they can create the conditions for a price recovery at some point, when the global economy starts to
recover,” he said.
1AR
Prices will fluctuate inevitably
Elmes, 06/23/2014 (David Elmes, Head, Warwick Business School Global Energy Research & Course Director of the WBS Global
Energy MBA and leads the WBS Global Energy Research Network, “What ISIS insurgency in Iraq could mean for global oil supplies and energy
options”, The Conversation, http://theconversation.com/what-isis-insurgency-in-iraq-could-mean-for-global-oil-supplies-and-energy-options28298)
While the trade-off between US shale oil and disrupted production in countries such as Libya and Iran has led to
price stability over the last few years, the longer-term view is a steady rise. Global population growth and
rising economic standards will require us to use steadily more expensive sources of energy so that the International
Energy Agency predicted last year a price of $128 per barrel in 2035. But that assumes a progressive climb of the sort that we can adjust to. Last
year the IEA forecast a 2020 price of $113, which we’ve already exceeded, illustrating the conflict
between long-term trends and market sensitivity to short-term changes. There will be disruptions along
the way and it’s unlikely they will cancel each other out as they have over recent years. It was as recent as
the summer of 2008 when a lack of confidence in managing short-term challenges led to the sudden climb to $147 per barrel.
Price econ turn
2AC
High oil prices cause economic collapse
Rubin, 12 – Canadian economist and author, former chief economist at CIBC World Markets (Jeff, “How High Oil Prices Will Permanently
Cap Economic Growth”, Bloomberg, 9/23/12, http://www.bloomberg.com/news/2012-09-23/how-high-oil-prices-will-permanently-capeconomic-growth.html) EK
For most of the last century, cheap
oil powered global economic growth. But in the last decade, the price of oil has
quadrupled, and that shift will permanently shackle the growth potential of the world’s economies .¶
The countries guzzling the most oil are taking the biggest hits to potential economic growth. That’s sobering
news for the U.S., which consumes almost a fifth of the oil used in the world every day. Not long ago, when oil was
$20 a barrel, the U.S. was the locomotive of global economic growth; the federal government was running budget surpluses; the jobless rate at the
beginning of the last decade was at a 40-year low. Now, growth is stalled, the deficit is more than $1 trillion and almost 13 million Americans are
unemployed.¶ And the
U.S. isn’t the only country getting squeezed. From Europe to Japan, governments are
struggling to restore growth. But the economic remedies being used are doing more harm than good, based as they are on a
fundamental belief that economic growth can return to its former strength. Central bankers and policy makers have failed to fully recognize the
suffocating impact of $100-a-barrel oil.¶ Running
huge budget deficits and keeping borrowing costs at record lows are
be long-term substitutes for cheap oil because an economy
can’t grow if it can no longer afford to burn the fuel on which it runs. The end of growth means
governments will need to radically change how economies are managed. Fiscal and monetary policies need to be
recalibrated to account for slower potential growth rates.¶ Energy Source¶ Oil provides more than a third of the energy we use
on the planet every day, more than any other energy source. And you can draw a straight line between oil consumption and grossdomestic- product growth. The more oil we burn, the faster the global economy grows. On average over the last four
only compounding current problems. These policies cannot
decades, a 1 percent bump in world oil consumption has led to a 2 percent increase in global GDP. That means if GDP increased 4 percent a year
– as it often did before the 2008 recession – oil consumption was increasing by 2 percent a year.¶ At
$20 a barrel, increasing annual
oil consumption by 2 percent seems reasonable enough. At $100 a barrel, it becomes easier to see how
a 2 percent increase in fuel consumption is enough to make an economy collapse .¶ Fortunately, the reverse is
also true. When our economies stop growing, less oil is needed. For example, after the big decline in 2008, global oil demand actually fell for the
first time since 1983. That’s why the best cure for high oil prices is high oil prices. When prices rise to a level that causes an economic crash,
Over the last four decades, each time oil prices have spiked, the global
economy has entered a recession .¶ Consider the first oil shock, after the Yom Kippur War in 1973, when the Organization of
Petroleum Exporting Countries’ Arab members turned off the taps on roughly 8 percent of the world’s oil supply by
cutting shipments to the U.S. and other Israeli allies. Crude prices spiked, and by 1974, real GDP in the U.S. had shrunk
by 2.5 percent.¶ The second OPEC oil shock happened during Iran’s revolution and the subsequent war with Iraq.
lower prices inevitably follow.
Disruptions to Iranian production during the revolution sent crude prices higher, pushing the North American economy into a recession for the
first half of 1980. A few months later, Iran’s
war with Iraq shut off 6 percent of world oil production, sending North
America into a double-dip recession that began in the spring of 1981.¶ Kuwait Invasion¶ When Saddam Hussein
invaded Kuwait a decade later, oil prices doubled to $40 a barrel, an unheard-of level at the time. The first Gulf War disrupted almost 10 percent
of the world’s oil supply, sending major oil-consuming countries into a recession in the fall of 1990.¶ Guess what oil prices were doing in 2008,
when the world fell into the deepest recession since the 1930s? From trading around $30 a barrel in 2004, oil prices marched steadily higher
before hitting a peak of $147 a barrel in the summer of 2008. Unlike past oil price shocks, this time there wasn’t even a supply disruption to
blame. The spigot was wide open. The problem was, we could no longer afford to buy what was flowing through it. ¶ There
are many
ways an oil shock can hurt an economy. When prices spike, most of us have little choice but to open our
wallets. Paying more for oil means we have less cash to spend on food, shelter, furniture, clothes, travel and pretty much anything else.
Expensive oil, coupled with the average American’s refusal to drive less, leaves a lot less money for the rest of the
economy.¶ Worse, when oil prices go up, so does inflation. And when inflation goes up, central banks respond
by raising interest rates to keep prices in check. From 2004 to 2006, U.S. energy inflation ran at 35 percent, according to the
Consumer Price Index. In turn, overall inflation, as measured by the CPI, accelerated from 1 percent to almost 6 percent. What happened next
was a fivefold bump in interest rates that devastated the massively leveraged U.S. housing market. Higher rates popped the speculative housing
bubble, which brought down the global economy.¶ Unfortunately, this
pattern of oil-driven inflation is with us again. And
world food prices are being affected. According to the food-price index tracked by the United Nations Food and Agriculture
Organization, the cost of food rose almost 40 percent from 2009 to the beginning of 2012. And since 2002, the
FAO’s food-price index, which measures a basket of five commodity groups (meat, dairy, cereals, oils and fats, and sugar), is up about 150
percent.
Economic decline causes war—statistics
Royal 10 – Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department of
Defense, 2010, “Economic Integration, Economic Signaling and the Problem of Economic Crises,” in
Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, p.
213-214
Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political science literature has
contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of interdependent states. Research in this vein
has been considered at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modelski and
Thompson's (1996) work on leadership cycle theory, finding that rhythms
in the global economy are associated with the rise and
fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such,
exogenous shocks such as economic crises could usher in a redistribution of relative power (see also Gilpin.
1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Feaver, 1995). Alternatively, even a
relatively certain redistribution of power could lead to a permissive environment for conflict as a rising
power may seek to challenge a declining power (Werner. 1999). Separately, Pollins (1996) also shows that global economic cycles
combined with parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and
connections between global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copeland's (1996, 2000) theory of trade
expectations suggests that 'future
expectation of trade' is a significant variable in understanding economic
conditions and security behaviour of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they
have an optimistic view of future trade relations. However, if the expectations of future trade decline, particularly for difficult to replace
items such as energy resources, the likelihood for conflict increases, as states will be inclined to use force to gain
access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or
because it triggers protectionist moves by interdependent states.4 Third, others have considered the link between economic
decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong
correlation between internal conflict and external conflict, particularly during periods of economic
downturn. They write: The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict tends to spawn
internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify the extent to which
international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89) Economic decline
has also been linked with an increase in the likelihood of terrorism (Blomberg, Hess, & Weerapana, 2004), which has the capacity
to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government. "Diversionary theory"
suggests that, when facing unpopularity arising from economic decline, sitting governments have
increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang
(1996), DeRouen (1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly
correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the
tendency towards diversionary tactics are
greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from
office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic performance in the
United States, and thus weak Presidential popularity, are statistically linked to an increase in the use of
force. In summary, recent economic scholarship positively correlates economic integration with an increase in the frequency of economic crises, whereas
political science scholarship links economic decline with external conflict at systemic, dyadic and
national levels.5 This implied connection between integration, crises and armed conflict has not featured prominently in the economic-security debate and
deserves more attention.
Natural Gas Prices DA
1NC
1NC Natural Gas Prices DA
NatGas producers will have to cut drilling to sustainable levels now- the plan’s introduction of
more supplies collapses the price floor and tanks industry profits
Fahey 2012 (Jonathan Fahey, writer for the Associated Press on energy policy, April 8, 2012. “U.S. Natural Gas Market Bursting at the
Seams.” Huffington Post, http://www.huffingtonpost.com/2012/04/08/natural-gas-market_n_1410851.html)//NR
NEW YORK -- The
U.S. natural gas market is bursting at the seams. So much natural gas is being produced
that soon there may be nowhere left to put the country's swelling surplus. After years of explosive growth,
natural gas producers are retrenching. The underground salt caverns, depleted oil fields and aquifers that store natural gas are
rapidly filling up after a balmy winter depressed demand for home heating. The glut has benefited businesses and homeowners that use natural
gas. But with natural gas prices at a 10-year low – and falling – companies that produce the fuel are
becoming victims of their drilling successes. Their stock prices are falling in anticipation of declining profits
and scaled-back growth plans. Some of the nation's biggest natural gas producers, including Chesapeake Energy,
ConocoPhillips and Encana Corp., have announced plans to slow down. "They've gotten way ahead of themselves, and winter got
way ahead of them too," says Jen Snyder, head of North American gas for the research firm Wood Mackenzie. "There hasn't been
enough demand to use up all the supply being pushed into the market." So far, efforts to limit production have barely made a dent.
Unless the pace of production declines sharply or demand picks up significantly this summer, analysts say the nation's storage
facilities could reach their limits by fall. That would cause the price of natural gas, which has been halved over the past year, to
nosedive. Citigroup commodities analyst Anthony Yuen says the price of natural gas – now $2.08 per 1,000 cubic feet – could
briefly fall below $1. "There would be no floor," he says. Since October, the number of drilling rigs exploring
for natural gas has fallen by 30 percent to 658, according to the energy services company Baker Hughes. Some of the sharpest
drop-offs have been in the Haynesville Shale in Northwestern Louisiana and East Texas and the Fayetteville Shale in Central Arkansas. But
natural gas production is still growing, the result of a five-year drilling boom that has peppered the country with wells. The workers and rigs
aren't just being sent home. They are instead being put to work drilling for oil, whose price has averaged more than $100 a barrel for months. The
oil rig count in the U.S is at a 25-year high. This activity is adding to the natural gas glut because natural gas is almost always a byproduct of oil
drilling. Analysts say that before long companies could have to start slowing the gas flow from existing wells or even take
the rare and expensive step of capping
off some wells completely. "Something is going to have to give," says Maria
Sanchez, manager of energy analysis at Bentek Energy, a research firm. U.S. natural gas production has boomed in recent years as
a result of new drilling techniques that allow companies to unlock fuel trapped in shale formations. Last year, the U.S. produced an
average of 63 billion cubic feet of natural gas per day, a 24 percent increase from 2006. But over that period consumption has
grown half as fast. The nation's storage facilities could easily handle this extra supply until recently because cold winters pushed up
demand for heating and hot summers led to higher demand for air conditioning. Just over half the nation's homes are heated with natural gas, and
one-quarter of its electricity is produced by gas-fired power plants. But this past winter was the fourth warmest in the last 117 years, according to
the National Oceanic and Atmospheric Administration. It was the warmest March since 1950. Between November and March, daily natural gas
demand fell 5 percent, on average, from a year earlier, according to Bentek Energy. Yet production grew 8 percent over the same period. "We
haven't ever seen a situation like this before," says Chris McGill, Vice President for Policy Analysis at the American Gas Association, an industry
group. At the end of winter, there is usually about 1.5 trillion cubic feet of gas in storage. Today there is 2.5 trillion cubic feet because utilities
withdrew far less than usual this past winter. There is 4.4 trillion cubic feet of natural gas storage capacity in the U.S. If full, that would be
enough fuel to supply the country for about 2 months. If current production and consumption trends were to continue, Bentek estimates that
storage facilities would be full on October 10. Storage capacity, which has grown by 15 percent over the past decade, cannot be built fast enough
to address the rapidly expanding glut. And analysts note there is little financial incentive to build more anyway. The low price brought on by the
glut has increased demand for natural gas among industrial users and utilities. Makers of chemicals, plastics and fertilizers that use natural gas as
a feedstock are expanding. Garbage trucks, buses and delivery vehicles are using more natural gas. Electric power producers are switching from
coal to natural gas whenever possible. This won't add up to enough new demand quickly enough to relieve the pressure on storage facilities this
summer. Scorching temperatures this summer would do the trick, but Mother Nature is not expected to cooperate. Temperatures this summer are
forecast to be about normal, and much cooler than the last two summers, says David Streit, a meteorologist at Commodity Weather Group
expects. Sultry winters, he said, do not usually develop into sultry summers.
And, the natgas industry is the lynchpin of long term economic growth and manufacturing- job
growth, GDP boost, and industrial competitiveness- but low prices kill the industry
Schwartz 2012 (Shelly K. Sschwartz, writer for the CNBC, June 20, 2012. “Can the Natural Gas Sector save the US economy?”
http://www.cnbc.com/id/47280026#.)//NR
Indeed, the natural gas industry supports some 2.8 million jobs — either directly through companies engaged in exploration
and drilling or indirectly through manufacturers that use the fuel as a raw material, according to the American Gas Association. The real potential
for economic impact, however, lies in the vast reservoirs of shale gas that are newly accessible through hydraulic fracturing. Better known as
“fracking,” the process involves extracting natural gas from shale rock layers deep within the Earth using a highly pressurized mixture of water
and chemicals. “Energy is always a key player in the economy and because producers have been able to make these advances in
technology and efficiency improvements, shale
gas could be a very significant driver for the economy going
forward,” says Rocco Canonica, director of energy analysis at Bentek Energy, an energy market research firm in Evergreen, Colo. Over the
last four years, fracking, along with traditional drilling, has unlocked a staggering 3,400 trillion cubic feet of natural gas in North America,
enough to supply U.S. consumers at current demand levels for more than 100 years, according to business and economic research firm IHS in
Englewood, Colo. In its 2012 study, the group found that shale gas production alone will create some 1.5 million jobs by 2015, and 2.4 million by
2035. The IHS study further concluded that the shale gas boom will continue to drive economic growth, receiving $3.2 trillion in
cumulative investment between 2010 and 2035, and contributing $332 billion to U.S. gross domestic product (GDP) by 2035
Earlier data from IHS concluded that shale gas contributed nearly $19 billion in tax and royalty revenue at the state, local and federal level in
2010, and that over the next 25 years that number could exceed $933 billion to fiscally strapped states, as well as the federal government. Its
contribution to gross domestic product is projected to reach $118.2 billion in 2015 and $231.1 billion in 2035 — up from $80 billion in 2010,
according to IHS. Lower Prices Spur Growth To get a better sense of the potential economic impact, consider the relative ubiquity of natural gas.
It is used to produce steel, glass, paper, clothing, brick and electricity. It is also used as a raw material for common products such as paint,
fertilizer and plastics, as well as home heating fuel. It is used to heat more than half of the nation's single-family homes, according to industry
trade groups. Like most commodities, natural gas has been prone to dramatic price swings for decades, creating cost
uncertainty for industries that rely on such fuel as an energy source or feedstock. As a result of current excess supply, however, the price
of natural gas in North America has fallen dramatically to about $2.20 per thousand cubic feet (mcf), a quarter of its record high of $8.86 in 2008.
Domestically, analysts expect natural gas prices to average $3.50 per mcf for at least the next five years. By comparison, Europe and Asia,
which use naphtha, a more expensive oil-based feedstock, are still paying up to $17 per mcf. According to the IHS report, low and stable gas
prices in the U.S. are contributing to a 10 percent reduction in electricity costs to consumers and a 1.1 percent increase in the level of 2012 GDP.
Perhaps more importantly, it is encouraging manufacturers to expand operations in the U.S., building new production
facilities, or reopen plants that were shuttered during the recession. The American Chemistry Council estimates that petrochemical companies and
other manufacturers will spend upwards of $25 billion over the next five years on the more than 30 major domestic projects currently under
development. Among them: Royal Dutch Shell, ExxonMobil, Dow Chemical, and Chevron Phillips Chemical, a joint venture of Chevron and
Phillips 66 , which is building a $5 billion ethane facility in Baytown, Texas, that should be operational in 2017. “This is a game changer because
it’s leading to an industrial renaissance,” says IHS VP John Larson. “Our manufacturing sector is recovering
because they are now able to compete on energy prices where they haven’t been able to compete in the global market
on labor prices or taxes.” Lower costs, of course, lead to lower prices for consumers — and higher demand for products made in the U.S. That
spurs manufacturers to hire more workers. A 2011 PricewaterhouseCoopers report estimates that U.S. chemical, metal and industrial
manufacturers could employ approximately 1 million more workers by 2025 due to benefits from affordable energy and demand for products
used to extract natural gas. Exports & Bans “There’s a silent oil and gas boom going on in this country,” says Kevin Swift, chief economist for
the American Chemistry Council. “Eight years ago, everyone was writing off the U.S. petrochemical industry, but our competitiveness has
improved so much in terms of the global cost curve that the U.S. and Canada are now second only to the Middle East.” Opportunity Abroad Apart
from job creation and capital investment from industry, the glut of natural gas on the market is also creating export opportunities for drilling
companies, says Canonica. That would contribute further to GDP. Just how much, remains unclear. “There are 10 proposed export projects
planned in the U.S. right now, so assuming politicians allow them to do it and we expect them to, it’s almost certain that natural gas companies
will begin exporting to Asia and Europe,” he says, noting exports could begin as early as 2016. That’s assuming prices don’t remain below $3 per
mcf for long. “The
price of natural gas has to be high enough for these companies to continue drilling,”
says Canonica. “In many locations, it’s not economical to drill when the price is below $3.50 per mcf.” There’s also a
contingent of politicians and activists who are lobbying to ban fracking out of concern it could contaminate groundwater supplies. New York has
placed a moratorium on fracking pending further study, while more recently in May 2012 Vermont became the first state in the nation to ban the
process outright. If more states follow suit, that could limit supply. As drilling technology improves, however, and the industry becomes more
efficient, natural gas will likely play an increasingly pivotal role in the story of economic recovery. “This
is the most significant development for this industry in 75 years,” says Swift, noting the last breakthrough was in the 1930s when the post-war
boom led to innovations like thermoplastic polyurethane, which is used in everything from footwear, to mobile phones to medical devices. “It’s
a positive shock to the economy.”
It’s reverse causal- failure to sustain strong manufacturing growth short circuits economic recovery
Duesterberg 2012 (Tom Duesterberg, Executive Director of the Manufacturing and Society in the 21st Century program at the Aspen
Institute. He recently retired as President and CEO of The Manufacturers Alliance/MAPI, an economic research and executive education
organization based in Arlington, Virginia with more than 500 manufacturing firms as members. Previous positions include: Director of the
Washington Office of The Hudson Institute, Assistant Secretary for International Economic Policy at the U.S. Department of Commerce, chief of
staff to two members of Congress, and associate instructor at Stanford University. His commentary and analysis on manufacturing, economic
performance, globalization, and related policy issues can be found in major news outlets. He holds a B.A. degree from Princeton and M. A. and
Ph.D. degrees from Indiana University, “Impact of the Energy Boom on US Manufacturing”, http://www.aspeninstitute.org/about/blog/impactenergy-boom-us-manufacturing)
The manufacturing sector has been leading the US economic recovery since the end of the Great Recession in
2009. One of the key drivers in the manufacturing recovery is the renaissance in domestic production of natural
gas and, to a lesser extent, oil. On November 28, the Institute’s program on Manufacturing and Society in the 21st Century will host an event
exploring the ramifications of recent developments in energy and manufacturing, and the sustainability of the production boom for the future.¶
Growth in domestic energy production, driven by the deployment of new exploration and drilling technologies, has been an
economic turning point in the US for a number of reasons. Not the least of these is the possibility of reaching the US’ longterm goal of energy independence, a goal which arguably has already been reached, if North America is considered the proper unit for
determining independence. The substitution of natural gas for coal in electricity production and process heat in manufacturing, as well as the
growing use of natural gas in transportation, also contribute to lowering greenhouse gas emissions. The Department of Energy’s estimates of
future carbon emissions show a 69 percent drop in expected emissions from 2002 to 2030 compared to projections from 1990. Finally, overall
economic growth is strengthened considerably by the energy boom. Not only is the United States producing more
energy, it will also be building more petrochemical refineries, will supply the equipment needed to build the exploration and refining
infrastructure, and almost every energy user—from households to large manufacturers—will benefit from more secure
supplies and lower costs.¶ Manufacturing is at a pivotal point in this emerging energy economy. It uses about
one-third of all energy produced in the United States, so lower prices and more secure supply give almost all firms in the
sector a competitive advantage over firms in other nations. Relative to the United States, the spot price of natural gas is
nearly three times more expensive in Europe and four times more expensive in most of Asia. This advantage is especially important in the
chemicals industry, which is the second largest subsector of US manufacturing. Natural gas and associated liquids represent over 80 percent of
the feedstock for US refineries, whereas in Europe and Asia the ratios are roughly two-thirds oil and one-third natural gas. When the price
differential between natural gas and oil is taken into account, the advantage to the American chemicals sector comes into much sharper relief.
The US manufacturing sector benefits in many other ways: lower process heat costs, a globally
competitive advantage in building the energy and refinery infrastructure driving the renaissance, and the stability
of supply which will help attract long-term investment in subsectors like steel, glass, aluminum, and metal working. Finally,
a larger share of GDP for a growing manufacturing sector helps to improve living standards, since productivity
growth is so strong in this sector. Since 1998, manufacturing productivity has grown at an annual rate of 3.5 percent, over twice as much as the
1.4 percent in the services sector.¶ In the last few decades, manufacturing -- which faces steadily growing foreign competition and must innovate
to protect its market share -- has steadily improved the energy efficiency of production. Total carbon emissions in this sector have fallen by nearly
one-fourth since 1998, even though total output has increased by about a third. As a result, carbon emissions per dollar of output in manufacturing
have fallen by 36 percent since 1998, compared to only 20 percent in the overall economy. This is due in part to the substitution of natural gas, in
part due to productivity increases, and in part due to higher use of renewable energy—manufacturing uses 90 percent more renewables than the
transportation sector.
That causes competition for resources and instability that escalates and goes nuclear
Harris and Burrows 2009 (Mathew Harris, PhD European History at Cambridge, counselor in the National Intelligence Council
(NIC) and Jennifer Burrows, member of the NIC’s Long Range Analysis Unit “Revisiting the Future: Geopolitical Effects of the Financial Crisis”
http://www.ciaonet.org/journals/twq/v32i2/f_0016178_13952.pdf)
Increased Potential for Global Conflict Of course, the report encompasses more than economics and indeed believes the future is likely to be the
result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each with ample opportunity for
unintended consequences, there is a growing sense of insecurity. Even so, history may be more instructive than ever. While we continue
to believe that the Great Depression is not likely to be repeated, the lessons to be drawn from that period include
the harmful effects on fledgling democracies and multiethnic societies (think Central Europe in 1920s and 1930s) and on
the sustainability of multilateral institutions (think League of Nations in the same period). There is no reason to think that this would
not be true in the twenty-first as much as in the twentieth century. For that reason, the ways in which the potential
for greater conflict could grow would seem to be even more apt in a constantly volatile economic environment as they
would be if change would be steadier. In surveying those risks, the report stressed the likelihood that terrorism and nonproliferation will remain
priorities even as resource issues move up on the international agenda. Terrorism’s appeal will decline if economic growth continues in the
Middle East and youth unemployment is reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies
and scientific knowledge will place some of the world’s most dangerous capabilities within their reach. Terrorist groups in 2025 will
likely be a combination of descendants of long established groups inheriting organizational structures, command and control processes, and
training procedures necessary to conduct sophisticated attacks and newly emergent collections of the angry and disenfranchised that become
self-radicalized, particularly in the absence of economic outlets that would become narrower in an economic downturn. The
most dangerous casualty of any economically-induced drawdown of U.S. military presence would almost certainly be the Middle
East. Although Iran’s acquisition of nuclear weapons is not inevitable, worries about a nuclear-armed Iran could lead states in the
region to develop new security arrangements with external powers, acquire additional weapons, and consider
pursuing their own nuclear ambitions. It is not clear that the type of stable deterrent relationship that existed between the
great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear Iran. Episodes of low intensity
conflict and terrorism taking place under a nuclear umbrella could lead to an unintended escalation and broader conflict if clear red lines between
those states involved are not well established. The close proximity of potential nuclear rivals combined with underdeveloped surveillance
capabilities and mobile dual-capable Iranian missile systems also will produce inherent difficulties in achieving reliable indications and warning
of an impending nuclear attack. The lack of strategic depth in neighboring states like Israel, short warning and missile flight times,
and uncertainty of Iranian intentions may place more focus on preemption rather than defense, potentially leading to
escalating crises. Types of conflict that the world continues to experience, such as over resources, could reemerge,
particularly if protectionism grows and there is a resort to neo-mercantilist practices. Perceptions of renewed energy
scarcity will drive countries to take actions to assure their future access to energy supplies. In the worst case, this could result in
interstate conflicts if government leaders deem assured access to energy resources, for example, to be essential for maintaining domestic
stability and the survival of their regime. Even actions short of war, however, will have important geopolitical implications. Maritime
security concerns are providing a rationale for naval buildups and modernization efforts, such as China’s and India’s development
of blue water naval capabilities. If the fiscal stimulus focus for these countries indeed turns inward, one of the most obvious funding targets may
be military. Buildup of regional naval capabilities could lead to increased tensions, rivalries, and counterbalancing moves, but it also
will create opportunities for multinational cooperation in protecting critical sea lanes. With water also becoming scarcer in Asia and the Middle
East, cooperation to manage changing water resources is likely to be increasingly difficult both within and between states in a more dog-
eat-dog world.
2NC
2NC Uniquenes
NatGas suppliers are cutting production and stabilizing costs
Chowdhury 2014 (Avik Chowdhury, writer for Market Realist, June 2014. “Must-Know: MLPs will profit from production and demand
surge.” https://marketrealist.com/2014/06/must-know-mlps-profit-from-production-demand-surge/)//NR
Natural gas prices to decline The U.S. Energy Information Administration (or EIA) has
predicted that the price of natural gas
will decline. Natural gas price at the Henry Hub was down by $0.08 per million British thermal units (MMBtu) in May, 2014, from the prior
month to an average of $4.58 per MMBtu. The EIA expects the natural gas price to stabilize at this level until the
start of the heating season next winter. In 2014, the EIA projects the price will increase by 3.5% to $4.74 per MMBtu and then decrease by 5.2%
to $4.49 per MMBtu. Why are natural gas prices important? Natural gas prices, like any other commodity prices, are mainly driven
by demand and supply dynamics. Therefore, the excess supply of natural gas, which hasn’t been met with a parallel demand,
has depressed gas prices in the U.S. An overabundance of gas price isn’t necessarily beneficial to the producers,
mainly because demand and supply dynamics come into play. After peaking at $12 per MMBtu in 2008, and remaining range bound between $2–
$6 per MMBtu in the early part of 2014, natural gas prices are currently averaging at about $4 per MMBtu—still not as
high as they used to be. Natural gas prices are one determinant of the rate of natural gas production. Gas
prices have somewhat
recovered, but they still haven’t reached the peak levels seen in 2008. However, despite the lower gas prices, natural gas production remains
steady. As a result, it would be reasonable to assume that there are factors that natural gas depends on for production. Lower natural gas
prices are undesirable for natural gas producers, who might want to cut down on production in order to
bring down supplies—causing prices to rise. This was the case when Baker Hughes (BHI), an oilfield services company, reported in May
that natural gas rigs have decreased throughout 2014. At the beginning of this year, there were 372 natural gas rigs drilling. The
current natural gas rig count of 326 represents a drop of 46—or 12%. Natural gas inventory declines On May 30, 2014, natural gas
inventories totaled 1.50 trillion cubic feet (or Tcf), which was 33% below the year-ago level. The recorded inventory was 37% lower than the
average inventory level for the five-year period of 2009–2013. Natural gas inventory figures are important indicators because inventory data can
signal supply and demand trends. If the increase in natural gas inventories is more than expected, it implies either greater supply or weaker
demand and is bearish for natural gas prices. If the increase in natural gas inventories is less than expected, it implies either weaker supply or
greater demand and is bullish for natural gas prices. NOAA’s take on the weather The National Oceanic and Atmospheric Administration (or
NOAA) predicts that the Atlantic Basin is likely to experience near normal or below-normal tropical weather from June, 2014–
November, 2014. With the Atlantic hurricane season commencing June 1, the EIA believes that the effect of the Atlantic hurricane season
commencing June 1, 2014, will cause disruption to the production by 12 million barrels of crude oil and 30 billion cubic feet of natural gas.
Natural gas use is highest in the winter, when the fuel is needed for heating homes. So, natural gas storage levels start decreasing in late October
or early November, when the winter heating season begins, and increases again through the fall. Natural gas production drives growth for
gathering and processing midstream operators like Williams Partners (WPZ), Kinder Morgan Partners (KMP), Boardwalk Pipeline Partners
(BWP), and DCP Midstream Partners (DPM). WPZ, KMP, NGLS, and DPM are all a part of the Alerian MLP ETF (AMLP). KMP is one of the
significant components of AMLP.
Low natural gas prices are driving down production – rigs are closing
Bhandaru 6/5 (Kshjitija Bhandaru, writer for Market Realist, June 5, 2014. “Must-Know: Natural gas production- then and now”, Market
Realist, http://marketrealist.com/2014/06/must-know-natural-gas-production-now/)//NR
Natural gas prices, like any other commodity prices, are mainly driven by
demand and supply dynamics. Therefore, the
excess supply of natural gas, which hasn’t been met with a parallel demand, has depressed gas prices in the
U.S. Logically, one would assume that the overabundance of gas should benefit its producers. However, this is
not the case, mostly because demand and supply dynamics come into play. After peaking at $12 per million British thermal units (or
MMBtu) in 2008, and remaining range bound between $2-$6 per MMBtu in the early part of 2014, natural gas prices are currently
averaging at about $4 per MMBtu—still not as high as they used to be. Lower natural gas prices are undesirable for
natural gas producers, who might want to cut down on production in order to bring down supplies—
causing prices to rise. This was the case when Baker Hughes (BHI), an oilfield services company, reported in May that natural gas rigs
have decreased throughout 2014. At the beginning of this year, there were 372 natural gas rigs drilling. The current natural gas rig count of 326
represents a drop of 46—or 12%. Natural gas rigs drilling can indicate the sentiment of major natural gas
producers such as Chesapeake Energy (CHK), Comstock Resources (CRK), Southwestern Energy (SWN), and Range Resources (RRC).
Many of these producers are also part of energy ETFs such as the S&P Oil & Gas Exploration & Production ETF (XOP).
Sustained low gas prices force producers to halt natgas production
Bhandaru 04/16 (Kshitija Bhandaru, Market Realist correspondent, “Why US rig counts continue to rise, driven by oil rigs”, Market
Realist, 04/16/2014, http://marketrealist.com/2014/04/total-us-rig-count-increases-oil-rigs-cross-1500-gas-rigs-continue-declining-streak/)
Natural gas rigs continue to fall, down to the lowest points of the year Last week, Baker Hughes reported yet another
reduction in the natural gas rig count. Gas rig counts decreased from 316 to 310—the lowest since the shale revolution.
Natural rigs have fallen sharply over the past few months, as rig counts were at 372 at the beginning of 2014 and have declined by 62 to current
levels of 310. As per the most recent report, the number of natural gas-directed rigs is at its lowest level since
May 5,
1995, and is down 62% from its recent peak of 811, achieved in 2012. Baker Hughes stated on its latest earnings call that it
gas
rigs have fallen sharply over the past few years due to low prices Through 2014, natural gas rigs fell from 372 to 310, a
anticipates that 2014 will exit with U.S. natural gas rigs drilling totaling ~360, somewhat above current levels. Background: Natural
drop of ~17%, with most of the decline from the Cana Woodford (-10), the Marcellus (-7), and other areas outside of the major classified plays (20). From a long-term perspective, natural gas rigs have been largely falling or remained flat since October 2011 in
response to sustained low natural gas prices (see the natural gas price graph above). Low natural gas prices can
spur producers to stop drilling for natural gas. Natural gas rigs drilling can indicate the sentiment of
major natural gas producers such as Chesapeake Energy (CHK), Comstock Resources (CRK), Southwestern Energy (SWN), and
Range Resources (RRC). Many of these names are also part of energy ETFs such as the S&P Oil & Gas Exploration & Production ETF (XOP).
Despite the recent rally in natural gas prices, prices remain relatively low from a long-term historical context.
Natural gas production has peaked and is declining to sustainable and profitable levels
Jaffe 2013 (Mark Jaffe, energy and corporate finance reporter for Bloomberg News, Knight fellow at Stanford University and a Neiman
Fellow at Harvard, January 9, 2013. “US natural gas glut may be slowly coming to an end says EIA.”, Denver Post,
http://blogs.denverpost.com/thebalancesheet/2013/01/09/natural-gas-glut-slowly-eia/7984/)//NR
The US natural gas industry’s response to a glut for the past several years has been to produce
more gas – that
may finally be nearing an end. The result of the over-production, no surprise, was prices that in 2012 reached a
ten-year-low of $1.95 a million British Thermal Units on the New York Mercantile Exchange spot market. There were a host of
reasons for the continued production including the need to drill or lose leases, some companies needing the cash follow, and lower
production costs in some of the new shale plays. No more. “It looks like we are finally at the end of that string,” said Adam
Sieminski, administrator of the U.S. Energy Information Administration. The EIA analysis is in its current Short-Term Energy Outlook. Before
traders start popping champagne corks, the EIA shows production growing a tiny bit, less than 1 percent, in 2013 to 69.5 billion cubic feet a day
before trailing down to 69.5 Bcf/d in 2014. Of course, any movement is reason enough for traders to pop corks. Still, Sieminski said a look at
the trend in drilling rigs shows there may be further reductions ahead. On December 28th, there were 431 natural
gas rigs operating in the U.S. compared with 811 at the start of 2012. In Colorado, the rig count is down 28 percent in the last
12 months to 55 – although that number includes an uptick in rigs drilling for oil in Niobrara formation. EIA projects that in 2013 the spot
price of natural gas will rise to an average $3.74 per million BTUs and $3.90 in 2014. Inventories remain high with 3,517
Bcf in storage as of December 28th – 11 percent higher than the five year average.
NatGas producers will cut production to hedge prices at a sustainable level and prevent industry
price collapse
AP 2012 (Associated Press, February 12, 2012. “Drillers cut natural gas production as prices drop.”
http://online.wsj.com/article/AP3e0b9812cd1c44829710ea9dba98efec.html)
PITTSBURGH — As natural gas prices continue to drop, the recent nationwide
boom in drilling is slowing.
Drillers don't make money if prices go too low — and drilling wells isn't cheap. "It is safe to say that there will
be fewer natural gas wells drilled in 2012," said Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group based
in Pennsylvania. In recent weeks, several companies have announced plans to cut gas production around the nation, but
experts say the low prices are also opening up new markets. When the shale drilling boom was starting in 2008 the average price
for a unit of gas was about $8. Two years ago it was down to $5.50, and now it's dropped to about $2.50. Part of the reason is
that the shale gas formations became productive more rapidly than expected, as thousands of new wells have been drilled nationwide. Industry
reports note that the national count of active new gas drilling rigs fell to 775 in early February, down from about 1,500 in
2008. Yet Klaber said that the low prices create opportunities for more people and industries to use the product. For example, some drilling
companies are focusing more on the so-called "wet gas" that sells for a higher price because it can be transformed by refineries into consumer
products such as plastics and fertilizer. Last month, Chesapeake Energy of Oklahoma City said it is reducing the number of new dry gas drilling
rigs from 47 to 24 this year. In addition, it
immediately cut existing production by about 500 million cubic feet per
day, adding that if low prices persist, it may double the cut, to 1 billion cubic feet per day. The company said that about 85
percent of its nationwide drilling expenditures this year will be toward the more profitable wet gas. A spokesman for
Chesapeake didn't respond to a request for comment. Experts say the companies have ways to cushion the low prices.
It's called hedging, and business people have used such tools for hundreds if not thousands of years, said Sara Moeller, a professor of
business at the University of Pittsburgh. "When
you put a hedge on, you're locking in one of your prices, because you're
Corp. said
last month that it received $5.17 per thousand cubic feet of natural gas on some hedged deliveries in the final quarter of 2011. Yet
happy with that price," said Moeller, who has also worked as a commodities trader. For example, Houston-based Cabot Oil & Gas
the market price at the time was $3.18 per thousand cubic feet. Moeller said such deals are possible because large consumers of commodities also
want to reduce price swings, such as utility companies. Locking in prices limits their exposure to sudden jumps. It's done by
a simple, registered trade on stock exchanges. People essentially buy and sell the hedges, setting varying prices for different points in the future.
Klaber said the record-low prices have "caused every company to evaluate their business model. A
well that may have been
profitable to drill last year, this year won't be profitable." A government report issued last week predicted that at the end of
March, the amount of natural gas that companies are storing is expected to be the highest since 1983. Those unsold reserves could push prices
even further down. But she noted that the drilling companies are just one part of the industry. "What may be tighter times for the producers
becomes incredibly positive for all the other people in the supply chain," she said. She said that means a big piece of the puzzle on long-term
trends is how quickly consumers, power plants and refineries increase their use of natural gas.
2NC Deterrence Module
Strong manufacturing industry is K2 an effective defense industrial base
O’Hanlon et al 2012 (Mackenzie Eaglen, American Enterprise Institute Rebecca Grant, IRIS Research Robert P. Haffa, Haffa Defense
Consulting Michael O'Hanlon, The Brookings Institution Peter W. Singer, The Brookings Institution Martin Sullivan, Commonwealth Consulting
Barry Watts, Center for Strategic and Budgetary Assessments “The Arsenal of Democracy and How to Preserve It: Key Issues in Defense
Industrial Policy January 2012,” pg online @ http://www.brookings.edu/~/ media/research/files/
papers/2012/1/26%20defense%20industrial%20base /0126_defense_industrial_base_ohanlon)//NR
The current wave of defense cuts is also different than past defense budget reductions in their likely industrial impact, as the U.S.
defense industrial base is in a much different place
than it was in the past. Defense industrial issues are too often viewed
through the lens of jobs and pet projects to protect in congressional districts. But the overall health of the firms that supply the technologies
our armed forces utilize does have national security resonance. Qualitative superiority in weaponry and other key military
technology has become an essential element of American military power in the modern era— not only for
winning wars but for deterring them. That requires world-class scientific and manufacturing
capabilities
- which in turn can also generate civilian and military export opportunities for the United States in a globalized
marketplace.
That makes war obsolete – it’s the ultimate deterrent
Taylor 04 (Mark, Professor of Political Science – Massachusetts Institute of Technology, “The Politics of Technological Change:
International Relations versus Domestic Institutions”, 4-1, http://www.scribd.com/doc/46554792/Taylor)//NR
Technological innovation is of central importance to the study of international relations (IR), affecting almost every aspect of the subfield. 2 First and foremost, a nation’s technological capability has a significant effect on its economic growth, industrial might, and
military prowess; therefore relative national technological capabilities necessarily influence the balance of power between
states, and hence have a role in calculations of war and alliance formation. Second, technology and innovative capacity also determine a
nation’s trade profile, affecting which products it will import and export, as well as where multinational corporations will base their production
facilities. 3 Third, insofar as innovation-driven economic growth both attracts investment and produces surplus capital, a nation’s technological
ability will also affect international financial flows and who has power over them. 4 Thus, in broad theoretical terms, technological change is
important to the study of IR because of its overall implications for both the relative and absolute power of states. And if theory alone does not
convince, then history also tells us that nations on the technological ascent generally experience a corresponding and dramatic change in their
global stature and influence, such as Britain during the first industrial revolution, the United States and Germany during the second industrial
revolution, and Japan during the twentieth century. 5 Conversely, great powers which fail to maintain their place at the technological frontier
generally drift and fade from influence on international scene. 6 This is not to suggest that technological innovation alone determines
international politics, but rather that shifts in both relative and absolute technological capability have a major impact on international
relations, and therefore need to be better understood by IR scholars. Indeed, the politics. 7 At the very least, they describe it as an essential part
of the distribution of material capabilities across nations, or an indirect source of military doctrine. And for some, like Gilpin quoted above,
technology is the very cornerstone of great power domination, and its transfer the main vehicle by which war and change occur
in world politics. 8 Jervis tells us that the balance of offensive and defensive military technology affects the incentives for war.
9 Walt agrees, arguing that technological change can alter a state’s aggregate power, and thereby affect both alliance formation and the
international balance of threats. 10 Liberals are less directly concerned with technological change, but they must admit that by raising or lowering
the costs of using force, technological progress affects the rational attractiveness of international cooperation and regimes. 11 Technology also
lowers information & transactions costs and thus increases the applicability of international institutions, a cornerstone of Liberal IR theory. 12
And in fostering flows of trade, finance, and information, technological change can lead to Keohane’s interdependence 13 or Thomas Friedman et
al’s globalization. 14 Meanwhile, over at the “third debate”, Constructivists cover the causal spectrum on the issue, from Katzenstein’s “cultural
norms” which shape security concerns and thereby affect technological innovation; 15 to Wendt’s “stripped down technological determinism” in
which technology inevitably drives nations to form a world state. 16 However most Constructivists seem to favor Wendt, arguing that new
technology changes people’s identities within society, and sometimes even creates new cross-national constituencies, thereby affecting
international politics. 17 Of course, Marxists tend to see technology as determining all social relations and the entire course of history, though
they describe mankind’s major fault lines as running between economic classes rather than nation-states. 18 Finally, Buzan & Little remind us
that without advances in the technologies of transportation, communication, production, and war, international systems would not exist in the first
place.
2NC Internal Link
Sustained low gas prices force producers to halt natgas production
Bhandaru, 04/16/2014 (Kshitija Bhandaru, Market Realist correspondent, “Why US rig counts continue to rise, driven by oil
rigs”, Market Realist, 04/16/2014, http://marketrealist.com/2014/04/total-us-rig-count-increases-oil-rigs-cross-1500-gas-rigs-continue-decliningstreak/)
Natural gas rigs continue to fall, down to the lowest points of the year Last week, Baker Hughes reported yet another
reduction in the natural gas rig count. Gas rig counts decreased from 316 to 310—the lowest since the shale revolution.
Natural rigs have fallen sharply over the past few months, as rig counts were at 372 at the beginning of 2014 and have declined by 62 to current
levels of 310. As
per the most recent report, the number of natural gas-directed rigs is at its lowest level since
May 5, 1995, and is down 62% from its recent peak of 811, achieved in 2012. Baker Hughes stated on its latest earnings call that it
anticipates that 2014 will exit with U.S. natural gas rigs drilling totaling ~360, somewhat above current levels. Background: Natural gas
rigs have fallen sharply over the past few years due to low prices Through 2014, natural gas rigs fell from 372 to 310, a
drop of ~17%, with most of the decline from the Cana Woodford (-10), the Marcellus (-7), and other areas outside of the major classified plays (20). From a long-term perspective, natural
gas rigs have been largely falling or remained flat since October 2011 in
response to sustained low natural gas prices (see the natural gas price graph above). Low natural gas prices can
spur producers to stop drilling for natural gas. Natural gas rigs drilling can indicate the sentiment of
major natural gas producers such as Chesapeake Energy (CHK), Comstock Resources (CRK), Southwestern Energy (SWN), and
Range Resources (RRC). Many of these names are also part of energy ETFs such as the S&P Oil & Gas Exploration & Production ETF (XOP).
Despite the recent rally in natural gas prices, prices remain relatively low from a long-term historical context.
Low natural gas prices force producers to gut production levels
IG, 2012 (Indiana Gasification, “Natural Gas: Low Prices May Prove Unsustainable”, Indiana Gasification, 08/22/2012,
http://indianagasification.com/natural-gas-low-prices-may-prove-unsustainable/)
It is no surprise that major
natural gas producers are reporting bleak earnings results and shifts in business
strategy due to low natural gas prices. Energy expert and geologist Arthur E. Berman has stated that “natural gas operators
require at least $7.00 per mcf on average to break even in the shale plays.” Chesapeake Energy Corp., the nation’s
second-largest producer and self-proclaimed “America’s champion of natural gas,” has sold key assets because of
tumbling natural gas prices and recently announced it would reduce natural gas output by 7 percent in
2013, ending 23 consecutive years of gas production growth. Encana Corp., America’s second-largest gas
producer, posted a $1.5 billion second-quarter loss and responded by closing down 500 million cubic feet of
production a day. Shell America reported a dip in earnings after its prices of U.S. natural gas fell 52 percent yet world prices increased 2
percent in the second quarter of 2012. BG Group profits fell 77 percent in the second quarter of 2012 after writing down the
value of its U.S. natural gas assets by $1.3 billion, post-tax. Yet profits on higher worldwide liquefied natural gas prices increased. BG will
refocus its U.S. efforts on exporting natural gas while scaling back on drilling in the U.S. “We don’t think the [current] gas price range will last,”
Statoil Chief Executive Helge Lund told The Wall Street Journal.
Sustained low prices create a vicious drilling cycle that makes industry collapse inevitable
Callahan 2012 (Jonathan Callahan, PhD chemist who has worked for 20 years as a data analyst expert for the NOAA, NASA, and EPA,
February 6, 2012. “Gas Boom Goes Bust.” http://www.theoildrum.com/node/8900)//NR
The current boom in drilling for ‘unconventional’ gas has helped raise US production to levels not seen
since the early 1970′s. This has been an incredible boon to consumers and has kept spot prices contained below $5 per million BTU for
the past year, recently dropping below $3/mmbtu. Unfortunately, this price is below the cost of production for many of
these new wells. When the flood of investment currently pouring into natural gas drilling operations dries
up, the inevitable bust will be as scary as the boom was exciting. Gas shale wells are expensive to drill
and complete as well are the cost of the leases on which they are drilled. Even though initial gas production from shale wells is
huge, the low price has depressed the amount of cash companies are receiving. As a result, producers are
spending well in excess of their cash flows. To supplement cash flow, producers have engaged in every known
trick in the finance book to boost available funds. These tactics include hedging forward future production whenever
high prices are available, tapping Wall Street to raise equity and debt, and seeking out relationships such as joint
ventures with
larger, and often foreign, oil and gas companies. In order to access Wall Street capital, producers have needed to
demonstrate that they are being successful in exercising a strategy for aggressive wealth creation. That means aggressively buying acreage and
drilling wells. Exercising a successful strategy often creates
a vicious cycle – more acreage and wells equals
increased production and depressed prices. This cycle will continue as long as the music (Wall Street’s money)
continues to flow. Once that stops, we will see how many producers can find a chair in the room. In the meantime, the fun continues!
Sustained low natgas prices create a vicious cycle that devastates the natural gas industry- squo
solves as the industry is cutting back and stabilizing production, but new drilling reverses this
Richter 2012 (Wolf Richter, writer on energy policy for Testosterone Pit, a website with cynical perspectives on economic, financial, and
business sectors, May 23, 2012. “The Natural Gas Massacre Gets Bloodier.” http://www.testosteronepit.com/home/2012/5/23/the-natural-gasmassacre-gets-bloodier.html)//NR
Fracking, which allows drillers to get gas and oil from shale deep underground, triggered a revolution. Gas
production in the US has been setting new highs, and as
supply overwhelmed demand, prices have collapsed. Gas in
storage is at a record high for this time of the year, and some doom-and-gloom prophets maintain that storage will reach capacity this
fall, and that producers won’t be able to get rid of their gas and will have to flare it, pushing its price to zero.
However, natural gas for June delivery settled on Wednesday at $2.73 per million Btu on the New York Mercantile Exchange. A 44% jump from
its April 19 low of $1.90 per million Btu, but still only half the five year average, and below the already low price at the beginning of the year. As
this chart shows, the recent uptick isn’t much of a salvation for the beleaguered drillers. In fracking, during the initial phase of production, high
pressure blows a huge quantity of gas out the well—and the quantity of the first 24 hours, the “initial production,” is bandied about to investors
and lenders, who are so impressed. Alas, it’s the most the well will ever produce in a 24-hour period. As pressure drops, gas production drops
precipitously. All wells have decline rates. But instead of declining gradually over decades, shale gas wells decline
sharply over days, weeks, and months. After a year, production may be down by 80%, and after a year and a half by 90%. But
the outsized production early in the lifecycle allows drillers to show a big upfront profit. To conceal the decline rates, they drill
another well. And another well, and so on. The more they drill, the more they have to drill to hide the
drop-off in production of the prior wells—ad infinitum! Which is impossible. But drillers kept it up
long enough to get prices to collapse. And then, what caught up with them was ... reality. The industry even has a term for it:
Ultimate Economic Recovery (UER), the quantity of gas a well produces over its life. Since no shale gas wells have lived through the entire
lifecycle yet, UER numbers have to be estimated, and they now appear to be much lower than the initial industry estimates that were mostly hype.
Whether or not a well is profitable over its life depends on the UER, the cost of drilling and maintaining the well, and the price of gas during that
time. An excellent pricing model for the Barnett Shale field determined that a well might become profitable over its life if gas is at $8 per million
Btu. Even if the model is off a bit, it shows that the industry has been fracking at a steep loss for years. But due to the way gas
drillers account for their wells by front-loading profits, the
pain has mostly shown up in their ballooning debt and their
current negative operating cash flows. Hence, Chesapeake's dire situation. Drillers have shifted whenever possible from drilling for
natural gas to drilling for oil, which is still highly profitable. And so, the rig count for gas wells has been heading south, from
over 900 last fall to 600 last week (Baker Hughes). Turns out, the shale gas revolution is an uneconomic activity even at much higher prices and
is sustainable only for a limited time and only by blowing through loads of borrowed money. Now debt has piled up, cash flow is
negative, and solvency risks are gathering on the horizon. With money running out to drill new wells, the steep
production declines inherent in all shale gas wells are oozing into P&L statements, and suddenly, all that debt that made so much sense a
year or two ago is unmanageable. Assets have to be sold off in a hurry, drilling diminishes further, and a vicious cycle overtakes the
false promises of yore. And production, which lags behind rig count movements, will drop, and drop steeply. Meanwhile, the
low price of gas has bent the demand curve: utilities are shifting massively from coal to gas for power generation. Their demand is eating
through the record amount in storage and will clash later this year with diminishing production. It’s a classic
example of how a price that is too low will spike, but only after a monumental massacre in the industry.
Sustained low prices collapse the natural gas industry- wells need 4-5$ to remain afloat
The Economist 2013 (The Economist, a multinational media company headquartered in London, United Kingdom which specializes in
international business and world affairs information, March 2, 2013. “Bonanza or Bane: Natural-Gas prices are sure to rise- eventually.”
http://www.economist.com/news/finance-and-economics/21572815-natural-gas-prices-are-sure-riseeventually-bonanza-or-bane)//NR
THE shale gas billowing out of American soil is a source of concern as well as cheap energy. Environmentalists worry that
fracking, the technique for dislodging gas from shale beds, may pollute the air and local water supplies. The glut of natural gas has a less likely
set of victims, too. Instead of banking handsome profits, many of the oil and gas firms that drill for shale gas
are suffering from the boom. Abundant supplies and slow growth in demand have sent gas prices
crashing. In 2008 shale gas fetched $12 per million BTU (British thermal units) at Henry Hub, a crossroads of pipelines in Louisiana that
serves as the main pricing point for the gas in America. Since then the frackers have been hard at work. From next to nothing shale now provides
a quarter of supplies. The rapid rush of gas onto the market has sent prices tumbling (see chart). After
falling to below $2 per mBTU in
have now nudged back to $3.40. But for many drillers this is still not enough. Most gas
wells require $4 or more to cover costs. Share prices have tumbled for firms such as Chesapeake Energy, Devon Energy and
early 2012, prices
Southwestern Energy. Asset sales to help pay debts racked up by drilling wells have become the norm—on February 25th Chesapeake announced
the sale of a stake in land containing wells as part of its efforts to raise $7 billion this year. The pain looks likely to persist. Analysts reckon that
gas has a “sweet spot”, where drillers can make money while consumers still feel little pain, of around $5-6 per
mBTU. But the economics of American shale beds means getting there will take time. To
cork the flow firms have shut down
some existing wells and stopped investment in new ones. But some leases with the owners of land that sits atop reserves
dictate that gas (and royalties) must flow regardless of prices. Intensive drilling in 2010 and 2011 has left a huge stock of wells that have been
paid for but are yet to be hooked up to local pipelines. Some producers have also contracted to deliver gas at higher prices, which keeps the stuff
flowing.
2NC Economy Impact:
Slow growth causes war—statistics
Royal 2010 (Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department of Defense, 2010, “Economic Integration,
Economic Signaling and the Problem of Economic Crises,” in Economics of War and Peace: Economic, Legal and Political Perspectives, ed.
Goldsmith and Brauer, p. 213-214)
Less intuitive is how periods of economic decline may increase the likelihood of external conflict . Political science
literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of
interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow.
First, on the systemic level, Pollins (2008) advances Modelski and Thompson's (1996) work on leadership cycle theory, finding that rhythms in
the global economy are associated with the rise and fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the
next. As such, exogenous
shocks such as economic crises could usher in a redistribution of relative power (see also
Gilpin. 1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Feaver, 1995).
Alternatively, even a relatively certain redistribution of power could lead to a permissive environment for conflict as a rising power may seek to
challenge a declining power (Werner. 1999). Separately, Pollins (1996) also shows that global economic cycles combined with parallel leadership
cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and connections between
global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copeland's (1996, 2000) theory of trade
expectations suggests that 'future expectation of trade' is a significant variable in understanding economic conditions and
security behaviour of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic
view of future trade relations. However, if
the expectations of future trade decline, particularly for difficult to replace items such
as energy resources, the likelihood for conflict increases, as states will be inclined to use force to gain access to those
resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it triggers protectionist moves by
interdependent states.4 Third, others have considered the link between economic decline and external armed conflict at a national level.
Blomberg and Hess (2002) find a strong correlation between internal conflict and external conflict,
particularly during periods of economic downturn. They write: The linkages between internal and external conflict and prosperity
are strong and mutually reinforcing. Economic conflict tends to spawn internal conflict, which in turn returns the favour. Moreover, the presence
of a recession tends to amplify the extent to which international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89)
Economic decline has also been linked with an increase in the likelihood of terrorism (Blomberg, Hess, & Weerapana, 2004), which has the
capacity to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government.
"Diversionary theory" suggests that, when facing unpopularity arising from economic
decline, sitting governments have
increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang (1996), DeRouen
(1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly
correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the tendency towards diversionary
tactics are
greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being
removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic
performance in the United States, and thus weak Presidential popularity, are statistically linked to an increase in the
use of force. In summary, recent economic scholarship positively correlates economic integration with an increase in the frequency of
economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels.5 This
implied connection between integration, crises and armed conflict has not featured prominently in the economic-security debate and deserves
more attention.
Links
Supply Link
1NC
Drilling is being cut now- plan’s new supply creates a natgas glut that tanks industry prices
Gill 2012 (Dee Gill, writer for Forbes and editor for the YCharts Pro investor service, March 15, 2012. “Natural gas glut killing drillers and
enriching fertilizer companies.” http://www.forbes.com/sites/ycharts/2012/03/15/natural-gas-glut-killing-drillers-and-enriching-fertilizercompanies/)//NR
Natural gas production is booming, but prices for the stuff aren’t, which is problematic for investors who
paid
up for driller stocks last year. But it’s great news for fertilizer companies that put it into the ground rather than suck it out. And those
companies are offering shares at sale prices now. Natural gas producer shares — big names include Chesapeake (CHK), Anadarko
(APC), Devon (DVN) and EnCana (ECA) — generally have moved down in the past year as the price of natural gas sank to a 10year low. For the most part, fertilizer company prices haven’t been much to write home about either. Their profit margins, however, have
greatly improved. Fertilizer companies don’t exactly live or die off the cost of natural gas, but it’s a key component in many of their products.
The chart below shows the change in operating profit margins as opposed to actual margins. Natural
gas drillers did not expect gas
prices to spend so much time in descent mode. They all started expensive domestic drilling projects a couple of years ago when
prices were close to $5 per million BTU instead of today’s $2.50. Higher demand as China’s fuel needs rise and Germany looks for alternatives to
nuclear power are supposed to greatly increase demand for natural gas, at least over decades. But with
a glut on the market now and
worries of low prices extending for years, most companies have cut drilling plans for 2012.
Offshore Natural Gas:
1NC:
*Note- if the aff is reading an offshore drilling aff, you shouldn’t have to do a lot of work on this
flow bc they will probably have to concede in order to get access to their advantages that the plan’s
investment lowers prices/increases domestic supply*
Offshore natgas is uniquely key to sustained low prices
Pirog 2012 [Robert Pirog Specialist in Energy Economics CRS, http://assets.opencrs.com/rpts/R40645_20120210.pdf]//NR
Natural gas markets differ from the oil market in that they are not global, but regional. As shown in Table 6,
above, virtually all U.S. natural gas consumption comes from U.S. or Canadian sources. The only link between regional natural gas markets is through LNG, but the
rapidly growing market for LNG predicted earlier in this decade has failed to materialize. LNG is still largely
characterized by long-term, two-party supply and purchase agreements. In the North American market, LNG plays the role of making up marginal short-falls in the
demand and supply balance. As
production from domestic onshore shale gas deposits increases, the role of LNG in
the U.S. market will likely be small. In this regional market structure, the development of new, offshore
U.S. supplies could have a significant impact on the domestic price of natural gas, as well as contributing to U.S.
energy independence of this fuel. Although the price of natural gas has not shown the same degree of volatility as oil, the United States has been
among the highest-priced regions in the world. High prices have caused residential consumers to allocate a greater portion of their budgets
to home heating expenses. Industrial users either lose sales to overseas competitors, or cease U.S. production when
domestic natural gas prices rise too much beyond those observed in other regions of the world. The
development of offshore natural gas resources is likely to further retard the development of a growing
LNG system in the United States. Terminals for the re-gasification of LNG have proven to be difficult to site and permit, and expensive to build. If
domestic natural gas resources, close to existing collection and distribution systems, at least in the Gulf of Mexico, could be developed, the LNG terminals might
prove to be redundant, depending on the volumes of natural gas that ultimately might be recovered. Offshore natural gas development, though commonly associated
with offshore oil production, will likely be less competitive in a market environment dominated by onshore shale gas development.
2NC:
Offshore natural gas resources would drastically increase domestic supply- squo
won’t produce it though
Luthi, 11/9/12 [Luthi is the president of the National Ocean Industry Association, representing more
than 275 companies engaged in all aspects of the exploration and production of both traditional and
renewable energy resources on the nation’s outer continental shelf, “Let's find agreement on new
offshore access”, http://thehill.com/blogs/congress-blog/energy-a-environment/267089-lets-findagreement-on-new-offshore-access]
Now that the election is (finally) behind us, President Obama has an opportunity to set the nation more forcefully on the road to energy independence. We’re well on
our way thanks in large part to new techniques and technologies that have
unlocked vast deposits of shale oil and natural gas. But we
be doing much more. Back in June, the Interior Department issued its five-year Outer Continental Shelf
(OCS) oil and gas leasing plan. Despite high expectations encouraged by President Obama’s self-described “all-of-the-above” approach to the nation’s energy
policy and the absence of long-standing Administrative and Congressional exploration bans that were lifted in 2008, the plan failed to open any new
offshore areas to oil and natural gas exploration and production. The industry is still limited to the same 15
percent of the acreage on the OCS that’s been available for decades, leaving 85 percent untouchable. Don’t
could and should
get me wrong. That 15 percent has been incredibly productive. In fact, the Gulf of Mexico region, which is the heart of America’s offshore oil and gas industry, has
yielded six times more oil than 1980s resource estimates predicted it held. Production in the Gulf is finally ramping back up now that permitting rates are bouncing
back from historic lows following the Macondo spill in 2010. We have every reason to believe that the areas where we can explore and produce will continue to
we will continue to advocate
that the Obama Administration streamline and accelerate permitting on these acres of the OCS. We will also fight to put to rest
support and create jobs and contribute to America’s energy security for years and even decades to come. For this reason,
once and for all the erroneous claims that the industry is “sitting on” offshore tracts, a red herring that surfaced again during the presidential debates. In fact, the
success industry has crafted out of the 15 percent of the OCS currently open to exploration and production underscores why the Interior Department’s 5-Year Leasing
Plan was so disappointing. Think
of how much energy awaits us in the 85 percent of the offshore areas where we
currently cannot explore or produce. One report by the Interstate Oil and Gas Compact Commission, conducted several years ago, estimates
recoverable resources in “U.S. moratorium areas” of 19.29 billion barrels of oil and 83.5 trillion cubic feet
of natural gas. If history is any guide, these estimates will prove to be very conservative. The frustrating truth is
we have no idea how much is waiting for us there, because we’re not allowed to go look.
The plan drastically lowers natgas prices- squo keeps them steady
Hastings, 12 [House Representative Doc, Republican Washington, President Obama's offshore drilling
plan must be replaced, http://thehill.com/blogs/congress-blog/energy-a-environment/239529-presidentobamas-offshore-drilling-plan-must-be-replaced]
Though President Obama uses lofty rhetoric to claim support for American oil and natural gas production, the
administration chose to bury the announcement of this plan under mountains of news coverage. It’s no surprise that during an
election year the president doesn’t want to hype a plan that represents a giant step backwards for American energy production and
keeps 85 percent of our offshore areas off-limits. Fortunately, Congress now has the responsibility to act and make clear that the
president’s plan is inadequate to meet the United States’ energy needs. Under current law, the president must submit the five-year
plan to Congress for a mandatory 60-day review before it goes into effect. While in the past, this 60-day review has been treated as just a formality, it is an opportunity
to reject the president’s plan and offer a better alternative for job creation and energy production. H.R. 6082, the Congressional Replacement of President Obama’s
Energy-Restricting and Job-Limiting Offshore Drilling Plan, would replace President Obama’s plan with an environmentally responsible, robust plan that supports
new offshore drilling. This plan passed out of the House Natural Resources Committee with bipartisan support and will be considered by the full House this week. It
sets up a clear choice between the president’s drill-nowhere-new plan and the Congressional replacement plan to responsibly expand offshore American energy
President Obama’s plan doesn’t open one new area for leasing and energy production. The Atlantic
Coast, the Pacific Coast and most of the water off Alaska are all placed off-limits. This is especially frustrating for
production.
Virginians who had a lease sale scheduled for 2011, only to have it canceled by President Obama. The president added further insult to injury by not including the
Virginia lease sale in his final plan, meaning the earliest it could happen is late 2017. The president’s plan only offers 15 lease sales limited to the Gulf of Mexico
and, very late in the plan, small parts of Alaska. It doesn’t open one new area for leasing and energy production. According to the non-partisan Congressional
Research Service, President Obama’s 15 lease sales represent the lowest number ever included in an offshore leasing plan. President Obama rates worse than even
Jimmy Carter. Thanks to President Obama, it’s as if the bipartisan steps to lift the drilling moratoria in 2008 never happened. Crippling $4 gasoline prices sparked
Americans’ outrage and pressured the Democrat-controlled Congress to allow legislation to pass opening up new offshore areas to drilling. Unfortunately, four years
later, American families and small businesses are experiencing the pain of higher gasoline prices and yet no progress has been made to expand production of our
offshore resources. The Congressional moratorium on drilling has simply been replaced by the “Obama moratorium” on drilling. Gasoline prices were $1.89 when
President Obama took office, and prices today are nearly double. Americans will continue to face volatile price spikes as long as we continue to keep the United
States’ energy resources under lock-and-key. In stark contrast to the president, the
Congressional replacement plan includes 29 lease sales and
a targeted effort towards those areas where we know we have the most
oil and natural gas resources – like the mid-Atlantic, the Southern California Coast and Alaska. This is a drill smart plan that would create
thousands of new American jobs, help lower prices at the pump and strengthen our national and economic security.
Congress has a choice – to either support the president’s plan that re-imposes the drilling moratorium and places the vast majority of offshore areas offlimits, or support using American energy to create American jobs and strengthen America’s economy.
opens new areas previously under moratoria. It’s
Offshore drilling increases domestic supply- collapses prices
Pirog and Ratner 2012 (Robert Pirog, Specialist in Energy Economics, and Michael Ratner, Specialist in Energy Policy, Congressional
Research Service, November 6, 2012. “Natural Gas in the U.S. Economy: Opportunities for Growth.”
http://fas.org/sgp/crs/misc/R42814.pdf)//NR
Other legislative or regulatory policies could impact the natural gas market. For example, if legislation
or regulation required tight carbon emission limits for electric power generators and the price of natural
gas was low, a large increase in demand might be expected. Increases in demand from any source tend to
raise prices. However, the price increases would tend to lead to increased development of natural gas
resources and increased supply. If offshore drilling opportunities were expanded, as oil and natural
gas were discovered, domestic supplies would increase, causing the price of natural gas to fall.
Falling prices would benefit consumers in the short-term, but would likely reduce the development of onshore shale resources in the longer term, depending upon which sources had lower costs. These two
examples show that unintended consequences of policy decisions could affect natural gas markets.
The results could upset the calculation of net economic benefits that the United States might expect to
experience from development of the expanded shale gas resource base.
Methane Hydr
1NC:
Methane hydrates would collapse the global oil market- they are incredibly abundant and cheap
Westenhaus 2012 (Brain Westenhaus, writer for OilPrice.com a blog on oil and energy news, May 9, 2012. “Abundance of
Methane Hydrates will destroy the Oil Market.” OilPirce.com, http://oilprice.com/Energy/Natural-Gas/Abundance-ofMethane-Hydrates-will-Destroy-the-Oil-Market.html)//NR
U.S. Department of Energy (DOE) Secretary Steven Chu contributed a statement to an announced breakthrough in research into tapping
the
vast fuel resource of methane hydrates that could eventually bolster already massive U.S. natural gas reserves.
As Al Fin pointed out yesterday natural gas is priced to a barrel of oil equivalent at about $10-$11 per the estimable Geoffrey Styles view,
something less than 10% of the cost of oil. For North Americans adding a viable and hopefully low cost means to make use of gas
hydrates could be giant boost to low cost fuel sources and a massive kick to the economy. For experts the
methane hydrates resource is the largest reserve of hydrocarbons in the planetary crust. So far humanity has not
devised a process to economically harvest this immense energy wealth. Today’s DOE announcement may point the way to a new era in abundant
energy to build out a bigger and better world economy. By injecting a mixture of carbon dioxide and nitrogen into a methane hydrate formation
(pdf link) on Alaska’s North Slope, the DOE partnering with ConocoPhillips and Japan Oil, Gas and Metals National Corp was able to produce a
steady flow of natural gas in the first field test of the new method. The test was done from mid-February to about mid-April this year. The
department said it would likely be years before production of methane hydrates becomes economically viable. Secretary Chu said in his
statement, “While this is just the beginning, this research could potentially yield significant new supplies of natural gas.” Methane hydrates are
cold ice crystal-like structures that contain methane the chemical of natural gas. The hydrates are located under the Arctic permafrost and in
ocean sediments along the continental shelf and widely spread worldwide. Gerald Holder, dean of the engineering program at University of
Pittsburgh, who has worked with the DOE’s National Energy Technology Laboratory on the hydrate issue, said before the announcement he had
been sceptical about what researchers would be able to accomplish. He said the main problem until now was finding a way to extract natural gas
from solid hydrates without adding a whole lot of steps that made the process too expensive, which makes the success of this new test significant.
“It makes the possibility of recovering methane from hydrates much more likely. It’s a long way off, but this could have huge impact on
availability of natural gas,” said Holder. While everyone is suggesting that methane hydrate production is some time in the future, we might note
that a partner is from Japan, a country that has been buying via imports virtually all its energy and fuel inputs. A glance at the map of potential
reserves shows that Japan may well pour on the intellectual and financial power to get results much quicker than many expect. On the other hand,
for North Americans natural gas is ratcheting down to dirt cheap, with more resources with the new horizontal drilling and reserve fracturing
available on land and significant amounts of natural gas at sea in already developed areas. For everyone the matter of coming up with the CO2 for
the injection is going to be a significant issue. First just gathering it remains a significant problem. Making it from – natural gas – is the preferred
method today. That raises the question if the CO2 injected is lost to sequestration or is it recycled for reuse, or what proportion is being lost or
recycled? CO2 is very useful and it may become a valuable resource in its own right very soon. Abundance makes a lot of things that weren’t
viable at a price possible at lower costs. Abundant fission or cold fusion could make electrolysis viable freeing hydrogen for adding to coal for
both liquid fuels and CO2 sources. Scaling could make such concepts usual and common thinking very quickly. For now though the DOE and
partner’s news is very gratifying. It must be giving the futurists at OPEC an OMG moment, again. Things are going to be
changing. Let’s hope the DOE and the partners spill some more info soon so we can have a better look.
2NC:
Methane hydrates solve for energy independence- abundance
Anderson 2014 (Richard Anderson, Business Reporter for the BBC News, April 16, 2014. “Methane hydrate: Dirty fuel or energy savior?”
http://www.bbc.com/news/business-27021610)//NR
The side-effects, however, are potentially devastating; burning fossil fuels emits the CO2 linked to global
warming. And as reserves of oil, coal and gas are becoming tougher to access, governments are looking
ever harder for alternatives, not just to produce energy, but to help achieve the holy grail of all sovereign
states - energy independence. Some have discovered a potential saviour, locked away under deep ocean
beds and vast swathes of permafrost. The problem is it's a hydrocarbon, but unlike any other we know.
Huge reserves Otherwise known as fire ice, methane hydrate presents as ice crystals with natural methane
gas locked inside. They are formed through a combination of low temperatures and high pressure, and are
found primarily on the edge of continental shelves where the seabed drops sharply away into the deep
ocean floor, as the US Geological Survey map shows. And the deposits of these compounds are
enormous. "Estimates suggest that there is about the same amount of carbon in methane hydrates as there
is in every other organic carbon store on the planet," says Chris Rochelle of the British Geological
Survey. In other words, there is more energy in methane hydrates than in all the world's oil, coal and gas
put together. By lowering the pressure or raising the temperature, the hydrate simply breaks down into
water and methane - a lot of methane. One cubic metre of the compound releases about 160 cubic metres
of gas, making it a highly energy-intensive fuel. This, together with abundant reserves and the relatively
simple process of releasing the methane, means a number of governments are getting increasingly excited
about this massive potential source of energy.
Impacts
Clean Tech Scenario
1NC Clean Tech Impact
And, the plan sustains low natural gas prices- undermines renewable energy transition- kills
political will and undercuts prices
Harris 2012 (Richard Harris, journalist on npr, bachelor’s degree in biology from Crown college, co-founder on the Area Science Writers
Association, February 2, 2012. “Could Cheap Gas Slow Growth of Renewable Energy?” http://www.npr.org/2012/02/02/146297284/couldcheap-gas-slow-growth-of-renewable-energy)//NR
The boom in cheap natural gas in this country is good news for the environment, because relatively clean gas is replacing dirty coal-fired power
plants. But in the long run, cheap natural gas could slow the growth of even cleaner sources of energy, such as wind
and solar power. Natural gas has a bad rap in some parts of the country, because the process of fracking is not popular. But many people looking
at cheap natural gas from the global perspective see it as a good thing. Henry Jacoby, an economist at the Center for Energy and Environmental
Policy Research at MIT, says cheap energy will help pump up the economy. "Overall, this is a great boon to the United States," he says. "It's not a
bad thing to have this new and available domestic resource." He says cheap energy can boost the economy, and he notes that natural gas is half as
polluting as coal when it's burned for electricity. "But we have to keep our eye on the ball long-term," Jacoby says. He's concerned about how
cheap gas will affect much cleaner sources of energy. Wind
and solar power are more expensive than natural gas, and
though those prices have been coming down, they're chasing a moving target that has fallen fast: natural
gas. "It makes the prospects for large-scale expansion of those technologies more chancy," Jacoby says.
Natural Gas: 'A Bridge To Nowhere'? From an environmental perspective, natural gas could help transition our economy from fossil fuels to
clean energy. It is often portrayed as a bridge fuel to help us through the transition, because it's so much cleaner than coal and it's
abundant. But Jacoby says that bridge could be in trouble if cheap gas kills the incentive to develop
renewable industry. "You'd better be thinking about a landing of the bridge at the other end. If there's no landing at the other end, it's
just a bridge to nowhere," he says. In the short run, at least, the wind industry isn't too worried about this. Denise Bode, who heads the
American Wind Energy Association, says low gas prices don't undercut current prices for wind, because those are mostly fixed by 20-year
contracts, not market prices. And even if wind is a bit more expensive than natural gas, she says utilities still want it in their mix. Windmills aren't
subject to changing fuel prices, so the cost of production is quite predictable. That's not true for natural gas — there's
no guarantee
that today's cheap prices will stay as low as some predict. "It's very difficult to really know how certain that is, so you always
want to balance that with something that is certain," Bode says. Reducing Political Will For Renewables? What really worries her isn't natural gas
— it's politics. Wind could lose a huge tax break at the end of this year. And that would have a much more dramatic effect than low natural gas
prices. "You'll see very low numbers" for new wind installations if the federal production tax credit expires," Bode says. "In fact, I think EIA [the
U.S. Energy Information Administration] projects almost zero for 2013." The solar industry's subsidies run for several more years, so they are not
in that bind, at least not yet. But Trevor Houser, an energy analyst at the Rhodium Group, says these tax credits and other incentives like state
renewable standards are key if renewables are to grow and mature during the natural-gas glut. "Long-term
renewable deployment in
the U.S. is going to depend primarily on policy," Houser says. "Is there enough concern about environmental consequences to
put in place incentives for renewable energy?" That partly depends on how much of a premium people and companies will be willing to pay for
cleaner energy. Right now, with
natural gas so cheap, that premium is fairly substantial. "If those prices hang around for
another three or four years, then I think you'll definitely see reduced political will for renewable energy
deployment, " Houser says. "But we don't expect prices that low to hang around that long, because low prices are in many
ways self-correcting." Gas is so cheap now that companies that produce it are struggling to make a profit. So Houser expects prices to move up.
That will help close the price gap between gas and renewable energy. Even so, there's still a huge way to go before prices and government
policies do enough to significantly reduce emissions of the gases that contribute to global warming.
Clean tech development is k2 global and economic primacy
Klarevas 2009 (Professor of Global Affairs Louis, Professor at the Center for Global Affairs – New York University, “Securing
American Primacy While Tackling Climate Change: Toward a National Strategy of Greengemony”, Huffington Post, 12-15,
http://www.huffingtonpost.com/louis-klarevas/securing-american-primacy_b_393223.html)
By not addressing climate change more aggressively and creatively, the United States is squandering
an
opportunity to secure its global primacy for the next few generations to come. To do this, though, the U.S. must rely on
innovation to help the world escape the coming environmental meltdown. Developing the key
technologies that will save the planet from global warming will allow the U.S. to outmaneuver potential
great power rivals seeking to replace it as the international system's hegemon. But the greening of
American strategy must occur soon. The U.S., however, seems to be stuck in time, unable to move beyond oilcentric geo-politics in any meaningful way. Often, the gridlock is portrayed as a partisan difference, with Republicans resisting
action and Democrats pleading for action. This, though, is an unfair characterization as there are numerous proactive Republicans and quite a few
reticent Democrats. The real divide is instead one between realists and liberals. Students of realpolitik, which still heavily guides American
foreign policy, largely discount environmental issues as they are not seen as advancing national interests in a way that generates relative power
advantages vis-à-vis the other major powers in the system: Russia, China, Japan, India, and the European Union. Liberals, on the other hand, have
recognized that global warming might very well become the greatest challenge ever faced by mankind. As such, their thinking often eschews
narrowly defined national interests for the greater global good. This, though, ruffles elected officials whose sworn obligation is, above all, to
protect and promote American national interests. What both sides need to understand is that by becoming a lean, mean, green fighting machine,
the U.S. can actually bring together liberals and realists to advance a collective interest which benefits every nation, while at the same time,
securing America's global primacy well into the future. To do so, the U.S. must re-invent itself as not just your traditional hegemon, but as
history's first ever green hegemon. Hegemons are countries that dominate the international system - bailing out other countries in times of global
crisis, establishing and maintaining the most important international institutions, and covering the costs that result from free-riding and cheating
global obligations. Since 1945, that role has been the purview of the United States. Immediately after World War II, Europe and Asia laid in ruin,
the global economy required resuscitation, the countries of the free world needed security guarantees, and the entire system longed for a
multilateral forum where global concerns could be addressed. The U.S., emerging the least scathed by the systemic crisis of fascism's rise,
stepped up to the challenge and established the postwar (and current) liberal order. But don't let the world "liberal" fool you. While many nations
benefited from America's new-found hegemony, the U.S. was driven largely by "realist" selfish national interests. The liberal order first and
foremost benefited the U.S. With the U.S. becoming bogged down in places like Afghanistan and Iraq, running a record national debt, and failing
to shore up the dollar, the future of American hegemony now seems to be facing a serious contest: potential rivals - acting like sharks smelling
blood in the water - wish to challenge the U.S. on a variety of fronts. This has led numerous commentators to forecast the U.S.'s imminent fall
from grace. Not all hope is lost however. With the impending systemic crisis of global warming on the horizon, the U.S. again finds itself in a
position to address a transnational problem in a way that will benefit both the international community collectively and the U.S. selfishly. The
current problem is two-fold. First, the competition for oil is fueling animosities between the major powers. The
geopolitics of oil
has already emboldened Russia in its 'near abroad' and China in far-off places like Africa and Latin America. As
nasty zero-sum contest could be looming on the horizon for the U.S. and its major power rivals - a
contest which threatens American primacy and global stability. Second, converting fossil fuels like oil to run national economies is
oil is a limited natural resource, a
producing irreversible harm in the form of carbon dioxide emissions. So long as the global economy remains oil-dependent, greenhouse gases
will continue to rise. Experts are predicting as much as a 60% increase in carbon dioxide emissions in the next twenty-five years.
That likely means
more devastating water shortages, droughts, forest fires, floods, and storms. In other words, if
global competition for access to energy resources does not undermine international security, global
warming will. And in either case, oil will be a culprit for the instability. Oil arguably has been the most precious energy
resource of the last half-century. But "black gold" is so 20th century. The key resource for this century will be green gold - clean,
environmentally-friendly energy like wind, solar, and hydrogen power. Climate change leaves no alternative. And the sooner we realize this, the
better off we will be. What Washington must do in order to avoid the traps of petropolitics is to convert the U.S. into the world's first-ever green
hegemon. For starters, the federal government must drastically increase investment in energy and environmental research and development (E&E
R&D). This will require a serious sacrifice, committing upwards of $40 billion annually to E&E R&D - a far cry from the few billion dollars
currently being spent. By promoting a new national project, the U.S. could develop new technologies that will
assure it does not drown in a pool of oil. Some solutions are already well known, such as raising fuel
standards for automobiles; improving
public transportation networks; and expanding nuclear and wind power sources. Others, however, have not progressed much beyond
the drawing board: batteries that can store massive amounts of solar (and possibly even wind) power; efficient and cost-effective photovoltaic
cells, crop-fuels, and hydrogen-based fuels; and even fusion. Such innovations will not only provide
alternatives to oil, they will also give the U.S. an edge in the global competition for hegemony. If the U.S.
is able to produce technologies that allow modern, globalized societies to escape the oil trap, those nations will
eventually have no choice but to adopt such technologies. And this will give the U.S. a tremendous economic
boom, while simultaneously providing it with means of leverage that can be employed to keep potential foes in check.
2NC Hegemony Module
Hegemony is good – solves great power war and multiple flashpoints of conflict – also ensures
multilateral cooperation – retrenchment collapses it all
Ikenberry et. al 2013 (John Ikenberry, Ph. D in Political Science from Chicago, Professor of Politics and International Affairs at the
Woodrow Wilson School at Princeton University, Senior Fellow at the Brookings Institute, Co-Director of Princeton’s Center for International
Security Studies; William Wohlforth, Ph. D in Political Science from Yale, Webster Professor of Government at Dartmouth College; Stephen
Brooks, Ph. D in Political Science from Yale, Associate Professor of Government at Dartmouth College, Senior Fellow at the Belfer Center for
Science and International Affairs at Harvard University; “Don’t Come Home, America: The Case Against Retrenchment”,
http://live.belfercenter.org/files/IS3703_Brooks%20Wohlforth%20Ikenberry.pdf)
Assessing the Security Benefits of Deep Engagement Even if deep engagement’s costs are far less than retrenchment advocates claim, they are
not worth bearing unless they yield greater benefits. We focus here on the strategy’s major security benefits; in the next section, we take up the
wider payoffs of the United States’ security role for its interests in other realms, notably the global economy—an interaction relatively
unexplored by international relations scholars. A core premise of deep engagement is that it prevents the emergence of a far more
dangerous global security environment. For one thing, as noted above, the United States’ overseas presence gives it the leverage to
restrain partners from taking provocative action. Perhaps more important, its core alliance commitments also deter states with
aspirations to regional hegemony from contemplating expansion and make its partners more secure, reducing their incentive to adopt
solutions to their security problems that threaten others and thus stoke security dilemmas. The contention that engaged U.S. power dampens the
baleful effects of anarchy is consistent with influential variants of realist theory. Indeed, arguably the scariest portrayal of the war-prone
world that would emerge absent the “American Pacifier” is provided in the works of John Mearsheimer, who forecasts dangerous
multipolar regions replete with security competition, arms races, nuclear proliferation and associated preventive war
temptations, regional rivalries, and even runs at regional hegemony and full-scale great power war. 72 How do retrenchment
advocates, the bulk of whom are realists, discount this benefit? Their arguments are complicated, but two capture most of the variation: (1) U.S.
security guarantees are not necessary to prevent dangerous rivalries and conflict in Eurasia; or (2) prevention of rivalry and conflict in Eurasia is
not a U.S. interest. Each response is connected to a different theory or set of theories, which makes sense given that the whole debate hinges on a
complex future counterfactual (what would happen to Eurasia’s security setting if the United States truly disengaged?). Although a certain answer
is impossible, each of these responses is nonetheless a weaker argument for retrenchment than advocates acknowledge. The first response flows
from defensive realism as well as other international relations theories that discount the conflict-generating potential of anarchy under
contemporary conditions. 73 Defensive realists maintain that the high ex pected costs of territorial conquest, defense dominance, and an array of
policies and practices that can be used credibly to signal benign intent, mean that Eurasia’s major states could manage regional multipolarity
peacefully without the American pacifier. Retrenchment would be a bet on this scholarship, particularly in regions where the kinds of stabilizers
that nonrealist theories point to—such as democratic governance or dense institutional linkages—are either absent or weakly present. There are
three other major bodies of scholarship, however, that might give decisionmakers pause before making this bet. First is regional expertise.
Needless to say, there is no consensus on the net security effects of U.S. withdrawal. Regarding each region, there are optimists and pessimists.
Few experts expect a return of intense great power competition in a post-American Europe, but many doubt European governments will pay the
political costs of increased EU defense cooperation and the budgetary costs of increasing military outlays. 74 The result might be a Europe that
is incapable of securing itself from various threats that could be destabilizing within the region and beyond (e.g., a regional conflict
akin to the 1990s Balkan wars), lacks capacity for global security missions in which U.S. leaders might want European participation, and is
vulnerable to the influence of outside rising powers. What about the other parts of Eurasia where the United States has a substantial military
presence? Regarding the Middle East, the balance begins to swing toward pessimists concerned that states currently backed by
Washington— notably Israel,
Egypt, and Saudi Arabia—might take actions upon U.S. retrenchment that would intensify
security dilemmas. And concerning East Asia, pessimism regarding the region’s prospects without the American pacifier is pronounced.
Arguably the principal concern expressed by area experts is that Japan and South Korea are likely to obtain a nuclear
capacity and increase their military commitments, which could stoke a destabilizing reaction from China. It is notable that
during the Cold War, both South Korea and Taiwan moved to obtain a nuclear weapons capacity and were only constrained from doing so by a
still-engaged United States. 75 The second body of scholarship casting doubt on the bet on defensive realism’s sanguine portrayal is all of the
research that undermines its conception of state preferences. Defensive realism’s optimism about what would happen if the United States
retrenched is very much dependent on its particular—and highly restrictive—assumption about state preferences; once we relax this assumption,
then much of its basis for optimism vanishes. Specifically, the prediction of post-American tranquility throughout Eurasia rests on the assumption
that security is the only relevant state preference, with security defined narrowly in terms of protection from violent external attacks on the
homeland. Under that assumption, the security problem is largely solved as soon as offense and defense are clearly distinguishable, and offense is
extremely expensive relative to defense. Burgeoning research across the social and other sciences, however, undermines that core assumption:
states have preferences not only for security but also for prestige, status, and other aims, and they engage in trade-offs among the various
objectives. 76 In addition, they define security not just in terms of territorial protection but in view of many and varied milieu goals. It follows
that even states that are relatively secure may nevertheless engage in highly competitive behavior. Empirical studies
show that this is indeed sometimes the case. 77 In sum, a bet on a benign postretrenchment Eurasia is a bet that leaders of major countries will
never allow these nonsecurity preferences to influence their strategic choices. To the degree that these bodies of scholarly knowledge have
predictive leverage, U.S. retrenchment would result in a significant deterioration in the security environment in at least
some of the world’s key regions. We have already mentioned the third, even more alarming body of scholarship. Offensive realism predicts that
the withdrawal of the American pacifier will yield either a competitive regional multipolarity complete with associated
insecurity, arms racing, crisis instability, nuclear proliferation, and the like, or bids for regional hegemony,
which may be beyond the capacity of local great powers to contain (and which in any case would generate intensely competitive behavior,
possibly including regional great power war). Hence it is unsurprising that retrenchment advocates are prone to focus on the second
argument noted above: that avoiding wars and security dilemmas in the world’s core regions is not a U.S. national interest. Few doubt that the
United States could survive the return of insecurity and conflict among Eurasian powers, but at what cost? Much of the work in this area has
focused on the economic externalities of a renewed threat of insecurity and war, which we discuss below. Focusing on the pure security
ramifications, there are two main reasons why decisionmakers may be rationally reluctant to run the retrenchment experiment. First, overall
higher levels of conflict make the world a more dangerous place. Were Eurasia to return to higher levels of interstate military competition, one
would see overall higher levels of military spending and innovation and a higher likelihood of competitive
regional proxy wars and arming of client states—all of which would be concerning, in part because it would promote a faster
diffusion of military power away from the United States. Greater regional insecurity could well feed proliferation
cascades, as states such as Egypt, Japan, South Korea, Taiwan, and Saudi Arabia all might choose to create nuclear forces.
78 It is unlikely that proliferation decisions by any of these actors would be the end of the game: they would likely generate pressure
locally for more proliferation. Following Kenneth Waltz, many retrenchment advocates are proliferation optimists, assuming that
nuclear deterrence solves the security problem. 79 Usually carried out in dyadic terms, the debate over the stability of proliferation changes as the
numbers go up. Proliferation optimism rests on assumptions of rationality and narrow security preferences. In social science, however, such
assumptions are inevitably probabilistic. Optimists assume that most states are led by rational leaders, most will overcome
organizational problems and resist the temptation to preempt before feared neighbors nuclearize, and most pursue only security and are risk
averse. Confidence in such probabilistic assumptions declines if the world were to move from nine to twenty, thirty, or forty nuclear states. In
addition, many of the other dangers noted by analysts who are concerned about the destabilizing effects of nuclear proliferation—
including the
risk of accidents and the prospects that some new nuclear powers will not have truly survivable forces—seem prone to go up
as the number of nuclear powers grows. 80 Moreover, the risk of “unforeseen crisis dynamics” that could spin out of control is
also higher as the number of nuclear powers increases. Finally, add to these concerns the enhanced danger of nuclear leakage, and a world with
overall higher levels of security competition becomes yet more worrisome. The argument that maintaining Eurasian peace is not a U.S. interest
faces a second problem. On widely accepted realist assumptions, acknowledging that U.S. engagement preserves peace dramatically narrows the
difference between retrenchment and deep engagement. For many supporters of retrenchment, the optimal strategy for a power such as the United
States, which has attained regional hegemony and is separated from other great powers by oceans, is offshore balancing: stay over the horizon
and “pass the buck” to local powers to do the dangerous work of counterbalancing any local rising power. The United States should commit to
onshore balancing only when local balancing is likely to fail and a great power appears to be a credible contender for regional hegemony, as in
the cases of Germany, Japan, and the Soviet Union in the midtwentieth century. The problem is that China’s rise puts the possibility
of its attaining regional hegemony on the table, at least in the medium to long term. As Mearsheimer notes, “The United States
will have to play a key role in countering China, because its Asian neighbors are not strong enough to do it by them selves.” 81 Therefore, unless
China’s rise stalls, “the United States is likely to act toward China similar to the way it behaved toward the Soviet Union during the Cold War.”
82 It follows that the United States should take no action that would compromise its capacity to move to onshore balancing in the future. It will
need to maintain key alliance relationships in Asia as well as the formidably expensive military capacity to intervene there. The implication is to
get out of Iraq and Afghanistan, reduce the presence in Europe, and pivot to Asia— just what the United States is doing. 83 In sum, the argument
that U.S. security commitments are unnecessary for peace is countered by a lot of scholarship, including highly influential realist scholarship. In
addition, the argument that Eurasian peace is unnecessary for U.S. security is weakened by the potential for a large number of nasty security
consequences as well as the need to retain a latent onshore balancing capacity that dramatically reduces the savings retrenchment might bring.
Moreover, switching between offshore and onshore balancing could well be difficult. Bringing together the thrust of many of the arguments
discussed so far underlines the degree to which the case for retrenchment misses the underlying logic of the deep engagement strategy. By
supplying reassurance, deterrence, and active management, the United States lowers security competition in the world’s
key regions, thereby preventing the emergence of a hothouse atmosphere for growing new military capabilities. Alliance
ties dissuade partners from ramping up and also provide leverage to prevent military transfers to potential rivals. On top of all this,
the United States’ formidable military machine may deter entry by potential rivals. Current great power military
expenditures as a percentage of GDP are at historical lows, and thus far other major powers have shied away from seeking to match top-end U.S.
military capabilities. In addition, they have so far been careful to avoid attracting the “focused en mity” of the United States. 84 All of the world’s
most modern militaries are U.S. allies (America’s alliance system of more than sixty countries now accounts for some 80 percent of global
military spending), and the gap between the U.S. military capability and that of potential rivals is by many
measures growing rather than shrinking. 85 In the end, therefore, deep engagement reduces security competition and does so in a
way that slows the diffusion of power away from the United States. This in turn makes it easier to sustain the policy over the long term. The
Wider Bene fits of Deep Engagement The case against deep engagement overstates its costs and underestimates its security benefits. Perhaps its
most important weakness, however, is that its preoccupation with security issues diverts attention from some of deep engagement’s most
important benefits: sustaining the global economy and fostering institutionalized cooperation in ways advantageous to U.S. national interests.
economic bene fits Deep engagement is based on a premise central to realist scholarship from E.H. Carr to Robert Gilpin: economic orders do not
just emerge spontaneously; they are created and sustained by and for powerful states. 86 To be sure, the sheer size of its economy would
guarantee the United States a significant role in the politics of the global economy whatever grand strategy it adopted. Yet the fact that it is the
leading military power and security provider also enables economic leadership. The security role figures in the creation, maintenance, and
expansion of the system. In part because other states—including all but one of the world’s largest economies—were heavily dependent on U.S.
security protection during the Cold War, the United States was able not only to foster the economic order but also to prod other states to buy into
it and to support plans for its progressive expansion. 87 Today, as the discussion in the previous section underscores, the security commitments of
deep engagement support the global economic order by reducing the likelihood of security dilemmas, arms racing, instability, regional conflicts
and, in extremis, major power war. In so doing, the strategy helps to maintain a stable and comparatively open world economy—a long-standing
U.S. national interest. In addition to ensuring the global economy against important sources of insecurity, the extensive set of U.S. military
commitments and deployments helps to protect the “global economic commons.” One key way is by helping to keep sea-lanes and other shipping
corridors freely available for commerce. 88 A second key way is by helping to establish and protect property/sovereignty rights in the oceans.
Although it is not the only global actor relevant to protecting the global economic commons, the United States has by far the most
important role given its massive naval superiority and the leadership role it plays in international economic institutions. If the
United States were to pull back from the world, protecting the global economic commons would likely be
much harder to accomplish for a number of reasons: cooperating with other nations on these matters would be less likely to occur;
maintaining the relevant institutional foundations for promoting this goal would be harder ; and preserving
access to bases throughout the world—which is needed to accomplish this mission—would likely be curtailed to some degree.
2NC Oil War Module
Independently, renewables are K2 long-term energy independence - finite oil reserves are
unsustainable
Reisser 2009 (Wesley Reisser, PhD student at University of California, Los Angeles, Department of Geography, 20 March, 2009. “The US
cannot drill its way out of energy dependence.”http://www.theguardian.com/environment/cif-green/2009/mar/20/oil-america-energyindependence)//NR
America knows its reliance on imported oil is a threat to national security but its own dwindling reserves will never provide a
solution The chant "Drill Baby Drill!", commonly heard at Republican rallies last autumn, became one of the most memorable slogans of the
2008 US presidential election. Oil prices had skyrocketed, with prices running to almost $150 a barrel. While John McCain suggested ratcheting
up domestic oil production as the solution, Barack Obama promised a technological revolution that would allow the development of green
alternatives to petrol within 10 years. Energy independence became the watchword of the day. President Obama clearly believes America's
addiction to oil is a national security problem, and is calling for the US to wean itself off foreign oil. Just six days into his presidency, he
declared: "America's dependence on oil is one of the most serious threats our nation has faced. It bankrolls dictators, pays for nuclear
proliferation, and funds both sides of our struggle against terrorism." Among the steps toward energy independence he recommends are
improving energy efficiency and building fuel-efficient vehicles. But although these initiatives will reduce oil consumption, they will not
remotely achieve the goal of US energy independence. The US will never again meet oil demand through domestic production, as
it faces permanent declines. The 1970s saw the American peak in oil production. Since then, annual production rates in the US have
fallen. The US accounts for nearly one quarter of worldwide oil consumption, and now close to 60% of that must be imported. Even a huge
increase in the number of wells drilled there cannot reduce the import level by more than a few percentage points. Potential new oil
discoveries, including any in the Arctic national wildlife refuge, will be insufficient to reverse projected declines. The US is more
extensively explored than any other country, and estimates by the US Geological Survey dash any hope of drilling to energy independence. Too
little oil remains in American reservoirs. Switching to alternative sources of energy is touted as the other great solution. But even
high oil prices and market forces are unlikely to halt US import dependence, as no meaningful near and midterm alternatives
exist. Options to limit or end oil dependence in the transportation sector include fuel switching and improvements in fuel economy. Fuel
switching entails the retooling of the transportation sector to vehicles powered by natural gas, electricity, biofuels or hydrogen fuel cells. Fuel
economy improvements could be attained by the more widespread adoption of either hybrid cars or diesel-powered vehicles. Although these
changes might affect consumption per mile, projected increases in travel would more than offset such gains. This means that nothing short
of fuel switching can reduce oil usage to the point where all oil used is produced domestically. Fuel switching is likelier to occur in an
era of high oil prices, but market incentives are low now that oil prices have slid from the record highs of summer 2008. High-volume
US oil importation will remain a constant for at least two to three decades. The current global energy market presents many geostrategic
challenges. These include the stability of oil producers, terrorism, embargoes, sanctions and ethnic conflicts. Also, by 2020, Chinese consumption
will outpace that of the US. This adds an additional challenge for national security planners, as the US has previously been the sole superpower
engaging oil-producing regions and trying to influence their politics. A rising China is likely to challenge the US for access and influence
throughout the oil-exporting world. Within the developed world, renewable production from wind, solar and geothermal sources will need
to be dramatically increased. This will eventually free fossil fuels for transportation use as opposed to electrical generation. Where
oil originates is largely irrelevant economically, so developing diverse supplies of energy globally may be the best energy security for all
importers – not just the US. The major energy-consuming countries must work together on long-term solutions to replace oil rather than worrying
about where it comes from.
And, dependence on finite amounts of oil makes war inevitable- we’ve reached the peak- their turns
are terminally non-unique
King 2008 (Neil King, Jr. “Peak Oil: A Survey of Security Concerns” CNAS Energy Security Visionaries Series. July 2008.
http://www.aspousa.org/aspousa4/proceedings/_CNAS_King_Peak_Oil_WorkingPaper.pdf)//NR
Commentators in the United States and abroad have begun to wrestle with the question of whether soaring
oil prices and market volatility
could spark an outright oil war between major powers—possibly ignited not by China or Russia, but by the United States. In a
particularly pointed speech on the topic in May, James Russell of the Naval Postgraduate School in California addressed what he called the
increasing militarization of international energy security. “Energy security is now deemed so central to ‘national security’ that threats
to the former are liable to be reflexively interpreted as threats to the latter,” he told a gathering at the James A. Baker Institute for Public Policy at
Houston’s Rice University.6 The possibility that a large-scale war could break out over access to dwindling energy resources, he
wrote, “is one of the most alarming prospects facing the current world system.”7 Mr. Russell figures among a growing pool of analysts who
worry in particular about the psychological readiness of the United States to deal rationally with a sustained oil shock. Particularly troubling is the
increasing perception within Congress that the financial side of the oil markets no longer functions rationally. It has either been taken over
by speculators or is being manipulated, on the supply side, by producers who are holding back on pumping more oil in order to drive up
the price. A breakdown in trust for the oil markets, these analysts fear, could spur calls for government action—even military
intervention. “The perceptive chasm in the United States between new [oil] market realities and their impact on the global distribution of
power will one day close,” Mr. Russell said. “And when it does, look out.”8 The World at Peak: Taking the Dim View For years, skeptics scoffed
at predictions that the United States would hit its own domestic oil production peak by sometime in the late 1960s. With its oil fields pumping full
out, the U.S. in 1969 was providing an astonishing 25 percent of the world’s oil supply—a role no other country has ever come close to matching.
U.S. production then peaked in December 1970, and has fallen steadily ever since, a shift that has dramatically altered America’s own sense of
vulnerability and reordered its military priorities. During World War II, when its allies found their own oil supplies cut off by the war, the United
States stepped in and made up the difference. Today it is able to meet less than a third of its own needs. A similar peak in worldwide
production would have far more sweeping consequences. It would, for one, spell the end of the world’s unparalleled economic boom over the
last century. It would also dramatically reorder the wobbly balance of power between nations as energy-challenged industrialized
countries turn their sights on the oil-rich nations of the Middle East and Africa. In a peak oil future, the small, flattened, globalized world that has
awed recent commentators would become decidedly round and very vast again. Oceans will reemerge as a hindrance to trade, instead of the
conduit they have been for so long. An energy-born jolt to the world economy would leave no corner of the globe untouched. Unable to pay their
own fuel bills, the tiny Marshall Islands this summer faced the possibility of going entirely without power. That is a reality that could sweep
across many of the smallest and poorest countries in Africa, Asia, and Latin America, reversing many of the tentative gains in those regions and
stirring deep social unrest. Large patches of the world rely almost entirely on diesel-powered generators for what skimpy electricity they now
have. Those generators are the first to run empty as prices soar. A British parliamentary report released in June on “The Impact of Peak Oil on
International Development” concluded that “the deepening energy crisis has the potential to make poverty a permanent state for a growing
number of people, undoing the development efforts of a generation.”9 We are seeing some of the consequences already in Pakistan – a country of
huge strategic importance, with its own stash of nuclear weapons – that is now in the grips of a severe energy crisis. By crippling the country’s
economy, battering the stock market, and spurring mass protests, Pakistan’s power shortages could end up giving the country’s Islamic parties the
leverage they have long needed to take power. It’s not hard to imagine similar scenarios playing out in dozens of other developing countries.
Deepening economic unrest will put an enormous strain on the United Nations and other international aid agencies. Anyone who has ever visited
a major UN relief hub knows that their fleets of Land Rovers, jumbo jets and prop planes have a military size thirst for fuel. Aid agency budgets
will come under unprecedented pressure just as the need for international aid skyrockets and donor countries themselves feel pressed for cash. A
peaking of oil supplies could also hasten the impact of global climate change by dramatically driving up the use of coal for power generation in
much of the world. A weakened world economy would also put in jeopardy the massively expensive projects, such as carbon capture and storage,
that many experts look to for a reduction in industrial emissions. So on top of the strains caused by scarce fossil fuels, the world may also have to
grapple with the destabilizing effects of more rapid desertification, dwindling fisheries, and strained food supplies. An oil-constricted world
will also stir perilous frictions between haves and have-nots. The vast majority of all the world’s known oil reserves is now in the
hands of national oil companies, largely in countries with corrupt and autocratic governments. Many of these governments—Iran and
Venezuela top the list—are now seen as antagonists of the United States. Tightened oil supplies will substantially boost these countries’ political
leverage, but that enhanced power will carry its own peril. Playing the oil card when nations are scrambling for every barrel will be a far more
serious matter that at any time in the past. The European continent could also undergo a profound shift as its needs—and sources of energy—
diverge all the more from those of the United States. A conservation-oriented Europe (oil demand is on the decline in almost every EU country)
will look all the more askance at what it sees as the gluttonous habits of the United States. At the same time, Europe’s governments may have
little choice but to shy from any political confrontations with its principal energy supplier, Russia. An energy-restricted future will greatly
enhance Russia’s clout within settings like the UN Security Council but also in its dealings with both Europe and China. Abundant oil and gas
have fueled Russia’s return to power over the last decade, giving it renewed standing within the UN and increasing sway over European capitals.
The peak oil threat is already sending shivers through the big developing countries of China and India, whose propulsive growth (and own
internal stability) requires massive doses of energy. For Beijing, running low on fuel spells economic chaos and internal strife, which in turn
spawns images of insurrection and a breaking up of the continent sized country. Slumping oil supplies will automatically pit the two
largest energy consumers—the United States and China—against one another in competition over supplies in South America, West
Africa, the Middle East, and Central Asia. China is already taking this competition very seriously. It doesn’t require much of a leap to imagine a
Cold War-style scramble between Washington and Beijing—not for like-minded allies this time but simply for reliable and tested suppliers of oil.
One region that offers promise and peril in almost equal measure is the Artic, which many in the oil industry consider the last big basin of
untapped hydrocarbon riches. But the Artic remains an ungoverned ocean whose legal status couldn’t be less clear, especially so long as the
United States continues to remain outside the international Law of the Sea Treaty. As the ices there recede, the risk increases that a scramble for
assets in the Artic could turn nasty.
2NC Warming Module
Warming is real and anthropogenic – emission cuts through clean tech are key to solve
Harvey 2013 (Fiona, Guardian Environment Reporter, IPCC climate report: human impact is 'unequivocal', September 27 2013,
http://www.theguardian.com/environment/2013/sep/27/ipcc-climate-report-un-secretary-general)
World leaders must now respond to an "unequivocal" message from climate scientists and act with policies to cut greenhouse gas emissions, the
United Nations secretary-general urged on Friday. Introducing a major report from a high level UN panel of climate scientists, Ban Ki-moon said,
"The heat is on. We must act." The world's leading climate scientists, who have been meeting in all-night sessions this week in the
Swedish capital, said there was no longer room for doubt that climate change was occurring, and the dominant cause has been human actions in
pouring greenhouse gases into the atmosphere. In their starkest warning yet, following nearly seven
years of new research on the
it was "unequivocal" and that even if the world begins to
moderate greenhouse gas emissions, warming is likely to cross the critical threshold of 2C by the end of this century. That
climate, the Intergovernmental Panel on Climate Change (IPCC) said
would have serious consequences, including sea level rises, heatwaves and changes to rainfall meaning dry regions get less and already wet areas
receive more. In response to the report, the US secretary of state, John Kerry, said in a statement: "This is yet another wakeup call: those who
deny the science or choose excuses over action are playing with fire." "Once again, the
science grows clearer, the case grows
more compelling, and the costs of inaction grow beyond anything that anyone with conscience or commonsense should be willing to even
contemplate," he said. He said that livelihoods around the world would be impacted. "With those stakes, the response must be all hands on deck.
It's not about one country making a demand of another. It's the science itself, demanding action from all of us. The United States is deeply
committed to leading on climate change." In a crucial reinforcement of their message – included starkly in this report for the first time – the IPCC
warned that the world cannot afford to keep emitting carbon dioxide as it has been doing in recent years. To avoid dangerous
levels of climate change, beyond 2C, the world can only emit a total of between 800 and 880 gigatonnes of carbon. Of this, about 530 gigatonnes
had already been emitted by 2011. That has a clear implication for our fossil fuel consumption, meaning that humans cannot burn all of the coal,
oil and gas reserves that countries and companies possess. As the former UN commissioner Mary Robinson told the Guardian last week, that will
have "huge implications for social and economic development." It will also be difficult for business interests to accept. The central estimate is
that warming is likely to exceed 2C, the threshold beyond which scientists think global warming will start to wreak serious changes to the planet.
That threshold is likely to be reached even if we begin to cut global greenhouse gas emissions, which so far has not happened, according to the
report. Other key points from the report are: • Atmospheric concentrations of carbon dioxide, methane and nitrous oxide are now at levels
"unprecedented in at least the last 800,000 years." • Since the 1950's it's "extremely likely" that human activities have been the dominant cause of
the temperature rise. • Concentrations of CO2 and other greenhouse gases in the atmosphere have increased to levels that are unprecedented in at
least 800,000 years. The burning of fossil fuels is the main reason behind a 40% increase in C02 concentrations since the industrial revolution. •
Global temperatures are likely to rise by 0.3C to 4.8C, by the end of the century depending on how much governments control carbon emissions.
• Sea levels are expected to rise a further 26-82cm by the end of the century. • The oceans have acidified as they have absorbed about a third of
the carbon dioxide emitted. Thomas Stocker, co-chair of the working group on physical science, said the message that greenhouse
gases
must be reduced was clear. "We give very relevant guidance on the total amount of carbon that can't be emitted to stay to 1.5 or 2C. We are
not on the path that would lead us to respect that warming target [which has been agreed by world governments]." He said: "Continued
emissions of greenhouse gases will cause further warming and changes in all components of the climate system.
Limiting climate change will require substantial and sustained reductions of greenhouse gas emissions." Though
governments around the world have agreed to curb emissions, and at numerous international meetings have reaffirmed their commitment to
holding warming to below 2C by the end of the century, greenhouse gas concentrations are still rising at record rates. Rajendra Pachauri, chair of
the IPCC, said it was for governments to take action based on the science produced by the panel, consisting of thousands of pages of detail,
drawing on the work of more than 800 scientists and hundreds of scientific papers. The scientists also put paid to claims that global warming has
"stopped" because global temperatures in the past 15 years have not continued the strong upward march of the preceding years, which is a key
argument put forward by sceptics to cast doubt on climate science. But the IPCC said the longer term trends were clear: "Each of the last three
decades has been successively warmer at the Earth's surface than any preceding decade since 1850 in the northern hemisphere [the earliest date
for reliable temperature records for the whole hemisphere]." The past 15 years were not such an unusual case, said Stocker. "People always pick
1998 but [that was] a very special year, because a strong El Niño made it unusually hot, and since then there have been some medium-sized
volcanic eruptions that have cooled the climate." But he said that further research was needed on the role of the oceans, which are thought to have
absorbed more than 90% of the warming so far. The
scientists have faced sustained attacks from so-called sceptics, often
funded by "vested interests" according to the UN, who try to pick holes in each item of evidence for climate change. The experts have
always known they must make their work watertight against such an onslaught, and every conclusion made by the IPCC must pass
scrutiny by all of the world's governments before it can be published. Their warning on Friday was sent out to governments
around the globe, who convene and fund the IPCC. It was 1988 when scientists were first convened for this task, and in the five landmark reports
since then the
research has become ever clearer. Now, scientists say they are certain that "warming in the climate
system is unequivocal and since 1950 many changes have been observed throughout the climate system that are unprecedented over decades
to millennia." That warning, from such a sober body, hemmed in by the need to submit every statement to extraordinary levels of scrutiny, is the
starkest yet. "Heatwaves are very likely to occur more frequently and last longer. As the earth warms, we expect to see currently wet regions
receiving more rainfall, and dry regions receiving less, although there will be exceptions," Stocker said. Qin Dahe, also co-chair of the working
group, said: "As the ocean warm, and glaciers and ice sheets reduce, global mean sea level will continue to rise, but at a faster rate than we have
experienced over the past 40 years." Prof David Mackay, chief scientific adviser to the Department of Energy and Climate Change, said: "The
far-reaching consequences of this warming are becoming understood, although some uncertainties remain. The most significant uncertainty,
however, is how much carbon humanity will choose to put into the atmosphere in the future. It
is the total sum of all our carbon
emissions that will determine the impacts. We need to take action now, to maximise our chances of being faced with
impacts that we, and our children, can deal with. Waiting a decade or two before taking climate change action will certainly lead to greater harm
than acting now."
Warming lead to extinction
Deibel 2007 (Terry L. Professor of IR @ National War College, 2007. “Foreign Affairs Strategy: Logic for American Statecraft”,
Conclusion: American Foreign Affairs Strategy Today)//NR
Finally, there is one major existential threat to American security (as well as prosperity) of a nonviolent nature, which, though far in the
future, demands urgent action. It is the threat of global warming to the stability of the climate upon which all earthly life
depends. Scientists worldwide have been observing the gathering of this threat for three decades now, and what was once a mere
possibility has passed through probability to near certainty. Indeed not one of more than 900 articles on climate change published in
refereed scientific journals from 1993 to 2003 doubted that anthropogenic warming is occurring. “In legitimate scientific circles,” writes
Elizabeth Kolbert, “it is virtually impossible to find evidence of disagreement over the fundamentals of global warming.” Evidence from a vast
international scientific monitoring effort accumulates almost weekly, as this sample of newspaper reports shows: an international panel predicts
“brutal droughts, floods and violent storms across the planet over the next century”; climate change could “literally alter
ocean currents, wipe away huge portions of Alpine Snowcaps and aid the spread of cholera and malaria”; “glaciers in the
Antarctic and in Greenland are melting much faster than expected, and…worldwide, plants are blooming several days earlier than a decade ago”;
“rising sea temperatures have been accompanied by a significant global increase in the most destructive hurricanes”;
“NASA scientists have concluded from direct temperature measurements that 2005 was the hottest year on record, with 1998 a close second”;
“Earth’s warming climate is estimated to contribute to more than 150,000 deaths and 5 million illnesses each year” as disease spreads;
“widespread bleaching from Texas to Trinidad…killed broad swaths of corals” due to a 2-degree rise in sea temperatures. “The world is
slowly disintegrating,” concluded Inuit hunter Noah Metuq, who lives 30 miles from the Arctic Circle. “They call it climate change…but
we just call it breaking up.” From the founding of the first cities some 6,000 years ago until the beginning of the industrial revolution, carbon
dioxide levels in the atmosphere remained relatively constant at about 280 parts per million (ppm). At present they are accelerating toward 400
ppm, and by 2050 they will reach 500 ppm, about double pre-industrial levels. Unfortunately, atmospheric CO2 lasts about a century, so there is
no way immediately to reduce levels, only to slow their increase, we are thus in for significant global warming; the only debate is how much
and how serous the effects will be. As the newspaper stories quoted above show, we are already experiencing the effects of 1-2 degree warming
in more violent storms, spread of disease, mass die offs of plants and animals, species extinction , and threatened
inundation of low-lying countries like the Pacific nation of Kiribati and the Netherlands at a warming of 5 degrees or less the Greenland and West
Antarctic ice sheets could disintegrate, leading to a sea level of rise of 20 feet that would cover North Carolina’s outer banks, swamp the southern
third of Florida, and inundate Manhattan up to the middle of Greenwich Village. Another catastrophic effect would be the collapse of the Atlantic
thermohaline circulation that keeps the winter weather in Europe far warmer than its latitude would otherwise allow. Economist William Cline
once estimated the damage to the United States alone from moderate levels of warming at 1-6 percent of GDP annually; severe warming could
cost 13-26 percent of GDP. But the most frightening scenario is runaway greenhouse warming, based on positive feedback from the buildup of
water vapor in the atmosphere that is both caused by and causes hotter surface temperatures. Past ice age transitions, associated with only 5-10
degree changes in average global temperatures, took place in just decades, even though no one was then pouring ever-increasing amounts of
carbon into the atmosphere. Faced with this specter, the best one can conclude is that “humankind’s continuing enhancement of the natural
greenhouse effect is akin to playing Russian roulette with the earth’s climate and humanity’s life support system. At worst, says physics professor
Marty Hoffert of New York University, “we’re just going to burn everything up; we’re going to heat the atmosphere to the temperature it was in
the Cretaceous when there were crocodiles at the poles, and then everything will collapse.” During the Cold War, astronomer Carl Sagan
popularized a theory of nuclear winter to describe how a thermonuclear war between the Untied States and the Soviet Union would not only
destroy both countries but possibly end life on this planet. Global warming is the post-Cold War era’s equivalent of nuclear
winter at least as serious and considerably better supported scientifically. Over the long run it puts dangers form terrorism and traditional
military challenges to shame. It is a threat not only to the security and prosperity to the United States, but potentially to the continued
existence of life on this planet.
Chemical Industry Scenario
1NC Chemical Industry Impact
Independently, natural gas collapse kills the chemical industry- stabilizing prices is key
Stones 2009 (Edward, Director of Energy Risk Dow Chemical Company in a presentation to the Committee on Energy and Natural
Resources, “The Role of Natural Gas in Mitigating Climate Change” 10/28/9
http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=9b7877b6-e616-76f1-3513-0c3fe4cda514)//NR
When it comes to natural gas and climate policy, Congress should consider policies that minimize the demand destruction that occurs in
natural gas price spikes. This means supporting price elastic consumers of natural gas and avoiding the disproportionate addition
of inelastic demand. It is not just price spikes in natural gas that hurt US manufacturers. It is also the average level of natural
gas prices. Much of the US chemical industry was built when natural gas prices were below $2 /MMBtu. Since 2001, this
historic price level has been exceeded, maybe forever. We do not expect US natural gas prices to return consistently to this low level in the future.
Because manufacturers that depend on competitive natural gas prices must make capital investment decisions that span decades,
the US faces stiff competition from abroad. In fact, in our 2005 testimony before this Committee, Dow stated that of the 120 world scale
petrochemical plants proposed to be built, only one was planned for the US. Should the US enact a price on GHG emissions, the net impact on
the supply and demand balances must be considered in cases of both average and extreme demand. The country’s energy supply must
be resilient enough to overcome natural phenomena such as hurricanes, harsh winters, and arid summers. It must continue to support
economic growth allowing for high-value job creation in the industrial sector. Without this resiliency, natural gas price
volatility will increase, affecting both employment in the industrial sector and all electricity users.
The chemical industry solves extinction- it’s an impact filter
Baum 1999 (Rudy M. Baum, C&EN Washington, Chemical and Engineering News, Millennium Special Report, 12-6-1999,
http://pubs.acs.org/hotartcl/cenear/991206/7749spintro2.html0)//NR
Here is the fundamental challenge we face: The world's growing and aging population
must be fed and clothed and housed and
transported in ways that do not perpetuate the environmental devastation wrought by the first waves of industrialization of the
19th and 20th centuries. As we increase our output of goods and services, as we increase our consumption of energy, as we meet the imperative
of raising the standard of living for the poorest among us, we must learn to carry out our economic activities sustainably. There are optimists out
there, C&EN readers among them, who believe that the history of civilization is a long string of technological triumphs of
humans over the limits of nature. In this view, the idea of a "carrying capacity" for Earth—a limit to the number of humans Earth's
resources can support—is a fiction because technological advances will continuously obviate previously perceived limits. This view has historical
merit. Dire predictions made in the 1960s about the exhaustion of resources ranging from petroleum to chromium to fresh water by the end of the
1980s or 1990s have proven utterly wrong. While I do not count myself as one of the technological pessimists who see technology as a mixed
blessing at best and an unmitigated evil at worst, I do not count myself among the technological optimists either. There are environmental
challenges of transcendent complexity that I fear may overcome us and our Earth before technological progress can come
to our rescue. Global climate change, the accelerating destruction of terrestrial and oceanic habitats, the catastrophic loss
of species across the plant and animal kingdoms—these are problems that are not obviously amenable to straightforward
technological solutions. But I know this, too: Science and technology have brought us to where we are, and only science and
technology, coupled with innovative social and economic thinking, can take us to where we need to be in the coming
millennium. Chemists, chemistry, and the chemical industry—what we at C&EN call the chemical enterprise—will play central
roles in addressing these challenges. The first section of this Special Report is a series called "Millennial Musings" in which a wide
variety of representatives from the chemical enterprise share their thoughts about the future of our science and industry. The five essays that
follow explore the contributions the chemical enterprise is making right now to ensure that we will successfully meet the challenges of the 21st
century. The essays do not attempt to predict the future. Taken as a whole, they do not pretend to be a comprehensive examination of the efforts
of our science and our industry to tackle the challenges I've outlined above. Rather, they paint, in broad brush strokes, a portrait of scientists,
engineers, and business managers struggling to make a vital contribution to humanity's future. The first essay, by Senior Editor Marc S. Reisch, is
a case study of the chemical industry's ongoing transformation to sustainable production. Although it is not well known to the general public, the
chemical industry is at the forefront of corporate efforts to reduce waste from production streams to zero. Industry giants DuPont and Dow
Chemical are taking major strides worldwide to manufacture chemicals while minimizing the environmental "footprint" of their facilities. This is
an ethic that starts at the top of corporate structure. Indeed, Reisch quotes Dow President and Chief Executive Officer William S. Stavropolous:
"We must integrate elements that historically have been seen as at odds with one another: the triple bottom line of sustainability—economic and
social and environmental needs." DuPont Chairman and CEO Charles (Chad) O. Holliday envisions a future in which "biological processes use
renewable resources as feedstocks, use solar energy to drive growth, absorb carbon dioxide from the atmosphere, use low-temperature and lowpressure processes, and produce waste that is less toxic." But sustainability is more than just a philosophy at these two chemical companies.
Reisch describes ongoing Dow and DuPont initiatives that are making sustainability a reality at Dow facilities in Michigan and Germany and at
DuPont's massive plant site near Richmond, Va. Another manifestation of the chemical industry's evolution is its embrace of life sciences.
Genetic engineering is a revolutionary technology. In the 1970s, research advances fundamentally shifted our perception of DNA. While it had
always been clear that deoxyribonucleic acid was a chemical, it was not a chemical that could be manipulated like other chemicals—clipped
precisely, altered, stitched back together again into a functioning molecule. Recombinant DNA techniques began the transformation of DNA into
just such a chemical, and the reverberations of that change are likely to be felt well into the next century. Genetic engineering has entered the
fabric of modern science and technology. It is one of the basic tools chemists and biologists use to understand life at the molecular level. It
provides new avenues to pharmaceuticals and new approaches to treat disease. It expands enormously agronomists' ability to introduce traits into
crops, a capability seized on by numerous chemical companies. There is no doubt that this powerful new tool will play a major role in feeding the
world's population in the coming century, but its adoption has hit some bumps in the road. In the second essay, Editor-at-Large Michael Heylin
examines how the promise of agricultural biotechnology has gotten tangled up in real public fear of genetic manipulation and corporate control
over food. The third essay, by Senior Editor Mairin B. Brennan, looks at chemists embarking on what is perhaps the greatest intellectual quest in
the history of science—humans' attempt to understand the detailed chemistry of the human brain, and with it, human consciousness. While this
quest is, at one level, basic research at its most pure, it also has enormous practical significance. Brennan focuses on one such practical aspect: the
effort to understand neurodegenerative diseases like Alzheimer's disease and Parkinson's disease that predominantly plague older humans and are
likely to become increasingly difficult public health problems among an aging population. Science and technology are always two-edged swords.
They bestow the power to create and the power to destroy. In addition to its enormous potential for health and agriculture ,
genetic engineering conceivably could be used to create horrific biological warfare agents. In the fourth essay of this Millennium Special Report,
Senior Correspondent Lois R. Ember examines the challenge of developing methods to counter the threat of such biological weapons. "Science
and technology will eventually produce sensors able to detect
the presence or release of biological agents, or devices that aid in
bioattacks," Ember writes. Finally, Contributing Editor Wil Lepkowski discusses the most
mundane, the most marvelous, and the most essential molecule on Earth, H2O. Providing clean water to Earth's population is
already difficult—and tragically, not always accomplished. Lepkowski looks in depth at the situation in Bangladesh—where a well-meaning
UN program to deliver clean water from wells has poisoned millions with arsenic. Chemists are working to develop better ways to detect
arsenic in drinking water at meaningful concentrations and ways to remove it that will work in a poor, developing country. And he
forecasting, remediating, and ameliorating
explores the evolving water management philosophy, and the science that underpins it, that will be needed to provide adequate water for all its
vital uses. In the past two centuries, our science has transformed the world. Chemistry is a wondrous tool that has allowed us to understand the
structure of matter and gives us the ability to manipulate that structure to suit our own purposes. It allows us to dissect the molecules of life to see
what makes them, and us, tick. It is providing a glimpse into workings of what may be the most complex structure in the universe, the human
brain, and with it hints about what constitutes consciousness. In the coming decades, we will use chemistry to delve ever deeper into
these mysteries and provide
for humanity's basic and not-so-basic needs.
AT: Natural Gas Prices DA
Uniqueness
2AC
Natgas prices will crash- our ev is predictive
Cohen 14 (Lior, contributor for the investment contributor Fool, 3 Factors That Could Bring Down
Natural Gas Prices, http://www.fool.com/investing/general/2014/05/16/3-factors-that-could-bring-downnatural-gas-prices.aspx, 5/16/14)
Investors in United States Natural Gas (NYSEMKT: UNG ) , a leading ETF that follows the price of natural gas, have benefited from the strong
what is keeping the price of
natural gas so high? What could bring it back down to below $4? Let's examine the recent developments
in the natural gas market and offer three factors that could bring down the price of natural gas in the
coming weeks. Rise in storage In the past several months, the working natural gas underground storage
plummeted to its lowest level in over a decade. Back at end of March, the storage level reached 822 Bcf,
which was more than 50% below the five-year average. One of the reasons for the drop in storage was the spike in demand in
performance of natural gas in the past several months. Now that the winter is slowly turning into spring,
the residential and commercial sectors. Earlier this year, the harsh weather has increased the demand for natural gas for heating purposes. In the
past several weeks, however, the natural gas storage level has started to rise. This
has slowly brought down the price of natural
gas. The chart below shows the change in natural gas storage and the price of natural gas in recent months. If the natural gas market
cools down, it could hurt leading natural gas producers such as Chesapeake Energy (NYSE: CHK ) . In the most recent
quarter, the company benefited from the elevated price of natural gas,with its revenue growing by over 20%
year over year. This high growth rate is likely to come down in the coming quarters as the price of natural
gas drops. Since natural gas accounts for more than 50% of its sales, and the company doesn't expect to
substantially increase its natural gas production in 2014, the potential price cut could impede Chesapeake
Energy's growth in total sales in future quarters. Fall in demand for natural gas During the first couple of months of 2014,
demand for natural gas in the residential and commercial sectors grew by 16% year over year. These two sectors combined account for nearly
50% of total U.S. consumption. The harsh winter conditions are behind most regions in the U.S., however. As a result, the
demand for
heating is likely to further subside in the coming months. This should correspond to a dip in natural gas
consumption in both of these sectors. The power sector accounts for roughly 20% of total natural gas consumption. During the first
couple of months of 2014, the demand for natural gas in this sector slightly rose by 1.7% as compared to the same time last year. This trend is
likely to change course in the near future, however, as high natural gas prices are likely to slowly reduce the demand in this sector, according to
the Energy Information Administration .
Rise in production The EIA also reported a 3.3% year-over-year rise in the
natural gas production during January and February. It estimates that production will further rise by 3%
during 2014. If the trend continues, this could increase injection levels to storage and further cool down
this market. Takeaway Natural gas is likely to come down from its highs in the coming months. The rise
in storage due to the decline in demand and ongoing rise in production could bring the price of natural gas
below $4. As a result, Chesapeake Energy and other natural gas producers are likely to see smaller margins and lower
growth in sales in the coming quarters.
1AR
Falling demand
Malik 14 (Naureen S. Malik, reporter for Bloomberg, Natural Gas Futures Decline With Milder
Weather Forecast, http://www.bloomberg.com/news/2014-03-03/natural-gas-rises-second-day-on-winterstorm-ukraine-escalation.html, 3/3/14)
Natural gas fell to a six-week low in New York on speculation that demand will lessen as winter nears an
end. Gas slid 2.5 percent. Commodity Weather Group LLC said the intense cold gripping the Midwest, South and East this week will
ease in mid-March, while above-normal temperatures spread across the Great Plains and West . Gas has tumbled 31 percent from a
five-year high on Feb. 24. “This is a pretty good sign the run-up has run its course,” said Stephen Schork, president
of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “Demand is going to remain strong, but we are at the
end of the season and prices aren’t reacting the way they would have a month ago. At these prices,
production is going to be very strong.”
Short and long term indicators have prices down
Chowdhury 14 (Avik, reporter for Market Realist, Natural gas liquids prices decline from propane and
butane price, http://finance.yahoo.com/news/natural-gas-liquids-prices-decline-130015088.html, 7/2/14)
This week saw NGL prices trade down—a negative short-term indicator. Despite falling from the highs
reached in February, NGL prices remained up significantly since late June 2013—a positive medium-term indicator. From a longerterm perspective, many producers still find current price levels economic enough to continue to target and
drill for NGLs, but they’ve suffered from NGL prices coming off highs (~$50– $60 per barrel through
much of 2011 versus ~$39 per barrel now). Major producers of NGLs include CHK, RRC, SM, and LINE—many of which are
found in energy ETFs such as the Vanguard Energy ETF (VDE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
Supply glut kills prices
Saefong 14 (Myra P. Saefong, reporter for Market Watch, Oil futures end higher; natural-gas prices
decline, http://www.marketwatch.com/story/oil-futures-end-higher-natural-gas-prices-decline-2014-0529, 5/29/14)
Oil futures closed higher Thursday after a weekly U.S. government report revealed strong fuel demand
and a decline in crude inventories at the Nymex delivery hub at Cushing, Okla. July crude rose 86 cents, or 0.8%, to settle at $103.58
a barrel on the New York Mercantile Exchange. Natural-gas prices, meanwhile, fell more than 1% after a weekly report
showed a bigger-than-expected rise U.S. supplies. July natural gas fell nearly 6 cents, or 1.2%, to settle at
$4.56 per million British thermal units.
Increased inventories and bad speculations
Puko 14 (TIMOTHY PUKO, reporter for the Wall Street Journal, Natural-Gas Prices Tumble on
Inventory Addition,
http://online.wsj.com/news/articles/SB10001424052702304431104579550231941155304, 5/8/14)
Natural-gas prices posted their biggest decline in 10 weeks as an increase in inventories eased concerns
about a potential shortage of the heating fuel next winter. Prices for the front-month June contract fell
16.8 cents, or 3.5%, to $4.572 a million British thermal units on the New York Mercantile Exchange. It
was the biggest percentage decline since Feb. 26 and put prices 5.4% below the two-month high they had
hit a week ago. "It's not a huge turn, but it's a bloody day," said Scott Gettleman, an independent trader in New York. "Usually,
you get a selloff, but you bounce back a little. Today, we never got a bounce." The federal government on
Thursday reported a larger-than-expected increase in inventories for a third straight week. Producers
added 74 billion cubic feet of gas to storage for the week ended May 2, the Energy Information Administration said. That
is three billion cubic feet more than the average forecast of traders, brokers and analysts surveyed by The
Wall Street Journal.
NatGas not key to economy
Natgas is an incredibly small part of the economy- it’s impact is negligible
Plumer 2013 (Brad Plumer, writer for the Washington Post, April 23, 2013. “The U.S. oil and gas boom has had a modest economic impact
– so far.” http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/23/the-oil-and-gas-boom-has-had-a-surprisingly-small-impact-on-the-us-economy/)//NR
The U.S. economy has expanded 7.6 percent since the recession ended in 2009. That's better than Britain, Japan, the euro zone and many other
advanced nations around the world. So why is that? One popular theory is that the United States has benefited from a huge domestic energy
boom. Thanks to new advances in drilling technology — particularly in hydraulic fracturing — U.S. companies have
managed to exploit new sources of oil and shale gas in places like North Dakota, Texas, Ohio and Pennsylvania. But not
everyone is convinced that this drilling frenzy has carried the U.S. economy. In a new research note for Capital
Economics, Paul Dales argues that the oil and gas boom has so far provided only a modest economic boost since
2009: Since June 2009 the volume of oil and gas extraction has risen by 24%. Over the same period the production of mining machinery has risen
by 47% and the output of mining support services, which includes oil and gas drilling, has leapt by 58%. The only disappointment is that output
of petroleum refining has risen by just 3%. But that rise explains only a small part of the economic recovery. Admittedly, it
is responsible for a fifth of the 18.3% increase in overall industrial production. Given
that the oil- and gas-related sectors
account for only 2.5% of GDP, they have contributed just 0.6 percentage points (ppts) to the 7.6% rise
in GDP. Dales gets a similar result — about 0.7 percentage points of growth since 2009 — when he measures the value of the oil and gas
boom in a different way, by looking at investments and the reduction of imports. That's still significant (the reduction in imports alone have
contributed 0.4 percentage points to growth), but it's also relatively limited. On the latter point, it's worth noting that while the United
States has managed to reduce the sheer volume of crude it imports, the price of oil has stayed high. So our total oil import bill hasn't fallen as
quickly: Okay, but what about the consumption benefits from cheap natural gas? Hasn't that helped lower costs for certain
industries and reduced electricity bills for households? Yes. But these effects have been surprisingly small on the
whole. Now, it's worth emphasizing that we're still early into this era of cheap natural gas. Firms like Shell are in the process of building ethane
crackersin places like Pennsylvania to take advantage of nearby shale production. That, in turn, could eventually provide a boon to other
industries — plastics, say. But it may be a few years before this registers in the macro-level data. In all, Dales concludes,
it's hard to give oil and gas more than a small bit of credit for America's better-than-average economic performance since 2009. "[T]he
recovery in US GDP since the recession has been driven by an improved performance across a wide range
of sectors, including motor vehicle production and professional business services." His preferred theory is that the United States has done
better than its peers "partly due to its greater exposure to the faster growing Asian nations and partly due to the willingness of U.S. households to
reduce their saving rate more significantly."
2AC
Impact is small – no recession
Henry and Stokes 6 (David K. and H. Kemble, Economics and Statistic Administration – U.S.
Department of Commerce, “Macroeconomic and Industrial Effects of Higher Natural Gas Prices”,
December,
https://www.esa.doc.gov/Nat.%20Gas%20Rept%20Web%20Version3a.pdf)
These impacts illustrate two general points. First, all industries—not just natural gas intensive sectors in
manufacturing—are affected by higher energy prices. Although there is a small offset from the decline of
the dollar, it is not enough to offset the loss of jobs because of the decline in domestic demand. Second,
while higher natural gas prices slow output and employment across all
industries, the economy, as a whole, and all major sectors continue to
grow. In the simulation, the economy keeps growing because the decline in
real income is quite limited. The impact is broad based, however, and spread throughout the
economy. The small size of the impact in the simulation indicates the
improbability of a recession occurring because of a shock of this size to
natural gas prices. There are two reasons for this. First, the economy’s sensitivity
to energy prices is somewhat less today than in the past. Second, natural gas
constitutes only a portion of all U.S. energy use. Thus, the decline in
real income (as a result of consumers paying more for natural gas and products that use natural gas)
is very modest.
1AR
Studies prove
Kliesen 6 (Kevin L., Economist – Federal Reserve Bank of St. Louis, “Rising Natural gas Prices and
Real Economic Activity”, November / December,
http://research.stlouisfed.org/publications/review/06/11/Kliesen.pdf)
Beginning in early 2002, prices of crude oil and natural gas began to trend upward. By September 2005, as the damage to the production, refining, and distribution
facilities in the Gulf Coast by hurricanes Katrina and Rita became clearer, natural gas prices rose to record-high levels in both nominal and real dollar terms. Although
crude oil prices rose to a record-high level in nominal terms, they remained below the record high levels in real terms seen in early 1981. Previous research has shown
that sharply higher oil prices have preceded all but one of the post- World War II recessions. However, less is known about the relationship between rising natural gas
prices and macroeconomic activity, despite the fact that many manufacturing industries and, increasingly, electric utilities are heavy consumers of natural gas.
Accordingly, one might reasonably assume that record-high levels of natural gas prices might have significant adverse consequences for U.S. macroeconomic activity.
The
article concludes with some empirical findings that generally suggest that
rising natural gas prices predict growth in only a handful of
manufacturing industries. Perhaps surprisingly, higher natural gas prices do
not predict slower growth for the three industries where expenditures on natural gas are a
relatively large share of total industry shipments: primary metals, nonmetallic mineral
products, and chemicals. In terms of the aggregate economy,
increases in crude oil prices significantly predict the growth of real gross
domestic product (GDP), but increases in natural gas prices do not.
This article examines developments in natural gas prices and highlights recent trends in natural gas usage at both the industry and national levels.
Natgas boom unsustainable/Collapse inev:
2AC
Collapse of natgas industry inevitable- over-drilling, lack of supply, and
overestimation
Siegel 2013 (RP Siegel, professional engineer, author, and inventor, February 22, 2013. “Shale Energy Bubble Threatens Second Economic
Collapse”, Triple Pundit, http://www.triplepundit.com/2013/02/shale-gas-bubble-threatens-second-economic-collapse/)//NR
There has been more than a little celebration as the result of the huge shale gas deposits discovered in Pennsylvania and elsewhere. The
discovery has led to a sense among many that our energy problems are not terribly urgent. Even President Obama referred to a 100 year supply of
natural gas in his second State of the Union address. The U.S. is now predicted to become the world’s top oil and gas producer in the year 2017.
What those predictions don’t tell is how long the U.S. is expected to remain in that position. According to one expert, that status could be very
short-lived indeed. In fact, according to David Hughes, a scientist who spent 32 years with the Geological Survey of Canada, the
exceedingly optimistic estimates could be setting us up for a fall, the likes of which we have not seen since the real estate collapse
of 2008. Hughes is currently a fellow with the Post Carbon Institute. Shale gas has grown explosively to the point that it now supplies some 40
percent of U.S. natural gas. But the question is, how long can that explosion last? Hughes has noted in his report, Drill Baby Drill that it’s not
the amount of gas in situ, but the achievable rate of supply that really matters. It turns out, there are significant constraints
to achieving the needed rates for both shale gas and oil. After studying production data for some 65,000 shale gas wells, using the
industry standard DI Desktop /HPDI database, Hughes found that the vast majority of these wells are depleted within five years. So
although, there is a huge amount of gas and oil sitting there, it will become increasingly difficult, risky and expensive to retrieve
those resources as time goes on. The very high rates of decline of these wells will require thousands of new wells to be dug at a cost
that could well exceed the value of the energy extracted. In the case of shale gas, Hughes estimates a cost of $42 billion per year as
compared to $32.5 billion worth of gas that was produced in 2012. A similar scenario exists with the shale (tight) oil, The two main plays in
North Dakota (Bakken/yellow) and Texas (Eagle Ford/brown) are declining rapidly and will require over 1500 new wells annually at a cost of
$14 billion, just to offset the declines. Production of this oil is expected to peak in 2017 (the year the US briefly becomes top producer) dropping
back within two years to 2012 levels and essentially petering out by 2025. In other words, this whole shale oil bonanza will be a bubble of about
ten years’ duration (see graph). Tar sands oil, the raison d’être for the much-opposed Keystone XL pipeline, is likewise troubled. It contains
relatively low energy while requiring lots of energy, in the form of steam, to produce. Some estimates claim a cost of as much as $100 per barrel.
It is not just Hughes saying this. The Energy Information Administration (EIA) sees U.S. domestic crude oil production including shale oil
peaking at 7.5 million barrels per day (mbd) in 2019 (well below the all-time U.S. peak of 9.6 mbd in 1970), and by 2040 the share of
domestically produced crude oil is projected to be lower than it is today. At the same time as Hughes’ report came out, Deborah Rogers of the
Energy Policy Forum also issued her report, Shale and Wall Street: Was the Decline in Natural Gas Prices Orchestrated?. Rogers is a former
investment banker, now the founder of the Energy Policy Forum. According to her report, shale mergers and acquisitions became one of the most
profitable areas for Wall St. investment banks, accounting for some $46.5 billion worth of deals. Her report provides evidence that Wall Street
promoted the natural gas drilling frenzy (much as it did the housing bubble), by, among other things, conspiring with energy companies to
overstate the size of reserves by as much as 4-500% , as well as understating the steep decline rates and highly inefficient nature of these
operations. Furthermore, they drove production to unsustainable levels in an effort to drive prices down to encourage investment and manipulate
government policy in a direction most favorable to domestic oil and gas production. Because of the debt resulting from these highly leveraged
operations, stated reserves may have broken SEC rules in an effort to avoid collateral default. So, it seems what we have here is a conspiracy of
misinformation, on the part of energy companies and their Wall Street backers, intended, in the name of short term profit, to lure our
economy out onto a branch of the energy tree that is not strong enough to hold its weight. When that branch collapses, prices will suddenly go
through the roof, and the result will be much the same as the financial collapse of 2008, only this time the government will be asked to bail
out the oil companies. I think it would be appropriate, given this information, to immediately terminate the Keystone XL pipeline and to initiate
criminal prosecution of all those involved, for their attempt to defraud the American public, and to, once again put the entire world economy at
risk. And, it’s time for this game to get some rules, so this doesn’t keep happening.
1AR
Natgas boom in unsustainable- cheap shale will run out this decade
Nelder 2012 [Chris, Smart Planet, February, Everything you know about shale gas is wrong, http://www.smartplanet.com/blog/energyfuturist/everything-you-know-about-shale-gas-is-wrong/341]//NR
But now there’s even more bad news: U.S. gas production appears to have hit a production ceiling, and is actually declining
in major areas. The startling revelation comes from a new paper published today by Houston-based petroleum geologist and energy sector
consultant Arthur Berman. Berman reached this conclusion by compiling his own production history of U.S. shale gas
from a massive data set licensed from data provider HPDI. His well-by-well analysis found that total U.S. gas
production has been on an “undulating plateau” since the beginning of 2009, and showed declines in some areas in
2011. This stands in stark contrast to recent data provided by the EIA, which shows shale gas production rising steadily for the
past two years, and well into the future. The EIA’s forecast is bullish because it’s mainly a view of demand, without great
regard for supply limits. But their historical supply data differs for a reason that will be no surprise to experienced observers: the data is
bad. The EIA gets its data on shale gas production by sampling the reports of major operators, then applying a formula to
estimate how much gas is actually being produced, according to Berman. This may explain why they only have official
monthly historical production data for the two years (unofficially, three) of 2008 and 2009, and only annual data for 2010 and 2011. This
has been a big red flag to me in my recent work on shale gas, accustomed as I am to EIA’s far more detailed and up-to-date monthly and
weekly data on oil, and has made it nearly impossible to verify the claim that we’ve had “booming” gas production over
the past two years. Data is also available directly from the states, but some states have flawed reporting processes,
the granularity and reporting frequency varies (as low as every six months, in the case of Pennsylvania), and ultimately the data
isn’t available in a usable format. It’s also inaccurate and incomplete, as one Pittsburgh newspaper recently found out.
Berman reached the same conclusion, noting in his paper that “the data that EIA makes available does not have sufficient resolution to
evaluate individual plays or states.” So he had to build his own database. An unprofitable treadmill One reason for the recent slowdown
in production growth is that “unconventional” shale gas wells have to make up for the decline of conventional gas
wells, which has accelerated from 23 percent per year in 2001 to 32 percent per year today. The U.S. now needs to
replace 22 billion cubic feet per day (Bcf/d) of production each year just to maintain flat supply. Currently, all shale gas plays together
produce around 19 Bcf/d. The shift to unconventional gas has put us on a production treadmill: We have to keep drilling like mad to maintain
output because unconventional wells are far less productive and shorter-lived than conventional gas wells. Berman
observes that an average gas well in Texas in 2010 produces one-fifth as much gas as an average conventional gas well did in 1972. In 1972,
23,000 gas wells produced 7.5 trillion cubic feet in Texas; in 2010, it took 102,000 wells to produce 6.4 trillion cubic feet. Another reason was
that the spurt of production created a gas glut and drove prices far below the level of profitability. Data from a January, 2012 presentation by the
CEO of gas operator Range Resources showed that gas needs to sell for at least $4 per million BTU in order for operators to turn a profit.
Source: Jonathan Callahan, The Oil Drum. Data from Range Resources. Berman is certain that the $4 threshold applies to new drilling on
existing plays only; after accounting for land leasing, overhead and debt service, the threshold would be much higher. In any case, we can see that
production flattened out when prices fell below $4 at the beginning of 2009. Source: Arthur Berman. Data from Natural Gas Intelligence. A gas
price below $3 spells real trouble for operators, and flagging production is but the first effect. The next is debt: According to analysis by ARC
Financial Research, the 34 top U.S. publicly traded shale gas producers are currently carrying a combined $10 billion
quarterly cash flow deficit. And finally, there will the destruction of forward supply, as new development grinds down.
Financing further development with debt in this environment will be extremely difficult , and eventually even the
joint-venture sugar daddies that have sustained operators over the past few months will get cold feet. Without a reversal
in price, gas production is guaranteed to decline. The gas gold rush is over Indeed, Berman concludes that “the gold rush is over at least for now
with the less commercial shale plays.” Within the major producing areas of the U.S., which account for 75 percent of
production, all except Louisiana have been either flat or declining in recent years. Overall, he sees evidence that 80
percent of existing U.S. shale gas plays are already approaching peak production. Rig counts have been falling, and
major operators such as Chesapeake Energy and ConocoPhilips have announced slowdowns in drilling in the last
month. The two major plays that do not show evidence of peaking yet are the newer ones: the Marcellus Shale in Pennsylvania and the
Haynesville Shale in Louisiana. To see the influence of these two plays on overall production, compare the first chart below, which shows
production from all shale plays, to the second, which removes production from those two plays: Source: Arthur Berman Source: Chart by Chris
Nelder, from Arthur Berman’s worksheets The Haynesville surpassed the Barnett Shale in Texas last year as the top-producing shale play in the
U.S., but it may be reaching a production plateau now. Worse, Berman’s analysis finds that despite its impressive production, the Haynesville is
among the least economic of the shale plays, requiring gas prices above $7.00 per thousand cubic feet to sustain new drilling profitably, and
nearly $9.00 per thousand cubic feet after accounting for leasing and other costs. (One thousand cubic feet is roughly equivalent to one million
BTU.) A word of caution is in order here: A one-year decline in production in an unprofitable environment is not proof that shale gas has
“peaked.” It’s certainly possible that renewed drilling could bring higher production when gas prices rise again. The operative question in that
case is when. If gas prices recover within the next year or two, it will be relatively easy to bring new wells online rapidly. But if gas prices
languish for longer than that, the most productive “core” areas of the plays could become exhausted because the wells deplete so quickly. Without
sustained new drilling to replace their production, by the time producers begin drilling again in the remaining, less productive prospects, an air
pocket could form in the supply line. Disinformation and diffusion theory Berman admits that it’s strange for his bottom-up analysis to produce
results that are so wildly divergent from the claims of the operators and the data offered by the EIA. “I ask myself: Where could we be wrong?”
he explained. “We’ve looked at the individual wells and it looks like they’ll produce less gas than the operators say, so where could we be
wrong? Likewise on cost: There are no retained earnings, so how could they be saying they’re profitable?” Having scrutinized the
financial reports of operators, Berman concludes that operators are being honest with the SEC, because if they
aren’t, somebody will go to jail. But then they’re telling a very different story to the public, and to investors, particularly regarding their
costs. This isn’t necessarily nefarious; it’s really just a way of working around the natural risks associated with new resource development.
They’re playing for the future, not for immediate profitability. Early wildcatters gambled on debt-fueled drilling with the hope that they’d be able
to hold the leases long enough to see prices rise again and put them nicely in the black, or flip them at a profit to someone who could. And the
profit picture is substantial: according to the Range Resources presentation, when gas is $6, they’ll be realizing a 135 percent internal rate of
return. “I think these companies realize—clearly—that the U.S. is moving toward a gas economy,” Berman observes. “The natural gas industry
has been very successful at screwing up the coal industry. . . a huge part of the demand is from the power generation business. The President now
thinks, incorrectly, that we’ve got 100 years of natural gas. [Op’erators think] ‘If we can just get all this land held, drilled, etc., then in a couple of
years when the price recovers we’re going to make a fortune’. . . and they’re right!” I am inclined to agree. My own analysis suggests that gas is
trouncing coal in the power generation sector. I am also strongly against exporting LNG, because it will increase domestic costs across the board,
another point on which Berman and I agree. “If they go through with the permits to export LNG, then that’s gonna seal it,” he remarked. “All you
have to do is commit to 20-year contracts to ship a few bcf per day. . . I fear what’s really going to happen is that we’re going to have to start
importing LNG.” Ultimately, we have to ask why there seems to be such an enormous disconnect between the reality of
the production and reserve data, and the wild-eyed claims of operators and politicians. Berman’s answer is blunt:
“We’re in a weird place where it’s not in anybody’s vested interest to say that things aren’t wonderful ,” he said, and
went on to relate a few stories of his encounters with politicians. They admitted to him, straight-up, that they can’t tell the public
the truth about energy issues like gas reserves and peak oil because nobody wants to hear it, and they’ll just wind up
getting voted out of office. “This gets back to basic diffusion theory,” Berman muses, “where only 5 percent of people
base their decisions on information, while the other 95 percent make decisions on what everybody else thinks .” That
sounds right to me. It benefits everyone involved to tell happy lies, and benefits no one to own up to the current reality. That is true for
everyone from the operators right on up to the President. Perhaps in the end—like government—we’ll simply get the energy policy we
deserve.
Shale gas boom is unsustainable- all easy natgas is gone
Heinber 2012 [Richard, He is Senior Fellow-in-Residence of the Institute and is widely regarded as one of the world’s foremost Peak
Oil educators, He has authored scores of essays and articles that have appeared in such journals as Nature, The Ecologist, The American Prospect,
Public Policy Research, Quarterly Review, Z Magazine, Resurgence, The Futurist, European Business Review, Earth Island Journal, Yes!, Pacific
Ecologist, and The Sun; and on web sites such as Alternet.org, EnergyBulletin.net, TheOilDrum.com, ProjectCensored.com, and
Counterpunch.com.¶ He has appeared in many film and television documentaries, including Leonardo DiCaprio’s 11th Hour, is a recipient of the
M. King Hubbert Award for Excellence in Energy Education, and in 2012 was appointed to His Majesty the King of Bhutan's International
Expert Working Group for the New Development Paradigm initiative, “Gas Bubble Leaking, About to Burst”, http://www.postcarbon.org/blogpost/1262435-gas-bubble-leaking-about-to-burst]
In those early days almost no one wanted to hear about problems with the shale gas boom—the need for
enormous amounts of water for fracking, the high climate impacts from fugitive methane, the threats to
groundwater from bad well casings or leaking containment ponds, as well as the unrealistic supply and
price forecasts being issued by the industry. I recall attempting to describe the situation at the 2010 Aspen Environment
Forum, in a session on the future of natural gas. I might as well have been claiming that Martians speak to me via my tooth fillings. After all, the
Authorities were all in agreement: The game has changed! Natural gas will be cheap and abundant from now on! Gas is better than coal! End of
story! These truisms were echoed in numberless press articles—none more emblematic than Clifford Krauss’s New York Times piece, “There
Will Be Fuel,” published November 16, 2010. Now Krauss and the Times are singing a somewhat different tune. “After the Boom in Natural
Gas,” co-authored with Eric Lipton and published October 21, notes that “. . . the gas rush has . . . been a money loser so far for many of the gas
exploration companies and their tens of thousands of investors.” Krauss and Lipton go on to quote Rex Tillerson, CEO of ExxonMobil: “We are
all losing our shirts today. . . . We’re making no money. It’s all in the red.” It seems gas producers drilled too many wells too quickly, causing gas
prices to fall below the actual cost of production. Sound familiar? The obvious implication is that one way or another the
market will balance itself out. Drilling and production will decline (drilling rates have already started
doing so) and prices will rise until production is once again profitable. So we will have less gas than we currently do, and
gas will be more expensive. Gosh, whoda thunk? The current Times article doesn’t drill very far into the data
that make Berman and Hughes pessimistic about future unconventional gas production prospects—the high
per-well decline rates, and the tendency of the drillers to go after “sweet spots” first so that future
production will come from ever-lower quality sites. For recent analysis that does look beyond the cash flow problems of
Chesapeake and the other frackers, see “Gas Boom Goes Bust” by Jonathan Callahan, and Gail Tverberg’s latest essay, “Why Natural Gas isn’t
Likely to be the World’s Energy Savior”. David Hughes is working on a follow-up report, due to be published in January 2013,
which looks at unconventional oil and gas of all types in North America. As part of this effort, he has
undertaken an exhaustive analysis of 30 different shale gas plays and 21 shale/tight oil plays—over
65,000 wells altogether. It appears that the pattern of rapid declines and the over-stated ability of shale to
radically grow production is true across the U.S., for both gas and oil. In the effort to maintain and grow oil and
gas supply, Americans will effectively be chained to drilling rigs to offset production declines and meet
No, shale gas won’t
entirely go away anytime soon. But expectations of continuing low prices (which drive business plans
in the power generation industry and climate strategies in mainstream environmental organizations ) are
about to be dashed. And notions that the U.S. will become a major gas exporter, or that we will convert millions of cars and trucks to run
demand growth, and will have to endure collateral environmental impacts of escalating drilling and fracking.
on gas, now ring hollow.
AT: Manufacturing
Not key to economy
US economy not reliant on manufacturing – innovation economy
Hassett 10 (Kevin, director of economic-policy studies at the American Enterprise Institute, “Obama's
Obsession Drives Progress in Reverse: Kevin Hassett,” 8-15-10, http://www.bloomberg.com/news/201008-16/obama-s-obsession-drives-progress-in-reverse-commentary-by-kevin-hassett.html)
Manufacturing has been on a more-or-less-steady decline as a share of national output for decades, part
of the natural evolution of the U.S. economy. It’s time politicians stop calling this a national crisis. Lots of firms went
bankrupt during the recession without the federal government sweeping in to save them. Big manufacturing
firms had to be rescued because of their symbolic power. Massive government intervention, it seems, is advisable to save the auto industry
because manufacturing output is somehow more valuable than other types of output. Like the rest of Obama’s economic policy,
the foundation for this idea is nonexistent. Small wonder his economists are quitting. Plan Power Later in his talk at GM, Obama
pledged “to insist that management, workers, creditors, suppliers, dealers, shareholders, everybody get together and come up with a plan so that
we can start building for the future.” I guess that means the problem with the American auto industry was not that the automakers were swamped
by insanely high labor costs after years of unwise concessions to unions; the problem was that we never had a presidential orator brilliant enough
to urge everyone to get together and craft a plan to save manufacturing. Truth is, we already know Obama’s plan: to tax you to keep the rustladen, union-heavy industrial sector afloat. Sadly, similar thinking seems to be catching like a plague. Two days before the
president’s speech, the House voted 379 to 38 to pass H.R. 4692, which recommends establishing a
presidential task force to create a National Manufacturing Strategy to revive U.S. industries . Special Treatment
You might ask, what’s the harm in yet another government study? Here’s what. One provision in the bill would require
the president to include, in each year’s federal budget, information on how the spending plan advances the manufacturing strategy. That would
give manufacturing special treatment in every budget. Manufacturing has been declining as a share of U.S. gross
domestic product for some time, from about 28 percent in 1950 to about 11 percent in 2009. Any
economist can tell you that this decline is not necessarily a cause for concern. Over the past few decades, our
economy has transformed dramatically, and the importance of innovation has increased sharply. A 2006
study by the Federal Reserve found that investment in intangible capital is more important today, in the aggregate,
than investment in tangible capital. We have become an ideas economy . That’s not a problem. It’s
economic evolution, a natural and positive force. The agricultural sector has seen a similar decline in the
last 60 years, falling to 1 percent of GDP from roughly 7 percent.
Manufacturing not key to competitiveness – innovation, education
Summers 10 (Larry, former Secretary of the Treasury, “Farewell Address at the Economic Policy
Institute,” 12-13-10,
http://delong.typepad.com/sdj/2010/12/lawrence-h-summers-farewell-address-at-the-economic-policyinstitute.html)
In a demand constrained economy like the one we have today and will have for several years, economics
is turned topsy-turvy. As Keynes pointed out in his celebrated Paradox of Thrift, individual efforts to save more lead to less total saving.
More educated workers get jobs but with demand constraints those job opportunities come at the expense
of their less educated neighbors. With demand constraints, increases in productivity may act to exacerbate
deflationary pressures and increases in efficiency may result in more unemployment rather than more output. That
is why we have to drive recovery and remove the demand constraint on the economy. At the same time, it is
essential that we recognize that fiscal and monetary policy or increases in demand never made a society
prosperous, fair, or strong. We need to renew the American economy for a century that will be very different from its predecessor. A
key lesson that management strategists have distilled for businesses is this: you don't succeed by
producing exactly the same thing that other people are producing in the same way just at a lower cost. You
succeed, by establishing your own uniqueness and excellence. Think of the distinctiveness of products like Google's search engine; the iPad or a
Harley-Davidson. Think of the distinctive way that Southwest or Nucor or even Walmart deliver their
products and services. The United States has led the global economy by building on its unique
capacities. By building on our distinctive strengths, we can continue to lead in the next century. There is no going back to the
past. Technology is accelerating productivity in mass production to the point where even China has seen
manufacturing employment decline by more than ten million jobs over the most recent decade for which data is available. We are
moving towards a knowledge and service economy . Another inescapable truth is that the world is shrinking. When I
worked in Jakarta just 30 years ago I tried to follow the Red Sox. When the Red Sox played on Tuesday night, I learned how they did on Friday
because I had to wait until the Herald Tribune arrived days later. It is a different: a smaller world. What does it mean to adapt to this? Just as the
American North prospered even as the southern part of the United States caught up, even as we drew strength in the generation after World War
II as Europe and Japan's economies converged towards our own, we will need to find ways to prosper as the emerging markets of the world take
their place on the global stage. What should our approach be? Some suggest that we have no alternative but to compete
with the world on price even if it means striving to win races to the bottom. They would have workers
sacrifice wages, benefits, and bargaining rights to hold onto their jobs. They would slash taxes on businesses even as
their profits rise in order to lure them to stay in the United States. They would shred social safety nets in the name of self-reliance. Such Social
Darwinism was bad morality and bad economics in the 19th century and it is no better in the 21st. Consider this: The flatness of the
world notwithstanding, by far the largest part of the activities Americans engage in and the goods they
buy remain quite local. It is health care and retail services, recreation and education, haircuts and insurance policies, hotels and houses
and I could go on. Moreover, where we compete with other countries, our strength is collective. Few of us can hope to succeed as individuals in a
global economy where any particular task or skill can be purchased at very low prices in much of Asia and beyond. Rather, our strength
must come from establishing uniqueness, establishing that which is difficult to replicate, that which comes from
more collective action. Any idea or machine or even individual capacity can be transplanted. Far harder to
transplant, imitate, or emulate are our great institutions – the national laboratories and the national parks and the
national highway system, great universities and great cities and great technology clusters, a diverse culture, deep capital markets, and a
tremendous ethic. Where competition is concerned, the lesson for us as a nation is the same as the lesson
for
business: far better to compete by innovating, leading, and competing on strength, than by standing still,
and reducing prices. Let me highlight what I see in this regard as the three essential priorities for the years ahead. President Clinton used
to say that in a world where ideas can move, capital can move, a nation's distinctive strength lay in its people. Our biggest failing as a nation over
the last 50 years has been with respect to education. We were once the envy of the world; now we struggle to get into the top half of OECD
nations. The Duke of Wellington famously observed that the Battle of Waterloo had been won on the playing fields of Eton, and I would suggest
that in this less elitist age, the battle for America's future will be won or lost in its public schools. For too long we have been caught in a sterile
debate between those who believe in more accountability and those who see the need for more resources. In truth, no one who has seen the
conditions in our urban schools can deny the need for more resources, and no one who believes in incentives can deny the need for more
accountability. Through Race to the Top the Administration has sought to reform elementary and secondary education both by providing
resources and by increasing accountability. These kinds of efforts will need to be magnified in the future.
Alt causes
Too many alt causes for them to solve
Jasinowski 2013 (Jerry Jasinowshi, Former President of the National Association of Manufacturers, “A Real Manufacturing Resurgence.”
http://www.huffingtonpost.com/jerry-jasinowski/manufacturing-comeback_b_3131062.html )//NR
There are contradictory analyses in the media about a resurgence of manufacturing - some praising it as the second coming and others insisting it
is imaginary. For instance, on April 2, The Washington Post featured a front page report of European manufacturers setting up shop in the U.S. to
take advantage of low natural gas prices, while the New York Times had a story on the front page of its business section entitled "Manufacturing's
Mirage, A Jobs Boom Built on Cheap Energy Has Yet To Appear." In reality, there is no contradiction. Even the optimistic souls like me who
perceive a resurgence in manufacturing do not contend manufacturing
will ever be the fountain of jobs that it once was. It
is a fact of life that low skill manufacturing jobs have fled the U.S. and they are increasingly fleeing developing
nations as more and more rote tasks are automated. Even so, manufacturing remains a key driving force of economy growth and a critical seedbed
for innovation. Akio Morita, the founder of Sony, said years ago that the world power that loses its manufacturing base will cease to be a world
power. That is why the Chinese are so determined to build their manufacturing sector. Manufacturing is key to economic growth. The reality on
the ground is that U.S.
manufacturing is today giving a good account of itself, but with sensible incentives, it could do
much more. Thomas J. Duesterberg of the Aspen Institute suggests there is a realistic path for growing manufacturing's contribution to GDP
by 4 percentage points, from 11.6 percent to 15.8 percent by 2025 . To do it, he advocates: • Expanding exports and reducing
imports. We need a much more aggressive effort to open foreign markets to our exports, a greater effort to promote
exports, and a tougher stand on violations of trade agreements, such as currency manipulation. • We need a clear
strategy for taking advantage of plentiful and cheaper natural gas that is attracting foreign investment. In many key
manufacturing sectors, this gives us a once in a lifetime opportunity to grow and expand. • We must intensify our investments in
productivity gains, knowing our competitors are nipping at our heels, and we should also streamline the U.S. regulatory
process and apply manufacturing technology to the service industries. • We need a coherent national commitment to endow
workers with the skills they need in modern manufacturing. For though manufacturing will never again be the fountain of
jobs it once was, it is creating millions of fresh opportunities for qualified people. The Aspen Study on the Manufacturing Resurgence provides a
practical framework for increasing manufacturing's contribution to economic growth, and the corporate and public policies we need to make it
happen. We should read it and heed it.
Energy is only small fraction of the manufacturing resurgence - on-shoring, productivity, increased
production, and investment are alt causes and mean manufacturing growth is inevitable
Fink 2013 (Billy Fink, a market analyst for Axial. Graduated from Columbia university with a BA in History and Psychology, June 6, 2013.
“Manufacturing Resurgence or New Growth?” http://www.axial.net/blog/manufacturing-resurgence-new-growth/)//NR
Over the past few years, the phrase “ manufacturing
resurgence” has grown in popularity throughout the United States. Industry
analysts have identified a variety of positive factors that suggest America may reclaim its bygone title of a manufacturing
powerhouse. Joe May, Managing Principal of Graham Partners, echoed the strength of this trend. He explained, “ Manufacturing jobs have
increased recently and industrial-production as a percent of GDP is rising.” However, May was certain to add that the resurgence is not as onedimensional as it seems. While manufacturing jobs are currently on the rise, the focus of American manufacturing has largely shifted
from basic, labor-intensive goods to more sophisticated products. This transformation is a critical characteristic of America’s historical and future
manufacturing presence. May believes that the shifting dynamics in the costs of energy has helped spur the recent manufacturing resurgence. “The
simultaneous rise in transportation cost for foreign-produced goods and the fall in energy costs in the US has led many manufacturers to rethink their foreign
manufacturing efforts,” said May. “For many manufacturers, the cost of shipping goods from another country is beginning to negate the benefits.” Transportation
costs are not the only fixed cost on the rise. As China — and other developing countries — continues to grow, so too does the cost of labor. According to a recent
report from the China Market Research Group, incomes in China have quadrupled over the past decade. In 2000, the average annual income was $760 per person. As
of 2010, it was $3,000. The
pace of growth is expected to continue or accelerate. Without the clear economic benefits, many
manufacturers are becoming less tolerant of the inherent risks that are introduced by international manufacturing. One of the
biggest risks is to the supply chain. “ Manufacturers are looking to avoid a variety of political, economic, or natural disasters that could impact the supply
chain,” explained May. By onshoring and bringing production efforts closer to home, there are fewer events that can disrupt the process. However, as
manufacturers look to mitigate supply chain risks and higher labor costs, the United States is not the only option on the table. Thanks to favorable trade agreements,
Mexico is being considered as nice alternatives for manufacturing needs. As Member Eric Rundall of Dura Motors explained last year, “OEMs are putting in
additional capacity [in Mexico]. Looking globally, if you consider total labor cost and logistics, it’s cheaper than China. Unrestricted trade and proximity of customer
destinations makes it more affordable.” According to a recent Economist article, “On present trends, by 2018 America will import more from Mexico than from any
other country.” Although manufacturing jobs are on the rise in the United States, May believes the manufacturing that left is not the same that is
returning to the United States. According to May, America has undergone a form of manufacturing evolution over the past 50 years – one in favor of industrial
technologies. “The US has begun to focus on manufacturing more sophisticated products that are higher up the value chain,” said May. “Rather than manufacturing
products with a large labor component in the cost structure, we are now focused on more high-tech products, such as measurement and control devices, across a wide
variety of industry sectors, including aerospace, pharmaceuticals, medical products, etc.” He continued, “ The
value of industrial production in
the US is up by more than four times since 1960, despite a drop in manufacturing employment. Currently, each employee is generating
almost 6x more output than an employee in 1960. As a result, I don’t think the low-value-add jobs of manufacturing will return. The US is a favorable home
for this trend in manufacturing because we have the most skilled workforce in the world at our disposal.” Given the current personality of US manufacturing, many
investors are focused on the manufacturing firms with a technology focus. “Businesses with strong industrial technologies at the core are
likely to experience the greatest gains from the ongoing resurgence,” explained May. “They are becoming quite attractive to investors.” In
addition to the growing investor demand, business exits are likely to rise as well. “Generally speaking, business owners that have weathered the storm of 2008 and
2009 will probably soon consider exits,” says May. “Most don’t want to be at the helm during the next downturn. Since you want to sell your business in a growing
economy, I expect we will see an increase in exits over the next 18 months.” Between the heightened supply and demand, manufacturing seems
ripe for M&A activity. Despite the positive trends, May has not seen significant change in buyer dynamics. “We have not seen much in terms of new competition or
new investors entering the manufacturing space.” Trends on Axial support May’s sense. While the proportion of direct investors in manufacturing has remained
relatively consistent, the average number of pursuits per deal has grown significantly – from 4.77 per deal in Q1-12 to 12.11 per deal in Q1-13. Whether new players
will enter the space in the near-term remains to be seen.
Aff doesn’t solve manufacturing – Trade deficit
Atkinson 12 (Robert D. Atkinson, “Worse Than the Great Depression: What Experts Are Missing About
American Manufacturing Decline,” http://www2.itif.org/2012-american-manufacturing-decline.pdf
In the 2000s, U.S. manufacturing suffered its worst performance in American history in terms of jobs.
Not only did America lose 5.7 million manufacturing jobs, but the decline as a share of total manufacturing jobs (33
percent) exceeded the rate of loss in the Great Depression. 1 Despite this unprecedented negative performance, most
economists, pundits and elected officials are remarkably blasé about what has transpired . Manufacturing, they argue, has simply
become incredibly productive. While tough on workers who are laid off, job losses indicate superior performance. All that is needed,
if anything, are better programs to help laid-off workers. This report argues that this dominant view on the loss of manufacturing jobs is
fundamentally mistaken. Manufacturing lost jobs because manufacturing lost output, and it lost output because its ability to compete in global
markets—some manipulated by egregious foreign mercantilist policies, others supported by better national competiveness policies, like lower
corporate tax rates—declined significantly.
In 2010, 13 of the 19 U.S. manufacturing sectors (employing 55 percent of
manufacturing workers) were producing less than they there were in 2000 in terms of inflation-adjusted output. 2
Moreover, we assert that the government’s official calculation of manufacturing output growth, and by definition productivity, is significantly
overstated. Overall, U.S.
manufacturing output actually fell by 11 percent during a period when GDP increased
by 17 percent. 3 The alarm bells are largely silent for two reasons: government statistics significantly overstate the change in U.S.
manufacturing output, and most economists and pundits do not extend their analysis beyond one macro-level number (change in real
manufacturing value added relative to GDP). But the conventional wisdom that U.S. manufacturing job loss is simply a result of productivitydriven restructuring (akin to how U.S. agriculture lost jobs but is still healthy) is wrong, or at least not the whole story. This report contends that
the loss of U.S. manufacturing jobs is a function of slow growth in output (and, in most sectors, actual
loss of output) caused by a steep increase in the manufactured goods trade deficit .
Here’s 6 alt causes to your manufacturing internal
PWC 12 [Pricewaterhouse Coopers – assurance, tax, and advisory services firm, “Rising Labor Costs
Not the Sole Factor Influencing Potential U.S. Manufacturing Resurgence,” September 12th, 2012,
http://www.pwc.com/us/en/press-releases/2012/manufacturing-resurgence-press-release.jhtml, Chetan]
NEW YORK, September 12, 2012― Consensus views on a U.S. manufacturing resurgence have largely centered on rising labor costs in markets such as China as the key driver of re-shoring
back to the U.S. However, a new PwC US report, A Homecoming for U.S. Manufacturing?, reveals that while rising labor costs are part of the story, a range of factors—including transportation
and energy costs and protecting the supply chain—could drive a sustained manufacturing renaissance in the U.S. beyond any cyclical recovery, potentially improving investment, employment,
PwC’s new report identifies seven factors—including transportation and
energy costs; currency fluctuations; U.S. market demand; labor costs; U.S. talent; availability of capital;
and the tax and regulatory climate—as the primary catalysts influencing manufacturers' decisions to establish
production output and research & development (R&D).¶
production facilities domestically and produce products closer to their major customer bases. PwC's report also notes that localizing production can mitigate supply chain disruptions, which
totaled $2.2 billion in financial impact for U.S. industrial products companies in 2011.¶ “The reviving industrial manufacturing sector is instrumental to U.S. economic recovery,” said Bob
McCutcheon, PwC’s U.S. Industrial Products leader. “Beyond the cyclical rebound, however, a host of structural changes is emerging that may lead to the U.S. becoming an important location
for basing production and R&D facilities for several industries. In addition to trends in labor costs, other factors include the need to reduce transportation and energy costs; the emergence of the
U.S. as a more attractive exporter and the relative attractiveness of the U.S. markets.Ӧ Relocating manufacturing production in the U.S. generally holds greater advantages for some industries
over others. When taking into account costs spanning labor, materials, transportation and energy, the PwC report shows that chemicals, primary metals and heavy equipment manufacturing
industries stand to benefit most from maintaining or expanding facilities in the U.S. given opportunities and cost incentives to re-shore domestically. Wood, plastic and rubber products
companies could also benefit from changes in domestic costs, but lower net imports in these industries may limit the full economic benefits of on-shoring in the U.S.¶ “Industrial manufacturers
may increasingly rethink their U.S. strategies, including the merits of continuing to separate production and R&D and producing abroad and importing back to U.S. buyers. Depending on the
industry, there may be considerable benefits to establishing regionalized supply chains and R&D facilities in the U.S., such as reducing costs, shortening lead times, protecting intellectual
property and mitigating many of the risk factors inherent in developing markets,” added McCutcheon.¶ The PwC report outlines seven factors that may play key roles in making re-shoring
decisions, as well as in determining whether or not the U.S. will become a more competitive and attractive market for manufacturing expansion:¶ Transportation and Energy Costs:
The
bull market in energy commodities over the last decade has contributed to a major increase in
transportation costs for manufacturers with global supply chains. As a result, some machinery companies are producing more in the U.S. for
sale in North America. Given growing global demand for energy, transportation costs will likely remain elevated, making production closer to home more attractive. This can also cut down on
lead times, reduce inventory levels, mitigate some currency risks, increase control over intellectual property and reduce supply chain disruption risks. In addition, technical progress in extracting
natural gas from shale in the U.S. has created new investment opportunities for manufacturers across several industries, particularly in chemicals and metals, due to more affordable energy and
The U.S. dollar generally depreciated d
greater downstream demand.¶ Currency Fluctuations:
uring the last decade, and China’s currency has risen moderately,
which narrows the cost gap between producing in the U.S. and importing from China for domestic consumption. In addition, the secular decline in the U.S. dollar helps make the U.S. a
potentially more competitive location to manufacture for exports. This is contributing to strong growth in the export of goods since the end of the recession. An appreciation of the Yuan relative
to the U.S. dollar may continue longer-term as China’s economy grows, which could provide some advantage to U.S. manufacturers.¶ U.S. Market Demand: While China and other emerging
markets are forecast to continue to grow GDP at a faster clip than the U.S., the disparity in wealth, as measured by real GDP per capita, is expected to persist with the U.S. dwarfing China and
other emerging markets. This difference in the relative standard of living, as well as the size of the U.S. market, supports investment in new domestic production of goods targeted for U.S.
consumption. At the same time, global manufacturers with a multi-region strategy that source from Asia, for example, are likely to keep production in that region to serve those local markets,
consistent with the trend toward regionalization of manufacturing for the largest global manufacturers.¶ U.S. Talent: The gap in the level of higher education and training between the U.S. and
. It is possible that the U.S. workforce will remain competitive for
the foreseeable future owing to institutional advantages in education and experience; however strength in
emerging economies is growing. Workforce training has also been commonly cited as a driver in recent manufacturing investment decisions regarding which states to
China has narrowed, though the U.S. still holds a significant advantage
operate in, indicating that manufacturers are keen to locate where there are vocational programs in place to develop skilled workers. Conversely, despite the relative strength of the U.S. labor
force, the aftermath of the housing bubble has slowed worker mobility and may contribute to labor market friction.¶ Availability of Capital: Although commercial and industrial lending demand
has recovered and credit standards have come back down from levels reached during the financial crisis,
banks have resumed tightening credit standards.
In addition, there is evidence that borrowing in China has become more difficult due to increased capital requirements for banks and tighter lending for exporters. The balance of risks favors
manufacturers may shy away from longer supply
chains and the risks they carry including inventory tied up in transit, particularly in industries with shorter
product cycles or high spoilage.¶ Tax and Regulatory Climate: The U.S. now has the highest statutory corporate tax rate
among developed countries as of mid-2012. While U.S. corporations tend to have a much lower effective tax rate, this and other factors have spurred talk of tax reform to
boost economic growth and employment. Proposals include a lower statutory rate, tax incentives and increasing—or making permanent—the R&D tax credit. However, the tax and
regulatory environments bring uncertainty to the current expansion of domestic manufacturing.¶ U.S. Labor Costs:
some continued credit tightening in several key economies to stave off inflation. As a result,
Higher labor costs in emerging economies, especially China, are challenging profitability for some industrial manufacturers. This concern may not ease as the Chinese government’s policies and
the rising cost of living in urban areas add to wage pressures. From 2008 to 2011, China’s hourly manufacturing labor costs rose by over 80 percent and are expected to rise at a similar rate for
the next four years. This compares with the estimated increase of around 10 percent for the U.S. over the same time period. However, the cost premium, based upon the difference in absolute
wages between the U.S. and China, has continued to expand, making it possible that labor arbitrage involving China and other low labor cost emerging markets will persist
AT: Clean tech
No internal link
Natural gas and renewable can be developed at the same time and complement one another- even
with lower prices, the clean tech industry will still grow exponentially
Allen 2014 (Jason Allen, writer for the Business Insider, March 11, 2014. “Renewable energy is getting ready for a boom that could rival
shale oil and gas.” http://www.businessinsider.com/renewable-energy-is-about-to-boom-2014-3)//NR
In the last five years shale, gas and fracking have come to dominate the zeitgeist of U.S.
energy. So you might expect
natural gas to overshadow every other energy source well into the future. Don’t. The truth is, renewable
sources, particularly solar and wind, are on the verge of a boom that could rival the rise of shale oil and gas.
And just as fracking has made millionaires out of farmers, driven down the price of natural gas and dramatically transformed the geopolitical
landscape, the coming renewable rush will also reshape our energy economy . In my law practice, where we work
with power investors, utilities, private equity funds, and independent power producers, my colleagues and I were pursuing fossil-fuel projects
almost exclusively five years ago. Renewables represented less than 10 percent of our clients’ deal flow. Since then renewables deals
have become our most common transactions. What’s driving the deals? New technologies that have pushed down the
cost of renewables, for starters. Add to that crucial Wall Street financing, which hasn’t dried up despite the
natural gas boom. Perhaps most importantly, the mindset of the energy prospector has changed. We see it in our
clients; people who once chased oil and gas rights and traditional power deals are now going after solar
contracts. Put all those factors together, and solar and wind power finally have the critical momentum to join shale
reserves as America’s energy gold mines. Just look at solar today compared to five years ago. In 2008 solar seemed the exclusive province of
wealthy (and perhaps feather-headed) green-energy advocates. This wasn’t a technology that could win on its economics—it was a $150,000
badge of pride that people stuck on the sides of their homes to demonstrate their occupants’ eco-credentials. Not anymore. Solar panels cost
60 percent less than they did just two years ago. Residential installation costs for solar panels in California now run about $4.25 per watt; in
three years, says the U.S. Energy Information Administration (EIA), that number will be $2.88 per watt (we believe it could get there even
sooner). Costs for utility-scale solar installations have fallen just as drastically, dropping from over $7.00 per watt to $2.50 per watt in the last
five years. Total U.S. solar installations now produce 14 gigawatts of electricity, a five-fold increase from 2010. That’s
equivalent to 23 billowing coal-fired power plants. Another 10 gigawatts are expected to come online in 2015. The price changes have made solar
accessible to middle-class homeowners who are more interested in cutting their electric bill than showing off for the neighbors. Residents in
California, New Jersey and several other states can now install solar panels without making a large investment up front, which had been a huge
barrier for years. Homeowners in California, for example, can sign zero-down 20-year contracts with SunPower and pay less for their monthly
electricity than they would from a conventional source. As with most things, the internet will play a part in dispersing this technology.
Washington-based Geostellar.com, launched in 2010, aims to be the Expedia or Orbitz of solar power. It raised $12 million in 2012 and just last
month launched its powerful new website, which allows consumers to see solar options for their rooftop, via an aerial view in Google Maps. The
financing options that have recently become available to solar installations may contribute more to their success than any technology. In
November Credit Suisse and SolarCity completed the first securitization of distributed solar energy assets, selling $54 million in bonds. With an
interest rate of 4.8 percent and a maturity date of December 2026, the securities received an investment grade rating of BBB+ from Standard &
Poor’s. As Wall Street-style financing opens deep investor pockets, the race for the country’s rooftops is rapidly picking up speed. More than
82,000 consumers have signed up with SolarCity and the company expects to double its installed capacity in 2014. Then there’s wind power,
where the efficiencies have advanced even more quickly than in solar. By 2018 wind installations will cost less to
build and operate than new coal, nuclear and some forms of gas-fired facilities, according to the EIA. Those costs do not include any federal
subsidies. Wind-system costs have dropped 43 percent since 2009. If natural gas prices go up any faster, wind power may even run at a discount
to all major generation sources by 2018. Wind has transitioned from an expensive green energy propped up by
legislative support to a bona fide player that competes shoulder-to-shoulder with gas and coal for large
generation projects. Look no further than the heart of oil and gas country, Texas. Some 25 percent of all U.S. wind power contracts this year were
in the Lone Star State, and many of those produced electricity at just $25 per megawatt-hour, a $10 discount to prevailing wholesale Texas power
prices Renewables have already made more progress than most realize—they will generate 14 percent of U.S. electricity this year, while the
entire nuclear fleet will churn out 19 percent. We’ve seen cheap natural gas reorder the energy topography—but gas’s
rise is actually complimentary to renewables. Renewables can’t avoid the inevitable downtimes—the wind
doesn’t always blow nor the sun always shine—and natural gas is the one conventional power source that can be readily and efficiently toggled
up and down. Combined,
a base of renewables and U.S.-sourced natural gas makes for a secure and
cheap energy future, something unfathomable just five years ago.
Not true- natural gas acts as a bridge fuel to ALLOW for renewable energy
Trembath et al 2013 (Alex Trembath, policy analyst in the Energy and Climate Program at Breakthrough Institute, where he researches
and writes about renewable energy technologies, American federal energy policy and the history of public investments in technological
innovation, and Max Luke, policy associate in the Energy and Climate Program at Breakthrough, where his research focused on a range of energy
issues and topics including nuclear power, natural gas, renewables, energy efficiency rebound and backfire, national energy subsidies, and
electricity systems, with Michael Shellenberger and Ted Nordhaus, “Coal Killer: How Natural Gas Fuels the Clean Energy Revolution”,
http://thebreakthrough.org/images/main_image/Breakthrough_Institute_Coal_Killer.pdf)
Gas-fired power provides cheap, low-carbon, and flexible backup support for intermittent wind and solar . Grid
operators depend on reliable power production from power plant operators to match grid supply and demand and ensure
consistent price signals. As intermittent renewables — particularly wind — continue to occupy a greater share of the
nation’s electricity output, power system operators will need to increasingly rely on capacities of backup and
firming power. Natural gas–fired power plants offer the best currently available solution. By contrast, the
majority of coal plants in the United States were designed to provide steady baseload power to the grid, with very little
flexibility. Today’s coal plants have low ramping rates (1.5 percent to 3 percent per minute) and become inefficient if they are
operated below maximum output, increasing marginal emissions of CO2, NOx, and SO2 pollutants.93 Conventional nuclear
power cannot be counted on for flexible power in any context today, given extreme technical difficulties in cycling and
ramping nuclear generators. Although grid-scale energy storage options are expanding, the technology is still limited in its commercial
applicability. Natural gas power — and particularly power from natural gas combined cycle (NGCC) plants — provides a readily
substitutable alternative to baseload and older load-following coal plants. Flexible gas plants provide support for
electric power grids that are increasingly occupied by intermittent wind and solar. A study from researchers at Carnegie Mellon
University suggests that for every 4 MW of wind capacity, 3 MW of NGCC capacity will be needed to operate the grid reliably.94 The
expansion of gas-fired power plants could accelerate the integration of intermittent power into existing grid
systems.95 New natural gas plants have ramping rates of approximately 8 percent per minute and can reduce their output to 80 percent capacity
with minimal heat rate penalty. New NGCC plants that are specifically designed to offer flexibility to a renewables-heavy grid system can ramp
to 150 MW in 10 minutes and to full load in 30 minutes.96 General Electric’s new fleet of gas-fired power plants is designed to optimize
integration with variable power sources and can ramp as fast as 100 MW per minute.97
Cheap natgas is k2 a zero carbon economy- fast tracks renewable integration
Luke and Trembath 2013 (Max, policy associate in the Energy and Climate Program at Breakthrough, where his research focused on
a range of energy issues and topics including nuclear power, natural gas, renewables, energy efficiency rebound and backfire, national energy
subsidies, and electricity systems, and Alex, policy analyst in the Energy and Climate Program at Breakthrough Institute, where he researches and
writes about renewable energy technologies, American federal energy policy and the history of public investments in technological innovation,
“The Bridge to Zero Carbon: Can natural gas catalyze the transition to a clean energy future?”, http://ensia.com/voices/the-bridge-to-zerocarbon/)
One of natural gas’s most important strengths as a bridge technology is its ability to support the continued expansion
and deployment of wind, solar and other zero-carbon energy. Renewables such as wind and solar complicate the
traditional operation of electricity power systems. For example, utility-scale wind generation, a particularly volatile intermittent power
source, requires electricity operators to make significant adjustments to balance generation and load, creating inefficiency in the system. By
providing backup and firming capacity, the expansion of gas-fired power plants can accelerate the integration of
intermittent power into existing electricity grids. New natural gas plants can power up and reduce output very
quickly with minimal efficiency loss, and new NGCC — natural gas combined cycle — plants are specifically designed to offer
flexibility to a renewables-heavy grid system. Countering concern that cheap natural gas undercuts the deployment of renewables,
wind and solar have seen rapid growth in recent years thanks to federal tax incentives , state mandates and other subsidies.
And while there may be cases where cheap natural gas has challenged the economics of renewable power, the far bigger threat to
renewables is subsidy dependence and regulatory uncertainty. Likewise, the existential threats to nuclear power have more to
do with high capital costs and regulatory challenges than with recent price competition by cheap natural gas. (Another report published this
month by the Breakthrough Institute details the reforms needed to accelerate innovation in nuclear energy to make it cheaper and more scalable.)
Finally, cheap natural gas presents opportunities for development of advanced carbon capture technologies . While
carbon capture has typically only been considered for coal-fired power, the cleaner pollution stream emitted from
natural gas plants makes them more amenable to carbon capture than coal.
No impact to warming
Long timeframe and adaptation solves
Robert O. Mendelsohn 9, the Edwin Weyerhaeuser Davis Professor, Yale School of Forestry and
Environmental Studies, Yale University, June 2009, “Climate Change and Economic Growth,” online:
http://www.growthcommission.org/storage/cgdev/documents/gcwp060web.pdf
The heart of the debate about climate change comes from a number of warnings from scientists and
others that give the impression that human-induced climate change is an immediate threat to society
(IPCC 2007a,b; Stern 2006). Millions of people might be vulnerable to health effects (IPCC 2007b), crop
production might fall in the low latitudes (IPCC 2007b), water supplies might dwindle (IPCC 2007b),
precipitation might fall in arid regions (IPCC 2007b), extreme events will grow exponentially (Stern
2006), and between 20–30 percent of species will risk extinction (IPCC 2007b). Even worse, there may
be catastrophic events such as the melting of Greenland or Antarctic ice sheets causing severe sea level
rise, which would inundate hundreds of millions of people (Dasgupta et al. 2009). Proponents argue there
is no time to waste. Unless greenhouse gases are cut dramatically today, economic growth and well‐being
may be at risk (Stern 2006). These statements are largely alarmist and misleading. Although climate
change is a serious problem that deserves attention, society’s immediate behavior has an extremely low
probability of leading to catastrophic consequences. The science and economics of climate change is
quite clear that emissions over the next few decades will lead to only mild consequences. The severe
impacts predicted by alarmists require a century (or two in the case of Stern 2006) of no mitigation.
Many of the predicted impacts assume there will be no or little adaptation. The net economic impacts
from climate change over the next 50 years will be small regardless. Most of the more severe impacts
will take more than a century or even a millennium to unfold and many of these “potential” impacts
will never occur because people will adapt. It is not at all apparent that immediate and dramatic
policies need to be developed to thwart long‐range climate risks. What is needed are long‐run
balanced responses.
Warming is irreversible
ANI 10 (“IPCC has underestimated climate-change impacts, say scientists”, 3-20, One India,
http://news.oneindia.in/2010/03/20/ipcchas-underestimated-climate-change-impacts-sayscientis.html)
According to Charles H. Greene, Cornell professor of Earth and atmospheric science, "Even if all man-made
greenhouse gas emissions were stopped tomorrow and carbon-dioxide levels stabilized at today's concentration, by the
end of this century, the global average temperature would increase by about 4.3 degrees Fahrenheit, or about 2.4
degrees centigrade above pre-industrial levels, which is significantly above the level which scientists and policy
makers agree is a threshold for dangerous climate change." "Of course, greenhouse gas emissions will not
stop tomorrow, so the actual temperature increase will likely be significantly larger, resulting in potentially
catastrophic impacts to society unless other steps are taken to reduce the Earth's temperature," he added. "Furthermore, while the oceans have
slowed the amount of warming we would otherwise have seen for the level of greenhouse gases in the atmosphere, the ocean's thermal inertia will
also slow the cooling we experience once we finally reduce our greenhouse gas emissions," he said. This
means that the temperature
rise we see this century will be largely irreversible for the next thousand years. "Reducing greenhouse
gas emissions alone is unlikely to mitigate the risks of dangerous climate change," said Green.
No impact to heg
Lots of factors prevent great power conflict without hegemony
Fettweis 10 (Christopher J. Professor of Political Science at Tulane, Dangerous Times-The
International Politics of Great Power Peace, pg. 175-6)
If the only thing standing between the world and chaos is the US military presence, then an adjustment in grand strategy would be exceptionally
of the other explanations for the decline of war – nuclear
weapons, complex economic interdependence, international and domestic political institutions,
counter-productive. But it is worth recalling that none
evolution in ideas and norms – necessitate an activist America to maintain their validity. Were
American to become more restrained, nuclear weapons would still affect the calculations of the
would be aggressor; the process of globalization would continue, deepening the complexity of
economic interdependence; the United Nations could still deploy peacekeepers where necessary; and democracy would
not shrivel where it currently exists. More importantly, the idea that war is a worthwhile way to resolve
conflict would have no reason to return. As was argued in chapter 2, normative evolution is typically unidirectional. Strategic
restraint in such a world be virtually risk free.
Statistically unipolarity is THE most conflict prone system
Montiero 12 [Nuno P. Monteiro is Assistant Professor of Political Science at Yale University, “Unrest
Assured: Why Unipolarity is Not Peaceful”, International Security, Vol. 36, No. 3 (Winter 2011/12), pp.
9–40, Chetan]
Wohlforth claims not only that the unipole can stave off challenges and preclude major
power rivalries, but also that it is able to prevent conflicts among other states and create incentives for them
to side with it. 39 The unipole’s advantage is so great that it can settle any quarrel in which it intervenes. As Wohlforth writes, “For as long as
unipolarity obtains....second-tier states are less likely to engage in conflict-prone rivalries for
security or prestige. Once the sole pole takes sides, there can be little doubt about which party will prevail.” 40 This is the core logic of Wohlforth’s argument that unipolarity is peaceful. But
what specifically does his argument say about each of the six possible kinds of war I identified in the previous section? Clearly, great power war is impossible in a unipolar world. In Wohlforth’s
famous formulation: “Two states measured up in 1990. One is gone. No new pole has appeared: 2 1
1.” 41 Furthermore, by arguing
that unipolarity precludes hegemonic rivalries, Wohlforth makes no room for wars between the sole great power and major powers. These are, according to him, the two main reasons why a
unipolar world is peaceful. Unipolarity, he writes, “means the absence of two big problems that bedeviled the statesmen of past epochs: hegemonic rivalry and balance-of-power politics among
major powers.” 42 I agree with Wohlforth on these two points, but they are only part of the picture. Granted, the absence of great power wars is an important contribution toward peace, but great
power competition—and the conflict it might engender—would signal the emergence of one or more peer competitors to the unipole, and thus indicate that a transition to a bipolar or multipolar
system was already under way. In this sense, great power conflict should be discussed within the context of unipolar durability, not unipolar peace. Indeed, including this subject in discussions of
unipolar peacefulness parallels the mistakes made in the debate about the Cold War bipolar system. Then, arguments about how the two superpowers were unlikely to fight each other were often
taken to mean that the system was peaceful. This thinking ignored the possibility of wars between a superpower and a lesser state, as well as armed conflicts among two or more lesser states,
often acting as great power proxies. 43 In addition,
Wohlforth claims that wars among major powers are unlikely, because
the unipole will prevent conflict from erupting among important states. He writes, “The sole pole’s power advantages matter only to the degree that it is engaged, and it is most likely to be
engaged in politics among the other major powers. 44 I agree that if the unipole were to pursue a strategy of defensive dominance, major power wars would be unlikely. Yet, there is no
compelling reason to expect that it will always follow such a course. Should the unipole decide to disengage, as Wohlforth implies, major power wars would be possible. At the same time,
Wohlforth argues that the unipole’s power preponderance makes the expected costs of balancing prohibitive, leading minor powers to bandwagon. This is his explanation for the absence of wars
between the sole great power and minor powers. But, as I show, the costs of balancing relative to bandwagoning vary among minor powers. So Wohlforth’s argument underplays the likelihood of
Although power preponderance allows the unipole
to manage conflicts globally, this argument is not meant to apply to relations between
major and minor powers, or among the latter. As Wohlforth explains, his argument “applies with less force to potential security competition between regional
this type of war. Finally, Wohlforth’s argument does not exclude all kinds of war.
powers, or between a second-tier state and a lesser power with which the system leader lacks close ties.” 45 Despite this caveat, Wohlforth does not fully explore the consequences of potential
How well, then, does the argument that
unipolar systems are peaceful account for the first two decades of unipolarity since the end of the Cold
conflict between major and minor powers or among the latter for his view that unipolarity leads to peace.
War? Table 1 presents a list of great powers divided into three periods: 1816 to 1945, multipolarity; 1946 to 1989, bipolarity; and since 1990, unipolarity. 46 Table 2 presents summary data about
Unipolarity is the most conflict prone of all the systems, according
to at least two important criteria: the percentage of years that great powers spend at war and
the incidence of war involving great powers. In multipolarity, 18 percent of great power years were spent at war. In bipolarity, the ratio is 16
percent. In unipolarity, however, a remarkable 59 percent of great power years until now were spent at
the incidence of war during each of these periods.
war. This is by far the highest percentage in all three systems. Furthermore, during periods of multipolarity and bipolarity, the
probability that war involving a great power would break out in any given year was, respectively, 4.2
percent and 3.4 percent. Under unipolarity, it is 18.2 percent—or more than four times higher. 47 These figures
provide no evidence that unipolarity is peaceful. 48 In sum, the argument that unipolarity makes for peace is heavily weighted toward
interactions among the most powerful states in the system. This should come as no surprise given that Wohlforth makes a structural argument: peace flows from the unipolar structure of
analyses of the international system are usually
centered on interactions between great powers. 50 As Waltz writes, “The theory, like the story, of international politics is written in terms of
the great powers of an era.” 51 In the sections that follow, however, I show that in the case of unipolarity, an investigation of its
peacefulness must consider potential causes of conflict beyond interactions between the most
important states in the system.
international politics, not from any particular characteristic of the unipole. 49 Structural
Heg is resilient
Wohlforth 7 (William, Professor of Government – Dartmouth College, “Unipolar Stability”, Harvard
International Review, Spring, http://hir.harvard.edu/articles/1611/3/)
US military forces are stretched thin, its budget and trade deficits are high, and the country continues to finance its profligate ways by borrowing
from abroad—notably from the Chinese government. These developments
have prompted many analysts to warn that the U nited
S tates suffers from “imperial overstretch.” And if US power is overstretched now, the argument goes, unipolarity can hardly be
sustainable for long. The problem with this argument is that it fails to distinguish between actual and latent power. One must be careful to take
into account both the level of resources that can be mobilized and the degree to which a government actually tries to mobilize them. And how
much a government asks of its public is partly a function of the severity of the challenges that it faces. Indeed, one can never know for sure what
a state is capable of until it has been seriously challenged. Yale historian Paul Kennedy coined the term “imperial overstretch” to describe the
situation in which a state’s actual and latent capabilities cannot possibly match its foreign policy commitments. This situation should be
contrasted with what might be termed “self-inflicted overstretch”—a situation in which a state lacks the sufficient resources to meet its current
foreign policy commitments in the short term, but has untapped latent power and readily available policy choices that it can use to draw on this
power. This is arguably the situation that the United States is in today.
But the US government has not attempted to extract more
resources from its population to meet its foreign policy commitments. Instead, it has moved strongly in the opposite direction by
slashing personal and corporate tax rates. Although it is fighting wars in Afghanistan and Iraq and claims to be fighting a global “war”
on terrorism, the U nited S tates is not acting like a country under intense international pressure. Aside from the volunteer
servicemen and women and their families, US citizens have not been asked to make sacrifices for the sake of national prosperity and
security. The country could clearly devote a greater proportion of its economy to military spending : today it spends
only about 4 percent of its GDP on the military, as compared to 7 to 14 percent during the peak years of the Cold War. It could
also spend its military budget more efficiently, shifting resources from expensive weapons systems to boots on
the ground. Even more radically, it could reinstitute military conscription, shifting resources from pay and benefits to
training and equipping more soldiers. On the economic front, it could raise taxes in a number of ways, notably on fossil
fuels, to put its fiscal house back in order. No one knows for sure what would happen if a US president undertook such drastic
measures, but there is nothing in economics, political science, or history to suggest that such policies would be any
less likely to succeed than China is to continue to grow rapidly for decades. Most of those who study US politics would argue that
the likelihood and potential success of such power-generating policies depends on public support, which is a function
of the public’s perception of a threat. And as unnerving as terrorism is, there is nothing like the threat of another hostile power
rising up in opposition to the United States for mobilizing public support. With latent power in the picture, it becomes
clear that unipolarity might have more built-in self-reinforcing mechanisms than many analysts realize. It is often
noted that the rise of a peer competitor to the United States might be thwarted by the counterbalancing actions of neighboring powers. For
example, China’s rise might push India and Japan closer to the United States—indeed, this has already happened to some extent. There is also the
rival that comes to be seen as a threat would create strong incentives for the U nited
S tates to end its self-inflicted overstretch and tap potentially large wellsprings of latent power.
strong possibility that a peer
No resource wars
No resource wars over oil
Victor 7 (David G., Professor of Law – Stanford Law School and Director – Program on Energy and
Sustainable Development, “What Resource Wars?”, The National Interest, 11-12,
http://www.nationalinterest.org/Article.aspx?id=16020)
ENERGY prices and mounting concerns about environmental depletion have animated fears
that the world may be headed for a spate of “resource wars”—hot conflicts triggered by a
RISING
struggle to grab valuable resources. Such fears come in many stripes, but the threat industry has sounded the alarm bells especially loudly in three
areas. First is the rise of China, which is poorly endowed with many of the resources it needs—such as oil, gas, timber and most minerals—and
has already “gone out” to the world with the goal of securing what it wants. Violent conflicts may follow as the country shunts others aside. A
second potential path down the road to resource wars starts with all the money now flowing into poorly governed but resource-rich countries.
Money can fund civil wars and other hostilities, even leaking into the hands of terrorists. And third is global climate change, which could
Most of
this is bunk, and nearly all of it has focused on the wrong lessons for policy. Classic resource wars are good material
for Hollywood screenwriters. They rarely occur in the real world. To be sure, resource money
can magnify and prolong some conflicts, but the root causes of those hostilities usually
lie elsewhere. Fixing them requires focusing on the underlying
institutions that govern how resources are used and largely determine whether stress explodes into violence. When
conflicts do arise, the weak link isn’t a dearth in resources but a
dearth in governance.
multiply stresses on natural resources and trigger water wars, catalyze the spread of disease or bring about mass migrations.
Oil will be plentiful and mutual interests check violence
Odell 4 (Peter, Professor Emeritus of International Energy Studies – Erasmus University, Why Carbon
Fuels Will Dominate the 21st Century’s Global Energy Economy, p. xii-xiii)
Over the 21st century as a whole, a total of some 1660 Gigatons (_ 1660 x 10' tons)
oil equivalent of carbon energy will be produced and used, compared with a
cumulative total in the 20th century of just under 500 Gigatons. This more-than-three-fold increase in
the use of carbon energy in the 21st century reflects not only the bountiful
nature of the world's endowment of carbon energy fuels, but also the willingness of
the nations which are rich in coal, oil and/or natural gas to accept the depletion of their "natural" resources, in return for the economic growth it
It also indicates the
managerial and technological achievements which can be
anticipated through the multitude of global regional and local
entities responsible for the extraction, the transportation and the
processing of the world's energy resources. The fundamental
mutuality of the interests of the very many parties already involved
generates for the countries concerned and the rising incomes it secures for their populations.
in such activities - albeit with temporary disturbances between them arising from economic and/or political difficulties (as over
the past 100 years) - will virtually ensure supply continuity at the levels required
by demand developments. In this set of defined circumstances for the
exploitation of carbon energies, the concept of "resource wars" (Klare, 2002;
Kleveman, 2003) becomes invalid, as such phenomena are likely only in the
context of a terminal scarcity of coal, oil and/or natural gas. This study
demonstrates that such scarcity is excludable, except on a local or regional scale from time to time, for the
21st century.
No econ impact
Economic decline doesn’t cause war
Tir 10 [Jaroslav Tir - Ph.D. in Political Science, University of Illinois at Urbana-Champaign and is an
Associate Professor in the Department of International Affairs at the University of Georgia, “Territorial
Diversion: Diversionary Theory of War and Territorial Conflict”, The Journal of Politics, 2010, Volume
72: 413-425)]
Empirical support for the economic growth rate is much weaker. The finding that poor economic
performance is associated with a higher likelihood of territorial conflict initiation is significant only in
Models 3–4.14 The weak results are not altogether surprising given the findings from prior literature. In
accordance with the insignificant relationships of Models 1–2 and 5–6, Ostrom and Job (1986), for example, note that the likelihood that a
U.S. President will use force is uncertain, as the bad economy might create incentives both to divert the
public’s attention with a foreign adventure and to focus on solving the economic problem, thus reducing
the inclination to act abroad. Similarly, Fordham (1998a, 1998b), DeRouen (1995), and Gowa (1998) find no relation
between a poor economy and U.S. use of force. Furthermore, Leeds and Davis (1997) conclude that the conflictinitiating behavior of 18 industrialized democracies is unrelated to economic conditions as do Pickering
and Kisangani (2005) and Russett and Oneal (2001) in global studies. In contrast and more in line with my findings of a significant
relationship (in Models 3–4), Hess and Orphanides (1995), for example, argue that economic recessions are linked with forceful action by an
incumbent U.S. president. Furthermore, Fordham’s (2002) revision of Gowa’s (1998) analysis shows some effect of a bad economy and DeRouen
and Peake (2002) report that U.S. use of force diverts the public’s attention from a poor economy. Among cross-national studies, Oneal and
Russett (1997) report that slow growth increases the incidence of militarized disputes, as does Russett (1990)—but only for the United States;
slow growth does not affect the behavior of other countries. Kisangani and Pickering (2007) report some significant associations, but they are
sensitive to model specification, while Tir and Jasinski (2008) find a clearer link between economic underperformance and increased attacks on
domestic ethnic minorities. While none of these works has focused on territorial diversions, my own inconsistent findings for economic growth fit
well with the mixed results reported in the literature.15 Hypothesis 1 thus receives strong support via the unpopularity variable but only weak
support via the economic growth variable. These
results suggest that embattled leaders are much more likely to
respond with territorial diversions to direct signs of their unpopularity (e.g., strikes, protests, riots) than to
general background conditions such as economic malaise. Presumably, protesters can be distracted via territorial diversions
while fixing the economy would take a more concerted and prolonged policy effort. Bad economic conditions seem to motivate only the most
serious, fatal territorial confrontations. This implies that leaders may be reserving the most high-profile and risky diversions for the times when
they are the most desperate, that is when their power is threatened both by signs of discontent with their rule and by more systemic problems
plaguing the country (i.e., an underperforming economy).
No escalation
Robert Jervis 11, Professor in the Department of Political Science and School of International and
Public Affairs at Columbia University, December 2011, “Force in Our Times,” Survival, Vol. 25, No. 4,
p. 403-425
Even if war is still seen as evil, the security community could be dissolved if severe conflicts of interest
were to arise. Could the more peaceful world generate new interests that would bring the members of the
community into sharp disputes? 45 A zero-sum sense of status would be one example, perhaps linked to a
steep rise in nationalism. More likely would be a worsening of the current economic difficulties, which
could itself produce greater nationalism, undermine democracy and bring back old-fashioned beggar-myneighbor economic policies. While these dangers are real, it is hard to believe that the conflicts could
be great enough to lead the members of the community to contemplate fighting each other. It is not so
much that economic interdependence has proceeded to the point where it could not be reversed – states
that were more internally interdependent than anything seen internationally have fought bloody civil wars.
Rather it is that even if the more extreme versions of free trade and economic liberalism become
discredited, it is hard to see how without building on a preexisting high level of political conflict leaders
and mass opinion would come to believe that their countries could prosper by impoverishing or even
attacking others. Is it possible that problems will not only become severe, but that people will entertain
the thought that they have to be solved by war? While a pessimist could note that this argument does not
appear as outlandish as it did before the financial crisis, an optimist could reply (correctly, in my view)
that the very fact that we have seen such a sharp economic down-turn without anyone suggesting that
force of arms is the solution shows that even if bad times bring about greater economic conflict, it will
not make war thinkable.
No impact – econ decline doesn’t cause war
Barnett ‘9 (Thomas P.M. Barnett, senior managing director of Enterra Solutions LLC, “The New Rules: Security Remains Stable Amid
Financial Crisis,” 8/25/2009)
When the global financial crisis struck roughly a year ago, the blogosphere was ablaze with all sorts of
scary predictions of, and commentary regarding, ensuing conflict and wars -- a rerun of the Great Depression
leading to world war, as it were. Now, as global economic news brightens and recovery -- surprisingly led by China and emerging markets -- is
the talk of the day, it's interesting to look back over the past year and realize how globalization's
first truly worldwide
recession has had virtually no impact whatsoever on the international security landscape. None of
the more than three-dozen ongoing conflicts listed by GlobalSecurity.org can be clearly attributed to the global
recession. Indeed, the last new entry (civil conflict between Hamas and Fatah in the Palestine) predates the economic crisis by a year, and
three quarters of the chronic struggles began in the last century. Ditto for the 15 low-intensity conflicts listed by Wikipedia (where the latest entry
is the Mexican "drug war" begun in 2006). Certainly, the Russia-Georgia conflict last August was specifically timed, but by most accounts the
opening ceremony of the Beijing Olympics was the most important external trigger (followed by the U.S. presidential campaign) for that sudden
spike in an almost two-decade long struggle between Georgia and its two breakaway regions. Looking over the various databases, then, we see a
most familiar picture: the usual mix of civil conflicts, insurgencies, and liberation-themed terrorist movements. Besides the recent Russia-Georgia
dust-up, the only two potential state-on-state wars (North v. South Korea, Israel v. Iran) are both tied to one side acquiring a nuclear weapon
capacity -- a process wholly unrelated to global economic trends. And with
the United States effectively tied down by its two
ongoing major interventions (Iraq and Afghanistan-bleeding-into-Pakistan), our involvement elsewhere around the
planet has been quite modest, both leading up to and following the onset of the economic crisis: e.g., the usual counter-drug efforts in
Latin America, the usual military exercises with allies across Asia, mixing it up with pirates off Somalia's coast). Everywhere else we find serious
instability we pretty much let it burn, occasionally pressing the Chinese -- unsuccessfully -- to do something. Our new Africa Command, for
example, hasn't led us to anything beyond advising and training local forces. So, to sum up: * No significant uptick in mass violence or unrest
(remember the smattering of urban riots last year in places like Greece, Moldova and Latvia?); * The usual frequency maintained in civil conflicts
(in all the usual places); * Not a single state-on-state war directly caused (and no great-power-on-great-power crises even triggered); * No great
improvement or disruption in great-power cooperation regarding the emergence of new nuclear powers (despite all that diplomacy); * A modest
scaling back of international policing efforts by the system's acknowledged Leviathan power (inevitable given the strain); and * No serious efforts
by any rising great power to challenge that Leviathan or supplant its role. (The worst things we can cite are Moscow's occasional deployments of
strategic assets to the Western hemisphere and its weak efforts to outbid the United States on basing rights in Kyrgyzstan; but the best include
China and India stepping up their aid and investments in Afghanistan and Iraq.) Sure, we've
finally seen global defense spending
surpass the previous world record set in the late 1980s, but even that's likely to wane given the stress on public
budgets created by all this unprecedented "stimulus" spending. If anything, the friendly cooperation on
such stimulus packaging was the most notable great-power dynamic caused by the crisis. Can we say that the
world has suffered a distinct shift to political radicalism as a result of the economic crisis? Indeed, no. The world's major economies
remain governed by center-left or center-right political factions that remain decidedly friendly to both
markets and trade. In the short run, there were attempts across the board to insulate economies from immediate
damage (in effect, as much protectionism as allowed under current trade rules), but there was no great slide into "trade wars."
Instead, the World Trade Organization is functioning as it was designed to function, and regional efforts
toward free-trade agreements have not slowed. Can we say Islamic radicalism was inflamed by the economic crisis? If it was,
that shift was clearly overwhelmed by the Islamic world's growing disenchantment with the brutality displayed by violent extremist groups such
as al-Qaida. And looking forward, austere economic times are just as likely to breed connecting evangelicalism as disconnecting fundamentalism.
At the end of the day, the economic crisis did not prove to be sufficiently frightening to provoke major economies into establishing global
regulatory schemes, even as it has sparked a spirited -- and much needed, as I argued last week -- discussion of the continuing viability of the
U.S. dollar as the world's primary reserve currency. Naturally, plenty of experts and pundits have attached great significance to this debate, seeing
in it the beginning of "economic warfare" and the like between "fading" America and "rising" China. And yet, in
a world of globally
integrated production chains and interconnected financial markets, such "diverging interests" hardly
constitute signposts for wars up ahead. Frankly, I don't welcome a world in which America's fiscal profligacy goes undisciplined,
so bring it on -- please! Add it all up and it's fair to say that this global financial crisis has proven the great resilience of
America's post-World War II international liberal trade order.
No empirical support for diversionary theory
Tir 10 [Jaroslav Tir - Ph.D. in Political Science, University of Illinois at Urbana-Champaign and is an
Associate Professor in the Department of International Affairs at the University of Georgia, “Territorial
Diversion: Diversionary Theory of War and Territorial Conflict”, The Journal of Politics, Vol. 72, No. 2,
April 2010, Pp. 413–425, Chetan]
According to the diversionary theory of war, the cause of some militarized conflicts is not a clash of salient interests
between countries, but rather problematic domestic circumstances. Under conditions such as economic adversity or political unrest,
the country’s leader may attempt to generate a foreign policy crisis in order both to divert domestic
discontent and bolster their political fortunes through a rally around the flag effect (Russett 1990). Yet,
despite the wide-ranging popularity of this idea and some evidence of U.S. diversionary behavior (e.g., DeRouen 1995, 2000;
Fordham 1998a, 1998b; Hess and Orphanides 1995; James and Hristolouas 1994; James and Oneal 1991; Ostrom and Job 1986), after
five decades of research broader empirical support for the theory remains elusive (e.g., Gelpi 1997; Gowa; 1998;
Leeds and Davis 1997; Levy 1998; Lian and Oneal 1993; Meernik and Waterman 1996). This has prompted one scholar to conclude that
‘‘seldom has so much common sense in theory found so little support in practice’’ (James 1987, 22), a view reflected in
the more recent research (e.g., Chiozza and Goemans 2003, 2004; Meernick 2004; Moore and Lanoue 2003; Oneal and Tir 2006). I argue
that this puzzling lack of support could be addressed by considering the possibility that the embattled leader may anticipate achieving their
diversionary aims specifically through the initiation of territorial conflict2—a phenomenon I call territorial diversion.
Economy’s resilient – can survive shocks
Bloomberg 12 (“Fed’s Plosser Says U.S. Economy Proving Resilient to Shocks,” 5-9,
http://www.bloomberg.com/news/2012-05-09/fed-s-plosser-says-u-s-economy-proving-resilient-toshocks.html)
Philadelphia Federal Reserve Bank President Charles Plosser said the U.S. economy has proven
“remarkably resilient” to shocks that can damage growth, including surging oil prices and natural
disasters. “The economy has now grown for 11 consecutive quarters,” Plosser said today according to remarks
prepared for a speech at the Philadelphia Fed. “Growth is not robust. But growth in the past year has continued despite
significant risks and external and internal headwinds.” Plosser, who did not discuss his economic outlook or the future for
monetary policy, cited shocks to the economy last year, including the tsunami in Japan that disrupted global
supply chains, Europe’s credit crisis that has damaged the continent’s banking system and political unrest
in the Middle East and North Africa. “The U.S. economy has a history of being remarkably resilient,” said
Plosser, who doesn’t have a vote on policy this year. “These shocks held GDP growth to less than 1 percent in the first half of 2011, and many
analysts were concerned that the economy was heading toward a double dip. Yet, the economy proved resilient and growth picked up in the
second half of the year.” Plosser spoke at a conference at the Philadelphia Fed titled, “Reinventing Older Communities: Building Resilient
Cities.” Urban Resilience His regional bank’s research department is working on a project to measure the resilience of different cities, to learn
more about the reasons that some urban areas suffer more than others in downturns, Plosser said. He mentioned one early finding of the study:
Industrial diversity increases a city’s resilience. “I do want to caution you that resilient and vibrant communities are not just about government
programs or directed industrial planning by community leaders,” Plosser said. “The
economic strength of our country is deeply
rooted in our market- based economy and the dynamism and resilience of its citizenry.”
Low Natgas prices good:
Low natgas is uniquely key to manufacturing resurgence – that spurs massive growth, onshoring,
and investment in the manufacturing sector – this card is a slayer
Sirkin et. al 2014 (Sirkin, Zinser, and Rose, coauthors of the 2012 book “The US Manufacturing Renaissance: How shifting global
economics are creating an American comeback.” February 13, 2014. “Nearly Every Manufacturer in the U.S. will benefit from low-cost natural
gas.”, Boston Consulting Group, http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-154623)//NR
New Analysis by The Boston Consulting Group Finds That Cheap Domestic Energy Is Increasing the U.S. Cost
Advantage in a Wide Range of Industries, Improving U.S. Competitiveness; Will Benefit the Full Value
Chain, from Feedstock to Finished Goods CHICAGO, February 13, 2014—Cheap natural gas will have a greater impact on
U.S. manufacturing over the next several years than is commonly assumed, giving the U.S. a powerful—and
unique—cost advantage that will benefit a wide range of industries across the full value chain, from feedstock to
finished goods. This cost advantage has already started to boost investment and employment and will persist
for at least five years, according to new research released today by The Boston Consulting Group (BCG). While other studies have assessed the
positive economic impact of rising U.S. production of natural gas on the domestic energy sector and on industries such as petrochemicals that use
natural gas as a raw material, the new BCG analysis finds that virtually every manufacturer in the U.S. is poised to
benefit—directly or indirectly. Low U.S. electricity prices in natural-gas-fired plants, for example, are already
encouraging investment in energy-intensive industries such as steel and glass. Not yet visible are the advantages that makers
of intermediate products, such as plastic-resin pellets, and makers of finished goods, such as plastic toys and plastic auto parts, will reap from
cheaper inputs. Even in less energy-intensive industries, cheap natural gas will shave 1 to 2 percent off of U.S. manufacturing costs
as the benefits eventually flow downstream through the value chain. The energy cost advantage is amplified by the fact that overall U.S.
manufacturing competitiveness is already improving owing to relatively low labor costs compared with those of other developed economies,
rapidly rising wages in China, and high productivity, as explained inprevious BCG publications. The research is part of the firm’s ongoingMade
in America, Again series produced by its Operations and Global Advantage practices. “Several major forces are aligning right
now that are dramatically reversing the fortunes of a U.S. manufacturing sector that many gave up for dead just a
few years ago," said Harold L. Sirkin, a BCG senior partner and a coauthor of the study. “The energy advantage and improved
competitiveness are unique to the U.S. and are accelerating an American manufacturing
renaissance.” Multiple, Sustainable Advantages for U.S. Manufacturing Wholesale prices for natural gas have fallen by
around 50 percent since 2005, when large-scale recovery from underground shale deposits through hydraulic fracturing began in earnest.
Natural gas currently costs more than three times as much in China, France, and Germany than in the U.S. and nearly four times as much in
Japan. U.S. prices are expected to remain within a range of $4 to $5 per thousand cubic feet for several decades. What's
more, because
it will take many years before other nations are able to begin large-scale recovery of shale
gas and before the U.S. can export domestic supplies, the low-cost advantage will be largely exclusive to the U.S. for
at least five to 10 years. By 2015, natural gas will account for only 2 percent of average U.S. manufacturing costs and electricity will
account for just 1 percent, according to BCG estimates. By contrast, natural gas will account for between 5 and 8 percent of manufacturing costs
in Japan and in Europe’s major exporting economies, where it is more expensive, while electricity will account for between 2 to 5 percent in
Japan and Europe. Cheap energy will also help further narrow the cost gap between the U.S. and China , where
natural gas and electricity combined will account for 6 percent of manufacturing costs. Cheap
natural gas is enhancing U.S.
manufacturing competitiveness in several important ways. The most immediate beneficiaries are
manufacturers of a wide range of petrochemicals, which enjoy a cost advantage of up to 50 percent over their counterparts in Europe and
Asia. As a primary feedstock, these chemicals use ethane, which is also found in many natural-gas fields, as well as propane and butane, which
are byproducts of natural-gas production. Much of those cost savings will pass to downstream manufacturers that use those
petrochemicals to make everything from plastics to synthetic fabrics—and eventually toU.S. consumers. Natural
gas is used
increasingly as a fuel in U.S. power plants. Therefore, it is likely to ensure that the price of industrial
electricity will remain between one-quarter and two-thirds the cost of electricity in major exporting
nations such as China, Japan, Germany, France, and Italy for a significantly long time. This will benefit
all manufacturers to a varying degree, but in particular energy-intensive industries such as glass and steel. The BCG research estimates that low
natural-gas prices help give U.S.-based glass makers a 40 percent cost advantage over South Korean producers, for example, and a 63 percent
advantage over German producers. A new steel mill using direct-reduced iron (DRI) technology, which uses low-cost natural gas, produces iron
(the key ingredient in steel) substantially more cheaply than mills using conventional blast furnaces. A Boon for Domestic and Foreign
Manufacturers in the U.S. “Companies
from around the world are already taking notice and beginning to
make long-term manufacturing investments in the U.S. to take advantage of low-cost natural gas,” said Michael Zinser,
a BCG partner and coleader of the firm’s Manufacturing practice. “Already tens of billions of dollars in new investments have
been announced, and we expect to see more such investment in the near future.” Some of the most widely publicized investments have
been in chemical production. Formosa Plastics, for example, is spending about $2 billion on a new ethylene plant and downstream assets in Point
Comfort, Texas, in part because of the availability of shale gas feedstock. In Louisiana, Sasol plans to a build a world-scale ethane cracker in
Lake Charles, and Methanex is relocating two methanol plants from Chile to Ascension Parish. There also has been a surge in investment in new
U.S. steel plants, most of them using a DRI process. Nucor Steel, for instance, recently began production at a $750 million DRI plant in
Louisiana. Other steelmakers are adding U.S. capacity to meet demand from the energy industry. In Youngstown, Ohio, Vallourec built a $1
billion plant to supply steel pipe to companies extracting shale gas. “A
number of industries are already nearing a
tipping point where it will be more economical to make many goods in the U.S.,” said Justin Rose, a BCG
partner and another coauthor. “The energy advantage helps them reach that tipping point faster .”
Low natgas prices are fueling the manufacturing resurgence
O’Keefe 2013 (William O’Keefe, writer for Fuelfix.com, reporting on the BCG report ‘Behind the American Export Surge’, August 23,
2013. “The resurgence of American exports: manufacturing and natural gas.” http://fuelfix.com/blog/2013/08/23/the-resurgence-of-americanexports-manufacturing-and-natural-gas/)//NR
The Boston Consulting Group (BCG) has just released a report, “Behind the American Export Surge,” which explores the recent resurgence in
US manufacturing. While BCG goes into some detail in explaining the reversal in the decline of domestic manufacturing, it
has been driven by two basic causes, a more attractive investment climate and the widespread availability of low cost
energy as a result of booming domestic shale gas production and natural gas development. But perhaps the single most
important conclusion drawn from the study is this: there is enough domestic shale gas to fuel an American
manufacturing resurgence and to export abroad. High-volume hydraulic fracturing natural gas development has made increased
production of shale gas and oil economically attractive. With increased production of natural gas, the price according to BCG has declined
51% since 2005. And, technology is projected to result in further lowering production costs. This is a big
advantage over our competitors that have natural gas prices that are 2.6 to 3.8 times greater than our
domestic prices in America. Lower natural gas prices mean that industries such as chemicals and plastics are able
to increase profit margins as natural gas is a major cost in the manufacture of synthetic textiles, paper, and primary metals.
Gas fired power plants are becoming an important source of electricity and this will, according to BCG help to
keep power costs lower in the US. The positive manufacturing and trade picture painted by the Boston Consulting Group is a bright
light in an otherwise dismal economic outlook. However, making that projection a reality requires that we avoid economic rent-seeking by certain
industries. That is especially true in energy where there already is a movement by such rent-seekers, like Dow Chemical, to restrict the export of
liquefied natural gas (LNG). These companies are lobbying for restrictions so that they can use the low price caused by over supply to increase
their own profits. Such a policy perspective is not only short-sighted but is the equivalent of an economic circular firing squad. It would deny the
benefits made clear by numerous studies from Brookings, Deloitte, and even the Department of Energy-commissioned NERA Economic
Consulting study which found increasing exports could add nearly $75 billion to annual economic growth. And, it would invite some form of
retaliation by our trading partners. Moreover, such a policy perspective denies the reality of shale gas reserves. As the BCG study notes, proven
shale gas reserves are estimated to be 350 trillion cubic feet, and production is expected to grow to double by 2035 to 12 trillion cubic feet of gas.
There’s enough gas there to power manufacturing and to export to American allies abroad. In the 1960s and 70s, inter-state natural gas was
subjected to price controls but intra-state gas wasn’t. As a result, inter-state gas had to be rationed as supplies diminished. Just the opposite
happened in gas producing states. Today, the current boom in natural gas production has produced an excess in supply which has significantly
depressed it price. Not surprising, as prices have dropped so has drilling activity. According to the Energy Information Administration, natural
gas drilling activity has dropped from over 1400 active rigs in 2007 and 2008 to the 400 range in the last couple of years. The notion of natural
gas prices set by bureaucrats and not market forces brings back memories of the price and allocation controls in the 1970s. They didn’t work then
and won’t work now. Free and open trade benefits all, not a few. The advocacy of those in the camp of Dow chemical against expanding LNG
exports is more about promoting crony capitalism than the “emerging renaissance in American manufacturing.” Companies should compete in
the market place as it exists, not as they would have government make it. As Boston Consulting Group makes clear, we can have both a domestic
renaissance in manufacturing and continue to boost domestic natural gas development through LNG exports. As a policy, we should avoid the
rent-seeking advocacy opposed to LNG exports. Instead, we should embrace both expanded natural gas development through exports and
domestic manufacturing. There’s more than enough gas to fuel both.
2AC
Cheap natgas is k2 onshoring and manufacturing resurgence
Baljko 2013 (Award-winning journalist (Jennifer, “Low-Cost Energy Tips Scales in Favor of US Manufacturing,” 07/25/13,
http://electronics360.globalspec.com/article/2120/low-cost-energy-tips-scales-in-favor-of-us-manufacturing)//NR
Everyone talks about the rising costs of doing business in China as a reason why manufacturers are bringing factories back to the United States.
But it’s certainly not the only one. Indeed, low energy costs in the U.S. arguably have as much influence on decisions to
repatriate business back to American soil. The increased availability of oil and shale gas — one of three commonly recognized forms
of unconventional natural gas along with tight gas and coal-bed methane — and the relative cost advantage of energy prices in the
U.S. compared to other countries are factors providing America with a competitive edge in manufacturing,
operations and logistics strategies. “Countries like Canada and the United States possess affordable, accessible reserves of natural gas and oil —
among the largest in the world. Some experts even expect natural gas prices in America to be 50 to 70 percent cheaper than prices in Europe for
the foreseeable future,” said Helmuth Ludwig, chief executive officer of Siemens Industry Sector, North America. (See the Sidebar at the end of
this article for the complete transcript of the interview with Ludwig.) “The natural gas boom is helping reindustrialize America by working to
lower the cost of doing business here. Even with low energy prices, Siemens is helping further reduce the operating costs of our customers
through efficiency measures. Using both hardware and software to modernize our Norwood, Ohio, plant, we were able to expand capacity by 50
percent, increase productivity by 42 percent and cut energy consumption by 40 percent — a return on investment in two years. We believe that in
the near and long term, these types of efforts, combined with low energy costs, will help make U.S. manufacturers even more
competitive globally.” From offshoring to reshoring Several factors, not just energy pricing, have boosted recent reshoring
activity, which some are calling a “manufacturing renaissance,” particularly within the U.S automotive and industrial sectors. Labor
and total-landed cost on both sides of the Pacific Ocean have shifted, and are typically the most-often cited reasons that companies give in
rethinking their factory location plans. For instance, China is targeting to raise the minimum wage by at least 13 percent a year as part of its fiveyear development plan, a move that has paved the way for Indonesia, Malaysia, Thailand and other Southeast Asian manufacturing countries to
take similar steps, said Dennis Young, executive vice president of business development at Sanmina Corp. in a speech. “We have seen labor rates
in China go up anywhere between 15 to 25 percent a year during the last three years,” he said. “In 2005, China enjoyed a 51 percent labor rate
benefit and 31 percent landed cost benefit. Five years later, because of the increase in labor rates that we have had to pay [in China], those
benefits shrank to 38 percent, and the landed cost benefit fell to 22 percent.” Conversely, labor unions representing U.S. factory workers have
given wage concessions to top-tier original equipment manufacturers (OEM), such as General Electric, which is investing $1 billion in its
Louisville, Ky., plant while hiring 3,000 workers there in the last few years. “GE took water heaters manufactured in China, which were very
complex but not too expensive, and brought them back to the U.S. and did a product redesign,” said Young, adding that Sanmina works with GE.
“GE was able to manufacture the heaters in Appliance Park in Louisville at a very cost-competitive rate compared to China — not just because of
the rising cost of labor in China, but also because of the redesign that GE did on the product and the concessions it got from the union to hire new
employees at a lower labor rate.” The Atlantic reported that Appliance Park’s union “was so fractious in the ’70s and ’80s that the place was
known as ‘Strike City.’” But the union, according to the magazine, agreed to a two-tier wage scale in 2005. Today, 70 percent of the jobs at the
site are on the lower tier, which starts at about $13.50 an hour — nearly $8 less than what the starting wage was previously. Other factors, such as
tax benefits and being close to the R&D team and the end customer, are also helping to tip the scales in favor of the U.S. And Siemens’ Ludwig
points out that engaging with innovation centers are also critical. “Manufacturing is no longer about brawn over brains,” said Ludwig.
“Manufacturing has become knowledge work with the introduction of innovative technology that is software based. This innovation engine must
be linked to our manufacturing sites. We need to keep that innovation pipeline full and focus our manufacturing on the early stage where value is
created. There is no better place for driving high-end technological innovations to commercial success than the U.S.,” he said. Energy costs also
affect business Energy prices are likewise becoming a high-priority issue, purely from a bottom-line perspective. Two main
manufacturing and operations costs are directly affected by energy prices: the cost of powering the plant; and the
cost of moving parts through the supply chain. Inside the plant, cost differences are increasingly evident. Comparing the cost of
running factories in Mexico, China and the U.S., Sanmina’s Young said, “Energy costs for us in Mexico are four times what they are in
the U.S. China is about three times [the U.S.].” And even though natural gas prices have started to rise after plummeting to near lows,
it’s often high oil prices that pinch the supply chain. This is something not likely to change any time soon, given the U.S. Energy Information
Administration’s projected short-term outlook calling for average crude oil spot prices to stay at or above $100 per barrel for the rest of 2013 and
2014. “The impact in the rise of energy costs is causing companies to rethink where they manufacture,” said Thomas Dinges, senior principal
analyst for electronics and media at IHS. “Companies are getting hit with increases in freight costs and fuel surcharges. This is a big cost for
everyone now, and it factors into a company’s total energy costs.” “The solution used to be ‘put it on a plane in Shanghai, fly it to Memphis and
FedEx will put it on the customer’s door the next day.’ But, that’s a heck of a lot of jet fuel that’s costing significantly more than it used to a few
years ago,” he added. “The final transportation and logistics costs have become prohibitively expensive in certain areas. Suddenly people are
getting their UPS, FedEx or DHL shipping bills from China and having one of those ‘My God…What are we paying for this?’ moments. They
start pulling out spreadsheets from the last five or seven years to compare prices, and they see that the prices keep going up. So, now people are
looking at their ‘all-in” costs. That’s part of why people are exploring the idea of returning to the U.S.” The U.S. energy scene Companies
considering the leap back will want to keep an eye on the energy-pricing scenario, especially as it relates to the U.S. shale gas
boom and the impact it’s expected to have on gross domestic product and manufacturing growth. By the numbers, shale gas accounted for
27 percent of U.S. natural gas production in 2010. That could climb to 44 percent by 2015 and reach 60 percent by 2035, according to a 2012
report from IHS called “The Economic and Employment Contributions of Unconventional Gas Development in State Economies.” The shale gas
contribution to GDP was approximately $77 billion in 2010; that will increase to $118 billion by 2015, and will nearly triple to $231 billion in
2035, according to the IHS report. The increased shale gas production has helped keep natural gas prices down, and IHS expects that this will
result in an average reduction of 10 percent in electricity costs nationwide over the forecast period. In the long run, improved
competitiveness among U.S. domestic manufacturers, due to lower natural gas and electricity costs, will result in an initial
2.9 percent increase in industrial production by 2017, and 4.7 percent higher production by 2035 compared to the projected activity level that
would occur under a higher-price scenario without unconventional gas, the firm said. For a company like Siemens, which already operates
approximately 130 manufacturing plants in the U.S. alone, the stakes are pretty clear. “ Energy pricing is one of j ust a number of
opportunities unique to the U.S. market right now and which make it an interesting place to invest. We expect our
Siemens Industry Sector market in the U.S. to grow by 4 percent annually between now and 2018. Additionally, the balance sheet shows
approximately $1.6 trillion in cash reserves currently being held by U.S. manufacturers,” Ludwig noted. “As confidence builds, we
expect to see investments that will modernize manufacturers similar to what we have already seen in the U.S. aerospace and
automotive industries.”
Backstopping DA
1NC Shell
1NC Saudi (Oil)
Saudi Arabia’s economy is high now—but heavy reliance on high oil prices makes it
vulnerable
-S&P outlook is positive-ratings agency will raise their ratings
-oil revenues elinated Saudi debt
-but they’re still vulnerable- undiversifed, 90% of government revenues is hydrocarbons
-sudden price collapses would ruin the economy
AN, 06/09/2014 (Arab News, “Saudi GDP per capita estimated at $26,000”, Arab News, 06/09/2014,
http://www.arabnews.com/news/583751)
Standard & Poor’s Ratings Services affirmed its long- and short-term foreign and local currency sovereign credit ratings on Saudi Arabia at ‘AA-
remains positive. The positive outlook reflects S&P’s view that there is at least a onein-three chance that the ratings agency could raise its ratings on Saudi Arabia in the next year,
according to an S&P statement. The ratings are supported by the very strong external and fiscal positions
Saudi Arabia has built up over several years. By managing high oil revenues prudently, the government
has retired virtually all of its debt, generating additional fiscal space for countercyclical policies. S&P estimates the general
/A-1+’. The outlook
Government’s net asset position at close to 110 percent of GDP on average during 2014-2017. Notwithstanding the assumption that the oil price
will decline to about $95 per barrel by 2017, S&P expect that Saudi Arabia’s current account surpluses will average a still-high 12 percent of
GDP and external debt net of liquid external assets will remain strong averaging about 200 percent of current account receipts over the same
period. S&P estimates Saudi GDP per capita at $26,000 in 2014. Trend growth in real per capita GDP, measured using 10-year weighted-average
growth, amounted to two percent during 2008-2017, which is in line with peers that have similar GDP per capita. S&P notes that government
reforms are resulting in some improvements to the highly segmented labor market. Latest data indicate that Saudi nationals’ share of total
employment increased to 24 percent in 2013 from 22 percent in 2012. The ratings agency estimates that 70 percent of the increase took place in
the private sector, which now accounts for around 56 percent of the employment of Saudi nationals. Meanwhile, women’s share of total
employment increased to 9.4 percent in 2013 from 7.7 percent in the previous year. However, the unemployment rate remained high at 11.7
percent for Saudi nationals and 0.2 percent for non-Saudis (overall 5.6 percent). It remains to be seen whether the private sector can generate jobs
sufficiently attractive to Saudi nationals to absorb the significant inflow into the labor market expected in the coming years. Saudi demographic
data show that about 40 percent of the population is younger than 20. Moreover, with the employment of Saudi nationals mostly requiring higher
labor costs than the expat population, unit labor costs could rise and in turn weaken overall economic competitiveness.
S&P views Saudi
Arabia’s economy as undiversified and vulnerable to a sharp and sustained decline in the oil price.
About 85 percent of exports and 90 percent of government revenues stem directly from the hydrocarbons
sector. The IMF calculated Saudi’s fiscal breakeven oil price — the oil price necessary to balance the government’s budget--at $84 in 2013.
The hydrocarbon sector accounts for slightly less than half of GDP. However, the non-hydrocarbon sector relies to a significant extent on
Saudi Arabia’s significant gas
and oil revenues are supportive of the current ratings. Sustained high oil prices over the past few
years have helped bolster financial buffers, maintaining government liquid assets at above 100 percent of GDP and significantly
government spending (funded by hydrocarbon revenues) and downstream hydrocarbon activities.
offsetting the concentration risk related to the economy’s hydrocarbon dependency.
Saudi Arabia floods the market in response to US oil production surge
Leed et. al, 06/05/2014 (Maren Leed- senior adviser with the Harold Brown Chair in Defense Policy Studies at CSIS, where she
works on defense-related issues. From 2011 to 2012, she served as senior adviser to the chief of staff of the U.S. Army. From 2009 to 2011, she
was a senior fellow and director of the New Defense Approaches Project at CSIS, where she led projects on topics as diverse as military
personnel costs, the future of ground forces, reforming the military personnel system, strategic forecasting, organizing for electromagnetic
spectrum control, amphibious capabilities’ contributions to deterrence and shaping missions, and service cultures. She also supported the U.S.
Department of Defense (DoD) inquiry into the shoot ings at Fort Hood. She previously served as an analyst at the RAND Corporation, where she
led projects relating to intelligence, surveillance, and reconnaissance (ISR) and countering improvised explosive devices (IEDs); Molly Waltonresearch associate with the CSIS Energy and National Security Pro gram, where she provides research and analysis on a wide range of projects
associated with domestic and global energy trends. Her current work focuses on the energy-water nexus, unconventional oil and gas,
environmental risk mitigation and industry best prac tices, clean energy, and global climate change. She also serves as editor in chief of New
Perspectives in Foreign Policy, a CSIS journal written by and for the enrichment of young professionals. Prior to joining CSIS, Ms. Walton was a
research analyst for Circle of Blue, an affiliate of the Pacific Institute, where she focused on the intersection of U.S. water and energy issues;
Sarah Ladislaw- director and senior fellow in the CSIS Energy and National Security Program, where she concentrates on the geopolitics of
energy, energy security, energy technology, and climate change. She has been involved with CSIS’s work on the geopolitics portion of the 2007
National Petroleum Council study and the CSIS Smart Power Commis sion, focusing particularly on energy security and climate issues. She has
published papers on U.S. energy policy, global and regional climate policy, clean energy technology, as well as European and Chinese energy
issues. She teaches a graduate-level course on energy security at the George Washington University. Ms. Ladislaw joined the Department of
Energy (DOE) in 2003 as a presidential manage ment fellow, and from 2003 to 2006 worked in the Office of the Americas in DOE’s Office of
Policy and International Affairs, “New Energy New Geopolitics, CSIS, 06/05/2014,
http://csis.org/files/publication/140605_Ladislaw_NewEnergyNewGeopolitics_background2_Web.pdf)
The combined slowdown in growth and rise
in supply (including from U.S. tight oil) means that Saudi Arabia could be in
a position to hold more spare capacity relative to overall market size than it has in a long time. This
position is forcing Saudi leaders to think about how to manage adequate, rather than limited, spare capacity in global
oil markets at least in the near to medium term. Some have speculated that Saudi Arabia might become so threat ened by
additional new crude supplies that they could try to flood the market, driving down prices (in extreme
cases). This could make tight oil development (as well as other high-cost production) uneconomic and/or
preclude the emergence of other major oil producers trying to reenter the market (specifically Iran). Others
argue that such action is implausible, either because of the kingdom’s domestic budget pressures or because the kingdom couldn’t sustain the
accompanying low prices and revenue long enough to achieve the desired effects. Revenue
dependence could also be a driver
for Saudi Arabia to undertake domestic energy pricing and subsidy reform. Though reform efforts had been recognized
priorities before the surge in U.S. oil production, the shale gas and tight oil revolution may reinforce the case for change. The need for
sustained high export revenue is further exacerbated by Saudi Arabia’s response to recent regional unrest .
Saudi leaders increased public spending to help quell internal dissatisfaction, thus increasing the levels of
public support that would be the target of future reform efforts. Because the shale gas and tight oil revolution increased
the potential for soft oil markets, the threat to Saudi Arabia’s domestic economy could be significant. (Many
argue, however, that this risk is manageable, as Saudi Arabia has sufficient resources to weather hard times for both the short and the medium
term.)
That collapses the Saudi regime
Austin, 06/17/2014 (Steve Austin, “What is the lower bound of oil prices?”, Before it’s News, 06/17/2014,
http://beforeitsnews.com/financial-markets/2014/06/what-is-the-lower-bound-of-oil-prices-7-2729640.html)
The Wave of unrest in the Arab world two years ago changed the history of Egypt, Libya, Syria and
Tunisia forever. As you may have heard, the initial catalyst for the protest in Tunisia was unemployment. Soon,
inflation, corruption, joblessness, unfair distribution of wealth, misgovernance and lack of freedom
fuelled upheavals across the region. Naturally, this Arab Spring evoked real fear among the rulers. Gaddafi’s
tragic ending to the hands of his constituents provided a real lesson and many rulers have taken a second look at their notion of ‘trickle down
economy’.
In the aftermath of Gaddafi’s slaying, Saudi Arabia and the UAE increased government spending
significantly through popular programs and subsidies to sidestep mass protests in their countries. Happily,
these wide-spread attempts to distribute wealth succeeded with consummate ease- thanks, oil money. Of course,
these countries will be in dire straits should the oil prices deflate in the near future. And as the
income is tied to oil sales, the minimum price Saudi Arabia wants for its oil has gotten, as expected, higher. In
fact, most oil-producing economies (Saudi Arabia, Qatar, UAE) depend heavily and exclusively on domestic oil
production for income as opposed to productive income-earning tax payers. Evidently, Saudi Arabia can expand
production as and when it wants-in light of the latest discoveries/technologies in oil exploration. But since more oil will lead to lower
oil prices, the kingdom is happy to sit on its oil reserves. That also explains why the Saudi oil Minister, while ‘politely’ welcoming the increased
oil production in the United States, saw ‘no need to go beyond our 12.5 million b/d capacity.’ Why would they when they need oil prices above
$80 to maintain stability? So, according to latest reports, crude oil output in Saudi Arabia May average 40,000 barrels a day less than in 2012.
Supposedly, what
happens with $50 a barrel energy prices? (Consumer is happy!) Along with Bahrain, Saudi
Arabia, Russia will probably suffer political collapse.
Saudi collapse destabilizes the Middle East
Cordesman, 2011 (Anthony Cordesman, Arleigh A. Burke Chair in Strategy at CSIS, former director of intelligence assessment in
the Office of the Secretary of Defense, former adjunct prof of national security studies at Georgetown, PhD from London University, Center for
Strategic and International Studies, 02/26/2011, http://csis.org/publication/understanding-saudi-stability-and-instability-very-different-nation)
History scarcely means we can take Saudi stability for granted. Saudi
Arabia is simply too critical to US strategic interests
and the world. Saudi petroleum exports play a critical role in the stability and growth of a steadily more
global economy, and the latest projections by the Department of Energy do not project any major reductions in the direct level of US
dependence on oil imports through 2025. Saudi Arabia is as important to the region’s security and stability as it is to
the world’s economy. It is the key to the efforts of the Gulf Cooperation Council to create local defenses, and
for US strategic cooperation with the Southern Gulf states. It plays a critical role as a counterbalance to
a radical and more aggressive Iran, it is the source of the Arab League plan for a peace with Israel,
and it has become a key partner in the war on terrorism. The US strategic posture in the Middle East
depends on Saudi Arabia having a friendly and moderate regime.
That escalates to nuclear Armageddon
The Earl of Stirling 11, hereditary Governor & Lord Lieutenant of Canada, Lord High Admiral of
Nova Scotia, & B.Sc. in Pol. Sc. & History; M.A. in European Studies, “General Middle East War Nears
- Syrian events more dangerous than even nuclear nightmare in Japan”,
http://europebusines.blogspot.com/2011/03/general-middle-east-war-nears-syrian.html
Any Third Lebanon War/General Middle East War is apt to involve WMD on both side quickly as both sides
know the stakes and that the Israelis are determined to end, once and for all, any Iranian opposition to a 'Greater
Israel' domination of the entire Middle East. It will be a case of 'use your WMD or lose them' to
enemy strikes. Any massive WMD usage against Israel will result in the usage of Israeli thermonuclear
warheads against Arab and Persian populations centers in large parts of the Middle East, with the
resulting spread of radioactive fallout over large parts of the Northern Hemisphere. However, the first use of nukes is
apt to be lower yield warheads directed against Iranian underground facilities including both nuclear sites and governmental command and control and leadership
bunkers, with some limited strikes also likely early-on in Syrian territory.¶ The
Iranians are well prepared to launch a global Advanced
Biological Warfare terrorism based strike against not only Israel and American and allied forces in the Middle
East but also against the American, Canadian, British, French, German, Italian, etc., homelands. This will
utilize DNA recombination based genetically engineered 'super killer viruses' that are designed to spread themselves
throughout the world using humans as vectors. There are very few defenses against such warfare, other than
total quarantine of the population until all of the different man-made viruses (and there could be dozens or even over a hundred different viruses released at the same
could kill a third of the world's total population. ¶ Such a result from an
Israeli triggered war would almost certainly cause a Russian-Chinese response that would eventually finish
off what is left of Israel and begin a truly global war/WWIII with multiple war theaters around the
world. It is highly unlikely that a Third World War, fought with 21st Century weaponry will be anything
but the Biblical Armageddon.
time) have 'burned themselves out'. This
1NC Saudi (Renewables)
Saudi Arabia’s economy is high now—but heavy reliance on high oil prices makes it
vulnerable
-S&P outlook is positive-ratings agency will raise their ratings
-oil revenues elinated Saudi debt
-but they’re still vulnerable- undiversifed, 90% of government revenues is hydrocarbons
-sudden price collapses would ruin the economy
AN, 06/09/2014 (Arab News, “Saudi GDP per capita estimated at $26,000”, Arab News, 06/09/2014,
http://www.arabnews.com/news/583751)
Standard & Poor’s Ratings Services affirmed its long- and short-term foreign and local currency sovereign credit ratings on Saudi Arabia at ‘AA-
remains positive. The positive outlook reflects S&P’s view that there is at least a onein-three chance that the ratings agency could raise its ratings on Saudi Arabia in the next year,
according to an S&P statement. The ratings are supported by the very strong external and fiscal positions
Saudi Arabia has built up over several years. By managing high oil revenues prudently, the government
has retired virtually all of its debt, generating additional fiscal space for countercyclical policies. S&P estimates the general
/A-1+’. The outlook
Government’s net asset position at close to 110 percent of GDP on average during 2014-2017. Notwithstanding the assumption that the oil price
will decline to about $95 per barrel by 2017, S&P expect that Saudi Arabia’s current account surpluses will average a still-high 12 percent of
GDP and external debt net of liquid external assets will remain strong averaging about 200 percent of current account receipts over the same
period. S&P estimates Saudi GDP per capita at $26,000 in 2014. Trend growth in real per capita GDP, measured using 10-year weighted-average
growth, amounted to two percent during 2008-2017, which is in line with peers that have similar GDP per capita. S&P notes that government
reforms are resulting in some improvements to the highly segmented labor market. Latest data indicate that Saudi nationals’ share of total
employment increased to 24 percent in 2013 from 22 percent in 2012. The ratings agency estimates that 70 percent of the increase took place in
the private sector, which now accounts for around 56 percent of the employment of Saudi nationals. Meanwhile, women’s share of total
employment increased to 9.4 percent in 2013 from 7.7 percent in the previous year. However, the unemployment rate remained high at 11.7
percent for Saudi nationals and 0.2 percent for non-Saudis (overall 5.6 percent). It remains to be seen whether the private sector can generate jobs
sufficiently attractive to Saudi nationals to absorb the significant inflow into the labor market expected in the coming years. Saudi demographic
data show that about 40 percent of the population is younger than 20. Moreover, with the employment of Saudi nationals mostly requiring higher
labor costs than the expat population, unit labor costs could rise and in turn weaken overall economic competitiveness.
S&P views Saudi
Arabia’s economy as undiversified and vulnerable to a sharp and sustained decline in the oil price.
About 85 percent of exports and 90 percent of government revenues stem directly from the hydrocarbons
sector. The IMF calculated Saudi’s fiscal breakeven oil price — the oil price necessary to balance the government’s budget--at $84 in 2013.
The hydrocarbon sector accounts for slightly less than half of GDP. However, the non-hydrocarbon sector relies to a significant extent on
Saudi Arabia’s significant gas
and oil revenues are supportive of the current ratings. Sustained high oil prices over the past few
years have helped bolster financial buffers, maintaining government liquid assets at above 100 percent of GDP and significantly
government spending (funded by hydrocarbon revenues) and downstream hydrocarbon activities.
offsetting the concentration risk related to the economy’s hydrocarbon dependency.
Saudi Arabia floods the market if alternative energy threatens its oil
ETS, 2008 (Energy Tech Stocks, “Petro-politics Expert Marcel: Saudis Have Oil But Not Enough; OPEC May Flood Market To Hurt
New Techs”, Energy Tech Stocks, 01/27/2008, http://energytechstocks.com.previewmysite.com/wp/?cat=15&paged=2)
Saudi Arabia still has a lot of oil; nevertheless, the world doesn’t have enough to meet forecasted demand of roughly 115 million barrels a day by
2030, a more than 30% increase over today’s 87 million barrel daily consumption. Shorter
term, should OPEC members feel
threatened by new alternative energy technologies, they very well may flood the market, temporarily
driving crude prices down in order to make the new technologies appear financially unattractive.
That’s the analysis of Valerie Marcel. a Dubai-based petro-politics expert and the author of ‘SOil Titans: National Oil Companies in the Middle
East.” During a lengthy conversation, Marcel, who is an associate fellow at UK-based Chatham House, one of Europe’s leading foreign policy
think-tanks, told EnergyTechStocks.com that she wasn’t optimistic that oil shortages can be avoided, despite growing recognition of the problem
national oil company — Saudi Aramco — appears
worried about fuel cell vehicles and other attempts by the world to wean itself off oil, and that should it and
other OPEC members feel threatened, they would “play hardball,” flooding the market in an attempt to
in major oil-consuming nations. Marcel further said that the Saudi
derail the new technologies. Marcel said that after 36 separate interviews with oil company officials, she believes Saudi Arabia
probably has about 75 years of reserves remaining at current production rates, and that the Kingdom is
capable of raising daily production from around nine million barrels a day currently to a sustained 12.5 million per day, which is its
plan. At the same time, Marcel said she understands why, given the Kingdom’s self-imposed secrecy surrounding its oil industry, the world keeps
asking, Why should we trust them?”
That collapses the Saudi regime
Austin, 06/17/2014 (Steve Austin, “What is the lower bound of oil prices?”, Before it’s News, 06/17/2014,
http://beforeitsnews.com/financial-markets/2014/06/what-is-the-lower-bound-of-oil-prices-7-2729640.html)
The Wave of unrest in the Arab world two years ago changed the history of Egypt, Libya, Syria and
Tunisia forever. As you may have heard, the initial catalyst for the protest in Tunisia was unemployment. Soon,
inflation, corruption, joblessness, unfair distribution of wealth, misgovernance and lack of freedom
fuelled upheavals across the region. Naturally, this Arab Spring evoked real fear among the rulers. Gaddafi’s
tragic ending to the hands of his constituents provided a real lesson and many rulers have taken a second look at their notion of ‘trickle down
economy’.
In the aftermath of Gaddafi’s slaying, Saudi Arabia and the UAE increased government spending
significantly through popular programs and subsidies to sidestep mass protests in their countries. Happily,
these wide-spread attempts to distribute wealth succeeded with consummate ease- thanks, oil money. Of course,
these countries will be in dire straits should the oil prices deflate in the near future. And as the
income is tied to oil sales, the minimum price Saudi Arabia wants for its oil has gotten, as expected, higher. In
fact, most oil-producing economies (Saudi Arabia, Qatar, UAE) depend heavily and exclusively on domestic oil
production for income as opposed to productive income-earning tax payers. Evidently, Saudi Arabia can expand
production as and when it wants-in light of the latest discoveries/technologies in oil exploration. But since more oil will lead to lower
oil prices, the kingdom is happy to sit on its oil reserves. That also explains why the Saudi oil Minister, while ‘politely’ welcoming the increased
oil production in the United States, saw ‘no need to go beyond our 12.5 million b/d capacity.’ Why would they when they need oil prices above
$80 to maintain stability? So, according to latest reports, crude oil output in Saudi Arabia May average 40,000 barrels a day less than in 2012.
Supposedly, what
happens with $50 a barrel energy prices? (Consumer is happy!) Along with Bahrain, Saudi
Arabia, Russia will probably suffer political collapse.
Saudi collapse destabilizes the Middle East
Cordesman, 2011 (Anthony Cordesman, Arleigh A. Burke Chair in Strategy at CSIS, former director of intelligence assessment in
the Office of the Secretary of Defense, former adjunct prof of national security studies at Georgetown, PhD from London University, Center for
Strategic and International Studies, 02/26/2011, http://csis.org/publication/understanding-saudi-stability-and-instability-very-different-nation)
History scarcely means we can take Saudi stability for granted. Saudi
Arabia is simply too critical to US strategic interests
and the world. Saudi petroleum exports play a critical role in the stability and growth of a steadily more
global economy, and the latest projections by the Department of Energy do not project any major reductions in the direct level of US
dependence on oil imports through 2025. Saudi Arabia is as important to the region’s security and stability as it is to
the world’s economy. It is the key to the efforts of the Gulf Cooperation Council to create local defenses, and
for US strategic cooperation with the Southern Gulf states. It plays a critical role as a counterbalance to
a radical and more aggressive Iran, it is the source of the Arab League plan for a peace with Israel,
and it has become a key partner in the war on terrorism. The US strategic posture in the Middle East
depends on Saudi Arabia having a friendly and moderate regime.
That escalates to nuclear Armageddon
The Earl of Stirling 11, hereditary Governor & Lord Lieutenant of Canada, Lord High Admiral of
Nova Scotia, & B.Sc. in Pol. Sc. & History; M.A. in European Studies, “General Middle East War Nears
- Syrian events more dangerous than even nuclear nightmare in Japan”,
http://europebusines.blogspot.com/2011/03/general-middle-east-war-nears-syrian.html
Any Third Lebanon War/General Middle East War is apt to involve WMD on both side quickly as both sides
know the stakes and that the Israelis are determined to end, once and for all, any Iranian opposition to a 'Greater
Israel' domination of the entire Middle East. It will be a case of 'use your WMD or lose them' to
enemy strikes. Any massive WMD usage against Israel will result in the usage of Israeli thermonuclear
warheads against Arab and Persian populations centers in large parts of the Middle East, with the
resulting spread of radioactive fallout over large parts of the Northern Hemisphere. However, the first use of nukes is
apt to be lower yield warheads directed against Iranian underground facilities including both nuclear sites and governmental command and control and leadership
bunkers, with some limited strikes also likely early-on in Syrian territory.¶ The
Iranians are well prepared to launch a global Advanced
Biological Warfare terrorism based strike against not only Israel and American and allied forces in the Middle
East but also against the American, Canadian, British, French, German, Italian, etc., homelands. This will
utilize DNA recombination based genetically engineered 'super killer viruses' that are designed to spread themselves
throughout the world using humans as vectors. There are very few defenses against such warfare, other than
total quarantine of the population until all of the different man-made viruses (and there could be dozens or even over a hundred different viruses released at the same
could kill a third of the world's total population. ¶ Such a result from an
Israeli triggered war would almost certainly cause a Russian-Chinese response that would eventually finish
off what is left of Israel and begin a truly global war/WWIII with multiple war theaters around the
world. It is highly unlikely that a Third World War, fought with 21st Century weaponry will be anything
but the Biblical Armageddon.
time) have 'burned themselves out'. This
Saudi Uniqueness
2NC High Oil Prices Now/Saudi Econ High
High oil prices underpin Saudi’s economy now
SG, 06/28/2014 (SG, “Saudi inflation seen at 3% in ’14”, Saudi Gazette, 06/28/2014,
http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140629209865)
With unemployment at the lowest level since 2009, 11.5 percent by the end of 4Q2013, an expected increase
in disposable income will boost private consumption expenditure, which posted a 7.2 percent increase last quarter.
However, the dollar-positive effect due to tapering will underpin the headline inflation rate, which will remain
in a range-bound movement around 3 percent this year. Moreover, Saudi Arabia’s monetary system continues to be
awash with liquidity as elevated oil prices and production resulted in higher revenues that
underpinned broader economic activities, the NCB report said.
Stable oil prices now are keeping Saudi Arabia economically sound
AN, 06/11/2014 (Arab News, “Oil prices at ‘right level’ for OPEC”, Arab News, 06/11/2014, http://www.arabnews.com/news/584751)
VIENNA: Oil
prices are at a suitable level for OPEC members and the group sees no shortage in supply, UAE Energy
Minister Suhail bin Mohammed Al-Mazroui was quoted as saying. OPEC, which pumps more than a third of the world’s oil, meets on
Wednesday in Vienna to decide on output policy. Ministers have said they expect that the 12-member group will
leave its output target of 30 million barrels per day unchanged. “Oil prices have been steady over
the past period and at a comfortable level for all members,” WAM quoted the minister as saying. “The UAE and all
of the OPEC members are committed to guarantee the balance in supply and demand and that consumers get the oil supplies that they may need,”
reserves are still “acceptable” in most oil consuming countries and
there is no shortage in supply, the minister added. An oil price comfortably over $100 a barrel leaves
smiling OPEC ministers with an easy task to leave things as they are on output policy at Wednesday’s
meeting. Brent crude has stayed above that price, the preferred level of Saudi Arabia, all year and was
trading near $110 on Tuesday, supported by the almost total loss of supplies from OPEC member Libya. “The price is good. Brent is
he told WAM before traveling to Vienna. Oil
$110, it is not bad,” said Angolan Oil Minister Jose de Vasconcelos. “There is no reason for a change. Absolutely no reason,” he said in Seoul.
“Supply is highly sufficient, demand is great and the market is fairly stable.” Riyadh kept production little
changed in May, pumping 9.705 million barrels per day, according to industry sources, supporting Saudi Arabia’s view that the market did not
need more.
2NC Yes Flood
Expected low prices will force Saudi Arabia to flood the market with cheap gas to
protect its market share
Fang et. al, 2012 (Songying Fang- Assistant Professor of Political Science at Rice University, Amy Myers Jaffe- Wallace Wilson
Fellow in Energy Studies at the James Baker Institute for Public Policy at Rice University, Ted Loch-Temzelides- Baker Institute Rice Scholar at
James A. Baker III Institute for Public Policy & Professor of Economics at Rice University, “New Alignments? The Geopolitics of Gas and Oil
Cartels and the Changing Middle East”, Rice University, 08/17/2012, http://gsm.ucdavis.edu/sites/main/files/fileattachments/new_alignments_aug17_2012.pdf)
However, it would be premature to draw the conclusion that Saudi Arabia will no longer be willing to wage a price war. Its interest in carrying
Saudi Arabia gains
international clout from its ability to guard the global economy by raising oil output and lowering
oil prices. Moreover, Riyadh’s ability to threaten other oil producers that it could flood the oil market
is a critical aspect buttressing its leadership role inside OPEC and gives the country regional clout as
well. Indeed, among the best levers Saudi Arabia has to influence regional politics is its ability to dramatically
lower the price of oil. Saudi Arabia has flooded the oil market for geopolitical reasons in the past,
the spare capacity to wage a credible price war goes beyond its security relationship with the United States.
and could arguably do so again.
For example, Saudi Arabia has made it clear that it aims to draw the line against Iranian
expansionism.27 Iran is dependent on oil revenues for more than 65 percent of its government revenue. In contrast, the Kingdom is in a position
to withstand a period of low oil prices. Thus, Saudi Arabia’s
ability to wage a price war is a major tool it can use to
ability to
wage an oil price war also helps the Kingdom to guard against other producers with large oil
reserves, such as Iraq, from taking over its oil market share. In fact, Iraq has expressed the ambition to reach 10 to 12
million b/d of production by 2017. This level is commensurate with Saudi Arabia’s capacity. Rising Iraqi output could
diminish Iranian power in the region and weaken Iran’s position as a regional military and political rival to the Kingdom. The
alter the balance of political power within OPEC and challenge Saudi Arabia’s current leadership. Iraqi oil reserves are considered very low-cost
to develop and are competitive with those of Saudi Arabia. In summary, while
the costs of maintaining enough spare
capacity to wage a price war have risen for Saudi Arabia, there are still many geopolitical
incentives for the Kingdom to maintain this capability. This includes contributing to its security by weakening Iran and
by remaining important to the United States, which would then be more apt to provide security guarantees in exchange for the free flow of oil.28
Saudi Arabia can and will flood the market with cheap oil if it perceives a threat
Taqui, 2011 (Dr. Jassim Taqui, Founder and Director General for the Al-Bab Institute for Strategic Studies, physical chemist, linguist
and security analyst, The Pakistan Observer, 07/04/2011, http://pakobserver.net/detailnews.asp?id=101173)
Islamabad—Saudi
Arabia has emerged as an international player and a savior by insisting on
increasing the oil production to bring down the oil prices. It is supported by the State of Kuwait, United Arab Emirates
and the State of Qatar. Prince Turki Al-Faisal has stated that Saudi Arabia can flood the international market with oil
to bring down the prices. Saudi Arabia has the capacity to achieve this feat. It has a spare
production capacity of 4 million barrels per day. It is the world leading oil producer and can achieve what it
promises. It has also the financial resources to further expand oil production at a fairly quick time. The
decision has already been taken. This decision is expected to be enhanced when Kuwait, UAE and Qatar would follow suit as per a tacit
other oil producing
nations would be compelled to reduce oil prices so as not to lose their traditional markets.
agreement between the four oil producing countries. With huge quantities of oil are floated in international market,
Saudi Arabia will undermine oil production in other countries to protect its market
Ergo, 2012 (Ergo, Provides a wide range of research and consulting services focused on oil and gas, Iraq, and Saudi Arabia, citing eight
sources from Saudi Arabia, Iraq, Iran, OPEC, and Middle East politics, “The Waning Era of Saudi Oil Dominance”, ERGO, 02/08/2012,
http://www.ergo.net/ErgoSpecialReport_Saudi_Oil_Feb2012.pdf)
Saudi Arabia’s importance to global oil markets is due not solely to its immense reserves and production,
but also its spare production capacity, which far surpasses that of any other country. Oil producers with spare capacity
can ramp up production to calm turbulent markets and prices in response to a crisis—Saudi Arabia did so during
the high market uncertainty in the period immediately after the September 11, 2001 terrorist attacks in the US, and again during the 2011 Libyan
unrest. However, spare
capacity can also be wielded as a tool to undermine other market participants.
Arabia warned other OPEC members that high oil prices would eventually curb demand. It enforced its
view in 1981 by flooding the market, bringing down prices and slowing upstream expansion programs in
countries that had sought high oil prices.
Between 1979 and 1980, Saudi
Saudi Arabia can flood the market with cheap oil
ML, 04/19/2014 (Market Leader, “Saudi Arabia Destroyed USSR: Can It Destroy Russia?”, Market Leader, 04/19/2014,
http://www.profi-forex.us/news/entry4000006168.html)
Indeed, Saudi
Arabia plays one of the key roles in crude oil pricing. According to Bloomberg, Saudi Arabia may
well increase its production capacity by 3 million barrels a day, which corresponds to 3% of the
global oil production volume. Another major thing about this Middle-Eastern state is that it is the only oil producer
that has technical ability to boost and cut its oil production easily and relatively fast if necessary.
This is an unquestionable fact. Still, the key question is whether the USA and Saudi Arabia can ally in order to depress Russia?
2NC HOP= Saudi Econ High
Heavy reliance on oil upholds Saudi’s economy now
KMEFIC, 03/02/2014 (Kuwait & Middle East Financial Investment Company, a leading asset management and financial services
company in the Middle East providing innovative investment products and services, consistently producing strong returns and increasing
shareholder value, “Saudi Arabia Economic Report”, KMEFIC, 03/02/2014, http://content.argaam.com.s3-eu-west-1.amazonaws.com/a3ecaea22d93-4bd9-995b-fb06a8c38890.pdf)
The Kingdom of Saudi
Arabia is one of the largest Arab countries with one of the fastest growing economies
in the Middle East and North Africa (8.8% over the past decade)1 . The kingdom’s economy is greatly dependent on
oil as its major resource for development. Saudi oil revenue accounts for roughly 90% of total government
revenues, oil exports account for about 88% of total export earnings, and the oil sector contributes about
50% percent to GDP2 . However the Kingdom’s heavy reliance on exhaustible resource oil makes it
vulnerable to global oil prices. Saudi Arabia possesses huge oil reserves and the time horizon for a Saudi non-oil economy is a
relatively distant future. As the world's leading oil producer and exporter, Saudi Arabia dominates the Organization of the Petroleum Exporting
Countries (OPEC). The kingdom has also joined the World Trade Organization (WTO) back in 2005 and sought to attract foreign investment and
promote economic diversification. Saudi Arabia's oil and natural gas operations are dominated by the government’s (Saudi Arabian Oil
Company) a.k.a. Saudi Aramco, the world's largest oil company in terms of proven oil reserves and production. According to OPEC annual report
2013, Saudi Arabia has the second largest proven crude oil reserves in the world after Venezuela which took the lead from the kingdom in proven
oil reserves since 2010. The Kingdom possesses about 18% of the world's proven oil reserves. In 2012, the oil sector accounted for roughly
49.7% of GDP and 8.19% of Government revenues. Like other GCC countries, Saudi Arabia has ambitions to leverage its Oil revenues to
diversify its economy and create world-class infrastructure. According to OPEC, Saudi Arabia possesses about 41.% of the world’s gas reserves.
The Kingdom's gas reserves stood at 8,235 bcm (billion cubic meter) in 2012, rising by 1% from 2011. Saudi Arabia is the second highest Gas
producer in all GCC countries after Qatar; the country’s gas production reached 99.33 bcm in 2012, a 7.7% growth from 2011. Business Monitor
International (BMI) expects that the outlook for gas remains tight, despite ambitious plans to tap unconventional resources; BMI believes that
rising consumption and faltering supplies may yet see the Kingdom seriously consider imports. According to IMF, Saudi Arabia has been one of
the best performing G-20 economies in recent years and has played a key stabilizing role in the global oil market. The Increase in oil production
in 2011 and 2012 helped prevent supply disturbances elsewhere from having a detrimental impact on global growth. Driven
by high oil
prices and expansionary public spending, Saudi Arabia's GDP has recorded a growth rate of 5.1% over 2012.
Overall real GDP growth is projected at 3.6% in 2013 and 4.4% in 2014.
High oil prices sustain Saudi’s economy
Kemp, 2013 (John Kemp, Reuters Correspondent, “COLUMN-Saudi Arabia must avoid perfect oil market storm: Kemp”, Reuters,
11/13/2013, http://uk.reuters.com/article/2013/11/11/saudi-arabia-oil-outlook-idUKL5N0IW2NK20131111)
Lower oil prices, reduced exports or both remain the biggest risks to Saudi Arabia's financial
position, as the Fund noted. "The projected increases in the production of unconventional oil in the United States and Canada and the
recovery in production in Iraq and Libya could result in a lower path for oil production in Saudi Arabia than assumed ... or a larger drop in oil
prices," according to the IMF. Despite efforts to diversify the Saudi economy over the past two decades, oil
still accounts for 80
percent of export revenue and 90 percent of budget revenue. The Fund complimented the Saudi authorities for reducing
short-term volatility in expenditure and prudent budgeting. Nonetheless, Saudi Arabia needs an oil price of more than $80 per
barrel to balance its budget, according to the Fund, and the breakeven price has increased by almost $50 per
barrel in the past five years. In effect, Saudi policy depends on a continuation of high prices and high volumes.
Neither is guaranteed, as Saudi policymakers are only too well aware. The IMF identified a large and
prolonged downturn in oil prices (or by extension, volumes) as a low-probability but high-consequence event for Saudi
Arabia in its risk assessment matrix.
2NC HOP= Political Stability
High oil prices now maintains Saudi stability
Johnson, 01/23/2014 (Keith Johnson, FP Correspondent, “Running on Empty”, Foreign Policy, 01/23/2014,
http://www.foreignpolicy.com/articles/2014/01/23/running_on_empty)
The task for Saudi Arabia is even harder, because it has acquired a host of financial obligations outside its
borders. Bruce Reidel of the Brookings Institution estimates that Riyadh's external commitments, including support for
tottering allies such as Egypt, Pakistan, Bahrain and Yemen, now totals about $30 billion a year. "The cost of
supporting the counter-revolution in the Arab and Islamic worlds adds greatly to the challenges facing the
House of Saud in the years ahead," he wrote in a new Brookings study released Thursday. But if the Middle East does not come to grips
with its rising oil consumption, the implications could be dire. Saudi Arabia's crucial role in global oil markets comes both
from the sheer volume of its exports, and the fact that it maintains "spare capacity" that it can essentially
turn on and off as needed, making it a sort of central banker of oil markets. The greater the domestic consumption, the
less potential spare capacity in OPEC's biggest producer. And that could lead to higher and more volatile oil prices, which would be bad news for
the entire global economy. Internal
stability could also be threatened. Countries in the Middle East, as well as petro-states
like Russia and Venezuela, have come to rely on exceedingly high oil prices in order to balance their budgets and
meet domestic commitments. That has worked for the last few years because oil prices are, in real terms, about
as high as they have been in a century.
Saudi stability is contingent on high oil prices
Rowies, 03/12/2014 (Daan Rowies, Country and sector risk analyst at Delcredere specializing in Islamic finance and the oil and gas
sector as well as overall Middle Eastern country risk, “Saudi Arabia: Country Risk Assessment”, Credendo Group, 03/12/2014,
http://www.delcredereducroire.be/newsletter/en/cra/54537/cra-saudi-arabia-march2014)
While unprecedented, protests remained limited in scale, as demonstrations are successfully suppressed by the country’s repressive security
apparatus. But also other factors have prevented the unrest from spreading across the country as most Sunni Saudis do not identify themselves
with the demands of the Shia minority, which curtails spillovers of public anger witnessed in the Eastern Province to other parts of the country.
Moreover, a
boost in public spending, financed with huge oil income, has helped to contain protests. In fact,
soon after the regional protests broke out, King Abdullah announced a massive increase in public
spending (estimated to have cost around USD 130 billion), mainly focusing on the housing sector (a long time
bottleneck in the country), but also on social security, education, public wages and increasing credit. Last year,
public expenditure was more than 40% higher than in 2010. However, thanks to high oil prices, public revenues
grew even stronger (+52% in the same period). As a result, the central government continued to book a strong
surplus, of around 7% of GDP, while bringing down public debt to a mere 3% of GDP.
Russia Uniqueness
2NC Nat Gas Uniqueness
Russia will manipulate the market to ensure they maintain their market share
Brewer, 07/04/2014 (Reuben Brewer, Motley Fool writer, “Would Russia Kill European Fracking to Protect Gazprom?”, The
Motley Fool, 07/04/2014, http://www.fool.com/investing/general/2014/07/04/would-russia-kill-european-fracking-to-protect-gaz.aspx)
Russia supplies Europe with around 30% of its natural gas. That makes the "old world" a valuable
customer. About half of that goes through Ukraine, the country that Russia is sparring with over Russia's annexation of Crimea and natural
gas deliveries. In fact, Gazprom just cut Ukraine's gas supply, though it is still sending enough gas through Ukraine's pipes to supply Europe .
The last thing Gazprom wants to do is jeopardize its European customer base. That one region accounts
for roughly half of its natural gas sales. While the company has inked a deal with China to send gas to
that giant nation, the pipes to do so aren't built yet. Now there are accusations that Russia is working hard to keep
Europe dependent on its gas supplies. According to Nato chief Anders Fogh Rasmussen, Russia is doing this by funding antifracking groups. That's something that some of the larger groups deny, but it would be hard to suss out where all of their donations come from in
the anti-fracking movement. Gazprom or bust There are good reasons for Russia to undertake such a covert operation. For starters, Gazprom
would suffer greatly if its European business started to slip away. Second, by keeping Europe hooked on
Gazprom gas, Russia maintains a strong bargaining position in world politics.
2NC Oil Uniqueness [Russia Impact]
High oil prices are supporting Russia’s economy now- but it’s fragile
Mackinnon, 03/12/2014 (Mark Mackinnon, The Globe and Mail Correspondent, “Globe in Ukraine: Crimean adventure could
cost Russia billions”, The Globe and Mail, 03/12/2014, http://www.theglobeandmail.com/news/world/globe-in-ukraine-crimean-adventure-couldcost-russia-billions/article17473763/)
Russia’s markets have been badly rattled by talk of war and economic sanctions. MICEX, the main Russian stock
exchange, fell 2.64 per cent on Wednesday, bringing its losses so far in March to a dramatic 11.8 per cent, comparable to the hit it took during the
2008 financial crisis. The
country’s economy, reliant on oil and gas exports, was already struggling, expected to
grow by just 1.5 per cent in 2014. By some estimates, it would already be in recession if not for high oil
prices.
High oil prices buttress Russia’s economy now
Schuman, 2012 (Michael Schuman, Time Correspondent, “Why Vladimir Putin Needs Higher Oil Prices”, TIME, 07/05/2012,
http://business.time.com/2012/07/05/why-vladimir-putin-needs-higher-oil-prices/)
What’s more, the
economic model Putin has designed in Russia relies heavily not just on oil, but high oil
prices. Oil lubricates the Russian economy by making possible the increases in government largesse that
have fueled Russian consumption. Budget spending reached 23.6% of GDP in the first quarter of 2012, up
from 15.2% four years earlier. What that means is Putin requires a higher oil price to meet his spending
requirements today than he did just a few years ago. Research firm Capital Economics figures that the government budget balanced at an
oil price of $55 a barrel in 2008, but that now it balances at close to $120. Oil prices today have fallen far below that, with Brent near $100 and
U.S. crude less than $90. The
farther oil prices fall, the more pressure is placed on Putin’s budget, and the harder
it is for him to keep spreading oil wealth to the greater population through the government . With a large
swath of the populace angered by his re-election to the nation’s presidency in March, and protests erupting on the streets of
Moscow, Putin can ill-afford a significant blow to the economy, or his ability to use government resources to
firm up his popularity.
Links
US Independence Link
Aggressive US climate policies cause Saudi Arabia to drop oil prices
Elass & Jaffe, 2010 (Jareer Elass- Energy Consultant and Editor at the James A. Baker Institute for Public Policy at Rice University,
Amy Myers Jaffe- Wallace Wilson Fellow in Energy Studies at the James Baker Institute for Public Policy at Rice University, “The History of
U.S. Relations with OPEC: Lessons to Policymakers”, James A. Baker III Institute for Public Policy, 09/15/2010,
http://bakerinstitute.org/files/379/)
While OPEC, led by Saudi Arabia, looks like it will continue to champion a $65-80 bbl oil price range as the
ideal level for the foreseeable future, aggressive U.S. climate policies, such as cap and trade legislation, might be viewed
down the road by OPEC as a rising energy tax that needs to be countered by less conciliatory
OPEC policies. Still, OPEC’s best defense against alternative energy is to drop the price of oil to
levels that would render alternative energy as commercially unprofitable. The producer group is not currently
actively concerned about the threat of alternative energy because it doesn’t believe that any of the technologies for renewable energy can be
scaled up commercially to a significant level within the next 20 years. Thus, the question
of OPEC response will be related to
the effectiveness of any U.S. or global climate regime and whether it taxes of penalizes oil in a substantial fashion that
significantly disadvantages oil-based fuel. A US. Border carbon tax that hits all U.S. imports, including oil imports from Saudi
Arabia, might be viewed as a more serious trade problem than U.S. policies to promote alternative energy.
Oil—Perception Links
It’s a perception link—any large-scale move to increase US oil strikes fear
Durden, 03/23/2014 (Tyler Durden, Zero Hedge writer, “Guest Post: The Hydraulic Fracturing of Saudi Arabia...”, Zero Hedge,
03/23/2014, http://www.zerohedge.com/news/2014-03-23/guest-post-hydraulic-fracturing-saudi-arabia)
Since the early twentieth century, Saudi Arabia has enjoyed a close relationship with the United States.
From the development of the Saudi oil fields,to the First Gulf War, this relationship has been an uneasy cooperation—each side received
something out of the alliance while nervously watching the other. So recently we have the first open break between the two powers culminating
in the Saudi’s refusing a seat on the U.N Security Council due to anger with U.S. Middle Eastern policies. Saudi
Arabia holds the
world’s second largest oil reserves and the sixth largest natural gas fields. In addition to being located in
the most volatile part of the world, these energy assets make the country a strategic interest for any global
power. The discovery of vast hydrocarbon reserves in the United States and the ability to harvest them through
hydraulic fracturing techniques has radically altered the relationship between the two countries. Ironically, even though
the Obama administration has reduced drilling on Federal lands in the US and attempted to curtail hydrocarbon use overall, it is fracking
which has allowed the United States to nearly gain energy independence, become a net energy exporter again, and reduced the
need to buy oil from the Middle East. This shift in the balance of power with the Saudis has made the
Kingdom extremely nervous.
It’s based on perception—Saudi Arabia fears the US will cut ties
Rogers, 2013 (Will Rogers, Bacevich Fellow at the Center for a New American Security (CNAS) & has authored or co-authored a range
of publications on energy, climate change, environmental cooperation in Asia and cybersecurity, “America Committed to Gulf Security Despite
Changing Relationship with Region's Oil, says Gen. Dempsey”, Center for New American Security, 03/20/2013,
http://www.cnas.org/blog/america-committed-to-gulf-security-despite-changing-relationship-with-region-s-oil-says-gen-dempsey7468#.U7oASPldWSo)
America’s relationship with the Middle East’s energy resources is changing as U.S. domestic oil production
continues to grow. A combination of hydraulic fracturing, horizontal drilling and advanced seismic technologies have contributed to the largest
annual growth in U.S. crude oil production since Colonel Edwin Drake first drilled for oil in Titusville, Pennsylvania in 1859. Most of the crude
oil is coming from shale formations in North Dakota and Texas – what we call “light tight oil.” Since 2010, the United States has, on average,
increased monthly crude oil production by 50,000 barrels a day.¶ Not all of this U.S. light tight oil is displacing Middle East crude, of course. A
number of factors matter, most importantly the crude oil grade. The
United States is producing light tight oil, that is, lowdensity crude oil, whereas the United States imports heavier crudes from the Persian Gulf, including from Saudi
Arabia. Moreover, U.S. refineries have been increasingly geared to absorb heavier crudes, from the Persian Gulf, but
more so from Canada, Mexico and Venezuela.¶ Nevertheless, the glut in U.S. crude oil production and declining demand for oil (a
consequence of slow economic growth and more fuel efficient vehicles) have contributed to a powerful notion that the United
States is relying less and less on oil from the Persian Gulf and could conceivably help wean America off
crude oil imports from the Middle East entirely (a debatable point).¶ Whether or not one believes that the
United States can break the tether to Middle East oil, U.S. allies and partners in the Persian Gulf are
increasingly nervous about America’s long-term security commitment to the region. After all, if the
United States no longer relies on energy from the region, why should American foot the bill for protecting
the sea lanes – that backbone of the crude oil trade in the region – or so the narrative goes.¶ The United States has a
number of stakes in stability of the Persian Gulf oil trade even if it does rely less on oil from the region. Supply shocks will contribute to higher
global oil prices, which will be felt at home. Moreover, supply shocks are damaging to our allies, particularly those in East Asia that have grown
more dependent on oil and gas from the Middle East and North Africa. But there are other legitimate security concerns as well, which were not
far from General Martin Dempsey’s mind when he responded to a question on Monday about how the American energy revolution will impact
U.S. interests and presence in the Persian Gulf. Here’s what the Chairman of the Joint Chiefs of Staff said:If by 2017 the United States can
achieve some level of energy independence, why in the world would we continue to be concerned about the energy that flows out of – out of the
Gulf? Well, look, my answer to that is I didn’t go to the Gulf in 1991 and stay there for about the next 20 years because of oil. That’s not why I
went. It’s not why my children went. It’s –and we went there because we thought that a region of the world where we had – where we had not,
except for a few bilateral relationships – where we hadn’t invested much of our, let’s call it, bandwidth, intellectual energy, commitment – now,
we went there in ’91 because of the – of the aggression of Saddam Hussein, but we stayed there because I think we came to the realization that
the future of the region was tied to our future, and not through this thing called oil but rather through the – as I said earlier, the shared interest in a
common future where people would be able to build a better life and where threats could be managed collaboratively, not by the United States
uniquely but by the relationships we would build on the basis of common interests. So when I hear about in 2017, you know, oil won’t be as big a
factor for us – and that’s great. I hope we do achieve energy independence. But I can assure you that at least from a military perspective – and I
can only speak, as I dress, from the military perspective – that the continued development of capabilities – military capabilities, notably, in my
world, but also partnerships and trust that we build by working together, by exchanging officers and noncommissioned officers in our
professional military schools, that on that basis, you will find –you will find that the future will be a period of greater commitment. ¶ Now, you
know, if you measure our commitment in terms of numbers of boots on the ground and numbers of aircraft and number of aircraft carriers, I think
you’ll probably –you know, there’ll always be this debate about inclining or declining commitment. But that’s not what the commitment’s all
about, really, in my view. As I said, I went to – I went to the Gulf in ’91, spent almost the next 20 years there on and off and didn’t do it for oil. ¶
So we have two powerful strategic cross-currents that the Obama administration will have to confront in the near term. ¶ This
week marks
the anniversary of the U.S. invasion of Iraq, a solemn reminder for some that the United States should be
less engaged in the Middle East, not more. Add this to the notion that the United States could break the
tether to Middle East oil, and the domestic narrative speaks for itself. At the same time, though, a credible U.S.
security commitment to our partners in the Persian Gulf may be the only way to allay concerns about
security challenges in the region. Take for example, Iran. My colleagues Colin Kahl, Melissa Dalton and Matt Irvine recently
published a report assessing the possibility that an Iranian bomb could lead to Saudi Arabia developing the bomb – Atomic Kingdom: If Iran
Builds the Bomb, Will Saudi Arabia be Next? Kahl, Dalton and Irvine argue quite persuasively that a
number of factors will keep
Saudi Arabia from developing the bomb. But one of the big caveats to this is a credible U.S. security
commitment to Saudi Arabia. Does the Royal Family in Riyadh feel comfortable about this commitment given the competing narrative
that America may have an opportunity to walk away from the Persian Gulf if it doesn’t need access to the region’s oil? The public perception
on these issues - at home and abroad - will have to be managed carefully. What a tightrope to walk.
Neg
Oil—Generic Links
US threat to Saudi oil means they’ll flood the market
Rahemtulla, 2013 (Karim Rahemtulla, an expert in emerging markets and energy, regarded as one of the country's foremost resource
and developing world analysts, “Will Saudi Arabia Go Nuclear With An Oil Supply Shock?”, Oil & Energy Daily, 07/30/2013,
http://www.oilandenergydaily.com/2013/07/30/saudi-arabia-oil-supply/)
More importantly, the
Saudi royal family will do anything to maintain their grip on their kingdom, as well as their
that means selling oil at a loss, so be it. The kingdom has NO other
source of income and NO other choice. If Saudi Arabia were to feel a genuine threat, it could open
the spigot and flood the market… literally. The other OPEC members would follow suit, as most are in the
same boat as Saudi Arabia – with no other source of revenue and leaderships that are dependent on the
largesse from oil sales. And if you want to get an idea of what can happen in an industry when supply increases faster than
demand, or when prices plunge by more than half, just look at what happened to natural gas prices over the past decade.
Wells sit idle and companies cut back production. So while oil may be trading at $106 per barrel today, it could just as easily
be trading at half that price a few years from now, and that’s not even counting the increasing downward pressure from
alternative energy sources like natural gas. And that would deal a serious blow to the dream of U.S.
energy independence.
own personal power, prestige and wealth. If
Oil—Drilling Links
Saudi Arabia floods the market in response to increased US drilling
Stafford, 2013 (James Stafford, OilPrice Editor citing Chris Faulkner (CEO of Breitling Energy Companies - a key player in Bakken
with a penchant for leading the new technology charge), “Will Saudi Arabia Allow the U.S. Oil Boom? Interview with Chris Faulkner”, OilPrice,
05/30/2014, http://oilprice.com/Interviews/Will-Saudi-Arabia-Allow-the-U.S.-Oil-Boom-Interview-with-Chris-Faulkner.html)
Oilprice.com: Can the US really compete with Saudi Arabia in terms of production? Chris Faulkner: Sure, just as long as the Saudis will allow it.
Don’t forget the
Kingdom is still the world’s swing supplier, a role it’s held since the late 1970s. It’s important to remember that
Saudis not only have the largest proved reserves of oil, it’s also the largest repository—by far—of
low-cost oil reserves. Much of Canada’s oil sands and US tight oil requires $75 per barrel or more to be economically
viable. Saudi Arabia also needs $75 per barrel, but that’s to support its current domestic budget. The Kingdom’s lifting costs are
somewhere around $5 at last report. So Saudi Arabia could easily flood the market, as it did in the early ‘80s, if it lost
too much market share, dropping oil prices to $50 or less, and US drilling and production would
collapse. Ideally, growing demand from China and other Asian markets will help sustain Saudi production levels and oil prices even as the
the
Americas become self-sufficient in oil.
Renewables—Generic Links
That means Saudi Arabia will flood the market with cheap oil to drive out green
energy
Malik et. al, 2009 (Khaleel Malik- Senior Lecturer in Technology Management and Innovation. Innovation, Management an
Research, Manchester Business School; Yasser Al-Saleh-awarded a PhD from the Manchester Institute of Innovation Research (University of
Manchester) for his novel examination of the emergence of clean-tech industries using an innovation system perspective. Yasser comes from an
engineering background and has previously worked in the oil industry (Saudi Aramco). He received his MSc(Eng) with Distinction from Leeds
University (UK) and has completed his BSc(Hons) degree in Southampton (UK) with First Class Honours; Paul Upham- Senior University
Research Fellow at Sustainability Research Institute and Centre for Integrated Energy Research, University of Leeds & Visiting Professor,
Climate and Energy at Finnish Environment Institute, Senior Research Fellow at Tyndall Centre for Climate Change Research, “Renewable
Energy Scenariosfor the Kingdom of Saudi Arabia”, Tyndall Centre for Climate Change Research, 05/03/2009,
http://www.academia.edu/197791/Renewable_energy_scenarios_for_major_oil-producing_nations_The_case_of_Saudi_Arabia)
In a world of abundant oil reserves, Saudi
Arabia - as a major oil-producer with the greatest spare production capacity - could
choose to maximise its oil production and perhaps further expand its operations in the Far East in order to achieve
a maximum market share and ultimately become the world’s unsurpassed supplier. As a result of the
adoption of a sustained ‘market flooding’ strategy, oil prices could gradually drop down to as low as $10 per
barrel. This low price may, however, guarantee the maintenance of reasonable revenue to Saudi Arabia, whose
production costs are very low (according to some unofficial estimates perhaps as low as $1.5 per barrel at present). Such an
aggressive approach - although regarded by a few panellists as beingsomewhat technically difficult - would result in driving other
‘high-cost’ oil-producers(including many OPEC members) from the market, as well as demolishing much of the global interest
and research into alternative energy means (including renewables).
Natural Gas—Russia Generic Links
Threat to Russian natural gas causes them to flood the market- empirics prove
Tsereteli, 2007 (Mamuka Tsereteli, Executive Director of the America-Georgia Business Council. He also teaches at George
Washington and American Universities in Washington D.C., “BUILDING A BLACK SEA/CASPIAN NATURAL GAS BRIDGE:
CHALLENGES AND OPPORTUNITIES”, The Central Asia-Caucasus Analyst, 01/27/2007, http://www.cacianalyst.org/publications/analyticalarticles/item/11313-analytical-articles-caci-analyst-2007-1-24-art-11313.html)
BACKGROUND: After
gaining full control over Armenia’s pipeline network and the Moldovan
distribution network, as well as partial control over the Belarusian transit pipelines, Russia’s State-controlled gas monopoly,
Gazprom, is getting closer to its ultimate goal to control all pipelines connecting the former Soviet
Union’s states to other markets and potential suppliers. The same strategy is now being applied to Europe. Russia is the primary source
for imported natural gas in most European states, and its role is set to increase in next decade, despite a potential shortage of the gas on the
domestic market. In order to secure supplies, in recent months the leading European states and their government-supported energy companies –
a frequently underestimated force in European energy politics – concluded bilateral deals with Russia’s Gazprom on long-term energy
supplies. The deal between the Russian and French gas monopolies, Gazprom and Gaz de France (GdF) on the supply of Russian gas is the latest
in a row of bilateral deals between Gazprom and major European consumer states. The deal establishes Gazprom’s strong position in a major
market and guarantees GdF sizeable supplies of gas for 24 years in return for giving the Russian company a slice of the French distribution
market. Earlier, Gazprom concluded similar deals with German and Italian companies. These bilateral agreements weakened potential for
EU’s common strategy towards Russian energy, and regarding energy security in general. On the contrary, it strengthened Gazprom’s
position tremendously. Gazprom
has very clear strategy: to obtain strong dominance over natural gas supply and
distribution networks in Europe. So far, implementation of this strategy is brilliant. By obtaining control over
the transit infrastructure in transit countries, Russia limits access to markets for other potential suppliers,
and by obtaining the distribution business, it limits the ability of importing countries to conclude long-term gas purchase agreements with other
producers. Without those agreements, the development of new transportation infrastructure is commercially impossible. IMPLICATIONS:
There is enough gas in the neighborhood of Europe; but the problem is delivery infrastructure. The particular problem
is delivery to Central and Eastern European states, where access to gas supplies from Northern Europe, Algeria or Central
Asia is limited. The existing pipeline network connects those states only to Russian gas sources, and –
only through Gazprom pipelines – to Central Asian gas. The potential to get access to Azerbaijani gas through
Turkey via the so-called Nabucco pipeline, stretching from Turkey to Austria’s Baumgarten terminal via Bulgaria, Romania and Hungary
is still present, although Russia is trying hard to close the only remaining window for alternative gas by
supplying additional volumes to Turkey via the Blue Stream pipeline. This would effectively flood the market,
thus preventing the entry of Caspian gas into the link from Turkey to Austria. Despite that effort, the recent history
of disruptions in supply, and the rising price of Russian gas elsewhere in the region pushes Central and Eastern European states to seek alternative
supplies based on commercially viable solutions. In this context, the development of transportation infrastructure connecting Central Asia to
Central Europe is the key to resolving this problem. The aggregate demand of the Central and Eastern European countries for import exceeds 100
billion cubic meters, and may well grow in the future. A long-term purchase agreement with Caspian, in the first place Azerbaijani but in the
longer term also Central Asian producers, could initiate the development of the basic infrastructure, which consequently could evolve into a
strategic supply line for Eastern Europe. The South Caucasus Pipeline connecting the Azerbaijani Shah-Deniz natural gas field to Turkey via
Georgia, and then to South-East and Central Europe, is the key priority. Shah-Deniz will produce up to 30 bcm, a significant amount, but one that
could be compounded by Kazakhstani or Turkmenistani resources to generate the volume needed to make large-scale pipeline construction
commercially viable. In this sense, the South Caucasus pipeline could be connected to the Georgian Black Sea cost, and then through an
underwater pipeline to the western shores of the Black Sea, from where additional inter-connectors could transport gas to Central and Eastern
Europe via existing pipeline networks. There are two options to end the pipeline: One in Ukraine, and another in Romania. Both options can coexist and complement each other. The destinations may look too distant and economically not viable. But the case of the North Stream pipeline
may set a positive precedent. North Stream is a planned 1200-kilometre-long off-shore natural gas pipeline stretching through the Baltic Sea,
from Vyborg, Russia to Greifswald, Germany. It will have two on-shore connections from Geifswald to the south and west of Germany with a
total length of 850 km, and one 917-kilometre-long on-shore connection to bring gas from the Russian system to Vyborg. The commercial
viability of the North Stream is not in question for Western European companies, given the significant quantities involved. The undersea pipeline
in the Black Sea would be shorter, and requires less additional infrastructure to be connected to markets. Over the years, Azerbaijan and Georgia
proved to be a reliable supplier and transit country, respectively, while NATO and EU member Romania could use existing pipeline network to
connect natural gas to consumer countries. Technical and environmental challenges also seem much less problematic. A more remote option
would be to develop liquefaction facilities on the Georgian Black Sea shore, and to ship LNG to Romania and Bulgaria, where it could be
degasified and fed into the pipeline system. A fleet of LNG tankers may build a strong and reliable energy connection between the two shores of
the Black Sea. Developing technology and the reduction of infrastructure cost may support this solution. CONCLUSIONS: It would be natural
for the EU to lead the process of developing the Caspian-European Natural Gas Bridge. This is a unique chance to show leadership and prove that
the EU is capable of securing alternative energy supply for Europe by working with producer, transit and consumer countries. The United States
would also benefit from committing resources and assisting countries of Eastern Europe to sign long term supply contracts with Caspian
producers, which will be the basis for the development of the gas fields and transport infrastructure. This will cement the relationship between the
Black Sea/Caspian region and the EU and would help their Euro-Atlantic integration. In case the EU is passive and fails to organize itself to
support a Caspian-Black Sea energy bridge, the U.S. may help interested Eastern European states to form a Consortium of Gas Importing States
to lead the infrastructure development. AUTHOR’S BIO: Mamuka Tsereteli is the Executive Director of the America-Georgia Business
Council. He also teaches at George Washington and American Universities in Washington D.C.
Russia will manipulate the natural gas market to pressure other markets
Henley, 03/03/2014 (Jon Henley, The Guardian writer, “Is Europe's gas supply threatened by the Ukraine crisis?”, The Guardian,
03/03/2014, http://www.theguardian.com/world/2014/mar/03/europes-gas-supply-ukraine-crisis-russsia-pipelines)
Gazprom, which controls nearly one-fifth of the world's gas reserves and supplies more than half of the
gas Ukraine uses each year, insisted the threatened price rise merely reflected cash-strapped Ukraine's
inability to meet its contractual obligations. The state-owned company said that Kiev owes it $1.55bn for gas supplied in 2013
and so far in 2014, and shows little evidence of paying up. But this is not the first time Russia has used gas exports to put
pressure on its neighbour – and "gas wars" between the two countries tend to be felt far beyond their
borders. Russia, after all, still supplies around 30% of Europe's gas.
Impacts
2NC Saudi Collapse Ext
Low oil prices collapse Saudi Arabia
Carey, 2012 (Glenn Carey, Bloomberg Correspondent, “The Saudis Need Those High Oil Prices”, Bloomberg,
02/23/2012, http://www.businessweek.com/articles/2012-02-23/the-saudis-need-those-high-oil-prices)
The world last year watched to see if Saudi Arabia would suffer the same instability that swept away other regimes in the Middle East. The
question now is whether the world’s largest oil supplier needs to raise prices to sustain ramped-up spending intended to calm its citizens. Higher
prices would be bad news for Western governments, which need affordable oil to nurture their economic recoveries .¶
The Saudis rarely
spell out exactly what they are thinking on the topic, but there are signs their strategy has changed, and they
are increasingly willing to raise prices. Still, they seem not inclined to let prices go sky-high. A year ago Saudi oil minister Ali AlNaimi said oil at $70 to $80 a barrel was fair. Then on Nov. 21, Al-Naimi said he was “very happy” with current crude
prices; on that day oil traded close to $98 a barrel. Prices are now around $106 a barrel.¶ The evolving price targets have
everything to do with the Saudis’ “budget needs” in response to the Arab Spring, says Robin Mills, an analyst at Manaar
Energy Consulting in Dubai. In February 2011, King Abdullah returned home from medical treatment in the U.S. to announce a
spending plan that would quiet the restive parts of the Saudi population. By the end of 2011’s first quarter the kingdom
had allocated $130 billion in additional spending to build homes and combat youth unemployment. Government spending increased
28 percent last year to 804 billion riyals ($214 billion), while government revenue surged 51 percent, to 1.1 trillion riyals, according to
Ministry of Finance Data.¶ The spending has achieved its political purpose: The House of Saud’s eightdecade rule survived unscathed as Hosni Mubarak and Muammar Qaddafi were toppled, despite sporadic protests in
the Shiite areas of Saudi Arabia’s Eastern Province. The Saudi economy expanded 6.8 percent in 2011, central bank data show.
Government employees were even awarded two months in bonus pay last year—an act of generosity that cost the government an extra 224 billion
riyals over budgeted expenses.¶ Oil
sales make up 80 percent of Saudi government revenue, says Faisal Hasan, head of
research at Kuwait-based Global Investment House. Two years ago the kingdom needed an oil price per barrel of around
$70 in order to pay for its budget without tipping into deficit. For 2011, the Saudis’ break-even oil price was estimated by
the International Monetary Fund to have risen to $80 a barrel, a figure that will increase to $98 a barrel by 2016. Saudi
Arabia will have to keep spending heavily if it is to create 3 million jobs over the next three years, King Abdullah’s
stated goal. The Saudis are spending on defense too: the U.S. has agreed to sell the country 84 F-15 fighter jets for $29.4 billion.¶ Raising oil
prices too high could backfire. The last global economic crisis caused prices to fall from nearly $150 a barrel in July 2008 to less than $40 by the
end of that year. The possibility of that happening again has the Saudis trying to keep prices high but not so high they impair global growth. Says
Mills, “They don’t want prices to go above $100, and they are above $100 at the moment. Saudi Arabia pretty much is at a record production
level and so is Kuwait. And the United Arab Emirates have been increasing too. So the Gulf allies are trying to maintain relative moderate
prices.” The Iranians and Venezuelans, members of OPEC but traditional adversaries of the Saudis, have no interest in a lower price. The Saudis
have a precarious balancing act to pull off.
High oil prices now sustain the economy and maintain political stability
Carstenius, 05/05/2014 (Victor Carstenius, Country Policy Advisor at EKN, “Country Risk Analysis: Saudi Arabia”, EKN,
05/05/2014, http://www.ekn.se/Global/Landriskanalyser/Mellan%C3%B6stern/Engelska/SaudiarabienMaj2014ExternEngelska.pdf)
Saudi Arabia is the world's largest oil exporter and a leading power in OPEC. The oil revenues are vital
for the country's development and a contributing factor to the royal family's ability to maintain their overall
power. The biggest threats to the ruling royal family are increased destabilisation in neighbouring countries as well as internal fragmentation
when power is to be handed over to the younger generation. The kingdom has gradually made reforms for trade and investment, and Saudi Arabia
is a major export market for Swedish companies. However, transparency in the political process is weak and reforms need to be more radical.
The country's financial situation is strong, with solid growth, low debt and strong revenue streams. The
main scenario for the coming three to four years is that the current situation continues with power remaining strongly
centralised in the royal family and, thanks to relatively high oil prices, the economic trend remaining
stable.
2NC Middle East War Ext
Middle East instability escalates to global nuclear war
Steinbach, 2009 (John Steinbach, Israeli policy specialist, “The Israeli Nuclear Weapons Program”, The Emirates Center for Strategic
Studies and Research, 2009, http://www.nuclearfiles.org/menu/key-issues/nuclear-weapons/issues/policy/israeli-nuclearpolicy/steinbach_israeli_program.pdf)
In the event of a future Middle Eastern war, the possible Israeli use of nuclear weapons should not be
discounted. According to Shahak, 1n Israeli terminology, the launching of missiles on to Israeli territory is regarded as nonconventionaI’
regardless of whether they are equipped with explosives or poison gas.”65 Israeli nuclear doctrine dictates that an unconventional attack requires
a nonconventional (nuclear) response; a perhaps unique exception being the Iraqi SCUD attacks during the Gulf War.’66 Seymour Hersh warns,
“Should
war break out in the Middle East again, or should any Arab nation fire missiles against Israel, as the
Iraqis did, a nuclear escalation, once unthinkable except as a last resort, would now be a strong
probability.”67 Ezer Weizman, former Israeli President, said, “The nuclear issue is gaining momentum [and the] next
war will not be conventional.t6X Jonathan Schell and Martin Sherwin appeal, “Israel and the entire Middle East are approaching a
stark existential choice: a nuclear holocaust or a nuclear-free Middle East ... In a desperate effort to assure its local nuclear monopoly, Israel is in
danger of courting national ii’69 The
Israeli nuclear arsenal has profound implications for the Middle East, and the
global community. Israel Shahak has argued, “Israel’s insistence on the independent use of its nuclear weapons can be
seen as the foundation on which Israeli grand strategy rests.”7° According to Seymour Hersh, “the size and sophistication
of Israel’s nuclear arsenal allows men such as Ariel Sharon (and Benjamin Netanyahu)’7’ to dream of redrawing the map of the Middle East
aided by the implicit threat of nuclear force.”72 General Amnon Shahak-Lipkin, former Israeli Chief of Staff is quoted in the Hebrew language
newspaper Maariv; “It is never possible to talk to Iraq about no matter what; it is never possible to talk to Iran about no matter what. Certainly
about nuclearization. With Syria we cannot really talk either.” Munya Mardoch, Director of the Israeli Institute for the Development of
Weaponry, said in 1994, “The moral and political meaning of nuclear weapons is that states which renounce their use are acquiescing to the status
of vassal states. All those states which feel satisfied with possessing conventional weapons alone are fated to become vassal states.”73 Russia —
and before it the Soviet Union — has long been an implied target of Israeli nuclear weapons. It is widely reported that the principal purpose of
Jonathan Pollard’s spying for Israel was to furnish satellite images of Soviet targets and other super sensitive data relating to US nuclear targeting
strategy.’74 According to the widely respected security analyst John Pike, “The USSR (by extension Russia) has always been one of the primary
targets of Israel’s nuclear force, as Israeli assumptions hold that no Arab nation would attack Israel without Soviet support.”75 Since it began
launching its own spy satellites in 1988, Israel no longer requires US spy secrets. Israeli
nuclear weapons aimed at the Russian
heartland seriously complicate disarmament and arms control negotiations and lower the threshold for
their actual use. Investigative journalist Mark Gaffney cautions, “... if the familiar pattern [Israel refining its weapons of mass destruction
with US complicity] is not reversed soon — for whatever reason — the deepening Middle East conflict could trigger a
world conflagration.”76
2NC Russia Impact
Low oil prices decimate the Russian economy
Burgess, 03/13/2014 (James Burgess, Oilprice writer, “US Using Oil to Fight Russian Gas Politics in Ukraine?”, OilPrice, 03/13/2014,
http://oilprice.com/Energy/Energy-General/US-Using-Oil-to-Fight-Russian-Gas-Politics-in-Ukraine.html)
If there is uncertainty over the impact of potential Western sanctions on Russia, what
is clear is that lower oil prices can do a
great deal of harm. Much of the success of the Russian economy under Vladimir Putin over the past 13-14
years has been largely attributed to high oil and commodity prices, so if oil prices fall, Russia could be heavily
exposed. Oil prices are the Achilles heel of the Russian economy, according to Robert Bensh, an advisor to Mr.
Boyko on Western capital markets and political systems. Twelve years ago, the Russian federal budget balanced at $22 per barrel for oil. Today it
is at $110 per barrel, said Bensh, who has been leading oil and gas companies in Ukraine for 13 years. And
if the US could get OPEC to
put further pressure on oil prices, the effect would be much more significant. “Imagine a fall to $80 per
barrel and the concomitant affect that would have on an already recessed Russian economy, its balance sheet
and its markets. At $80 or lower, the Russian economy would head deeper into recession, the budget and
current accounts would run significant deficits, capital flight would accelerate markedly, depleting FX
reserves and putting hefty downside pressure on the [Russian] ruble.”
help
Decline causes global conflict
Royal 10 (Jedediah, Director of Cooperative Threat Reduction at the U.S. Department of Defense, 2010, Economic Integration, Economic
Signaling and the Problem of Economic Crises, in Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and
Brauer, p. 213-215)
Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political
science literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of
interdependent stales. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow.
First, on the systemic level. Pollins (20081 advances Modclski and Thompson's (1996) work on leadership cycle theory, finding that rhythms
in the global economy are associated with the rise and fall of a pre-eminent power and the often bloody
transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crises
could usher in a redistribution of relative power (see also Gilpin. 19SJ) that leads to uncertainty about power
balances, increasing the risk of miscalculation (Fcaron. 1995). Alternatively, even a relatively certain
redistribution of power could lead to a permissive environment for conflict as a rising power may seek to
challenge a declining power (Werner. 1999). Separately. Pollins (1996) also shows that global economic cycles combined with parallel
leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and connections
between global economic conditions and security conditions remain unknown. Second, on a dyadic level. Copeland's (1996. 2000) theory of trade
expectations suggests that 'future expectation of trade' is a significant variable in understanding economic conditions and security behaviour of
states. He argues that interdependent states arc likely to gain pacific benefits from trade so long as they have an optimistic view of future trade
relations. However, if
the expectations of future trade decline, particularly for difficult to replace items such as
energy resources, the likelihood for conflict increases, as states will be inclined to use force to gain
access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it triggers
protectionist moves by interdependent states.4 Third, others have considered the link between economic decline and
external armed conflict at a national level. Mom berg and Hess (2002) find a strong correlation between internal
conflict and external conflict, particularly during periods of economic downturn. They write. The linkage,
between internal and external conflict and prosperity are strong and mutually reinforcing. Economic
conflict lends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a
recession tends to amplify the extent to which international and external conflicts self-reinforce each other
(Hlomhen? & Hess. 2(102. p. X9> Economic decline has also been linked with an increase in the likelihood of
terrorism (Blombcrg. Hess. & Wee ra pan a, 2004). which has the capacity to spill across borders and lead to external
tensions. Furthermore, crises generally reduce the popularity of a sitting government. "Diversionary theory"
suggests that, when facing unpopularity arising from economic decline, sitting governments have
increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang
(1996), DcRoucn (1995), and Blombcrg. Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force arc
at least indirecti) correlated. Gelpi (1997). Miller (1999). and Kisangani and Pickering (2009) suggest that Ihe tendency towards diversionary
tactics arc greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being
removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic
performance in the United States, and thus weak Presidential popularity, are statistically linked lo an increase in the use of force. In summary,
rcccni economic scholarship positively correlates economic integration with an increase in the frequency of economic crises, whereas
political science scholarship links economic decline with external conflict al systemic, dyadic and national levels.'
This implied connection between integration, crises and armed conflict has not featured prominently in the economic-security debate and
deserves more attention.
2NC Russia Impact Ext
Low oil prices collapse the Russian economy
Grennes & Strazds, 03/18/2014 (Andris Strazds & Thomas Grennes, EconoMonitor writers, “Does the West Have
Economic Levers to Influence Russian Foreign Policy?”, The EconoMonitor, 03/18/2014,
http://www.economonitor.com/thoughtsacrossatlantic/2014/03/18/does-the-west-have-economic-levers-to-influence-russia/)
There is, however, an Achiles heel in the Russian economy, and that is its heavy dependence on exports of
raw materials. Oil alone accounts for more than 50% of Russia’s exports while oil, natural gas and metals
together make up more than 70%. The non-oil deficit of the federal budget of Russia is in excess of 10% of GDP, even though with
the oil revenues the budget is roughly in balance. Thus, a sharp downward correction in oil prices would have a
significant negative effect on the financial situation of the government and the economy in general.
However, even then a fall in prices would have to be protracted – like the 1980s „Oil Glut”.After reaching its
peak in 1980 at USD 106 per barrel, the real price of crude oil (in 2013 dollars) experience a large and sustained drop
to USD 34 per barrel in 1991. This dramatic decline in the price of Russia’s main export has been
considered as a factor that contributed to the disintegration of the Soviet Union. However, since 2011, the real oil
price has been consistently above USD 90 per barrel, and it has boosted Russia’s real GDP and the power of the Putin regime. The inital reaction
to Russian intervention in Crimea by the U.S. and EU has been to restrict travel and freeze assets of certain Russian and Ukrainian
individuals,without restricting trade. According to extensive empirical studies (Hufbauer et al.), economic sanctions have rarely been an effective
way to restrain the actions of target governments or impair their military potential, in particular, when dealing with large target countries. A key
problem in such cases is that the countries imposing sanctions suffer a sizeable economic loss in addition to the loss suffered by the target
country. For example, an embargo on oil exports from Russia would result in a huge increase in oil prices, at least temporarily. In addition,
several EU countries are heavily dependent on Russia for natural gas. Beyond energy, German and many other European Union businesses trade
extensively with Russia, and they would be harmed by sanctions. In addition to trade, there are also extensive investments between EU and
Russian firms that would be adversely affected. For example, German firms have energy investments in Russia while Mikhail Fridman, a Russian
billionaire, just announced the purchase of the Dea oil and gas unit from RWE, Germany’s second largest utility (Bloomberg).
Drop in oil prices would be a 1991 redux- Russia will collapse
Crowe, 03/30/2014 (Tyler Crowe, Motley Fool writer, “America May Have Just Unveiled a New Weapon to Combat Russia's Action
in Ukraine”, The Motley Fool, 03/30/2014, http://www.fool.com/investing/general/2014/03/30/america-may-have-just-unveiled-a-new-weaponto-com.aspx0
Hit 'em where it hurts -- their wallet It's no secret that Russia is one of the world's leading exporters of oil and
gas. It exports about 8.5 million barrels per day of crude oil and refined petroleum products, as well as 19.3% of the worlds
natural gas exports. What is less known is Russia's nearly crippling dependence on oil and gas revenues to pay
the bills. The $662.3 billion petroleum industry in Russia represents 26.5% of GDP, and over 50% of the
federal government's revenue comes from royalties. Unfortunately for Russia, its oil doesn't come cheap. Even with
oil at $100 per barrel and current production levels, the country projects only 1.8% GDP growth, and if oil were to
fall any lower it would force massive federal budget cuts. So what exactly would releasing oil from there do? Let's say U.S.
production and imports from Canada and Mexico were to hold place. The U.S. would need to release about 950,000 barrels per day to meet all of
the United States' current demand. Based on the SPR's 727 million barrels in storage, we could do this for well over two years and drive down
global prices significantly. Surprisingly, though, we don't even need to go to that extreme. According to economist Phillip Verleger in a recent
Quartz article, if the U.S. were to release only 500,000 barrels per day from the SPR, it would lead to a $10 drop in oil prices and would cost
Russia $40 billion in sales. At this pace, we could maintain this pace for more than four years and could potentially cause Russia's GDP to drop
by 4%. We've done it before, but it will be harder this time There
are two ways to describe the collapse of the Soviet
Union: The storybook version is about the arms race that eventually bankrupted the USSR and led to its
evenutal collapse. The one that doesn't get told as much, though, is the other half of what caused the bankruptcy:
cheap oil. In a coordinated effort with Saudi Arabia to increase global crude production, inflation-adjusted oil
prices fell 69% between 1981 and 1988. This resulted in massive revenue shortfalls for the USSR and
became a critical piece that eventually led to its downfall.
Low oil prices collapse Russia’s economy
Woodhill, 03/03/2014 (Louis Woodhill, Forbes Contributor, “It's Time To Drive Russia Bankrupt – Again”, Forbes, 03/03/2014,
http://www.forbes.com/sites/louiswoodhill/2014/03/03/its-time-to-drive-russia-bankrupt-again/)
Russia does today, the old USSR depended
upon oil exports for most of its foreign exchange earnings, and much of its government revenue. The 68%
reduction in real oil prices during the Reagan years drove the USSR bankrupt. In May 1990, Gorbachev called
By the end of Reagan’s two terms in office, real oil prices had plunged to $27.88/bbl. As
German Chancellor Helmut Kohl and begged him for a loan of $12 billion to stave off financial disaster. Kohl advanced only $3 billion. By
August of 1990, Gorbachev was back, pleading for more loans. In December 1991, the Soviet Union collapsed. President Bill
Clinton’s “strong dollar” policy (implemented via Federal Reserve Vice-Chairman Wayne Angell’s secret commodity price rule system) kept real
oil prices low during the 1990s, despite rising world oil demand. Real crude oil prices during Clinton’s time in office averaged only $27.16/bbl.
At real oil price levels like this, Russia is financially incapable of causing much trouble. It was George W. Bush and Barack Obama’s feckless
“weak dollar” policy that let the Russian geopolitical genie out of the bottle. From the end of 2000 to the end of 2013, the gold value of the dollar
fell by 77%, and real oil prices tripled, to $111.76/bbl. It is these artificially high oil prices that are fueling Putin’s mischief machine. The Russian
government has approved a 2014 budget calling for revenues of $409.6 billion, spending of $419.6 billion, and a deficit of $10.0 billion, or 0.4%
Russia cannot
run large fiscal deficits without creating hyperinflation. Given that Russia expects to get about half of its
revenue from taxes on its oil and gas industry, it is clear that it would not take much of a decline in
world oil prices to create financial difficulties for Russia. Assuming year-end 2013 prices for crude oil ($111.76/bbl)
and natural gas ($66.00/FOE* bbl) the total revenue of Russia’s petroleum industry is $662.3 billion (26.5% of GDP), and
Russian’s oil and gas export earnings are $362.2 billion, or 14.5% of GDP. Obviously, a decline in world oil prices would
cause the Russian economy and the Russian government significant financial pain.
of expected GDP of $2.5 trillion. Unlike the U.S., which has deep financial markets and prints the world’s reserve currency,
Low oil prices collapse the Russian regime
Riley, 2012 (Alan Riley, Professor, City Law School, City University, Grays Inn, London, and Associate Senior Research Fellow,
Institute for Statecraft, London, “The Geostrategic Implications of the Shale Gas Revolution”, Institute for Statecraft, 12/15/2012,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224434/evidence-alan-riley.pdf)
On balance it is likely that despite the ‘Arab Spring’ Saudi Arabia has greater capacity to withstand a structural increase in supply. It has a much
smaller population to protect; proportionally and absolutely greater reserves to deploy and probably more regime coherence ie officials in both
the state bureaucracy and Aramco with the capacity to take effective steps to rebalance the economy. For example, by developing gas resources at
scale and building a major petrochemical industry as part of an alternative economic base. Russia by contrast
has a population of 140 million;
far less reserves available to see it through a sustained oil price fall and a requires a higher oil
price to balance the books. It is also doubtful that there is sufficient coherence and willingness amongst the
regime elite to take the necessary steps to ensure regime survivability as in the Saudi case. It is difficult to say
when the markets will recognize the appearance of a structural increase in supply. The likelihood is that it will be before the full
physical effects of that supply have been brought onto the market. The markets will re-price oil when they
finally recognize that structural increase in supply is overwhelming the structural increase in demand. When it
becomes clear a major price adjustment is taking place both regimes will come under significant internal
and external challenge.
proportionately
2NC Renewables
Cheap oil means renewables aren’t cost competitive—those solve warming
Bergeron, 08 (Louis, Science writer at Stanford University News Service, “Wind, water and sun beat other energy alternatives, study
finds”, http://news.stanford.edu/news/2009/january7/power-010709.html)
The best ways to improve energy security, mitigate global warming and reduce the number of
deaths caused by air pollution are blowing in the wind and rippling in the water, not growing on prairies or
glowing inside nuclear power plants, says Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford . And "clean
coal," which involves capturing carbon emissions and sequestering them in the earth, is not clean at
all, he asserts. Jacobson has conducted the first quantitative, scientific evaluation of the proposed, major, energy-related solutions by assessing
not only their potential for delivering energy for electricity and vehicles, but also their impacts on global warming, human health, energy security,
the options that are
getting the most attention are between 25 to 1,000 times more polluting than the best available
options. The paper with his findings will be published in the next issue of Energy and Environmental Science but is available online now.
water supply, space requirements, wildlife, water pollution, reliability and sustainability. His findings indicate that
Jacobson is also director of the Atmosphere/Energy Program at Stanford. "The energy alternatives that are good are not the ones that people have
been talking about the most. And some options that have been proposed are just downright awful," Jacobson said. "Ethanol-based biofuels will
actually cause more harm to human health, wildlife, water supply and land use than current fossil fuels." He added that ethanol may also emit
more global-warming pollutants than fossil fuels, according to the latest scientific studies. The
raw energy sources that
Jacobson found to be the most promising are, in order, wind, concentrated solar (the use of mirrors to heat a
fluid), geothermal, tidal, solar photovoltaics (rooftop solar panels), wave and hydroelectric. He recommends
against nuclear, coal with carbon capture and sequestration, corn ethanol and cellulosic ethanol, which is made of prairie
grass. In fact, he found cellulosic ethanol was worse than corn ethanol because it results in more air pollution, requires more land to produce and
causes more damage to wildlife. To place the various alternatives on an equal footing, Jacobson first made his comparisons among the energy
sources by calculating the impacts as if each alternative alone were used to power all the vehicles in the United States, assuming only "newtechnology" vehicles were being used. Such vehicles include battery electric vehicles (BEVs), hydrogen fuel cell vehicles (HFCVs), and "flexfuel" vehicles that could run on a high blend of ethanol called E85. Wind
was by far the most promising, Jacobson said,
owing to a better-than 99 percent reduction in carbon and air pollution emissions; the consumption
of less than 3 square kilometers of land for the turbine footprints to run the entire U.S. vehicle fleet
(given the fleet is composed of battery-electric vehicles); the saving of about 15,000 lives per year from premature air-pollution-related deaths
from vehicle exhaust in the United States; and virtually no water consumption. By contrast, corn and cellulosic ethanol will continue to cause
more than 15,000 air pollution-related deaths in the country per year, Jacobson asserted. Because the wind turbines would require a modest
amount of spacing between them to allow room for the blades to spin, wind farms would occupy about 0.5 percent of all U.S. land, but this
amount is more than 30 times less than that required for growing corn or grasses for ethanol. Land between turbines on wind farms would be
simultaneously available as farmland or pasture or could be left as open space. Indeed, a battery-powered U.S. vehicle fleet could be charged by
73,000 to 144,000 5-megawatt wind turbines, fewer than the 300,000 airplanes the U.S. produced during World War II and far easier to build.
Additional turbines could provide electricity for other energy needs. "There
is a lot of talk among politicians that we
need a massive jobs program to pull the economy out of the current recession," Jacobson said. "Well,
putting people to work building wind turbines, solar plants, geothermal plants, electric vehicles and
transmission lines would not only create jobs but would also reduce costs due to health care, crop
damage and climate damage from current vehicle and electric power pollution, as well as provide
the world with a truly unlimited supply of clean power."
Accelerated warming guarantees extinction
Deibel 2007 (Terry, Professor of National Strategy at the National War College, “Foreign Affairs Strategy: Logic for American
Statecraft”, pgs. 387-389)
Finally, there
is one major existential threat to American security (as well as prosperity) of a
nonviolent nature, which, though far in the future, demands urgent action. It is the threat of global
warming to the stability of the climate upon which all earthly life depends. Scientists worldwide have been
observing the gathering of this threat for three decades now, and what was once a mere possibility has passed through
probability to near certainty. Indeed, not one of more than 900 articles on climate change published in refereed scientific journals
from 1993 to 2003 doubted that anthropogenic warming is occurring. "In
legitimate scientific circles," writes Elizabeth Kolbert, "it
is virtually impossible to find evidence of disagreement over the fundamentals of global warming."83
Evidence from a vast international scientific monitoring effort accumulates almost weekly, as this sample of newspaper reports shows: • an
international panel predicts "brutal droughts, floods and violent storms across the planet over the
next century"; • climate change could "literally alter ocean currents, wipe away huge portions of
Alpine snowcaps and aid the spread of cholera and malaria"; • "glaciers in the Antarctic and in Greenland are melting
much faster than expected, and... worldwide, plants are blooming several days earlier than they did a decade ago"; • "rising sea
temperatures have been accompanied by a significant global increase in the most destructive
hurricanes"; • "NASA scientists have concluded from direct temperature measurements that 2005 was the hottest year on record, with 1998
a close second"; • "Earth's warming climate is estimated to contribute to more than 150,000 deaths and 5
million illnesses each year" as disease spreads: • "widespread bleaching from Texas to Trinidad ... killed broad swaths of
corals" due to a 2-degree rise in sea temperatures.84 "The world is slowly disintegrating," concluded Inuit hunter Noah Metuq, who lives 30
miles from the Arctic Circle. "They call it climate change,... but we just call it breaking up."85 From the founding of the first cities some 6,000
years ago until the beginning of the industrial revolution, carbon dioxide levels in the atmosphere remained relatively constant at about 280 parts
per million (ppm). At present they are accelerating toward 400 ppm, and by 2050 they will reach 500 ppm, about double pre-industrial levels.
Unfortunately, atmospheric CO2 lasts about a century, so there is no way immediately to reduce levels, only to slow their increase. We
are
thus in for significant global warming; the only debate is how much and how serious the effects will
be. As the newspaper stories quoted above show, we are already experiencing the effects of 1-2 degree warming in
more violent storms, spread of disease, mass die offs of plants and animals, species extinction, and
threatened inundation of low-lying countries like the Pacific nation of Kiribati and the Netherlands. At a warming of
5 degrees or less the Greenland and West Antarctic ice sheets could disintegrate, leading to a sea
level of rise of 20 feet that would cover North Carolina's outer banks, swamp the southern third of Florida, and inundate Manhattan up to
the middle of Greenwich Village. Another catastrophic effect would be the collapse of the Atlantic thermohaline circulation that keeps the winter
the damage to the
United States alone from moderate levels of warming at 1-6 percent of GDP annually; severe
warming could cost 13-26 percent of GDP.87 But the most frightening scenario is runaway
greenhouse warming, based on positive feedback from the buildup of water vapor in the atmosphere that is both caused by and causes
weather in Europe far warmer than its latitude would otherwise allow.86 Economist William Cline once estimated
hotter surface temperatures. Past ice age transitions, associated with only 5-10 degree changes in average global temperatures, took place in just
decades, even though no one was then pouring ever-increasing amounts of carbon into the atmosphere. Faced with this specter, the
best one
can conclude is that "humankind's continuing enhancement of the natural greenhouse effect is akin
to playing Russian roulette with the earth's climate and humanity's life-support system."88 At worst,
says physics professor Marty Hof-fert of New York University, "we're just going to burn everything up; we're going to heat the
atmosphere to the temperature it was in the Cretaceous, when there were crocodiles at the poles. And then everything will collapse."89 During the
Cold War, astronomer Carl Sagan popularized a theory of nuclear winter to describe how a thermonuclear war between the United States and the
Soviet Union would not only destroy both countries but possibly end life on this planet.90 Global
warming is the post-Cold War
era's equivalent of nuclear winter, at least as serious and considerably better supported
scientifically. Over the long run, it puts dangers from terrorism and traditional military challenges to shame. It is a threat not only
to the security and prosperity of the United States, but potentially to the continued existence of life
on this planet.
2NC Saudi Prolif Impact
Resurged US energy deteriorates US-Saudi relations
Al-Tamimi, 2013 (Naser al-Tamimi, a U.K.-based Middle East analyst with research interest in energy politics and Middle East-Asia
relations. He holds a PhD degree in International Relations from Durham University, U.K., “Will Riyadh Get the Bomb?: Saudi Arabia's Atomic
Ambitions”, The Middle East Quarterly, Spring 2013, http://www.meforum.org/3509/saudi-arabia-nuclear-bomb)
A major deterioration in U.S.-Saudi relations—especially if Washington fails to stop Tehran's nuclear program or
decides to scale back its military presence in the Middle East due to its recent energy discoveries—
could force Riyadh to reconsider nuclear weapon acquisition to avoid having to face foreign
aggression without U.S. security assurances. However, the relationship between Riyadh and Washington has
thus far provided the Saudis with an unprecedented level of protection. From Washington's perspective, conventional
wisdom holds that U.S. security commitments can keep Iran in check, prevent U.S. allies in the Middle East from submitting to Tehran's
demands, and dissuade them from pursuing nuclear weapons. Yet
both the willingness and the ability of the U.S.
government to defend its partners in the region against a nuclear-armed Iran have been questioned.[4] As an Israeli
observer argued recently: The lack of American will to confront the ayatollahs and stop them in their tracks has given various Arab leaders plenty
of incentive, as well as a good excuse, to proceed down the nuclear trail ... If the Iranians aren't stopped, and soon, we may wake up a few years
from now to discover that Saudi Arabia and other unfriendly regimes have decided to upgrade their "civilian" nuclear programs into weaponsmaking industries.[5] Additionally, the
Saudis are increasingly nervous about the strength of any U.S. commitment
in light of the Obama administration's abandonment of such a long-standing regional ally as Egypt's
Hosni Mubarak.[6]
US energy independence collapses US-Saudi ties—causes Saudi proliferation
Guzansky, 2013 (Yoel Guzansky, fellow at the Institute for National Security Studies, Tel Aviv University & served as Iran
coordinator at Israel's National Security Council, “Questioning Riyadh's Nuclear Rationale: Saudi Arabia's Atomic Ambitions”, Spring 2013, The
Middle East Quarterly, http://www.meforum.org/3512/saudi-arabia-pakistan-nuclear-weapon)
Continued Iranian progress toward a nuclear weapon, Iraq's increasing alignment with Tehran, and an expedited U.S. exit from Afghanistan are
all changing the Saudi strategic landscape. The Obama administration's "lead from behind" approach in Libya and its hesitation to get involved in
the Syrian civil war all contribute to a reassessment of U.S. commitments. With the U.S. "pivot to Asia"—taking the form of a series of military,
economic, commercial, and diplomatic initiatives aimed at contending with the rising power of China—and a changing global energy map due to
expansion of oil and natural gas production in the United States,
Riyadh and others are beginning to prepare for a post-U.S.
Middle East.¶ According to recent reports, Washington is considering expanding its nuclear cooperation with Riyadh on the basis of a 2008
memorandum of understanding: In exchange for foregoing the operation of nuclear fuel cycles on its soil, Saudi Arabia was to receive nuclear
assistance.[33] Such a move, should it come to pass, may be meant to persuade Riyadh to abandon its strategic goals, prevent other players from
gaining a foothold in the attractive Saudi market, and challenge Tehran's nuclear policy. The United States is still Saudi Arabia's most effective
security support, but if
Washington distances itself from regional matters, the gradual entrance of new players into the Gulf
is inevitable.¶ The question of Saudi acquisition of a nuclear deterrent is more relevant than ever when both enemies and friends of the
United States are looking at a possible regional drawdown on Washington's part as well as a lack of support for the pro-Western regimes that
remain in place. If the U.S. government provides Riyadh with formal security guarantees, it would be natural for it to demand that the kingdom
forego its strategic goals. But Riyadh's
inclusion under a U.S. defense umbrella is not a given and depends both
on the quality of relations between the two countries and other Saudi considerations. Riyadh remains skeptical over
Washington's willingness to come to its aid and may thus seek to purchase a nuclear deterrent, which
would provide it with more freedom vis-à-vis its stronger ally. Under present circumstances, it is not unreasonable for Riyadh to rely on other
states for its defense in addition to Washington for the simple reason that it has done so in the past. Likewise, it
is more than likely that
the Saudis will not act transparently because they have acted in secret previously.¶ After Iran, Saudi Arabia
is the number one candidate for further nuclear proliferation in the Middle East. Open source evidence
remains circumstantial, but perhaps more than any other regional player, Riyadh has the requisite ideological and strategic
motives as well as the financial wherewithal to act on the option.¶ The kingdom may conclude that its security constraints
as well as the attendant prestige and influence generated by having a bomb outweigh the political and economic costs it will pay. The difficulty in
stopping Tehran's dogged quest for a nuclear capability coupled with Riyadh's
doubts about the reliability of Washington is
liable to encourage Riyadh to shorten timetables for developing an independent nuclear infrastructure, as
well as to opt to purchase a turnkey nuclear system, an off-the-shelf product, or to enter into a security
compact of one sort with another power. Sunni-majority Pakistan has emerged as the natural candidate for such an arrangement.¶
Heavy U.S. pressure is likely to be brought to bear on the Saudis not to acquire nuclear capabilities. Indeed, it seems that, at present, the
price Riyadh is likely to pay should it acquire military nuclear capabilities might outweigh the advantages
of such a move. But strategic interest, motivated by considerations of survival, could have the upper hand.
Should it seem that the kingdom's vital security interests are threatened, it may prefer to take a series of
steps, including obtaining a nonconventional arsenal, to reduce risks and ensure the continuity of the
House of Saud.
Saudi prolif causes nuclear war.
Edelman ’11 (Eric –Distinguished Fellow at the Center for Strategic and Budgetary Assessments & Former U.S. Undersecretary of Defense
for Policy, Foreign Affairs, Jan/Feb, http://www.foreignaffairs.com/articles/67162/eric-s-edelman-andrew-f-krepinevich-jr-and-evan-bradenmontgomer/the-dangers-of-a-nuclear-iran)
There is, however, at least one state that could receive significant outside support: Saudi Arabia. And if it did, proliferat ion could accelerate throughout the region. Iran and Saudi Arabia have
long been geopolitical and ideological rivals. Riyadh would face tremendous pressure to respond in some form to a nuclear-armed Iran, not only to deter Iranian coercion and subversion but also
to preserve its sense that Saudi Arabia is the leading nation in the Muslim world. The Saudi government is already pursuing a nuclear power capability, which could be the first step along a slow
road to nuclear weapons development. And concerns persist that it might be able to accelerate its progress by exploiting its close ties to Pakistan. During the 1980s, in response to the use of
missiles during the Iran-Iraq War and their growing proliferation throughout the region, Saudi Arabia acquired several dozen css-2 intermediate-range ballistic missiles from China. The Pakistani
government reportedly brokered the deal, and it may have also offered to sell Saudi Arabia nuclear warheads for the css-2s, which are not accurate enough to deliver conventional warheads
effectively. There are still rumors that Riyadh and Islamabad have had discussions involving nuclear weapons, nuclear technology, or security guarantees. This “Islamabad option” could develop
in one of several different ways. Pakistan could sell operational nuclear weapons and delivery systems to Saudi Arabia, or it could provide the Saudis with the infrastructure, material, and
technical support they need to produce nuclear weapons themselves within a matter of years, as opposed to a decade or longer. Not only has Pakistan provided such support in the past, but it is
currently building two more heavy-water reactors for plutonium production and a second chemical reprocessing facility to extract plutonium from spent nuclear fuel. In other words, it might
accumulate more fissile material than it needs to maintain even a substantially expanded arsenal of its own. Alternatively, Pakistan might offer an extended deterrent guarantee to Saudi Arabia
and deploy nuclear weapons, delivery systems, and troops on Saudi territory, a practice that the United States has employed for decades with its allies. This arrangement could be particularly
appealing to both Saudi Arabia and Pakistan. It would allow the Saudis to argue that they are not violating the NPT since they would not be acquiring their own nuclear weapons. And an
extended deterrent from Pakistan might be preferable to one from the United States because stationing foreign Muslim forces on Saudi territory would not trigger the kind of popular opposition
that would accompany the deployment of U.S. troops. Pakistan, for its part, would gain financial benefits and international clout by deploying nuclear weapons in Saudi Arabia, as well as
strategic depth against its chief rival, India. The Islamabad option raises a host of difficult issues, perhaps the most worrisome being how India would respond. Would it target Pakistan’s weapons
in Saudi Arabia with its own conventional or nuclear weapons? How would this expanded nuclear competition influence stability during a crisis in either the Middle East or South Asia?
any decision by the Saudi government to seek out nuclear weapons, by whatever means,
would be highly destabilizing. It would increase the incentives of other nations in the Middle East to
pursue nuclear weapons of their own. And it could increase their ability to do so by eroding the remaining
barriers to nuclear proliferation: each additional state that acquires nuclear weapons weakens the
nonproliferation regime, even if its particular method of acquisition only circumvents, rather than
violates, the NPT. Were Saudi Arabia to acquire nuclear weapons, the Middle East would count three
nuclear-armed states, and perhaps more before long. It is unclear how such an n-player competition would unfold because
most analyses of nuclear deterrence are based on the U.S.- Soviet rivalry during the Cold War. It seems likely, however, that the interaction
among three or more nuclear-armed powers would be more prone to miscalculation and escalation than a
Regardless of India’s reaction,
bipolar competition. During the Cold War, the United States and the Soviet Union only needed to concern themselves with an attack from the
other. Multi-
polar systems are generally considered to be less stable than bipolar systems because
coalitions can shift quickly, upsetting the balance of power and creating incentives for an attack. More
important, emerging nuclear powers in the Middle East might not take the costly steps necessary to
preserve regional stability and avoid a nuclear exchange. For nuclear-armed states, the bedrock of deterrence is the
knowledge that each side has a secure second-strike capability, so that no state can launch an attack with the expectation that it can wipe out its
opponents’ forces and avoid a devastating retaliation. However, emerging
nuclear powers might not invest in expensive but
survivable capabilities such as hardened missile silos or submarine- based nuclear forces. Given this
likely vulnerability, the close proximity of states in the Middle East, and the very short flight times of
ballistic missiles in the region, any new nuclear powers might be compelled to “launch on warning” of an
attack or even, during a crisis, to use their nuclear forces preemptively. Their governments might also delegate launch authority to lower-level
commanders, heightening the possibility of miscalculation and escalation. Moreover, if early warning systems were not integrated into robust
command-and-control systems, the risk of an unauthorized or accidental launch would increase further still. And without sophisticated early
warning systems,
a nuclear attack might be unattributable or attributed incorrectly. That is, assuming that the leadership
this uncertainty,
when combined with the pressure to respond quickly, would create a significant risk that it would retaliate
of a targeted state survived a first strike, it might not be able to accurately determine which nation was responsible. And
against the wrong party, potentially triggering a regional nuclear war. Most existing nuclear powers have taken steps to protect their
nuclear weapons from unauthorized use: from closely screening key personnel to developing technical safety measures, such as permissive action links, which require special codes before the
weapons can be armed. Yet there is no guarantee that emerging nuclear powers would be willing or able to implement these measures, creating a significant risk that their governments might lose
control over the weapons or nuclear material and that nonstate actors could gain access to these items. Some states might seek to mitigate threats to their nuclear arsenals; for instance, they might
hide their weapons. In that case, however, a single intelligence compromise could leave their weapons vulnerable to attack or theft. Meanwhile, states outside the Middle East could also be a
source of instability. Throughout the Cold War, the United States and the Soviet Union were engaged in a nuclear arms race that other nations were essentially powerless to influence. In a
multipolar nuclear Middle East, other nuclear powers and states with advanced military technology could influence—for good or ill—the military competition within the region by selling or
transferring technologies that most local actors lack today: solid-fuel rocket motors, enhanced missile-guidance systems, war- head miniaturization technology, early warning systems, air and
missile defenses. Such transfers could stabilize a fragile nuclear balance if the emerging nuclear powers acquired more survivable arsenals as a result. But they could also be highly destabilizing.
If, for example, an outside power sought to curry favor with a potential client state or gain influence with a prospective ally, it might share with that state the technology it needed to enhance the
accuracy of its missiles and thereby increase its ability to launch a disarming first strike against any adversary. The ability of existing nuclear powers and other technically advanced military
states to shape the emerging nuclear competition in the Middle East could lead to a new Great Game, with unpredictable consequences.
AT: Prolif Inev
Saudi proliferation not inevitable—only the plan triggers it
Al-Tamimi, 2013 (Naser al-Tamimi, a U.K.-based Middle East analyst with research interest in energy politics and Middle East-Asia
relations. He holds a PhD degree in International Relations from Durham University, U.K., “Will Riyadh Get the Bomb?: Saudi Arabia's Atomic
Ambitions”, The Middle East Quarterly, Spring 2013, http://www.meforum.org/3509/saudi-arabia-nuclear-bomb)
It is unlikely that the Saudis would want to proliferate at the present time; doing so would deeply strain
the U.S.-Saudi relationship, perhaps to an irrevocable degree.[49] Doing so would also place Riyadh in breach of a
memorandum of understanding signed with Washington in 2008, promising U.S. assistance with civilian
nuclear power on condition that Riyadh not pursue "sensitive nuclear technologies."[50] Riyadh's desire to
maintain a strong relationship with Washington, especially in light of the royal family's desire to prevent unconventional
terrorism within its borders, inhibits any strong appetite to develop nuclear weapons.[51]
2NC Saudi Economy
Low oil prices deck Saudi’s economy
Mikhin, 06/03/2014 (Viktor Mikhin, WTFRLY writer, “Can Saudi Arabia crash the oil market?”, WTFRLY, 06/03/2014,
http://wtfrly.com/2014/06/03/can-saudi-arabia-crash-the-oil-market/#.U7sL6vldWSo)
Riyadh has not escaped the pitfalls of
the Dutch disease: the kingdom’s budget currently relies on oil prices being $90/barrel and it is only able
to sustain very temporary price drops to $80/barrel. In Saudi Arabia, 85% of the budget is sustained through
oil exports. Oil also makes up 90% of the country’s exports (as a comparison, this is 33% in Russia), which is why a
decrease in oil revenue may lead to a foreign deficit as well as increased pressure on the exchange rate
and on the gold and foreign-exchange reserves, which are also significantly lower than Russia’s. Furthermore, Saudi
Arabia is a member of OPEC and its decision to lower prices may not be understood by the other cartel
members for whom lower oil prices are just as dangerous as they are for Russia. Incidentally, analysts have already
Naturally, production costs are much lower in Saudi Arabia than in the U.S. and Russia, but
calculated the “behaviour” of oil countries after 2008: if prices close in on the $80-$90 mark, the value indexes quickly turn around and swiftly
increase back up.
2NC Global escalation
Low oil prices collapses oil dependent regimes and leads to global instability
Mackenzie, 2013 (Kate Mackenzie, Financial Times Correspondent, “A future scenario with oil prices dominated by ‘above-ground’
factors”, The Financial Times, 01/07/2013, http://ftalphaville.ft.com/2013/01/07/1323023/a-future-scenario-with-oil-prices-dominated-by-aboveground-factors/?Authorised=false)
Professor Adelman often stated that oil prices fall as reserve constraints are broken. He may prove correct. However, lower
prices need
not be the long-run consequence, at least not all the time. Instead, the consequences of Adelman’s vindication will more likely be
increased price volatility. This will occur because the sharp short-term downward pressure on prices will
probably increase political instability in some oil-exporting countries. Periods of low oil prices will
undermine existing governments in nations such as Russia, Kuwait, Iraq, Algeria, Nigeria, Iran, United Arab Emirates,
and Venezuela. These countries have not used oil revenues to diversify economies and build infrastructure
for the post-petroleum future. Instead the monies have gone to fund larger and larger transfer (welfare)
payments to mushrooming populations. Adelman’s vindication will mean these nations must curtail such payments
when they are forced to cut sales and production sharply or when prices fall. Political instability will increase as
such times.
Iran/Iraq economy Impact
Saudi Arabia market flood would collapse Iran and Iraq’s economy and undermine
US production
-answers their turns that it would hurt Saudi’s economy- they’ve already accumulated a surplus to ride out
any revenue constraints
Stevens, 06/17/2014 (Paul Stevens, Distinguished Fellow (Energy) at Chatham House and professor emeritus at the University of
Dundee. He also works as a consultant for many companies and governments. In March 2009 he was presented with the OPEC Award in
recognition of his outstanding work in the field of oil and energy research, “Unrest in Iraq and the oil market”, Middle East Eye, 06/17/2014,
http://www.middleeasteye.net/columns/unrest-iraq-and-oil-market/1997588224)
Riyadh, so dependent upon the United States’ military umbrella, has limited policy options to respond. One possibility
would be to bring oil prices right down which the Saudis have the power to do very quickly. This
would damage Iran and Iraq both of whom are desperate for immediate revenues. It would also put
at risk the American drive for “energy independence” by undermining the continued growth of tight oil
production. While lower prices would also threaten Saudi oil revenues, they have a large
accumulated financial pot to ride out short to medium term revenue constraints. Also, often in the
Kingdom, emotion overrides economic logic.
AT: Backstopping DA
2AC
2AC Won’t flood
Their diversifying now—they won’t respond with flooding the market
Korosec, 2010 (Kristen Korosec, MoneyWatch correspondent, “Saudi Arabia Fears a Peak in Oil Demand -- And It's Going Green, Sort
Of”, MoneyWatch, 02/17/2010, http://www.cbsnews.com/news/saudi-arabia-fears-a-peak-in-oil-demand-and-its-going-green-sort-of/)
Concerns over peak oil -- that moment when oil demand exceeds global oil supply -- has produced little more than a disdainful eye roll from
Saudi Arabia. After all, the
largest oil producer in the world has far more pressing problems -- like peak demand,
leaders are so worried that demand for oil could peak in the next decade they've
done the unexpected -- and slightly ironic -- by calling for an economy that includes renewable energy. It's an
interesting reversal coming from a country that has poo-pooed investments in renewable energy in the past. Let's not forget Saudi Arabia -along with OPEC, the oil cartel it's a member of -- was a major opponent of greenhouse-gas reduction proposals during
the climate summit in Copenhagen last year. At the time, OPEC's chief said oil-producing countries should be compensated for lost
for example. In fact, Saudi
revenues if any agreement coming out of Copenhagen leads to cuts in the use of oil. No, really. Earlier this month, OPEC producers had the gall
to ask the world to give them more clarity and certainty about long-term oil demand in order to justify additional investment in new production
capacity, according to the Petroleum Economist. As Robert Rapier over at R-Squared notes, that's simply not the way the world works. The best
any business can do is try and estimate where demand will end up and then make decisions from there. Now, the
renewable energy that
so worried Saudi Arabia before has suddenly become a worthy investment. The country is starting its first
carbon-capture project and is investing in other industries including aluminum and steel in an effort to diversify its
heavily crude-focused economy, according to a Bloomberg report. Mohammad al-Sabban, oil minister adviser and the lead negotiator
at the climate talks, said the country is working to become the top exporter of energy, including alternative forms such as solar power. The
challenges facing Saudi Arabia are huge: we need to develop Saudis in order to be innovative, creative, to catch up with the rest of the world, alSabban said this week at the Jeddah Economic Forum.
1AR Won’t Flood
Saudi Arabia can’t and won’t flood the market
Mikhin, 06/03/2014 (Viktor Mikhin, WTFRLY writer, “Can Saudi Arabia crash the oil market?”, WTFRLY, 06/03/2014,
http://wtfrly.com/2014/06/03/can-saudi-arabia-crash-the-oil-market/#.U7sL6vldWSo)
Saudi Arabia’s ability to manipulate market prices currently does not hold much promise. Analysts believe that to
do this, a country needs to be able to decrease and increase the volume of production painlessly both for the
industry and for the economy. The kingdom has the capacity to produce an additional 3 million barrels/day, which
only makes up around 3% of global production. Correspondingly, it will not be able to “flood” the market
with cheap oil. Naturally, production costs are much lower in Saudi Arabia than in the U.S. and Russia, but
Riyadh has not escaped the pitfalls of the Dutch disease: the kingdom’s budget currently relies on oil prices
being $90/barrel and it is only able to sustain very temporary price drops to $80/barrel. In Saudi Arabia, 85% of the budget is
sustained through oil exports. Oil also makes up 90% of the country’s exports (as a comparison, this is 33% in
Russia), which is why a decrease in oil revenue may lead to a foreign deficit as well as increased pressure on the exchange rate and on the gold
and foreign-exchange reserves, which are also significantly lower than Russia’s. Furthermore, Saudi
Arabia is a member of OPEC
and its decision to lower prices may not be understood by the other cartel members for whom lower oil
prices are just as dangerous as they are for Russia. Incidentally, analysts have already calculated the “behaviour” of
oil countries after 2008: if prices close in on the $80-$90 mark, the value indexes quickly turn around and
swiftly increase back up. However, head of the Oil Market Research Department at the New York Branch of Société Générale Mike
Whitner believes that “Saudi Arabia will always play a key role. It is the only country that has the technical capabilities and the ability to increase
or decrease oil production as necessary”. Gary Hufbauer from the Peterson Institute for International Economics in Washington points out that
Saudi Arabia could partner with the States because Riyadh greatly dislikes the role that Moscow is playing in Syria.
Saudi Arabia won’t flood the market
ML, 04/19/2014 (Market Leader, “Saudi Arabia Destroyed USSR: Can It Destroy Russia?”, Market Leader, 04/19/2014,
http://www.profi-forex.us/news/entry4000006168.html)
These are just suppositions and rumors since there has been no official confirmation of any agreements so far. Still, there are reasons to think that
Obama reached some agreements with his Eastern ally. Even though Obama made a visit to Saudi Arabia, it is amateurish to compare the current
situation to the one that existed in the 1980s. The world has evolved since then. First of all, the
current global oil market is so
huge that even one of its biggest players like Saudi Arabia cannot manipulate it alone. Without any doubt,
Saudi Arabia is the world’s biggest oil exporter. Still, it is not the only major exporter of the “black gold” and the
“blood of the global economy”. This leads us to believe that an instant drop in oil prices is unlikely.
It is sufficient to say that Saudi Arabia’s spare oil production capacity is equal to just 2,6 million barrels a
day. On top of that, low oil prices may favor China, the world’s biggest consumer of crude oil, which is definitely the last item on the list of the
USA’s desires.
No Saudi Collapse
Flood won’t collapse the Saudi state
Tsafos, 06/30/2014 (Nikos Tsafos, National Interest correspondent, “Could Lower Oil Prices Bring Chaos to Oil Exporters?”, The
National Interest, 06/30/2014, http://nationalinterest.org/feature/could-lower-oil-prices-bring-chaos-oil-exporters-10767)
Even so, oil
exporters today do need higher prices to balance their budgets, and this affects their economies and for pricing
this is not the same as equating lower oil prices with serious financial strain.
For one, many countries have sizeable buffers; the Middle East oil exporters, for example, had $1.4 trillion in official
reserves in 2013, and hundreds of billions of dollars in sovereign wealth funds. Low public debt also
means that these countries can borrow more easily—including from each other. And their current account breakevens are far below their fiscal break-evens (on average $28 per barrel less), meaning a shortage of hard currency is not as high a
concern—meaning they can finance deficits through inflation. Nor is it clear that lower oil prices will cause
budget deficits right away or force governments to make “draconian budget reductions” (to quote Blackwill and
O'Sullivan’s words on Russia). Governments can muddle through when money is tight, and they first cut spending in
politically easier areas. When oil prices fell in the 1980s, for instance, Saudi Arabia exhausted capital spending (which fell by
85 percent from 1981 to 1988) before touching current expenditures (which stayed flat). Other oil exporters behave
strategies (for OPEC members). But
similarly—as do developed economies that tend to protect spending geared to special interests or powerful constituencies.
AT: Destroys Saudi’s Econ
Backstopping won’t hurt the Saudi economy
Torchia, 06/16/2014 (Andrew Torchia, Reuters correspondent, “Gulf's billions insulate economies, markets from Iraq turmoil”,
Reuters, 06/16/2014, http://uk.reuters.com/article/2014/06/16/uk-iraq-mideast-markets-idUKKBN0ER1VD20140616)
One reason for the growing confidence in the Gulf is that three years of high global oil prices have
allowed most governments to build up their financial reserves, leaving them in better shape to cope
with any political or economic shocks. Saudi Arabia’s net foreign reserves, for example, have ballooned by
over a third since 2011 to $730 billion – enough to finance several years of state spending at current levels
even if oil revenues plunged tomorrow. Also, in contrast to Iraq, GCC governments have over the past three years shown they
can spend their oil money effectively to maintain social peace. Riyadh has directed tens of billions of dollars towards social benefits, new housing
and new jobs to avert any pro-democracy unrest. Compared to three years ago,
“governments are better prepared to
confront the sectarian threat, the fiscal reserves they have to do this with are bigger, and macroeconomic conditions are better,” said
Raza Agha, chief economist for the Middle East and Africa at VTB Capital in London.
Saudi Arabia’s economy can sustain backstopping
SUSRIS, 06/11/2014 (Saudi-US Relations Information Service, “S&P Affirms Saudi Arabia’s Ratings – ‘AA-/A-1+’ for 2014”,
SUSRIS, 06/11/2014, http://susris.com/2014/06/11/sp-affirms-saudi-arabias-ratings-aa-a-1-for-2014/)
The Kingdom of Saudi Arabia has received a score of ‘AA-/A-1+’ for 2014, meaning that the KSA
“has strong capacity to meet its financial commitments, but is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligors in higher-rated categories.” The score of ‘AA-/A-1+’ is viewed
favorably, as it symbolizes a well-earned recommendation from an internationally respected
financial institution. S&P released a statement along with the report expressing their view that “Saudi Arabia’s government
and external balance sheets remain strong and provide an ample buffer to withstand external
shocks, including a drop in oil prices.”
AT: Middle East Impact
No Middle East impact
Cook 7—CFR senior fellow for Mid East Studies. BA in international studies from Vassar College, an MA in international relations from the Johns
Hopkins School of Advanced International Studies, and both an MA and PhD in political science from the University of Pennsylvania(Steven, Ray Takeyh,
CFR fellow, and Suzanne Maloney, Brookings fellow, 6 /28, Why the Iraq war won't engulf the Mideast, http://www.iht.com/bin/print.php?id=6383265)
Underlying this anxiety was a scenario in which Iraq's sectarian and ethnic violence spills over into neighboring countries, producing conflicts between the major Arab states and Iran as well as Turkey and the Kurdistan
Regional Government. These wars then destabilize the entire region well beyond the current conflict zone, involving heavyweights like Egypt. This is scary stuff indeed, but with the exception of the conflict between Turkey
and the Kurds, the scenario is far from an accurate reflection of the way Middle Eastern leaders view the situation in Iraq and calculate their interests there. It is abundantly clear that major outside powers like Saudi Arabia, Iran
and Turkey are heavily involved in Iraq. These countries have so much at stake in the future of Iraq that it is natural they would seek to influence political developments in the country. Yet, the Saudis, Iranians, Jordanians,
Syrians, and others are very unlikely to go to war either to protect their own sect or ethnic group or to prevent one country from gaining the upper hand in Iraq. The reasons are fairly straightforward. First, Middle Eastern
leaders, like politicians everywhere, are primarily interested in one thing: self-preservation. Committing forces to Iraq is an inherently risky proposition, which, if the
conflict went badly, could threaten domestic political stability. Moreover, most Arab armies are geared toward regime protection rather than
projecting power and thus have little capability for sending troops to Iraq. Second, there is cause for concern about the so-called blowback scenario in which jihadis
returning from Iraq destabilize their home countries, plunging the region into conflict. Middle Eastern leaders are preparing for this possibility. Unlike in the 1990s, when Arab fighters in the Afghan jihad against the Soviet
Union returned to Algeria, Egypt and Saudi Arabia and became a source of instability, Arab security services are being vigilant about who is coming in and going from their countries. In the last month, the Saudi government
there is
no precedent for Arab leaders to commit forces to conflicts in which they are not directly involved. The
Iraqis and the Saudis did send small contingents to fight the Israelis in 1948 and 1967, but they were either ineffective or never made it. In the 1970s and 1980s, Arab countries other than Syria, which
had a compelling interest in establishing its hegemony over Lebanon, never committed forces either to
protect the Lebanese from the Israelis or from other Lebanese. The civil war in Lebanon was regarded as
someone else's fight. Indeed, this is the way many leaders view the current situation in Iraq. To Cairo, Amman and Riyadh, the
has arrested approximately 200 people suspected of ties with militants. Riyadh is also building a 700 kilometer wall along part of its frontier with Iraq in order to keep militants out of the kingdom. Finally,
situation in Iraq is worrisome, but in the end it is an Iraqi and American fight. As far as Iranian mullahs are concerned, they have long preferred to press their
interests through proxies as opposed to direct engagement. At a time when Tehran has access and influence over powerful Shiite militias, a massive cross-border incursion is both unlikely and unnecessary. So Iraqis will remain
The Middle East is a region both prone and accustomed
to civil wars. But given its experience with ambiguous conflicts, the region has also developed an intuitive ability
locked in a sectarian and ethnic struggle that outside powers may abet, but will remain within the borders of Iraq.
to contain its civil strife and prevent local conflicts from enveloping the entire Middle East.
AT: Russia Economy Impact
Non-unique—Russia’s economy low despite high oil prices
Stolyarov, 05/13/2014 (Gleb Stolyarov, Reuters Correspondent, “UPDATE 1-Russian economy likely to be in recession at end of
Q2”, Reuters, 05/13/2014, http://www.reuters.com/article/2014/05/13/russia-economy-idUSL6N0NZ3AX20140513)
KALININGRAD, Russia, May 13 (Reuters) - The
Russian economy will probably enter recession by the end of the
second quarter, the economy minister said on Tuesday, as investment and financial markets suffer from the
Ukrainian crisis, the worst standoff with the West since the Cold War. Gross domestic product might fall 0.0 to 0.1 percent in April-June,
after shrinking on a quarter-on-quarter basis by 0.5 percent in the first three months of the year, Economy Minister Alexei Ulyukayev said on
Tuesday. A technical recession "is possible", Ulyukayev said. The common definition of recession is two consecutive quarters of declining GDP.
It would be the second recession in five years for Russia. Ulyukayev would not specify the causes behind the ebbing of the economy, but other
government officials have admitted that sanctions
imposed against Moscow have hurt the economy and that
geopolitical risks related to Ukraine are hindering growth. The economy ministry has warned that
investment - once a pillar behind growth - is falling dramatically. Analysts expect investment by Russian companies in
tangible assets to fall 2.5 percent this year and 5 percent in April alone. Ulyukayev's GDP forecast follows a similar warning earlier this month
from the finance ministry. It is in line with the view of the International Monetary Fund, which said in late April that Russia was already
"experiencing recession". "Russia's
economy ... will dampen further in the face of a deteriorating political
situation, tougher sanctions, falling investor confidence and a business climate worsened by fears of
retaliation against western companies that produce in or sell to Russia," analysts at IHS company, which offers
economic and financial analysis, said in a note on Tuesday. The economic downturn comes despite relatively high oil
prices, Russia's main export and a huge source of income. Crude prices have stayed above $100 a barrel so far this year.
Russia's annexation of Crimea from Ukraine, however, spurred capital flight that in the first three months
exceeded last year's total, reaching $63.7 billion. The losses weighed on the rouble, which has fallen 6 percent against the dollar this
year. Moscow stocks also tumbled. Most assets have recovered some ground, but Russian equities and the rouble are still
undervalued compared with many emerging markets peers. INFLATION PLAGUE Economic consequences
emerging from Russia's involvement in the Ukrainian political crisis also include higher inflation, which
Ulyukayev said may peak at 7.5-7.6 percent by the end of this month or in June, above the central bank's recently raised forecast for the
year of 6 percent. Inflation, a long-time plague for Russia, has been pushed higher by the weakening of the rouble. The
rate is broadly expected to decline in the second half of the year when food prices fall after the harvest and tight monetary policy restrains
spending. Ulyukayev, a former deputy governor at the central bank, said the central bank should lower its key lending rate, which the bank was
forced to raised by a cumulative 200 basis points in the past two months to 7.5 percent to stem capital flight. "I would do it (cut rates), based on
the economic situation and on the basis of the forecast for inflation," he said. He estimates inflation may come at between 6-6.5 percent this year.
But most analysts polled by Reuters do not expect the central bank to cut rates anytime soon, with risks of escalation of the Russia's standoff with
the West still very high. "We see the central bank as biased to hike, since we see a further hike in the event of escalation, and no cutting in deescalation scenario," analysts at Morgan Stanley wrote in a recent note. (Reporting by Gleb Stolyarov; Writing by Lidia Kelly, editing by Jason
Bush/Jeremy Gaunt/Larry King)
No impact – won’t alter their foreign policy
Blackwill 9 – former associate dean of the Kennedy School of Government and Deputy Assistant to the
President and Deputy National Security Advisor for Strategic Planning (Robert, RAND, “The
Geopolitical Consequences of the World Economic Recession—A Caution”,
http://www.rand.org/pubs/occasional_papers/2009/RAND_OP275.pdf)
Now on to Russia. Again, five years from today. Did the global recession and Russia’s present serious economic
problems
substantially modify Russian foreign policy? No. (President Obama is beginning his early July visit to Moscow as this
paper goes to press; nothing fundamental will result from that visit). Did it produce a serious weakening of Vladimir Putin’s power
and authority in Russia? No, as recent polls in Russia make clear. Did it reduce Russian worries and capacities to oppose
NATO enlargement and defense measures eastward? No. Did it affect Russia’s willingness to accept much tougher sanctions against Iran?
No. Russian Foreign Minister Lavrov has said there is no evidence that Iran intends to make a nuclear weapon.25 In sum, Russian
foreign policy is today on a steady, consistent path that can be characterized as follows: to resurrect Russia’s standing as a
great power; to reestablish Russian primary influence over the space of the former Soviet Union; to resist Western eff orts to encroach on the
space of the former Soviet Union; to revive Russia’s military might and power projection; to extend the reach of Russian diplomacy in
Europe, Asia, and beyond; and to oppose American global primacy. For Moscow, these foreign policy first principles are here to stay, as they
have existed in Russia for centuries. 26 None of these enduring objectives of Russian foreign policy are likely to be
changed in any serious way by the economic crisis.
Russian stability does not depend on its economy
Goodrich and Zeihan 9 [Lauren Goodrich, Stratfor's Director of Analysis and Senior Eurasia
analyst, and Peter Zeihan, Vice President of Analysis at Stratfor, “The Financial Crisis and the Six Pillars
of Russian Strength,” March 3 2009,
http://www.stratfor.com/weekly/20090302_financial_crisis_and_six_pillars_russian_strength]
Politics: It is no secret that the
Kremlin uses an iron fist to maintain domestic control. There are few
domestic forces the government cannot control or balance. The Kremlin understands the revolutions
(1917 in particular) and collapses (1991 in particular) of the past, and it has control mechanisms in place to prevent a
repeat. This control is seen in every aspect of Russian life, from one main political party ruling the country to
the lack of diversified media, limits on public demonstrations and the infiltration of the security services into nearly every aspect
of the Russian system. This domination was fortified under Stalin and has been re-established under the reign
of former President and now-Prime Minister Vladimir Putin. This political strength is based on neither
financial nor economic foundations. Instead, it is based within the political institutions and parties, on
the lack of a meaningful opposition, and with the backing of the military and security services. Russia's neighbors, especially in Europe,
cannot count on the same political strength because their systems are simply not set up the same way. The stability of the Russian
government and lack of stability in the former Soviet states and much of Central Europe have also allowed the Kremlin to reach beyond
Russia and influence its neighbors to the east. Now as before, when some of its former Soviet subjects -- such as Ukraine -- become
destabilized, Russia sweeps in as a source of stability and authority, regardless of whether this benefits the recipient of Moscow's attention
Russia diversifying economy now in it’s shift away from oil dependence
Melik 12 [James, Reporter, Business Daily, BBC World News, July 4,
http://www.bbc.co.uk/news/business-18622834, JP]
Twenty miles west of Moscow, a new technology race, rather like the space race of the 1960s, is opening
up. In the area of farmland, Russia is trying to build its own version of Silicon Valley - the Skolkovo
Innovation Centre. It is part of the government initiative to divert the country away from its economic
dependence on oil and gas and towards a new kind of industry. It has been a key policy for Dmitry Medvedev, the man
who was Russia's president until he was replaced by Vladimir Putin at the beginning of May 2012. The Skolkovo project is widely criticised in
Russia and construction work has still not started in earnest more than two years after the proposals was announced. Another aim of this proposed
drive is to keep clever Russians in the country, along with their money-making ideas, rather than
them leaving because they are fed up with corruption and the weight of bureaucracy.The Russian
government is promoting technology and internet-based companies, and Mr Creitzman says the
development at Skolkovo is a good example of using state money along with private funding. The success of
technology
such ventures depends on Russians adapting to new ideas. "The use of the internet and e-commerce sites, buying things online, which is a normal
thing to do in the West, is just starting here," Mr Creitzman says.
Alt Cause – Banking Sector
Mankoff 10 -
specialist in Eurasian/Russian affairs, adjunct fellow for Russia studies at the Council on Foreign Relations
(Jeffrey, March, “Internal and External Impact of Russia's Economic Crisis”)
Within Russia, the economic crisis has been moderately severe, and while the economy appeared to be gradually recovering by the end of
2009, the crisis exposed several structural weaknesses that could hold back Russian growth even after the worst has passed. While many Western
countries as well as China, India, and Brazil appeared poised for a fairly rapid recovery in 2010, Russia‘s trajectory is likely to be much
more gradual—absent a rapid upswing in global energy prices. Moreover ,
Russia still faces some fairly serious risks that
could plunge the economy back into recession, notably a banking sector that has still not purged itself of
bad loans and a high level of indebtedness across much of the private sector. During the first six months of the
financial crisis, Russian banks‘ non- performing loans increased 240%; even by the end of 2009, fears of
the crisis entering a second
wave centered on concerns that banks‘ balance sheets had not been cleared of these loans.4
Electricity Prices DA
1NC
1NC Electricity Prices DA
The natural gas boom means US will have comparatively lower electricity prices for decades – that
spurs massive growth, onshoring, and investment in the manufacturing sector
Sirkin et. al 2014 (Sirkin, Zinser, and Rose, coauthors of the 2012 book “The US Manufacturing Renaissance: How shifting global
economics are creating an American comeback.” February 13, 2014. “Nearly Every Manufacturer in the U.S. will benefit from low-cost natural
gas.”, Boston Consulting Group, http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-154623)//NR
New Analysis by The Boston Consulting Group Finds That Cheap Domestic Energy Is Increasing the U.S. Cost
Advantage in a Wide Range of Industries, Improving U.S. Competitiveness; Will Benefit the Full Value
Chain, from Feedstock to Finished Goods CHICAGO, February 13, 2014—Cheap natural gas will have a greater impact on
U.S. manufacturing over the next several years than is commonly assumed, giving the U.S. a powerful—and
unique—cost advantage that will benefit a wide range of industries across the full value chain, from feedstock to
finished goods. This cost advantage has already started to boost investment and employment and will persist
for at least five years, according to new research released today by The Boston Consulting Group (BCG). While other studies have assessed the
positive economic impact of rising U.S. production of natural gas on the domestic energy sector and on industries such as petrochemicals that use
natural gas as a raw material, the new BCG analysis finds that virtually every manufacturer in the U.S. is poised to
benefit—directly or indirectly. Low U.S. electricity prices in natural-gas-fired plants, for example, are already
encouraging investment in energy-intensive industries such as steel and glass. Not yet visible are the advantages that makers
of intermediate products, such as plastic-resin pellets, and makers of finished goods, such as plastic toys and plastic auto parts, will reap from
cheaper inputs. Even in less energy-intensive industries, cheap natural gas will shave 1 to 2 percent off of U.S. manufacturing costs
as the benefits eventually flow downstream through the value chain. The energy cost advantage is amplified by the fact that overall U.S.
manufacturing competitiveness is already improving owing to relatively low labor costs compared with those of other developed economies,
rapidly rising wages in China, and high productivity, as explained inprevious BCG publications. The research is part of the firm’s ongoingMade
in America, Again series produced by its Operations and Global Advantage practices. “Several major forces are aligning right
now that are dramatically reversing the fortunes of a U.S. manufacturing sector that many gave up for dead just a
few years ago," said Harold L. Sirkin, a BCG senior partner and a coauthor of the study. “The energy advantage and improved
competitiveness are unique to the U.S. and are accelerating an American manufacturing
renaissance.” Multiple, Sustainable Advantages for U.S. Manufacturing Wholesale prices for natural gas have fallen by
around 50 percent since 2005, when large-scale recovery from underground shale deposits through hydraulic fracturing began in earnest.
Natural gas currently costs more than three times as much in China, France, and Germany than in the U.S. and nearly four times as much in
Japan. U.S. prices are expected to remain within a range of $4 to $5 per thousand cubic feet for several decades. What's
more, because
it will take many years before other nations are able to begin large-scale recovery of shale
gas and before the U.S. can export domestic supplies, the low-cost advantage will be largely exclusive to the U.S. for
at least five to 10 years. By 2015, natural gas will account for only 2 percent of average U.S. manufacturing costs and electricity will
account for just 1 percent, according to BCG estimates. By contrast, natural gas will account for between 5 and 8 percent of manufacturing costs
in Japan and in Europe’s major exporting economies, where it is more expensive, while electricity will account for between 2 to 5 percent in
Japan and Europe. Cheap energy will also help further narrow the cost gap between the U.S. and China , where
natural gas and electricity combined will account for 6 percent of manufacturing costs. Cheap
natural gas is enhancing U.S.
manufacturing competitiveness in several important ways. The most immediate beneficiaries are
manufacturers of a wide range of petrochemicals, which enjoy a cost advantage of up to 50 percent over their counterparts in Europe and
Asia. As a primary feedstock, these chemicals use ethane, which is also found in many natural-gas fields, as well as propane and butane, which
are byproducts of natural-gas production. Much of those cost savings will pass to downstream manufacturers that use those
petrochemicals to make everything from plastics to synthetic fabrics—and eventually toU.S. consumers. Natural
gas is used
increasingly as a fuel in U.S. power plants. Therefore, it is likely to ensure that the price of industrial
electricity will remain between one-quarter and two-thirds the cost of electricity in major exporting
nations such as China, Japan, Germany, France, and Italy for a significantly long time. This will benefit
all manufacturers to a varying degree, but in particular energy-intensive industries such as glass and steel. The BCG research estimates that low
natural-gas prices help give U.S.-based glass makers a 40 percent cost advantage over South Korean producers, for example, and a 63 percent
advantage over German producers. A new steel mill using direct-reduced iron (DRI) technology, which uses low-cost natural gas, produces iron
(the key ingredient in steel) substantially more cheaply than mills using conventional blast furnaces. A Boon for Domestic and Foreign
Manufacturers in the U.S. “Companies
from around the world are already taking notice and beginning to
make long-term manufacturing investments in the U.S. to take advantage of low-cost natural gas,” said Michael Zinser,
a BCG partner and coleader of the firm’s Manufacturing practice. “Already tens of billions of dollars in new investments have
been announced, and we expect to see more such investment in the near future.” Some of the most widely publicized investments have
been in chemical production. Formosa Plastics, for example, is spending about $2 billion on a new ethylene plant and downstream assets in Point
Comfort, Texas, in part because of the availability of shale gas feedstock. In Louisiana, Sasol plans to a build a world-scale ethane cracker in
Lake Charles, and Methanex is relocating two methanol plants from Chile to Ascension Parish. There also has been a surge in investment in new
U.S. steel plants, most of them using a DRI process. Nucor Steel, for instance, recently began production at a $750 million DRI plant in
Louisiana. Other steelmakers are adding U.S. capacity to meet demand from the energy industry. In Youngstown, Ohio, Vallourec built a $1
billion plant to supply steel pipe to companies extracting shale gas. “A
number of industries are already nearing a
tipping point where it will be more economical to make many goods in the U.S.,” said Justin Rose, a BCG
partner and another coauthor. “The energy advantage helps them reach that tipping point faster .”
But, renewable development reverses this trend- cause huge price spikes in electricity
Brook 2013 (Barry Brook, ARC Future Fellow in the School of Earth and Environmental Sciences at the University of Adelaide, Australia,
Sir Hubert Wilkins Chair of Climate Change, Director of Climate Science at the Environment Institute and co-runs the Global Ecology Lab,
March 23, 2013. “Renewable Energy's Hidden Costs?,http://theenergycollective.com/barrybrook/201991/counting-hidden-costs-energy)//NR
A recent Bloomberg press release got wide coverage with its claim that wind power is now cheaper than coal. But a new report from the OECD
shows that when you cover the full cost to the grid, variable renewables like wind don’t add up as favourably. It is often claimed that
introducing variable renewable energy resources such as solar and wind into the electricity network comes with some extra
due to “system effects”. These system effects include
environmental impacts, and
cost penalties,
intermittent electricity access, network congestion, instability,
security of supply. Now a new report from the OECD titled System Effects of Low-Carbon Electricity
Systems gives some hard dollar values for these additional imposts. The OECD work focuses on nuclear power, coal, gas, and renewables
such as wind and solar. Their conclusion is that grid-level system costs can have significant impacts on the total cost of
delivered electricity for some power-generation technologies. All generation technologies cause system effects to some degree. They are all
connected to the same transmission and distribution grid structure and deliver electricity into the same market. They also exert impacts on each
other, on the total load available to satisfy demand, and the stability of the grid’s frequency control. These dependencies are heightened by the
fact that only small amounts of cost-efficient electricity storage are available. Any electricity generation technology can cause
grid instability and price fluctuations if it goes offline unexpectedly. But a key finding of the OECD report is that renewables
that are particularly variable, such as wind and solar, generate system effects that are at least an order of magnitude
greater than for “dispatchable” technologies such as coal, gas, and nuclear. These renewable sources require no fuel, and so have
very low operating costs. This allows them to enter the market at low prices (or even negative prices if production subsidies or generation
mandates are in place). As a consequence, with the current power-generation mix in the OECD (including Australia), dispatchable technologies
will suffer due to lower average electricity prices and reduced capacity factors when a significant quantity of low-cost renewable energy is
available. (That is, dispatchable units will more often be forced to ramp down their output when there are high flows of low-cost renewable
energy, yet will still need to be ready to ramp up again when the output from variable renewable generators is not sufficient to meet the total
demand across the grid.) The report defines grid-level system costs as the total costs (on top of plant-level costs) to supply electricity at a given
load and given level of security of supply. These additional costs include the extra investment to extend and reinforce the
grid, plus the costs for increased short-term balancing and for maintaining the long-term adequacy of electricity
supply in the face of intermittent variable renewables. The system costs are limited to costs that accrue within the electricity system, so
environmental and long-term security of supply impacts are excluded from this study. The study assessed the grid-level system costs for six
OECD countries with contrasting mixes of electricity technologies: Finland, France, Germany, South Korea, the United Kingdom and the United
States. System costs, which include short-term balancing, long-term adequacy, and the costs of various grid infrastructures, were
calculated at both 10% and 30% penetration levels of the main generating sources. A summary of the results, expressed in dollars per megawatt
hour ($/MWh) of electricity delivered, is shown in Table 1 below. The table shows the lowest and highest system costs for each technology
considered at each penetration level. Table 1: Grid-level system costs at differing penetration levels for a range of electricity generation
technologies The consequences of these results are clear. Grid-level system costs can be significant, particularly for
wind and solar, and must be included in any realistic analysis of the total system costs of all technologies deployed at scale in regional or
national electricity markets. For Australia, the Bureau of Resources and Energy Economics (BREE) in its AETA reportsets out the Levelised Cost
of Electricity (LCOE) for each technology, with and without a carbon price. However the bureau does not consider grid-level system costs. The
levelised cost reflects the minimum cost of energy at which a generator must sell the produced electricity in order to break even. If we take the
mid-point of the OECD grid-level costs for 30% technology penetration shown in Table 1 and add them to the plant costs and carbon costs from
the bureau, we can make a more accurate comparison of the total system costs for each technology as might apply in the Australian context – see
Figure 1.
That undermines manufacturing resurgence- cheap electricity is key
Perry 2012 (Mark, Prof of Economics @ Univ. of Michigan, "America's Energy Jackpot: Industrial Natural Gas Prices Fall to the Lowest
Level in Recent History," http://mjperry.blogspot.com/2012/07/americas-energy-jackpot-industrial.html)//NR
Building petrochemical plants could suddenly become attractive in the United States. Manufacturers will "reshore" production
take advantage of low natural gas and electricity prices. Energy costs will be lower for a long time, giving a
to
competitive advantage to companies that invest in America, and also helping American consumers who get hit hard when
energy prices spike. After years of bad economic news, the natural gas windfall is very good news. Let's make the most of it." The falling
natural gas prices also make the predictions in this December 2011 study by PriceWaterhouseCoopers, "Shale gas: A renaissance in US
manufacturing?"all the more likely: U.S. manufacturing companies (chemicals, metals and industrial) could employ approximately
one million more workers by 2025 because of abundant, low-priced natural gas. Lower feedstock and energy cost could help
U.S. manufacturers reduce natural gas expenses by as much as $11.6 billion annually through 2025. MP: As I have emphasized lately,
America's ongoing shale-based energy revolution is one of the real bright spots in an otherwise somewhat gloomy economy, and
provides one of the best reasons to be bullish about America's future. The shale revolution is creating thousands of well-paying, shovel-ready jobs
in Texas, North Dakota and Ohio, and thousands of indirect jobs in industries that support the shale boom (sand, drilling equipment,
transportation, infrastructure, steel pipe, restaurants, etc.). In addition, the abundant shale gas is driving down energy prices for
industrial, commercial, residential and electricity-generating users, which frees up billions of dollars that can be spent on other goods and
services throughout the economy, providing an energy-based stimulus to the economy. Cheap natural gas is also translating into
cheaper electricity rates, as low-cost natural gas displaces coal. Further, cheap and abundant natural gas is sparking a
manufacturing renaissance in energy-intensive industries like chemicals, fertilizers, and steel. And unlike renewable energies like solar
and wind, the natural gas boom is happening without any taxpayer-funded grants, subsidies, credits and loans. Finally, we get an environmental
bonus of lower CO2 emissions as natural gas replaces coal for electricity generation. Sure seems like a win, win, win, win situation to me.
Manufacturing strength is key to the economy and military deterrence
Ettlinger and Gordon 2011 (Michael and Kate, the Vice President for Economic Policy at the Center for American Progress, former
director of the Economic Analysis and Research Network of the Economic Policy Institute and Vice President for Energy Policy at the Center for
American Progress. Most recently, Kate was the co–director of the national Apollo Alliance, where she still serves as senior policy advisor.
Former senior associate at the Center on Wisconsin Strategy, "The Importance and Promise of American Manufacturing"
http://www.americanprogress.org/issues/2011/04/pdf/manufacturing.pdf–)//NR
Manufacturing is critically important to the American economy. For generations, the strength of our country rested
on the power of our factory floors—both the machines and the men and women who worked them. We need manufacturing to
continue to be a bedrock of strength for generations to come. Manufacturing is woven into the structure of
our economy: Its importance goes far beyond what happens behind the factory gates. The strength or weakness of American
manufacturing carries implications for the entire economy, our national security, and the well–being of all
Americans. Manufacturing today accounts for 12 percent of the U.S. economy and about 11 percent of the private–sector workforce. But its
significance is even greater than these numbers would suggest. The direct impact of manufacturing is only a part of the picture. First, jobs in the
manufacturing sector are good middle–class jobs for millions of Americans. Those jobs serve an important role, offering economic opportunity to
hard–working, middle–skill workers. This creates upward mobility and broadens and strengthens the middle class to the benefit of the entire
economy. What’s more, U.S.–based manufacturing underpins a broad range of jobs that are quite different from the usual
image of manufacturing. These
are higher–skill service jobs that include the accountants, bankers, and lawyers that are associated
well as a broad range of other jobs including basic research and technology development,
product and process engineering and design, operations and maintenance, transportation, testing, and lab
work. Many of these jobs are critical to American technology and innovation leadership. The problem
with any industry, as
today is this: Many multinational corporations may for a period keep these higher–skill jobs here at home while they move basic manufacturing
elsewhere in response to other countries’ subsidies, the search for cheaper labor costs, and the desire for more direct access to overseas markets,
but eventually many of these service jobs will follow. When the basic manufacturing leaves, the feedback loop from the manufacturing floor to
the rest of a manufacturing operation—a critical element in the innovative process—is eventually broken. To maintain that feedback loop,
companies need to move higher–skill jobs to where they do their manufacturing. And with those jobs goes American leadership in technology
and innovation. This is why having a critical mass of both manufacturing and associated service jobs in the United States matters. The "industrial
commons" that comes from the crossfertilization and engagement of a community of experts in industry, academia, and government is vital to our
nation’s economic competitiveness. Manufacturing also is important for the nation’s economic stability. The experience
of the Great Recession exemplifies this point. Although manufacturing plunged in 2008 and early 2009 along with the rest of the economy, it is
on the rebound today while other key economic sectors, such as construction, still languish. Diversity in the economy is
important—and manufacturing is a particularly important part of the mix. Although manufacturing is certainly
affected by broader economic events, the sector’s internal diversity—supplying consumer goods as well as industrial
goods, serving both domestic and external markets— gives it great potential resiliency. Finally, supplying
our own needs through a strong domestic manufacturing sector protects us from international economic
and political disruptions. This is most obviously important in the realm of national security, even narrowly
defined as matters related to military strength, where the risk of a weak manufacturing capability is obvious.
But overreliance on imports and substantial manufacturing trade deficits weaken us in many ways, making us vulnerable to everything from
exchange rate fluctuations to trade embargoes to natural disasters.
Econ collapse causes competition for resources and instability -escalates to nuclear war
Harris and Burrows 2009 (Mathew Harris, PhD European History at Cambridge, counselor in the National Intelligence Council
(NIC) and Jennifer Burrows, member of the NIC’s Long Range Analysis Unit “Revisiting the Future: Geopolitical Effects of the Financial Crisis”
http://www.ciaonet.org/journals/twq/v32i2/f_0016178_13952.pdf)
Increased Potential for Global Conflict Of course, the report encompasses more than economics and indeed believes the future is likely to be the
result of a number of intersecting and interlocking forces. With so many possible permutations of outcomes, each with ample opportunity for
unintended consequences, there is a growing sense of insecurity. Even so, history may be more instructive than ever. While we continue
to believe that the Great Depression is not likely to be repeated, the lessons to be drawn from that period include
the harmful effects on fledgling democracies and multiethnic societies (think Central Europe in 1920s and 1930s) and on
the sustainability of multilateral institutions (think League of Nations in the same period). There is no reason to think that this would
not be true in the twenty-first as much as in the twentieth century. For that reason, the ways in which the potential
for greater conflict could grow would seem to be even more apt in a constantly volatile economic environment as they
would be if change would be steadier. In surveying those risks, the report stressed the likelihood that terrorism and nonproliferation will remain
priorities even as resource issues move up on the international agenda. Terrorism’s appeal will decline if economic growth continues in the
Middle East and youth unemployment is reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies
and scientific knowledge will place some of the world’s most dangerous capabilities within their reach. Terrorist groups in 2025 will
likely be a combination of descendants of long established groups inheriting organizational structures, command and control processes, and
training procedures necessary to conduct sophisticated attacks and newly emergent collections of the angry and disenfranchised that become
self-radicalized, particularly in the absence of economic outlets that would become narrower in an economic downturn. The
most dangerous casualty of any economically-induced drawdown of U.S. military presence would almost certainly be the Middle
East. Although Iran’s acquisition of nuclear weapons is not inevitable, worries about a nuclear-armed Iran could lead states in the
region to develop new security arrangements with external powers, acquire additional weapons, and consider
pursuing their own nuclear ambitions. It is not clear that the type of stable deterrent relationship that existed between the
great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear Iran. Episodes of low intensity
conflict and terrorism taking place under a nuclear umbrella could lead to an unintended escalation and broader conflict if clear red lines between
those states involved are not well established. The close proximity of potential nuclear rivals combined with underdeveloped surveillance
capabilities and mobile dual-capable Iranian missile systems also will produce inherent difficulties in achieving reliable indications and warning
of an impending nuclear attack. The lack of strategic depth in neighboring states like Israel, short warning and missile flight times,
and uncertainty of Iranian intentions may place more focus on preemption rather than defense, potentially leading to
escalating crises. Types of conflict that the world continues to experience, such as over resources, could reemerge,
particularly if protectionism grows and there is a resort to neo-mercantilist practices. Perceptions of renewed energy
scarcity will drive countries to take actions to assure their future access to energy supplies. In the worst case, this could result in
interstate conflicts if government leaders deem assured access to energy resources, for example, to be essential for maintaining domestic
stability and the survival of their regime. Even actions short of war, however, will have important geopolitical implications. Maritime
security concerns are providing a rationale for naval buildups and modernization efforts, such as China’s and India’s development
of blue water naval capabilities. If the fiscal stimulus focus for these countries indeed turns inward, one of the most obvious funding targets may
be military. Buildup of regional naval capabilities could lead to increased tensions, rivalries, and counterbalancing moves, but it also
will create opportunities for multinational cooperation in protecting critical sea lanes. With water also becoming scarcer in Asia and the Middle
East, cooperation to manage changing water resources is likely to be increasingly difficult both within and between states in a more dog-
eat-dog world.
Independently, US deterrence is key to solve war
Moore 2004 (Walter L. Brown Professor of Law at the University of Virginia School of Law (John Norton Moore, “Solving the War
Puzzle: beyond the democratic peace,” pg 41-43)//NR
If major interstate war is predominantly a product of a synergy between a potential nondemocratic aggressor and an absence of effective
theories of war and religious
differences, arms races, poverty or social injustice, competition for resources, incidents and accidents, greed, fear,
and perceptions of “honor”, or many other such factors. Such factors may well play a role in motivating
aggression or in serving as a means for generating fear and manipulating public opinion. The reality, however, is that while some of these
may have more potential to contribute to war than others, there may well be an infinite set of motivating factors, or human
deterrence, what is the role of many traditional “causes” of war? Past and many contemporary,
wants, motivating aggression. It is not the independent existence of such motivating factors for war but rather the circumstances permitting or
encouraging high risk decisions leading to war that are the key to most effectively controlling war….Yet another way to conceptualize the
importance of democracy and deterrence in war avoidance is to note that each in its own way internalizes the costs to decision elites of engaging
in high risk aggressive behavior. Democracy internalizes these costs in a variety of ways including displeasure of the electorate at having war
deterrence either prevents achievement of the objective altogether or
imposes punishing costs making the gamble not worth the risk.
imposed upon it by its own government. And
2NC
2NC Uniqueness
US electricity prices low now
Johnson, 07/04/2014 (Robert Johnson, Morning Star writer, “Outlook for the economy: A longer, if not stronger, recovery”, The
Morning Star, 07/04/2014, http://cawidgets.morningstar.ca/ArticleTemplate/ArticleGL.aspx?id=640882)
Like the housing industry, the
oil boom benefits many sectors beyond the drillers. Low natural gas and oil prices
enable the United States to have unusually low electricity prices compared with the rest of the world. In
turn, these low electricity prices, combined with direct use of natural gas, benefit large portions of the manufacturing
sector including chemicals, steel and plastics. Low energy prices even benefit offices, which now have lower electricity bills.
The world economy, with some key exceptions, is picking up steam The news is looking better for the world economy, according
to the IMF. After a small decline in world GDP growth in 2013, the IMF is now expecting growth to accelerate sharply from 3% to 3.7%, as
developed markets in general and Europe in particular begin to pick up steam.
US natural gas production maintains low electricity prices- that drives a
manufacturing resurgence
WEA, 06/20/2014 (Western Energy Alliance, focuses on federal legislative, regulatory, environmental, public lands and other policy
issues relating to oil and natural gas, “Natural Gas Is Bringing Manufacturing Back to the U.S.”, WEA, 03/20/2014,
http://www.westernenergyalliance.org/why-western-oil-natural-gas/powering-america/manufacturing)
The low price of natural gas is reviving American manufacturing and creating hundreds of thousands of
jobs as companies build or expand plants. Natural gas is a major input to fertilizer manufacturing, and
natural gas liquids are an important feedstock for chemical manufacturing. The American Chemistry Council reports
that manufacturers are planning 148 new chemical manufacturing projects to take advantage of abundant, affordable natural gas and liquids
supplies. ACC anticipates over $100 billion in new capital investment will create 637,000 permanent new jobs in the chemical industry and add
$81 billion in annual economic output by 2023. European
companies are moving their manufacturing to the United
States to take advantage of our abundant natural gas supply. BASF is converting a crude-based naphtha cracker in Port
Arthur, TX, to run on natural gas-based ethane. Linde, a German industrial gas company, plans to invest $200 million in Texas to create the
world’s largest natural gas-based syngas chemical plant. According to the American Chemistry Council, a 25 percent increase in ethane supply, a
commonly used natural gas liquid, will lead to 412,000 new jobs in the chemical industry, more than $132 billion in U.S. economic output and
$4.4 billion in new tax revenues. According
to the Industrial Energy Consumers of America, an American
manufacturing renaissance is under way because of low natural gas prices. Companies are investing $110 billion in
123 projects that will create 5 million new jobs. Low electricity prices are also driving manufacturing back to the
U.S. from Germany and other countries that lack access to abundant natural gas.
US natural gas boom sustains low electricity prices now which is reviving the
manufacturing industry
Wood, 02/02/2014 (Duncan Wood, director of the Mexico Institute at the Wilson Center. Prior to this, Wood was a professor and the
director of the International Relations Program at the Instituto Tecnologico Autonomo de Mexico (ITAM) in Mexico City for 17 years. He also
held the role of researcher at the Centro de Derecho Economico Internacional (CDEI) at ITAM. He is a member of the Mexican National
Research System (level 2), a member of the editorial board of Foreign Affairs Latinoamerica, and has been an editorial advisor to both Reforma
and El Universal newspapers. In 2007, he was a non-resident Fulbright Fellow. Between 2007 and 2009, he was technical secretary of the Red
Mexicana de Energia, a group of experts in the area of energy policy in Mexico. He has been a Senior Associate with the Simon Chair and the
Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C, “Is Geography Destiny?”, The Wilson
Center, 02/02/2014, http://www.wilsoncenter.org/sites/default/files/primer_north_american_relations.pdf)
The boom in crude oil production, while impressive, pales beside the paradigm shift that has occurred in the
natural gas sector. In the 1 990s the North American region had some of the highest natural gas prices in the world duc to depressed
production and rising consumption. Thanks to fracking, however, since 2005 production in the United States has increased exponentially from
just under 18,000 billion cubic feet (bcf) to more than 24,000 bcf in 2012. This abu ndance
in natural gas has meant that for
many parts of North America imported liquefied natural gas (LNG), an alternative to piped natural gas that
became viable in the early 2000s, has been replaced by cheaper, domestic sources from shale. This has meant that the
price per million British Thermal Units (BTUs) for natural gas in the United States has fallen from more than $15 in
2006 to under $2 in 2012. Although the price has risen somewhat since then to around $4 per million BTUs, the North American
price is amongst the lowest in the world. This, in turn, has had a highly beneficial impact on
manufacturing competitiveness through lower prices for feedstock and electricity. In fact, Canada has replaced domestic
production of natural gas with increased American imports in response to the low price in the United States.
US natural gas boom sustains low electricity prices now which is reviving the
manufacturing industry
Wilson, 02/02/2014 (Christopher Wilson, an associate at the Mexico Institute of the Wilson Center, where he leads the Institute’s
research and programming on regional economic integration and U.S.-Mexico border affairs. He is the author of Working Together: Economic
Ties between the United States and Mexico (2011) and co-author of the State of the Border Report (2013). Wilson has testified before the United
States Congress and is regularly consulted by national and international media outlets regarding U.S.- Mexico relations. He has written opinion
columns for the Wall Street Journal, Politico, CNN, and Reuters, among others. Wilson previously conducted Mexico analysis for the U.S.
military and worked as a researcher at American University’s Center for North American Studies, “Is Geography Destiny?”, The Wilson Center,
02/02/2014, http://www.wilsoncenter.org/sites/default/files/primer_north_american_relations.pdf)
Technological developments in energy extraction, particularly the increasing use of hydrau lic fracturing to extract natural gas
and crude oil from shale formations, have significantly lowered electricity prices for manufacturers in the United
States and Canada. In the United States, the price of natural gas for electricity generation was $3.52 per thousand
cubic feet, half the 2006 price.10 Prices in Canada fell a similar amount since the energy markets of the
United States and Canada are closely linked, but the same cannot be said for Mexico, where both natural gas and electricity
prices remain much higher because of Mexico’s lower production levels and minimal connections (via electricity and pipeline) to the U.S.
market. Of course, Mexico did pass major energy reform legislation in December 2013, so it may have the opportunity to feel a similar boost
from its energy sector in the years ahead (see the next chapter by Duncan Wood for more on North American energy).
2NC Internal Links
Low electricity prices are fueling the manufacturing resurgence- cheap natural gas makes this
trend sustainable
O’Keefe 2013 (William O’Keefe, writer for Fuelfix.com, reporting on the BCG report ‘Behind the American Export Surge’, August 23,
2013. “The resurgence of American exports: manufacturing and natural gas.” http://fuelfix.com/blog/2013/08/23/the-resurgence-of-americanexports-manufacturing-and-natural-gas/)//NR
The Boston Consulting Group (BCG) has just released a report, “Behind the American Export Surge,” which explores the recent resurgence in
US manufacturing. While BCG goes into some detail in explaining the reversal in the decline of domestic manufacturing, it
has been driven by two basic causes, a more attractive investment climate and the widespread availability of low cost
energy as a result of booming domestic shale gas production and natural gas development. But perhaps the single most
important conclusion drawn from the study is this: there is enough domestic shale gas to fuel an American
manufacturing resurgence and to export abroad. High-volume hydraulic fracturing natural gas development has made increased
production of shale gas and oil economically attractive. With increased production of natural gas, the price according to BCG has declined
51% since 2005. And, technology is projected to result in further lowering production costs. This is a big
advantage over our competitors that have natural gas prices that are 2.6 to 3.8 times greater than our
domestic prices in America. Lower natural gas prices mean that industries such as chemicals and plastics are able
to increase profit margins as natural gas is a major cost in the manufacture of synthetic textiles, paper, and primary metals.
Gas fired power plants are becoming an important source of electricity and this will, according to BCG help to
keep power costs lower in the US. The positive manufacturing and trade picture painted by the Boston Consulting Group is a bright
light in an otherwise dismal economic outlook. However, making that projection a reality requires that we avoid economic rent-seeking by certain
industries. That is especially true in energy where there already is a movement by such rent-seekers, like Dow Chemical, to restrict the export of
liquefied natural gas (LNG). These companies are lobbying for restrictions so that they can use the low price caused by over supply to increase
their own profits. Such a policy perspective is not only short-sighted but is the equivalent of an economic circular firing squad. It would deny the
benefits made clear by numerous studies from Brookings, Deloitte, and even the Department of Energy-commissioned NERA Economic
Consulting study which found increasing exports could add nearly $75 billion to annual economic growth. And, it would invite some form of
retaliation by our trading partners. Moreover, such a policy perspective denies the reality of shale gas reserves. As the BCG study notes, proven
shale gas reserves are estimated to be 350 trillion cubic feet, and production is expected to grow to double by 2035 to 12 trillion cubic feet of gas.
There’s enough gas there to power manufacturing and to export to American allies abroad. In the 1960s and 70s, inter-state natural gas was
subjected to price controls but intra-state gas wasn’t. As a result, inter-state gas had to be rationed as supplies diminished. Just the opposite
happened in gas producing states. Today, the current boom in natural gas production has produced an excess in supply which has significantly
depressed it price. Not surprising, as prices have dropped so has drilling activity. According to the Energy Information Administration, natural
gas drilling activity has dropped from over 1400 active rigs in 2007 and 2008 to the 400 range in the last couple of years. The notion of natural
gas prices set by bureaucrats and not market forces brings back memories of the price and allocation controls in the 1970s. They didn’t work then
and won’t work now. Free and open trade benefits all, not a few. The advocacy of those in the camp of Dow chemical against expanding LNG
exports is more about promoting crony capitalism than the “emerging renaissance in American manufacturing.” Companies should compete in
the market place as it exists, not as they would have government make it. As Boston Consulting Group makes clear, we can have both a domestic
renaissance in manufacturing and continue to boost domestic natural gas development through LNG exports. As a policy, we should avoid the
rent-seeking advocacy opposed to LNG exports. Instead, we should embrace both expanded natural gas development through exports and
domestic manufacturing. There’s more than enough gas to fuel both.
Low electricity prices will create a new manufacturing renaissance and revitalize
the economy
Brooks, 01/07/2014 (Allen Brooks, Managing Director of Energy Musings, “Musings From the Oil Patch”, Energy Musing,
01/07/2014, http://energy-musings.com/node/335)
Behind all these investments is the long-term forecast for natural gas supply in the United States. The 2014 Annual Energy Report of the Energy Information
This forecast also underlies the
optimistic outlook for LNG exports commencing in 2015 and building through 2018 and possibly
thereafter (but that analysis is for another day). What has happened as a result of the shale revolution and its impact on
natural gas prices has been a reduction in the cost of the feedstock for petrochemical companies and the cost of electricity to
operate their plants. IHS forecasts that natural gas prices will remain at $4 per million BTUs through 2030. The low cost of gas and
electricity also positively impacts the cost of operating refineries and America’s manufacturing industry in
general. Low electricity costs are a significant driver behind the American manufacturing
Administration (EIA) calls for U.S. gas supply to surpass demand projections between 2015 and 2020.
renaissance currently underway, although it is also being helped by other considerations. A recent article in Global Finance examining the
American manufacturing renaissance highlighted a new state-of-the-art semiconductor plant being built in Malta, New York, a town of 15,000 residents located about
175 miles north of New York City by Global Foundries, a unit of Advanced Micro Devices (AMD-NYSE) purchased in 2012 by the government of Abu Dhabi. The
three-million-square-foot plant, built at a cost of $8 billion, opened early in 2013. The game-changers that justified that investment, besides low natural gas prices and
low electricity prices, included the decline in the cost of a programmable logic controller, which represents the main investment in an automated factory, and workers’
willingness to accept lower wages as a result of the prolonged weak economic recovery from the Great Recession of 2009. A
consultant to companies
considering re-shoring their operations to the United States estimates that manufacturers will have made
$100 billion to $150 billion in new investments by 2020. Those new plants should produce about 2.5
million new jobs in manufacturing and related services. As manufacturing accounts for about 12% of America’s
economic activity, the impact of this investment and job creation should provide a meaningful boost to
future economic activity. Some of these same factors are behind the revival and expansion of the domestic petrochemical industry. If the EIA’s
forecast for natural gas supply growth proves correct, then it is likely natural gas prices will remain well below the doubledigit levels experienced during the early 2000s, which coincidently helped drive the petroleum industry to solve the shale puzzle and unlock
the trapped oil and gas that has propelled the American shale revolution. Given the characteristics of natural gas, with the projected new supply growth there should be
an equally meaningful NGL volume growth, which is exactly what IHS forecasts to happen.
Low electricity prices are key to US manufacturing
Waters, 2013 (Jim Waters, president of the Bluegrass Institute, “EPA’s coal chill will be felt worldwide”, Bluegrass Institute,
10/25/2013, http://www.bipps.org/epas-coal-chill-will-be-felt-worldwide/)
The report predicts that such electric-rate
increases will cause manufacturers, who tend to use huge amounts of
energy and thus are most susceptible to costs and dwindling supply, to “permanently shed 17,500 full-time jobs.”
The same report indicated that the other largest employment sectors in Kentucky, including retail stores, restaurants and hotels, “can be expected
to fail to create 12,500 full-time jobs.” That’s a total of 30,000 jobs, and that doesn’t even include thousands of new jobs that will never be
created. So, as the state agency’s own report indicates that future rising electricity rates due to EPA plundering will not only force double-digit
increases in the electric bills of eastern Kentuckians, who previously had about the only good jobs available in a swamp of poverty and can now
least afford such spikes, it will affect individuals and manufacturers statewide. It states: “Kentucky’s low
electricity prices have
fostered the single-most electricity-intensive manufacturing economy in the United States, a manufacturing
economy that is now threatened by future electricity price increases.” Many struggling manufacturers and
individuals face the chilling prospect of a cold winter – many cold winters, actually – with the wolf camped out at their doors.
Low electricity prices bolster the manufacturing industry
Price, 03/04/2014 (Gregory Price, Sikich writer, “ Natural Gas Fueling U.S. Manufacturing”, Sikich, 03/04/2014,
http://www.sikich.com/blog/post/Industrial-Equipment-Manufacturing-Trends/Natural-Gas-Fueling-US-Manufacturing#.U7ypSvldWSp)
Inexpensive natural gas may provide the U.S. manufacturing sector a cost advantage over the next several years.
Furthermore, President Barack Obama stated in his recent State of the Union address, “Businesses plan to invest almost $100 billion in new
factories to use natural gas,” and pledged to aid building these facilities. It
was found that virtually every type of
manufacturer in the U.S. can benefit from natural gas. For example, low electricity prices in natural-gasfired plants encourage energy-intensive industries, such as steel and glass, to invest in natural gas.
Steel can be produced at 8 percent lower costs when cheap energy, such as natural gas, is used. Recently, Louisiana
steelmaker, Nucor, opened a new natural-gas-fired iron processing plant. Other widely publicized investments include chemical production
company, Formosa Plastics, which is spending about $2 billion on a new ethylene plan and downstream assets in Point Comfort, Texas. Ethylene
More U.S. power
plants will opt for natural gas over coal. Wholesale prices of natural gas have fallen by 50 percent since
2005 when large-scale natural gas production began, and U.S. prices are forecasted to remain between $4 to $5 per thousand
is a basic chemical widely used in the production of plastics and can be produced from the methane found in natural gas.
cubic feet. Ed Ratchford, geologist for the Arkansas Geological Survey, stated “It doesn’t matter if you’re in Arkansas or Illinois; the price is
going to be the same.”
2NC Squo solves
Renewables will be developed in the squo as prices lower- developing them now
causes huge electricity price spikes and results in more co2 emissions than the aff
can solve for
The Economist 2014 (The Economist, citing General Electric, January 5, 2014. “Why is renewable energy so expensive?”
http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-0)//NR
MOST people agree that carbon emissions from power stations are a significant cause of climate change. These days a fiercer argument is over
what to do about it. Many governments are pumping money into renewable sources of electricity, such as wind turbines, solar farms,
hydroelectric and geothermal plants. But countries with large amounts of renewable generation, such as Denmark and
Germany, face
the highest energy prices in the rich world. In Britain electricity from wind farms costs twice as
much as that from traditional sources; solar power is even more dear. What makes it so costly? Enthusiasts have used
wind turbines to generate electricity since the 1880s, but efforts to build very large wind farms started only in the late 1970s. Utility-scale solar
and other renewable generation is more recent still. Despite the lure of government subsidies, there are still too few companies
making renewable kit (almost all the wind turbines in British seas, as one example, are produced by a single firm). Supply-chain
bottlenecks have frustrated governments scrabbling to install new renewable capacity. And compared with traditional power
stations, renewable generators are cheap to run but costly to build, which makes them particularly
vulnerable to changes in the cost of capital. A more fundamental challenge is that renewable generators also impose costs on
the wider electricity grid. The best sites are often far from big cities (on Scottish hillsides, French lakes or American
deserts) which makes them expensive to connect. Many common types of renewable generators only produce
power intermittently—when the sun shines or when the wind blows. Wind turbines, for example, spin only about a third of the time.
That means countries which have a lot of renewable generation must still pay to maintain traditional kinds
of power stations ready to fire up when demand peaks. And energy from these stations also becomes more expensive
because they may not run at full-blast. The high cost of renewable generators obstructs efforts to
tackle climate change, even when governments dig deep to fund them. One danger is that sharp rises in energy
prices will drive manufacturers to set up in less “green” countries, which might mean citizens end up
consuming more carbon, through imports. Another worry is that governments will end up extending the life of dirty
coal plants to serve as back-up when renewable generation is low—or when over-ambitious renewable roll-outs run out
of steam. But for now the main consequence of high renewable costs is growing interest in controversial alternatives. The price of nuclear power
has been rising for decades, but it still looks less expensive than many types of renewable generation. Gas-fired power stations are
roughly half as polluting as coal-fired ones. Building more of them could provide a cheaper way for countries
to cut emissions in the short term, and buy renewable operators time to bring their costs under
control.
Renewable energy is being developed in the squo at a reasonable rate with the electric grid- solves
the aff- doing the plan now undermines grid stability and spikes prices
Walker 4/27 (Alissa Walker, writer for GIZMODO, April 27, 2014. “The Price of Electricity in the U.S. is about to skyrocket.”
http://gizmodo.com/the-price-of-electricity-in-the-u-s-is-about-to-skyroc-1568384997)//NR
Here's the sad, dark truth about our aging electrical grid: The way we generate power is not sustainable and needs to change. Here's the other sad,
dark truth: As the U.S. becomes more reliant on renewable energy like solar and wind, our electricity bills are
going to go up. Way up. In fact, you might have already seen some rate spikes on your bill. A cold, snowy winter is to blame for some
high electricity prices in much of the country, while a drought is driving up prices in the West. But according to this insightful Los Angeles
Times article, those temporary shifts are evidence of a larger trend pointing towards increasing "fragility" in the grid: There is a growing
fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in
nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is
likely to be future price shocks. And they may not be temporary. Many of the changes are good moves, or at least
they will be in the long run: Coal and nuclear plants are being shut down due to environmental concerns, which will reduce carbon emissions,
airborne pollution, and the risk of a disaster. But it's getting more expensive to operate those kind of plants in the meantime. The ones that are still
around are being taxed heavily or forced to comply with new regulations at a great cost. Some coal plants are being replaced by natural gas,
which is less reliable and can fluctuate in price. But the real problem lies in switching those old systems off and getting the
renewable systems—wind power, solar farms—online. Many states have a mandate to convert a certain percentage of their energy
production to renewable energy by a certain date, but they still haven't figured out exactly how that plan will work. Plus all these
renewable systems need to have access to a backup system, adding still more costs. California, which is seen as a
leader for renewable energy, has the most aggressive mandate: 33 percent of its power must be renewable by 2020. But that means the cost of
electricity could rise 47 percent over the next 16 years. In the long run, this will all be for the best, of course—if we build the
infrastructure for renewable energy, eventually the cost-savings will be evident (and hopefully the impact on our environment even more so).
Plus, the antiquated tech that brings that coal/nuclear blend to our homes certainly needs to be eradicated—it's old, inefficient and dangerous. But
if customers start seeing their bills go up, they'll freak out and blame the renewable energy sources, says Alex Leupp, of the Northern California
Power Agency. "If power gets too expensive, there will be a revolt," Leupp said. "If the state pushes too fast on
renewables before the technology is viable, it could set back the environmental goals we all believe in at
the end of the day." [Los Angeles Times]
**Links**
Generic RE
1NC
Renewable energy jacks electricity prices - even the cheapest renewables are 3x as
expensive as conventional fuels
Bryce 2012 (Robert Bryce, Senior Fellow at Center for Energy Policy and the Environment – Manhattan Institute, "The High Cost of
Renewable Energy Mandates," http://www.manhattan–institute.org/html/eper_10.htm)//NR
Although the cost of renewable energy may someday be competitive with conventional sources of power, that generally isn't the case today and
likely won’t be for years to come. In June 2011, the Electric Power Research Institute (EPRI), an independent science and
research organization, released a report on technology innovation in electricity generation. The report examined
fossil– and nuclear–based technologies, as well as four renewable technologies.[62] EPRI found that burning natural gas was, by
far, the cheapest way to generate electricity, and it predicted that gas would continue to provide the lowest–cost option through
2025. In 2015, generating a megawatt–hour of electricity with natural gas will cost between $49 and $79,
according to EPRI estimates. That same quantity of energy produced from onshore wind will cost between $75
and $138, while generating it with solar photovoltaic will cost at least $242 and as much as $455.[63] By
2025, very little will have changed, EPRI says: gas–fired electricity production will have gone down a few dollars, to between $47
and $74 per megawatt–hour, leaving it comfortably ahead of onshore wind generation, down only marginally as well, to a range of $73 to $134
per megawatt–hour. The latest cost estimates from the EIA are similar to those made by EPRI. By 2016, the EIA
expects that electricity from onshore wind turbines will cost $97 per megawatt–hour. That's about 50 percent more than the same amount of
electricity generated by natural gas, which the EIA estimates will cost $63. Offshore
wind will be even more expensive,
least expensive form of solar–generated electricity—the type generated by
photovoltaic panels—will cost $210, or more than triple the cost of gas–generated electricity.[64] Contrary to the
claims of many environmental groups, the cost of new wind–energy installations has actually been rising. In November
coming in at $243 per megawatt hour. The
2010, the EIA estimated that installing a megawatt of wind–generation capacity on land would cost $2.43 million.[65] That's a major increase
over the estimate of $1.7 million per megawatt used by the National Renewable Energy Laboratory in a report that it issued in 2008.[66]
Offshore–windgeneration costs are also climbing. The latest EIA estimate for installing one megawatt of offshore capacity is $5.97 million.[67]
In 2009, the EIA estimated that cost at $3.4 million.[68] The rising cost of wind energy installations provides a stark contrast to what is occurring
in the natural gas market, where prices have fallen precipitously. Over the six–year period from 2003 to 2008, (the period just before the
beginning of the shale revolution), domestic natural gas prices averaged about $7 per thousand cubic feet.[69] In mid–February 2012, the spot
price for natural gas was about $2.50.[70] If we assume the price reduction is $4 per thousand cubic feet, the savings for consumers is at least
$263 million per day.[71] That low–cost gas is directly competing with renewable sources in general and wind energy in particular. In early 2011,
Dallas–based energy investor T. Boone Pickens said that it was difficult to obtain financing for a wind project "unless you have $6 gas."[72] In
February 2012, Pickens again cited the $6 price floor for natural gas as being essential to the economics of wind–energy projects.[73] Cheap
natural gas is also displacing coal, a fuel that has long been among the cheapest options for electricity production. In December 2011, Exxon
Mobil Corp. predicted that natural gas will overtake coal as the primary fuel in the domestic electricity market by 2025.[74] Furthermore, the
surfeit of low–cost gas is helping reduce electricity costs. A January 2012 report by Standard & Poor's Financial Services LLC found
that in some regions of the country, wholesale electricity prices had declined by more than 50 percent since 2008
due to cheap supplies of gas.
2NC
But, renewable development reverses this trend- cause huge price spikes in electricity
Brook 2013 (Barry Brook, ARC Future Fellow in the School of Earth and Environmental Sciences at the University of Adelaide, Australia,
Sir Hubert Wilkins Chair of Climate Change, Director of Climate Science at the Environment Institute and co-runs the Global Ecology Lab,
March 23, 2013. “Renewable Energy's Hidden Costs?,http://theenergycollective.com/barrybrook/201991/counting-hidden-costs-energy)//NR
A recent Bloomberg press release got wide coverage with its claim that wind power is now cheaper than coal. But a new report from the OECD
shows that when you cover the full cost to the grid, variable renewables like wind don’t add up as favourably. It is often claimed that
introducing variable renewable energy resources such as solar and wind into the electricity network comes with some extra
due to “system effects”. These system effects include
environmental impacts, and
cost penalties,
intermittent electricity access, network congestion, instability,
security of supply. Now a new report from the OECD titled System Effects of Low-Carbon Electricity
Systems gives some hard dollar values for these additional imposts. The OECD work focuses on nuclear power, coal, gas, and renewables
such as wind and solar. Their conclusion is that grid-level system costs can have significant impacts on the total cost of
delivered electricity for some power-generation technologies. All generation technologies cause system effects to some degree. They are all
connected to the same transmission and distribution grid structure and deliver electricity into the same market. They also exert impacts on each
other, on the total load available to satisfy demand, and the stability of the grid’s frequency control. These dependencies are heightened by the
fact that only small amounts of cost-efficient electricity storage are available. Any electricity generation technology can cause
grid instability and price fluctuations if it goes offline unexpectedly. But a key finding of the OECD report is that renewables
that are particularly variable, such as wind and solar, generate system effects that are at least an order of magnitude
greater than for “dispatchable” technologies such as coal, gas, and nuclear. These renewable sources require no fuel, and so have
very low operating costs. This allows them to enter the market at low prices (or even negative prices if production subsidies or generation
mandates are in place). As a consequence, with the current power-generation mix in the OECD (including Australia), dispatchable technologies
will suffer due to lower average electricity prices and reduced capacity factors when a significant quantity of low-cost renewable energy is
available. (That is, dispatchable units will more often be forced to ramp down their output when there are high flows of low-cost renewable
energy, yet will still need to be ready to ramp up again when the output from variable renewable generators is not sufficient to meet the total
demand across the grid.) The report defines grid-level system costs as the total costs (on top of plant-level costs) to supply electricity at a given
load and given level of security of supply. These additional costs include the extra investment to extend and reinforce the
grid, plus the costs for increased short-term balancing and for maintaining the long-term adequacy of electricity
supply in the face of intermittent variable renewables. The system costs are limited to costs that accrue within the electricity system, so
environmental and long-term security of supply impacts are excluded from this study. The study assessed the grid-level system costs for six
OECD countries with contrasting mixes of electricity technologies: Finland, France, Germany, South Korea, the United Kingdom and the United
States. System costs, which include short-term balancing, long-term adequacy, and the costs of various grid infrastructures, were
calculated at both 10% and 30% penetration levels of the main generating sources. A summary of the results, expressed in dollars per megawatt
hour ($/MWh) of electricity delivered, is shown in Table 1 below. The table shows the lowest and highest system costs for each technology
considered at each penetration level. Table 1: Grid-level system costs at differing penetration levels for a range of electricity generation
technologies The consequences of these results are clear. Grid-level system costs can be significant, particularly for
wind and solar, and must be included in any realistic analysis of the total system costs of all technologies deployed at scale in regional or
national electricity markets. For Australia, the Bureau of Resources and Energy Economics (BREE) in its AETA reportsets out the Levelised Cost
of Electricity (LCOE) for each technology, with and without a carbon price. However the bureau does not consider grid-level system costs. The
levelised cost reflects the minimum cost of energy at which a generator must sell the produced electricity in order to break even. If we take the
mid-point of the OECD grid-level costs for 30% technology penetration shown in Table 1 and add them to the plant costs and carbon costs from
the bureau, we can make a more accurate comparison of the total system costs for each technology as might apply in the Australian context – see
Figure 1.
Renewable energy skyrockets electricity prices – cost of production and
transmission lines
Bryce 2012 (Robert Bryce , Senior Fellow at Manhattan Institute, "The High Cost of Renewable Energy Mandates," Energy Policy & the
Environment Report, No. 10 February 2012, http://www.manhattan-institute.org/html/eper_10.htm)//NR
Although supporters of renewable
energy claim that the RPS mandates will bring benefits, their contribution to the economy is problematic because they
costs that must be incorporated into the utility bills paid by homeowners, commercial
businesses, and industrial users. And those costs are or will be substantial. Electricity generated from
renewable sources generally costs more—often much more—than that produced by conventional fuels such as
coal and natural gas. In addition, large-scale renewable energy projects often require the construction of many miles
of high-voltage transmission lines. The cost of those lines must also be incorporated into the bills paid by
consumers.¶ These extra costs amount to a "back-end way to put a price on carbon," says Suedeen Kelly, a
also impose
former member of the Federal Energy Regulatory Commission.[5] Indeed, with Congress unwilling to approve national carbon dioxide restrictions or renewableenergy quotas, the RPS mandates have become a sprawling state system of de facto carbon-reduction taxes.
Renewable backup capacity causes huge price spikes- studies prove
Zycher 11 (Benjamin Zycher, Visiting scholar at AEI, April 20, 2011. “The Folly of Renewable Electricity,” AEI,
http://www.aei.org/article/energy-and-the-environment/alternative-energy/the-folly-of-renewable-electricity/)//NR
It gets worse: Wind
and solar facilities are only about a quarter to a third as reliable as conventional power
plants, because wind and sunlight cannot be scheduled, and neither can renewable electricity production. Therefore, conventional backup
capacity must be built along with the wind farms and solar stations in order to prevent blackouts. A study
done for the California Energy Commission estimates that this needed backup capacity will be almost
5,000 megawatts; estimates from the Energy Information Administration suggest that the capital costs alone will be well over $5 billion. These are
among the reasons that the EIA estimates that wind and solar power cost 100-300 percent more than
conventional power. This is consistent with a recent finding by Professor Constant Tra that each percentage-point increase in a
renewable requirement raises commercial and residential rates by 4-10 percent. The proponents' claim that the 33 percent
requirement will increase costs by only 7 percent is a pipe dream. ¶
Best studies prove that hidden costs and infrastructure problems more than triple
electricity prices
Bastasch 12 (Michael Bastasch, “Report: Wind generation costs twice as much as government estimates,” December 31, 2012,
http://dailycaller.com/2012/12/31/report-wind-generation-cost-twice-as-much-as-government-estimates/)//NR
once hidden costs are accounted
for, the true cost of wind power generation is twice that of what previous government estimates have
shown.¶ “Once these hidden costs are included and subsidies are excluded, wind generation is not close to being competitive with
conventional generation sources such as natural gas, coal or nuclear,” said George Taylor, lead author of the report and senior
fellow in energy policy at American Tradition Institute, in a statement.¶ For example, wind generation costs three times as much as
natural gas-fired electricity and up to 50 percent more than government estimates for new nuclear and
coal power generation. The Energy Information Administration reported in its most recent “levelized cost of electricity” that wind generation costs
eight cents per kilowatt hour. However, this understates the true cost of wind generation because it leaves out indirect
and infrastructure costs which are hard to measure and raise the true cost of generating wind power.
As lawmakers rush to hash out a deal to extend tax credits for wind energy generation, a new report shows that,
Grid parity destroys integration and means it’s more expensive to get the electricity
Koerth-Baker 2012 (Maggie, columnist with the New York Times Magazine, journalism degree from the University of Kansas, “Shining Light on the
Cost of Solar Energy”, National Geographic, 11/5/2012, http://news.nationalgeographic.com/news/energy/2010/11/101105-cost-of-solar-energy/)
How Long Must Consumers Wait? But the question for most consumers is when it will make sense to put a solar panel on the roof. Partly because of the issues in
estimating levelized cost, there’s not a clear answer right now. In fact, the right answer could change over time. For instance, cadmium telluride thin film panels could
help solar reach grid parity sooner than silicon panels could, but tellurium—a key ingredient—is fairly rare. If
production of cadmium telluride
solar panels increases substantially, it could trigger a scarcity of tellurium, raising the price for that type of
panel. If the solar industry has become dependent on the short-term low-cost cadmium telluride option, longterm scarcity could end up moving solar electricity back out of grid parity for many people. Thanks to the rising cost of coal
and natural gas—as well as the short-term cost benefits of cadmium telluride, and falling costs of silicon and other solar options—the National Renewable Energy
Laboratory estimates that solar energy could reach nationwide grid parity by 2017. That’s without any subsidies and with only small, incremental improvements on
current technology. But Seth Darling at Argonne says the United States won’t be likely to see hundreds of gigawatts of solar running at grid parity until 2025, at the
earliest.
Renewables hike domestic electricity prices
Walker, 04/27/2014 (Alissa Walker, GIZMODO writer, “The Price of Electricity In The U.S. Is About to Skyrocket”, GIZMODO,
04/27/2014, http://gizmodo.com/the-price-of-electricity-in-the-u-s-is-about-to-skyroc-1568384997)
Here's the sad, dark truth about our aging electrical grid: The way we generate power is not sustainable and needs to change. Here's the other sad,
dark truth: As
the U.S. becomes more reliant on renewable energy like solar and wind, our electricity
bills are going to go up. Way up. In fact, you might have already seen some rate spikes on your bill. A cold, snowy winter is to
blame for some high electricity prices in much of the country, while a drought is driving up prices in the West. But according to this insightful
Los Angeles Times article, those temporary shifts are evidence of a larger trend pointing towards increasing "fragility" in the grid: There
is a
growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in
nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is
likely to be future price shocks. And they may not be temporary. Many of the changes are good moves, or at least they
will be in the long run: Coal and nuclear plants are being shut down due to environmental concerns, which will reduce carbon emissions, airborne
pollution, and the risk of a disaster. But it's getting more expensive to operate those kind of plants in the meantime. The ones that are still around
are being taxed heavily or forced to comply with new regulations at a great cost. Some coal plants are being replaced by natural gas, which is less
reliable and can fluctuate in price. But the
real problem lies in switching those old systems off and getting the
renewable systems—wind power, solar farms—online. Many states have a mandate to convert a certain percentage of their
energy production to renewable energy by a certain date, but they still haven't figured out exactly how that plan will work. Plus all these
renewable systems need to have access to a backup system, adding still more costs.
Wind Energy
1NC
Wind is uniquely expensive - intermittency, backups, transmission
Lea 2012 (Ruth Lee, Civitas, Institute for the Study of Civil Society, “Electricity ¶ Costs: The ¶ folly of windpower,” January 2012,
http://www.civitas.org.uk/economy/electricitycosts2012.pdf)//NR
There are several estimates of the additional costs associated with wind-power. For example ¶ Parsons Brinckerhoff
(PB) Power, in a report for the Royal Academy of Engineering (RAE), ¶ estimated in 2004 that stand-by costs could add
around 45% to the costs for onshore wind ¶ and 30% to the costs for offshore wind.6¶ More recent and
detailed estimates are provided in a paper by Colin Gibson, Power Network ¶ Director at the National
Grid Group (1993-97),7¶ which are quoted in a recent paper by the ¶ Renewable Energy Foundation.8 Gibson’s cost estimates, the caveats on the accuracy of ¶
which are discussed in his paper, are shown in table 1 below. ¶ Gibson identifies three separate additional costs:
The Extra
System Costs, which refer to the costs of fast response plant to address the ¶ intermittency, the uncontrolled
variability, of wind
The Planning Reserve, which refers
to the need to maintain an under-utilized ¶ conventional fleet equivalent to peak load (plus a margin) to cover periods
when output ¶ from the wind fleet falls to extremely low levels – in common parlance “when there’s ¶ little or no wind”. Gibson assumes a level of 8% of installed
Required Transmission, which describes the cost of grid needed to transport energy ¶ from wind
farms tend to be situated in the north of the ¶ country in order to exploit higher wind speeds to improve load factors.
But demand is ¶ weighted towards the south of the country. This exacerbates the existing north to south ¶ flow of power and brings
forward requirements to reinforce the system. Incorporating the additional costs, and taking our two chosen Mott MacDonald cases as ¶ illustrations, the cost of
onshore wind would become quite uneconomic and offshore wind ¶ even more absurdly expensive. Charts 4a
and 4b show the effective generating costs ¶ including the additional costs. The costing of wind-power electricity generation is clearly very complex. But one
conclusion ¶ can safely be drawn and that is that wind-power is expensive – especially offshore. Under ¶ these
circumstances it seems unwise to be embarking on a huge programme of investment ¶ in wind generated
electricity, especially when the country is facing grave economic ¶ challenges. This analysis also ignores the perceived environmental costs of wind-power, ¶
sites to consumers. Wind
especially onshore wind turbines.
2NC
Transmission of wind power is incredibly expensive and energy gaps require fossil
fuel backups.
Bastasch 12 (Michael Bastasch, “Report: Wind generation costs twice as much as government estimates,” December 31, 2012,
http://dailycaller.com/2012/12/31/report-wind-generation-cost-twice-as-much-as-government-estimates/)//NR
Most electricity cost estimates fail to take into account, the cost of keeping fossil fuel power plants online
to balance out the variations in wind power generation, and the increased fuel consumption — per unit
of output — which wind requires of power plants. Estimates also typically don’t include the additional
long-distance transmission costs required by wind, as well as the electricity losses associated with it. ¶ “The
costs that have been left out of previous reports are the costs of paying for the fossil-fired plants that must balance wind’s variations, the inefficiencies that wind
imposes on those plants, and the cost of longer-distance transmission,” Taylor said.¶ Taking these hidden costs into account, as well as two subsidies, the
cost of
wind generation doubles — from eight cents per kilowatt hour to 15 cents per kilowatt hour when added to natural gas generation. the cost is even
higher — 19 cents per kilowatt hour — when added to coal generation.¶ “Because wind is an intermittent source of electricity, it
needs appropriate amounts of fossil-fueled capacity ready at all times to balance its large and rapid
variations,” added Tom Tanton, co-author of the report and Director of Science & Technology Assessment at ATI, in a statement. “ Those primary
fossil plants then operate less efficiently than if they were running full-time without wind, meaning that
any savings of gas and coal or any reductions in emissions are much less than simple calculations would
indicate.”
Wind more than doubles prices.
Bryce 2011 (Senior Fellow at Manhattan Institute, (Robert, "The High Cost of Wind Energy as a Carbon-Dioxide Reduction Method,"
Issue Brief, No. 11 October 2011, http://www.manhattan-institute.org/html/ib_11.htm)//NR
The Global Wind Energy Council (GWEC), an industry group, maintains that reducing the amount of carbon dioxide going into the atmosphere “is the most important
environmental benefit from wind power generation.”[27] For its part, the American Wind Energy Association (AWEA), a national trade association, says “there is no
need to wait for a new climate solution. Wind power is one of only a few near-term options to reduce emissions.”[28] In its 2008 report, the NREL claimed that if the
United States were to derive 20 percent of its electricity from wind, it “could avoid approximately 825 million metric tons of carbon dioxide in the electric sector in
2030.”[29] How does that 825 million tons of carbon dioxide compare with global emissions? In 2010, global carbon-dioxide emissions totaled 33.1 billion tons.[30]
Thus, if
the United States were somehow able to instantly increase its wind-generated electricity to 20 percent of total
consumption, doing so might reduce global emissions by about 2.5 percent. But it is unlikely that global emissions will be the same in 2030 as they were in
2010. By 2030, the International Energy Agency (IEA) expects global emissions will total about 40.2 billion tons.[31] Thus, the 825 million tons that NREL claims
might be reduced by achieving the “20 by ‘30” goal will result in a global reduction of jaust 2 percent.[32] Therefore, to justify a total investment of $850 billion in
wind, U.S. policymakers would have to agree that reducing carbon dioxide in the year 2030 is worth spending $1,030 per ton. Of course, that amount would not be
spent all at once. Instead it would be allocated over the coming 19 years and would be, in effect, a carbon tax set at $54 per ton. However, the actual cost may be
somewhat lower. In its 2008 report, NREL claimed that only 305,000 megawatts of wind capacity would be needed to meet the “20 by ‘30” goal. Recall that the
United States has built about 40,000 megawatts of wind capacity at a cost of about $68 billion. Thus, build ing an additional 265,000 megawatts of wind capacity
(again, at $2.43 million per megawatt) at a cost of $644 billion, would lead to a total cost of $712 billion, thereby implying that cutting one ton of carbon dioxide by
2030 would cost about $863. Spread over the next 19 years, the cost would be the equivalent of a carbon levy set at $45 per ton. Achieving the “20 by ‘30” goal will
have a significant impact on electricity rates. In 2007, Steven Hayward and Kenneth Green of the American Enterprise Institute (AEI)
estimated that a $15 carbon tax would likely increase the cost of coal-fired generation by about $0.0163 per kilowatt-hour. Therefore, we can assume that a carbon
levy of $54-per-ton could
increase electricity rates in coal-reliant regions by about $0.058 per kilowatt-hour.
That’s a major increase given that the average price of electricity for residential consumers in the United
States is currently $0.12 per kilowatt-hour.[33] Put another way, if the United States were to achieve the “20 by ‘30”
goal, U.S. residential electricity prices in coal-dependent regions could increase by about 48 percent
over current levels. If we use the lower range of wind costs outlined by NREL in its 2008 report, and assume that reducing a ton of carbon by 2030 will cost
$45 per year, the increase in electricity costs in coal-dependent areas will amount to about $0.049 per kilowatthour. That would result in an increase of 40 percent over current levels for residential customers in those
regions. These higher electricity costs will likely accelerate the pace of electric rate increases now underway around the country. Since 2004, the average cost of
residential electricity has gone from $0.0895 per kilowatt-hour to $0.1218 per kilowatt-hour, an increase of 36 percent.[34] Wind energy is not a costeffective method of reducing carbon-dioxide emissions. Any effort—whether at the state level or the federal level—to dramatically increase the use of
wind energy will result in a new tax on electricity consumers. If the United States were to achieve the “20 by ‘30” goal, the effective
carbon tax of $45 to $54 per ton would far exceed any such tax regime currently in place. Further, if the stated goal were met by 2030, the likely reduction in carbon
dioxide emissions would amount to just 2 percent of the expected global total.
1NC Offshore Wind specific
Offshore wind raises electricity prices—transmission infrastructure
Harvey 2013 (Fiona Harvey, environment correspondent for The Guardian [January 13, 2013, “Plan to link offshore windfarms to grid
could cost £17bn,” http://www.guardian.co.uk/environment/2013/jan/14/linking-offshore-wind-farms-to-grid)//NR
The government's plans to bring more offshore wind power on to the grid are flawed and could lead to
higher electricity prices for consumers, an influential committee of MPs has warned. Offshore windfarms require
heavy-duty transmission infrastructure to carry the power to land, and the provision of the cables needed
has been a serious obstacle to the growth of the wind industry, as windfarms both on and offshore have
had to wait for long periods to be connected. Under the government's current system, a licensing system allows National Grid
and other providers to construct the transmission lines. But the public accounts committee has said that savings for consumers could
be illusory, because of the way the licensing system has been designed. Ofgem said it was consulting on possible
changes to the system that would solve the problems the MPs had identified in the first few projects. Margaret Hodge, chair of the public
accounts committee, said: "Not only is it unlikely that this new licensing system for bringing electricity from
offshore windfarms on to the national grid will deliver any savings for consumers, it could well lead to
higher prices. Indeed the terms of the licences appear to have been designed almost entirely to attract investors at the expense of securing a
good deal for consumers."
2NC Offshore Wind Specific:
The UK proves offshore wind raises prices
Peixe 2013 (Joao Peixe, a writer for Oilprice.com [January 14, 2013, “Installing Transmission Infrastructure makes Offshore Wind too
Expensive,” http://oilprice.com/Latest-Energy-News/World-News/Installing-Transmission-Infrastructure-makes-Offshore-Wind-tooExpensive.html)//NR
The UK government hopes that offshore wind will help it to reduce its carbon emissions, reliance on imported
oil, and provide it with a cheap, renewable energy for the future. Unfortunately this plan to rely on offshore
wind farms is flawed and could actually lead to higher electricity prices.
Offshore wind farms have always, required heavy duty transmission lines to connect them to the land.
These transmission lines are expensive to lay and delays in their construction constantly lead to wind
farms waiting long periods before they are actually connected to the national grid, and their electricity can
be used by consumers.
Solar Energy
1NC
Solar energy drives up electricity prices
Koerth-Baker 2012 (Maggie, columnist with the New York Times Magazine, journalism degree from the University of Kansas, “Shining Light on the
Cost of Solar Energy”, National Geographic, 11/5/2012, http://news.nationalgeographic.com/news/energy/2010/11/101105-cost-of-solar-energy/)
This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge. The sun packs some serious power. Even taking into
account the all the energy that’s lost in space, enough still reaches Earth in an hour to power the entire planet, theoretically, for a year. So why doesn’t the world
harness all this energy? The truth: Capturing that power, and putting it to work in the form of electricity, is relatively expensive. It’s true that the cost of solar
electricity has declined over the past ten years. Along the way, the popularity of solar electricity has risen. A decade ago, fewer than 25,000 solar cells and modules
were shipped in the United States every year. In 2008, that number had skyrocketed to more than 500,000. But that is still a drop in the bucket. Only about one-tenth
of 1 percent of the energy consumed in the United States came from solar sources in 2008. In Germany, a country with a much more robust government incentive
program, solar’s share is much larger, but still only 1.1 percent of that nation’s electricity. And, while most scientists agree solar power will be an important part of the
future energy mix, there’s no clear consensus on when it will be able to compete on a large scale. In fact, the experts don’t even agree on how much solar electricity
costs today. Calculating the Sun’s Power The problem: Solar electricity isn’t just one thing. Think about any simple item, like a shirt. A shopper may know how much
he or she paid for it, but that doesn’t mean the consumer knows how much a shirt, in general, costs. That number can vary quite a bit, depending on the type of shirt
and where it is purchased. Solar electricity is similar. The cost varies based on the technology being used, and on where it is being installed. The situation looks much
different in Phoenix, Arizona, than it does in Albany, New York, and looks much different in Seville, Spain, than in Leipzig, Germany. (Related: “For Hurricane
Katrina Victims, A Solar Restart”) The reasons for those differences are fairly easy to figure out, but sunlit geography is only the beginning, says Seth Darliinnkking,
a scientist at the U.S. Department of Energy (DOE) Argonne National Laboratory in Illinois. A standard way of thinking about the cost of electricity is “total system
levelized cost”—basically, how much a power producer would have to charge for electricity to earn back the money spent building a new generating facility. “But
what’s surprising is that there’s no one accepted way to do a levelized cost calculation,” Darling said. “That’s the gorilla in the room and it’s a big reason there’s so
much confusion about the cost” of solar photovoltaics (PV). Figuring out the levelized cost requires a number of guesses: How well the solar energy system will
perform, how long it will last, and even how much sunshine it will get over the next 30 years. It’s possible to make good guesses. But, right now, everybody makes
there’s wide agreement that solar electricity is pricey. The U.S. DOE’s
Energy Information Administration (EIA) estimates that it’s the most expensive form of electricity among current
technologies for new electricity generation, about $396 per megawatthour for PV. That’s more than double
EIA’s estimate of the total system levelized cost of wind, and almost four times the cost of conventional coal .
different ones and it’s hard to say who’s right. That said,
And that analysis looks at large-scale solar, the kind usually owned by utility companies. Small installations on home rooftops are even more expensive, because they
don’t take advantage of buying—or installing—in bulk. To be fair, over 20 years, a homeowner will earn back between 76 percent and 109 percent of the system’s
cost in the form of lower electricity bills, because the fuel that powers solar energy is free, according to a 2009 report on financing solar installations in the residential
sector by the U.S. DOE National Renewable Energy Laboratory. With such a broad range in the potential rate of return, it isn’t always easy to find a bank that will
make that loan, says Ed Regan, assistant general manager of strategic planning at Gainesville Regional Utilities (GRU) in Gainesville, Florida. GRU helped
Gainesville residents get around that problem by implementing a feed-in tariff, a system where a utility offers solar panel owners a 20-year contract to buy solar
electricity, guaranteeing the owners will make a set profit on their decision to go solar.
2NC
Solar jacks up prices - coal’s better
Koerth-Baker 2010 (Maggie “Shining Light on the Cost of Solar Energy,” National Geographic, November 5, 2010,
http://news.nationalgeographic.com/news/energy/2010/11/101105-cost-of-solar-energy/)//NR
That said, there’s wide agreement that solar
electricity is pricey. The U.S. DOE’s Energy Information Administration (EIA) estimates that
it’s the most expensive form of electricity among current technologies for new electricity generation, about $396 per
megawatthour for PV. That’s more than double EIA’s estimate of the total system levelized cost of wind, and almost four times the cost of
conventional coal. And that analysis looks at large-scale solar, the kind usually owned by utility companies. Small installations on home rooftops are even more
expensive, because they don’t take advantage of buying—or installing—in bulk. To be fair, over 20 years, a homeowner will earn back between 76 percent and 109
percent of the system’s cost in the form of lower electricity bills, because the fuel that powers solar energy is free, according to a 2009 report on financing solar
installations in the residential sector by the U.S. DOE National Renewable Energy Laboratory . With such a broad range in the potential rate of return, it isn’t always
easy to find a bank that will make that loan, says Ed Regan, assistant general manager of strategic planning at Gainesville Regional Utilities (GRU) in Gainesville,
Florida. GRU helped Gainesville residents get around that problem by implementing a feed-in tariff, a system where a utility offers solar panel owners a 20-year
contract to buy solar electricity, guaranteeing the owners will make a set profit on their decision to go solar. There are other alternative financing options—such as
letting the utility or a third party buy and own the solar system, while the homeowner hosts it on the roof—but these options aren’t available everywhere. (Related:
“Beating the White House to the Solar Punch”) (Related: “Renewable Energy: Ontario’s New Gold Rush”) It’s All in the Material So why
is solar so
expensive? Converting light into electricity with no moving parts is a profoundly different enterprise than
turning a turbine to make power—the technology that is at work in coal, natural gas, nuclear, hydropower plants and, most visibly to the public, at
wind farms. “Wind power is the same technology as it’s been for 1,000 years,” said Tom Meyer, a professor of chemistry at the University of North Carolina at
Chapel Hill . “There’s nothing to invent. It just needs to be improved.” The makers of wind turbines have made huge cost reductions in recent decades with relatively
solar cells are made from silicon—the same
semiconductor material that is at the heart of computers. The cells are expensive to produce because it
takes a great deal of energy to purify the silicon. And, while the computer industry has made enormous
strides in making cheaper silicon devices, those advancements don’t translate to the solar industry.
small tweaks to an otherwise familiar system. That’s not yet true for solar, experts say. Most
Increases energy prices – subsidies are insufficient
OCR 2011 (Orange county register citing BP, “Editorial: Solar power failures adding up”, 12/27/2011, Orange County Register,
http://www.ocregister.com/articles/solar-333211-energy-company.html)//NR
Since 1990 Germany has imposed
mandates that utilities must pay higher-than-market prices for solar and other so-
called renewable energy sources, driving retail costs 46 percent higher than conventional sources, Bloomberg New Energy Finance says.
California government mandates designed to stimulate renewable energy mean that utilities "are committed to spending - and their ratepayers to financing - at least $6
billion in above-market power costs, with more to come," according to columnist Dan Walters. Electric bills for U.S. consumers skyrocketed
in the past five years, adding $300 a year to household costs, USA Today reported. This should be unsurprising. President Barack Obama three years ago said to move
the nation off traditional energy sources and on to these impractical alternatives, " electricity
rates would necessarily skyrocket ." Soenergy is possible only if government demands those source8s replace conventional energy, and subsidizes
their manufacture, purchase or operation with tax dollars. Even then, there isn't enough subsidy – let alone demand – to make these
systems cost-effective. Sooner or later, economic reality prevails .
called renewable
OTEC
1NC
OTEC is uniquely expensive- raises electricity prices
Bailey et al. 2013 (Jed Bailey, Nils Janson, and Ramon Espinasa, writers for the Inter-American Development Bank, December 2013.
“Pre-Feasibility study of the potential market for Natural Gas as a fuel for Power generation in the Caribbean.”
file:///C:/Users/nlrice1/Downloads/IDB-TN-600%20PreFactibility%20Study%20of%20the%20Potential%20Market%20for%20Natural%20Gas%20as%20a%20Fuel%20for%20Power%20Generation%
20in%20the%20Caribbean.pdf)//NR
Since electricity prices are high in the Caribbean, the introduction of RE and EE technologies can help reduce the cast of generating electricity In
other words, introducing any technologies where the long run marginal cost is lower than that of fuel fired
plants means that the cost of producing electricity will decrease. Therefore, we now analyze the economic viability of a
range of renewable energy and energy efficiency technologies for the countries in this study. By 'economically viable' we mean
technologies that can reduce the cost of energy to a country as a whole. 'Commercially viable' are
technologies that save or make money for an individual customer or business. .All economically viable technologies arc also
commercially viable, but not vice versa. We find that a large set of RE and EE technologies would be viable in the Caribbean, given
the high costs and prices of electricity. In particular, we find that: Most renewable energies may be
economically viable, with the exception of OTEC, wind at a small scale, and some solar technologies (Section 2.3.1)
At least half of the energy efficiency technologies considered are economically viable. (Section 2.3.2). We explain these conclusions in more
detail below.
AT: Renewables are Cheap
No link turns- all of their evidence assumes renewable energy operating in optimal conditions- the
current grid infrastructure prevents cheap renewable energy
Yeager 2009 (Kurt Yeager, Galvin Electricity Initiative, “Renewable Energy: A Smart Grid is a Green Grid.”
http://www.galvinpower.org/sites/default/files/documents/Renewable_Energy.pdf)//NR
Upgrading the network of power plants, power lines, and substations that constitute our electricity grid is decades overdue. This upgrade to a
“smart grid” will be the energy equivalent to opening the information superhighway, as it ensures that information about pricing and use gets to consumers and
electricity producers in real time so they can conserve energy and anticipate problems. In addition, smart technology will allow out current electricity grid to better
incorporate renewable energy sources such as wind and solar power. The benefits of a smart grid include increasing the efficiency of the current electricity
infrastructure, reducing greenhouse gas emissions, and reducing costs to consumers. The importance of renewable energy has been recognized, and repeatedly
rediscovered, since ancient times. Today, we are again rediscovering wind, solar, geothermal and biomass renewable energy resources because of their potential
importance in limiting carbon dioxide (CO2) emissions from electricity and establishing sustainable U.S. energy self-sufficiency. The U.S. Department of Energy
estimates that Illinois’ power plants emit more than 100 million tons of CO2 —mostly because nearly half of the state’s electricity is produced from coal. Although
renewable energy sources, which emit no CO2, is becoming more competitive with rising coal and gas costs, these sources still provide
less than one percent of a state’s electricity. A major reason why coal and gas remain dominant despite rising costs is because
today’s electricity grid is not designed to handle renewable energy sources such as wind and solar on a large scale. For
today’s electricity grid to accommodate a significantly higher percentage of wind and solar power, it would need large
quantities of conventional back-up power and/or non-existent large-scale, centralized energy storage (i.e. huge industrial batteries). These
the cost of
would be necessary to compensate for natural variations in the amount of power generated depending on the time of day, season, and other factors such as the amount
today’s electricity grid cannot handle this variability, the cost of adopting
these renewable energy sources is much more expensive than it should be. In other words, many power companies do not
pursue renewable energy simply because their grids are too old, too inefficient, and too cumbersome to adapt.
of sunlight or wind at any given time. Because
Successfully incorporating renewable electricity sources like wind and solar into Illinois’ existing power transmission and distribution grid requires state-wide
deployment of what has become broadly known as the “smart grid.” The smart grid can be best understood as the overlaying of a comprehensive electronic control
and communication system on the current power grid, essentially providing 1950s technology with an upgrade that is 50 years overdue. In many ways, a smart grid is
the energy equivalent of the information superhighway, as it ensures that the right information gets to the right people at the right time so they can take the right
actions. This much-needed upgrade would optimize power supply and delivery, minimize losses, “selfheal,” enable maximum use of renewable energy resources, and
substantially increase energy efficiency. A smart grid incorporates a variety of important technologies, including smart meters that enable time-of-use electricity
pricing for consumers; electronic sensors and controls that enable the grid to automatically correct for power supply variability; and distributed clean generation and
storage that maintain system reliability at all times under all conditions. One benefit of a smart grid is that it provides an instantaneously accurate flow of information,
eliminating the cumbersome layers of slow—and manual—decision-making required by today’s grid operators. Instead, a smart grid better automates the complex
network of devices that control the flow of electricity to work together faster, more efficiently, and with a level of precision that is not possible using today’s manual
systems. Furthermore, a smart grid supports renewable energy because it can anticipate the intermittency of wind and solar power and keep electricity supply in
absolute balance with consumer demand at all times, at literally the speed of light. As a result, far less back-up power and expensive storage capacity will be needed to
keep the power system from failing to keep the lights and computers on. Just as a smart grid can protect users when renewable sources are not operating at optimal
generation, it also will enable each transmission and distribution line to carry much more electricity without the risk of overloads and blackouts when the amount of
power being generated is high. The need for coupling a smart grid with renewable energy was recently demonstrated, for example, by the near collapse of the obsolete
Texas power grid in February 2008 due to a sudden drop-off in wind speed. Indeed, as reported in the media, “Texas power grid operations narrowly avoided rolling
blackouts.” In addition to making renewable energy more efficient and reliable, a new smart grid will also enable distributed power generation and plug-in hybrid
electric vehicles to contribute to grid reliability and capacity. And a smart grid will enable consumers to better control the cost and quality of their electricity service
with absolute convenience. Real-time “prices to devices” is the ultimate realization of the smart grid. Here, dynamic utility price signals are conveyed to consumers’
appliances, which then automatically adjust their operation to best meet each consumer’s cost and performance requirements.
**Impacts**
2NC Steel Industry Impact
High electricity prices deck the steel industry
Gupta & Sengupta, 2012 (Dr. Manish Gupta-Assistant Professor at the National Institute of Public Finance and Policy, New
Delhi. Prior to this he has served as Economist at the Institute for four years. He was associated with the Institute of Economic Growth, Delhi as a
Consultant. He has also worked with the Thirteenth Finance Commission, Government of India on deputation as Deputy Director. He holds a
Ph.D. in Economics from the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi; Ramprasad Senguptaprofessor at JNU at the Centre for Economic Studies and Planning School of Social Sciences, “Fiscal & Monetary Policy aspects under
Framework for Energy Efficient Economic Development (FEED) Mechanism of National Mission for Enhanced Energy Efficiency (NMEEE)”,
National Institute of Public Finance and Policy, 10/17/2012, http://www.nipfp.org.in/media/medialibrary/2013/08/BEE_draft_report.pdf)
what
is important from the point of view of energy conservation is the impact the changes in prices of different
fuels will have on the demand for aggregate energy. If, suppose, the price of electricity changes, not only will
its own demand will change, but the demand for the other two fuels namely, coal and oil will also change thereby effecting the demand
So far we had looked at the impact of changes in prices of different fuels on their respective demands and demand for the other fuels. But
for the aggregate energy input. It is therefore, important to study the impact on the aggregate energy demand of changes in the prices of various
fuels. Will the aggregate demand for energy increase or will it decline? Table 4.25 provides answers to some of these questions. It shows how the
We see that a 10
percent increase in electricity price will result in a decline in aggregate energy demanded in all the
concerned industries. The aggregate energy requirement would decline the least in iron and steel industry (around 1 percent reduction in
energy demand), the highest decline being observed in the chlor-alkali industry (around 5.23 percent). The all manufacturing
sector’s demand for energy will decline by around 3.84 percent due to a 10 percent increase in electricity
prices.
demand for aggregate energy input will be affected due to a 10 percent increase in the prices of different fuels.
The steel industry is the backbone of US hegemony- it would collapse with an
increase in prices
AISI, 2007 (AISI, serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the
marketplace as the preferred material of choice. AISI also plays a lead role in the development and application of new steels and steelmaking
technology, “Steel and the National Defense”, AINSI, 01/10/2007,
http://www.ssina.com/news/releases/pdf_releases/steel_and_national_defense_0107.pdf)
The U.S. carbon/alloy and specialty steel industries are vital partners to American defense contractors and to the
DOD. Domestic and specialty metals are found in virtually every military platform. Whether it is missiles,
jet aircraft, submarines, helicopters, Humvees® or munitions, American-made steels and specialty metals are
crucial components of U.S. military strength. A few examples follow: 1. The Joint Strike fighter F135 engine,
the gears, bearings, and the body itself, will use high performance specialty steels and superalloys produced by U.S.
specialty steel companies. 2. Land based vehicles such as the Bradley Fighting Vehicle, Abrams Tank, and the family of Light Armored
Vehicles use significant tonnage of steel plate per vehicle. 3. Steel plate is used in the bodies and propulsion
systems of the naval fleet. 4. The control cables on virtually all military aircraft, including fighter jets and military
transport planes, are produced from steel wire rope. Numerous additional examples illustrating how steel and specialty metals directly
support the U.S. defense industrial base are provided in Appendices 1 and 2. These materials are an integral part of many
diversified military applications and, as such, are in a continuing state of technological development. Steel’s
importance to the military must also be looked at in a broader context to include both direct and indirect steel shipments to the military
infrastructure that are needed to support our defense efforts, both at home and overseas -- e.g., all of the steel that goes into the rails, rail cars,
ground vehicles, tanks, ships, military barracks, fences and bases, which are not classified as shipments to ordinance, aircraft, shipbuilding or
other military uses. The September 11 attacks on the United States made it clear that (1) steel
will be needed to “harden” existing
U.S. infrastructure and installations and (2) a strong and viable domestic steel industry will be needed to
provide immediate steel deliveries when and where required. Consider the potential difficulties the U.S. would face in defending,
maintaining and rebuilding infrastructure in an environment where our nation is largely dependent upon foreign steel. By becoming even more
dangerously dependent upon offshore sources of steel,
the United States would experience sharply reduced security
preparedness in the face of: • Highly variable, and certainly higher, costs; • Uncertain supply, impacted by unsettled foreign
economies and politics; • Quality, design and performance problems; • Inventory problems, long lead times and extended construction schedules.
In Appendix 3 of this paper, we illustrate how the U.S. depends upon a healthy American steel industry to meet the growing U.S. demands for
steel-intensive infrastructure. Engineers
and contractors on sophisticated infrastructure projects require an
uninterrupted supply of quality steel that they can depend upon to meet the performance characteristics of a project’s design,
delivered on time, and at a competitive cost. U.S. national economic security requires a strong and viable domestic steel industry to meet
all of these criteria on a consistent basis.
2NC Aluminum Industry Impact
High electricity prices collapse the aluminum industry
Sendich, 02/28/2014 (Elizabeth Sendich, Analyst at U.S. Department of Energy- EIA, “The Importance of Natural Gas in the
Industrial Sector With a Focus on Energy-Intensive Industries”, US Energy Information Administration, 02/28/2014,
http://www.eia.gov/workingpapers/pdf/natgas_indussector.pdf)
Aluminum Though it might be reasonable to expect that both dry NG
price and supply would affect all energy- intensive
industries, particularly the aluminum industry (211, aluminum output does not demonstrate a statistical relationship with dry NG
production, only the industrial sector specific dry NG price. Aluminum output changes following price changes without a
link to supply changes suggests that demand of NG is the driver of this relationship. Because the Granger result is
limited to the industrial sector price specifically, it implies that the link is industrial sector demand for NG specifically. Changes in
industrial sector demand for NG without broader economic demand for NG, which would affect the more
general wellhead price, points to demand for manufactured goods outside the U.S. (i.e. exports). Dry NG
price may also indirectly affect aluminum via electricity prices given the aluminum industry is also a large
user of electricity; although some regions rely heavily on hydro-power.
The aluminum industry is the lynchpin of the US economy
Newswire 6
Reputable international news source (“Aluminum Industry Standing Strong in United States”, September
9 2006, http://www.newswiretoday.com/news/9024/)//EO
Aluminum, being a lightweight, corrosion resistant, high-strength and easily recyclable material, is a vital
ingredient for manufacturing, maintaining and amending products, required by modern society
and demanded by developing nations. Aluminum industry is an important part of the US element
industry. It will have a key role in deciding the US' competitiveness in global arena. As the industry is
developing technically and financially, it will contribute substantially in the evolvement of socially
befitting, ecologically sustainable and financially feasible products and manufacturing methods
worldwide. Aluminum is significant for the markets crucial to the US economy. Construction,
transportation, defense, aerospace, food and beverage packaging, electricity transmission, consumer
durables, equipment and machinery, all depend on a constant supply of technically rich, low priced
aluminum products. These industries are enabled in consistently upgrading the performance, energy
efficiency, cost, recyclables and product safety due to aluminum processes. "US Aluminum Market
(2006)", RNCOS' recent market research report, puts forth that US, with over 400 aluminum plants, is a
major hub of primary aluminum production. Automotive and light-truck manufacturing accounts for
the largest market share. US Aluminum industry showed the value of $ 4,603.2 million in 2005, a rise of
6.3% over 2004. The compound annual growth rate (CAGR) for 2001-2005 is 4.9%. Following factors
are also highlighted by the report: - Trends in the US Aluminum Market with respect to production,
market value, consumption, price, etc - Demand and supply analysis of Aluminum and its ore - Cost of
labor and Energy in various US' states - Success aspect of Aluminum Industry in US - Challenges
associated with US Aluminum industry
Economic decline causes war—statistics
Royal 10 – Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department of
Defense, 2010, “Economic Integration, Economic Signaling and the Problem of Economic Crises,” in
Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, p.
213-214
Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political science literature has
contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of interdependent states. Research in this vein
has been considered at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modelski and
Thompson's (1996) work on leadership cycle theory, finding that rhythms
in the global economy are associated with the rise and
fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such,
exogenous shocks such as economic crises could usher in a redistribution of relative power (see also Gilpin.
1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Feaver, 1995). Alternatively, even a
relatively certain redistribution of power could lead to a permissive environment for conflict as a rising
power may seek to challenge a declining power (Werner. 1999). Separately, Pollins (1996) also shows that global economic cycles
combined with parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and
connections between global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copeland's (1996, 2000) theory of trade
expectations suggests that 'future
expectation of trade' is a significant variable in understanding economic
conditions and security behaviour of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they
have an optimistic view of future trade relations. However, if the expectations of future trade decline, particularly for difficult to replace
items such as energy resources, the likelihood for conflict increases, as states will be inclined to use force to gain
access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or
because it triggers protectionist moves by interdependent states.4 Third, others have considered the link between economic
decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong
correlation between internal conflict and external conflict, particularly during periods of economic
downturn. They write: The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict tends to spawn
internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify the extent to which
international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89) Economic decline
has also been linked with an increase in the likelihood of terrorism (Blomberg, Hess, & Weerapana, 2004), which has the capacity
to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government. "Diversionary theory"
suggests that, when facing unpopularity arising from economic decline, sitting governments have
increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang
(1996), DeRouen (1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly
correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the
tendency towards diversionary tactics are
greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from
office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic performance in the
United States, and thus weak Presidential popularity, are statistically linked to an increase in the use of
force. In summary, recent economic scholarship positively correlates economic integration with an increase in the frequency of economic crises, whereas
political science scholarship links economic decline with external conflict at systemic, dyadic and
national levels.5 This implied connection between integration, crises and armed conflict has not featured prominently in the economic-security debate and
deserves more attention.
The aluminum industry is the cornerstone of US competitiveness
Newswire 6
Reputable international news source (“Aluminum Industry Standing Strong in United States”, September
9 2006, http://www.newswiretoday.com/news/9024/)//EO
Aluminum, being a lightweight, corrosion resistant, high-strength and easily recyclable material, is a vital
ingredient for manufacturing, maintaining and amending products, required by modern society
and demanded by developing nations. Aluminum industry is an important part of the US element
industry. It will have a key role in deciding the US' competitiveness in global arena. As the industry is
developing technically and financially, it will contribute substantially in the evolvement of socially
befitting, ecologically sustainable and financially feasible products and manufacturing methods
worldwide. Aluminum is significant for the markets crucial to the US economy. Construction,
transportation, defense, aerospace, food and beverage packaging, electricity transmission, consumer
durables, equipment and machinery, all depend on a constant supply of technically rich, low priced
aluminum products. These industries are enabled in consistently upgrading the performance, energy
efficiency, cost, recyclables and product safety due to aluminum processes. "US Aluminum Market
(2006)", RNCOS' recent market research report, puts forth that US, with over 400 aluminum plants, is a
major hub of primary aluminum production. Automotive and light-truck manufacturing accounts for
the largest market share. US Aluminum industry showed the value of $ 4,603.2 million in 2005, a rise of
6.3% over 2004. The compound annual growth rate (CAGR) for 2001-2005 is 4.9%. Following factors
are also highlighted by the report: - Trends in the US Aluminum Market with respect to production,
market value, consumption, price, etc - Demand and supply analysis of Aluminum and its ore - Cost of
labor and Energy in various US' states - Success aspect of Aluminum Industry in US - Challenges
associated with US Aluminum industry
Maintaining global competitiveness is critical to US heg – solves great power war
and multiple flashpoints of conflict – also ensures multilateral cooperation –
retrenchment collapses it all
Ikenberry et. al, 13 – John Ikenberry, Ph. D in Political Science from Chicago, Professor of Politics and International Affairs at the
Woodrow Wilson School at Princeton University, Senior Fellow at the Brookings Institute, Co-Director of Princeton’s Center for International
Security Studies; William Wohlforth, Ph. D in Political Science from Yale, Webster Professor of Government at Dartmouth College; Stephen
Brooks, Ph. D in Political Science from Yale, Associate Professor of Government at Dartmouth College, Senior Fellow at the Belfer Center for
Science and International Affairs at Harvard University; “Don’t Come Home, America: The Case Against Retrenchment”,
http://live.belfercenter.org/files/IS3703_Brooks%20Wohlforth%20Ikenberry.pdf
Assessing the Security Benefits of Deep Engagement Even if deep engagement’s costs are far less than retrenchment advocates claim, they are
not worth bearing unless they yield greater benefits. We focus here on the strategy’s major security benefits; in the next section, we take up the
wider payoffs of the United States’ security role for its interests in other realms, notably the global economy—an interaction relatively
unexplored by international relations scholars. A
core premise of deep engagement is that it prevents the emergence
of a far more dangerous global security environment. For one thing, as noted above, the United States’
overseas presence gives it the leverage to restrain partners from taking provocative action. Perhaps more
important, its core alliance commitments also deter states with aspirations to regional hegemony from
contemplating expansion and make its partners more secure, reducing their incentive to adopt solutions to
their security problems that threaten others and thus stoke security dilemmas. The contention that engaged
U.S. power dampens the baleful effects of anarchy is consistent with influential variants of realist
theory. Indeed, arguably the scariest portrayal of the war-prone world that would emerge absent the “American
Pacifier” is provided in the works of John Mearsheimer, who forecasts dangerous multipolar regions
replete with security competition, arms races, nuclear proliferation and associated preventive war
temptations, regional rivalries, and even runs at regional hegemony and full-scale great power war.
72 How do retrenchment advocates, the bulk of whom are realists, discount this benefit? Their arguments are complicated, but two capture most
of the variation: (1) U.S. security guarantees are not necessary to prevent dangerous rivalries and conflict in Eurasia; or (2) prevention of rivalry
and conflict in Eurasia is not a U.S. interest. Each response is connected to a different theory or set of theories, which makes sense given that the
whole debate hinges on a complex future counterfactual (what would happen to Eurasia’s security setting if the United States truly disengaged?).
Although a certain answer is impossible, each
of these responses is nonetheless a weaker argument for retrenchment
than advocates acknowledge. The first response flows from defensive realism as well as other international relations theories that
discount the conflict-generating potential of anarchy under contemporary conditions. 73 Defensive realists maintain that the high ex pected costs
of territorial conquest, defense dominance, and an array of policies and practices that can be used credibly to signal benign intent, mean that
Eurasia’s major states could manage regional multipolarity peacefully without the American pacifier. Retrenchment would be a bet on this
scholarship, particularly in regions where the kinds of stabilizers that nonrealist theories point to—such as democratic governance or dense
institutional linkages—are either absent or weakly present. There
are three other major bodies of scholarship, however,
that might give decisionmakers pause before making this bet. First is regional expertise. Needless to say, there is no
consensus on the net security effects of U.S. withdrawal. Regarding each region, there are optimists and pessimists. Few experts expect a return
of intense great power competition in a post-American Europe, but many doubt European governments will pay the political costs of increased
EU defense cooperation and the budgetary costs of increasing military outlays. 74 The
result might be a Europe that is
incapable of securing itself from various threats that could be destabilizing within the region and
beyond (e.g., a regional conflict akin to the 1990s Balkan wars), lacks capacity for global security missions in which U.S.
leaders might want European participation, and is vulnerable to the influence of outside rising powers.
What about the other parts of Eurasia where the United States has a substantial military presence? Regarding the Middle East, the
balance begins to swing toward pessimists concerned that states currently backed by Washington—
notably Israel, Egypt, and Saudi Arabia—might take actions upon U.S. retrenchment that would
intensify security dilemmas. And concerning East Asia, pessimism regarding the region’s prospects without
the American pacifier is pronounced. Arguably the principal concern expressed by area experts is that Japan and South
Korea are likely to obtain a nuclear capacity and increase their military commitments, which could
stoke a destabilizing reaction from China. It is notable that during the Cold War, both South Korea and
Taiwan moved to obtain a nuclear weapons capacity and were only constrained from doing so by a stillengaged United States. 75 The second body of scholarship casting doubt on the bet on defensive realism’s
sanguine portrayal is all of the research that undermines its conception of state preferences. Defensive realism’s
optimism about what would happen if the United States retrenched is very much dependent on its particular—and highly restrictive—assumption
about state preferences; once
we relax this assumption, then much of its basis for optimism vanishes. Specifically,
the prediction of post-American tranquility throughout Eurasia rests on the assumption that security is the
only relevant state preference, with security defined narrowly in terms of protection from violent external attacks on the homeland.
Under that assumption, the security problem is largely solved as soon as offense and defense are clearly
distinguishable, and offense is extremely expensive relative to defense. Burgeoning research across the social and other
sciences, however, undermines that core assumption: states have preferences not only for security but also for prestige,
status, and other aims, and they engage in trade-offs among the various objectives. 76 In addition, they define
security not just in terms of territorial protection but in view of many and varied milieu goals. It follows that even states that are
relatively secure may nevertheless engage in highly competitive behavior. Empirical studies show that this
is indeed sometimes the case. 77 In sum, a bet on a benign postretrenchment Eurasia is a bet that leaders of
major countries will never allow these nonsecurity preferences to influence their strategic choices. To the
degree that these bodies of scholarly knowledge have predictive leverage, U.S. retrenchment would result in a significant
deterioration in the security environment in at least some of the world’s key regions. We have already
mentioned the third, even more alarming body of scholarship. Offensive realism predicts that the withdrawal of the American
pacifier will yield either a competitive regional multipolarity complete with associated insecurity, arms
racing, crisis instability, nuclear proliferation, and the like, or bids for regional hegemony, which
may be beyond the capacity of local great powers to contain (and which in any case would generate
intensely competitive behavior, possibly including regional great power war). Hence it is unsurprising that
retrenchment advocates are prone to focus on the second argument noted above: that avoiding wars and security dilemmas in the world’s core
regions is not a U.S. national interest. Few doubt that the United States could survive the return of insecurity and conflict among Eurasian
powers, but at what cost? Much of the work in this area has focused on the economic externalities of a renewed threat of insecurity and war,
which we discuss below. Focusing on the pure security ramifications, there are two main reasons why decisionmakers may be rationally reluctant
to run the retrenchment experiment. First, overall
higher levels of conflict make the world a more dangerous place.
Were Eurasia to return to higher levels of interstate military competition, one would see overall higher
levels of military spending and innovation and a higher likelihood of competitive regional proxy wars and
arming of client states—all of which would be concerning, in part because it would promote a faster
diffusion of military power away from the United States. Greater regional insecurity could well feed
proliferation cascades, as states such as Egypt, Japan, South Korea, Taiwan, and Saudi Arabia all might
choose to create nuclear forces. 78 It is unlikely that proliferation decisions by any of these actors would be the end of the game:
they would likely generate pressure locally for more proliferation. Following Kenneth Waltz, many
retrenchment advocates are proliferation optimists, assuming that nuclear deterrence solves the security
problem. 79 Usually carried out in dyadic terms, the debate over the stability of proliferation changes as the numbers
go up. Proliferation optimism rests on assumptions of rationality and narrow security preferences. In
social science, however, such assumptions are inevitably probabilistic. Optimists assume that most states are led by rational
leaders, most will overcome organizational problems and resist the temptation to preempt before feared
neighbors nuclearize, and most pursue only security and are risk averse. Confidence in such probabilistic
assumptions declines if the world were to move from nine to twenty, thirty, or forty nuclear states. In
addition, many of the other dangers noted by analysts who are concerned about the destabilizing effects of
nuclear proliferation—including the risk of accidents and the prospects that some new nuclear powers
will not have truly survivable forces—seem prone to go up as the number of nuclear powers grows. 80
Moreover, the risk of “unforeseen crisis dynamics” that could spin out of control is also higher as the
number of nuclear powers increases. Finally, add to these concerns the enhanced danger of nuclear
leakage, and a world with overall higher levels of security competition becomes yet more worrisome. The
argument that maintaining Eurasian peace is not a U.S. interest faces a second problem. On widely accepted realist assumptions, acknowledging
that U.S. engagement preserves peace dramatically narrows the difference between retrenchment and deep engagement. For many supporters of
retrenchment, the optimal strategy for a power such as the United States, which has attained regional hegemony and is separated from other great
powers by oceans, is offshore balancing: stay over the horizon and “pass the buck” to local powers to do the dangerous work of counterbalancing
any local rising power. The United States should commit to onshore balancing only when local balancing is likely to fail and a great power
appears to be a credible contender for regional hegemony, as in the cases of Germany, Japan, and the Soviet Union in the midtwentieth century.
The problem is that China’s
rise puts the possibility of its attaining regional hegemony on the table, at least in the
medium to long term. As Mearsheimer notes, “The United States will have to play a key role in countering China,
because its Asian neighbors are not strong enough to do it by them selves.” 81 Therefore, unless China’s rise stalls,
“the United States is likely to act toward China similar to the way it behaved toward the Soviet Union during the Cold War.” 82 It follows that the
It will need to
maintain key alliance relationships in Asia as well as the formidably expensive military capacity to
intervene there. The implication is to get out of Iraq and Afghanistan, reduce the presence in Europe, and
pivot to Asia— just what the United States is doing. 83 In sum, the argument that U.S. security commitments
are unnecessary for peace is countered by a lot of scholarship, including highly influential realist scholarship. In addition,
the argument that Eurasian peace is unnecessary for U.S. security is weakened by the potential for a large
number of nasty security consequences as well as the need to retain a latent onshore balancing capacity
that dramatically reduces the savings retrenchment might bring. Moreover, switching between offshore and
onshore balancing could well be difficult. Bringing together the thrust of many of the arguments discussed so far underlines the
degree to which the case for retrenchment misses the underlying logic of the deep engagement strategy. By supplying reassurance,
deterrence, and active management, the United States lowers security competition in the world’s key
regions, thereby preventing the emergence of a hothouse atmosphere for growing new military
capabilities. Alliance ties dissuade partners from ramping up and also provide leverage to prevent
military transfers to potential rivals. On top of all this, the United States’ formidable military machine may
deter entry by potential rivals. Current great power military expenditures as a percentage of GDP are at
historical lows, and thus far other major powers have shied away from seeking to match top-end U.S.
military capabilities. In addition, they have so far been careful to avoid attracting the “focused en mity” of the
United States. 84 All of the world’s most modern militaries are U.S. allies (America’s alliance system of more than
sixty countries now accounts for some 80 percent of global military spending), and the gap between the U.S. military capability
and that of potential rivals is by many measures growing rather than shrinking. 85 In the end, therefore, deep
engagement reduces security competition and does so in a way that slows the diffusion of power
away from the United States. This in turn makes it easier to sustain the policy over the long term. THE WIDER BENE FITS OF
United States should take no action that would compromise its capacity to move to onshore balancing in the future.
DEEP ENGAGEMENT The case against deep engagement overstates its costs and underestimates its security benefits. Perhaps its most
important weakness, however, is that its preoccupation with security issues diverts attention from some of deep engagement’s most important
benefits: sustaining the global economy and fostering institutionalized cooperation in ways advantageous to U.S. national interests. ECONOMIC
BENE FITS Deep engagement is based on a premise central to realist scholarship from E.H. Carr to Robert Gilpin: economic orders do not just
emerge spontaneously; they are created and sustained by and for powerful states. 86 To be sure, the sheer size of its economy would guarantee
the United States a significant role in the politics of the global economy whatever grand strategy it adopted. Yet the
fact that it is the
leading military power and security provider also enables economic leadership. The security role figures
in the creation, maintenance, and expansion of the system. In part because other states—including all but one
of the world’s largest economies—were heavily dependent on U.S. security protection during the Cold
War, the United States was able not only to foster the economic order but also to prod other states to buy
into it and to support plans for its progressive expansion. 87 Today, as the discussion in the previous section underscores,
the security commitments of deep engagement support the global economic order by reducing the
likelihood of security dilemmas, arms racing, instability, regional conflicts and, in extremis, major power
war. In so doing, the strategy helps to maintain a stable and comparatively open world economy—a
long-standing U.S. national interest. In addition to ensuring the global economy against important sources
of insecurity, the extensive set of U.S. military commitments and deployments helps to protect the
“global economic commons.” One key way is by helping to keep sea-lanes and other shipping corridors
freely available for commerce. 88 A second key way is by helping to establish and protect
property/sovereignty rights in the oceans. Although it is not the only global actor relevant to protecting the global economic
commons, the United States has by far the most important role given its massive naval superiority and the
leadership role it plays in international economic institutions. If the United States were to pull back
from the world, protecting the global economic commons would likely be much harder to accomplish
for a number of reasons: cooperating with other nations on these matters would be less likely to occur;
maintaining the relevant institutional foundations for promoting this goal would be harder; and
preserving access to bases throughout the world—which is needed to accomplish this mission—would
likely be curtailed to some degree.
2NC Chemical Industry Impact
Low electricity prices invigorate the chemical industry
Brooks, 01/07/2014 (Allen Brooks, Managing Director of Energy Musings, “Musings From the Oil Patch”, Energy Musing,
01/07/2014, http://energy-musings.com/node/335)
With the optimistic gas supply outlook and low price assumption, chemical companies are rapidly expanding
facilities along the Gulf Coast. In an updated forecast, ACC says the industry will invest $91 billion over the next 10 years with the
peak investment amount in 2016. A recent example of the impact of this expansion is the restarting, expansion
and building of new methanol plants in the Houston area. There are nine projects underway at a cost of $5-$7 billion. This
expansion, which will lead to a 12-fold increase in the nation’s output of this building block for plastics, is driven by the prospect of low natural gas prices for at least
the next 17 years. What
the chemical industry’s capacity expansion means is the potential for $67 billion in new
chemical industry shipments by 2020. Because of the recovering U.S. and global economies and the
continuation of attractive cost dynamics, the increase in industry shipments should be permanent. What
makes the American chemical industry expansion significant is that the cost dynamics will enable it to
capture a greater share of world chemical output. The ACC study showed the cost position of the United States chemical
industry relative to China and other regions of the world. It also showed the cost improvement for the U.S. chemical industry
between 2005 and 2012, which is nothing short of amazing. Clearly, much of this cost improvement is due to reduced natural gas
and NGL prices between the two years. In 2005, spot natural gas prices at Henry Hub averaged $8.69 per million BTUs compared to $2.75 in 2012. According to the
EIA, whose data series begins in 2007, the composite price for NGLs averaged $12.91 per million BTUs compared to $10.98 in 2012.
The chemical industry solves extinction
Baum 1999 (Rudy, C&EN Washington, MILLENNIUM SPECIAL REPORT, Volume 77, Number 49 CENEAR 77 49 pp.46-47,
http://pubs.acs.org/cen/hotarticles/cenear/991206/7749spintro2.html)
Here is the fundamental challenge we face: The
world's growing and aging population must be fed and clothed and
housed and transported in ways that do not perpetuate the environmental devastation wrought by the first waves of
industrialization of the 19th and 20th centuries. As we increase our output of goods and services, as we increase our consumption of energy, as
we meet the imperative of raising the standard of living for the poorest among us, we must learn to carry out our economic activities sustainably.
There are optimists out there, C&EN readers among them, who believe that the history of civilization is a long string of technological triumphs of
humans over the limits of nature. In this view, the idea of a "carrying capacity" for Earth—a limit to the number of humans Earth's resources can
support—is a fiction because technological advances will continuously obviate previously perceived limits. This view has historical merit. Dire
predictions made in the 1960s about the exhaustion of resources ranging from petroleum to chromium to fresh water by the end of the 1980s or
1990s have proven utterly wrong. While I do not count myself as one of the technological pessimists who see technology as a mixed blessing at
best and an unmitigated evil at worst, I do not count myself among the technological optimists either. There are environmental challenges of
transcendent complexity that I fear may overcome us and our Earth before technological progress can come to our rescue. Global climate change,
the accelerating destruction of terrestrial and oceanic habitats, the catastrophic loss of species across the plant and animal kingdoms—these are
problems that are not obviously amenable to straightforward technological solutions. But I know this, too: Science and technology have brought
us to where we are, and only science and technology, coupled with innovative social and economic thinking, can take us to where we need to be
in the coming millennium. Chemists, chemistry, and the
chemical industry—what we at C&EN call the chemical enterprise—will play
central roles in addressing these challenges. The first section of this Special Report is a series called "Millennial Musings" in
which a wide variety of representatives from the chemical enterprise share their thoughts about the future of our science and industry. The five
essays that follow explore the contributions the chemical enterprise is making right now to ensure that we will successfully meet the challenges of
the 21st century. The essays do not attempt to predict the future. Taken as a whole, they do not pretend to be a comprehensive examination of the
efforts of our science and our industry to tackle the challenges I've outlined above. Rather, they paint, in broad brush strokes, a portrait of
scientists, engineers, and business managers struggling to make a vital contribution to humanity's future. The first essay, by Senior Editor Marc S.
Reisch, is a case study of the chemical industry's ongoing transformation to sustainable production. Although it is not well known to the general
public, the
chemical industry is at the forefront of corporate efforts to reduce waste from production streams
to zero. Industry giants DuPont and Dow Chemical are taking major strides worldwide to manufacture chemicals while minimizing the
environmental "footprint" of their facilities. This is an ethic that starts at the top of corporate structure. Indeed, Reisch quotes Dow President and
Chief Executive Officer William S. Stavropolous: "We must integrate elements that historically have been seen as at odds with one another: the
triple bottom line of sustainability—economic and social and environmental needs." DuPont Chairman and CEO Charles (Chad) O. Holliday
envisions a future in which "biological processes use renewable resources as feedstocks, use solar energy to drive growth, absorb carbon dioxide
from the atmosphere, use low-temperature and low-pressure processes, and produce waste that is less toxic." But sustainability is more than just a
philosophy at these two chemical companies. Reisch describes ongoing Dow and DuPont initiatives that are making sustainability a reality at
Dow facilities in Michigan and Germany and at DuPont's massive plant site near Richmond, Va. Another manifestation of the chemical industry's
evolution is its embrace of life sciences. Genetic engineering is a revolutionary technology. In the 1970s, research advances fundamentally shifted
our perception of DNA. While it had always been clear that deoxyribonucleic acid was a chemical, it was not a chemical that could be
manipulated like other chemicals—clipped precisely, altered, stitched back together again into a functioning molecule. Recombinant DNA
techniques began the transformation of DNA into just such a chemical, and the reverberations of that change are likely to be felt well into the next
century. Genetic
engineering has entered the fabric of modern science and technology. It is one of the basic tools chemists
and biologists use to understand life at the molecular level. It provides new avenues to pharmaceuticals and
new approaches to treat disease. It expands enormously agronomists' ability to introduce traits into crops,
a capability seized on by numerous chemical companies. There is no doubt that this powerful new tool will play a major
role in feeding the world's population in the coming century, but its adoption has hit some bumps in the road. In the second
essay, Editor-at-Large Michael Heylin examines how the promise of agricultural biotechnology has gotten tangled up in real public fear of
genetic manipulation and corporate control over food. The third essay, by Senior Editor Mairin B. Brennan, looks at chemists embarking on what
is perhaps the greatest intellectual quest in the history of science—humans' attempt to understand the detailed chemistry of the human brain, and
with it, human consciousness. While this quest is, at one level, basic research at its most pure, it also has enormous practical significance.
Brennan focuses on one such practical aspect: the effort to understand neurodegenerative diseases like Alzheimer's disease and Parkinson's
disease that predominantly plague older humans and are likely to become increasingly difficult public health problems among an aging
population. Science
and technology are always two-edged swords. They bestow the power to create and the power to destroy.
In addition to its enormous potential for health and agriculture, genetic engineering conceivably could be used to create
horrific biological warfare agents. In the fourth essay of this Millennium Special Report, Senior Correspondent Lois R. Ember
examines the challenge of developing methods to counter the threat of such biological weapons. " Science and technology will
eventually produce sensors able to detect the presence or release of biological agents, or devices that aid
in forecasting, remediating, and ameliorating bioattacks," Ember writes. Finally, Contributing Editor Wil Lepkowski
discusses the most mundane, the most marvelous, and the most essential molecule on Earth, H2O. Providing clean water to Earth's population is
already difficult—and tragically, not always accomplished. Lepkowski looks in depth at the situation in Bangladesh—where a well-meaning UN
program to deliver clean water from wells has poisoned millions with arsenic. Chemists are working to develop better ways to detect arsenic in
drinking water at meaningful concentrations and ways to remove it that will work in a poor, developing country. And he explores the evolving
water management philosophy, and the science that underpins it, that will be needed to provide adequate water for all its vital uses. In the past
two centuries, our science has transformed the world. Chemistry is a wondrous tool that has allowed us to understand the structure of matter and
gives us the ability to manipulate that structure to suit our own purposes. It allows us to dissect the molecules of life to see what makes them, and
us, tick. It is providing a glimpse into workings of what may be the most complex structure in the universe, the human brain, and with it hints
about what constitutes consciousness. In
the coming decades, we will use chemistry to delve ever deeper into these
mysteries and provide for humanity's basic and not-so-basic needs.
2NC Nuclear Meltdowns Impact
Nathan i/l
Grid collapse triggers widespread nuclear meltdown- extinction
IBT 2011 (International Business Times, Solar Flare Could Unleash Nuclear Holocaust Across Planet Earth, Forcing Hundreds of Nuclear
Power Plants Into Total Meltdowns, http://au.ibtimes.com/articles/213249/20110914/solar-flare-could-unleash-nuclear-holocaust-acrossplanet-earth-forcing-hundreds-of-nuclear-power-pl.htm)//NR
What happens when there's no electricity? Imagine a world without
electricity. Even for just a week. Imagine New York City with no
electricity, or Los Angeles, or Sao Paulo. Within 72 hours, most cities around the world will devolve into total chaos, complete with looting,
violent crime, and runaway fires. But that's not even the bad news. Even if all the major cities of the world burned to the ground for some other
reason, humanity could still recover because it has the farmlands: the soils, the seeds, and the potential to recover, right? And yet the real crisis
here stems from the realization that once there is no power
grid, all the nuclear power plants of the world suddenly go into
"emergency mode" and are forced to rely on their on-site emergency power backups to circulate coolants and prevent nuclear meltdowns
from occurring. And yet, as we've already established, these facilities typically have only a few hours of battery power available, followed by
perhaps a few days-worth of diesel fuel to run their generators (or propane, in some cases). Did I also mention that half the people who work at
nuclear power facilities have no idea what they're doing in the first place? Most of the veterans who really know the facilities inside and out have
been forced into retirement due to reaching their lifetime limits of on-the-job radiation exposure, so most of the workers at nuclear facilities right
now are newbies who really have no clue what they're doing. There are 440 nuclear power plants operating across 30 countries around the
world today. There are an additional 250 so-called "research reactors" in existence, making a total of roughly 700
nuclear reactors to be
dealt with (http://www.world-nuclear.org/info/i...). Now imagine the scenario: You've got a massive solar flare that knocks out the world
power grid and destroys the majority of the power grid transformers, thrusting the world into darkness. Cities collapse into chaos and rioting,
martial law is quickly declared (but it hardly matters), and every nation in the world is on full emergency. But that doesn't solve the really big
problem, which is that you've got 700 nuclear reactors that can't feed power into the grid (because all the transformers are blown up) and yet
simultaneously have to be fed a steady stream of emergency fuels to run the generators the keep the coolant pumps functioning. How
long does the coolant need to circulate in these facilities to cool the nuclear fuel? Months. This is also the lesson of Fukushima: You can't cool
nuclear fuel in mere hours or days. It takes months to bring these nuclear facilities to a state of cold shutdown. And that means in order to avoid a
multitude of Fukushima-style meltdowns from occurring around the world, you need to truck diesel fuel, generator parts and nuclear
plant workers to
every nuclear facility on the planet, ON TIME, every time, without fail, for months on end. Now
remember, this must be done in the middle of the total chaos breakdown of modern civilization, where there is no power, where law
enforcement and emergency services are totally overrun, where people are starving because food deliveries have been disrupted, and when
looting and violent crime runs rampant in the streets of every major city in the world. Somehow, despite all this, you have to run these diesel fuel
caravans to the nuclear power plants and keep the pumps running. Except there's a problem in all this, even if you assume you can somehow work
a logistical miracle and actually deliver the diesel fuel to the backup generators on time (which you probably can't). The problem is this: Where
do you get diesel fuel? Why refineries will be shut down, too from petroleum refineries. Most people don't realize it, but petroleum refineries run
on electricity. Without the power grid, the refineries don't produce a drop of diesel. With no diesel, there are no generators keeping the coolant
running in the nuclear power facilities. But wait, you say: Maybe we could just acquire diesel from all the gas stations in the world. Pump it out
of the ground, load it into trucks and use that to power the generators, right? Except there are other problems here: How do you pump all that fuel
without electricity? How do you acquire all the tires and spare parts needed to keep trucks running if there's no electricity to keep the supply
businesses running? How do you maintain a truck delivery infrastructure when the electrical infrastructure is totally wiped out? Some countries
might be able to pull it off with some degree of success. With military escorts and the total government control over all fuel supplies, a few
nations will be able to keep a few nuclear power facilities from melting down. But here's the real issue: There are 700 nuclear power facilities in
the world, remember? Let's suppose that in the aftermath of a massive solar flare, the nations of the world are somehow able to control half of
those facilities and nurse them into cold shutdown status. That still leaves roughly 350 nuclear facilities at risk. Now let's suppose half of those
are somehow luckily offline and not even functioning when the solar flare hits, so they need no special attention. This is a very optimistic
assumption, but that still leaves 175 nuclear power plants where all attempts fail. Let's be outrageously optimistic and suppose that a third of
those somehow don't go into a total meltdown by some miracle of God, or some bizarre twist in the laws of physics. So we're still left with 115
nuclear power plants that "go Chernobyl." Fukushima was one power plant. Imagine the devastation of 100+ nuclear power plants, all
going into meltdown all at once across the planet. It's not the loss of electricity that's the real problem; it's the global tidal
wave of invisible radiation that blankets the planet, permeates the topsoil, irradiates everything that breathes and delivers the
final crushing blow to human civilization as we know it today. Because if you have 100 simultaneous global nuclear meltdowns,
the tidal wave of radiation will make farming nearly impossible for years. That means no food production for several years in a row. And that, in
turn, means a near-total collapse of the human population on our planet. How many people can survive an entire year with no food from the
farms? Not one in a hundred people. Even beyond that, how many people can essentially live underground and be safe enough from the
radiation that they can have viable children and repopulate the planet? It's a very, very small fraction of the total population.
2NC Blackouts Impact
Nathan i/l
One blackout shuts down the entire grid and triggers chemical plant explosionsextinction
Latynina 2003 (Yulia Latynina, writer for the World Press Review: World Press Review (VOL. 50, No. 11). August 18, 2003. “America in
the Dark.” www.worldpress.org/Americas/1579.cfm )//NR
The scariest thing about the cascading power outages was not spoiled groceries in the fridge, or elevators getting stuck, or even, however cynical
it may sound, sick patients left to their own devices without electricity-powered medical equipment. The scariest thing of all was chemical
plants and refineries with 24-hour operations, which, if interrupted, can result in consequences even more disastrous and on a
larger scale than those of an atomic bomb explosion. So it is safe to say that Americans got lucky this time. Several hours after the
disaster, no one could know for certain whether the power outage was caused by an accident or someone’s evil design. In fact, the disaster on the
East Coast illustrates just one thing: A modern city is in itself a bomb, regardless of whether someone sets off the detonator intentionally or by
accident. As I recall, when I was writing my book Industrial Zone, in which business deals were bound to lead to a massive industrial catastrophe,
at some point in time I was considering making a cascading power outage the cause of a catastrophe. Back then, I was amazed and
shocked at the swiftness of the process. Shutting down at least one electric power plant is enough to cause a drop in power output
throughout the entire power grid. This is followed by an automatic shutdown of nuclear power plants, a further catastrophic drop
in power, and finally a cascading outage of the entire grid system. To start with, the electric power plant may burn out because of just
about anything. In Ekibastuz [Kazakhstan] under the Soviet regime, a large hydroelectric power station was burned to the ground because of the
negligence of one extremely smart worker, who used a wrench to unscrew the cap from a pressurized oil vessel. A stream of oil shot up to the
ceiling; the worker got scared and dropped the wrench, which hit against the steel floor and created a spark that set the stream of oil on fire. Then
the lights went off. Which brings us back to our main thesis. In order to destroy a modern city, one does not need to have nuclear weapons,
because the modern city is in itself a weapon. The city infrastructure is an infrastructure with dual purpose. Why should terrorists need chemical
weapons if their enemies already have chemical plants? Why should terrorists need nuclear weapons if their enemies already have skyscrapers
and airplanes with tanks full of fuel, which can be hijacked with the help of a penknife? Why would they need sophisticated military technologies
and stolen explosives if the KamAZ truck that blew up the hospital in Mozdok was carrying a load of, let us say, fertilizer? So-called dictatorship
regimes and terrorists themselves have long since figured that out. That is exactly why there were no nuclear or bacteriological weapons in Iraq.
Why not? A bomb planted on an airplane would kill dozens fewer people than a failure of the air traffic control system of a large airport. Sept. 11
taught the world that the infrastructure of the modern civilization could be as lethal as the weapons themselves. Last week, a significant
and major addition was made to the lesson of Sept. 11: The actions of terrorists can’t always be distinguished from the actions of a drunken
dispatcher or random lightning.
AT: Electricity Prices DA
AT: Uniqueness
Electricity prices are rising- the trend will continue
Vartabedian 2014 (Ralph Vartabedian, writer for the LA times, April 25, 2014. “U.S. Electricity Prices may be going up for good.”
http://www.latimes.com/nation/la-na-power-prices-20140426-story.html#page=1)//NR
The electrical system's duress was a direct result of the polar vortex, the cold air mass that settled over the nation. But it exposed a more
fundamental problem. There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of
coal-fired plants, reductions in nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The
result is
likely to be future price shocks. And they may not be temporary. One recent study predicts the cost of electricity in
California alone could jump 47% over the next 16 years, in part because of the state's shift toward more expensive renewable energy. "We are
now in an era of rising electricity prices," said Philip Moeller, a member of the Federal Energy Regulatory Commission, who said
the steady reduction in generating capacity across the nation means that prices are headed up. "If you take enough supply out of the system, the
price is going to increase." In fact, the price of electricity has already been rising over the last decade,
jumping by double digits in many states, even after accounting for inflation. In California, residential electricity prices shot up 30%
between 2006 and 2012, adjusted for inflation, according to Energy Department figures. Experts in the state's energy markets project the price
could jump an additional 47% over the next 15 years. The problems confronting the electricity system are the result of
a
wide range of forces: new federal regulations on toxic emissions, rules on greenhouse gases, state mandates for
renewable power, technical problems at nuclear power plants and unpredictable price trends for natural gas. Even
cheap hydro power is declining in some areas, particularly California, owing to the long-lasting drought. "Everywhere you turn, there are
proposals and regulations to make prices go higher," said Daniel Kish, senior vice president at the Institute for Energy Research. "The trend
line is up, up, up. We are going into uncharted territory." New emissions rules on mercury, acid gases and other toxics
by the Environmental Protection Agency are expected to result in significant losses of the nation's coal-generated power, historically the largest
and cheapest source of electricity. Already, two dozen coal generating units across the country are scheduled for decommissioning. When the
regulations go into effect next year, 60 gigawatts of capacity — equivalent to the output of 60 nuclear reactors — will be taken out of the system,
according to Energy Department estimates. Moeller, the federal energy commissioner, warns that these rapid changes are eroding the system's
ability to handle unexpected upsets, such as the polar vortex, and could result in brownouts or even blackouts in some regions as early as next
year. He doesn't argue against the changes, but believes they are being phased in too quickly. The federal government appears to have
underestimated the impact as well. An Environmental Protection Agency analysis in 2011 had asserted that new regulations would cause few coal
plant retirements. The forecast on coal plants turned out wrong almost immediately, as utilities decided it wasn't economical to upgrade their
plants and scheduled them for decommissioning. The lost coal-generating capacity is being replaced largely with cleaner natural gas, but the
result is that electricity prices are linked to a fuel that has been far more volatile in price than coal. The price of natural gas now stands at about
$4.50 per million BTUs, more expensive than coal. Plans to export massive amounts of liquefied natural gas, the rapid construction of gas-fired
power plants and the growing trend to convert the U.S. heavy truck fleet to natural gas could exert even more upward pressure on prices.
Malcolm Johnson, a former Shell Oil gas executive who now teaches the Oxford Princeton Program, a private energy training company, said
prices could move toward European price levels of $10. "When those natural gas prices start going up again, we will feel it
in the way of higher electricity prices," warns James Sweeney, a Stanford University energy expert. The loss of coal is
being exacerbated by problems at the nation's nuclear plants. Five reactors have been taken out of operation in the last few
years, mainly due to technical problems. Additional shutdowns are under consideration. At the same time, 30 states have mandates
for renewable energy that will require the use of more expensive wind and solar energy. Since those sources depend on the weather, they require
backup generation — a hidden factor that can add significantly to the overall cost to consumers. Nowhere are the forces more in play than in
California, which has the nation's most aggressive mandate for renewable power. Major utilities must obtain 33% of their power from renewable
sources by 2020, not counting low-cost hydropower from giant dams in the Sierra Nevada mountains. In some cases, the renewable power costs
as much as twice the price of electricity from new gas-fired power plants. Newer facilities are more competitive and improved technology should
hold down future electricity prices, said former FERC Chairman Jon Wellinghoff, now a San Francisco attorney. But San Francisco-based Energy
+ Environmental Economics, a respected consultant, has projected that the cost of California's electricity is likely to increase 47% over the next
16 years, adjusted for inflation, in part because of the renewable power mandate and heavy investments in transmission lines. The mandate is just
one market force. California has all but phased out coal-generated electricity. The state lost the output of San Onofre's two nuclear reactors and is
facing the shutdown of 19 gas-fired power plants along the coast because of new state-imposed ocean water rules by 2020. "Our rates are
increasing because of all of these changes that are occurring and will continue to occur as far out as we
can see," said Phil Leiber, chief financial officer of the Los Angeles Department of Water and Power. "Renewable power has merit, but
unfortunately it is more costly and is one of the drivers of our rates." "While renewables are coming down in cost, they are still more expensive,"
said Russell Garwacki, manager of pricing design and research at Southern California Edison. The company is imposing a 10% price hike this
year to catch up with increased costs in the past. Officials at the California Public Utilities Commission, responsible for setting utility rates,
dispute predictions of large-scale electricity price hikes in the near future. Edward Randolph, head of the PUC's energy division, said price
increases were not likely to exceed the rate of inflation, though the commission has refused to spell out the data on which it bases its projections.
In any case, while California already has some of the highest hourly rates for electricity in the nation, the average consumer in the state pays bills
that are below the national average because overall electricity use is so low. The push to wean California off fossil fuels for electricity could
cause a consumer backlash as the price for doing so becomes increasingly apparent, warns Alex Leupp, an executive with the Northern California
Power Agency, a nonprofit that generates low-cost power for 15 agencies across the state. The nonprofit was formed decades ago during a
rebellion against the PUC and the high prices that resulted from its regulations. "If power gets too expensive, there will be a
revolt," Leupp said. "If the state pushes too fast on renewables before the technology is viable, it could set back the environmental goals we all
believe in at the end of the day."
2AC
Prices are up- natural gas prices
ISO New England 14 (ISO New England is the independent, not-for-profit corporation responsible
for the reliable operation of New England’s electric power generation and transmission system,
overseeing and ensuring the fair administration of the region’s wholesale electricity markets, and
managing comprehensive regional electric power planning, 2013 Wholesale Electricity Prices in New
England Rose on Higher Natural Gas Prices, http://www.isone.com/nwsiss/pr/2014/2013_price%20release_03182014_final.pdf, 3/18/14)
Rising natural gas prices pushed wholesale electricity prices in New England up by 55% in 2013, according to
preliminary figures from ISO New England Inc., the operator of the region’s bulk power system and wholesale electricity markets.
Preliminary data show that the average price of wholesale electric energy rose to $56.06 per megawatthour (MWh) in 2013, up from 2012’s historic low price of $36.09/MWh. Compared to average annual wholesale
electricity prices since 2003, the year that competitive markets in their current form were introduced in New England, the 2013 annual average
was the fifth highest, and 30% lower than the all-time high of $80.56/MWh during 2008. Natural
gas is the predominant fuel used
to generate the region’s electricity, at about 46% of total generation in 2013, so wholesale power prices
tend to track the price of natural gas. In 2013, preliminary figures show that the price of natural gas
averaged $6.97 per million British thermal units (MMBtu), up 76% from the 2012 record low price of
$3.95/MMBtu. The highest annual average price for natural gas in New England occurred in 2008 at $10.07/MMBtu.
1AR
They will stay up- trends and reduction in capacity
VARTABEDIAN 14 (RALPH VARTABEDIAN, reporter for the LA Times, U.S. electricity prices
may be going up for good, http://www.latimes.com/nation/la-na-power-prices-20140426story.html#page=1, 4/25/14)
The electrical system's duress was a direct result of the polar vortex, the cold air mass that settled over the nation. But it exposed a
more fundamental problem. There is a growing fragility in the U.S. electricity system, experts warn, the
result of the shutdown of coal-fired plants, reductions in nuclear power, a shift to more expensive
renewable energy and natural gas pipeline constraints. The result is likely to be future price shocks. And
they may not be temporary. One recent study predicts the cost of electricity in California alone could
jump 47% over the next 16 years, in part because of the state's shift toward more expensive renewable
energy. "We are now in an era of rising electricity prices," said Philip Moeller, a member of the Federal Energy Regulatory
Commission, who said the steady reduction in generating capacity across the nation means that prices are
headed up. "If you take enough supply out of the system, the price is going to increase."
They’ll increase- regulations
VARTABEDIAN 14 (RALPH VARTABEDIAN, reporter for the LA Times, U.S. electricity prices
may be going up for good, http://www.latimes.com/nation/la-na-power-prices-20140426story.html#page=1, 4/25/14)
The problems confronting the electricity system are the result of a wide range of forces: new federal
regulations on toxic emissions, rules on greenhouse gases, state mandates for renewable power, technical
problems at nuclear power plants and unpredictable price trends for natural gas. Even cheap hydro power
is declining in some areas, particularly California, owing to the long-lasting drought. "Everywhere you turn,
there are proposals and regulations to make prices go higher," said Daniel Kish, senior vice president at the Institute for
Energy Research. "The trend line is up, up, up. We are going into uncharted territory." New emissions rules on
mercury, acid gases and other toxics by the Environmental Protection Agency are expected to result in
significant losses of the nation's coal-generated power, historically the largest and cheapest source of electricity. Already,
two dozen coal generating units across the country are scheduled for decommissioning. When the
regulations go into effect next year, 60 gigawatts of capacity — equivalent to the output of 60 nuclear
reactors — will be taken out of the system, according to Energy Department estimates. Moeller, the federal energy commissioner,
warns that these rapid changes are eroding the system's ability to handle unexpected upsets, such as the polar
vortex, and could result in brownouts or even blackouts in some regions as early as next year. He doesn't argue
against the changes, but believes they are being phased in too quickly.
Price indexes and data prove
Jeffrey 14 (Terence P. Jeffrey, editor in chief of CNSNews.com, Electricity Price Index Soars to New
Record at Start of 2014; U.S. Electricity Production Declining, http://cnsnews.com/news/article/terencep-jeffrey/electricity-price-index-soars-new-record-start-2014-us-electricity, 2/21/14)
The electricity price index soared to a new high in January 2014 with the largest month-to-month increase
in almost four years, according to the Bureau of Labor Statistics. Meanwhile, data from the Energy Information
Administration, a division of the U.S. Department of Energy, indicates that electricity production in the
United States has declined since 2007, when it hit its all-time peak. The U.S. is producing less electricity than it
did seven years ago for a population that has added more than 14 million people. “The electricity index
rose 1.8 percent, its largest increase since March 2010,” said BLS in its summary of the Consumer Price Index released
Thursday.
Rising coal costs
Pisani 14 (Glen, Great Eastern Energy, Are Increasing Electricity Prices Coming?,
http://www.poanj.org/index.php?option=com_content&task=view&id=206, copyright 2014 and
regulations cited were announced in 2014)
Coal-fired plants have historically been one of the cheapest ways to generate electricity, but operating
costs are expected to increase significantly because of upgrades needed on older plants to meet new
environmental regulations. Although there are many public concerns, it is quite possible that some of the regulations may never get to
the table. Nevertheless, it is almost certain that there will be an increase in electricity prices throughout the
economy. Any increases are expected to begin to appear in 2014. If policymakers cannot find additional alternatives to
those already on the table, consumers can expect further increases as more expensive forms of generation take on
a greater share of the electricity load. Any sudden increase in electricity rates will have an impact on the
economy at a time when people and businesses are still struggling.
Shale Gas Boom Unsustainable:
(The main warrant as to why electricity prices will stay low is because of cheap shale gas- win that us
won’t have cheap shale for long and you take out their main warrant)
Natgas boom in unsustainable- cheap shale will run out this decade
Nelder 2012 [Chris, Smart Planet, February, Everything you know about shale gas is wrong, http://www.smartplanet.com/blog/energyfuturist/everything-you-know-about-shale-gas-is-wrong/341]//NR
But now there’s even more bad news: U.S. gas production appears to have hit a production ceiling, and is actually declining
in major areas. The startling revelation comes from a new paper published today by Houston-based petroleum geologist and energy sector
consultant Arthur Berman. Berman reached this conclusion by compiling his own production history of U.S. shale gas
from a massive data set licensed from data provider HPDI. His well-by-well analysis found that total U.S. gas
production has been on an “undulating plateau” since the beginning of 2009, and showed declines in some areas in
2011. This stands in stark contrast to recent data provided by the EIA, which shows shale gas production rising steadily for the
past two years, and well into the future. The EIA’s forecast is bullish because it’s mainly a view of demand, without great
regard for supply limits. But their historical supply data differs for a reason that will be no surprise to experienced observers: the data is
bad. The EIA gets its data on shale gas production by sampling the reports of major operators, then applying a formula to
estimate how much gas is actually being produced, according to Berman. This may explain why they only have official
monthly historical production data for the two years (unofficially, three) of 2008 and 2009, and only annual data for 2010 and 2011. This
has been a big red flag to me in my recent work on shale gas, accustomed as I am to EIA’s far more detailed and up-to-date monthly and
weekly data on oil, and has made it nearly impossible to verify the claim that we’ve had “booming” gas production over
the past two years. Data is also available directly from the states, but some states have flawed reporting processes,
the granularity and reporting frequency varies (as low as every six months, in the case of Pennsylvania), and ultimately the data
isn’t available in a usable format. It’s also inaccurate and incomplete, as one Pittsburgh newspaper recently found out.
Berman reached the same conclusion, noting in his paper that “the data that EIA makes available does not have sufficient resolution to
evaluate individual plays or states.” So he had to build his own database. An unprofitable treadmill One reason for the recent slowdown
in production growth is that “unconventional” shale gas wells have to make up for the decline of conventional gas
wells, which has accelerated from 23 percent per year in 2001 to 32 percent per year today. The U.S. now needs to
replace 22 billion cubic feet per day (Bcf/d) of production each year just to maintain flat supply. Currently, all shale gas plays together
produce around 19 Bcf/d. The shift to unconventional gas has put us on a production treadmill: We have to keep drilling like mad to maintain
output because unconventional wells are far less productive and shorter-lived than conventional gas wells. Berman
observes that an average gas well in Texas in 2010 produces one-fifth as much gas as an average conventional gas well did in 1972. In 1972,
23,000 gas wells produced 7.5 trillion cubic feet in Texas; in 2010, it took 102,000 wells to produce 6.4 trillion cubic feet. Another reason was
that the spurt of production created a gas glut and drove prices far below the level of profitability. Data from a January, 2012 presentation by the
CEO of gas operator Range Resources showed that gas needs to sell for at least $4 per million BTU in order for operators to turn a profit.
Source: Jonathan Callahan, The Oil Drum. Data from Range Resources. Berman is certain that the $4 threshold applies to new drilling on
existing plays only; after accounting for land leasing, overhead and debt service, the threshold would be much higher. In any case, we can see that
production flattened out when prices fell below $4 at the beginning of 2009. Source: Arthur Berman. Data from Natural Gas Intelligence. A gas
price below $3 spells real trouble for operators, and flagging production is but the first effect. The next is debt: According to analysis by ARC
Financial Research, the 34 top U.S. publicly traded shale gas producers are currently carrying a combined $10 billion
quarterly cash flow deficit. And finally, there will the destruction of forward supply, as new development grinds down.
Financing further development with debt in this environment will be extremely difficult, and eventually even the
joint-venture sugar daddies that have sustained operators over the past few months will get cold feet. Without a reversal
in price, gas production is guaranteed to decline. The gas gold rush is over Indeed, Berman concludes that “the gold rush is over at least for now
with the less commercial shale plays.” Within the major producing areas of the U.S., which account for 75 percent of
production, all except Louisiana have been either flat or declining in recent years. Overall, he sees evidence that 80
percent of existing U.S. shale gas plays are already approaching peak production. Rig counts have been falling, and
major operators such as Chesapeake Energy and ConocoPhilips have announced slowdowns in drilling in the last
month. The two major plays that do not show evidence of peaking yet are the newer ones: the Marcellus Shale in Pennsylvania and the
Haynesville Shale in Louisiana. To see the influence of these two plays on overall production, compare the first chart below, which shows
production from all shale plays, to the second, which removes production from those two plays: Source: Arthur Berman Source: Chart by Chris
Nelder, from Arthur Berman’s worksheets The Haynesville surpassed the Barnett Shale in Texas last year as the top-producing shale play in the
U.S., but it may be reaching a production plateau now. Worse, Berman’s analysis finds that despite its impressive production, the Haynesville is
among the least economic of the shale plays, requiring gas prices above $7.00 per thousand cubic feet to sustain new drilling profitably, and
nearly $9.00 per thousand cubic feet after accounting for leasing and other costs. (One thousand cubic feet is roughly equivalent to one million
BTU.) A word of caution is in order here: A one-year decline in production in an unprofitable environment is not proof that shale gas has
“peaked.” It’s certainly possible that renewed drilling could bring higher production when gas prices rise again. The operative question in that
case is when. If gas prices recover within the next year or two, it will be relatively easy to bring new wells online rapidly. But if gas prices
languish for longer than that, the most productive “core” areas of the plays could become exhausted because the wells deplete so quickly. Without
sustained new drilling to replace their production, by the time producers begin drilling again in the remaining, less productive prospects, an air
pocket could form in the supply line. Disinformation and diffusion theory Berman admits that it’s strange for his bottom-up analysis to produce
results that are so wildly divergent from the claims of the operators and the data offered by the EIA. “I ask myself: Where could we be wrong?”
he explained. “We’ve looked at the individual wells and it looks like they’ll produce less gas than the operators say, so where could we be
wrong? Likewise on cost: There are no retained earnings, so how could they be saying they’re profitable?” Having scrutinized the
financial reports of operators, Berman concludes that operators are being honest with the SEC, because if they
aren’t, somebody will go to jail. But then they’re telling a very different story to the public, and to investors, particularly regarding their
costs. This isn’t necessarily nefarious; it’s really just a way of working around the natural risks associated with new resource development.
They’re playing for the future, not for immediate profitability. Early wildcatters gambled on debt-fueled drilling with the hope that they’d be able
to hold the leases long enough to see prices rise again and put them nicely in the black, or flip them at a profit to someone who could. And the
profit picture is substantial: according to the Range Resources presentation, when gas is $6, they’ll be realizing a 135 percent internal rate of
return. “I think these companies realize—clearly—that the U.S. is moving toward a gas economy,” Berman observes. “The natural gas industry
has been very successful at screwing up the coal industry. . . a huge part of the demand is from the power generation business. The President now
thinks, incorrectly, that we’ve got 100 years of natural gas. [Op’erators think] ‘If we can just get all this land held, drilled, etc., then in a couple of
years when the price recovers we’re going to make a fortune’. . . and they’re right!” I am inclined to agree. My own analysis suggests that gas is
trouncing coal in the power generation sector. I am also strongly against exporting LNG, because it will increase domestic costs across the board,
another point on which Berman and I agree. “If they go through with the permits to export LNG, then that’s gonna seal it,” he remarked. “All you
have to do is commit to 20-year contracts to ship a few bcf per day. . . I fear what’s really going to happen is that we’re going to have to start
importing LNG.” Ultimately, we have to ask why there seems to be such an enormous disconnect between the reality of
the production and reserve data, and the wild-eyed claims of operators and politicians. Berman’s answer is blunt:
“We’re in a weird place where it’s not in anybody’s vested interest to say that things aren’t wonderful ,” he said, and
went on to relate a few stories of his encounters with politicians. They admitted to him, straight-up, that they can’t tell the public
the truth about energy issues like gas reserves and peak oil because nobody wants to hear it, and they’ll just wind up
getting voted out of office. “This gets back to basic diffusion theory,” Berman muses, “where only 5 percent of people
base their decisions on information, while the other 95 percent make decisions on what everybody else thinks.” That
sounds right to me. It benefits everyone involved to tell happy lies, and benefits no one to own up to the current reality. That is true for
everyone from the operators right on up to the President. Perhaps in the end—like government—we’ll simply get the energy policy we
deserve.
Shale gas boom is unsustainable- all easy natgas is gone
Heinber 2012 [Richard, He is Senior Fellow-in-Residence of the Institute and is widely regarded as one of the world’s foremost Peak
Oil educators, He has authored scores of essays and articles that have appeared in such journals as Nature, The Ecologist, The American Prospect,
Public Policy Research, Quarterly Review, Z Magazine, Resurgence, The Futurist, European Business Review, Earth Island Journal, Yes!, Pacific
Ecologist, and The Sun; and on web sites such as Alternet.org, EnergyBulletin.net, TheOilDrum.com, ProjectCensored.com, and
Counterpunch.com.¶ He has appeared in many film and television documentaries, including Leonardo DiCaprio’s 11th Hour, is a recipient of the
M. King Hubbert Award for Excellence in Energy Education, and in 2012 was appointed to His Majesty the King of Bhutan's International
Expert Working Group for the New Development Paradigm initiative, “Gas Bubble Leaking, About to Burst”, http://www.postcarbon.org/blogpost/1262435-gas-bubble-leaking-about-to-burst]
In those early days almost no one wanted to hear about problems with the shale gas boom—the need for
enormous amounts of water for fracking, the high climate impacts from fugitive methane, the threats to
groundwater from bad well casings or leaking containment ponds, as well as the unrealistic supply and
price forecasts being issued by the industry. I recall attempting to describe the situation at the 2010 Aspen Environment
Forum, in a session on the future of natural gas. I might as well have been claiming that Martians speak to me via my tooth fillings. After all, the
Authorities were all in agreement: The game has changed! Natural gas will be cheap and abundant from now on! Gas is better than coal! End of
story! These truisms were echoed in numberless press articles—none more emblematic than Clifford Krauss’s New York Times piece, “There
Will Be Fuel,” published November 16, 2010. Now Krauss and the Times are singing a somewhat different tune. “After the Boom in Natural
Gas,” co-authored with Eric Lipton and published October 21, notes that “. . . the gas rush has . . . been a money loser so far for many of the gas
exploration companies and their tens of thousands of investors.” Krauss and Lipton go on to quote Rex Tillerson, CEO of ExxonMobil: “We are
all losing our shirts today. . . . We’re making no money. It’s all in the red.” It seems gas producers drilled too many wells too quickly, causing gas
prices to fall below the actual cost of production. Sound familiar? The obvious implication is that one way or another the
market will balance itself out. Drilling and production will decline (drilling rates have already started
doing so) and prices will rise until production is once again profitable. So we will have less gas than we currently do, and
gas will be more expensive. Gosh, whoda thunk? The current Times article doesn’t drill very far into the data
that make Berman and Hughes pessimistic about future unconventional gas production prospects—the high
per-well decline rates, and the tendency of the drillers to go after “sweet spots” first so that future
production will come from ever-lower quality sites. For recent analysis that does look beyond the cash flow problems of
Chesapeake and the other frackers, see “Gas Boom Goes Bust” by Jonathan Callahan, and Gail Tverberg’s latest essay, “Why Natural Gas isn’t
Likely to be the World’s Energy Savior”. David Hughes is working on a follow-up report, due to be published in January 2013,
which looks at unconventional oil and gas of all types in North America. As part of this effort, he has
undertaken an exhaustive analysis of 30 different shale gas plays and 21 shale/tight oil plays—over
65,000 wells altogether. It appears that the pattern of rapid declines and the over-stated ability of shale to
radically grow production is true across the U.S., for both gas and oil. In the effort to maintain and grow oil and
gas supply, Americans will effectively be chained to drilling rigs to offset production declines and meet
demand growth, and will have to endure collateral environmental impacts of escalating drilling and fracking. No, shale gas won’t
entirely go away anytime soon. But expectations of continuing low prices (which drive business plans
in the power generation industry and climate strategies in mainstream environmental organizations ) are
about to be dashed. And notions that the U.S. will become a major gas exporter, or that we will convert millions of cars and trucks to run
on gas, now ring hollow.
AT: Renewables increase price
2AC No Link
Renewable energy doesn’t affect electricity prices
Jaffe 6/4 (Mark Jaffe writer for the Denver Post, June 4, 2014. “Meeting renewable energy targets turns out to be inexpensive, according to
NREL study.” http://www.denverpost.com/business/ci_25892100/energy-cheap)//NR
It turns out that adding renewable energy to the electricity generation
mix doesn't end up costing all that much.
Among the 24 states with renewable portfolio standards that were analyzed, the cost of complying between 2010 and 2012 was equal
on average to roughly 1 percent of retail electricity rates —according to a study by the National Renewable Energy
Laboratory in Golden and the Lawrence Berkeley National Laboratory in Berkeley, Calif. In Colorado the cost came to 1 cent per kilowatt-hour
in 2012. The average additional cost in 2012 for renewable energy came to about 2 cents for each kilowatt-
hour. "The cost is fairly modest, though not insignificant," said Galen Barbose, one of the study's co-authors and a Lawrence
Berkeley researcher. There has been upward pressure on the cost of compliance as renewable-energy targets are raised and more renewable
sources are added, Barbose said. In Colorado, the cost of compliance roughly doubled between 2010 and 2012. But because many states,
including Colorado, cap the rate impacts of renewable energy, the pressure likely will not translate to higher bills. In Colorado,
the cost to Xcel Energy customers is capped at 2 percent of a residential bill. The charge, which averaged $1.44 per customer bill in 2012, raises
money for renewable energy projects. Most of the money has gone into Xcel Solar Rewards program for residential and small-business rooftop
solar installations. Since 2006, Solar Rewards has provided $276 million of rebates and incentives to Colorado customers who installed nearly
17,800 photovoltaic systems, the company said.
Link Turn
2AC Generic
Renewable energy massively decreases electricity prices
White 2013 (Bill, manager for the National Clean Energy Transmission Initiative for the Energy Future
Coalition, senior EPA advisor during the Clinton Administration, “The truth about renewable energy:
Inexpensive, reliable, and inexhaustible”, July 27, 2013, Grist, http://grist.org/renewable-energy/the-truthabout-renewable-energy-inexpensive-reliable-and-inexhaustible/)
We’ve all heard the common myths about renewable energy: It’s expensive; it can’t be relied upon; there just isn’t enough
of it to meet our energy needs. But as technological advances and plummeting costs drive explosive growth — U.S. installed
wind capacity has grown sevenfold to nearly 47 gigawatts in the last seven years — real-world experience is shattering long-held
assumptions every day. Even ardent supporters of renewables may be surprised by what we’re learning. Renewable energy actually
reduces electricity prices for businesses and consumers . A new analysis [PDF] conducted by Synapse Energy Economics on behalf of
Americans for a Clean Energy Grid found that adding more wind power to the electric grid could reduce wholesale market
prices by more than 25 percent in the Midwest region by 2020 — $3–$10 per megawatt hour (MWh) in the near term, and up to nearly $50 per
MWh by 2030. Those savings would be passed along to consumers through lowering retail electricity prices by
$65–$200 each year. The reason for this is surprisingly intuitive when you understand that electricity prices are based on the marginal (or
operating) cost of the power plant generating the power. The marginal cost is essentially the cost of fuel, be it coal, natural gas, wind, etc.
Since the fuel cost of renewable resources like wind and solar is zero, adding renewable resources always
pulls down the market price of all the electricity sold in the market whenever it is available . Infrastructure to
connect renewable energy is a great investment. The Synapse analysis also found that new transmission is needed in the Midwest region to tap wind power. New highvoltage transmission lines are large infrastructure investments, but are the smallest part of a typical electricity bill — less than 10 percent, according to the U.S.
Department of Energy. Generation is much more expensive, comprising two-thirds of the average bill. Synapse found that new transmission to
connect more zero-fuel-cost renewable energy would save customers more than double the cost of building it. Again, it makes plain sense that transmission to connect
cleaner and cheaper sources of power is a good deal for customers. Integrating variable renewable resources is easier and cheaper than we thought. There are
challenges to integrating any kind of power into the grid, but the challenges for wind are minimal and well worth the effort. Joe Gardner, executive director of realtime operations for the Midwest Independent Transmission System Operator (MISO, the regional grid for all or part of 12 Midwestern states), told his board of
directors in February that “MISO does not currently anticipate significant operational management issues in the next several years.” This statement is especially
remarkable when one considers the explosive rate of growth in wind on the MISO system: less than 1000 MW in 2008; 11,000 MW today; and more than 14,000 MW
by the end of 2012 — about 10 percent of all generation on the system. Why has integrating so much wind so fast been relatively painless? Geographic diversity: The
wind blows at different times in different places across MISO’s 12-state footprint, smoothing out the variation at any single location. Better forecasting tools make it
easier to accurately predict wind-turbine output. Transmission expansions and upgrades are being approved and constructed, giving operators greater flexibility to
manage all resources and consumers more choices and competition. Grid operators around the country and the globe are gaining experience and learning from each
other as they successfully integrate ever larger amounts of renewable energy into their systems. America has far more than enough renewable energy resources to meet
its entire electric demand. World-class renewable resources from wind in the Great Plains to solar in the Southwest could power the whole country more than a dozen
times over. The fuel for these power plants, wind and sunlight, are unlimited and will always be free. State renewable energy standards once considered ambitious at
10 to 40 percent now look modest in light of recent growth. Given our current understanding of renewable energy resources, technology, cost, and integration, it’s
now realistic to envision a future where renewable resources provide far higher shares of America’s electric generation needs — 80 to 90 percent or more. The only
remaining barriers to achieving such massive increases in renewable energy use are a lack of understanding and a lack of political will. We are overcoming the former
as we discover the truth about renewable energy. It’s inexpensive, reliable, abundant, all-American — and yes, it’s still clean.
2AC Solar
Turn - Solar power lowers the price of electricity
Farrell 12 (Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand
the benefits of local ownership and dispersed generation of renewable energy, (John “How Distributed Solar Power Can Lower Electricity Prices,” CleanTechnica,
February 13, 2012, http://cleantechnica.com/2012/02/13/how-distributed-solar-can-reduce-electricity-prices/)//NR
What if installing more solar could reduce electricity prices? It’s already happening in Germany,
world leader in solar power, and it’s likely to happen in the U.S., too. Right now, the idea of solar reducing electricity prices seems
silly. After all, when subsidies aren’t factored in, the cost of residential solar will be higher than residential retail electricity prices in all but 3 states until after
2016. But solar has two key factors in its favor:
1.Electricity, like many things, costs more when in high
demand. And while many U.S. ratepayers on are flat rate electricity plans, the truth is that their utility
pays more to deliver electricity on those hot, sunny afternoons in the summer when air conditioners
are running like mad. Utilities call these times “peak periods,” when electricity use spikes and they
have to turn on every last power plant. 2.Solar PV arrays tend to produce at their best during these
peak periods. The following chart shows how PG&E (a California utility) charges significantly more for electricity during the afternoon hours when
demand is high, and how a south-facing, fixed-tilt solar array can produce a lot of electricity during those peak hours. Solar output can actually match this peak
curve better, if the panels are angled toward the southwest rather than due south, resulting in more late afternoon output. Either way, however, solar
adds
electricity to the electricity system when it needs it most. And when that happens, it supplants electricity that
was previously supplied by the dirtiest and most costly fossil fuel “peaking” power plants.
2AC Win
Wind energy decreases electricity prices
Bloomberg 2012 (Tom Randall, energy correspondent for Bloomberg, “Wind Innovations Drive Down Costs, Stock Prices”, March 14,
2012, http://go.bloomberg.com/multimedia/wind-innovations-drive-down-costs-stock-prices/)//NR
The world’s wind-power capacity increased 113-fold over the past 20 years. As
installations increase, turbines become more efficient
and electricity prices decline . For a growing number of countries, this means wind power is now cheaper than conventional
energy sources, even without government subsidies. Wind's ‘Learning Curve’ This chart shows how the cost of producing a wind turbine falls as more
turbines are produced. The improved efficiencies of technology and scale -- the industry's learning curve -- reduce wind-power
prices by 7 percent every time installed capacity doubles. The price for a megawatt of wind power dropped by almost half since 1991. The global turbine
price is currently lower than the industry's historic learning curve by about 60,000 euros ($78,000) per megawatt. Oversupply and competition from China have led
manufacturers like Vestas, the world's largest turbine maker, to cut prices. The company's shares tumbled 68 percent in the last year. Wind's Golden Goal Wind
electricity providers have begun to reach what energy experts call the "golden goal" of grid parity, when operating fields of wind turbines is as cheap as burning coal
or natural gas. Falling natural gas prices makes it harder for wind to compete in the US, despite its good wind resources. However, rising natural gas prices in Europe
are making wind more competitive Countries with high power prices and strong winds are already past parity: Brazil, Italy, Argentina, Canada, the U.K. and Portugal.
As time passes, the country bubbles expand to represent growing capacity and shift right to reflect increased turbine efficiency. "The cost of producing wind energy
needs to come down to reach parity," said Stefan Linder, an analyst at Bloomberg New Energy Finance. "However in
the best locations onshore
wind is already competitive with fossil fuel electricity, and most wind farms in fair resource areas will be at parity
by 2016." Use the sliders above to calculate when wind power is competitive with fossil fuels without subsidies.
AT: Manufacturing
Internal link defense
Energy costs don’t change manufacturing competitiveness
Levi 12 (Michael Levi- senior fellow for energy and the environment at Council on
Foreign Relations, director of CFR Program on Energy Security and Climate
Change.May 16, 2012, "Energy and U.S. Manufacturing: Five Things to Think
About," CFR blogs.cfr.org/levi/201205/16/energy-and-u-s-manufacturing-fivethings-to-think-about/)
The boom in U.S. oil and gas production has sparked talk of a manufacturing renaissance. I mentioned that
somewhat skeptically last week in the context of a much broader piece on the excitement surrounding surging U.S. oil and gas output. I want to
drill down on / five important issues here. Some of this thinking is preliminary, so as always, feedback is most welcome. Energy is of
marginal importance to most manufacturing. Most U.S. manufacturing is not energy intensive. Joe Aldy and
Billy Pizer reported in a 2009 paper that only one tenth of U.S. manufacturing involved energy costs exceeding five
percent of the total value of shipments. These industries – the most prominent of which are iron and steel, primary aluminum, bulk cement,
chemicals, paper, and glass – are what we are talking about when we discuss the potential for an energy-driven manufacturing boom. The size
of these sectors would need to grow enormously to have revolutionary consequences for the fate of the
U.S. manufacturing sector. Avoiding substantial decline, though, could be more feasible. Manufacturing growth tied to
cheap natural gas is mostly a chemicals story. Take a look at the sweep of major energy-intensive industries, and you’ll find that
most are still quite insensitive to energy prices. IHS-CERA, which is not shy about extolling the benefits of the “shale gale” (a term it coined),
surveyed these areas in an ANGA-fundedstudy on shale jobs late last year and came to some striking conclusions. Aluminum: “Lower U.S.
natural gas prices could potentially slow or even halt the slow decay in the aluminum industry. However , it is unlikely that they would
change the economics of primary aluminum production enough, even in the long-term, to redirect investment here.” Steel: “Cheaper
electricity [due to low gas prices] will have only a small positive effect on this industry in terms of profitability
and competitiveness.” Cement: “The electricity fraction of costs for cement production is too small to generate a significant impact on
competitiveness, and the cost savings are not expected to cause production expansion and capacity investment.”
AT: Deterrence
Deterrence fails- based on flawed assumptions and guarantees extinction.
Krieger 2000 (David Krieger, Founder of the Nuclear Age Peace Foundation, April 7, 2000. “The Irrationality of Deterrence: A Modern
Zen Koan.” http://www.wagingpeace.org/the-irrationality-of-deterrence-a-modern-zen-koan/)//NR
The concept of deterrence, which underlies the nuclear weapons policies of the United States and other nuclear weapons states,
presupposes human rationality in all cases. It is based upon the proposition that a rational person will not attack you if he
understands that his country will be subject to unacceptable damage by retaliation. What rational person would want his
country to be exposed to unacceptable damage? Perhaps one who miscalculates. A rational person could believe that he could
take action X, and that would not be sufficient for you to retaliate . Saddam Hussein, for example, believed that he could invade
Kuwait without retaliation from the United States. He miscalculated, in part because he had been misled by the American Ambassador to Iraq
who informed him that the US would not retaliate. Misinformation, misunderstanding, or misconstruing information could
lead a rational person to miscalculate. We don't always get our information straight, and we seldom have all of the facts. Even more
detrimental to the theory of deterrence is irrationality. Can anyone seriously believe that humans always act rationally? Of course
not. We are creatures who are affected by emotions and passions as well as intellect. Rationality is not to be relied upon.
People do not always act in their own best interests. Examples abound. Almost everyone knows that smoking causes terrible diseases
and horrible deaths, and yet hundreds of millions of people continue to smoke. We know that the stock markets are driven by passions as much as
they are by rationality. The odds are against winning at the gambling tables in Las Vegas, and yet millions of people accept the odds, believing
that they can win despite the odds. Nuclear deterrence is based on rationality - the belief that a rational leader will not attack a country
with nuclear weapons for fear of retaliation. And yet, it is clearly irrational to believe that rationality will always prevail .
Let me put it another way. Isn't it irrational for a nation to rely upon deterrence, which is based upon humans always acting rationally (which they
don't), to provide for its national security? Those who champion deterrence appear rational, but in fact prove their irrationality
by their unfounded faith in human rationality. With nuclear deterrence, the deterring country threatens to retaliate with nuclear
weapons if it is attacked. What if a country is attacked by nuclear weapons, but is unable to identify the source of the attack? How
does it retaliate? Obviously, it either guesses, retaliates against an innocent country, or doesn't retaliate. So much for deterrence. What if a
national leader or terrorist with a nuclear weapon believed he could attack without being identified? It doesn't matter whether he is right or wrong.
It is his belief that he is unidentifiable that matters. So much for deterrence. What if a leader of a country doesn't care if his country is retaliated
against? What if he believes he has nothing more to lose, like a nuclear-armed Hitler in his bunker? So much for deterrence. It takes only minimal
analysis to realize that nuclear deterrence is a fool's game. The unfortunate corollary is that those who propound nuclear deterrence are fools in
wise men's garb. The further corollary is that we have entrusted the future of the human species to a small group of fools. These include the
political and military leaders, the corporate executives who support them and profit from building the weapons systems, and the academics and
other intellectuals like Henry Kissinger, who provide the theoretical underpinnings for the concept of deterrence. Eleven years after the fall of the
Berlin Wall and the end of the Cold War, we continue to live in a world in which a small number of nations rely upon the theory of
deterrence to provide for their national security. In doing so, they threaten to kill tens of millions or perhaps hundreds of millions of innocent
people by retaliation should deterrence fail. To perhaps state what should be obvious, but doesn't appear to our leaders to be: This is highly
immoral. It also sets an extremely bad example for other states, whose leaders just might be thinking: If the strongest nations in the
world are continuing to rely upon nuclear weapons for their national security, shouldn't we be doing so also? Fortunately, most leaders in most
countries are concluding that they should not. There is only one way out of the dilemma we are in, and that is to begin immediately to abolish
nuclear weapons. This happens also to be required by international law as stated in Article VI of the Non-Proliferation Treaty and as decided
unanimously in the 1996 opinion of the International Court of Justice: "There exists an obligation to pursue in good faith and bring to a
conclusion negotiations leading to nuclear disarmament in all its aspects under strict and effective international control." Morality, the law, and
rationality converge in the need to rid the world of nuclear weapons. This is the greatest challenge of our time. The will of the people on this issue
is being blocked by only a few leaders in a few countries. As the world's most powerful nation, leadership should fall most naturally to the United
States. Unfortunately, the policies of the United States have been driven by irrationality to the detriment of our own national security and the
future of life on our planet. This is unlikely to change until the people of the United States exercise their democratic rights and demand policies
that will end the nuclear threat to humanity. These include: negotiating a multilateral treaty for the phased elimination of nuclear weapons under
strict and effective international control; de-alerting nuclear weapons and separating warheads from delivery vehicles; making pledges of No First
Use of nuclear weapons under any circumstances; stopping all nuclear testing and ratifying the Comprehensive Test Ban Treaty; reaffirming the
1972 Anti-Ballistic Missile Treaty; and applying strict international safeguards to all weapons-grade fissile materials and agreeing to no further
production of such materials. The sound of one hand clapping is silence. That is the sound of most people in most places in response to the
nuclear weapons policies of the nuclear weapons states. While they do not applaud these policies with both hands, they also do not raise their
voices to oppose them. The sound of one finger pressing the button is the sound of a deeper silence, brought about by unrelenting apathy. It is the
sound of the silence before a more final silence. It is an unbearable silence `for its consequences are beyond our power to repair. It is a silent
death knell for humanity. We must raise our voices now with passion and commitment to prevent this pervasive silence from becoming the
sound of our world.
AT: Hegemony
Lots of factors prevent great power conflict without hegemony
Fettweis 10 (Christopher J. Professor of Political Science at Tulane, Dangerous Times-The
International Politics of Great Power Peace, pg. 175-6)
If the only thing standing between the world and chaos is the US military presence, then an adjustment in grand strategy would be exceptionally
of the other explanations for the decline of war – nuclear
weapons, complex economic interdependence, international and domestic political institutions,
counter-productive. But it is worth recalling that none
evolution in ideas and norms – necessitate an activist America to maintain their validity. Were
American to become more restrained, nuclear weapons would still affect the calculations of the
would be aggressor; the process of globalization would continue, deepening the complexity of
economic interdependence; the United Nations could still deploy peacekeepers where necessary; and democracy would
not shrivel where it currently exists. More importantly, the idea that war is a worthwhile way to resolve
conflict would have no reason to return. As was argued in chapter 2, normative evolution is typically unidirectional. Strategic
restraint in such a world be virtually risk free.
Statistically unipolarity is THE most conflict prone system
Montiero 12 [Nuno P. Monteiro is Assistant Professor of Political Science at Yale University, “Unrest
Assured: Why Unipolarity is Not Peaceful”, International Security, Vol. 36, No. 3 (Winter 2011/12), pp.
9–40, Chetan]
Wohlforth claims not only that the unipole can stave off challenges and preclude major
power rivalries, but also that it is able to prevent conflicts among other states and create incentives for them
to side with it. 39 The unipole’s advantage is so great that it can settle any quarrel in which it intervenes. As Wohlforth writes, “For as long as
unipolarity obtains....second-tier states are less likely to engage in conflict-prone rivalries for
security or prestige. Once the sole pole takes sides, there can be little doubt about which party will prevail.” 40 This is the core logic of Wohlforth’s argument that unipolarity is peaceful. But
what specifically does his argument say about each of the six possible kinds of war I identified in the previous section? Clearly, great power war is impossible in a unipolar world. In Wohlforth’s
famous formulation: “Two states measured up in 1990. One is gone. No new pole has appeared: 2 1
1.” 41 Furthermore, by arguing
that unipolarity precludes hegemonic rivalries, Wohlforth makes no room for wars between the sole great power and major powers. These are, according to him, the two main reasons why a
unipolar world is peaceful. Unipolarity, he writes, “means the absence of two big problems that bedeviled the statesmen of past epochs: hegemonic rivalry and balance-of-power politics among
major powers.” 42 I agree with Wohlforth on these two points, but they are only part of the picture. Granted, the absence of great power wars is an important contribution toward peace, but great
power competition—and the conflict it might engender—would signal the emergence of one or more peer competitors to the unipole, and thus indicate that a transition to a bipolar or multipolar
system was already under way. In this sense, great power conflict should be discussed within the context of unipolar durability, not unipolar peace. Indeed, including this subject in discussions of
unipolar peacefulness parallels the mistakes made in the debate about the Cold War bipolar system. Then, arguments about how the two superpowers were unlikely to fight each other were often
taken to mean that the system was peaceful. This thinking ignored the possibility of wars between a superpower and a lesser state, as well as armed conflicts among two or more lesser states,
often acting as great power proxies. 43 In addition,
Wohlforth claims that wars among major powers are unlikely, because
the unipole will prevent conflict from erupting among important states. He writes, “The sole pole’s power advantages matter only to the degree that it is engaged, and it is most likely to be
engaged in politics among the other major powers. 44 I agree that if the unipole were to pursue a strategy of defensive dominance, major power wars would be unlikely. Yet, there is no
compelling reason to expect that it will always follow such a course. Should the unipole decide to disengage, as Wohlforth implies, major power wars would be possible. At the same time,
Wohlforth argues that the unipole’s power preponderance makes the expected costs of balancing prohibitive, leading minor powers to bandwagon. This is his explanation for the absence of wars
between the sole great power and minor powers. But, as I show, the costs of balancing relative to bandwagoning vary among minor powers. So Wohlforth’s argument underplays the likelihood of
Although power preponderance allows the unipole
to manage conflicts globally, this argument is not meant to apply to relations between
major and minor powers, or among the latter. As Wohlforth explains, his argument “applies with less force to potential security competition between regional
this type of war. Finally, Wohlforth’s argument does not exclude all kinds of war.
powers, or between a second-tier state and a lesser power with which the system leader lacks close ties.” 45 Despite this caveat, Wohlforth does not fully explore the consequences of potential
How well, then, does the argument that
unipolar systems are peaceful account for the first two decades of unipolarity since the end of the Cold
conflict between major and minor powers or among the latter for his view that unipolarity leads to peace.
War? Table 1 presents a list of great powers divided into three periods: 1816 to 1945, multipolarity; 1946 to 1989, bipolarity; and since 1990, unipolarity. 46 Table 2 presents summary data about
Unipolarity is the most conflict prone of all the systems, according
to at least two important criteria: the percentage of years that great powers spend at war and
the incidence of war involving great powers. In multipolarity, 18 percent of great power years were spent at war. In bipolarity, the ratio is 16
percent. In unipolarity, however, a remarkable 59 percent of great power years until now were spent at
the incidence of war during each of these periods.
war. This is by far the highest percentage in all three systems. Furthermore, during periods of multipolarity and bipolarity, the
probability that war involving a great power would break out in any given year was, respectively, 4.2
percent and 3.4 percent. Under unipolarity, it is 18.2 percent—or more than four times higher. 47 These figures
provide no evidence that unipolarity is peaceful. 48 In sum, the argument that unipolarity makes for peace is heavily weighted toward
interactions among the most powerful states in the system. This should come as no surprise given that Wohlforth makes a structural argument: peace flows from the unipolar structure of
analyses of the international system are usually
centered on interactions between great powers. 50 As Waltz writes, “The theory, like the story, of international politics is written in terms of
the great powers of an era.” 51 In the sections that follow, however, I show that in the case of unipolarity, an investigation of its
peacefulness must consider potential causes of conflict beyond interactions between the most
important states in the system.
international politics, not from any particular characteristic of the unipole. 49 Structural
Heg is resilient
Wohlforth 7 (William, Professor of Government – Dartmouth College, “Unipolar Stability”, Harvard
International Review, Spring, http://hir.harvard.edu/articles/1611/3/)
US military forces are stretched thin, its budget and trade deficits are high, and the country continues to finance its profligate ways by borrowing
from abroad—notably from the Chinese government. These developments
have prompted many analysts to warn that the U nited
S tates suffers from “imperial overstretch.” And if US power is overstretched now, the argument goes, unipolarity can hardly be
sustainable for long. The problem with this argument is that it fails to distinguish between actual and latent power. One must be careful to take
into account both the level of resources that can be mobilized and the degree to which a government actually tries to mobilize them. And how
much a government asks of its public is partly a function of the severity of the challenges that it faces. Indeed, one can never know for sure what
a state is capable of until it has been seriously challenged. Yale historian Paul Kennedy coined the term “imperial overstretch” to describe the
situation in which a state’s actual and latent capabilities cannot possibly match its foreign policy commitments. This situation should be
contrasted with what might be termed “self-inflicted overstretch”—a situation in which a state lacks the sufficient resources to meet its current
foreign policy commitments in the short term, but has untapped latent power and readily available policy choices that it can use to draw on this
power. This is arguably the situation that the United States is in today.
But the US government has not attempted to extract more
resources from its population to meet its foreign policy commitments. Instead, it has moved strongly in the opposite direction by
slashing personal and corporate tax rates. Although it is fighting wars in Afghanistan and Iraq and claims to be fighting a global “war”
on terrorism, the U nited S tates is not acting like a country under intense international pressure. Aside from the volunteer
servicemen and women and their families, US citizens have not been asked to make sacrifices for the sake of national prosperity and
security. The country could clearly devote a greater proportion of its economy to military spending : today it spends
only about 4 percent of its GDP on the military, as compared to 7 to 14 percent during the peak years of the Cold War. It could
also spend its military budget more efficiently, shifting resources from expensive weapons systems to boots on
the ground. Even more radically, it could reinstitute military conscription, shifting resources from pay and benefits to
training and equipping more soldiers. On the economic front, it could raise taxes in a number of ways, notably on fossil
fuels, to put its fiscal house back in order. No one knows for sure what would happen if a US president undertook such drastic
measures, but there is nothing in economics, political science, or history to suggest that such policies would be any
less likely to succeed than China is to continue to grow rapidly for decades. Most of those who study US politics would argue that
the likelihood and potential success of such power-generating policies depends on public support, which is a function
of the public’s perception of a threat. And as unnerving as terrorism is, there is nothing like the threat of another hostile power
rising up in opposition to the United States for mobilizing public support. With latent power in the picture, it becomes
clear that unipolarity might have more built-in self-reinforcing mechanisms than many analysts realize. It is often
noted that the rise of a peer competitor to the United States might be thwarted by the counterbalancing actions of neighboring powers. For
example, China’s rise might push India and Japan closer to the United States—indeed, this has already happened to some extent. There is also the
rival that comes to be seen as a threat would create strong incentives for the U nited
S tates to end its self-inflicted overstretch and tap potentially large wellsprings of latent power.
strong possibility that a peer
Econ internal link defnese
US economy not reliant on manufacturing – innovation economy
Hassett 10 (Kevin, director of economic-policy studies at the American Enterprise Institute, “Obama's
Obsession Drives Progress in Reverse: Kevin Hassett,” 8-15-10, http://www.bloomberg.com/news/201008-16/obama-s-obsession-drives-progress-in-reverse-commentary-by-kevin-hassett.html)
Manufacturing has been on a more-or-less-steady decline as a share of national output for decades, part
of the natural evolution of the U.S. economy. It’s time politicians stop calling this a national crisis. Lots of firms went
bankrupt during the recession without the federal government sweeping in to save them. Big manufacturing
firms had to be rescued because of their symbolic power. Massive government intervention, it seems, is advisable to save the auto industry
because manufacturing output is somehow more valuable than other types of output. Like the rest of Obama’s economic policy,
the foundation for this idea is nonexistent. Small wonder his economists are quitting. Plan Power Later in his talk at GM, Obama
pledged “to insist that management, workers, creditors, suppliers, dealers, shareholders, everybody get together and come up with a plan so that
we can start building for the future.” I guess that means the problem with the American auto industry was not that the automakers were swamped
by insanely high labor costs after years of unwise concessions to unions; the problem was that we never had a presidential orator brilliant enough
to urge everyone to get together and craft a plan to save manufacturing. Truth is, we already know Obama’s plan: to tax you to keep the rustladen, union-heavy industrial sector afloat. Sadly, similar thinking seems to be catching like a plague. Two days before the
president’s speech, the House voted 379 to 38 to pass H.R. 4692, which recommends establishing a
presidential task force to create a National Manufacturing Strategy to revive U.S. industries . Special Treatment
You might ask, what’s the harm in yet another government study? Here’s what. One provision in the bill would require
the president to include, in each year’s federal budget, information on how the spending plan advances the manufacturing strategy. That would
give manufacturing special treatment in every budget. Manufacturing has been declining as a share of U.S. gross
domestic product for some time, from about 28 percent in 1950 to about 11 percent in 2009. Any
economist can tell you that this decline is not necessarily a cause for concern. Over the past few decades, our
economy has transformed dramatically, and the importance of innovation has increased sharply. A 2006
study by the Federal Reserve found that investment in intangible capital is more important today, in the aggregate,
than investment in tangible capital. We have become an ideas economy . That’s not a problem. It’s
economic evolution, a natural and positive force. The agricultural sector has seen a similar decline in the
last 60 years, falling to 1 percent of GDP from roughly 7 percent.
Manufacturing not key to competitiveness – innovation, education
Summers 10 (Larry, former Secretary of the Treasury, “Farewell Address at the Economic Policy
Institute,” 12-13-10,
http://delong.typepad.com/sdj/2010/12/lawrence-h-summers-farewell-address-at-the-economic-policyinstitute.html)
In a demand constrained economy like the one we have today and will have for several years, economics
is turned topsy-turvy. As Keynes pointed out in his celebrated Paradox of Thrift, individual efforts to save more lead to less total saving.
More educated workers get jobs but with demand constraints those job opportunities come at the expense
of their less educated neighbors. With demand constraints, increases in productivity may act to exacerbate
deflationary pressures and increases in efficiency may result in more unemployment rather than more output. That
is why we have to drive recovery and remove the demand constraint on the economy. At the same time, it is
essential that we recognize that fiscal and monetary policy or increases in demand never made a society
prosperous, fair, or strong. We need to renew the American economy for a century that will be very different from its predecessor. A
key lesson that management strategists have distilled for businesses is this: you don't succeed by
producing exactly the same thing that other people are producing in the same way just at a lower cost. You
succeed, by establishing your own uniqueness and excellence. Think of the distinctiveness of products like Google's search engine; the iPad or a
Harley-Davidson. Think of the distinctive way that Southwest or Nucor or even Walmart deliver their
products and services. The United States has led the global economy by building on its unique
capacities. By building on our distinctive strengths, we can continue to lead in the next century. There is no going back to the
past. Technology is accelerating productivity in mass production to the point where even China has seen
manufacturing employment decline by more than ten million jobs over the most recent decade for which data is available. We are
moving towards a knowledge and service economy . Another inescapable truth is that the world is shrinking. When I
worked in Jakarta just 30 years ago I tried to follow the Red Sox. When the Red Sox played on Tuesday night, I learned how they did on Friday
because I had to wait until the Herald Tribune arrived days later. It is a different: a smaller world. What does it mean to adapt to this? Just as the
American North prospered even as the southern part of the United States caught up, even as we drew strength in the generation after World War
II as Europe and Japan's economies converged towards our own, we will need to find ways to prosper as the emerging markets of the world take
their place on the global stage. What should our approach be? Some suggest that we have no alternative but to compete
with the world on price even if it means striving to win races to the bottom. They would have workers
sacrifice wages, benefits, and bargaining rights to hold onto their jobs. They would slash taxes on businesses even as
their profits rise in order to lure them to stay in the United States. They would shred social safety nets in the name of self-reliance. Such Social
Darwinism was bad morality and bad economics in the 19th century and it is no better in the 21st. Consider this: The flatness of the
world notwithstanding, by far the largest part of the activities Americans engage in and the goods they
buy remain quite local. It is health care and retail services, recreation and education, haircuts and insurance policies, hotels and houses
and I could go on. Moreover, where we compete with other countries, our strength is collective. Few of us can hope to succeed as individuals in a
global economy where any particular task or skill can be purchased at very low prices in much of Asia and beyond. Rather, our strength
must come from establishing uniqueness, establishing that which is difficult to replicate, that which comes from
more collective action. Any idea or machine or even individual capacity can be transplanted. Far harder to
transplant, imitate, or emulate are our great institutions – the national laboratories and the national parks and the
national highway system, great universities and great cities and great technology clusters, a diverse culture, deep capital markets, and a
tremendous ethic. Where competition is concerned, the lesson for us as a nation is the same as the lesson
for
business: far better to compete by innovating, leading, and competing on strength, than by standing still,
and reducing prices. Let me highlight what I see in this regard as the three essential priorities for the years ahead. President Clinton used
to say that in a world where ideas can move, capital can move, a nation's distinctive strength lay in its people. Our biggest failing as a nation over
the last 50 years has been with respect to education. We were once the envy of the world; now we struggle to get into the top half of OECD
nations. The Duke of Wellington famously observed that the Battle of Waterloo had been won on the playing fields of Eton, and I would suggest
that in this less elitist age, the battle for America's future will be won or lost in its public schools. For too long we have been caught in a sterile
debate between those who believe in more accountability and those who see the need for more resources. In truth, no one who has seen the
conditions in our urban schools can deny the need for more resources, and no one who believes in incentives can deny the need for more
accountability. Through Race to the Top the Administration has sought to reform elementary and secondary education both by providing
resources and by increasing accountability. These kinds of efforts will need to be magnified in the future.
Econ impact defense
Economic decline doesn’t cause war
Tir 10 [Jaroslav Tir - Ph.D. in Political Science, University of Illinois at Urbana-Champaign and is an
Associate Professor in the Department of International Affairs at the University of Georgia, “Territorial
Diversion: Diversionary Theory of War and Territorial Conflict”, The Journal of Politics, 2010, Volume
72: 413-425)]
Empirical support for the economic growth rate is much weaker. The finding that poor economic
performance is associated with a higher likelihood of territorial conflict initiation is significant only in
Models 3–4.14 The weak results are not altogether surprising given the findings from prior literature. In
accordance with the insignificant relationships of Models 1–2 and 5–6, Ostrom and Job (1986), for example, note that the likelihood that a
U.S. President will use force is uncertain, as the bad economy might create incentives both to divert the
public’s attention with a foreign adventure and to focus on solving the economic problem, thus reducing
the inclination to act abroad. Similarly, Fordham (1998a, 1998b), DeRouen (1995), and Gowa (1998) find no relation
between a poor economy and U.S. use of force. Furthermore, Leeds and Davis (1997) conclude that the conflictinitiating behavior of 18 industrialized democracies is unrelated to economic conditions as do Pickering
and Kisangani (2005) and Russett and Oneal (2001) in global studies. In contrast and more in line with my findings of a significant
relationship (in Models 3–4), Hess and Orphanides (1995), for example, argue that economic recessions are linked with forceful action by an
incumbent U.S. president. Furthermore, Fordham’s (2002) revision of Gowa’s (1998) analysis shows some effect of a bad economy and DeRouen
and Peake (2002) report that U.S. use of force diverts the public’s attention from a poor economy. Among cross-national studies, Oneal and
Russett (1997) report that slow growth increases the incidence of militarized disputes, as does Russett (1990)—but only for the United States;
slow growth does not affect the behavior of other countries. Kisangani and Pickering (2007) report some significant associations, but they are
sensitive to model specification, while Tir and Jasinski (2008) find a clearer link between economic underperformance and increased attacks on
domestic ethnic minorities. While none of these works has focused on territorial diversions, my own inconsistent findings for economic growth fit
well with the mixed results reported in the literature.15 Hypothesis 1 thus receives strong support via the unpopularity variable but only weak
support via the economic growth variable. These
results suggest that embattled leaders are much more likely to
respond with territorial diversions to direct signs of their unpopularity (e.g., strikes, protests, riots) than to
general background conditions such as economic malaise. Presumably, protesters can be distracted via territorial diversions
while fixing the economy would take a more concerted and prolonged policy effort. Bad economic conditions seem to motivate only the most
serious, fatal territorial confrontations. This implies that leaders may be reserving the most high-profile and risky diversions for the times when
they are the most desperate, that is when their power is threatened both by signs of discontent with their rule and by more systemic problems
plaguing the country (i.e., an underperforming economy).
No escalation
Robert Jervis 11, Professor in the Department of Political Science and School of International and
Public Affairs at Columbia University, December 2011, “Force in Our Times,” Survival, Vol. 25, No. 4,
p. 403-425
Even if war is still seen as evil, the security community could be dissolved if severe conflicts of interest
were to arise. Could the more peaceful world generate new interests that would bring the members of the
community into sharp disputes? 45 A zero-sum sense of status would be one example, perhaps linked to a
steep rise in nationalism. More likely would be a worsening of the current economic difficulties, which
could itself produce greater nationalism, undermine democracy and bring back old-fashioned beggar-myneighbor economic policies. While these dangers are real, it is hard to believe that the conflicts could
be great enough to lead the members of the community to contemplate fighting each other. It is not so
much that economic interdependence has proceeded to the point where it could not be reversed – states
that were more internally interdependent than anything seen internationally have fought bloody civil wars.
Rather it is that even if the more extreme versions of free trade and economic liberalism become
discredited, it is hard to see how without building on a preexisting high level of political conflict leaders
and mass opinion would come to believe that their countries could prosper by impoverishing or even
attacking others. Is it possible that problems will not only become severe, but that people will entertain
the thought that they have to be solved by war? While a pessimist could note that this argument does not
appear as outlandish as it did before the financial crisis, an optimist could reply (correctly, in my view)
that the very fact that we have seen such a sharp economic down-turn without anyone suggesting that
force of arms is the solution shows that even if bad times bring about greater economic conflict, it will
not make war thinkable.
No impact – econ decline doesn’t cause war
Barnett ‘9 (Thomas P.M. Barnett, senior managing director of Enterra Solutions LLC, “The New Rules: Security Remains Stable Amid
Financial Crisis,” 8/25/2009)
When the global financial crisis struck roughly a year ago, the blogosphere was ablaze with all sorts of
scary predictions of, and commentary regarding, ensuing conflict and wars -- a rerun of the Great Depression
leading to world war, as it were. Now, as global economic news brightens and recovery -- surprisingly led by China and emerging markets -- is
the talk of the day, it's interesting to look back over the past year and realize how globalization's
first truly worldwide
recession has had virtually no impact whatsoever on the international security landscape. None of
the more than three-dozen ongoing conflicts listed by GlobalSecurity.org can be clearly attributed to the global
recession. Indeed, the last new entry (civil conflict between Hamas and Fatah in the Palestine) predates the economic crisis by a year, and
three quarters of the chronic struggles began in the last century. Ditto for the 15 low-intensity conflicts listed by Wikipedia (where the latest entry
is the Mexican "drug war" begun in 2006). Certainly, the Russia-Georgia conflict last August was specifically timed, but by most accounts the
opening ceremony of the Beijing Olympics was the most important external trigger (followed by the U.S. presidential campaign) for that sudden
spike in an almost two-decade long struggle between Georgia and its two breakaway regions. Looking over the various databases, then, we see a
most familiar picture: the usual mix of civil conflicts, insurgencies, and liberation-themed terrorist movements. Besides the recent Russia-Georgia
dust-up, the only two potential state-on-state wars (North v. South Korea, Israel v. Iran) are both tied to one side acquiring a nuclear weapon
capacity -- a process wholly unrelated to global economic trends. And with
the United States effectively tied down by its two
ongoing major interventions (Iraq and Afghanistan-bleeding-into-Pakistan), our involvement elsewhere around the
planet has been quite modest, both leading up to and following the onset of the economic crisis: e.g., the usual counter-drug efforts in
Latin America, the usual military exercises with allies across Asia, mixing it up with pirates off Somalia's coast). Everywhere else we find serious
instability we pretty much let it burn, occasionally pressing the Chinese -- unsuccessfully -- to do something. Our new Africa Command, for
example, hasn't led us to anything beyond advising and training local forces. So, to sum up: * No significant uptick in mass violence or unrest
(remember the smattering of urban riots last year in places like Greece, Moldova and Latvia?); * The usual frequency maintained in civil conflicts
(in all the usual places); * Not a single state-on-state war directly caused (and no great-power-on-great-power crises even triggered); * No great
improvement or disruption in great-power cooperation regarding the emergence of new nuclear powers (despite all that diplomacy); * A modest
scaling back of international policing efforts by the system's acknowledged Leviathan power (inevitable given the strain); and * No serious efforts
by any rising great power to challenge that Leviathan or supplant its role. (The worst things we can cite are Moscow's occasional deployments of
strategic assets to the Western hemisphere and its weak efforts to outbid the United States on basing rights in Kyrgyzstan; but the best include
China and India stepping up their aid and investments in Afghanistan and Iraq.) Sure, we've
finally seen global defense spending
surpass the previous world record set in the late 1980s, but even that's likely to wane given the stress on public
budgets created by all this unprecedented "stimulus" spending. If anything, the friendly cooperation on
such stimulus packaging was the most notable great-power dynamic caused by the crisis. Can we say that the
world has suffered a distinct shift to political radicalism as a result of the economic crisis? Indeed, no. The world's major economies
remain governed by center-left or center-right political factions that remain decidedly friendly to both
markets and trade. In the short run, there were attempts across the board to insulate economies from immediate
damage (in effect, as much protectionism as allowed under current trade rules), but there was no great slide into "trade wars."
Instead, the World Trade Organization is functioning as it was designed to function, and regional efforts
toward free-trade agreements have not slowed. Can we say Islamic radicalism was inflamed by the economic crisis? If it was,
that shift was clearly overwhelmed by the Islamic world's growing disenchantment with the brutality displayed by violent extremist groups such
as al-Qaida. And looking forward, austere economic times are just as likely to breed connecting evangelicalism as disconnecting fundamentalism.
At the end of the day, the economic crisis did not prove to be sufficiently frightening to provoke major economies into establishing global
regulatory schemes, even as it has sparked a spirited -- and much needed, as I argued last week -- discussion of the continuing viability of the
U.S. dollar as the world's primary reserve currency. Naturally, plenty of experts and pundits have attached great significance to this debate, seeing
in a world of globally
integrated production chains and interconnected financial markets, such "diverging interests" hardly
constitute signposts for wars up ahead. Frankly, I don't welcome a world in which America's fiscal profligacy goes undisciplined,
in it the beginning of "economic warfare" and the like between "fading" America and "rising" China. And yet,
so bring it on -- please! Add it all up and it's fair to say that this
global financial crisis has proven the great resilience of
America's post-World War II international liberal trade order.
No empirical support for diversionary theory
Tir 10 [Jaroslav Tir - Ph.D. in Political Science, University of Illinois at Urbana-Champaign and is an
Associate Professor in the Department of International Affairs at the University of Georgia, “Territorial
Diversion: Diversionary Theory of War and Territorial Conflict”, The Journal of Politics, Vol. 72, No. 2,
April 2010, Pp. 413–425, Chetan]
According to the diversionary theory of war, the cause of some militarized conflicts is not a clash of salient interests
between countries, but rather problematic domestic circumstances. Under conditions such as economic adversity or political unrest,
the country’s leader may attempt to generate a foreign policy crisis in order both to divert domestic
discontent and bolster their political fortunes through a rally around the flag effect (Russett 1990). Yet,
despite the wide-ranging popularity of this idea and some evidence of U.S. diversionary behavior (e.g., DeRouen 1995, 2000;
Fordham 1998a, 1998b; Hess and Orphanides 1995; James and Hristolouas 1994; James and Oneal 1991; Ostrom and Job 1986), after
five decades of research broader empirical support for the theory remains elusive (e.g., Gelpi 1997; Gowa; 1998;
Leeds and Davis 1997; Levy 1998; Lian and Oneal 1993; Meernik and Waterman 1996). This has prompted one scholar to conclude that
‘‘seldom has so much common sense in theory found so little support in practice’’ (James 1987, 22), a view reflected in
the more recent research (e.g., Chiozza and Goemans 2003, 2004; Meernick 2004; Moore and Lanoue 2003; Oneal and Tir 2006). I argue
that this puzzling lack of support could be addressed by considering the possibility that the embattled leader may anticipate achieving their
diversionary aims specifically through the initiation of territorial conflict2—a phenomenon I call territorial diversion.
Economy’s resilient – can survive shocks
Bloomberg 12 (“Fed’s Plosser Says U.S. Economy Proving Resilient to Shocks,” 5-9,
http://www.bloomberg.com/news/2012-05-09/fed-s-plosser-says-u-s-economy-proving-resilient-toshocks.html)
Philadelphia Federal Reserve Bank President Charles Plosser said the U.S. economy has proven
“remarkably resilient” to shocks that can damage growth, including surging oil prices and natural
disasters. “The economy has now grown for 11 consecutive quarters,” Plosser said today according to remarks
prepared for a speech at the Philadelphia Fed. “Growth is not robust. But growth in the past year has continued despite
significant risks and external and internal headwinds.” Plosser, who did not discuss his economic outlook or the future for
monetary policy, cited shocks to the economy last year, including the tsunami in Japan that disrupted global
supply chains, Europe’s credit crisis that has damaged the continent’s banking system and political unrest
in the Middle East and North Africa. “The U.S. economy has a history of being remarkably resilient,” said
Plosser, who doesn’t have a vote on policy this year. “These shocks held GDP growth to less than 1 percent in the first half of 2011, and many
analysts were concerned that the economy was heading toward a double dip. Yet, the economy proved resilient and growth picked up in the
second half of the year.” Plosser spoke at a conference at the Philadelphia Fed titled, “Reinventing Older Communities: Building Resilient
Cities.” Urban Resilience His regional bank’s research department is working on a project to measure the resilience of different cities, to learn
more about the reasons that some urban areas suffer more than others in downturns, Plosser said. He mentioned one early finding of the study:
Industrial diversity increases a city’s resilience. “I do want to caution you that resilient and vibrant communities are not just about government
programs or directed industrial planning by community leaders,” Plosser said. “The
economic strength of our country is deeply
rooted in our market- based economy and the dynamism and resilience of its citizenry.”
Alt Causes to manufacturing:
Too many alt causes for them to solve
Jasinowski 2013 (Jerry Jasinowshi, Former President of the National Association of Manufacturers, “A Real Manufacturing Resurgence.”
http://www.huffingtonpost.com/jerry-jasinowski/manufacturing-comeback_b_3131062.html )//NR
There are contradictory analyses in the media about a resurgence of manufacturing - some praising it as the second coming and others insisting it
is imaginary. For instance, on April 2, The Washington Post featured a front page report of European manufacturers setting up shop in the U.S. to
take advantage of low natural gas prices, while the New York Times had a story on the front page of its business section entitled "Manufacturing's
Mirage, A Jobs Boom Built on Cheap Energy Has Yet To Appear." In reality, there is no contradiction. Even the optimistic souls like me who
perceive a resurgence in manufacturing do not contend manufacturing
will ever be the fountain of jobs that it once was. It
is a fact of life that low skill manufacturing jobs have fled the U.S. and they are increasingly fleeing developing
nations as more and more rote tasks are automated. Even so, manufacturing remains a key driving force of economy growth and a critical seedbed
for innovation. Akio Morita, the founder of Sony, said years ago that the world power that loses its manufacturing base will cease to be a world
power. That is why the Chinese are so determined to build their manufacturing sector. Manufacturing is key to economic growth. The reality on
the ground is that U.S.
manufacturing is today giving a good account of itself, but with sensible incentives, it could do
much more. Thomas J. Duesterberg of the Aspen Institute suggests there is a realistic path for growing manufacturing's contribution to GDP
by 4 percentage points, from 11.6 percent to 15.8 percent by 2025 . To do it, he advocates: • Expanding exports and reducing
imports. We need a much more aggressive effort to open foreign markets to our exports, a greater effort to promote
exports, and a tougher stand on violations of trade agreements, such as currency manipulation. • We need a clear
strategy for taking advantage of plentiful and cheaper natural gas that is attracting foreign investment. In many key
manufacturing sectors, this gives us a once in a lifetime opportunity to grow and expand. • We must intensify our investments in
productivity gains, knowing our competitors are nipping at our heels, and we should also streamline the U.S. regulatory
process and apply manufacturing technology to the service industries. • We need a coherent national commitment to endow
workers with the skills they need in modern manufacturing. For though manufacturing will never again be the fountain of
jobs it once was, it is creating millions of fresh opportunities for qualified people. The Aspen Study on the Manufacturing Resurgence provides a
practical framework for increasing manufacturing's contribution to economic growth, and the corporate and public policies we need to make it
happen. We should read it and heed it.
Energy is only small fraction of the manufacturing resurgence - on-shoring, productivity, increased
production, and investment are alt causes and mean manufacturing growth is inevitable
Fink 2013 (Billy Fink, a market analyst for Axial. Graduated from Columbia university with a BA in History and Psychology, June 6, 2013.
“Manufacturing Resurgence or New Growth?” http://www.axial.net/blog/manufacturing-resurgence-new-growth/)//NR
Over the past few years, the phrase “ manufacturing
resurgence” has grown in popularity throughout the United States. Industry
analysts have identified a variety of positive factors that suggest America may reclaim its bygone title of a manufacturing
powerhouse. Joe May, Managing Principal of Graham Partners, echoed the strength of this trend. He explained, “ Manufacturing jobs have
increased recently and industrial-production as a percent of GDP is rising.” However, May was certain to add that the resurgence is not as onedimensional as it seems. While manufacturing jobs are currently on the rise, the focus of American manufacturing has largely shifted
from basic, labor-intensive goods to more sophisticated products. This transformation is a critical characteristic of America’s historical and future
manufacturing presence. May believes that the shifting dynamics in the costs of energy has helped spur the recent manufacturing resurgence . “The
simultaneous rise in transportation cost for foreign-produced goods and the fall in energy costs in the US has led many manufacturers to rethink their foreign
manufacturing efforts,” said May. “For many manufacturers, the cost of shipping goods from another country is beginning to negate the benefits.” Transportation
costs are not the only fixed cost on the rise. As China — and other developing countries — continues to grow, so too does the cost of labor. According to a recent
report from the China Market Research Group, incomes in China have quadrupled over the past decade. In 2000, the average annual income was $760 per person. As
of 2010, it was $3,000. The
pace of growth is expected to continue or accelerate. Without the clear economic benefits, many
manufacturers are becoming less tolerant of the inherent risks that are introduced by international manufacturing. One of the
biggest risks is to the supply chain. “ Manufacturers are looking to avoid a variety of political, economic, or natural disasters that could impact the supply
chain,” explained May. By onshoring and bringing production efforts closer to home, there are fewer events that can disrupt the process. However, as
manufacturers look to mitigate supply chain risks and higher labor costs, the United States is not the only option on the table. Thanks to favorable trade agreements,
Mexico is being considered as nice alternatives for manufacturing needs. As Member Eric Rundall of Dura Motors explained last year, “OEMs are putting in
additional capacity [in Mexico]. Looking globally, if you consider total labor cost and logistics, it’s cheaper than China. Unrestricted trade and proximity of customer
destinations makes it more affordable.” According to a recent Economist article, “On present trends, by 2018 America will import more from Mexico than from any
other country.” Although manufacturing jobs are on the rise in the United States, May believes the manufacturing that left is not the same that is
returning to the United States. According to May, America has undergone a form of manufacturing evolution over the past 50 years – one in favor of industrial
technologies. “The US has begun to focus on manufacturing more sophisticated products that are higher up the value chain,” said May. “Rather than manufacturing
products with a large labor component in the cost structure, we are now focused on more high-tech products, such as measurement and control devices, across a wide
variety of industry sectors, including aerospace, pharmaceuticals, medical products, etc.” He continued, “The
value of industrial production in
the US is up by more than four times since 1960, despite a drop in manufacturing employment. Currently, each employee is generating
almost 6x more output than an employee in 1960. As a result, I don’t think the low-value-add jobs of manufacturing will return. The US is a favorable home
for this trend in manufacturing because we have the most skilled workforce in the world at our disposal.” Given the current personality of US manufacturing, many
investors are focused on the manufacturing firms with a technology focus. “Businesses with strong industrial technologies at the core are
likely to experience the greatest gains from the ongoing resurgence,” explained May. “They are becoming quite attractive to investors.” In
addition to the growing investor demand, business exits are likely to rise as well. “Generally speaking, business owners that have weathered the storm of 2008 and
2009 will probably soon consider exits,” says May. “Most don’t want to be at the helm during the next downturn. Since you want to sell your business in a growing
economy, I expect we will see an increase in exits over the next 18 months.” Between the heightened supply and demand, manufacturing seems
ripe for M&A activity. Despite the positive trends, May has not seen significant change in buyer dynamics. “We have not seen much in terms of new competition or
new investors entering the manufacturing space.” Trends on Axial support May’s sense. While the proportion of direct investors in manufacturing has remained
relatively consistent, the average number of pursuits per deal has grown significantly – from 4.77 per deal in Q1-12 to 12.11 per deal in Q1-13. Whether new players
will enter the space in the near-term remains to be seen.
Aff doesn’t solve manufacturing – Trade deficit
Atkinson 12 (Robert D. Atkinson, “Worse Than the Great Depression: What Experts Are Missing About
American Manufacturing Decline,” http://www2.itif.org/2012-american-manufacturing-decline.pdf
In the 2000s, U.S. manufacturing suffered its worst performance in American history in terms of jobs.
Not only did America lose 5.7 million manufacturing jobs, but the decline as a share of total manufacturing jobs (33
percent) exceeded the rate of loss in the Great Depression. 1 Despite this unprecedented negative performance, most
economists, pundits and elected officials are remarkably blasé about what has transpired . Manufacturing, they argue, has simply
become incredibly productive. While tough on workers who are laid off, job losses indicate superior performance. All that is needed,
if anything, are better programs to help laid-off workers. This report argues that this dominant view on the loss of manufacturing jobs is
fundamentally mistaken. Manufacturing lost jobs because manufacturing lost output, and it lost output because its ability to compete in global
markets—some manipulated by egregious foreign mercantilist policies, others supported by better national competiveness policies, like lower
corporate tax rates—declined significantly.
In 2010, 13 of the 19 U.S. manufacturing sectors (employing 55 percent of
manufacturing workers) were producing less than they there were in 2000 in terms of inflation-adjusted output. 2
Moreover, we assert that the government’s official calculation of manufacturing output growth, and by definition productivity, is significantly
overstated. Overall, U.S.
manufacturing output actually fell by 11 percent during a period when GDP increased
by 17 percent. 3 The alarm bells are largely silent for two reasons: government statistics significantly overstate the change in U.S.
manufacturing output, and most economists and pundits do not extend their analysis beyond one macro-level number (change in real
manufacturing value added relative to GDP). But the conventional wisdom that U.S. manufacturing job loss is simply a result of productivitydriven restructuring (akin to how U.S. agriculture lost jobs but is still healthy) is wrong, or at least not the whole story. This report contends that
the loss of U.S. manufacturing jobs is a function of slow growth in output (and, in most sectors, actual
loss of output) caused by a steep increase in the manufactured goods trade deficit .
Here’s 6 alt causes to your manufacturing internal
PWC 12 [Pricewaterhouse Coopers – assurance, tax, and advisory services firm, “Rising Labor Costs
Not the Sole Factor Influencing Potential U.S. Manufacturing Resurgence,” September 12th, 2012,
http://www.pwc.com/us/en/press-releases/2012/manufacturing-resurgence-press-release.jhtml, Chetan]
NEW YORK, September 12, 2012― Consensus views on a U.S. manufacturing resurgence have largely centered on rising labor costs in markets such as China as the key driver of re-shoring
back to the U.S. However, a new PwC US report, A Homecoming for U.S. Manufacturing?, reveals that while rising labor costs are part of the story, a range of factors—including transportation
and energy costs and protecting the supply chain—could drive a sustained manufacturing renaissance in the U.S. beyond any cyclical recovery, potentially improving investment, employment,
PwC’s new report identifies seven factors—including transportation and
energy costs; currency fluctuations; U.S. market demand; labor costs; U.S. talent; availability of capital;
and the tax and regulatory climate—as the primary catalysts influencing manufacturers' decisions to establish
production output and research & development (R&D).¶
production facilities domestically and produce products closer to their major customer bases. PwC's report also notes that localizing production can mitigate supply chain disruptions, which
totaled $2.2 billion in financial impact for U.S. industrial products companies in 2011.¶ “The reviving industrial manufacturing sector is instrumental to U.S. economic recovery,” said Bob
McCutcheon, PwC’s U.S. Industrial Products leader. “Beyond the cyclical rebound, however, a host of structural changes is emerging that may lead to the U.S. becoming an important location
for basing production and R&D facilities for several industries. In addition to trends in labor costs, other factors include the need to reduce transportation and energy costs; the emergence of the
U.S. as a more attractive exporter and the relative attractiveness of the U.S. markets.Ӧ Relocating manufacturing production in the U.S. generally holds greater advantages for some industries
over others. When taking into account costs spanning labor, materials, transportation and energy, the PwC report shows that chemicals, primary metals and heavy equipment manufacturing
industries stand to benefit most from maintaining or expanding facilities in the U.S. given opportunities and cost incentives to re-shore domestically. Wood, plastic and rubber products
companies could also benefit from changes in domestic costs, but lower net imports in these industries may limit the full economic benefits of on-shoring in the U.S.¶ “Industrial manufacturers
may increasingly rethink their U.S. strategies, including the merits of continuing to separate production and R&D and producing abroad and importing back to U.S. buyers. Depending on the
industry, there may be considerable benefits to establishing regionalized supply chains and R&D facilities in the U.S., such as reducing costs, shortening lead times, protecting intellectual
property and mitigating many of the risk factors inherent in developing markets,” added McCutcheon.¶ The PwC report outlines seven factors that may play key roles in making re-shoring
decisions, as well as in determining whether or not the U.S. will become a more competitive and attractive market for manufacturing expansion:¶ Transportation and Energy Costs:
The
bull market in energy commodities over the last decade has contributed to a major increase in
transportation costs for manufacturers with global supply chains. As a result, some machinery companies are producing more in the U.S. for
sale in North America. Given growing global demand for energy, transportation costs will likely remain elevated, making production closer to home more attractive. This can also cut down on
lead times, reduce inventory levels, mitigate some currency risks, increase control over intellectual property and reduce supply chain disruption risks. In addition, technical progress in extracting
natural gas from shale in the U.S. has created new investment opportunities for manufacturers across several industries, particularly in chemicals and metals, due to more affordable energy and
The U.S. dollar generally depreciated d
greater downstream demand.¶ Currency Fluctuations:
uring the last decade, and China’s currency has risen moderately,
which narrows the cost gap between producing in the U.S. and importing from China for domestic consumption. In addition, the secular decline in the U.S. dollar helps make the U.S. a
potentially more competitive location to manufacture for exports. This is contributing to strong growth in the export of goods since the end of the recession. An appreciation of the Yuan relative
to the U.S. dollar may continue longer-term as China’s economy grows, which could provide some advantage to U.S. manufacturers.¶ U.S. Market Demand: While China and other emerging
markets are forecast to continue to grow GDP at a faster clip than the U.S., the disparity in wealth, as measured by real GDP per capita, is expected to persist with the U.S. dwarfing China and
other emerging markets. This difference in the relative standard of living, as well as the size of the U.S. market, supports investment in new domestic production of goods targeted for U.S.
consumption. At the same time, global manufacturers with a multi-region strategy that source from Asia, for example, are likely to keep production in that region to serve those local markets,
consistent with the trend toward regionalization of manufacturing for the largest global manufacturers.¶ U.S. Talent: The gap in the level of higher education and training between the U.S. and
. It is possible that the U.S. workforce will remain competitive for
the foreseeable future owing to institutional advantages in education and experience; however strength in
emerging economies is growing. Workforce training has also been commonly cited as a driver in recent manufacturing investment decisions regarding which states to
China has narrowed, though the U.S. still holds a significant advantage
operate in, indicating that manufacturers are keen to locate where there are vocational programs in place to develop skilled workers. Conversely, despite the relative strength of the U.S. labor
force, the aftermath of the housing bubble has slowed worker mobility and may contribute to labor market friction.¶ Availability of Capital: Although commercial and industrial lending demand
has recovered and credit standards have come back down from levels reached during the financial crisis,
banks have resumed tightening credit standards.
In addition, there is evidence that borrowing in China has become more difficult due to increased capital requirements for banks and tighter lending for exporters. The balance of risks favors
manufacturers may shy away from longer supply
chains and the risks they carry including inventory tied up in transit, particularly in industries with shorter
product cycles or high spoilage.¶ Tax and Regulatory Climate: The U.S. now has the highest statutory corporate tax rate
among developed countries as of mid-2012. While U.S. corporations tend to have a much lower effective tax rate, this and other factors have spurred talk of tax reform to
boost economic growth and employment. Proposals include a lower statutory rate, tax incentives and increasing—or making permanent—the R&D tax credit. However, the tax and
regulatory environments bring uncertainty to the current expansion of domestic manufacturing.¶ U.S. Labor Costs:
some continued credit tightening in several key economies to stave off inflation. As a result,
Higher labor costs in emerging economies, especially China, are challenging profitability for some industrial manufacturers. This concern may not ease as the Chinese government’s policies and
the rising cost of living in urban areas add to wage pressures. From 2008 to 2011, China’s hourly manufacturing labor costs rose by over 80 percent and are expected to rise at a similar rate for
the next four years. This compares with the estimated increase of around 10 percent for the U.S. over the same time period. However, the cost premium, based upon the difference in absolute
wages between the U.S. and China, has continued to expand, making it possible that labor arbitrage involving China and other low labor cost emerging markets will persist
AT: Competitiveness
US military and economic competitiveness is inevitable
Stephen G. Brooks & William C. Wohlforth 08 Associate Professors in the Department of
Government @ Dartmouth College (World Out of Balance, p. 32-4)
American primacy is also rooted in the country’s position as the world’s leading technological power. The
United States remains dominant globally in overall R&D investments, high-technology production,
commercial innovation, and higher education (table 2.3). Despite the weight of this evidence, elite
perceptions of U.S power had shifted toward pessimism by the middle of the first decade of this century.
As we noted in chapter 1, this was partly the result of an Iraq-induced doubt about the utility of material predominance, a doubt redolent
of the post-Vietnam mood. In retrospect, many assessments of U.S economic and technological prowess from the 1990s were overly optimistic; by the next decade
important potential vulnerabilities were evident. In particular, chronically imbalanced domestic finances and accelerating public debt convinced some analysts that the
If concerns continue to mount, this will count as the fourth such
crisis since 1945; the first three occurred during the 1950s (Sputnik), the 1970s (Vietnam and stagflation), and the 1980s (the Soviet threat and Japan’s
challenge). None of these crises, however, shifted the international system’s structure: multipolarity did not
return in the 1960s, 1970s or early 1990s, and each scare over competitiveness ended with the American
position of primacy retained or strengthened. Our review of the evidence of U.S. predominance is not meant to suggest that the United States
United States once again confronted a competitiveness crisis.
lacks vulnerabilities or causes for concern. In fact, it confronts a number of significant vulnerabilities; of course, this is also true of the other major powers. The point
adverse trends for the United States will not cause a polarity shift in the near future. If we take a long
view of U.S. competitiveness and the prospects for relative declines in economic and technological
dominance, one takeaway stands out: relative power shifts slowly. The United States has accounted for a quarter to a third of
global output for over a century. No other economy will match its combination of wealth, size, technological
capacity, and productivity in the foreseeable future (table 2.2 and 2.3) The depth, scale, and projected
longevity of the U.S. lead in each critical dimension of power are noteworthy. But what truly
distinguishes the current distribution of capabilities is American dominance in all of them simultaneously.
is that
The chief lesson of Kennedy’s 500-year survey of leading powers is that nothing remotely similar ever occurred in the historical experience that informs modern
international relations theory. The implication is both simple and underappreciated :
the counterbalancing constraint is inoperative and
will remain so until the distribution of capabilities changes fundamentally. The next section explains why.
-- Competitiveness isn’t key to heg or the economy
Krugman 94 (Paul, Professor of Economics – Massachusetts Institute of Technology,
“Competitiveness: A Dangerous Obession”, Foreign Affairs, March / April, Lexis)
Unfortunately, his diagnosis was deeply misleading as a guide to what ails Europe, and similar
diagnoses in the United States are equally misleading. The idea that a country's
economic fortunes are largely determined by its success on world
markets is a hypothesis, not a necessary truth; and as a practical, empirical matter,
that hypothesis is flatly wrong. That is, it is simply not the case that the world's
leading nations are to any important degree in economic competition with each other,
or that any of their major economic problems can be attributed to failures
to compete on world markets. The growing obsession in most advanced nations with
international competitiveness
should be seen, not as a well-founded concern, but as a
view held in the face of overwhelming contrary evidence. And yet it is clearly a
view that people very much want to hold -- a desire to believe that is reflected in a remarkable tendency
of those who preach the doctrine of competitiveness to support their case with careless, flawed arithmetic.
This article makes three points. First, it argues that concerns about competitiveness are, as an empirical
matter, almost completely unfounded. Second, it tries to explain why defining the economic problem as
one of international competition is nonetheless so attractive to so many people. Finally, it argues that the
obsession with competitiveness is not only wrong but dangerous, skewing
domestic policies and threatening the international economic system. This last issue is, of course,
the most consequential from the standpoint of public policy. Thinking in terms of competitiveness leads,
directly and indirectly, to bad economic policies on a wide range of issues, domestic and foreign, whether
it be in health care or trade.
AT: Blackouts
2AC
New developments sure up grid stability
Kemp 12 -- Reuters market analyst (John, 4/5/12, "COLUMN-Phasors and blackouts on the U.S. power
grid: John Kemp," http://www.reuters.com/article/2012/04/05/column-smart-grididUSL6E8F59W120120405)
The hoped-for solution
to grid instability is something called the North American SynchroPhasor Initiative (NASPI), which sounds like
in fact a collaboration between the federal government and industry to improve
grid monitoring and control by using modern communications technology. More than 500 phasor
monitoring units have so far been installed across the transmission network to take precise
measurements of frequency, voltage and other aspects of power quality on the grid up to 30 times per
second (compared with once every four seconds using conventional technology). Units are synchronised using GPS to enable
users to build up a comprehensive real-time picture of how power is flowing across the grid
something out of Star Trek but is
(www.naspi.org/Home.aspx and). It is a scaled-up version of the monitoring system developed by the University of Tennessee's Power
Information Technology Laboratory using inexpensive frequency monitors that plug into ordinary wall sockets. Tennessee's FNET project
provides highly aggregated data to the public via its website. The systems
being developed under NASPI provide a much
finer level of detail that will reveal congestion and disturbances on individual transmission lines and
particular zones so that grid managers can act quickly to restore balance or isolate failures ()
AT: Chemical Industry
2AC
Chemical industry demand declining
Fulp 11 (Mickey, Certified Professional Geologist with a B.Sc. Earth Sciences with honor from the
University of Tulsa, and M.Sc. Geology from the University of New Mexico, “What's Up (or Down) with
the Nat Gas Market?,” 7-12-11, The Energy Report, http://www.theenergyreport.com/pub/na/10247)
Domestic demand for natural gas comes from four general uses: Residential and commercial: 22%; space
heating and cooking. Industrial: 38%; fuel for the pulp and paper, metal, chemical, petroleum refining and
food-processing industries; feedstock for plastic, chemical and fertilizer production. These uses are
projected to decline as the economy moves toward less energy-intensive manufacturing processes.
1AR
Chemical industry resilient
CNI 8 (Chemical News & Intelligence, “This Week in ICIS Chemical Business”, 8-18, Lexis)
Engineering and construction companies are expanding to specialties and photovoltaics Global
engineering and construction companies report that the
projects are changing, but the
chemical sector continues to show a surprising amount of resilience
Profitability analysis reveals North American petrochemical
industry's demise is exaggerated Profits in the North American petrochemical
industry are expected to decline sharply following Middle Eastern and
Asian capacity additions. But contrary to the prevailing view, fears
of its long-term demise will prove to be exaggerated. Shell's Omega MEG
process kicks off in South Korea The big goal for a process engineer could be the development of a
technology that converts all the raw materials to the desired end product with the minimum theoretical
energy consumption, no emissions and the lowest capital cost.
Chemical industry doesn’t solve sustainability
Elkington 12 (John, executive chairman of Volans and non-executive director at SustainAbility. “Chemical industry isn't doing enough to
embrace sustainability,” 9-12-12, http://www.guardian.co.uk/sustainable-business/sustainability-with-john-elkington/chemical-industry-embracesustainability-environment?newsfeed=true)
is …', spotlighting Shin-Etsu, a Japanese chemical company that
suffered a major explosion. Instead of clamming up, as Japanese corporate leaders are wont to do, the CEO took a voluntary pay-cut
One speaker showed a slide headed 'Sustainability
and went out to apologise to the local community. Apologising to people when you have accidentally blown them up makes sense, most of the
time, but in
the context of the global challenges we face I struggle to see this as a definitive (indeed, even a
legitimate) case of sustainability in practice. Then another speaker, this time from ExxonMobil Chemical,
asserted that – based on the latest life-cycle assessment data – shopping bags made out of high density
polyethylene (HDPE) are the sustainable option. Paper bags, he insisted, should be dropped because of the energy and water
consumption involved. Ah. When the discussion period came, I asked whether the data had taken into account the great swirling gyres
of plastic debris that now scar large areas of the world ocean? No, he admitted. For such people, as a speaker from
BASF assured us, sustainability means we "are on a journey". Like many others, this German company has talked to a considerable number of
stakeholders (350, by their reckoning) and boiled it all down to a shortlist of issues (just 40 of those). The main conclusion seems to be that we
must all create more shared value while, simultaneously, shrinking our environmental footprints. Good,
but by how much? That's a
question that the sector finds it hard to answer, except in areas where there is a legal requirement that the
use of particular chemicals be driven to zero, like hexavalent chromium. And, while most participants intensely dislike
the idea of further regulation, there were those – including Peter Kunze of the European Automobile Manufacturers Association – who argued for
much clearer signals on which chemicals would be banned ultimately, coupled with "smart legislation" to ensure that the process of conversion
didn't undermine industrial or regional competitiveness. It was intriguing to see successive speakers through the lenses of vested interests. A
panel of four speakers, for example, agreed that renewable feedstocks were very unlikely to make much
of an impression on the industry in the next decade or two. Then a colleague from another chemical company
whispered in my ear that three of the four companies were backwards-integrated into the oil sector,
effectively making them fossil fuel junkies. Hardly surprising, then, that they find it hard to imagine – or at least
publicly admit the possibility of – a radically different future. Behind the scenes people spoke quietly of lobbying that is
underway by parts of the industry: in the US, for example, chemical companies are fighting tooth-and-nail to
ensure suspect chemicals and products like formaldehyde and styrene continue to be allowed in LEEDcertified buildings. On the upside, Nicholas Denis of McKinsey & Co reported results of their recent market survey showing that green
products are now seen much more positively by both consumers and industry executives, with between 82 and 93% of both categories saying
they want to go greener, even though "the
road to green chemicals is harder than we thought initially" and the notion
of a "green premium is still a Holy Grail for most companies." Procter & Gamble promptly disagreed, to a
degree, noting that their efforts to promote greener products like compact detergents had been stymied by
the unwillingness of most consumers to change to seemingly smaller products at the same price-point. So the detergent industry
went to government, asked for permission to avoid anti-trust rules, and moved as a group of companies to strip non-compact products from the
shelves. "I would love it if consumers wanted greener products, mused P&G's Peter Kunze, "because we would then have a business model!"