2004/2005 PREFACE
The magnitude and scope of the Editor-in-Chief’s task has increased dramatically over the past few years since the inception of CAR. The exigencies in terms of demand on the editorial skills required of the Chief Editor and her supporting team of specialists in the ever increasing range of disciplines involved is becoming more and more exacting. This year a record number of 88 papers were reviewed which were whittled down to a final selection of 25 submissions presented in this year’s CAR.
Year by year the quality of the CAR papers has excelled until the point was reached when one began to doubt if such exacting standards could be maintained. Incredibly they improved still further until the point was attained in the 2004/5 edition when it seemed that the denouement had been achieved. So from here on it seemed that it would be very unlikely that such high standards could be maintained.
However the current CAR this year has scaled even greater heights. Addressing a yet wider range of themes than ever before, the authors in this edition did not flinch from tackling several of the most controversial of the current issues. For example, with China’s debut as a major player on the world stage, a thought provoking highly original analysis was presented on how she might go about securing her vitally needed energy requirements. Although inevitably speculative it is not impossible that this scenario might well become a reality which bodes ill for a much needed downward trend in oil prices!
Another highly original paper ventures into the realms of outer space to contemplate how the somewhat idealistic regulations governing our extra terrestrial heritage might be developed for the benefit of all mankind. Controlled development would then be sanctioned by the signatories subject to this proviso. The subject became topical in response to a recent Chinese announcement tentatively indicating the possibility of a mission to mine and transport to earth loads of helium 3 which is a perfect fuel in terms of adverse environmental impact, –(possibly commencing around 2007)
The themes addressed in this year’s CAR accurately reflect major current issues across the natural resources spectrum. It is not surprising, given the present energy crisis that intensive debate on how to deal with it in an environmentally viable but economically feasible way, tops the agenda. Since gas, although less profitable, is now recognised as the most environmentally virtuous member of the hydrocarbon clan the pros and cons of its expanding role receive in depth consideration as it goes global.
Another paper explores the problems encountered by a monolithic one hundred percent state owned petroleum company that has become a national icon. With the present impetus towards gas generation which requires massive investment in infrastructure and inputs of technical expertise, there seems to be no alternative to accepting foreign capital and specialist transfer of technology. However, apart from national sensitivities, a major sticking point seems to be an ever increasing indebtedness to the National Government which absorbs a huge share of the income generated despite rocketing oil prices.
On the dubious side of the mammoth oil industry are the findings of the NGO’s and others who champion the cause of indigenous rights and the upholding of environmental laws. They are increasingly highlighting the misdemeanours of the major players in the context of both these considerations. However, the culpability does not rest solely on the shoulders of the of the oil companies. Less than scrupulous conduct on the part of state governments is equally, or even more to blame.
Returning to the burgeoning gas industry one contribution explores the case for forming an Organisation of Gas Exporting Countries (OGEC) to function along parallel lines to OPEC. Another author wrestles with the problem of raising the huge infrastructure capital required against the security commitment of a take or pay basis. A third contributor tackles the ‘Beast of high oil prices’ with it’s awesome capability of triggering economic recessions and holding even advanced economies to ransom .
Turning from liquid fuels to another fluid of yet greater fundamental importance, two contributors deal with matters concerning water requirements. At last, with the trend towards privatisation water is perceived in a commercial context as a critically valuable commodity, probably the most valuable one on the planet since practically no living forms can exist without it. Although new laws have been enacted which are designed to maximise the benefit of this commodity to mankind some important situations have yet to be addressed. Such is the case of the vast non-renewable resource of ‘fossil’ water that resides in the extensive Nubian sandstone formation.
A just and equitable solution has yet to be formulated for the populations of the various countries that live in the vast desert areas of North-eastern Africa. In a different context another author searches for an effective model capable of evaluating the financial risk involved in modelling water projects in terms of power projects with which there are many similarities relative to the risks involved; in the case of sewage treatment for example.
In the energy category other forms of power such as electricity receives it’s share of the limelight in the wake of the unbundling of vertically integrated monopolistic subsidised state entities with the objective of rendering the industry more economically viable. Here the trend is towards fostering competition as the industry moves away from the former mega-power station concept of subsidised state entities. Now the trend is towards small producers with direct inputs into the distributional network.
The topic of human rights is still very much in vogue. In this context the strategies of international agencies which are directly catalysing globalisation come under review as they challenge the bland conventional presumption of gains in terms of universal welfare. These are deemed to create negative externalities, notably in terms of the extractive industry. This introduces the question of the need to introduce safeguards for human rights into further, primarily economic agreements that are creating an ever increasing degree of interdependence.
Issues concerning indigenous rights justifiably continue to enjoy a high profile in the current CAR. One author asks the cogent question as to whether or not the long overdue recognition of Native Title has affected the competitiveness of Australia’s mineral industry. Despite an anxious period characterised by a jittery reaction on the part of the mining companies the economy of the ‘Lucky Country’ is once again forging ahead on the back of the current cycle breaking mineral boom.
With an upsurge of nationalism in some parts of the developing world there is currently a disquieting ground swell of apprehension where the role of foreign MNC’s
is concerned in the developing world. On the other hand, while preoccupation exists over environmental concerns and indigenous rights there is a tendency to overlook the high risk that companies run in exploration for oil and particularly for minerals, where the success ratio commonly amounts to a fraction of one per cent. Such a risky field of endeavour is hardly a suitable venue for gambling with much needed government funds. So with the shadow of expropriation again looming in the background it is reassuring to know that, in such cases, a more just and equitable settlement is in view that previously.
Another stumbling block to progress in mineral exploration in the past has been the less attractive legislation in some countries such as Brazil and the Philippines. In the latter case development in the mineral industry has been functioning at a level well below it’s maximum potential, given it’s impressive mineral endowment. Until recently foreign financial/technical assistance has not been allowed. A concession plus service contract akin to the Indonesian COW type of agreement has now been developed which it is hoped will prove more competitive than the previous terms. However it remains to be seen how competitive it proves to be with the strong competition coming from other countries well endowed with mineral resources plus highly attractive exploration and mining legislations.
The topics touched upon in this brief review are far from exhaustive as many other intriguing issues are scrutinised and discussed in the current CAR. As with last years’ CAR, the present issue should certainly have items of particular interest for everyone thanks to the monumental effort, unflagging enthusiasm and meticulous reviewing of the manuscripts submitted by the editor- in – Chief , Naomi Barnes. If it is acceptable to judge a publication in terms of qualities such as interest, depth of perception, topicality, clarity, degree of conviction and the commendable brevity of the most of the contributions, then our CAR has come of age and can compete with many of the iconic journals across the field of natural resources.
Dr Arthur J. Warden
Co-ordinator CAR 2004-2005
