China grapples with growing water shortages

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"I think it rained once or twice last year, but I'm not sure," said Wang, a Muslim who lives in China's bleak, remote northwestern region of Ningxia.

"It definitely rained the year before that," he added, sounding a little more certain.

Water -- or rather lack of it -- has shaped Wang's life, living as he does in one of China's most arid regions, where sand dunes lap at fields and dust storms regularly harry its people.

When he was a small boy, his family gave up the struggle of trying to eke crops from the stony, dusty soil and moved from their farm in the even drier southern part of Ningxia to the regional capital, Yinchuan.

Since then, Wang, 23, has worked as a coal miner, a building site labourer and as a long-distance truck driver. He does not plan to return to the old family farm.

"My grandparents say it used to be much greener before. They say it once rained for an entire week," he said, looking out from the barren Helan mountains outside of Yinchuan at the desert, pitted with dried up river beds and abandoned fields.

Per capita water resources in the world's most populous country are less than a third of the global average, and falling.

More than 300 million people in rural areas lack clean drinking water, and many are being slowly poisoned by water that contains too much fluorine, salt and even arsenic.

Tackling these issues is a key part of Beijing's economic and social development plan for the next five years, but the problems are deep-rooted.

More than a decade of near double-digit economic growth coupled with a still expanding population has put an almost unbearable strain on water demand in China.

Pollution is so severe the Ministry of Water Resources estimates 40 percent of water in the country's 1,300 or so major rivers is fit only for industrial or agricultural use.

"The Rhine and the Thames became cesspools during industrialisation but China's industrialisation is moving so quickly now that it's going to take a gigantic effort to address this," said Dermot O'Gorman, the WWF's China representative.

"The negative effects of pollution and the health effects of dirty drinking water can undermine the development on which you depend," he told Reuters.

China's water is also unevenly distributed, and flooding causes serious damage every year in central and southern China.

To address this and help alleviate drought in the north, the government is spending almost 500 billion yuan ($62.29 billion) on a diversion scheme to ship the water north.

One of the rivers to benefit from this plan is the Yellow River, the country's longest and once known as "China's sorrow", for the millions of flood deaths it once inflicted.

The Yellow River today is a shadow of its former self, hit by massive extraction of water for farming and industrial use and declining levels of rainfall. In some years, the river runs dry before reaching the sea.

Ill-conceived irrigation has made matters worse. In arid Ningxia, rice is grown beside the river.

"It's probably the craziest place to grow rice. Look at the evaporation in the summer -- it's 40 degrees Celsius and doesn't see rain for months," said Vaclav Smil, a professor at Canada's University of Manitoba and a Chinese water expert.

"The rational thing would be to shut it down and walk away from it, but now you have all these people depending on it," he told Reuters.

"What would you do with these people? Where would you shove them? Gansu? It would be the same," Smil said, referring to Ningxia's equally dry neighbouring province.

The prolonged drought has forced Lao Tian to look for alternative forms of work -- sifting for sand to build a new mosque in Xiaokouzi hamlet, in the hills overlooking Yinchuan.

"Life here is very bitter," said Tian, 54, wearing a traditional white Muslim skull cap. "No rain means it's harder to raise crops and I have to find other work."

Signs warning of flash floods are joined by newer arrivals, threatening fines for smoking, the risk of setting the stunted trees on fire now greater than the danger of being swept away by a flood.

In downtown Yinchuan, bold signs proclaim the establishment of a "water saving city" by 2010, part of a larger government effort to get the man on the street to save water.

"They don't have it and they don't manage it right, but they somehow manage it a little bit better every year so the crisis never fully happens," said Smil. ($1=8.027 Yuan)

[More bluster from right wing news outlets. Do not confuse the drums of war with war itself. It is a kind of tragic-comic theater though, knowing that the American tiger is toothless. – MCR]

The Government is to hold secret talks with defence chiefs tomorrow to discuss possible military strikes against Iran.

A high-level meeting will take place in the Ministry of Defence at which senior defence chiefs and government officials will consider the consequences of an attack on Iran.

It is believed that an American-led attack, designed to destroy Iran's ability to develop a nuclear bomb, is "inevitable" if Teheran's leaders fail to comply with United Nations demands to freeze their uranium enrichment programme.

Tomorrow's meeting will be attended by Gen Sir Michael Walker, the chief of the defence staff, Lt Gen Andrew Ridgway, the chief of defence intelligence and Maj Gen Bill Rollo, the assistant chief of the general staff, together with officials from the Foreign Office and Downing Street.

The International Atomic Energy Authority, the nuclear watchdog, believes that much of Iran's programme is now devoted to uranium enrichment and plutonium separation, technologies that could provide material for nuclear bombs to be developed in the next three years.

The United States government is hopeful that the military operation will be a multinational mission, but defence chiefs believe that the Bush administration is prepared to launch the attack on its own or with the assistance of Israel, if there is little international support. British military chiefs believe an attack would be limited to a series of air strikes against nuclear plants - a land assault is not being considered at the moment.

But confirmation that Britain has started contingency planning will undermine the claim last month by Jack Straw, the Foreign Secretary, that a military attack against Iran was "inconceivable".

Condoleezza Rice, the US secretary of state, insisted, during a visit to Blackburn yesterday, that all negotiating options - including the use of force - remained open in an attempt to resolve the crisis.

Tactical Tomahawk cruise missiles fired from US navy ships and submarines in the Gulf would, it is believed, target Iran's air defence systems at the nuclear installations.

That would enable attacks by B2 stealth bombers equipped with eight 4,500lb enhanced BLU-28 satellite-guided bunker-busting bombs, flying from Diego Garcia, the isolated US Navy base in the Indian Ocean, RAF Fairford in Gloucestershire and Whiteman USAF base in Missouri.

It is understood that any direct British involvement in an attack would be limited but may extend to the use of the RAF's highly secret airborne early warning aircraft.

At the centre of the crisis is Washington's fear that an Iranian nuclear weapon could be used against Israel or US forces in the region, such as the American air base at Incirlik in Turkey.

The UN also believes that the production of a bomb could also lead to further destabilisation in the Middle East, which would result in Egypt, Syria and Saudi Arabia all developing nuclear weapons programmes.

A senior Foreign Office source said: "Monday's meeting will set out to address the consequences for Britain in the event of an attack against Iran. The CDS [chiefs of defence staff] will want to know what the impact will be on British interests in Iraq and Afghanistan which both border Iran. The CDS will then brief the Prime Minister and the Cabinet on their conclusions in the next few days.

"If Iran makes another strategic mistake, such as ignoring demands by the UN or future resolutions, then the thinking among the chiefs is that military action could be taken to bring an end to the crisis. The belief in some areas of Whitehall is that an attack is now all but inevitable.

There will be no invasion of Iran but the nuclear sites will be destroyed. This is not something that will happen imminently, maybe this year, maybe next year. Jack Straw is making exactly the same noises that the Government did in March 2003 when it spoke about the likelihood of a war in Iraq.

"Then the Government said the war was neither inevitable or imminent and then attacked."

The source said that the Israeli attack against Iraq's Osirak nuclear reactor in 1981 proved that a limited operation was the best military option.

The Israeli air force launched raids against the plant, which intelligence suggested was being used to develop a nuclear bomb for use against Israel.

Military chiefs also plan tomorrow to discuss fears that an attack within Iran will "unhinge" southern Iraq - where British troops are based - an area mainly populated by Shia Muslims who have strong political and religious links to Iran.

They are concerned that this could delay any withdrawal of troops this year or next. There could also be consequences for British and US troops in Afghanistan, which borders Iran.

The MoD meeting will address the economic issues that could arise if Mahmoud Ahmadinejad, the Iranian president - who became the subject of international condemnation last year when he called for Israel to be "wiped off the map" - cuts off oil supplies to the West in reprisal.

There are thought to be at least eight known sites within Iran involved in the production of nuclear materials, although it is generally accepted that there are many more secret installations.

Iran has successfully tested a Fajr-3 missile that can reach Israel, avoiding radar and hitting several targets using multiple warheads, its military has confirmed.

[Hugo Chavez is no fool. He knows that his extra-heavy oil cannot and should not be counted as conventional oil. It’s not just because of higher costs involved in refining it; the key is the absolute lack of refinery capacity to use it. The kinds of complex, cracking refineries needed to turn this extra-heavy oil into usable petroleum are extremely expensive at a time when there has been no new major refinery construction for twenty years. The cost of building enough refineries to feed the world’s petroleum hunger would run into the hundreds of billions of dollars and refinery construction would take decades.

Don’t hold your breath. The US economy is imploding from debt, hidden inflation, current energy scarcity, and a host of other factors. Who’s got the billions needed for these refineries? Where would they be located?

And last but not least, the DoE’s estimates of Venezuelan reserves are certain to be as untrustworthy and as unreliable as every other reserve number they’ve put out. By inflating even Venezuela’s estimated reserves the DoE is still protecting Wall Street and the markets. Now that’s irony for you.

The bottom line is that Hugo Chavez is—either as a result of design or destiny—becoming one of the most powerful men in the world. – MCR]

If you thought high oil prices were just a blip think again - Venezuelan President Hugo Chavez has ruled out any return to the era of cheap oil.

In an interview with BBC Newsnight's Greg Palast, Mr Chavez - who is due to host the Opec meeting on 1 June in Caracas - said he would ask the oil cartel to set $50 a barrel as the long term level.

During the 1990s the price of oil had hovered around the $20 mark falling as low as $10 a barrel in early 1999.

"We're trying to find an equilibrium. The price of oil could remain at the low level of $50. That's a fair price it's not a high price," Mr Chavez said.

Analysis by the US Department of Energy (DoE) - seen by Newsnight - shows that at $50 a barrel Venezuela - not Saudi Arabia - will have the biggest oil reserves in Opec.

Venezuela has vast deposits of extra-heavy oil in the Orinoco. Traditionally these have not been counted because at $20 a barrel they were too expensive to exploit - but at $50 a barrel melting them into liquid petroleum becomes extremely profitable.

The DoE report shows that at today's prices Venezuela's oil reserves are bigger than those of the entire Middle East - including Saudi Arabia, the Gulf states, Iran and Iraq.

The DoE estimates that the Venezuelan government controls 1.3 trillion barrels of oil - more than the entire declared oil reserves of the rest of the planet.

Mr Chavez told Newsnight that "Venezuela has the largest oil reserves in the world. In the future Venezuela won't have any more oil - but that's in the 22nd Century."

He will ask the Opec meeting in June to formally accept that Venezuela's reserves are now bigger than Saudi Arabia's.

Mr Chavez's increased muscle will not go down well in Washington, which is deeply opposed to his government.

Ironically, by invading Iraq, George W Bush has boosted oil prices and effectively transferred billions of dollars from American consumers to the Venezuelan government.

Mr Chavez is spending this on building infrastructure and increasing the minimum wage and improving health and education in the poor ranchos which surround the cities.

As a result even his opponents accept that Mr Chavez is extremely popular and will easily win the next presidential election in December.

Mr Chavez is also spending billions in the rest of Latin America - exchanging contracts for oil tankers and infrastructure projects and buying up debt in Argentina and Brazil.

He has also spent some of the dollars which have come in from the US to support Fidel Castro in Cuba. In return Cuba has supplied the thousands of doctors and teachers who are transforming conditions in the barrios of Caracas.

The Venezuelan president has repeatedly won democratic elections and the opposition operates freely although some members have been charged with accepting illegal foreign donations.

Nonetheless Bush's administration repeatedly targets Mr Chavez on human rights and finances his opponents.

Earlier this year, US Defence Secretary Donald Rumsfeld compared Mr Chavez to Hitler - because he was elected democratically.

Mr Chavez told Newsnight he was still concerned that Mr Bush had not learned the lessons of Iraq and would order an invasion to try to secure Venezuela's oil.

"I pray this will not happen because US soldiers will bite the dust and so will we, Venezuelans," he said.

He warned that any such attempt would lead to a prolonged guerrilla war and an end to oil production.

Mr Chavez does not accept UK Prime Minister Tony Blair's criticism of him for lining up with Mr Castro.

He told Newsnight: "If someone is sleeping together it is Bush and Blair. They share the same bed."

[Curioser and curioser it gets. First you see it, then you don’t. One day it’s here, the next day it’s not. Whenever a new story appears, it is always in a relatively obscure (from an American viewpoint) venue. But we have seen that Iran’s oil bourse is clearly in play and most-certainly a bargaining chip in some hazily sensed negotiations to which we are not privy. It’s interesting also to note that after this story was published on April 1st, we see a new flock of mainstream stories, such as one from Britain’s Telegraph yesterday, putting war fears back on the front page. There’s a game being played here for sure and Iran’s oil bourse is definitely perceived as a threat of some kind to the US and Britain. (Note: This is an automated translation from the original story in German. That’s why it reads funky.) – MCR]

Iran is still insisting on opening a Persian Gulf oil bourse with the southern Iranian island Kish as its base, state-television reported Saturday.

'The issue has already been agreed upon and the oil ministry has been instructed to open this bourse in the Persian Gulf island of Kish,' Economic and Finance Minister Davoud Danesh-Jafari said.

'This bourse will have a positive impact on oil sale by not only Iran but the whole (Persian Gulf) region,' the minister added.

He also reiterated that the new oil bourse could also replace the dollar-based oil exchange with euro.

Iran argues that while 60 per cent of the global oil and 25 per cent natural gas need was covered by the Persian Gulf states, oil dealin in either New York or London would have no meaning.

Iran also wants to avoid the dollar-based oil exchange for not being target of economic problems of the United States and calls on a fair distribution of global economic interests.

The plan to open the oil-bourse in Kish was raised by the administration of President Mahmoud Ahmadinejad last year and supposed to be opened before the new Persian year which began March 21 but eventually postponed.