Several forms of hyphenated-commerce have worked their way into the collective consciousness in the last decade. The "m" in m-commerce stands for "mobile." The c-commerce stands for "collaborative" and of course the "e" in e-commerce is short for "electronic". Marketwatch's story about the cut internet cables in the Middle East could add a new letter to the list- the letter.

Nobody knows what caused the cut cables in the Mediterranean that interrupted Internet service to parts of the Middle East last week, but there are now conspiracy theories galore written by bloggers and pundits. Some say it will benefit terrorists and Iran somehow. In fact, the cut cables -- originally blamed on ships dragging anchors -- look more like a ploy by some intelligence agency to disrupt Iranian commerce, specifically an emerging oil bourse that the Iranians have been quietly establishing and hoped to roll out fully in the next 60 days.This concept seems a little farfetched until you look at the details which were provided to me by one of my readers, Martin Kuplens-Ewart who has been following the story from the outset. He notes: "there is a substantial event that has effectively been killed by the loss of connectivity: the launch of the Iranian Oil Bourse.

In most instances Internet connectivity can be rerouted, and much of the Middle East has already done this. But what makes this situation unique is that the bourse was being established on Kish Island, a free-trade zone set up by the Iranians in hopes of creating a cool tourist destination. There doesn't seem to be an alternate Internet connection to the island other than the cut cables. I attempted to email the three top hotels on the island and all the email bounced. I was also unable to make a telephone call there indicating a large telecommunications failure. There has always been talk about disrupting commerce by screwing up the Internet. We've just seen a proof of concept, whether done on purpose or by accident.

The "d" in d-commerce is "disruptive", or maybe it's "defense."

Posted by Starling Hunter at 8:04 PM | Permalink | Comments (0) | TrackBacks (0) | Link Count

The cover story for the January 25-31 issue of theMiddle East Economic Digest is entitled "Why the Gulf is Going Nuclear: The Case of Atomic Energy." While acknowledging that both environmental costs and the potential for weapons proflieration are substantial roadblocks, MEED maintains that the need to meet "the region's growing demand for energy" is what is driving Middle Eastern countries towards the development of civilian nuclear power. They offer three specific rationales, the first of which is economic:

The advocates of civlian nuclear power argue that (nuclear power plants) make economic sense. "The reason the region is now interested in nuclear power is exactly the same reason other regions are facing a nuclear renaissance," sayd Charles Hufnagel, spokesman for (French) Areva. "The cost of production is competitive and stable in the long term." The initial cost of a nucclear power plant are high, ranging from $4bn for a 1200 MW reactor to $5bn for a 1600 MW plant. But once it is up and running, the cost of operating a plant is relatively low.

Added to this is the revenue lost by using fossil fuels as feedstocks for running electrical utilities:

For now, Gulf countries are selling feedstock to their utility firms are subsidized prices which keeps the cost of electricity artificially low. ... Diverting more (oil and gas) to export markets would make greater economic sense.

There are also environmental benefits:

Unlike coal and gas-fired plants, nuclear power generation does not emit any carbon dioxide (CO2). The IEA estimates that replacing 1000 MW of coal-fired generation with nuclear power cuts CO2 emissions by 5-6 million tonnes a year.

Economic and environmental rationales aside, whether or not the Middle East and North Africa sees civilian nuclear power in the near future depends in large part on the ability deal effectively with...

...the more serious question (of) what will happen to spent fuel. Once removed from the reactor, the radioactive material is either stored or reprocessed. Reprocessing yields more energy, but it an also be used to produce weapons-grade plutonium. Third party enrichment is one way of reducing the risk of proliferation.

Until greater confidence in the ability of the IAEA, the UN's nuclear watchdog, to monitor, rein in (or if need be, thwart) the nuclear ambitions of a certain Middle Eastern state, the whole region is likely to remain a no-glow zone for some time to come.

Posted by Starling Hunter at 12:34 PM | Permalink | Comments (0) | TrackBacks (0) | Link Count