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[Rob <becida AT comcast.net>]

This came in on another list, it's really worth the read.

Rob

New Orleans: A Geopolitical Prize



By George Friedman

The American political system was founded in Philadelphia, but the 
American nation was built on the vast farmlands that stretch from the 
Alleghenies to the Rockies. That farmland produced the wealth that 
funded American industrialization: It permitted the formation of a 
class of small landholders who, amazingly, could produce more than 
they could consume. They could sell their excess crops in the East 
and in Europe and save that money, which eventually became the 
founding capital of American industry.

But it was not the extraordinary land nor the farmers and ranchers 
who alone set the process in motion. Rather, it was geography -- the 
extraordinary system of rivers that flowed through the Midwest and 
allowed them to ship their surplus to the rest of the world. All of 
the rivers flowed into one -- the Mississippi -- and the Mississippi 
flowed to the ports in and around one city: New Orleans. It was in 
New Orleans that the barges from upstream were unloaded and their 
cargos stored, sold and reloaded on ocean-going vessels. Until last 
Sunday, New Orleans was, in many ways, the pivot of the American economy.

For that reason, the Battle of New Orleans in January 1815 was a key 
moment in American history. Even though the battle occurred after the 
War of 1812 was over, had the British taken New Orleans, we suspect 
they wouldn't have given it back. Without New Orleans, the entire 
Louisiana Purchase would have been valueless to the United States. 
Or, to state it more precisely, the British would control the region 
because, at the end of the day, the value of the Purchase was the 
land and the rivers - which all converged on the Mississippi and the 
ultimate port of New Orleans. The hero of the battle was Andrew 
Jackson, and when he became president, his obsession with Texas had 
much to do with keeping the Mexicans away from New Orleans.

During the Cold War, a macabre topic of discussion among bored 
graduate students who studied such things was this: If the Soviets 
could destroy one city with a large nuclear device, which would it 
be? The usual answers were Washington or New York. For me, the answer 
was simple: New Orleans. If the Mississippi River was shut to 
traffic, then the foundations of the economy would be shattered. The 
industrial minerals needed in the factories wouldn't come in, and the 
agricultural wealth wouldn't flow out. Alternative routes really 
weren't available. The Germans knew it too: A U-boat campaign 
occurred near the mouth of the Mississippi during World War II. Both 
the Germans and Stratfor have stood with Andy Jackson: New Orleans 
was the prize.

Last Sunday, nature took out New Orleans almost as surely as a 
nuclear strike. Hurricane Katrina's geopolitical effect was not, in 
many ways, distinguishable from a mushroom cloud. The key exit from 
North America was closed. The petrochemical industry, which has 
become an added value to the region since Jackson's days, was at 
risk. The navigability of the Mississippi south of New Orleans was a 
question mark. New Orleans as a city and as a port complex had ceased 
to exist, and it was not clear that it could recover.

The Ports of South Louisiana and New Orleans, which run north and 
south of the city, are as important today as at any point during the 
history of the republic. On its own merit, POSL is the largest port 
in the United States by tonnage and the fifth-largest in the world. 
It exports more than 52 million tons a year, of which more than half 
are agricultural products -- corn, soybeans and so on. A large 
proportion of US agriculture flows out of the port. Almost as much 
cargo, nearly 17 million tons, comes in through the port -- including 
not only crude oil, but chemicals and fertilizers, coal, concrete and so on.

A simple way to think about the New Orleans port complex is that it 
is where the bulk commodities of agriculture go out to the world and 
the bulk commodities of industrialism come in. The commodity chain of 
the global food industry starts here, as does that of American 
industrialism. If these facilities are gone, more than the price of 
goods shifts: The very physical structure of the global economy would 
have to be reshaped. Consider the impact to the US auto industry if 
steel doesn't come up the river, or the effect on global food 
supplies if US corn and soybeans don't get to the markets.

The problem is that there are no good shipping alternatives. River 
transport is cheap, and most of the commodities we are discussing 
have low value-to-weight ratios. The US transport system was built on 
the assumption that these commodities would travel to and from New 
Orleans by barge, where they would be loaded on ships or offloaded. 
Apart from port capacity elsewhere in the United States, there aren't 
enough trucks or rail cars to handle the long-distance hauling of 
these enormous quantities -- assuming for the moment that the 
economics could be managed, which they can't be.

The focus in the media has been on the oil industry in Louisiana and 
Mississippi. This is not a trivial question, but in a certain sense, 
it is dwarfed by the shipping issue. First, Louisiana is the source 
of about 15 percent of U.S.-produced petroleum, much of it from the 
Gulf. The local refineries are critical to American infrastructure. 
Were all of these facilities to be lost, the effect on the price of 
oil worldwide would be extraordinarily painful. If the river itself 
became unnavigable or if the ports are no longer functioning, 
however, the impact to the wider economy would be significantly more 
severe. In a sense, there is more flexibility in oil than in the 
physical transport of these other commodities.

There is clearly good news as information comes in. By all accounts, 
the Louisiana Offshore Oil Port, which services supertankers in the 
Gulf, is intact. Port Fourchon, which is the center of extraction 
operations in the Gulf, has sustained damage but is recoverable. The 
status of the oil platforms is unclear and it is not known what the 
underwater systems look like, but on the surface, the damage - though 
not trivial -- is manageable.

The news on the river is also far better than would have been 
expected on Sunday. The river has not changed its course. No major 
levees containing the river have burst. The Mississippi apparently 
has not silted up to such an extent that massive dredging would be 
required to render it navigable. Even the port facilities, although 
apparently damaged in many places and destroyed in few, are still 
there. The river, as transport corridor, has not been lost.

What has been lost is the city of New Orleans and many of the 
residential suburban areas around it. The population has fled, 
leaving behind a relatively small number of people in desperate 
straits. Some are dead, others are dying, and the magnitude of the 
situation dwarfs the resources required to ameliorate their 
condition. But it is not the population that is trapped in New 
Orleans that is of geopolitical significance: It is the population 
that has left and has nowhere to return to.

The oil fields, pipelines and ports required a skilled workforce in 
order to operate. That workforce requires homes. They require stores 
to buy food and other supplies. Hospitals and doctors. Schools for 
their children. In other words, in order to operate the facilities 
critical to the United States, you need a workforce to do it -- and 
that workforce is gone. Unlike in other disasters, that workforce 
cannot return to the region because they have no place to live. New 
Orleans is gone, and the metropolitan area surrounding New Orleans is 
either gone or so badly damaged that it will not be inhabitable for a 
long time.

It is possible to jury-rig around this problem for a short time. But 
the fact is that those who have left the area have gone to live with 
relatives and friends. Those who had the ability to leave also had 
networks of relationships and resources to manage their exile. But 
those resources are not infinite -- and as it becomes apparent that 
these people will not be returning to New Orleans any time soon, they 
will be enrolling their children in new schools, finding new jobs, 
finding new accommodations. If they have any insurance money coming, 
they will collect it. If they have none, then -- whatever emotional 
connections they may have to their home -- their economic connection 
to it has been severed. In a very short time, these people will be 
making decisions that will start to reshape population and workforce 
patterns in the region.

A city is a complex and ongoing process - one that requires physical 
infrastructure to support the people who live in it and people to 
operate that physical infrastructure. We don't simply mean power 
plants or sewage treatment facilities, although they are critical. 
Someone has to be able to sell a bottle of milk or a new shirt. 
Someone has to be able to repair a car or do surgery. And the people 
who do those things, along with the infrastructure that supports 
them, are gone -- and they are not coming back anytime soon.

It is in this sense, then, that it seems almost as if a nuclear 
weapon went off in New Orleans. The people mostly have fled rather 
than died, but they are gone. Not all of the facilities are 
destroyed, but most are. It appears to us that New Orleans and its 
environs have passed the point of recoverability. The area can 
recover, to be sure, but only with the commitment of massive 
resources from outside -- and those resources would always be at risk 
to another Katrina.

The displacement of population is the crisis that New Orleans faces. 
It is also a national crisis, because the largest port in the United 
States cannot function without a city around it. The physical and 
business processes of a port cannot occur in a ghost town, and right 
now, that is what New Orleans is. It is not about the facilities, and 
it is not about the oil. It is about the loss of a city's population 
and the paralysis of the largest port in the United States.

Let's go back to the beginning. The United States historically has 
depended on the Mississippi and its tributaries for transport. Barges 
navigate the river. Ships go on the ocean. The barges must offload to 
the ships and vice versa. There must be a facility to empower this 
exchange. It is also the facility where goods are stored in transit. 
Without this port, the river can't be used. Protecting that port has 
been, from the time of the Louisiana Purchase, a fundamental national 
security issue for the United States.

Katrina has taken out the port -- not by destroying the facilities, 
but by rendering the area uninhabited and potentially uninhabitable. 
That means that even if the Mississippi remains navigable, the 
absence of a port near the mouth of the river makes the Mississippi 
enormously less useful than it was. For these reasons, the United 
States has lost not only its biggest port complex, but also the 
utility of its river transport system -- the foundation of the entire 
American transport system. There are some substitutes, but none with 
sufficient capacity to solve the problem.

It follows from this that the port will have to be revived and, one 
would assume, the city as well. The ports around New Orleans are 
located as far north as they can be and still be accessed by 
oceangoing vessels. The need for ships to be able to pass each other 
in the waterways, which narrow to the North, adds to the problem. 
Besides, the Highway 190 bridge in Baton Rouge blocks the river going 
north. New Orleans is where it is for a reason: The United States 
needs a city right there.

New Orleans is not optional for the United States' commercial 
infrastructure. It is a terrible place for a city to be located, but 
exactly the place where a city must exist. With that as a given, a 
city will return there because the alternatives are too devastating. 
The harvest is coming, and that means that the port will have to be 
opened soon. As in Iraq, premiums will be paid to people prepared to 
endure the hardships of working in New Orleans. But in the end, the 
city will return because it has to.

Geopolitics is the stuff of permanent geographical realities and the 
way they interact with political life. Geopolitics created New 
Orleans. Geopolitics caused American presidents to obsess over its 
safety. And geopolitics will force the city's resurrection, even if 
it is in the worst imaginable place.