President Obama to call for one-third cut to oil imports
By Steven Mufson, Wednesday, March 30, 6:00 AM
President Obama on Wednesday will call for a one-third cut in oil imports by 2020, part of a plan he says will reduce U.S. dependence on foreign petroleum.
March 29 (Bloomberg) -- Mike Wittner, global head of oil research at Societe Generale SA, talks about the impact political turmoil has had on the oil industry and the outlook for gasoline prices in the U.S. Wittner speaks with Mark Crumpton on Bloomberg Television's "Bottom Line."
With rising gasoline prices at home and political turmoil throughout the Middle East, Obama will seek in a speech at Georgetown University to rally Americans — and bickering lawmakers — behind a program that draws about half of that import cut from energy savings and about half from greater energy production, according to Obama aides who briefed reporters Tuesday.
Many facets of his program will be familiar. The president will propose wider use of natural gas, including incentives to use it to fuel fleet vehicles such as city buses. He will back greater production of biofuels and will vow to establish at least four commercial-scale refineries producing cellulosic ethanol or advanced biofuels within the next two years. He also will pledge to establish higher fuel-efficiency standards for heavy trucks, just as he did for passenger vehicles early in his administration.
Obama will also urge oil companies to make greater use of the federal leases both onshore and offshore to prop up domestic oil output. The oil industry and GOP lawmakers have been loudly complaining about delays in the permitting of offshore drilling in recent months. But an irked administration, which had pledged tougher scrutiny of drilling applications after last year’s massive Gulf of Mexico oil spill, fired back Tuesday with an Interior Department report that revived earlier debates about whether oil companies were exploiting the leases they already have.
Obama has made energy a priority since taking office, with the increase in automobile fuel efficiency marking perhaps his greatest impact. As part of the economic stimulus package adopted in 2009, he also won about $70 billion in grants and loan guarantees to promote energy efficiency, advanced batteries for cars and renewable energy. He has said that in addition to energy benefits those monies will create what he calls “green jobs.” But he poured a large amount of effort into winning passage of a cap-and-trade climate bill, which failed.
Obama faces a plethora of obstacles in the push for less reliance on foreign oil. One is the appetite of the U.S. economy. The federal Energy Information Administration forecasts that the United States will import a net of 9.7 million barrels a day of crude oil and refined petroleum products in 2011 and 10 million barrels a day in 2012. Net imports accounted for 49 percent of all U.S. liquid fuel consumption in 2010, down from 57 percent in 2009 primarily because of the drop in consumption during the recession.
Yet members of Congress are divided about the best ways to cut imports, with lawmakers often uniting across party lines depending on what region they represent. An expansion of offshore drilling, for example, garners substantial support among gulf coast lawmakers, but opposition from representatives from states such as California, Florida and New Jersey.
With Obama’s push for more electric cars, there is also disagreement about the best way to make sure electric utilities can meet demands. With Japan’s nuclear crisis still in progress, it is a sensitive time to promote nuclear energy.
But Obama can expect support from people across party lines worried about the national security implications of relying on oil imports. On Wednesday the Bipartisan Policy Center — featuring former senators Trent Lott and Byron Dorgan and former Obama national security adviser Jim Jones — is releasing a report saying “recent events — from unprecedented unrest in the Middle East and North Africa to the Japanese nuclear crisis to the Gulf of Mexico oil spill — demand a thorough reassessment of America’s energy security.”
In addition to political obstacles, Obama faces technical ones. Legislation signed by President George W. Bush in 2007 called on oil refiners to use minimum amounts of biofuels, including 16 billion gallons a year of cellulosic ethanol by 2022. Though substantial amounts of venture capital — and government subsidies — have gone into pilot plants, commercial viability has remained elusive.
Finally, even if the United States becomes more efficient and uses less energy for every unit of economic output, a growing economy is one hungry for energy.
Virtually every president since President Richard M. Nixon has called upon Americans to conserve energy and seek alternatives to oil imports in the name of independence from international turmoil or pressure.
In 1973, Nixon called for a “Project Independence,” an effort he said should summon the spirit of the Apollo space missions or Manhattan Project and achieve self-sufficiency by 1980. Instead, the United States was importing more oil by that time.
In January 1975, President Gerald R. Ford said that “Americans are no longer in full control of their own destiny, when that destiny depends on uncertain foreign fuel at high prices fixed by others.”
In 1977, President Jimmy Carter called the energy challenge “the moral equivalent of war” and proposed conservation, alternative energy, higher gasoline taxes, ethanol fuels and wider use of nuclear power. He too set a goal of reducing oil imports by a third, to 6 million barrels a day by 1985 from 9 million a day in 1977.
That target was surpassed by 1982, thanks to a rise in Alaskan oil production and the virtual end of the use of oil by electric utilities and manufacturers. But soon imports resumed their relentless climb as a share of U.S. oil needs. By 2006, Bush was calling on Americans to end their “addiction” to oil , warning of “danger and decline” if the country continued to rely on “unstable” countries. He urged a 75 percent reduction in U.S. oil imports by 2025.
“We’ve been having this conversation for nearly four decades now,” Obama said in a March 11 news conference. “Every few years, gas prices go up; politicians pull out the same old political playbook, and then nothing changes. And when prices go back down, we slip back into a trance. And then when prices go up, suddenly we’re shocked. I think the American people are tired of that.”
Japan’s Reactor Risk Foretold 20 Years Ago in U.S. Agency Report
By Makiko Kitamura and Maki Shiraki
March 16 (Bloomberg) -- The earthquake disaster at the Fukushima nuclear power plant north of Tokyo was foretold in a report published two decades ago by a U.S. regulatory agency.
In a 1990 report, the U.S. Nuclear Regulatory Commission, an independent agency responsible for ensuring the safety of the country’s power plants, identified earthquake-induced diesel generator failure and power outage leading to failure of cooling systems as one of the “most likely causes” of nuclear accidents from an external event.
While the report was cited in a 2004 statement by Japan’s Nuclear and Industrial Safety Agency, adequate measures to address the risk were not taken by Tokyo Electric Power Co., which operates the plant in Fukushima prefecture, said Jun Tateno, a former researcher at the Japan Atomic Energy Agency and professor at Chuo University.
“It’s questionable whether Tokyo Electric really studied the risks outlined in the report,” Tateno said in an interview. “That they weren’t prepared for a once in a thousand year occurrence will not go over as an acceptable excuse.”
Hajime Motojuku, a spokesman for Tokyo Electric, said today he couldn’t immediately confirm whether or not the company was aware of the report.
The 40-year-old Fukushima plant was hit by Japan’s strongest earthquake on record March 11 only to have its power and cooling systems knocked out by the 7-meter (23-foot) tsunami that followed.
Lacking power to cool reactors, engineers vented radioactive steam to release pressure, leading to as many as four explosions that blew out containment walls at the plant 135 miles (220 kilometers) north of the capital.
While the appropriate measures that should have been implemented are still to be evaluated, more extensive waterproofing of the underground portion of the reactor could have helped prevent the cooling systems’ failure, said Tateno, who questions the use of nuclear power in Japan because of its seismic activity.
Engineering of the Fukushima Dai-Ichi nuclear plant or its age are unlikely causes of the problem, said Tateno, author of a book titled “The Coming Age of Scrapping Nuclear Plants.”
While nuclear power has been supported as a way of producing vast quantities of energy compared with other sources, “it will be difficult to get any more nuclear plants built going forward” in Japan, Tateno said.
To contact the reporters on this story: Makiko Kitamura in Tokyo at firstname.lastname@example.org; Maki Shiraki in Tokyo at email@example.com
Exelon, Reactor Owners Fall on Japan Meltdown Threat (2)
March 14 (Bloomberg) -- Exelon Corp., owner of the largest group of U.S. nuclear power plants, fell the most in 10 months as engineers in Japan struggled to stabilize a reactor similar in design to four of its units.
Exelon, based in Chicago, fell 27 cents to $42.89 at 4:00 p.m. in New York Stock Exchange composite trading. The shares earlier declined as much as 5.5 percent, the most since May 6, 2010. Exelon’s 17 reactors at 10 stations in Illinois, Pennsylvania and New Jersey account for 20 percent of U.S. nuclear power capacity, according to the company’s website.
Fifteen U.S. reactors use a similar design to the General Electric Co. unit at Tokyo Electric Power Co’s. Fukushima Daiichi No. 1, Hugh Wynne, a New York-based analyst for Sanford C. Bernstein, wrote in a note to clients today. “Exelon in particular has relied heavily on this design.”
The Japanese reactor was forced to vent radioactive vapor and gas over the weekend when its cooling system failed after the March 11 record earthquake and tsunami that followed. Engineers are flooding that unit and two others with sea water trying to prevent meltdowns that may result in the release of catastrophic levels of radioactivity.
PG&E Corp.’s Diablo Canyon nuclear plant and Edison International’s San Onofre station, both in California, are at similar risk of damage from earthquakes and tsunamis, Wynne wrote.
Damage to Tokyo Electric Power Co’s. nuclear stations in Fukushima prefecture was primarily from the tsunami, not the earthquake, Exelon Chief Executive Officer John Rowe said today in a statement.
“Our plants are safe, particularly given the different seismic patterns in our regions and the absence of tsunami-type events where we operate,” Rowe said.
Entergy Corp., the second-largest U.S. nuclear reactor operator, is subject to the threat of regulatory delay because it’s seeking to renew licenses for four of its reactors, according to Wynne. Entergy operates 12 reactors at 10 sites in New York, Arkansas, Louisiana, Massachusetts, Nebraska, and Vermont.
Shares of Entergy, based in New Orleans, fell $3.60, or 4.9 percent, to $70.09, the biggest drop since May, 2010. PG&E fell $1.34, or 2.9 percent, to $44.41 and Edison International fell 98 cents, or 2.6 percent, to $36.78.
Southern Co., the largest U.S. utility owner by market value, fell 63 cents, or 1.7 percent, to $37.65. Southern has begun preliminary construction on two new reactors at its Vogtle plant near Augusta, Georgia and has been expecting Nuclear Regulatory Commission approval to begin full construction this year.
Final approval “could take longer and be more contentious than was hoped before the earthquake and tsunami,” Christine Tezak, a McLean, Virginia-based energy policy analyst for Robert W. Baird & Co., wrote today in a note to clients.
The Westinghouse AP100 reactor Southern proposes to build doesn’t depend on pumps to cool the core after a shutdown, and should be approved on schedule by the NRC, Chief Executive Officer Thomas Fanning said today in an interview on Bloomberg Television.
To contact the reporter on this story: Jim Polson in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: Tina Davis at email@example.com
Asian Stocks, Oil Drop on Japan Quake; Gold Gains, Yen Weakens
By Shiyin Chen and Shani Raja
March 14 (Bloomberg) -- Asian shares fell, with the Nikkei 225 Stock Average tumbling the most in two years, after Japan’s biggest earthquake on record sent oil lower and spurred a jump in gold and default risk. The euro rose after European leaders agreed to expand a rescue fund for cash-strapped governments.
The MSCI Asia Pacific Index fell 2.8 percent to 131.31 as of 11:43 a.m. in Tokyo and the Nikkei 225 plunged 4.5 percent. Standard & Poor’s 500 Index futures fell 0.6 percent. The cost of protecting Japan’s sovereign and corporate bonds from non- payment surged. The yen weakened against 12 of 16 major currencies after the central bank injected 7 trillion yen ($86 billion) into the financial system. Crude oil retreated for a fifth day in New York, while gold advanced 0.4 percent.
Prime Minister Naoto Kan said yesterday Japan is facing its worst crisis since World War II after a March 11 earthquake and ensuing tsunami killed an estimated 10,000 people and caused explosions at a nuclear power plant. In Europe, officials broadened the size and scope of their 440 billion-euro ($614 billion) bailout fund and eased the terms of Greek rescue loans in a pact struck in the early hours of the weekend.
“I expect a weaker tone to pervade Asian markets,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Uncertainty about the ultimate impact of Friday’s earthquake and tsunami are likely to see investors adopt a cautious stance.”
About five stocks dropped for each that gained on MSCI’s Asia index. Toshiba Corp., a maker of nuclear reactors, and Tokio Marine Holdings Inc., Japan’s second-largest casualty insurer, led losses on the Nikkei 225. Posco, South Korea’s biggest steelmaker, jumped 5.6 percent, leading gains among steel and construction-material suppliers on speculation of increased demand from reconstruction in Japan.
The temblor and tsunami may have killed 10,000 people in Miyagi prefecture north of Tokyo, said Go Sugawara, a spokesman for the prefectural police department. The official toll reached 1,597, with 1,481 more missing and 1,683 injured, the National Police Agency said. More than 350,000 people are in emergency shelters.
Japan’s bonds rose for a second day, dragging yields on benchmark five-year notes lower by 7.5 basis points to 0.49 percent. The decline in the yield was the biggest since December 2009. Five-year credit-default swaps on Japanese government debt rallied 14 basis points to 92.5 basis points, the biggest increase since February 2009 and the highest level since July 8, according to prices from Deutsche Bank AG and data provider CMA.
The Markit iTraxx Japan index soared 21.5 basis points to 119 basis points, the biggest gain since May 25, according to Deutsche Bank AG and CMA. Credit-default swaps on Tokyo Electric Power Co., which is battling to avoid a meltdown at its Fukushima nuclear plant, surged 60 basis points to 100 basis points, Deutsche Bank AG said. That’s the highest on record, according to CMA data going back to 2004.
The yen retreated from a four-month high as the Bank of Japan added money to the financial system and on speculation policy makers will intervene in foreign-exchange markets by selling the currency to aid exporters. The government sold 2.12 trillion yen in September in its first intervention since 2004. The currency hit 80.22 per dollar on Nov. 1, the strongest since April 1995, when it reached a postwar record of 79.75.
The yen reached a high of 80.62 today, before trading at 82.24 from 81.84 in New York last week. It also fell 0.7 percent to 114.56 per euro. Bank of Japan Governor Masaaki Shirakawa told reporters yesterday that he’s ready to unleash “massive” liquidity as policy makers seek to assure financial stability.
The euro climbed 0.2 percent to $1.3933 after the region’s leaders negotiated an accord to allow primary-market bond purchases that will offer a lifeline to aid recipients in return for austerity commitments. The deal broke a deadlock as policy makers sought to extinguish a crisis that has raged for more than a year and forced Greece and Ireland to seek financial aid.
Leaders will allow the facility to spend its full 440 billion-euro capacity, removing restrictions that would have capped outlays at about 250 billion euros, though it won’t be used to finance bond buybacks for debt-strapped states. A final agreement is slated for a summit on March 24-25.
“The European accord is quite significant and a better outcome than the market was expecting so that will be a positive or the euro,” said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington. “With the ECB looking to hike rates in April the euro could be ripe to break that key $1.40 level in the near-term.”
Oil for April delivery fell 1.4 percent to $99.70 a barrel on concern Japan’s quake will limit demand in the world’s third- largest economy and crude user.
Gold for immediate delivery climbed for a second day, trading at $1,423.18 an ounce. Silver added 0.2 percent to $35.9638 an ounce.
To contact the reporter on this story: Shiyin Chen in Singapore at firstname.lastname@example.org; Shani Raja in Sydney at email@example.com.
To contact the editor responsible for this story: James Regan at firstname.lastname@example.org
Last Updated: March 13, 2011 22:44 EDT
Nuclear Renaissance Threatened as Japanese Reactor Struggles
By Jim Polson and Kim Chipman
March 13 (Bloomberg) -- Global expansion of nuclear power may draw more scrutiny and skepticism as the world watches Japan struggle to prevent a meltdown at a reactor damaged by a record earthquake, a former U.S. atomic regulator said.
“This is obviously a significant setback for the so-called nuclear renaissance,” said Peter Bradford, a former member of the U.S. Nuclear Regulatory Commission. “The image of a nuclear power plant blowing up before your eyes on a television screen is a first.”
An explosion at Tokyo Electric Power Co.’s Fukushima Daiichi No. 1 reactor, which had begun venting radioactive gas after its cooling system failed, injured four workers yesterday. The utility reported no damage to the building housing the reactor. It began flooding the reactor with sea water and boric acid today to prevent a meltdown and eliminate the potential for a catastrophic release of radiation.
There are 442 reactors worldwide that supply about 15 percent of the globe’s electricity, according to the London- based World Nuclear Association. There are plans to build more than 155 additional reactors, most of them in Asia, and 65 reactors are currently under construction, the association said on its website.
Japan gets about a third of its electricity from 54 nuclear power plants, the third-most after the U.S. and France. Two reactors are under construction and 12 more are planned, according to the World Nuclear Association.
China is tripling the number of its reactors, building 27 units to add to the 13 operating reactors on the mainland, according to the association. In the U.S., companies including Southern Co. and NRG Energy Inc. have submitted applications to build as many as 21 new reactors, adding to 104 existing units.
“Certainly it’s going to cause some reappraisals because this is what you call a show-stopping event,” said Robert Alvarez, a senior scholar at the Washington-based Institute for Policy Studies and former senior policy adviser at the U.S. Energy Department.
U.S. utilities canceled 14 nuclear plant orders in the wake of the 1979 partial meltdown at the Three Mile Island reactor in Pennsylvania, according to the International Atomic Energy Agency. The “immense” psychological effect of the accident spread through the Western world, the agency said in a report.
“The arguments that held sway during the Three Mile Island days will hold sway today with this accident,” said Tom Cochran, a nuclear physicist at the New York-based Natural Resources Defense Council. “The situations are somewhat similar, assuming this doesn’t blow up or breach the reactor vessel.”
Those who advocate nuclear power, which emits virtually no carbon dioxide, as a way to combat climate change will now have to deal with a “greatly heightened skepticism” and “heightened unwillingness to have nuclear power plants located in one’s own neighborhood,” Bradford said.
The damaged Japanese reactor, designed by General Electric Co., began commercial operation in 1971 and is similar to units still running in the U.S., said Cochran, who advised U.S. regulators on the cleanup of Three Mile Island.
Problems at the reactor may encourage the replacement of older models, said Sergei Novikov, a spokesman for Russia’s state-owned nuclear holding company Rosatom Corp.
“The global nuclear industry will speed up phasing out first-generation power units and start building new ones,” Novikov said.
Rosatom is building 15 new reactors worldwide, more than any other international supplier, five of them outside Russia.
GE, the largest U.S.-based reactor builder, is focused on the situation at the reactor in Fukushima and staff weren’t available to comment on the outlook for the industry, Michael Tetuan, a spokesman for the Fairfield, Connecticut-based company, said in an e-mailed message.
“In general, our business is going very well, but the situation in Japan is troubling,” said Vaughn Gilbert, a spokesman for Toshiba Corp.’s Westinghouse nuclear unit.
Jarret Adams, a U.S.-based spokesman for France’s Areva SA, declined to comment on the Fukushima situation or its effect on the nuclear industry.
The U.S. Nuclear Regulatory Commission is in talks with its Japanese counterparts, according to a press release. German Chancellor Angela Merkel and French Minister of Industry Eric Besson affirmed their nation’s confidence in the safety of nuclear power.
“We know how secure our power stations are,” Merkel told reporters in Berlin amid opposition calls for a rethink of Germany’s use of nuclear power.
It’s too early to speculate on U.S. political and financial fallout from the accident in Fukushima, said Richard Myers, vice president for policy at the Washington-based Nuclear Energy Institute, which represents reactor owners and builders.
“We’ve been saying for five years now that we expect the renaissance of nuclear power would unfold slowly,” Myers said. “We expected to see between four and eight new nuclear reactors between now and 2020 and we still believe that.”
Preliminary construction has begun on new reactors in Georgia and South Carolina, where state regulators allow companies to recover the cost of reactors as they are built, he said.
Avoiding disaster in Japan may help the industry prove its ability to handle emergencies, said Dale Klein, a former U.S. Nuclear Regulatory Commission chairman and a professor of nuclear engineering at the University of Texas at Austin.
“As long as they keep the core covered, as long as there’s no significant radiation release, it will demonstrate that the safety systems for the most part worked,” Klein said. “The human disaster that will be remembered will be the earthquake and the tsunami, which will have caused many more deaths.”
To contact the reporters on this story: Jim Polson in New York at email@example.com; Kim Chipman in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Warren at email@example.com
China Guangdong Plans 756 Million-Pound Offer for Kalahari (2)
By Jesse Riseborough and James Paton
March 8 (Bloomberg) -- China Guangdong Nuclear Power Group Co., the nation’s second-largest reactor builder, made a 756 million-pound ($1.2 billion) bid for Kalahari Minerals Plc as the Chinese government seeks uranium to boost atomic generation.
The proposed acquisition would give the state-owned company access to Extract Resources Ltd.’s Husab uranium project in Namibia. Kalahari owns about 43 percent of Australia’s Extract, which calls its venture the fifth-biggest uranium deposit.
“This would give them a foothold in one of the largest uranium assets in the world and supply their plans to significantly grow their reactor fleet,” Simon Tonkin, an analyst at Patersons Securities Ltd. in Perth, said today. Rio Tinto Group, a shareholder in Kalahari and Extract, may seek to block the offer or make a counter bid, according to Tonkin. Bruce Tobin, a Rio spokesman in Melbourne, didn’t return a telephone call seeking comment.
China Guangdong made a “possible offer” of 290 pence a share, 11 percent above Kalahari’s March 4 close, it said in a statement yesterday. Kalahari rose 9.5 percent to a record 285 pence in London trading after earlier saying it was in talks with an unidentified third party. The acquisition by China Guangdong would be the second-biggest Chinese takeover of a foreign mining company, according to Bloomberg data.
Extract gained as much as 8 percent to A$10 in Sydney after the announcement, the biggest gain since Oct. 15, compared with a drop of 0.2 percent for the S&P/ASX 200 Index. The shares traded at A$9.88, up 6.7 percent, at 11:30 a.m. local time.
Extract’s directors will “consider the implications” of the proposed bid, the company said in a statement today to the Australian stock exchange. Extract said it recommends shareholders take “no action” and await advice from the board.
“The Kalahari board believes this represents attractive value for Kalahari shareholders,” Mark Hohnen, chairman of the London-based company, said in the China Guangdong statement. Kalahari will recommend the proposal to its stockholders, according to the Chinese company.
China may raise its 2020 target for atomic power generation to 86 gigawatts, with annual investment of 70 billion yuan ($10.7 billion), the state-run China Daily said Jan. 26. In comparison, capacity may total 11.7 gigawatts by the end of 2011, the National Energy Administration said.
The plan is subject to regulatory approval in China and the securing of funding, the Chinese company said. China Guangdong would also seek approval from the Australian Securities & Investments Commission because a deal would give it more than 20 percent of Extract.
China Guangdong’s offer is 17 percent more than the average price of Kalahari’s shares in the 20 trading days before the announcement of the bid. That’s less than the 33 percent average premium paid by Chinese companies for foreign mining companies in 10 comparable deals in the past 10 years, Bloomberg data show.
Kalahari’s stake in Extract is valued at about A$1 billion ($1 billion), based on Extract’s A$9.26 closing share price in Sydney yesterday, giving the company a market value of A$2.3 billion. Rio, the world’s third-largest mining company, has a 14 percent stake in Extract and 11.5 percent of Kalahari.
Extract, based in Perth, Western Australia, said last month it was in talks with London-based Rio about merging the companies’ uranium projects in Namibia. Extract also said it was talking to Kalahari “to explore various options that might simplify the Extract/Kalahari shareholding structure.”
Rio owns the Rossing uranium mine in Namibia. The deposit is the third-biggest producer of the nuclear fuel, accounting for 7 percent of world supply, according to World Nuclear Association figures.
Husab is about 7 kilometers (4.4 miles) from Rossing and 30 kilometers from Paladin Energy Ltd.’s Langer Heinrich project.
U.S. commandos have captured four suspected pirates who boarded a Japanese-owned oil tanker off the coast of Oman, according to an international anti-piracy task force.
Twenty-four crew members on the MV Guanabara took refuge in a protected part of the vessel after reporting they were under attack Saturday, roughly 328 nautical miles southeast of Duqm in southern Oman.
A special unit from the destroyer USS Bulkeley boarded the oil tanker Sunday and detained the suspected pirates, according to a news release from the Combined Maritime Forces (CMF). No shots were fired and no injuries were reported.
"The ships and aircraft under my command have today scored a real and immediate victory through the disruption of a suspected act of piracy and the detention of individuals believed to be engaging in piracy," CMF's counter-piracy commander, Abdul Alheem, said in a statement.
The Bulkeley is part of a Bahrain-based multinational flotilla fighting piracy from Somalia.
The Associated Press contributed to this report.
Japanese foreign minister Maehara resigns amid donation flap
By Chico Harlan
Sunday, March 6, 2011; 10:46 AM
TOKYO - Japanese Foreign Minister Seiji Maehara resigned Sunday after receiving an illegal donation from a foreigner, dealing another blow to Prime Minister Naoto Kan's faltering ruling party.
At a televised press conference, Maehara, 48, apologized to the Japanese people for "provoking distrust over a problem with my political funding - although I have sought to pursue a clean style of politics."
Maehara's surprise resignation, coming just two days after he acknowledged receiving illegal donations from a South Korean living in Japan, amplifies the problems Japan faces both domestically and with its closest allies. The hawkish Maehara was popular among Obama administration officials, who viewed him as an advocate for the countries' shared security interest in Asia. Maehara, too, was often described by political analysts as a prime minister-in-waiting and this scandal sidetracks, at least briefly, the aspirations of one of Japan's most prominent leaders.
According to reports in the Japanese media, Maehara had received a total of 200,000 yen ($2,429) from a 72-year-old South Korean woman. The donor happens to live in Japan; she speaks the language and runs a restaurant in Kyoto. And she's known Maehara since childhood. But in an effort to prevent outside influence, Japanese law bans politicians from receiving donations from foreign nationals.
Maehara said he did not knowingly violate the law. Even so, Maehara faced the possibility of a fine or a prison sentence, causing opposition lawmakers to pounce, calling during Sunday morning talk shows for the foreign minister to either take responsibility for his actions or step down.
A foreign ministry spokesman said by e-mail that Maehara notified Kan before his resignation.
As it tries to deal with economic stagnation and a towering pile of debt, Japan's government has had a hard time finding leaders who can survive long-term in office. None of Japan's previous four prime ministers lasted more than a year on the job. The current leader, Kan, has recently seen his approval rating drop near 20-percent, and his party's inability to push bills through a twisted parliament could further erode his credibility.
Already, Japan's opposition politicians are urging Kan to either resign or call for a snap election.
Even the ruling Democratic Party of Japan is being threatened by vicious in-fighting. Early last week, 16 party members refused to show up for a voting session for the upcoming budget. The bloc of parliamentarians remains loyal to former DPJ leader Ichiro Ozawa, a scandal-tainted heavyweight from whom Kan has tried to distance himself.
U.S. officials have privately bemoaned the lack of continuity in Tokyo, and the merry-go-round leadership has further undermined efforts to finalize a plan for the relocation of a controversial Marine base in Okinawa. Maehara, who became foreign minister in September, had urged for the base to be relocated to a less populated part of Okinawa - as stated by a 2006 agreement between the two governments.
Maehara also was the point man in Tokyo for the DPJ's efforts to deal with concerns over North Korea and an increased militarized China. Maehara discussed both issues during a January meeting with U.S. Secretary of State Hillary Clinton. It was Maehara's fourth meeting with Clinton in four months on the job.
Maehara at the time called 2011 "the inaugural year of the new Japan-US alliance."
"The roles of our two countries will not diminish in any way in the days ahead," he said. "In fact, in view of the urgent need to develop institutional foundations in the region today, expectations are only rising that we play even greater roles, and I feel the responsibilities on our shoulders are very great."
Pentagon hesitant on no-fly zone over Libya
By Craig Whitlock
Washington Post Staff Writer
Tuesday, March 1, 2011; 5:27 PM
Defense Secretary Robert M. Gates on Tuesday played down the likelihood that the United States would enforce a no-fly zone over Libya, citing numerous political obstacles and questioning the wisdom of taking military action against an additional Muslim country.
Gates said the Pentagon was preparing "a lot of options and contingencies" for President Obama to consider in response to the fighting in Libya and general instability in the region. Although Gates did not rule out establishing a no-fly zone to prevent Libyan ruler Moammar Gaddafi from carrying out airstrikes against rebel forces, he said such measures would have indirect consequences that "need to be considered very carefully."
For starters, Gates noted that the U.N. Security Council had not authorized military intervention in Libya and that NATO was also divided on the subject. He also suggested that such a military campaign could drain U.S. forces away from the wars in Afghanistan and Iraq.
"We also have to think about frankly the use of the U.S. military in another country in the Middle East," he told reporters at a news conference. "So we are sensitive about all these things."
Although U.S. and European diplomats have openly discussed the possibility of enforcing a no-fly zone over Libya in recent days, U.S. military officials have tried to emphasize that such an operation would not be bloodless.
On Capitol Hill, Gen. James N. Mattis, the head of U.S. Central Command, told a Senate panel that it would be necessary to preemptively attack Libyan air-defense batteries and installations to ensure that they could not shoot down U.S. or NATO planes.
"It would be a military operation," he said. "It wouldn't be just telling people not to fly airplanes."
Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, echoed Mattis's warning about preemptive strikes on Libyan targets. "We'd have to work out way through it, do it in a safe manner and not put ourselves in jeopardy," he said in a joint appearance with Gates.
Mullen and Gates said that the Pentagon was aware of news reports that Gaddafi has ordered Libyan military aircraft to attack rebel targets but that they could not confirm whether such attacks have taken place. Gates also said that U.S. officials had not received requests from Libyan rebel leaders to provide air cover.
Gates did not spell out what other military options and contingencies are under consideration by the White House. He said, however, that he has directed two Navy ships, the Kearsarge and the Ponce, to sail to the Mediterranean in case they are needed for emergency evacuations or humanitarian relief. Both ships are in the Red Sea and are scheduled to travel through Egypt's Suez Canal on Wednesday en route to the Mediterranean.
Gates said 1,400 Marines assigned to the Kearsarge, an amphibious warfare ship, are fighting in Afghanistan. As a result, he said, 400 other Marines will be deployed to the ship from the United States.