It had to happen someday:  A Middle Eastern oil exporter glimpsing the bottom of the barrels.

The booming United Arab Emirates, facing declining oil reserves, will be issuing a call for bids early next year for the construction of "several" nuclear power plants, the Paris-based Intelligence Online (IO) newsletter is reporting.
 
Westinghouse (now a U.S.-Japanese company) and France's Areva "are geared up to bid for the huge contract," it said.

The Bush administration has favored the deal, arguing that it's an object lesson on U.S. support for peaceful nuclear power development in the region.    

"This is a real counter-example to what Iran is doing," a senior US official was quoted as saying in the Wall Street Journal over the weekend. "We're seeking commitments from nations within the Middle East."

The clock's running out for the Bushies, however. As my CQ colleague Matt Korade pointed out Dec. 9:

"Under Section 123 of the Atomic Energy Act of 1954 (PL 83-703), Congress must be given 90 days to approve this kind of nuclear trade deal. Because there is not enough time left in the current session, the Bush administration has indicated it probably will not submit the agreement for approval before the next Congress takes office, a congressional aide said."

There are other hurdles.

Last week Rep. Ileana Ros-Lehtinen of Florida, the top Republican on the House Foreign Affairs Committee, introduced a resolution (HR 7316)  "that would bar any agreement or the issuing of licenses to export nuclear technology unless the president certifies to Congress that the UAE has met certain requirements," as Korade described it.

They include "taking effective action to prohibit the transfer of sensitive technology to Iran for a one-year period and enforcing U.S. sanctions and non-proliferation law."

But an earlier effort isn't working very well, Intelligence Online says.

Under pressure from the Commerce Department's Bureau of Industry and Security, the UAE last year adopted a law on export controls designed to prevent the transfer of classified American technology to Iran.

But the law "has failed by far to put a halt to trade between Dubai and Tehran," despite U.N. sanctions, IO reported.

As for the Obama team, it's not commenting on the issue.

But it's interesting to note that the French company in the running for the UAE's business, Areva, is represented by Covington & Burling, the Washington superlawyer firm where Obama's attorney general-designate, Eric Holder, worked until recently.

On the other hand, Areva is competing for major contracts here, IO reported, and can't afford to alienate members of Congress

Victor Comras, a longtime State Department diplomat and trade expert, argues that plunging oil prices and chaos in the international finance system could force Iran back to the bargaining table over its nuclear program.

Economic sanctions have also begun to show results, Comras said, as reports surfaced that the Bush administration was forcing Israel to stand down from plans to attack the Islamic republic.

"Iran's economy is already in shambles," Comras wrote for the widely read Counterterrorism Blog Tuesday.

"The downturn in the price of oil has left Iran's government with serious budget shortfalls and significantly reduced its ability to support and subsidize its extensive ongoing energy sector and other infrastructure projects," he said.

"It has also significantly reduced the profit incentives that previously enticed foreign businesses and banks to compete for Iran's business, even when that meant irritating their American relationships.

"Iran's cost of doing business is soaring, and the stepped up measures adopted by the U.S. Treasury Department, and the US campaign to dissuade financial dealings with Iran, are now actually having a significant impact! More and more Western banks are reducing their Iran exposure and pulling out of the Iran marketplace. Even non Western banks in Dubai are beginning to view triangular transactions with Iran more cautiously. These factors may serve to enhance the chances of engaging Iran in a more constructive dialogue on its nuclear program than previously."

Read the rest here.

For a Vice Presidential candidate who didn't own a passport until last year, Sarah Palin's brief passages on national security Thursday night were perfectly tailored to her lack of expertise or experience in foreign affairs.

But it hit the spot -- the oil spot, to be precise -- in a rollicking acceptance speech spent mostly ridiculing the Democratic ticket and extolling the expertise hockey moms bring to high office.

The Alaska governor's office floats in a sea of oil politics. During her 20 months in office, Palin threw herself into ramping up exports of North Slope supplies to the lower 48. In fact, she accelerated the construction of infrastructure to deliver fuel.  

It's hard to imagine an Alaska governor not knowing at least something about what's going on in the rest of world's energy markets.

But it's a sure bet that the average Alaskan is as familiar with the intricacies of crude futures as ordinary Iowans are with the price of ethanol or, for that matter, Third Worlders with the price of kerosene.

But otherwise, Palin has shown little interest in the world outside the United States.

Her first, and apparently only, foreign travel came last year, to visit members of the Alaska National Guard stationed in Kuwait, and wounded troops in Germany, according to her deputy communications director, Sharon Leighow.

That was roughly equal to the travels of George W. Bush when he entered the White House in 2001. The erstwhile Texas governor had visited China when his father was ambassador to Beijing in the 1980s, and Israel, and there were the famous "lost weekends" in Mexico  during his drinking years -- all of which, critics say, left him woefully unprepared for the rigors of the post-9/11 world.

Historians will have the final call on that.

Palin sounded authoritative when she mentioned "Russia wanting to control a vital pipeline in the Caucasus and to divide and intimidate our European allies by using energy as a weapon...."  

Critics have credited speechwriter Matthew Scully, late of the Bush White House, with writing the words Palin merely sang.  

But as tidy a line as that was, it's likely Palin had at least as much a hand in drafting it as Scully, considering her involvement with oil infrastructure during her term as governor, no matter how brief.

She went on to talk about the scary what-ifs:

To confront the threat that Iran might seek to cut off nearly a fifth of the world's energy supplies, or that terrorists might strike again at the Abqaiq facility in Saudi Arabia, or that Venezuela might shut off its oil discoveries and its deliveries of that source, Americans, we need to produce more of our own oil and gas . . . .

Big applause.

And take it from a gal who knows the North Slope of Alaska: We've got lots of both.

More big applause.

If Palin didn't write that line, she sure had obvious fun delivering it.

The next lines, though, came right out of the Republican boilerplate for the past eight years.

Starting in January, in a McCain-Palin administration, we're going to lay more pipelines, and build more nuclear plants, and create jobs with clean coal, and move forward on solar, wind, geothermal, and other alternative sources . . . .

The problem is, it's a script grounded more in the kind of kitchen-table, hockey-mom talk that makes so much sense to so many people, until it's tested against the complicated real world.
Washington has shown only fitful interest in alternative energy supplies (the technology for which, most energy economists say, doesn't exist yet to generate meaningful amounts of power) .

And nuclear is a non-starter, unless she and McCain win the election and the Republicans take both houses of Congress -  not -- unless we want to buy them from France; U.S. companies deserted the business years ago.

Nor is there's going to be any explosion of offshore drilling, which all the Republicans, except those who actually would have to look at them from their patios, seem to be for. (Likewise, look up Ted Kennedy's position on windmills in Nantucket Sound.)

Meanwhile, even capitalist icons, notably, T. Boone Pickens, have given to issuing Al Gore-like pronouncements that natural gas, not oil, is only a temporary solution to our energy problem.

So, like it or not -- and nobody outside Saudi Arabia does -- we'll be mired in global oil politics for decades to come, particularly in the Middle East

So when Palin falls back on right-wing red-meat rather than thoughtful alternatives, as she did Thursday night, she sounds like nothing more than an echo of Harry and Louise on the Republican ticket -- not a serious contender for the second highest post in the land.  

"Victory in Iraq is finally in sight, and he wants to forfeit," she said of Barrack Obama, in a disturbing slander. (Has anyone noticed that the Iraqis themselves have forced the Bush administration into adopting Obama's position?)  

She goes on, in a similar vein:

Terrorist states are seeking nuclear weapons without delay; he wants to meet them without preconditions.

and:

Al Qaeda terrorists still plot to inflict catastrophic harm on America, and he's worried that someone won't read them their rights.

The Republicans lapped it up. 

Do they really believe it? Does she?

If so, God help us.