Posts Tagged ‘Oklahoma’

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Finding manna from heaven under the sea

September 10, 2012

The Financial Times has an excellent article on recent natural gas discoveries off the coast of Israel.  For many decades, the commonly held perception of Israel was that it is the only country in the Middle East without oil.  The recent discoveries, which involved hard work and long odds, turn the old perception on its head.

Energy independence is extremely important for the U.S. and the West at large.  But it may be a matter of existential survival for Israel.  Israel has had to depend exclusively on imported energy in the past, leaving it vulnerable to price shocks and supply interruptions.  Natural gas deposits at Tamar and Leviathan will go a long way in helping Israel to write its own future.

Here’s a long excerpt, but you should take a look at the full piece:

Field of dreams: Israel’s natural gas

Aug. 31

By Tobias Buck

After decades of importing every drop of fuel, Israel has struck it rich, uncovering vast reserves of natural gas in the Mediterranean

The black and yellow helicopter heads north from Tel Aviv, passing over empty beaches, a yacht harbour and a string of sprawling seafront residences that house some of Israel’s wealthiest families. After a few minutes the pilot makes a sharp turn to the left and steers his ageing Bell 412 towards the open sea.

For more than half an hour, all there is to see is the blue waters of the Mediterranean. Then suddenly a hulking mass of brightly painted steel rises from the midday haze. Towering more than 100m above the water, this is the Sedco Express, a drilling rig that has been operating in this stretch of ocean for almost three years. As the helicopter touches down on the landing pad, we see a small blue and white Star of David flag fluttering in the wind. It is the only sign that the Sedco Express sits atop one of the greatest treasures that Israel has ever found. Far below, connected to the rig by a slender steel pipe that runs through 1,700m of ocean and another 4,500m of rock and sand, lies a vast reservoir of natural gas known as the Tamar field.

The men on board the Sedco Express are busy testing the field’s multiple wells in preparation for the long-awaited day next April, when a US-Israeli consortium will start pumping the gas onshore. With reserves of almost 10 trillion cubic feet of natural gas, the Tamar field is a hugely valuable asset for the Israeli economy. Discovered in January 2009, it was the biggest gas find in the world that year, and by far the biggest ever made in Israeli waters. But the record held for barely two years. In December 2010, Tamar was dwarfed by the discovery of the Leviathan gasfield some 20 miles farther east – the largest deepwater gas reservoir found anywhere in the world over the past decade. The two fields, together with a string of smaller discoveries, will cover Israel’s domestic demand for gas for at least the next 25 years, and still leave hundreds of billions of cubic feet for sale abroad. The government take from the gasfields alone is forecast to reach at least $140bn over the next three decades – a staggering sum for a relatively small economy such as Israel’s.

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Hawala tax presentation

October 13, 2011

Not fond of reading a 2,000 word essay?  Not to worry.  Here’s the abridged rationale behind our proposed tax on hawala boiled down to just 11 slides:

If you like the idea, please help spread the word!

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The case for taxing hawala

October 3, 2011

Problem/Issue:

1)  Hawala, the traditional Islamic method of transferring money, plays a key role in financing major terrorist activity.  A)  The 9/11 Commission found that Al Qaeda relied on a trusted network of a dozen hawala dealers leading up to the terrorist attacks of Sept. 11, 2001.  B)  Hawala finances terror in South Asia.  The lethal Lashkar-e-Taiba terrorist organization uses hawala and Italian hawaladars may have helped fund the 26/11 attacks against Mumbai, India.  C) The late ambassador Richard Holbrooke disclosed that hawala funds the Taliban.

2)  Hawala’s lack of transparency or an audit trail imposes risks to customers and markets.  Since hawaladars (hawala dealers) often operate outside formal financial rules, their records are subject to less scrutiny, and they do not practice know-your-customer requirements.

3)  Even when practiced legally with the best of intentions by immigrants to send the money home to family in their country of origin, hawala enables a massive transfer of wealth to locations with hostilities toward the United States such as Osama bin Laden’s long-time host, Pakistan.  When Mexican immigrants use Western Union, at least they are using an American company with American employees exercising industry standard controls on wire transfers to a country that is not our sworn enemy.

When a Muslim immigrant seeks the services of a black market hawaladar who doesn’t demand proper customer identification, allows the money to be transferred to a high-risk country, and may only keep a paper log of the transaction, it’s a far different scenario.

Options

Regulatory

Many experts and lawmakers have attempted to regulate hawala by forcing hawaladars to register their business with or become licensed by the government.

Effectiveness

In the U.S., hawaladars are required to register as money services businesses (MSBs) with FinCEN.  A publication from George Mason University indicates that only 17 percent of U.S. hawaladars have actually registered.  From a compliance standpoint, the current system is not working.

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