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USA-Russia Gas War

Hat tip to John Helmer

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From EuroMaidan to EuroAnschluss Victoria Nuland’s ‘Ukraine-gate’ Sanctions against Russia Russian foreign policy Russian Fifth column Humor Etc

A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass - at the expense of the United States.

Pepe Escobar


Introduction

The USA proxy gas war with Russia is directly on limiting economic ties between EU and Russia and  uses Ukraine as cannon fodder. Today Ukraine is much like Spain in 1936. Split nation, civil war, the arena of collision of interests of foreign powers (with old players known from Spain war -- the USA, GB, Germany and Russia, but this time USA and GB are on German side of the conflict; Poland is playing the role of Italy), betrayal of national elite, spies, foreign volunteers, mercenaries ... But there is one important difference -- all this events are happening on the background of the US gas war with Russia. The strategic goal in this war is to isolate Russia from EU, and first of all Germany.

A starting point, kind of 101 for the topic might be nakedcapitalism.com Ukraine: The Real Energy Crisis Starts in June, BBC report Ukraine-Russia gas row: Red bills and red rags by Alix Kroeger and Russell Hotten, and The Russian Gas Carousel: Who Wants Off, and Who Wants On (May 21, 2014)

BBC report is pretty biased (as it should be in government controlled MSM) but it provides some discussion of key problems with the exception of one -- chronic, systemic inability of Ukraine to pay for Russia gas due to low competitiveness of the industries which are major consumers or it. For that nakedcapitalism.com article is a better source information. Here is the map of EU countries dependence of Russian supplies:

The nightmare of having a "partner" that is insolvent and steals the gas

For Russia Ukraine is a huge chronic pain, the partner that they iether need to subsidize or to cut the flow of gas. Ukraine is insolvent and can't pay market price for Russian gas. So it simply steals it. This nightmare of subsiding Ukraine lasted since the independence.

“We cannot deliver gas for free, so they need to pay off the debt,” said Aleksey Miller, Gazprom chief executive has said. The fact that junta came to power in Kiev in February, 2014 was the last drop that broke the camel back.

Russia understands that junta enjoys full support of the US government and that further complicates the situation, probably to the great delight of the USA energy companies brass:

Russia has threatened to cut gas supplies to Ukraine because of the dispute over prices. That could also affect EU countries, as much Russian gas is delivered to the West through Ukraine.

We examine what's behind the row, and its potential impact on Europe and its gas supplies.

What is the row about?

The immediate dispute is about Ukraine's very large unpaid gas bill: $2.2bn (£1.2bn; 1.4bn Euros), according to the Russian state-controlled utility Gazprom.

If Ukraine does not settle its bill, Gazprom will in effect install the world's largest pre-pay meter, and Ukraine will be obliged to pay for its gas in advance. If it fails to pay, Gazprom says it will restrict or suspend delivery.

But lurking behind this is the power struggle between the interim Ukrainian government, which leans towards the EU, and Russia, which wants to keep Ukraine firmly within its sphere of influence.

In February, months of street protests culminated in the removal from power of Ukraine's pro-Russian president, Viktor Yanukovich. He had decided not to sign an association agreement with the EU, opting instead to join Russia's customs union.

But the interim government has reversed course. In return, the EU is providing development assistance, a loan of 1.6bn Euros (£1.3bn; $2.2bn), the temporary removal of customs duties on Ukrainian exports to the EU, and a programme to lessen Ukraine's energy dependence on Russia.

That has angered the Kremlin. Gazprom has raised the price Ukraine will have to pay for its gas in future by 81%: up to $485.50 (£293; 354 Euros) from $268.50 for 1,000 cubic metres.

Previously, Ukraine's gas imports were subsidised in return for Russia's lease of the naval base at Sevastopol in Crimea, the home of the Russian Black Sea fleet. But since Russia annexed Crimea last month, that agreement is no longer valid.

Will anyone outside Ukraine be affected?

Quite possibly - the EU gets about a third of its gas from Russia, with some 50% of this flowing through Ukraine.

Outside Ukraine, two other pipelines link Russia to the EU: the North Stream (under the Baltic) and the Yamal, which flows through Belarus and Poland.

Germany and Italy are the two biggest customers for Russian gas. However, Germany is building more coal-fired power plants and renewable energy installations, including offshore wind farms.

Countries most reliant on Russian gas flows via Ukraine (cubic metres, billion)
Source: Oxford Institute for Energy Studies
2013 2012
Italy 25.33 15.08
Turkey 13 14.02
Germany 11.71 21
Czech Republic 7.32 7.28
Hungary 6 5.29
Slovakia 5.42 4.19

Another pipeline, the South Stream, is under construction, running from Russia under the Black Sea to Bulgaria and then splitting into two branches, north through Hungary to Austria, and south to Italy.

The project website says the South Stream is scheduled to begin supplying gas late next year and be completed in 2018-19.

However, the EU could decide to freeze construction as part of a further round of sanctions on Russia.

Interconnectors between different pipelines could also help. South-eastern EU countries such as Austria and the Czech Republic receive their supplies via Ukraine and are most at risk if Russia turns off the taps. However, they could receive relief supplies via the interconnectors flowing down from Germany.

Other countries, such as Poland, Lithuania, Estonia and Finland, are looking to diversify their energy supplies, for example by bringing in more liquefied natural gas (LNG) from non-European countries, such as Qatar, or shale gas from North America.

One factor working in the favor of EU consumers is the weather: energy use falls in summer, reducing dependence on imports.

Looks like Ukrainian events are used by the USA and its proxies and clients in Europe as a pretext for launched a campaign directed on undermining Russia’s strategic economic position in energy exports through a variety of means.

Geopolitical games about Ukrainian pipeline and Southern Stream project

From derailing negotiations over pipeline construction to using puppet governments as a wedge between Moscow and Europe, the US and its allies want to weaken Russia strategic position vis-à-vis gas delivery infrastructure, while simultaneously strengthening their own.

See also IEA Publication Energy Policies beyond IEA Countries - Ukraine 2012 - Ukrainian Version

Ukraine’s energy sector faces unprecedented challenges, from a heavy reliance on expensive fossil-fuel imports to inefficient infrastructure and markets. Yet there is also potential for Ukraine to experience an energy revolution, one that could boost employment, lift economic growth and enhance energy security. Modernisation of Ukraine’s energy-supply sectors has only begun and will require investment on a huge scale, complemented by a fundamental reform of the business environment.

A strong dependency on oil and gas imports and often-inefficient energy production, transportation and supply sectors means that reducing energy demand must be a greater priority. The potential for energy efficiency gains in the residential, district heating and industrial sectors is large. Endowed with large conventional energy reserves, alongside sizeable renewable potential, Ukraine can build the capacity to significantly increase its resource production.

Releasing this potential will require deep regulatory reform and full implementation of international treaty provisions. Effective competition, alongside a progressive move towards market prices, will also help Ukraine attract investment to develop the sector. A draft energy strategy, which sets out a series of supply-side measures, was published in 2012. Broadening and implementing a comprehensive energy strategy, one that takes greater account of demand-side policies, could significantly improve progress in the medium term.

This review analyses the large energy-policy challenges facing Ukraine and provides recommendations for further policy improvements. It is intended to help guide policy makers in the country towards a more secure and sustainable energy future.

Related link:

Putin's failed "Turkish Gambit"

As EU blocked Putin's attempt to bypass Ukraine via Back Sea route to Bulgaria, Putin decided to solve the problem via Turkey, despite the fact htat it more legthy path and turkey is not among Russia friends and is a member of NATO.

This "Turkish Gambit" was a very dangerous play. This idea of "sacrificing" the "South stream" to induce some sense of reality into EU and get some leverage is both very bold and very risky play. At the end it failed. But it instantly demonstrated astonished EU brass that Russia can search and find other markets for its gas. And no less profitable then German market. That raises for EU the spectre of redirection of Russia energy flows away from Europe, the last thing the EU wants as alternatives are more expensive and need additional infrastructure to be built. .

Southern European countries, especially Serbia and Bulgaria, which also were keen to blackmail Russian over this project, but which were already counting rent from running the pipeline, now look like a bride for which the groom left just before the wedding.

Of cause the perspective of subsidizing Ukraine which will steal gar from the pipeline in any case is even worse then running pipeline via Turkey which is on its way of transformation from secular into moderate Islamist state and as such is a threat to Russia (if this is a real plan; that is just the first move; Putin might have in mind something else) but here dangers are also clearly visible. Among them alienation of Greece and Armenia, as well as additional costs of running the pipeline for a longer distance.

One think is clear -- EU bureaucrats and Angela Merkel did shoot itself in the foot.

The greatest winner in this Turkish gambit play is the USA. For them this is a real and huge diplomatic victory. and it opens the path of supplying US LNG to Europe, if (big if) they can pay the price. While this is called energy diversification by US politicians in reality this is a power play to capture new markets.

Turkey politicians were not too exited with this perspective. They viewed it as mainly a good possibility to extract huge concession from Russia as for price  of the gas sold to turkey. Here is Turkish view on the problem from Batı’ya karşı Rusya kozunu kullanmak (Dec 4, 2014):

The visit of Russian President Vladimir Putin to Turkey caused serious debate not only about energy, but also about policy in energy shere.

The issues on which the parties have significant differences of opinion (especially Syria and Ukraine), were not mentioned at all during the visit. Instead, priority in these discussions (and, in my opinion, somewhat exaggerated form) was given to Russia's decision to cancel the project pipeline in Europe and lay it in Turkey.

As in the case of accidents in coal mines, one can observe that the Minister of Energy and Natural Resources Taner Yildiz (Taner Yıldız) demonstrates good communication skills. One of the first order, award-active discussion, it was Putin's statement about a 6% discount on natural gas, which Moscow supplies to Turkey. According to unofficial sources, the ministry has requested to reduce the price by 15%, while in the energy department requested the exact figure is not announced prices. Therefore, it is likely that once the discount exceeds 6%, to be made a statement saying that "this is the desired amount." But other countries Russia really sells gas is cheaper, so reducing the price of gas supplied to Turkey, was widely anticipated move.

The main surprise, in my view, was the statement of Vladimir Putin's rejection of the project "South Stream" and a willingness to build a pipeline to Turkey. In our country, the news is presented as a success for Turkey, however much it would be better to consider it as part of the game Putin against the West. In other words, we use Russia, and Russia uses us in your game.

This new project Russia is quite complicated to implement. First of all, we should recognize that in this form it is not profitable for either Turkey or Russia. Russia is seeking to sell gas directly to Europe. Over the past few years Russia invested large sums in Europe, wanting to fully capture the western energy market. But Russia is unlikely to increase their bets in this market through Turkey, despite the position of the EU and the failure of Bulgaria. Moreover, if Turkey by giving permission for the use of its territory and will only receive payment for transit, then it's better not to build this pipeline at all. But if Turkey will buy gas from Russia, mix it with the gas purchased in other countries, and sell it to yourself to Europe, then the project will be really beneficial for Turkey. But in this case, the question arises: "Why Russia to invest that amount of money if it will not be aboee to determine the price of the resold gas "

So, Russia is choking under pressure from the West, trying to find some way out. Initiating a similar project, Russia is trying to use it as a bargaining chip against Europe. However, anyone who has jurisdiction in this matter, understand that to realize these plans will not be easy.

It is in the interests of Turkey to pursue the gas deal from Northern Iraq.

A further increase Turkey's dependence on Russia - is, from all points of view, the risk. It is important to remember that for the last two years, Turkey has been successful in politics in Northern Iraq. Drawing their attention to the region and getting a direct license to extract gas Ankara actually can get a profitable business. Furthermore, Turkey does not need to turn away from this path in the future, for example, to conclude an agreement with the Northern Iraq like those that have been signed with Iran. Turkey should get gas from Southern Mediterranean thanks to the center created in Ceyhan. In this case Turkey, on the one hand, acquire a strategic force, on the other - guarantee the security of supplies and price advantages.

If we decide to go this path, it becomes obvious that buying the old volumes of gas in Russia in not rational. Of course, Russia is great player in energy sphere, but there are too many unknowns in this game. If Turkey agrees to this game, knowing that it is contrary to its interests, it can be explained only one reason - the desire to set the tone in the resistance to the West because of the growing contradictions with it.

Obviously, due to pressure from the West, Russia is left without countervailing forces on which it rely in pursuing its policy. And this sense Turkey rude "demonstration of power ansd independence" is just playing into another dangerous game.


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[Oct 10, 2017] Central-Eastern European pipeline gets go-ahead

Oct 10, 2017 | marknesop.wordpress.com

et Al , September 30, 2017 at 7:24 am

Euractiv: Central-Eastern European pipeline gets go-ahead
https://www.euractiv.com/section/energy/news/central-eastern-european-pipeline-gets-go-ahead/

An ambitious gas pipeline project connecting Bulgaria, Romania, Hungary and Austria received a shot in the arm on Thursday (28 September), when all of the involved parties signed a memorandum of understanding for the project, a vital part of Europe's efforts to wean itself off Russian gas

"We are at a very advanced stage with the BRUA project. We issued the building permit, we are conducting procedures for assigning the construction works, and contracts have already been signed for the design part and for the part concerning equipment for stations," Romanian Energy Minister Toma Petcu revealed.

"In December, the contracts for the execution part are going to be signed and pipe procurement is going to be finalised," Petcu added
####

Plenty more at the link.

Patient Observer , September 30, 2017 at 8:36 am
BRUA will be able to transport gas from the Black Sea and, when supply comes online at the end of the decade, from the Caspian too.

It is intended to cut Eastern and Central Europe's dependence on Russian gas, an important part of the European Commission's third energy package and the CESEC group's objectives.

Black Sea gas? Where again? Crimea does apparently have significant off-shore deposits of undeveloped gas. It is difficult to find an article via Google on the subject that does not have an anti-Russian slant (you know, something like just facts) but here is something on the topic:

http://www.zerohedge.com/news/2014-05-20/putins-crimea-bonus-vast-oil-and-gas-fields

I don't know if there are other sources of Black Sea gas directly accessible to the EU.

Caspian sea gas seems a looong way off, if ever it were to happen.

Patient Observer , September 30, 2017 at 10:21 am
Thinking more about the BRUA pipe line, It could be a make work project for the region with PC overtones (e.g. Crimea's little escapade will soon end bringing Black Sea gas back to Europe). The usual graft and corruption will also keep Brussels bureaucrats and local counterparts fat and happy.
et Al , September 30, 2017 at 2:00 pm
It fits in to the Energy Union progapanda that Brussels is spreading. There at least it makes some sense that where ever you are in the EU, member states will have access to energy resources from wherever else in the EU. Of course, the real question is of price and is something completely different. Does anyone else think it is insane to ship LNG to Krk off Croatia to be pipelined to the rest of the Balkans? Is this a bribe to Qatar or something? Or American LNG to say Antwerp or through the Med?

Still, the EU pipeline projects are small change compared to the amount spend on the Common Agricultural Policy and other stuff. I guess its just another 'Do Something' schtick to make Brussels seem relevant to EU citizens like me. Speaking of which, I enjoyed data and telecoms free roaming this summer when I went to the g/f's folk's place this summer. It was.. surreal. And normal. The fact that national EU telecomms operators have been shafting their own customers so hard and for so long and it took f($*ing Brussels to force it through shows which side their own states are on. A sorry state indeed!

marknesop , September 30, 2017 at 3:55 pm
It must be said again – Russia does not intend to sit idle in the LNG business either. And if the planned Kaliningrad terminal comes online by the end of this year as planned , it will not only position Russia attractively in the LNG market (does it cost more to bring European gas cargoes from Kaliningrad, or across the Atlantic?), it will bring increased energy independence to Kaliningrad itself. A cruise terminal is planned as well.
kirill , September 30, 2017 at 11:38 am
These clowns are a combination of corrupt and delusional. The only non-Russian gas coming via the Black Sea would be hypothetical sources via Turkey from Qatar/Iran and the Caspian basin. There is no source of natural gas in the Black Sea that, for example, Bulgaria could develop to feed this pipe.
marknesop , September 30, 2017 at 12:54 pm
Europe is forever bragging about weaning itself off of Russian gas, when what it is mostly doing is taking Russian gas and moving it around through connectors, and then reselling it to each other. A prime example – although not European – is Ukraine, which claims to have taken no Russian gas throughout 2015 and 2016 during which time it sourced most of its gas from Slovakia, supplied at 90% and above levels by Russia.

Ukraine claims to be getting gas from Yurrup at cheaper prices than Gazprom offered for direct supplies. If that's true, Slovakia is selling gas to Ukraine for less than it paid for it. And there's a word for people like that.

[Oct 04, 2017] The Logical (and Coming) End to the US Empire by Robert Abele

No so fast... Five years later (the article was written in 2013) the US empire is still going strong. meanwhile from 2013 to 2017 it managed to counterattack resource nationalists (killing Kaddafi) and and win in Libya, making the country a colony again. I think Venezuela is the next. Oil prices dropped more then 50% in 2014 (from over $100 to less then $50 per barrel ) and did not yet recovered...
Notable quotes:
"... For an example of the ethical problems of empire, think about the completely unjustifiable attacks on civilians done by the U.S. in Afghanistan, Iraq, Libya, Syria, and most prominently in Pakistan and Yemen, especially done by drones. Or consider U.S. use of torture, from Abu Ghraib to Guantanamo Bay. As everyone knows by now, ethical and humanitarian appeals have been completely and categorically rejected by U.S. leaders, not beginning with 9-11, certainly rejected with greater vigor since then. ..."
"... But there is another, often overlooked, analysis of U.S. actions, that is the logical result of engaging in the actions of Empire, and that concerns the logical consequence of using massive amounts of resources to attempt to control the resources being used (the second use of the term resources here includes citizens; the people of a city or nation). As the economic, logistic, and humanitarian costs all rise in direct proportion to Empire's actions, the sustaining of the Empire becomes impossible, on the basis of its own internal logic. ..."
"... When the issue of blowback is added "i.e. that other nations and peoples are unlikely to cooperate willingly in having their resources, humanity, and very lives removed from them "the end result, Empire's fall, could be hastened, and is certainly assured. We can now predict not only how it will happen, but also its imminent coming. ..."
"... First, the heaviest resource consumers of fossil fuels, in order, are the U.S. military, U.S. citizens, China, and India. The Department of Defense per capita energy consumption is 10 times more than per capita energy consumption in China, or 30 times more than that of Africa. ..."
"... Oil accounts for more than three-fourths of DoD’s total energy consumption. The Post Carbon Institute estimates that abroad alone, the U.S. military consumes about 150,000 barrels per day. In 2006, for example, the Air Force consumed 2.6 billion gallons of jet-fuel, which is the same amount of fuel U.S. airplanes consumed during all of WWII (between December 1941 and August 1945) (from The Resilience Group of the Post Carbon Institute, www.resilience.org ). ..."
"... This essays suggests that these two solid arguments should now be combined with an institutional-logical analysis to demonstrate not only the intrinsic, natural limits to empire, but to show reasons how and why empire must and will ultimately disintegrate due to the hubris of ignoring natural limitations of unbridled consumption coupled with attempts at singular control over others' resources and peoples. ..."
Jul 29, 2013 | www.counterpunch.org

There are numerous legal and ethical arguments that can and have been made in opposition to U.S. foreign policy of raw aggression. For an example of the illegalities of U.S. Empire, examine the Geneva Conventions, all four of which directly proscribe what they each call outrages to human dignity, in particular humiliating and degrading treatment (I, 1, 3). The outrages are named specifically as torture, mutilation, cruel treatment, taking hostages, murder, biological experimentation, and passing sentences on prisoners without benefit of a regularly constituted court.

Additionally, the Hague Conventions of 1899 and 1907 both underscore the Geneva Conventions and expand the traditional ethical concerns to rights and duties of neutral states by banning the use of poison gases or arms, destroying or seizing enemy private property, attacking towns and cities that are undefended, pillaging, collective punishment, servility of enemy citizens, and bullets made to wreak havoc once inside the human body. Prescriptions to limit the conduct of war include the requirements to warn towns of impending attacks, to protect cultural, religious, and health institutions, and to insure public order and safety.

For an example of the ethical problems of empire, think about the completely unjustifiable attacks on civilians done by the U.S. in Afghanistan, Iraq, Libya, Syria, and most prominently in Pakistan and Yemen, especially done by drones. Or consider U.S. use of torture, from Abu Ghraib to Guantanamo Bay. As everyone knows by now, ethical and humanitarian appeals have been completely and categorically rejected by U.S. leaders, not beginning with 9-11, certainly rejected with greater vigor since then.

But there is another, often overlooked, analysis of U.S. actions, that is the logical result of engaging in the actions of Empire, and that concerns the logical consequence of using massive amounts of resources to attempt to control the resources being used (the second use of the term resources here includes citizens; the people of a city or nation). As the economic, logistic, and humanitarian costs all rise in direct proportion to Empire's actions, the sustaining of the Empire becomes impossible, on the basis of its own internal logic.

In whatever historical epoch you choose, if you take your compass and draw a circle around any given tribe, you can see the desired extent of their territorial claims for resource control. One thus can see that particular group's

  1. resource consumption; and
  2. circle of desired resource control. But when two further historical developments are added, such as
  3. technologically-driven consumption (e.g. fossil-fuel guzzling appliances and cars, etc.); and
  4. now necessary desires for global resources needed to feed that group's consumption habits "then the situation expands sufficiently to become one of using extensive amounts of the very resources one is attempting to control (in the U.S. case, oil and money) for the sake of controlling the resources over which one needs to exert control! This circular logic cannot be maintained when it meets
  5. a scarcity of resources; and
  6. the natural-institutional-logical antinomy of using resources in massive amounts to control the resources you are using for control. In other words, the empire based on this pattern must end when it runs headlong into resource scarcity, and/or natural-logical contradictions involving its own internal (economic and resource) limitations.

This argument against U.S. Empire is not based on ethical or legal grounds (although those remain the best arguments in favor of voluntarily ending empire and regaining our citizenship [civil rights] and humanness) "since those arguments have been put asunder by the U.S. administrators of empire. Rather, the institutional-logical analysis argues that an empire such as the U.S. has constructed exhausts itself by being unable to expand fast enough to control everything it seeks in order to continue its dominance.

When the issue of blowback is added "i.e. that other nations and peoples are unlikely to cooperate willingly in having their resources, humanity, and very lives removed from them "the end result, Empire's fall, could be hastened, and is certainly assured. We can now predict not only how it will happen, but also its imminent coming. Here's how.

First, the heaviest resource consumers of fossil fuels, in order, are the U.S. military, U.S. citizens, China, and India. The Department of Defense per capita energy consumption is 10 times more than per capita energy consumption in China, or 30 times more than that of Africa.

Oil accounts for more than three-fourths of DoD’s total energy consumption. The Post Carbon Institute estimates that abroad alone, the U.S. military consumes about 150,000 barrels per day. In 2006, for example, the Air Force consumed 2.6 billion gallons of jet-fuel, which is the same amount of fuel U.S. airplanes consumed during all of WWII (between December 1941 and August 1945) (from The Resilience Group of the Post Carbon Institute, www.resilience.org ).

Second, concerning the global dimension of resource control, one needs only to understand the preferred method that U.S. Empire acolytes use to justify their actions abroad: the state of emergency that was declared after 9/11 has continued unabated since then, due to the ongoing threat of terrorism (see Jeremy Scahill, Dirty Wars: The World is a Battlefield , for the latest detailed instances of this process.). The domestic equivalent to his war has been well underway since 9-11. (For detail on the domestic front, see also Trevor Aaronson, Terror Factory , regarding FBI domestic use of the ongoing threat of terrorism to deny basic civil rights to citizens).

This allows U.S. government administrators to maintain a state of exception to the rule of law. Georgio Agamben, in his book States of Exception , defines this phrase as extraordinary governmental actions resulting from distinctively political crises. As such, the actions of such administrators are in-between normal political operations and legal ones. This no man's land of government policy is not only difficult to define, but brings in its wake a suspension of the entire existing juridical order. Thus, states of exception are those in which a government in fact suspends the rule of law for itself, while attempting to maintain some semblance of legal order, for the purpose of consolidating its power and control (see Georgio Agamben, States of Exception , Chapter Two).

Regarding the scarcity of resources issue, none other than the World Bank produced a detailed study of demand and supply projections for the immediate future. The study projects that, on the basis of current consumption and immediately precedent rises in it, the demand for food will rise by 50% by 2030, for meat by 85%, for oil by 20 million barrels a day, and for water by 32%, all by the same year.

This is met by alarming statistics and predictions from the supply side. In their report, they state that global food growth rates fell by 1.1% over the past decade, and are continuing to fall, while global food consumption outstripped production in seven of the eight years between 2000 and 2008. Further, the Food and Agricultural Organization and the UN Environment Program estimate that 16% of the arable land used now is degraded. Intensifying competition between different land uses is likely to emerge in future, including food crops, livestock, etc., and the world's expanding cities. Current rates of water extraction from rivers, groundwater and other sources are already unsustainable in many parts of the world.

Over one billion people live in water basins in which the physical scarcity of water is absolute; by 2025, the figure is projected to rise two billion, with up to two thirds of the world's population living in water-stressed conditions (mainly in non-OECD countries).

On oil , the International Energy Agency has warned consistently that there is a significant risk of a new supply crunch as the global economy recovers. Additionally, the IEA's chief economist argues that peak production could take place by 2020 (from the World Development Report 2011, Background Paper: Resource Scarcity, Climate Change and the Risk of Violent Conflict, www.worldbank.org ).

The conclusion from all of these points is nearly obvious: if resources are even relatively scarce, and the habits of and desires for consumption continue to rise among nations, and especially among the citizens of Empire (as has been documented in part above), and if control over those resources is the goal of Empire, but if the Empire consumes more resources than it can logistically or economically control due to natural limitations of those resources themselves, and/or to the consumption of more resources than is either available to it or that it needs to survive, then the power of the Empire will naturally-logically end in a sharp decline, and soon (For applicable details on this, see Richard Heinberg, The Brief, Tragic Reign of Consumerism "and the Birth of a Happy Alternative, www.postcarbon.org ).

With all indicators predicting that the contradictions of Empire's resource consumption, circle of desired resource control, scarcity of resources, and contradiction in resource use and control, are all about to collide in a few years, not decades, it is time to start planning for a post-Empire future. To that end, any psychologist reading this analysis will recognize themes of realistic conflict theory, which is a theory which explains how intergroup hostility can arise as a result of conflicting goals and competition over limited resources

The key point in bringing this psychological theory into the discussion is that in this theory, it is concluded that friction between groups can be reduced only in the presence of superordinate goals that promote united, cooperative action (see Wikipedia on Realistic Conflict Theory for a good overview, summarized here. https://en.wikipedia.org ). Note the agreement of the ethical, legal, and psychological analyses of Empire's oppression: the most effective resolution to oppression, (empire) dominance, and conflict is united, cooperative action, not the attempt to control or destroy people and nations who stand in the way of our control.

We have seen that progressives have had available to them a standard two-pronged argument against empire "American or any other". Progressives have for good reason appealed consistently to the ethical and the legal arguments available to help stem the desires for world and resource domination.

This essays suggests that these two solid arguments should now be combined with an institutional-logical analysis to demonstrate not only the intrinsic, natural limits to empire, but to show reasons how and why empire must and will ultimately disintegrate due to the hubris of ignoring natural limitations of unbridled consumption coupled with attempts at singular control over others' resources and peoples.

Dr. Robert P. Abele holds a Ph.D. in Philosophy from Marquette University He is the author of three books: A User’s Guide to the USA PATRIOT Act (2005); The Anatomy of a Deception: A Logical and Ethical Analysis of the Decision to Invade Iraq (2009); Democracy Gone: A Chronicle of the Last Chapters of the Great American Democratic Experiment (2009). He contributed eleven chapters to the Encyclopedia of Global Justice, from The Hague: Springer Press (October, 2011). Dr. Abele is a professor of philosophy at Diablo Valley College, located in Pleasant Hill, California in the San Francisco Bay area.

[Sep 25, 2017] The EU is again taking the position that transit of Russian gas through Ukraine after 2020 is a priority.

Notable quotes:
"... I know it's an analogy I have used before – as Lucy in the Peanuts ..."
"... Washington is the big brother Poroshenko turns to when he wants help to stymie Russia's efforts to build circumferential commercial links around Ukraine, and instead for Ukraine to have an important linking role in Russia's energy business with Europe – in short, for Russia to continue using Ukraine to transit its gas to Europe. ..."
"... In Ukraine's current condition, it is at serious risk of collapse. And a country that sends its gas across Ukraine is a country that cannot afford to let Ukraine turn into a failed state, at any cost. Just to put a cherry on top of this splendiferous vision, complications actually can be introduced, at a whim, into Europe's energy supply, should they get uppity. ..."
"... This is no time for Russia to weaken in its resolve. But it is also no time for Germany to allow itself to be rolled. Somebody is going to be a major gas hub for Europe, and in the current climate it is going to be Germany or Ukraine. Germany should ask itself what Ukraine has done for it which would merit such sacrifice. ..."
Sep 25, 2017 | marknesop.wordpress.com

Originally from: The West is as Thick as the Earth's Mantle

First, I ran across an hilarious post on Interfax Ukraine, which I was just going to offer for everyone's amusement. It featured the 17-year-old CEO of Naftogaz, Andriy (it's very important to Ukrainians that they spell their names differently from the Russian spelling, because they are not ignorant Slavs like the Russians, but the descendants of billion-year-old-carbon extraterrestrials) Kobolev, blubbering about how Siemens had caved in to pressure from the Russians, and stopped the sale of compressors to Naftogaz that it needed to modernize its Gas Transit System (GTS). He's not really 17, of course; he just has that Richie Cunningham kind of face that makes him look perennially pubescent, complete with red hair. That's part of what makes the article funny. There's more, but we'll get to that, in a bit.

Then it occurred to me that I've seen a loose series of pieces lately which mention Ukraine and gas transit, such as Ken Rapoza's piece for Forbes (which I mentioned already, in the comments to the previous post), where he unaccountably suggests that Russia has discovered it still needs Ukraine. As I argued on that occasion, Ukraine's soulful big-eyed caricature of trustworthiness is unlikely to fool anyone in Russia, and merely underscores how important it is for Russia's continuing progress and uncoupling from the west that it circumvent Ukraine, and not rely on it for anything.

But then I ran across this . The EU is again taking the position, or at least it appears so from the gobbling of the human turkey Maros Sefcovic, that transit of Russian gas through Ukraine after 2020 is a priority. And I thought, holy shit. Are we really going to go through all this all over again? And then I thought, what's a word for people who are incapable of learning? It's plain that western bureaucrats see themselves – and I know it's an analogy I have used before – as Lucy in the Peanuts comic strips , holding the football for Charlie Brown (Russia), only to snatch it away at the last second so that Charlie Brown/Russia falls ignominiously on his ass, to great amusement. What's a word for people who are so stupid that they believe everyone else is too stupid to see through their self-interested mendacity?

So I searched "What do you call people who are incapable of learning?" This site – somewhat unkindly – suggested "thick". Fair enough, I thought.

... ... ...

But that wasn't the part that made me laugh. No, what I found funny was Kobolev's pouty insistence that Nord Stream II be opposed as a 'politically-motivated project'. Just as if leaning on the jellyfish President of the European Commission to force Russia to continue transiting Europe's gas through the slow-motion collapse that is Ukraine had nothing whatsoever to do with politics. Nope, that just stands out as a solid business decision in every way, doesn't it?

Let's get something up-front and on deck right now, so that there is no ambiguity to confuse the issue. Washington was behind the Maidan turning into a violent insurrection, and the USA remains behind the scenes pulling the strings at the SBU . A very frank phone conversation between State Department neoconservative cookie-distributor Victoria Nuland and United States Ambassador to Ukraine Geoffrey Pyatt, in which the eventual composition of the coup government was planned in unambiguous detail should be all the evidence anyone needs that the entire process was manipulated and micromanaged. Lest anyone forget, Nuland's choice, 'Yats' – Arseniy Yatsenyuk – was such a political dung-magnet that he lasted only 26 months in the job. To be fair to him, he was tasked with implementing the IMF's favourite reform (because it's the only one the IMF really knows); austerity, in the poorest country in Europe. And it is the United States of America which continues to have its arm up the back of Kiev's shirt, making its mouth move. Washington is the big brother Poroshenko turns to when he wants help to stymie Russia's efforts to build circumferential commercial links around Ukraine, and instead for Ukraine to have an important linking role in Russia's energy business with Europe – in short, for Russia to continue using Ukraine to transit its gas to Europe.

Why is that, do you suppose? What's in it for Washington?

Dragging Ukraine into the west's orbit has long been a goal for Washington, dating back to the late and mostly-unlamented Zbigniew Brzezinski's 'grand chessboard' strategy – a geostrategic imperative, he said, to ensure American primacy in the world. Russia without Ukraine, quoth the pushing-up-daisies Pole, would never attain great-power status. And America has sort of gotten to like the feeling of being the only great power in the world.

The strategic value of Ukraine, then, is manifold. It can be stirred at any time to whip up global ire against Russia. NATO military exercises in Ukraine can be used to parade western might across Russia's doorstep. But its real value lies in continued gas transit by Russia between the source and Russia.

For one thing, it's the money – more than $ 2 Billion a year out of Russia's pocket and into Ukraine's, in transit fees. Once Russia is committed to continuing to use Ukraine as a transit country, transit fees can always be used as leverage to negotiate sweet energy deals for Ukraine, against the threat of interrupting Europe's gas supply. Europe would play its part by acting hysterically terrified and victimized. But that's still pretty small potatoes.

In Ukraine's current condition, it is at serious risk of collapse. And a country that sends its gas across Ukraine is a country that cannot afford to let Ukraine turn into a failed state, at any cost. Just to put a cherry on top of this splendiferous vision, complications actually can be introduced, at a whim, into Europe's energy supply, should they get uppity.

There is no room in this sugarplum daydream for an independent Germany which is a gas hub for Europe, perhaps not even with Mutti Merkel at the helm.

Perhaps some sort of medal could be struck for Sefcovic, for his relentless determination to herd Russia into a horrible bargain which would see it constantly bargaining and negotiating with greedy and lawless Ukraine for the expensive privilege of transiting its gas through Ukraine's whistling, creaking pipelines. In other circumstances, such dedication might be admirable. But I'm pretty confident that nobody in Russia is buying it. Europe has made an increasingly half-hearted attempt to stop Nord Stream II, and has learned instead that if it wanted to make a sensible legal argument, it should never have allowed the first pipeline; that's what, in the legal business, is known as 'precedent'.

All of which leads us to suspect that the real remaining antagonist to the Nord Stream II pipeline is somebody whom it should not by rights concern at all, since that entity is neither part of the supply chain nor the end user of the product – Uncle Sam.

This is no time for Russia to weaken in its resolve. But it is also no time for Germany to allow itself to be rolled. Somebody is going to be a major gas hub for Europe, and in the current climate it is going to be Germany or Ukraine. Germany should ask itself what Ukraine has done for it which would merit such sacrifice.

[Sep 17, 2017] Absence of common sense articles on the gas wars issue is really alaming by Nikos Tsafos

Notable quotes:
"... The critics allege that Nord Stream 2 is a political project. So what? When the Obama Administration authorised liquefied natural gas (LNG) exports from the United States, did it have politics in mind? Sure. When the Lithuanians turned to LNG to lessen their reliance on Russia, were they pursuing a political project? Well, the importing vessel is called "Independence." Saying that Nord Stream 2 is a political project does not get you very far ..."
"... I can't believe it has taken this long for Euractiv to post a normal article on NordStream II. Sure, it is not the Russophobic shitrag that EUObserver carrying bs opinions from self-acclaimed 'apolitical' energy expert Srijben de Jong, but absence of common sense articles on the issue are few and far between. I'll give this a '1 Hurrah!'. Let see if if it spreads. ..."
Jul 13, 2017 | marknesop.wordpress.com

et Al , July 12, 2017 at 11:23 am

Euractiv: Nord Stream 2 doesn't matter
https://www.euractiv.com/section/energy/opinion/nord-stream-2-doesnt-matter/

By Nikos Tsafos | enalytica

Nord Stream 2 continues to divide Europe. That's a pity. For all the noise, Nord Stream 2 is just a distraction – it doesn't really matter. Here's why, writes Nikos Tsafos.

Nikos Tsafos is president of enalytica, an energy consulting firm, and an adjunct lecturer at the Johns Hopkins School of Advanced International Studies (SAIS).

The critics allege that Nord Stream 2 is a political project. So what? When the Obama Administration authorised liquefied natural gas (LNG) exports from the United States, did it have politics in mind? Sure. When the Lithuanians turned to LNG to lessen their reliance on Russia, were they pursuing a political project? Well, the importing vessel is called "Independence." Saying that Nord Stream 2 is a political project does not get you very far

####

I can't believe it has taken this long for Euractiv to post a normal article on NordStream II. Sure, it is not the Russophobic shitrag that EUObserver carrying bs opinions from self-acclaimed 'apolitical' energy expert Srijben de Jong, but absence of common sense articles on the issue are few and far between. I'll give this a '1 Hurrah!'. Let see if if it spreads.

[Aug 26, 2017] First tanker crosses northern sea route without ice breaker

Aug 26, 2017 | marknesop.wordpress.com

et Al , August 24, 2017 at 4:05 pm

Al Beeb s'Allah GONAD (God's Own News Agency Direct): First tanker crosses northern sea route without ice breaker
http://www.bbc.co.uk/news/science-environment-41037071

The specially-built ship completed the crossing in just six-and-a-half days setting a new record, according to tanker's Russian owners.

The 300-metre-long Sovcomflot ship, the Christophe de Margerie, was carrying gas from Norway to South Korea .

The Christophe de Margerie is the world's first and, at present, only ice-breaking LNG carrier.

The ship, which features a lightweight steel reinforced hull, is the largest commercial ship to receive Arc7 certification, which means it is capable of travelling through ice up to 2.1m thick. ..
####

Another misleading headline, which is a pity because I wanted to say that the downside would be that it makes for shit Gin & Tonics if there is no ice!

Just as a reminder of FAKE news by the previous President that was met with raptured adulation by the professional media:

Neuters 3 August 2014: Obama: 'Russia Doesn't Make Anything'
http://www.businessinsider.com/obama-russia-doesnt-make-anything-2014-8?IR=T

karl1haushofer , August 25, 2017 at 1:07 am
Are you sure that tanker was built in Russia?
Moscow Exile , August 25, 2017 at 1:19 am
LNG TANKER CHRISTOPHE DE MARGERIE sails under the Cypriot flag and is registered in Limassol, Cyprus.

The vessel was built by Daewoo Shipbuilding Marine Engineering.

As we all know, Russians cannot make anything.

marknesop , August 25, 2017 at 12:03 pm
Was the ASIA VISION built in the USA ?
davidt , August 25, 2017 at 1:24 am
For information only, I think the boat was built by the South Korean firm DSME.

[Aug 26, 2017] Gas princess Tymoshenko might be back on power as Poroshenko lost the trust of Ukranians

Aug 26, 2017 | marknesop.wordpress.com

karl1haushofer , August 25, 2017 at 12:23 am

I would not call Julia Tymoshenko "pro-Russian". She was part of the Orange revolution leaders in 2004.
Moscow Exile , August 25, 2017 at 1:07 am
You are absolutely correct about her not being "pro-Russian", albeit she is an "ethnic" Russian: she is pro-Yulia Tymoshenko, nothing else..

Tymoshenko started off as a businesswoman in Dnepropetrovsk (now Dnipro), her home town, and with the help of the former governor of her home province, the unbelievably corrupt former Ukrainian prime minister, "Mr. 50%" Lazarenko, became immensely wealthy in an amazingly short time, not least because, for an appropriate fee, Prime Minister Lazarenko gave her control of the Ukrainian gas industry.

Tymoshenko was a brunette when she started of her business career and at that time only spoke Russian, which is both her mother tongue and the first (and probably only) language of her Russian mother. Her first foray into business was running a video-hire firm in Dnepropetrovsk, where she flogged off bootleg soft-porn imported from Poland.

The "Gas Princess" then saw that there was much more wealth to be further garnered by her entering what is laughably called in the Ukraine "politics". She changed her image to one of, I suspect, a latter-day Lesya Ukrainka, and the rest is history.

She also seriously studied the Ukrainian language, which on her own admission, she did not speak until she was in her 30s: she speaks nothing else now, in public at any rate.

The "Orange Revolution" for dear Yulia was just another opportunity for her to make even more lolly.

Moscow Exile , August 25, 2017 at 2:07 am

Ukrainians remember that in the 1990s, before the braids, Tymoshenko was a shrewd businesswoman with dark hair and a dark side: tough, unrelenting, unforgiving, and in a league with then-Prime Minister Pavlo Lazarenko. She amassed an enormous fortune in the natural gas business. People started calling her "The Gas Princess." And there she was helped by the sweetheart deals Lazarenko allegedly sent her way.

Given all the talk that later charges against Tymoshenko were trumped up or falsified in the Ukraine, it's probably important to know that her ally Lazarenko was prosecuted in the United States, where he was convicted and imprisoned for money laundering and other crimes. Tymoshenko was not charged in that case and she has denied wrongdoing, but she was named explicitly as part of the conspiracy detailed in the indictment.

"Lazarenko received money from companies owned or controlled by Ukrianian [sic] business woman Yulia Tymoshenko in exchange for which Lazarenko exercised his official authority in favor of Tymoshenko's companies, and Lazarenko failed to disclose to the people and government of Ukraine that he was receiving significant amounts of money from these companies."

Tymoshenko moved from business to politics when she entered parliament in 1996. Three years later, when Lazarenko fled the country (claiming people were out to kill him), Tymoshenko helped found the Fatherland Party on an anti-Lazarenko anti-corruption platform.

Yulia Tymoshenko: She's No Angel

marknesop , August 25, 2017 at 12:06 pm
That prosecution is important, because the USA knows full well many of the details of Tymoshenko's business relationship with Lazarenko. Consequently, it could probably make or break her – exactly the position Uncle Same likes to be in with his relentless spying and snooping on everyone and everything.
Moscow Exile , August 25, 2017 at 12:28 pm
That's why Washington has Merkel by the balls -- metaphorically speaking, of course.

[Aug 26, 2017] Certainly Naftogas managers doing a lot to help themselves, aren't they?

Aug 26, 2017 | marknesop.wordpress.com

August 24, 2017

marknesop , August 24, 2017 at 1:12 pm

Well, well; look at that – Naftogaz made a profit of 22.6 Billion hryvnia in 2016 , most of it from transit fees.

The same Naftogaz which plans to tack on an extra $5 Billion to its demands from Gazprom – already $12.3 Billion – for what it says was underpayment of transit fees between 2009 and 2016. The same Naftogaz that squeals what a reliable partner it is whenever there is mention of building a pipeline around Ukraine so Russia will not have to transit gas through it.

Certainly doing a lot to help themselves, aren't they?

et Al , August 24, 2017 at 3:49 pm
For 2016, its an odd 25 hryvnia to the dollar so their gained transit fees were a little below $1 billion.

[Aug 26, 2017] Lithuania has accepted the first batch of liquefied natural gas from the USA

Aug 26, 2017 | marknesop.wordpress.com

moscowexile , August 21, 2017 at 9:17 am

The beginning of the end?

Литва помогает Америке покорить Европу
Литва приняла первую партию сжиженного природного газа из США

Lithuania helps America conquer Europe
Lithuania has accepted the first batch of liquefied natural gas from the USA

.... ... ...

The first consignment of liquefied natural gas (LNG) from the United States has arrived at the port of Klaipeda. The Lithuanian authorities hope that the country will become a regional distribution centre (hub) for US gas. They also believe that supplies of overseas raw materials will help reduce gas prices in neighbouring countries and Lithuania itself.

Analysts do not consider Lithuania's gas policy rational and effective, noting that Russian pipeline gas is now much cheaper than LNG.

marknesop , August 21, 2017 at 11:10 am
There is nothing you can do to stop an ideologue who turns up his/her nose at cheaper local supply of a particular commodity because he/she dislikes the supplier, and elects to purchase more expensive goods from an alternate source. The fact is, Lithuania could become a hub for US LNG, and bring down gas prices for its customers so that they were eager to purchase it. Lithuania could accomplish this through the simple expedient of buying American gas at a high price – compared with Russian pipeline gas – and selling it at a lower price than Russia was willing to do. Of course, somebody would have to absorb the cost of the price difference, and that would be Lithuania. If Lithuania is willing to do that, as I said, she cannot be stopped from doing it by anything short of the poverty which will eventually result.

Knock yourself out, Grybauskaitė. If you were ordered to describe her policies in one word, 'irrational' would probably do quite well. Americans will be comforted to know there is more than one irrational president in the world.

[Aug 11, 2017] The Trump Presidency is effectively over. It ended on the day he signed the Sanctions Bill. A velvet junta has assumed control of the executive branch. Trump's family and advisors await conviction. The Generals are now in charge and will lead us into the next war sooner than later.

Aug 11, 2017 | www.moonofalabama.org

RenoDino | Aug 7, 2017 10:50:25 AM | 88

fast freddy | Aug 7, 2017 11:36:47 AM | 89

Sanctions, but US still buying billions of dollars worth (including baksheesh) of rocket engines and screwing around with international space station boondoggle (million dollar toilet seats, hammers and widgets). And more baksheesh.

Try to google search a fixed price on one Russian rocket engine.

Just Sayin' | Aug 7, 2017 11:39:59 AM | 90
This 'Pipelineistan' [Bullshit?] conspiracy: The war in Syria has never been about gas
Paul Cochrane
Wednesday 10 May 2017 10:57 UTC

The pipeline hypotheses do not stand up to the realities of how energy is transported through the Middle East in the 21st century

3. No Qatari offer to Damascus

The pipeline narrative, from 2013 onwards, also makes much mention of Damascus rebuffing an alleged Qatari offer in 2009 to build a pipeline. This part of the story hinges around statements by unnamed diplomats in a 2013 Agence France-Presse article about a meeting between Russia's President Vladimir Putin and Saudi Arabia's Bandar bin Sultan.

Qatar's then-Emir Sheikh Hamad bin Khalifa al-Thani (R) and First Lady Sheikha Mozah bint Nasser al-Misned (L) welcome Syrian President Bashar al-Assad and his wife Asma at Doha airport in January 2010 (AFP)

The report says: "In 2009, Assad refused to sign an agreement with Qatar for an overland pipeline running from the Gulf to Europe via Syria to protect the interests of its Russian ally, which is Europe's top supplier of natural gas."

But Dargin says: "There are no credible sources that show that Qatar even approached Syria in 2009 and was rebuffed in the process. I am not saying it definitely did not occur, rather there is no evidence supporting this claim."

Syrian experts also support Dargin's rebuttal, highlighting the burgeoning economic and political ties between Doha and Damascus.

'An important aspect that we don't talk about is the Syrian government never said the Qataris were fighting for a pipeline' - Jihad Yazigi, Syria Report

Yassin-Kassab says: "The absurdity is that relations between the Assad regime and the Qataris were excellent until summer 2011. Assad and his wife and the Qatari royal couple were also being portrayed as personal friends."

Although Assad may have repeatedly criticized Qatar since late 2011 onwards for supporting "terrorists," he has never publicly stated that Qatari support for the rebels was over a future pipeline.

Jihad Yazigi, editor of economy website Syria Report, says: "An important aspect that we don't talk about is the Syrian government never said the Qataris were fighting for a pipeline; that is telling in itself, that Assad never mentioned it."


4. The Moscow-Tehran connection

Then there's the other part of the Pipelineistan puzzle – the Iran-Syria pipeline, also known as the Islamic Pipeline.

Yazigi explains: "The Islamic pipeline has been talked about for years. There were pre-contract memorandums of understanding, but until July 2011, there was no formal signing [between Syria and Iran]. You can't argue this is a serious reason to destroy the whole country. "

While the project was politically expedient, it ignored economic and energy realities. First, the project was estimated to cost $10 billion, but it was unclear who would foot the bill, particularly as Tehran was – and still is – under US and international sanctions, as is Syria, since 2011.

Second, Iran lacks the capabilities to export significant amounts of gas. Sanctions mean it cannot access the advanced US technology that would allow it to exploit gas from the South Pars field that borders Qatar.

dh | Aug 7, 2017 11:41:03 AM | 91
@71 James, there are many small contractors involved in Nordstream in several countries. The sanctions are designed to squeeze them out and make Nordstream impossible.

It's not unlike the strategy being used against NK. They are designed to make life even more difficult for ordinary people....perhaps drive them into China and cause China to attack NK.

Skip | Aug 7, 2017 12:04:55 PM | 93
@15

"Not me! Term limits mean nothing more than the elimination of the ability of the voters to assess candidates based on legislative track records. The result is that every two years the voters will have to choose representatives with no past history of legislation. Disaster."

Gag me with a spoon. This argument is so old and so worn thin. Statistically 95+% of these fools are reelected because the highly cerebral voters you refer to have elevators that almost never go to the top of the building.

Money, money money. That's what drives the engine of elections. Incumbents have it working for them in so many ways: PACs, corporate centers of influence; radio and teevee.

All of the alternatives you propose are red herrings. They are only workable in heaven, not here on Terra Firma.

Remember, all of that institutional memory brought about by all of the 'experienced' members of congress got us where we are today. And, it's gotten them a 10% approval rating.

karlof1 | Aug 7, 2017 12:16:45 PM | 94
Grieved @66 & 67--

Thanks for your reply and endorsement.

Something to consider when dealing with the Revolutionary time period is what part of the populous is considered "The People," as in "We The People"? And just how equal in reality were those people in 1776 when the phrase "All men are created equal" appeared?

This is of great importance when we look at the proportion of the populous that was allowed to have a stake in the process and compare that with the amount of time it took until a majority was finally deemed to have equal rights under the law--1920 within USA

Although it can be argued that full equality under the law is still lacking as Glenn Greenwald did to great affect in With Liberty and Justice for Some: How the Law Is Used to Destroy Equality . Two works providing info on this issue are The Right to Vote: The Contested History of Democracy in the United States and People of Paradox: An Inquiry Concerning the Origins of American Civilization , although there are many others.

Is the United States federal government reformable? IMO, as currently constituted, no. A new document and associated institutions needs to be written and built, although some current institutions will have a place within the new construct.

Yes, I did write a Constitution 3.0 using Madisonian principles not long after the fiasco of the 2000 election to use as a classroom discussion tool. But to have any chance at making that reality, the Rule of Law must be reinstated within the Outlaw US Empire in order to bring the Deep State to Justice and thus its destruction.

Arioch | Aug 7, 2017 1:30:51 PM | 97
One jewish journalist (link was posted here few days ago) nicely pointed out these sanctions are the stupidest thing US could have possibly done. Not only it forges even closer Russia-China-Iran alliance, it also alienates the closest and strongest ally US have - the EU.

@18 - or the opposite. If Trump really is isolationists and if he wants USA isolate itself on the two Americas, then he has two options: make America turn its back on the world, or make the world turn its back on America. The first option he failed, DC regime is stronger than POUTS. Then - the second option.

Just Sayin' | Aug 7, 2017 2:56:49 PM | 99
Not only it forges even closer Russia-China-Iran alliance, it also alienates the closest and strongest ally US have - the EU.

Posted by: Arioch | Aug 7, 2017 1:30:51 PM | 96

What's wrong about that statement is that the EU nations are not US Allied states - they are US vassal states. A bit of a difference between those two: "allied state" and "vassal state"

[Aug 11, 2017] Russian gas pipelines to go ahead despite U.S. sanctions by Oksana Kobzeva and Alissa de Carbonnel

marknesop.wordpress.com

New U.S. sanctions will make it harder for Russia to build two gas export pipelines to Europe but the projects are unlikely to be stopped.

U.S. President Donald Trump has reluctantly signed into law further sanctions on Russia but some of the measures are discretionary and most White House watchers believe he will not take action against Russia's energy infrastructure.

This would allow Gazprom's two big pipeline projects to go ahead, although at a higher price and with some delays.

... ... ...

Gazprom warned investors last month that the sanctions "may result in delays, or otherwise impair or prevent the completion of the projects by the group."

With all that in mind, the Russian gas giant is taking steps to reduce the impact of sanctions.

It has accelerated pipe-laying by Swiss contractor Allseas Group under the Black Sea for TurkStream - even though there is no final agreement on where the pipeline will make landfall in Turkey. It is also hurriedly building a second TurkStream line to export gas to Europe.

"The construction of the second line is underway just in case the sanctions hit," a senior Gazprom source told Reuters.

A spokesman for Allseas said 100 km of the 900-km first line have been built since June 23 and preparatory work is underway for the second line.

THE UKRAINIAN CONNECTION

The biggest cost of any delays to the new lines could come from increased transit fees paid to Ukraine, the route by which Russian gas has traditionally reached Europe. Nord Stream 2 and TurkStream bypass Ukraine, but if they are brought into use late, Gazprom will have to continue using the Ukrainian route and may have to pay more for the privilege.

The European Union, fearing sanctions will hurt oil and gas projects on which it depends, said it was ready to retaliate unless it obtained U.S. guarantees that European firms would not be targeted.

Five Western firms that have invested in Nord Stream 2 - Wintershall (BASFn.DE) and Uniper (UN01.DE) of Germany, Austria's OMV (OMVV.VI), Anglo-Dutch Shell (RDSa.L), and France's Engie (ENGIE.PA) - say it is too early to judge the impact of sanctions.

For now, they are standing by their pledge of up to 950 million euros ($1.13 billion) each to finance the 1,225 km (760 mile) Nord Stream 2.

... ... ...

RISK PREMIUM

The sanctions law is however expected to hamper Gazprom's efforts to raise money. "The price of any project automatically increases," said Tatiana Mitrova, director of the Skolkovo Energy Center.

... ... ...

[Aug 09, 2017] Liberating Europe from Russian Gas

Notable quotes:
"... The sanctions bill has been promoted as one that appropriately penalizes Russia for its international misbehavior. The always-cited examples being the invasion of Georgia in 2008 and the (alleged) invasion of Ukraine in 2014. (As though these in any way rival in their impact and ramifications of the U.S. invasion of Iraq, based on lies, in 2003, or the U.S./NATO-led assault on Libya sold in the UN Security Council as a "humanitarian" intervention supported by Russia, that turned out to be a grotesque regime change operation culminating with Hillary Clinton's public orgasm following Muammar Gadaffi's sodomy-murder. "We came, we saw, he died!") ..."
"... Russia is always depicted in the corporate media as an "adversary." It acts, we are told ad nauseam, against U.S. "interests" around the world. Its involvement in Syria is (to support the survival of the secular modern Syrian state against the most savage opponents imaginable) is somehow objectionable (whereas U.S. bombing of Syria, condemned by Damascus as a violation of Syrian sovereignty and clearly in violation of international law, is treated as a matter of course). Its role in the bombing of Aleppo, resulting in the reconquest of the city from al-Nusra and its allies, was depicted by the U.S. media as a bad thing. Meanwhile U.S. bombing of Mosul, to retake that city from ISIL, is treated as heroic, however many thousands perish in "collateral damage." Anyway CNN won't cover it and has fewer reporters on the ground there than RT does. ..."
"... Russian Prime Minister Dmitry Medvedev matter-of-factly tweeted: "The Trump administration has shown its total weakness by handing over executive power to Congress in the most humiliating way." But where will this power lead? ..."
Aug 09, 2017 | www.counterpunch.org

But U.S. policy now, under the Trump administration, is to promote U.S. energy exports to Europe to replace Russian ones. It is both old-fashioned Cold War Russophobia and old-fashioned inter-capitalist, inter-imperialist contention.

The sanctions bill has been promoted as one that appropriately penalizes Russia for its international misbehavior. The always-cited examples being the invasion of Georgia in 2008 and the (alleged) invasion of Ukraine in 2014. (As though these in any way rival in their impact and ramifications of the U.S. invasion of Iraq, based on lies, in 2003, or the U.S./NATO-led assault on Libya sold in the UN Security Council as a "humanitarian" intervention supported by Russia, that turned out to be a grotesque regime change operation culminating with Hillary Clinton's public orgasm following Muammar Gadaffi's sodomy-murder. "We came, we saw, he died!")

https://www.youtube.com/embed/Fgcd1ghag5Y?feature=oembed

Hillary Clinton on Gaddafi: We came, we saw, he died

Russia is always depicted in the corporate media as an "adversary." It acts, we are told ad nauseam, against U.S. "interests" around the world. Its involvement in Syria is (to support the survival of the secular modern Syrian state against the most savage opponents imaginable) is somehow objectionable (whereas U.S. bombing of Syria, condemned by Damascus as a violation of Syrian sovereignty and clearly in violation of international law, is treated as a matter of course). Its role in the bombing of Aleppo, resulting in the reconquest of the city from al-Nusra and its allies, was depicted by the U.S. media as a bad thing. Meanwhile U.S. bombing of Mosul, to retake that city from ISIL, is treated as heroic, however many thousands perish in "collateral damage." Anyway CNN won't cover it and has fewer reporters on the ground there than RT does.

Russia is depicted as "provocative" when it mobilizes military forces within its own territory (and Belarus), in response to massive NATO exercises involving 31,000 troops in Poland last June that the German foreign minister criticized as "warmongering."

Russian Prime Minister Dmitry Medvedev matter-of-factly tweeted: "The Trump administration has shown its total weakness by handing over executive power to Congress in the most humiliating way." But where will this power lead?

The concept, as articulated by Sen. John McCain and Sen. John Hoeven in a 2014 Wall Street Journal op-ed, is to "liberate our allies from Russia's stranglehold on the European natural-gas market." But as the Washington Post has observed, "The problem is that Europeans don't necessarily want to be liberated. Russian gas is much cheaper than American LNG, and could become even cheaper to undercut the United States if it entered the European market. American LNG suppliers prioritize their own profits over America's strategic advantage anyway, and are likely to want to target more lucrative markets than Europe, such as Japan. Finally, the Russian gas supply is likely to be more reliable than the United States', since it involves predictable long-term contracts, whereas U.S. production capacity rises and falls, as it becomes cheaper and more expensive to extract American unconventional hydrocarbons."

The McCain-Hoeven piece was of course written before there was any talk about Russian "election meddling." But that issue was used to justify the sanctions bill. That, plus miscellaneous Russian actions, basically in response to U.S. actions (as in Ukraine, where!as everyone should know!Hillary Clinton's crony Victoria Newland helped organize a putsch in February 2014, designed to pull Ukraine into NATO, although that effort has failed and anyway lacks German support).

The U.S. at this point (under Trump) is taking actions towards Russia that recall those of the Truman administration. The warm, fuzzy (and miserable, abjectly weak) Russia of the 1990s under Yeltsin is now a reviving world power within an emerging Eurasian trade system. The relationship between Russia and China will stay strong even if the U.S. takes measures to sabotage trade relations between Russia and Europe.

Meanwhile, the sanctions law has produced general European outrage. This is not the anti-Trump outrage that accompanied his withdrawal from the Paris Agreement. It is outrage at the U.S. legislature for its arrogance in demanding Europe shoot itself in the foot, to show Washington deference. In other words, the entirety of the divided, troubled U.S. polity is seen as a problem. This is as a new Pew Research Center report showing that only 49% of the world's people now hold a positive view of the U.S.

German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern have publicly condemned the law, which could prevent them from benefiting from the planned Nord Stream 2 pipeline, declaring: "we cannot agree with threats of illegal extraterritorial sanctions against European companies which take part in the development of European energy supply." Brigitte Zypries, head of Germany's Ministry for Economic Affairs and Energy, says the new sanctions are "against international law, plain and simple Americans cannot punish German companies because they [do business] in another country." The foreign ministers of Germany, France, Austria, Italy and Spain have protested. Jean-Claude Juncker, president of the European Commission, said the bill could have "unintended unilateral effects" on the EU's energy security, adding, "America first cannot mean that Europe's interests come last."

This is not just a provocation of Russia, but of the whole world. It's leveled by a bipartisan effort, and general (although insane) consensus that Russia is trying to revive the Soviet empire, is constantly interfering in foreign countries' elections, and represents an "existential" threat to the U.S. and its freedoms, etc. (Because!reputable media talking heads opine routinely!Putin hates freedom and wants to oppose it, by electoral interference in Germany, France, Italy, etc.)

U.S. politicians!many of whom who do not believe in global warming or evolution, and cannot find Syria or Ukraine on the map!have boldly gone where no one has gone before: to risk a trade war with traditional allies, to force them to more firmly embrace the principle of U.S. hegemony. This when the U.S. GDP has dropped below that of the EU, and U.S. clout and credibility in the world!in large part due to global revulsion at the results of U.S. regime-change wars!is at low ebb.

Medvedev predicts that "relations between Russia and the United States are going to be extremely tense regardless of Congress' makeup and regardless of who is president. Lengthy arguments in international bodies and courts are ahead, as well as rising international tensions and refusal to settle major international issues." No bromance here.

Meanwhile Sen. Lindsey Graham!an extreme reactionary and warmonger now lionized my the mainstream media as some sort of "moderate" and adult in the room!informs NBC's Today Show that reports that "there is no military option" on North Korea are "just false."

"There is a military option: to destroy North Korea's nuclear program and North Korea itself. He's not going to allow -- President Trump -- the ability of this madman [Kim Jong Un] to have a missile that could hit America. If there's going to be a war to stop him, it will be over there. If thousands die, they're going to die over there. They're not going to die over here -- and he's told me that to my face."

[Jul 30, 2017] Are the Latest Russia Sanctions Really About Forcing US LNG on Europe?

Notable quotes:
"... Of course they are; and it's so bloody transparent that nobody is fooled. Please check the link below: http://russia-insider.com/en/politics/eu-ready-retaliate-if-us-imposes-new-russia-sanctions/ri20467 ..."
"... The U.S. is waging full scale war against Russia; economic sanctions are war and Japan attacked Pearl Harbour for almost identical sanctions on oil and energy imports. Vladimir Putin is the Cool Hand Luke of Russia; let hope the outcome is not like the movie. The E.U. seems to have had a recent spinal transplant; let's just see how it plays out ..."
"... The Western, eastern stuff is irrelevant. Russia isn't the aggressor in the situation. Putin will enjoy a population much more willing to stand against U.S. aggression which is largely dependent on an ignorant U.S. population. ..."
"... Merkel will be under pressure as these sanctions are simply a tax on EU citizens and corporations to support American corporate profits without providing better products. Given the EU political structure and the lack of a "cool" President, I suspect the next Congressional delegation will be shocked to find they aren't well received. ..."
"... I personally doubt that the Blob/US financial interests are 'jealous' of them -- they just think that Russia, like other countries, should kowtow to them, and allow them to buy whatever part of the Russian society and economy and land they like. ..."
"... I had thought of it the other way around: that the insistence on unprofitable fracking was to support America as a world power. Got to have some way to bribe Europe away from the Russians. Is there actually enough gas to do that? I know there's quite a bit. ..."
"... The Dragon in the Sea ..."
Jul 26, 2017 | www.nakedcapitalism.com

Anti Schmoo , July 26, 2017 at 5:17 am

Are the Latest Russia Sanctions Really About Forcing US LNG on Europe?

Of course they are; and it's so bloody transparent that nobody is fooled. Please check the link below: http://russia-insider.com/en/politics/eu-ready-retaliate-if-us-imposes-new-russia-sanctions/ri20467

Anti Schmoo , July 26, 2017 at 5:30 am

The U.S. is waging full scale war against Russia; economic sanctions are war and Japan attacked Pearl Harbour for almost identical sanctions on oil and energy imports. Vladimir Putin is the Cool Hand Luke of Russia; let hope the outcome is not like the movie. The E.U. seems to have had a recent spinal transplant; let's just see how it plays out

Anti Schmoo , July 26, 2017 at 5:34 am

I dare say, Russia is more self sufficient than the U.S. and almost every other country on the planet. Do the research; it's very enlightening.
The U.S. is a very jealous hegemon and can't bear this reality

Foppe , July 26, 2017 at 6:31 am

It's also got half the population, and a far less diversified economy (fwtw), so it's not exactly a apples to apples comparison.

Anti Schmoo , July 26, 2017 at 8:43 am

Have you ever thought to question your comparitive references? Most views of Russia are western-centric in the extreme. Russia is not western or European in any sense of that reality; Russia is a very different culture/s and sees things drastically different than the western-centric POV. Just sayin

NotTimothyGeithner , July 26, 2017 at 9:14 am

The Western, eastern stuff is irrelevant. Russia isn't the aggressor in the situation. Putin will enjoy a population much more willing to stand against U.S. aggression which is largely dependent on an ignorant U.S. population.

Merkel will be under pressure as these sanctions are simply a tax on EU citizens and corporations to support American corporate profits without providing better products. Given the EU political structure and the lack of a "cool" President, I suspect the next Congressional delegation will be shocked to find they aren't well received.

Foppe , July 26, 2017 at 10:38 am

I'm confused. Who was it who brought up "Russia is more self-sufficient than the US and almost every other country on the planet? That implies that you feel self-sufficiency (with respect to certain metrics) is something that one should value. Let's say other people do not share that meta value: does that then mean they are wrong?

I personally doubt that the Blob/US financial interests are 'jealous' of them -- they just think that Russia, like other countries, should kowtow to them, and allow them to buy whatever part of the Russian society and economy and land they like.

Mel , July 26, 2017 at 10:08 am

I had thought of it the other way around: that the insistence on unprofitable fracking was to support America as a world power. Got to have some way to bribe Europe away from the Russians. Is there actually enough gas to do that? I know there's quite a bit.

Damson , July 27, 2017 at 1:13 am

Yes indeed.

It's looking like quite the little diplomatic spat between the EU and Capitol Hill.

Here's the Russian envoy to the EU on talks to ban funding by EU banks for US business, if the US law is declared invalid in the EU :
http://tass.com/politics/957927

Note the bill bans not just business with Russians in Europe, but also Eurasia.

OBOR is clearly a target too.

So are the Chinese going to pipe up?

For this is nothing less than gloves – off imperialism .

timbers , July 26, 2017 at 6:38 am

Anyone know if it's possible the German's will act w/o the EU? In other words, unilaterally?

I'm asking because the article says EU may not be the "required" unanimous in responding to the U.S. sanctions & LNG so there may not be an official EU retaliation (though it seems there was much stronger opposition to the EU imposing Russian sanctions in 2014 in the first place but supposedly that was a "unanimous" decision).

Will Germany be a total puppet to the U.S.? Or might it start to move towards Russia which seems to be in Germany's business interest?

Ignacio , July 26, 2017 at 7:52 am

Germany wants to ensure stable gas supply for as long as possible. A pipeline thas goes through the sea and does not depend on third countries that migth disconnect the pipeline (like Ukrania) allows for a durable contract. So the US is not only intefering with russian interests but with german ones. I don't think Germany considers US shale LNG supply a robust enough alternative competitive in price and duration with russian gas. My guess is that in this case, Germany won't be a total puppet.

No spine no pain , July 26, 2017 at 9:05 am

Anti Schmoo put it very well "The E.U. seems to have had a recent spinal transplant"

EU has been following every global US initiative enthusiastically even though it only hurts Europeans: wars and invasions, TTIP, TiSA, CETA etc.

On top of being emasculated and spineless with regards to national and continental interests the current leaders of EU are neoliberals so they don't care about a new 'market solution' for gas. Will subsidize the higher prices for companies while the citizens pay the price.

Mel , July 26, 2017 at 11:30 am

:) q.v. Frank Herbert's very old novel The Dragon in the Sea (aka Under Pressure .) Being by Frank Herbert, it's about psychology, but it's also about petroleum pirating by submarine. Yeah, I guess the price per barrel must have been pretty high.

Harry , July 26, 2017 at 7:28 pm

The pipelines that go under the sea have lower capacities. They work to reduce the impact of ukrainians et al blackmailing gas supplies. They do not eliminate the need to route gas overland.

ZeWorldIsMine , July 26, 2017 at 6:52 am

Sadly, Sigmar Gabriel's word means nothing.

He's an opportunitist and may advocate something one day and oppose it the next day.
He is absolutely not trustworthy. A total pushover.
And I wouldn't expect much from the rest of the german government, too.

The german media could pick it up and put pressure on politicians.
But due to the pathetic state the germain mainstream media are in (with exceptions),
I expect they'll just stop bringing up this issue and let people forget about it.

Maybe other european countries will be more resistant, maybe

Clive , July 26, 2017 at 7:25 am

Plus Japan -- a big LNG importer historically as it has no conventional energy sources of its own -- is going to lessen its LNG demand as the nuclear restart gathers pace. Whatever you might think of the safety aspects, Japan has 50+gW of embedded nuclear generating capacity with a residual economic life of 20+ years on average. It is simply inconceivable that this plant, much of which, unlike Fukushima which was end-of-life, is mid-life and has decades of viable reactor runtimes available, will be mothballed and decommissioned without generating another kW of power ever again.

The LNG glut will only continue and probably get noticeably worse once all, or at least the vast majority, of Japanese reactors are brought back on line, which will be 5 years from now at the outer limit. Cutting off Russian gas into Europe (and the rest of the world) will be a big plus for the US. LNG liquefaction plant is a massive capital outlay, has big fixed costs and is highly operationally geared, so even small reductions below peak output have a big hit on plant profitability. It is those "wheels" the US plant operators will want to keep turning. Conversely, the regasification plants (based in EU countries) don't need to operate flat out, they're designed to have peaks and troughs as LNG consignments come in and get processed, then sit around for a bit waiting for the next one. Which, again, is why the US is bothered about restricting Russian supply, the EU not so much.

rjs , July 26, 2017 at 8:24 am

there is no surplus US LNG to be forced on Europe, it's a myth we are still importing more natural gas from Canada than we are exporting to Mexico and liquifying for export moreover, our own natural gas production has been falling year over year for 15 months straight i wrote about exactly this situation two weeks ago:
http://www.economicpopulist.org/content/great-us-natural-gas-exports-myth-6112
all the data is included. you can repost it if you want.
we are contracting to sell US natural gas at below the cost of US production, and it's gonna come back and bite US natgas users big time when a shortage develops here..

ambrit , July 26, 2017 at 8:39 am

IS natgas users would be anyone who uses American electricity, right? Another 'regressive' tax on the way. Really, this is not New Cold War oriented, but Class War materiel.
Time for work.

rjs , July 26, 2017 at 10:10 am

there's been a gradual shift back to coal for generating over the past half year or so whether that's because of price or because the utilities see what's coming i couldn't tell you..

Yves Smith Post author , July 26, 2017 at 5:43 pm

See the comments above, the US is flaring a ton of gas now due to supposedly to lack of delivery mechanisms.

rjs , July 26, 2017 at 6:24 pm

maybe i'm projecting too much, but i see us heading down the same path that Australia took


How energy-rich Australia exported its way into an energy crisis
- Australia exported 62% of its gas production last year, according to the BP Statistical Review of World Energy. Yet its policy makers didn't ensure enough gas would remain at home. As exports increased from new LNG facilities in eastern Australia, some state governments let aging coal plants close and accelerated a push toward renewable energy for environmental concerns. That left the regions more reliant on gas for power, especially when intermittent sources such as wind and solar weren't sufficient. Shortages drove domestic gas prices earlier this year in some markets in eastern Australia to as high as $17 per million British thermal units for smaller gas users such as manufacturers. On the spot market, gas prices have gone from below $1 in 2014 to roughly $7 today .. In March, Australia's largest aluminum smelter cut production and laid off workers because it said it couldn't secure enough cheap energy.

the problem is that we are are contracting to export natural gas at today's low prices, which wont pay for tomorrow's production..

Carolinian , July 26, 2017 at 8:36 am

Perhaps the most interesting and depressing thing is that 419 to 3 vote. Who were these heroes who dared to defy the Blob?

Clearly defeating Hillary was not enough. TPTB will have their war with Russia–cold or hot–or bust.

NotTimothyGeithner , July 26, 2017 at 9:35 am

The U.S. much like Team Blue hid behind our "cool" President and 9/11 for so long, no one knows how to act. This is a trade war where we picked a fight with our most loyal vassals on behalf of one industry which needs to be replaced anyway. Do you remember Hollande? He joined with Obama against "OMG Russia." Macron's honey moon is over.

Vatch , July 26, 2017 at 10:00 am

http://clerk.house.gov/evs/2017/roll413.xml

The 3 no voters were Justin Amash of Michigan, John Duncan of Tennessee, and Thomas Massie of Kentucky. All are Republicans.

Carolinian , July 26, 2017 at 11:20 am

Thanks.

p7b , July 26, 2017 at 9:27 am

One aspect of the US natgas pipeline situation !

Due to resignations early in the Trump administration, and refusal of the Senate to approve new FERC nominees, the FERC, whose approval is needed for building interstate energy transport infrastructure, now lacks a quorum (having only 1 of the minimum 3 members out of 5 total). A number of pipeline projects originating in marcellus were approved around end of 2016 prior to the resignations, and are due to come on line in 2018, but many dozens more are now awaiting permitting -- both for domestic use and to transport to LNG export, as the piece above states.

The other interesting thing is that in the past, the explicit strategy of the US was to use domestic natgas domestically, but no longer, it seems.

Pipelines would raise prices at the wellhead and lower prices elsewhere in the country. If the lack of approval goes on for a few more years, it may have an impact on: the battle between natgas and wind for the medium-term dominance of newly added utility scale electric generation in the US, and the timing of how fast we can retire coal electric.

Lastly, besides Russia, Qatar is also a major natgas exporter to Europe, so they'll get their gas either way, they'll just pay more. A points of reference there -- I belive Germany is currently using coal as its main domestic baseload electric fuel – as prices were relatively high until recently, they're using NG for home heating only. Now everyone needs to retire coal for obvious reasons.

JohnnyGL , July 26, 2017 at 10:28 am

Jamming up FERC shouldn't be underestimated. They've got a huge amount of discretionary authority to blast through state and local laws and regulations at will. It's amazing how the oil/gas industry gets 1-stop shopping for all it's regulatory requirements.

oh , July 26, 2017 at 10:15 am

It's sickening to see how much power the Petroleum companies have over Congress. Bribes work well in our country. We need a wholesale re-haul of CON gress.

TheCatSaid , July 26, 2017 at 10:19 am

Regarding possible EU development of a spine, a recent George Webb video from just about 3 days ago said he's been told by some of his IC sources that Germany has been printing DMs on the quiet. I take this with a pinch of salt but it's intriguing nonetheless. If true, Germany must also be looking at the IT issue as well.

yan , July 26, 2017 at 11:14 am

EU is still threatening to cancel Poland voting rights for 1 year, even after the President vetoed the legislation regarding judiciary reform (which was to my understanding the main bone, albeit the country is keen on going full Adolph). Maybe it has something to do with this?

vidimi , July 26, 2017 at 11:25 am

i thought the president signed the bill despite saying he would veto it?

vidimi , July 26, 2017 at 11:23 am

thanks for this article, it's really a remarkable powerplay. the stakes are so high that it's unfathomable that it doesn't backfire spectacularly. this looks like an exercise in hubris that future historians will be long discussing.

more than forcing the EU to use american LNG, it is an attempt to force the EU to back american efforts to replace assad in syria. remember, syria is what stands in the way between bahraini/saudi gas and oil pipelines to europe.

the US is already at war against russia, they just haven't yet started shooting at each other. but also, any chinese silk road to europe will have to use russian assets and infrastructure, so this, potentially, affects them, too.

dcblogger , July 26, 2017 at 2:46 pm

Trump Is Being Moved Aside So That Conflict with Russia Can Proceed
http://www.paulcraigroberts.org/2017/07/26/trump-moved-aside-conflict-russia-can-proceed/

Rosario , July 26, 2017 at 3:54 pm

All stupidity with the Russia hysteria aside this may be all the faster at forcing a move to renewables in the US. NG is the bounciest of all carbon based fuels WRT price. Once they start pumping US NG into more foreign markets the price will climb, which will squeeze utilities that have moved en mass into NG based generation and prove that renewables are even more cost effective. Petty politics may end up having a silver lining 5 years down the road, and at this point I am open to any route to renewables, even the sloppiest, unintentional ones.

Synapsid , July 26, 2017 at 6:43 pm

Rosario,

If exporting US NG causes its price to rise domestically, utilities that had been using coal can shift back to it. That happened recently.

Rosario , July 26, 2017 at 7:43 pm

Sure, but the ball is in another (higher) cup as the cost graphs go. I suspect it is going to get increasingly difficult to transition back and forth with the lowering costs of renewables. Also, coal is not getting any cheaper to extract and it definitely hasn't reduced its externalities. We'll see, big utilities move in herds and it takes years to make a full transition. They may flood back to coal, and build new plants (I doubt it), but they will eventually get burnt and have to swing back again. In the absence of purposeful national level policy (what I prefer) this is the only way the market based approach will turn away from fossil fuels.

Olaf Lukk , July 26, 2017 at 4:02 pm

"Instruments of political sanctions should not be connected with economic interests"?

This echoes the rationalizations of Wall Street when they crashed the economy in '08. Let's not let politics interfere with the right to make money?

The sanctions against Russia were put in place in response to its annexation of Crimea and its support of insurrection in Eastern Ukraine. They have been extended, and expanded, in response to Russian meddling in the recent presidential election. To what extent their cyber warfare had an effect is debatable, but Trump's stonewalling on the issue practically guaranteed the lopsided vote on the latest sanctions.

The LNG issue has some valid points, but it ignores an issue which I have not seen addressed on Naked Capitalism: Just how much is Trump- and those in his administration (infested with alumni of the vampire squid)- beholden to Putin and his fellow oligarchs?

Trump appears to be the Pied Piper of Putin Patsies. I can't help but wonder why.

Yves Smith Post author , July 26, 2017 at 5:51 pm

Crimea was not "annexed". The US destabilized Ukraine. The government in Kiev came in as a result of a coup even thought elections were scheduled for a mere six weeks later and Yanukovich would clearly have been voted out. The new government tore up the current constitution and went through no legal process whatsoever to do that. That is not the behavior of a legitimate government.

Even though neo-Nazis are a very small percentage of the voters, they got 15% of government positions. The head of the defense department gave a speech in which he encouraged ethnic cleansing of Ukrainians of Russian origin, saying that any soldiers who removed them could keep their property.

Crimea petitioned to join Russia after a referendum that approved of that move by a large margin. The US used precisely the same mechanism with Kosovo. Are you about to call that an annexation?

We have repeatedly discussed how the idea that Russia has influence over Trump is nonsense.

Better trolls, please.

GeorgW , July 26, 2017 at 8:26 pm

http://www.rollingstone.com/politics/features/taibbi-what-does-russiagate-look-like-to-russians-w493462# -Amazed, that you never linked this

Yves Smith Post author , July 27, 2017 at 12:33 am

I'm not omniscient and I've been unable to read for more than a week due to an eye injury, as Lambert told readers.

Lambert Strether , July 27, 2017 at 12:47 am

Did you suggest it at the time? The newsflow is a gusher right now. It's simply not possible to give notice to everything. So do feel free to stifle your amazement.

Adding, it is a very good story (although I'm not a Russia hand). So readers may enjoy it even at this late date which was, I take it, the real point of your comment.

TheCatSaid , July 26, 2017 at 9:48 pm

Plus the assertion of Russian "meddling" in the 2016 election was never proven–it was only asserted and repeated ad nauseum. Recent investigations have shown that in fact the DNC and Podesta emails were insider leaks, they were not outsider hacks. The technical analysis showed evidence that Russian "footprints" had been specifically inserted to cause Russia to be blamed.

In contrast the US has a well-established track record of meddling in other countries elections and setting up regime change in various ways. Ukraine is one example, as Yves described. There are many others, think of the US-sponsored coups in Latin America. They seem to be trying to pull off another coup in Venezuela since their 2002 attempt didn't work out. And Obama didn't hesitate to publicly endorse Macron just a couple days before the French election.

jo6pac , July 26, 2017 at 10:11 pm

Thank You, Thank You

Lambert Strether , July 27, 2017 at 12:52 am

> the Pied Piper

Highly unfortunate, then, that the Clinton campaign maneuvered to have Trump as their opponent, using just that phrase ("Pied Piper") .

clarky90 , July 26, 2017 at 9:16 pm

"the latest US sanctions against Russia, which passed the House today by a 419-3 margin ".

and

"Republicans and Democrats agreed almost unanimously, by 97 votes to 2 , to impose new sanctions on Russia in the Senate on Wednesday"

I have been a member of many organizations, and do not recall seeing this kind of "unanimity" when voting on significant and controversial resolutions. Clearly, a majority of US Americans want peace, particularly with Russia (a Christian democracy). How and why did the People's Representatives/Senators find the "courage" to vote against the People's wishes??? Hmmmmmmmm?

To put the vote into a context, 77 years ago; on

" ..July 14–15, 1940 – Rigged elections held in Latvia and the other Baltic states. Only one pre-approved list of candidates was allowed for elections for the "People's Parliament". The ballots held following instructions: "Only the list of the Latvian Working People's Bloc must be deposited in the ballot box. The ballot must be deposited without any changes." The alleged voter activity index was 97.6% . Most notably, the complete election results were published in Moscow 12 hours before the election closed. Soviet electoral documents found later substantiated that the results were completely fabricated. Tribunals were set up to punish "traitors to the people." those who had fallen short of the "political duty" of voting Latvia into the USSR. Those who failed to have their passports stamped for so voting were allowed to be shot in the back of the head.

July 21, 1940 – The fraudulently installed Saeima meets for the first time. It has only one piece of business!a petition to join the Soviet Union. (The consideration of such an action was denied throughout the election.) The petition carried unanimously. .."

https://en.wikipedia.org/wiki/Soviet_occupation_of_Latvia_in_1940

Is the Neo-NKVD whipping the Senate and USA House members into voting in the "correct" way?

It is the nearly 100% vote that bothers me- Not what I would expect in a free and open minded democracy.

Olaf Lukk , July 29, 2017 at 4:03 am

So the US congress voted almost unanimously to impose sanctions because they were worried that otherwise, they would be shot in the back of the head?

Makes perfect sense to me!

Mark W. , July 27, 2017 at 1:10 am

Read Petrodollar Warfare and The Hidden Hand of American Hegemony for a start and a lot of this will become more clear. The Iraq war, the U.S. instigated coup in Ukraine, U.S. backed attempt at regime change in Syria and the demonization of Russia all concern oil supplies and who will be allowed to supply what to whom, and more importantly in what currency such sales will be denominated. All of this stuff is about trying to maintain the dollar's reserve currency status. Isn't this becoming clear by now. Americans are still trying to understand why they invaded Iraq. Was it WMDs, Al Qaeda, to bring freedom and democracy to the towel heads? Hussein decided in 2000 that Iraqi oil sales would be denominated in Euros, three years later he was conveniently dead.

Yves Smith Post author , July 27, 2017 at 3:09 am

While I agree that the US has hegemonic aspirations, the petrodollar thesis is all wet.

Since the 1600s at least, countries have pursued mercantilist policies. That means first of all that they like running trade surpluses. That allows them to have more jobs than their own economies would support, keeping their citizens happy. They can also be net savers without having a drag on the domestic economy.

But who will be the chump that exports jobs and has crappy growth to accommodate the mercantlists? The US has signed up for that role, in large measure because the US cares more about the 1%, the 0.1%, and the interest of US multinationals than its citizens.

As long as everyone else wants to run trade surpluses and we are the only big player willing to run sustained trade deficits, the dollar will remain the reserve currency. China has absolutely zero interest in running trade deficits despite pining after the cachet of having the reserve currency. The Eurozone maybe could have been a contender, but not with Germany being fiercely mercantlist and Germany's insistence on not rebalancing within the Eurozone creating perceived breakup risk.

mark , July 27, 2017 at 3:19 am

@Yves
In order to answer your question to German language readers in the article.
There are several differences this time compared to previous instances of perhaps controversial US-policy in Europe.
First of all the official positions of the German and Austrian government as well as the EU-Commission are in harsh opposition to the bill while previously only opposition politicians or fringe business interests voiced negative opinions.
Secondly the issue has been spread around in the relevant German business press a great deal, yesterday alone about a dozen news agency reports were published, all with pretty much the same tone and content. It has also been picked up by the op-ed pages in the papers today. This is in stark contrast to previous instances like a leader from Die Linke blaming the refugee crisis on US wars in 2015, Nato expansion to the east and troop build up in the Baltic or the planned upgrade of US nuclear weapons stationed in Germany. All three topics are out of mainstream discussion and anyone bringing up a negative opinion, like the mentioned politician from Die Linke, is ridiculed.
Thirdly while the EU needs the approval of all members to establish sanctions it could do a great deal to prosecute a trade war via executive decisions by the EU-Commission alone. While there has been no official indication how the threatened retaliation is going to look like several simple measures come to mind. For instance the EU could suspend the EU-US privacy shield agreement thereby increasing the cost of doing business in the EU for US companies by a significant amount, it would also be likely that cartell/market dominance investigations might result in harsher fines for US companies and more restricted mergers, something which has been brought up by EU officials sometime ago is to require all foreign or only US banking and maybe other financial institutions to be seperate concerns with full capitalisation and no dependencies on the US-holdings.

To summarise: it looks like a significant amount of the German "business community" is not amused and views the bill as a direct attack on its interests and tries to use their influence with the goverment against it. This raises the likelihood of something more than mere talk to above 0%. In any case the image of the US has taken another hit, this time with a group of people with mostly very positive opinions about close US-German relations.

Yves Smith Post author , July 27, 2017 at 5:51 am

This is VERY helpful. Thanks so much!

Damson , July 27, 2017 at 5:04 pm

Of course, the gas suppliers won't necessarily be in US – others plan to benefit from the Russian sanctions :

http://m.dw.com/en/eu-to-cut-gas-dependency-on-russia-with-israel-pipeline/a-38269274

What do people think the Syria carve – up is really about?

vidimi , July 26, 2017 at 11:23 am

thanks for this article, it's really a remarkable powerplay. the stakes are so high that it's unfathomable that it doesn't backfire spectacularly. this looks like an exercise in hubris that future historians will be long discussing.

more than forcing the EU to use american LNG, it is an attempt to force the EU to back american efforts to replace assad in syria. remember, syria is what stands in the way between bahraini/saudi gas and oil pipelines to europe.

the US is already at war against russia, they just haven't yet started shooting at each other. but also, any chinese silk road to europe will have to use russian assets and infrastructure, so this, potentially, affects them, too.

dcblogger , July 26, 2017 at 2:46 pm

Trump Is Being Moved Aside So That Conflict with Russia Can Proceed
http://www.paulcraigroberts.org/2017/07/26/trump-moved-aside-conflict-russia-can-proceed/

Rosario , July 26, 2017 at 3:54 pm

All stupidity with the Russia hysteria aside this may be all the faster at forcing a move to renewables in the US. NG is the bounciest of all carbon based fuels WRT price. Once they start pumping US NG into more foreign markets the price will climb, which will squeeze utilities that have moved en mass into NG based generation and prove that renewables are even more cost effective. Petty politics may end up having a silver lining 5 years down the road, and at this point I am open to any route to renewables, even the sloppiest, unintentional ones.

Synapsid , July 26, 2017 at 6:43 pm

Rosario,

If exporting US NG causes its price to rise domestically, utilities that had been using coal can shift back to it. That happened recently.

Rosario , July 26, 2017 at 7:43 pm

Sure, but the ball is in another (higher) cup as the cost graphs go. I suspect it is going to get increasingly difficult to transition back and forth with the lowering costs of renewables. Also, coal is not getting any cheaper to extract and it definitely hasn't reduced its externalities. We'll see, big utilities move in herds and it takes years to make a full transition. They may flood back to coal, and build new plants (I doubt it), but they will eventually get burnt and have to swing back again. In the absence of purposeful national level policy (what I prefer) this is the only way the market based approach will turn away from fossil fuels.

Olaf Lukk , July 26, 2017 at 4:02 pm

"Instruments of political sanctions should not be connected with economic interests"?

This echoes the rationalizations of Wall Street when they crashed the economy in '08. Let's not let politics interfere with the right to make money?

The sanctions against Russia were put in place in response to its annexation of Crimea and its support of insurrection in Eastern Ukraine. They have been extended, and expanded, in response to Russian meddling in the recent presidential election. To what extent their cyber warfare had an effect is debatable, but Trump's stonewalling on the issue practically guaranteed the lopsided vote on the latest sanctions.

The LNG issue has some valid points, but it ignores an issue which I have not seen addressed on Naked Capitalism: Just how much is Trump- and those in his administration (infested with alumni of the vampire squid)- beholden to Putin and his fellow oligarchs?

Trump appears to be the Pied Piper of Putin Patsies. I can't help but wonder why.

Yves Smith Post author , July 26, 2017 at 5:51 pm

Crimea was not "annexed". The US destabilized Ukraine. The government in Kiev came in as a result of a coup even thought elections were scheduled for a mere six weeks later and Yanukovich would clearly have been voted out. The new government tore up the current constitution and went through no legal process whatsoever to do that. That is not the behavior of a legitimate government.

Even though neo-Nazis are a very small percentage of the voters, they got 15% of government positions. The head of the defense department gave a speech in which he encouraged ethnic cleansing of Ukrainians of Russian origin, saying that any soldiers who removed them could keep their property.

Crimea petitioned to join Russia after a referendum that approved of that move by a large margin. The US used precisely the same mechanism with Kosovo. Are you about to call that an annexation?

We have repeatedly discussed how the idea that Russia has influence over Trump is nonsense.

Better trolls, please.

[Jul 29, 2017] Collateral Damage

Notable quotes:
"... République en marche ..."
Jul 29, 2017 | www.unz.com

Do they know what they are doing? When the U.S. Congress adopts draconian sanctions aimed mainly at disempowering President Trump and ruling out any move to improve relations with Russia, do they realize that the measures amount to a declaration of economic war against their dear European "friends"?

Whether they know or not, they obviously don't care. U.S. politicians view the rest of the world as America's hinterland, to be exploited, abused and ignored with impunity.

The Bill H.R. 3364 "Countering America's Adversaries Through Sanctions Act" was adopted on July 25 by all but three members of the House of Representatives. An earlier version was adopted by all but two Senators. Final passage at veto-overturning proportions is a certainty.

This congressional temper tantrum flails in all directions. The main casualties are likely to be America's dear beloved European allies, notably Germany and France. Who also sometimes happen to be competitors, but such crass considerations don't matter in the sacred halls of the U.S. Congress, totally devoted to upholding universal morality.

Economic "Soft Power" Hits Hard

Under U.S. sanctions, any EU nation doing business with Russia may find itself in deep trouble. In particular, the latest bill targets companies involved in financing Nord Stream 2, a pipeline designed to provide Germany with much needed natural gas from Russia.

By the way, just to help out, American companies will gladly sell their own fracked natural gas to their German friends, at much higher prices.

That is only one way in which the bill would subject European banks and enterprises to crippling restrictions, lawsuits and gigantic fines.

While the U.S. preaches "free competition", it constantly takes measures to prevent free competition at the international level.

Following the July 2015 deal ensuring that Iran could not develop nuclear weapons, international sanctions were lifted, but the United States retained its own previous ones. Since then, any foreign bank or enterprise contemplating trade with Iran is apt to receive a letter from a New York group calling itself "United Against Nuclear Iran" which warns that "there remain serious legal, political, financial and reputational risks associated with doing business in Iran, particularly in sectors of the Iranian economy such as oil and gas". The risks cited include billions of dollars of (U.S.) fines, surveillance by "a myriad of regulatory agencies", personal danger, deficiency of insurance coverage, cyber insecurity, loss of more lucrative business, harm to corporate reputation and a drop in shareholder value.

The United States gets away with this gangster behavior because over the years it has developed a vast, obscure legalistic maze, able to impose its will on the "free world" economy thanks to the omnipresence of the dollar, unrivaled intelligence gathering and just plain intimidation.

European leaders reacted indignantly to the latest sanctions. The German foreign ministry said it was "unacceptable for the United States to use possible sanctions as an instrument to serve the interest of U.S. industry". The French foreign ministry denounced the "extraterritoriality" of the U.S. legislation as unlawful, and announced that "To protect ourselves against the extraterritorial effects of US legislation, we will have to work on adjusting our French and European laws".

In fact, bitter resentment of arrogant U.S. imposition of its own laws on others has been growing in France, and was the object of a serious parliamentary report delivered to the French National Assembly foreign affairs and finance committees last October 5, on the subject of "the extraterritoriality of American legislation".

Extraterritoriality

The chairman of the commission of enquiry, long-time Paris representative Pierre Lellouche, summed up the situation as follows:

"The facts are very simple. We are confronted with an extremely dense wall of American legislation whose precise intention is to use the law to serve the purposes of the economic and political imperium with the idea of gaining economic and strategic advantages. As always in the United States, that imperium, that normative bulldozer operates in the name of the best intentions in the world since the United States considers itself a 'benevolent power', that is a country that can only do good."

Always in the name of "the fight against corruption" or "the fight against terrorism", the United States righteously pursues anything legally called a "U.S. person", which under strange American law can refer to any entity doing business in the land of the free, whether by having an American subsidiary, or being listed on the New York stock exchange, or using a U.S.-based server, or even by simply trading in dollars, which is something that no large international enterprise can avoid.

In 2014, France's leading bank, BNP-Paribas, agreed to pay a whopping fine of nearly nine billion dollars, basically for having used dollar transfers in deals with countries under U.S. sanctions. The transactions were perfectly legal under French law. But because they dealt in dollars, payments transited by way of the United States, where diligent computer experts could find the needle in the haystack. European banks are faced with the choice between prosecution, which entails all sorts of restrictions and punishments before a verdict is reached, or else, counseled by expensive U.S. corporate lawyers, and entering into the obscure "plea bargain" culture of the U.S. judicial system, unfamiliar to Europeans. Just like the poor wretch accused of robbing a convenience store, the lawyers urge the huge European enterprises to plea guilty in order to escape much worse consequences.

Alstom, a major multinational corporation whose railroad section produces France's high speed trains, is a jewel of French industry. In 2014, under pressure from U.S. accusations of corruption (probably bribes to officials in a few developing countries), Alstom sold off its electricity branch to General Electric.

The underlying accusation is that such alleged "corruption" by foreign firms causes U.S. firms to lose markets. That is possible, but there is no practical reciprocity here. A whole range of U.S. intelligence agencies, able to spy on everyone's private communications, are engaged in commercial espionage around the world. As an example, the Office of Foreign Assets Control, devoted to this task, operates with 200 employees on an annual budget of over $30 million. The comparable office in Paris employs five people.

This was the situation as of last October. The latest round of sanctions can only expose European banks and enterprises to even more severe consequences, especially concerning investments in the vital Nord Stream natural gas pipeline.

This bill is just the latest in a series of U.S. legislative measures tending to break down national legal sovereignty and create a globalized jurisdiction in which anyone can sue anyone else for anything, with ultimate investigative capacity and enforcement power held by the United States.

Wrecking the European Economy

Over a dozen European Banks (British, German, French, Dutch, Swiss) have run afoul of U.S. judicial moralizing, compared to only one U.S. bank: JP Morgan Chase.

The U.S. targets the European core countries, while its overwhelming influence in the northern rim – Poland, the Baltic States and Sweden – prevents the European Union from taking any measures (necessarily unanimous) contrary to U.S. interests.

By far the biggest catch in Uncle Sam's financial fishing expedition is Deutsche Bank. As Pierre Lellouche warned during the final hearing of the extraterritorial hearings last October, U.S. pursuits against Deutsche Bank risk bringing down the whole European banking system. Although it had already paid hundreds of millions of dollars to the State of New York, Deutsche Bank was faced with a "fine of 14 billion dollars whereas it is worth only five and a half. In other words, if this is carried out, we risk a domino effect, a major financial crisis in Europe."

In short, U.S. sanctions amount to a sword of Damocles threatening the economies of the country's main trading partners. This could be a Pyrrhic victory, or more simply, the blow that kills the goose that lays the golden eggs. But hurrah, America would be the winner in a field of ruins.

Former justice minister Elisabeth Guigou called the situation shocking, and noted that France had told the U.S. Embassy that the situation is " insupportable " and insisted that "we must be firm".

Jacques Myard said that "American law is being used to gain markets and eliminate competitors. We should not be naïve and wake up to what is happening."

This enquiry marked a step ahead in French awareness and resistance to a new form of "taxation without representation" exercised by the United States against its European satellites. They committee members all agreed that something must be done.

That was last October. In June, France held parliamentary elections. The commission chairman, Pierre Lellouche (Republican), the rapporteur Karine Berger (Socialist), Elisabeth Guigou (a leading Socialist) and Jacques Myard (Republican) all lost their seats to inexperienced newcomers recruited into President Emmanuel Macron's République en marche party. The newcomers are having a hard time finding their way in parliamentary life and have no political memory, for instance of the Rapport on Extraterritoriality.

As for Macron, as minister of economics, in 2014 he went against earlier government rulings by approving the GE purchase of Alstom. He does not appear eager to do anything to anger the United States.

However, there are some things that are so blatantly unfair that they cannot go on forever.

exiled off mainstreet > , July 29, 2017 at 4:40 am GMT

It looks like the rest of the world is going to have to bring down the economic yankee imperium or be destroyed themselves.

Randal > , July 29, 2017 at 9:01 am GMT

there are some things that are so blatantly unfair that they cannot go on forever.

LOL! Naïve, I think. As long as European countries (and the UK) are prepared to carry on acting as Washington's bitches, Washington will go on treating them as such.

The political, media and business elites need to be thoroughly cleansed of US apologists. That won't be easy, especially when Europe and the UK are in the grip of an ideologically anti-nationalist culture that is essentially treasonous and utterly lacking in national self-respect.

Ending NATO and suppressing the US-backed anti-Russian propaganda that keeps Europe and the UK subordinate would be the bare minimum first steps, along with cooperating with China and Russia to promote and use financial systems independent of the dollar.

or even by simply trading in dollars, which is something that no large international enterprise can avoid

The countries that are regularly targeted for US bullying are building structures that avoid vulnerability. European countries and the UK need to join with them in doing so (though it's unlikely they will be trusted very far given their track records of collaboration with Washington).

Also companies that decline to deal in the US market should be protected and supported, on national security grounds. It should be straightforwardly illegal in all sovereign countries for the US to try to impose its laws on any company merely for dealing in dollars, and the US should be held directly responsible when its courts seek to do so. US extraterritoriality has always been a gross intrusion into and threat to national sovereignty.

In 2014, France's leading bank, BNP-Paribas, agreed to pay a whopping fine of nearly nine billion dollars, basically for having used dollar transfers in deals with countries under U.S. sanctions.

Ideally this kind of extortion will be to some extent counterbalanced by retaliatory extractions from US business assets such as Google and Facebook.

entering into the obscure "plea bargain" culture of the U.S. judicial system, unfamiliar to Europeans. Just like the poor wretch accused of robbing a convenience store, the lawyers urge the huge European enterprises to plea guilty in order to escape much worse consequences

The US plea bargain system is a disgrace to any kind of concept of justice and basically means that no US confessions or guilty pleas can be regarded as meaningful, and nor should any sovereign country agree to extradition of its own citizens to the US. It is basically a system of organised blackmail, coerced confessions and corruption of witnesses.

El Dato > , July 29, 2017 at 9:24 am GMT

Well, Europe could consider all of these payouts to the US as "reparations for Nazi atrocities". This will make it go down easier, after all who wouldn't want to enslave himself to Yankees to repair Nazi atrocities?

Meanwhile, self-flaggelation goes on

Anonymous, July 29, 2017 at 1:11 pm GMT

Western European allies?

Nice choice of words, but fiction-supporting. Under-surerainty would be a better fit.

[Jul 28, 2017] The new sanctions expose that the US political establishment, spearheaded by the intelligence agencies is opposed to any shift away from the anti-Russia policy developed under the Obama administration.

Notable quotes:
"... The near-unanimous vote in both houses of Congress (all "no" votes in the House were from Republicans) testifies to the degree to which the CIA, NSA and other spy agencies directly control the institutions of the state and the personnel that compose them."*** ..."
"... By far the new U.S. bill place the most distressing question mark on the pipeline to northern Europe known as Nord Stream II. Five of Europe's biggest energy companies are all signed on to partner Gazprom in pumping gas westwards. ..."
"... "The Europeans intensely dislike U.S. extraterritoriality, and this will widen the breach between the EU and U.S.," Sir Lyne says. "For the Russians, that is a silver lining." ..."
"... All the Europeans need do is tell Uncle Sam to go fuck himself with his sanctions That will pull the rug out from under the American psychos behind the rabid sanction lunacy ..."
"... American politicians are also under the bizarre delusion that they can replace Russia's piped gas with LNG exports. This delusion is something else. America imports natural gas! It would have to take a major consumption hit, thereby driving up prices since demand will remain, to supply the EU with 150+ billion cubic meters of gas per year that currently comes from Russia. The USA consumed about 780 bcm of gas in 2016. It does not have a spare 150 bcm to sell. ..."
"... As I alluded yesterday, the USA has staked out a position from which it cannot back away, one which is of surpassing stupidity, because it has accustomed itself to being obeyed and fancies itself such a clever manipulator that it will always get its way. It is critical now that Europe actually stand together and speak with one voice; otherwise, America will begin probing for lack of resolve and unlimbering its divide-and-conquer game. ..."
"... It will also be pretty funny if Russia struggled and pleaded and accepted all manner of small-minded insults just to get into the World Trade Organization, only to see it collapse only a few years later. Because I'm pretty sure what America is trying to pull off here is in gross violation of WTO rules as well. ..."
Jul 28, 2017 | marknesop.wordpress.com

Northern Star , July 26, 2017 at 9:32 am

http://www.wsws.org/en/articles/2017/07/26/pers-j26.html

"The new sanctions expose the essential issues behind the "election hacking" campaign of the US media and political establishment, spearheaded by the intelligence agencies that are opposed to any shift away from the anti-Russia policy developed under the Obama administration.

**** The near-unanimous vote in both houses of Congress (all "no" votes in the House were from Republicans) testifies to the degree to which the CIA, NSA and other spy agencies directly control the institutions of the state and the personnel that compose them."***

Northern Star , July 26, 2017 at 9:53 am
http://www.newsweek.com/how-do-sanctions-work-new-us-bill-targets-russia-and-europe-nervous-642136

"One key question now is how Europe will react," Sir Lyne says. "Over Ukraine, the US and EU marched in step. That is not the case now; and the new bill has the potential to make Europe pay a much higher price than the US."

The EU has never been more dependent on Russian gas, according to Bloomberg, as Russia's state-run gas monopoly Gazprom now pumps over a third (34 percent) of Russia's gas. At present, Gazprom has put the kibosh on one pipeline to the EU, known as South Stream but agreed one that will bring gas on the EU's borders, to Turkey.

By far the new U.S. bill place the most distressing question mark on the pipeline to northern Europe known as Nord Stream II. Five of Europe's biggest energy companies are all signed on to partner Gazprom in pumping gas westwards.

Anglo-Dutch group Royal Dutch Shell, Austria's OMV, France's Engie and Germany's Uniper and Wintershall have agreed to work with Gazprom on the pipeline, collectively covering around half of the nearly $11 billion cost.

The European Commission President Jean Claude-Juncker warned Wednesday that Brussels needs to act "within days" if the U.S. does provide Europe with reassurance that the sanctions will not jeopardize EU interests. A U.S. official, speaking on the condition of anonymity told European news site EUobserver, that the European companies would likely not be punished by the U.S. as part of the sanctions but called the situation a "risk" regardless.

"The Europeans intensely dislike U.S. extraterritoriality, and this will widen the breach between the EU and U.S.," Sir Lyne says. "For the Russians, that is a silver lining."

All the europeans need do is tell Uncle Sam to go fuck himself with his sanctions That will pull the rug out from under the American psychos behind the rabid sanction lunacy

marknesop , July 26, 2017 at 6:31 pm
All the Europeans need do is tell Uncle Sam to go fuck himself with his sanctions That will pull the rug out from under the American psychos behind the rabid sanction lunacy

Of course that is not going to happen, at least not publicly – there will be no outward sign of European rebellion, because that would be 'playing into Putin's hands', and the European elite still loathes Putin enough to not want to be seen doing that. At the same time, Uncle Sam does not want to back down, and an arrangement – even secret – that America would not apply the sanctions to European companies would completely nullify their effect. European companies would simply ignore them and carry on with their plans. So the possibility they might be invoked has to stay, with all the attendant fury that is likely to cause. Juicy as a mango, I think. Official America has been a bully for so long that it's the only problem-solving approach it remembers.

The question that keeps nagging at the corner of my mind, though, is "What if the USA were successful at stopping the construction of Nord Stream II and Russia ceased transit through Ukraine anyway?" After all, this whole effort is focused on forcing Russia to continue transiting a big part of Europe's gas supplies through Ukraine, both to keep Ukraine viable by forcing Russia to engage with it despite its objectionable ideological government, and to keep Ukraine as a bargaining chip to make Russia appear to be an unreliable supplier.

Washington's assumption is that Russia will continue to transit gas through Ukraine if its alternatives are removed – after all, it's just a big gas station, and it can't live without its gas sales to Europe. But what if, once again, Washington guessed wrong? If I were running Russia – let's pretend, because I'm not – I would orchestrate a series of 'rebel' sabotage attacks on Naftogaz's pipeline network, blowing up substantial parts of it, and then use that as a reason to cease transit of gas through the line: it's just not safe. I would then maximize transit through existing pipelines except Ukraine, perhaps accelerating the completion of Turkish Stream, and publicly and loudly blame any shortfall on American meddling – if Nord Stream had been twinned, you wouldn't have this problem. If it were managed correctly and everything went according to plan, I think it would resonate.

Also, Russia has reduced its dependence on energy exports. It might be worth it to allow a scenario in which Washington got the opportunity to make up for Russian shortfalls, because it would be a complete failure – the export capability is just not there, and if they redoubled their efforts they would lose money like crazy because they could not do it for Russia's prices. Either they would flop at the delivery end, or the Europeans would squeal like pigs because their gas rates went out of sight, or Uncle Sam would take a bath on American exports. Those are the only possible scenarios, it should be emphasized.

kirill , July 26, 2017 at 7:01 pm
We have clear evidence that the politicians in the USA do not have a grip on Russia's economy and exports dependence. By 2019 Russia will have a massive gas pipeline to China. Gas for this pipeline has to come from somewhere and filling it up with Banderastan transit gas would be a good start to put the USA and its EU colony in its place. According to the most recent Awara Group report, the fraction of oil and gas industry in Russia is down to 8% of GDP. Not only is Russia not dependent on oil and gas for its GDP, it will lose nothing by shifting supply away from the EU.

American politicians are also under the bizarre delusion that they can replace Russia's piped gas with LNG exports. This delusion is something else. America imports natural gas! It would have to take a major consumption hit, thereby driving up prices since demand will remain, to supply the EU with 150+ billion cubic meters of gas per year that currently comes from Russia. The USA consumed about 780 bcm of gas in 2016. It does not have a spare 150 bcm to sell.

Northern Star , July 27, 2017 at 11:20 am
http://www.wsws.org/en/articles/2017/07/27/euro-j27.html

"The European powers reacted sharply yesterday to the US House of Representatives' passage of a bill imposing sanctions on Russia, Iran and North Korea, indicating that it was unacceptable to European interests and that the European Union (EU) was preparing retaliatory measures."

"Angry commentary over the sanctions bill in the German press underscore that influential forces in the German ruling class see the sanctions bill as yet further evidence of hostile US intent towards Germany and Europe.
"What is particularly dangerous is that supporters of Russia sanctions in Washington are not only trying to put Putin and Trump in the same bag, but also helping the US economy against foreign competition," wrote the Sueddeutsche Zeitung. Under the bill, the daily added, "Europeans would be forced to burn less Russian natural gas and more American liquefied natural gas. This is an unfriendly act, especially against Germany."
The Frankfurter Allgemeine Zeitung wrote that, "with all due respect for the Senate and its ambition to tie President Donald Trump's hands on Russia policy, the draft law is unacceptable from a European perspective. First, it breaks the diplomatic alliance between Europe and the United States in deciding on sanctions against Russia. The argument that America is promoting Europe's energy security is also quite insolent. That is Europe's responsibility. This is how you lose friends."

The question that is emerging is whether the US-EU military rivalry and bitter trade conflicts will now coalesce and escalate into a catastrophic breakdown in US-EU relations!in the form of a trade war that would bring the world economy to its knees, or of outright military conflict."

Hmmm .So the RWETA is born.. Russia &Western EuropeTrade Allliance

marknesop , July 27, 2017 at 5:37 pm
Why make it more complicated than it is? The French are in the lead for once – such sanctions are a violation of international law. Consequently no other nations are obligated to abide by them. If America levied a massive fine against BASF Wintershall, and that company simply ignored it, what would America do? Start booting out German companies in the USA? Melt BMW's and pour them down the drains in the street?

As I alluded yesterday, the USA has staked out a position from which it cannot back away, one which is of surpassing stupidity, because it has accustomed itself to being obeyed and fancies itself such a clever manipulator that it will always get its way. It is critical now that Europe actually stand together and speak with one voice; otherwise, America will begin probing for lack of resolve and unlimbering its divide-and-conquer game.

The really funny part in this, from my viewpoint, is the way the Europeans blame Trump and his presidency. Granted, he did frame the 'America first' policy, but that's just a convenient handle for the angry Europeans to grab. Trump entered office with the declared intention of mending the damaged relationship with Russia, and it was the Democrats who created an hysterical firestorm of accusation that Russia had greased Trump's way into office. It has been ideologues outside Trump's circle who crafted the sanctions legislation with a view to preventing him from lifting the sanctions under his own recognizance.

It will also be pretty funny if Russia struggled and pleaded and accepted all manner of small-minded insults just to get into the World Trade Organization, only to see it collapse only a few years later. Because I'm pretty sure what America is trying to pull off here is in gross violation of WTO rules as well.

[Jul 07, 2017] The Power of Siberia gas pipeline, the first to connect Russia and China, will start pumping in December 2019, Gazprom said on Tuesday

Jul 07, 2017 | marknesop.wordpress.com
et Al , July 7, 2017 at 8:30 am
Oh, looky here! De Bong didn't feel the need to do any current research:

July 6

Financial Crimes: Gazprom confident of $400bn Chinese gas supply
https://www.ft.com/content/623c7396-60cc-11e7-91a7-502f7ee26895

State-owned gas monopoly ahead of schedule on politically important Siberian pipeline

The Power of Siberia gas pipeline, the first to connect Russia and China, will start pumping in December 2019, Gazprom said on Tuesday, paving the way for a 30-year supply agreement of more than 1.15tn cubic metres of gas for the Kremlin-controlled export monopoly

Mr Miller's affirmation is important. The project, which will cost Gazprom more than $55bn just to build the necessary infrastructure to get the gas flowing, is one of the most critical investments for Russia's energy sector, which has targeted a long-term strategic supply link with China to match its market penetration in Europe. ..

Power of Siberia is expected to run significantly below capacity in its first few years of operation, as China instead runs down its domestic gas reserves. The 30-year supply agreement is set to kick in around 2025 .
####

Plenty more at the link.

[Jul 07, 2017] Can quatar expand its natural gas export volumes?

Jul 07, 2017 | www.moonofalabama.org

karlof1 | Jul 5, 2017 10:04:01 PM | 37

Here's last year's NatGas industrial review, so you can determine just how sane Qatar's move is. The link is to a modestly sized pdf file, http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwit-fbqxPPUAhVSxmMKHRY1CyAQFggiMAA&url=http%3A%2F%2Fwww.igu.org%2Fdownload%2Ffile%2Ffid%2F2123&usg=AFQjCNHNu-nmLpatVthD04g0UWtOuREDMw

The report's loaded with info. Production can certainly be increased, but it's all the other infrastructure that's required for the market to expand, particularly regasification terminals.

somebody | Jul 5, 2017 5:33:36 PM | 18

By the way, there is a LNG price war between Qatar and the United States .
Anonymous | Jul 5, 2017 6:14:36 PM | 22
The Saudis tried to make a public IPO of Aramco a while back. This has fizzled, probably in recognition of the fact that Saudi is almost running on empty. One reason behind the Qatar lunacy might be a wish to take over Qatar's resources to keep Saudi solvent for a while at least.
mauisurfer | Jul 5, 2017 7:33:04 PM | 30
interview with Chas Freeman last week: Qatar Crisis Could Lead to War: Veteran US Diplomat

if you don't know who Chas is, please wiki was ambassador to Saudi, was Nixon's interpreter in China, that's right, he speaks mandarin and arabic not just knowledgeable, also very funny remember when AIPAC vetoed his appointment by Obama?

https://lobelog.com/qatar-crisis-could-lead-to-war-veteran-us-diplomat/

more Chas here: http://chasfreeman.net/category/speeches/

Grieved | Jul 5, 2017 9:26:42 PM | 35
@18 somebody

Yes, that's exactly how that Reuters story reads to me too. The prime target is the US. Extraordinarily powerful move by Qatar, using a weapon that it knows and owns completely and in massive scale, and with an understanding of the damage it can do to its enemies. Asymmetrical warfare indeed. Priceless.

~~

I'm really hoping that over the years, as Qatar rubs shoulders with the multi-polar world, it will reform itself to renounce and atone for its former support of terrorism. As I watch its moves in this situation I'm struck with a certain admiration. It would be nice to be able to root for it someday as one of the good guys.

Noirette | Jul 6, 2017 1:48:27 PM | 50
Unless the Saudis can reconfigure their economy and train their populous to do actual work, their kingdom will sink ..
karlof1 at 1

This is impossible. Laguerre at 10. > see also response from karlof1 at 20.

The curse of black gold + a rentier economy coupled with an authoritarian repressive State that enslaves the 'people.' The two are often soldered: dominating class capts the profits and co-opts slave labor, and pays off citizens with 'stipends.' Escaping or changing such a template is imho incredibly difficult or impossible in the case of KSA.

The rentier class, aka Royals and hangers-on is several tens of thousands of ppl, not detailed on wiki. (Comp. with US not the 1%, but the 20%..) In fact it is one of the problems of such arrangements, some gang of 'hangers on' has to be appeased and maintained, they have quite some power. Because the 'authoritarian' schema deploys in a clear top-down, to down further, a fixed ladder - way, and once some lower layer is stiffed, objections and obstructions may fly and richochet to the top. For the system to endure, these HAVE to be appeased.

A power sharing scheme like this also mandates that women are kept from acting in any way. The easiest and cheapest way to control half the population, plus all children, ask the MB, the Taliban, KSA.

https://www.bloomberg.com/news/articles/2016-09-26/saudi-arabia-cancels-bonus-payment-for-state-employees-spa-says

http://www.bbc.com/news/world-middle-east-39683592 (reverses pay cuts)

The crazed moves of the new Prince are vain attempts to escape the self-constructed trap. Floundering, flailing, about, considering that killing others, war, (e.g. Yemen), engaging in aggro (Qatar) might help - as that might please the USA, who encourages all aggro and sells arms, etc. Won't end well for KSA for sure all Internationals are wondering who will grab what when collapse it is.

[Jul 04, 2017] Why Ukranian economics now is flirting with disaster and why South Stream pipeline was derailed

fpif.org

Try to put aside, for the moment, the insufferable arrogance of American meddling in Europe's energy market, with a view to restricting its choice while – laughably – pretending it is broadening European energy options.

The readers and commenters of this blog will be well aware, since it has been a topic of discussion for years here, that a critical underpinning of the western plan to seize Ukraine and wrest it into the western orbit was the premise that Russia would be forced by simple momentum to go along with it. As long as events continued to unfold too quickly to get ahead of, Russia would have to help supply the sinews of its own destruction. And a big part of that was the assumption that Russia would help to finance Ukraine's transition to a powerful western fulcrum upon which to apply leverage against it, through continued trade with Ukraine and continued transit of Europe's energy supply through Ukraine's pipeline system.

But Russia slapped a trade embargo on most Ukrainian goods, and rescinded its tariff-free status as it became clear Brussels planned to use it to stovepipe European trade goods into the Russian market, through Ukraine – thus crushing domestic industries which would not be able to compete on economically-favorable terms. The armchair strategists nearly shit a brick when construction of the South Stream pipeline commenced, bypassing Ukraine and depriving it of about $2 billion annually in transit fees. But pressure ultimately forced Bulgaria to throw a wrench into the works, and the pipeline plans were shelved, to much victory dancing in the west. There was not quite as much happy-dancing in Bulgaria , but they were only ever a pawn anyway.

Sidebar for a moment, here; while the $2 Billion annually in transit fees is extremely important, Ukraine's pre-crisis GDP was $163 Billion. The funds realized for transit fees are important because (a) Russia has to pay them and (b) the west will have to come up with the equivalent in aid if Ukraine loses out on them. But the real value intrinsic to Ukraine as a transit country is its physical reality as an interface for Russian gas transit to Europe – what is a bridge can be easily turned into a wall. Any time Washington thinks Russia needs some more shit on its face, Ukraine can be prodded to announce a doubling of its transit fees, or to kick off some other dispute which the popular press will adroitly spin to make Russia appear to be an unreliable supplier. Therefore, it is essential to western strategy that significant amounts of Russian gas continue to transit Ukraine. Sufficiently so that Europe continues to evolve ever-more-desperate contingency plans in order to keep receiving gas through the country which was known to have provoked the previous shutoff of European supplies by siphoning Europe-bound gas for its own use. That's despite the assurances of Germany and western partners of Gazprom in the Nord Stream line that it will mean cheaper gas prices for Europe.

[Jun 27, 2017] The USA is sucessfully sabotaging Russian and try to secure its own shipping LNG to europe while Russia do not have alternative consumers comparable to EU, althout China and India shipments will grow dramatically

Notable quotes:
"... icebreaking LNG Carrier ..."
"... Yamal is projected to double Russia's share of the growing global LNG market by the time it reaches full capacity of 16.5m tonnes a year - equivalent to more than 80 per cent of China's annual demand - by 2021. Construction is three-quarters complete and production from the first phase of the project is due to commence by the end of this year. ..."
"... More than 95 per cent of Yamal's expected output has already been sold through 15 to 20 year contracts, with customers mostly in Asia and Europe. ..."
Jun 27, 2017 | marknesop.wordpress.com
Northern Star , June 23, 2017 at 11:55 am
https://www.yahoo.com/news/putin-launches-deep-water-phase-turkstream-gas-pipeline-143410466.html

One of the best comment people on Yahoo:

"oldgeekMA 2 hours ago

Truth is Russia has been looking for an excuse to get out of the business of Shipping Natural Gas to the West and the South, altogether and these US Sanctions and EU Complaints about Gazprom Pipeline Construction, may just be the out they have been looking for. In Jan 2016, Russia completed 7 Massive High-Pressure Gas Pipelines, 2 to India and 5 to China. The ones to India make 4 total Gas Lines to India, but the 5 to China are the first time China, has had access to Russian Natural Gas. The contracts India and China signed with Gazprom are 50 years, and the price of NG starts at more than double the highest rate Gazprom charges in Europe, the icing on the cake however is that the currency is not US Paper Promissory Notes(Petro Dollars), but Gold Bullion. At full capacity those pipelines can use every single NG resource Gazprom, has at the present time, and all future NG resources. So, Gazprom would be foolish not to want to cut all off its Western and Southern pipelines off, and divert Maximum Flow East. In addition to these NG Pipelines, there are Crude Oil and Diesel pipelines under construction, going to China and India – Completion date scheduled for between November 2017 and January 2018. Chinese and Indian Construction Crews completed their internal distribution pipeline networks in 2016, and have 7 Oil Refineries in various stages of completion. -– All American III Percenter and Combat Disabled US Veteran"

Now..remind me what was this stuff about 'Murica shipping LNG to europe???
LOL!!!!

https://ads.pubmatic.com/AdServer/js/showad.js#PIX&kdntuid=1&p=156204

marknesop , June 24, 2017 at 5:27 pm
That would indeed be delightful if there were even the whiff of truth about it; but, unfortunately, there is not. Europe is still Russia's most important gas market by far. Numbers on the Russia-China gas deal are hard to come by and reporters who quote the price China will pay are just guessing because nobody has officially disclosed that figure and will not; it is strictly confidential.

However, the China-vs-EU figures are not even close; starting next year, Russia will export 30-38 BcM annually to China, and that might go as high as double as the agreement evolves. So, say 65 BcM annually, in a couple of years. That's still far less than half what Gazprom exports annually to Europe – 178.3 BcM in 2016, a significant jump over the previous year's 158.6 BcM.

Moreover, nearly all the increases in the past decade have been to imports by western Europe. Despite all the preaching in the media, the only countries which seem to be seriously trying to wean themselves off of Russian gas – with little to limited success, it must be said – are eastern European countries. One of the biggest yappers in the west is the UK but the UK went from zero imports of Russian gas in 2003 to the fourth-biggest European importer in 2013 .

That little quick-reference pocket guide is actually chock-full of useful facts which you can whip out and quote whenever some pea-brained bucket-mouthed know-nothing is trying to blizzard you with blue-sky bullshit. Here's a few:

1. All the blather and angst about reducing Europe's dependency on Russian gas imports conveniently ignores one buzzing fly in the ointment – long-term contracts. Of 178.6 BcM imported by Europe in 2013, 166 BcM of it was under 30-year contracts. By far the most of it. And you know what would happen if the EU broke a contract in order to reduce its imports, even if it could practically do so under conditions in which domestic sources of supply are rapidly drying up, which it can't. Also, contract supplies are by definition sanctions-exempt.

2. Home-grown Shale gas is not going to ride to the rescue. Even if Europe could tap supplies which are not sour with so much nitrogen that you can't even burn it, in order to reach shale gas supplies of only 28 BcM annually Europe would have to drill 800-1000 new wells every year for 10 years. Let's see that spun as fiscally viable, or sensible in any way, shape or form.

3. Blabber about the Southern Gas Corridor was always nothing more than that – supplies from Azerbaijan to Europe were never expected to total more than 30 BcM, about what Russia expects to export to China starting in 2018, and it would have taken until 2030 to reach that capacity.

4. LNG actually holds the best promise of undercutting Russian supply, and Europe's regassification terminals actually could handle more than the combined total of Russian imports now; 200 BcM. But LNG supplies to Europe depend entirely on whether they can be profitable, and all current objective studies find that Russia can keep LNG away as long as it likes, simply by consistently pricing its pipeline supplies lower than LNG. Given what it would cost Uncle Sam to get his supplies to market, Gazprom can still easily do that and turn a handsome profit.

https://ads.pubmatic.com/AdServer/js/showad.js#PIX&kdntuid=1&p=156204

Cortes , June 23, 2017 at 1:41 pm
Japanese need to diversify energy imports to benefit RF?

http://journal-neo.org/2017/06/22/japan-regards-russia-as-a-reliable-hydrocarbons-exporter/

et Al , June 24, 2017 at 11:25 am
I thought there was a plan to pipeline NG from Nakhoda to Japan? What happened to that, or was it simply to be an LNG terminal but got shifted?
marknesop , June 24, 2017 at 5:43 pm
I'm glad you brought that up; quite apart from the very interesting information contained in the article itself, it is a springboard to a larger discussion – is Russia equally committed to reducing its dependency on European pipelines as the Europeans are? Some say yes: Russia's $27 Billion icebreaking LNG Carrier project is an eye-opener which has been more or less entirely left out of energy discussions. And its target market is Asia .

Yamal is projected to double Russia's share of the growing global LNG market by the time it reaches full capacity of 16.5m tonnes a year - equivalent to more than 80 per cent of China's annual demand - by 2021. Construction is three-quarters complete and production from the first phase of the project is due to commence by the end of this year.

More than 95 per cent of Yamal's expected output has already been sold through 15 to 20 year contracts, with customers mostly in Asia and Europe.

et Al , June 25, 2017 at 8:04 am
That's hardcore! Thanks Mark. So the Chinese stepped in to take up the slack created by US sanctions against Timchenko's Novatek part of the project. Another US epic fail.

It's curious that the West's interpretation of 'globalization' hasn't turned out as expected. They saw it as western globo-corporations buying in around the world, but globalization has naturally progressed as 'multi-polarization' of global power, away from the US & the West's dominance. The Chinese stepping in is a perfect example. It shows that Russia has real options which it is building and if needs be, at some point in the future, tell the 'No thanks!'.

[Jun 25, 2017] Capturing world markets for US LNG exporters is a major driver of US policy

Notable quotes:
"... The U.S. is on track to produce 10 million barrels of oil per day on average next year, according to a forecast from the Energy Information Administration -- a milestone that would shatter a record set in 1970. ..."
"... Although "dominance" may be hyperbole in that context as well -- given totals that exporters such as Qatar are achieving -- capturing world markets for US LNG exporters is a major driver of US policy. Ukraine, the nonsense about Russian interference in US elections, and the new Senate sanctions against European companies working with Russia on the Baltic Sea pipeline are three cases in point. ..."
Jun 25, 2017 | www.moonofalabama.org
likklemore | Jun 25, 2017 4:57:18 PM | 48

It's All About Oil and Gas and here is Trump a -twittering:

Bloomberg: Trump to Call for U.S. 'Dominance' in Global Energy Production

Link

Trump is set to deliver a speech at the Energy Department on Thursday focused almost entirely on energy exports -- describing how the foreign sale of U.S. natural gas, oil and coal helps strengthen the country's influence globally, bolster international alliances, and help stabilize global markets. Energy Secretary Rick Perry may touch on similar themes when he speaks Tuesday with analysts and executives at the U.S. Energy Information Administration conference in Washington.[..]

Ironically, some of Trump's policies could exacerbate the market challenges facing oil, gas and coal, by spurring more domestic production at a time when a supply glut is already suppressing prices.

The U.S. is on track to produce 10 million barrels of oil per day on average next year, according to a forecast from the Energy Information Administration -- a milestone that would shatter a record set in 1970.

'Dominance' Sought

Trump's theme of "energy dominance" marks an evolution. For years, the catch phrase of choice has been "energy independence," as politicians and industry officials sought to highlight how a new era of abundance was helping the U.S. wean itself from foreign sources of oil and natural gas.

That was in turn a dramatic change from the 1970s, when former President Jimmy Carter turned down the White House thermostats and used a televised address in February 1977 to urge consumers to conserve energy amid a permanent "shortage." After that, federal energy policy became rooted in the view that oil and gas were in short supply.[.]

"Trump is reorienting our national rhetoric toward 'dominance,'" said Kevin Book, analyst with ClearView Energy Partners LLC. "Captives crave independence; competitors strive to dominate. It's a shift from getting by to getting ahead."

~ ~ ~ ~ ~
Reminds of the old song – "Dream, dream, dream"

Forecast is 10 million bbls per day 2018 and we are proposing dominance in global energy production!! What a twit.

Are the bf Saudis not afraid? Iran, Russia?

somebody | Jun 25, 2017 5:21:44 PM | 49
48) Yep, it is funny. According to above quoted US Energy Information administration the US consumed 19.68 million barrels of petroleum products per day in 2016.
Berry Friesen | Jun 25, 2017 6:27:06 PM | 51

48 & 49:

Mainly the reference to "dominance" applies to liquefied natural gas. Comparing LNG exports during the first 3 months of 2015 with the first 3 months of 2017 shows an increase by a factor of 30.

Although "dominance" may be hyperbole in that context as well -- given totals that exporters such as Qatar are achieving -- capturing world markets for US LNG exporters is a major driver of US policy. Ukraine, the nonsense about Russian interference in US elections, and the new Senate sanctions against European companies working with Russia on the Baltic Sea pipeline are three cases in point.

likklemore | Jun 25, 2017 7:06:09 PM | 53

Thank you somebody @ 49 for the added input.

@ 51 Berry Friesen

Mainly the reference to "dominance" applies to liquified natural gas. Comparing LNG exports during the first 3 months of 2015 with the first 3 months of 2017 shows an increase by a factor of 30.

.[capturing] world markets for US LNG exporters is a major driver of US policy.

My comment was it's on someone's wish list and dreaming on.

Do you have any idea the cost to set up LNG terminals and cost to transport from US to global - for starters, to compete with Russia, Iran, Qatar and others in the EU and Asian markets?

Pricing a factor: It's gone cold. The oil price crash has eliminated the discount U.S. LNG has to world prices

jfl | Jun 25, 2017 8:03:55 PM | 54

@53 lm

from your bloomberg link ...

Now spot LNG in Asia has fallen to just $5.95, while Pertamina would pay $6.86 for its U.S. LNG even before shipping it halfway across the world.
geostrategy ... if ya gotta ask how much it costs, you can't afford it.

Brad | Jun 25, 2017 8:33:14 PM | 55

@53
http://www.thenational.ae/business/energy/qatar-lifts-development-moratorium-on-worlds-biggest-gas-field

somebody | Jun 25, 2017 9:47:57 PM | 58

53 add Germany and Austria

Austrian Federal Chancellor Christian Kern (SPÖ) and German Foreign Minister Sigmar Gabriel (SPD) commented as follows today (15 June) on the approval by the United States Senate of legislation regarding sanctions against Russia:

...

It is in the common interest of the EU and the US to take resolute and unified action with a view to resolving the conflict in Ukraine.

We cannot, however, accept the threat of illegal extraterritorial sanctions being imposed on European companies that are participating in efforts to expand Europe's energy supply network!

The draft bill of the US is surprisingly candid about what is actually at stake, namely selling American liquefied natural gas and ending the supply of Russian natural gas to the European market. The bill aims to protect US jobs in the natural gas and petroleum industries.

Political sanctions should not in any way be tied to economic interests. Threatening to impose penalties on companies in Germany, Austria and other European countries with regard to their business in the United States if they participate in, or fund, natural gas projects involving Russia, such as Nord Stream 2, impacts European-American relations in a new and very negative way. This is about the competitiveness of our energy-intensive industries, and about thousands of jobs. We therefore strongly support the efforts of the US Department of State to amend this draft bill.

[Jun 25, 2017] The story about about the legendary Qatari pipeline is probably British fake

Notable quotes:
"... A pipeline through Syria would have been a great boost to national economy for a number of years & could raise a port of the country to one of global importance, just at a time that Turkey started turning the spigot of Euphrates off ..."
"... Consider that Qatar would have been a captive ally for Syria, a commodity rather in short supply for that country. The best part of it is, perhaps, that Syria presumably had a natural aversion to the transit fees. ..."
"... There is another interesting story in this regard, which is to do with (at least) three rounds of exploration for gas in Saudi Arabia, all failed, and the special need for gas to service its petrochemical industry. If memory serves, the reason is they want to upgrade the heavy crude portion of their production, which has steadily been growing, and which the Saudis might have to sell as bunker oil at great discount, if they fail to find gas. ..."
"... the Qataris were told in no uncertain terms that their gas 'had to remain in the peninsula' (Arabian subcontinent) for consumption, to serve the oil sector. ..."
"... If this is right (honestly, I do not know), it might explain quite a bit about the rivalries of the extremist Moslem clergy, and their activities both within the Moslem world and abroad, why not, even developments in Europe & the States. ..."
Jun 25, 2017 | www.moonofalabama.org

atVec | Jun 23, 2017 10:14:39 PM 52

|Jen@31 writes about the legendary Qatari pipeline. That story made its appearance early in the conflict, and if anybody knows its origin, I would be keen to be let know.
That story goes that Assad would not let Qatar have its pipeline because, presumably, Russians wanted to retain their stranglehold on European gas supplies.

The subtext is that those Russians must be very hard task masters and Assad, the lowliest of low lives, a terrified thug. And when the troubles started, Assad did not go back to the Qataris to discuss the matter over.

Sorry, I cannot square that.

A pipeline through Syria would have been a great boost to national economy for a number of years & could raise a port of the country to one of global importance, just at a time that Turkey started turning the spigot of Euphrates off (this is a sense I have, do not know if it is right) & a protracted drought and economic hardship all hit the country at the same time.

Consider that Qatar would have been a captive ally for Syria, a commodity rather in short supply for that country. The best part of it is, perhaps, that Syria presumably had a natural aversion to the transit fees.

There is another interesting story in this regard, which is to do with (at least) three rounds of exploration for gas in Saudi Arabia, all failed, and the special need for gas to service its petrochemical industry. If memory serves, the reason is they want to upgrade the heavy crude portion of their production, which has steadily been growing, and which the Saudis might have to sell as bunker oil at great discount, if they fail to find gas.

The story was run in the English papers of the Gulf circa 2012, whereby the Qataris were told in no uncertain terms that their gas 'had to remain in the peninsula' (Arabian subcontinent) for consumption, to serve the oil sector.

Once I chanced on an article on the educational proclivities of the thousands of the Saudi princes. Any guess? Yes, a good portion of them goes in for religious studies! Somehow I do not think they aspire to be lowly priests; but if not, where might they wish to have their sees? What if the other principalities of the Gulf have nobilities with similar outlooks & hopes?

If this is right (honestly, I do not know), it might explain quite a bit about the rivalries of the extremist Moslem clergy, and their activities both within the Moslem world and abroad, why not, even developments in Europe & the States.

Regards, Vec.

Lozion | Jun 23, 2017 10:24:34 PM | 53

@36 & @31 I think you are both right. The Pipelinistan angle is a major part of this feud.

A probable change of heart from Qatar who has seen the light that no regime change will happen in Syria therefore making a Fars --> Iraq --> Syria -> Lebanon LNG pipeline a realistic endeavor is causing panic in KSA/US/IS who are trying to pressure Qatar to back-off from any deals with Iran..

If Turkey is firm on protecting Qatar then the ultimatum will come to pass and be null and void..

Don Bass | Jun 24, 2017 1:34:34 AM | 57

@ Vic

Y'know, when I read a comment such as yours: "~ I don't reckon its got anything to do with a pipeline ~" I immediately think of that old trope: Better to remain silent and be thought a fool, than to open ones mouth and remove all doubts"

Vic: instead of visiting here to blatantly display your ignorance, how about more usefully spending that typing time to research the topic, hmmm?

The Imperial drive to crush Syria has been in play since the early 1980s, when Assad senior was in power.

Here's a link: http://www.globalresearch.ca/1983-cia-document-reveals-plan-to-destroy-syria-foreshadows-current-crisis/5577785

And another http://www.washingtonsblog.com/2014/07/57-years-ago-u-s-britain-approved-use-islamic-extremists-topple-syrian-government.html

And another http://www.newyorker.com/magazine/2007/03/05/the-redirection

And here's your bonus link, cause I'm feeling the karma burst of sharing http://humansarefree.com/2014/09/exposing-covert-origins-of-isis.html

Now, go and do your homework: you may be able to raise your F to a C, for a pass grade, once you've done some actual reading on the topic.

[Jun 24, 2017] The Saudi-Qatar spat - the reconciliation offer to be refused>. Qater will move closer to Turkey

Highly recommended!
Notable quotes:
"... "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region. ..."
"... Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle. ..."
"... Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms. ..."
"... This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years." ..."
"... KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor. ..."
"... I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation. ..."
"... It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip. ..."
"... Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran. ..."
"... Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region. ..."
"... Gaddafi's speech to the Arab League in Syria 2008 was so prescient ..."
"... "We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend. ..."
"... I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character. ..."
"... "...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother." ..."
"... It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front. ..."
"... Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet. ..."
"... Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region. ..."
"... Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran. ..."
"... Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies. ..."
"... The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. ..."
Jun 23, 2017 | www.moonofalabama.org
Pft | Jun 23, 2017 8:43:28 PM | 45
William Engdahls views. "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region.

The Saudi move, clearly instigated by Prince Bin Salman, Minister of Defense, was not about going against terrorism. If it were about terrorism, bin Salman would have to arrest himself and most of his Saudi cabinet as one of the largest financiers of terrorism in the world, and shut all Saudi-financed madrasses around the world, from Pakistan to Bosnia-Herzgovina to Kosovo. Another factor according to informed sources in Holland is that Washington wanted to punish Qatar for seeking natural gas sales with China priced not in US dollars but in Renminbi. That apparently alarmed Washington, as Qatar is the world's largest LNG exporter and most to Asia.

Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle.

As to the future, it appears that Qatar is not about to rollover and surrender in face of Saudi actions. Already Sheikh Tamim bin Hamad al-Thani is moving to establish closer ties with Iran, with Turkey that might include Turkish military support, and most recently with Russia.

Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms.

This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years."

lysander | Jun 23, 2017 7:43:17 PM | 42
KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor.

I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation.

R Winner | Jun 23, 2017 1:41:04 PM | 4

It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip.

Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran.

Juggs | Jun 23, 2017 2:24:33 PM | 9
Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region.

I wonder if there is some sort of interest between Russia, Turkey, Qatar, and Iran on a coup in Saudi Arabia. I can't imagine it would be that difficult. I know it is not Putin's policy to play these types of games like the US Regime, but one has to assume that people are just fucking done with the clowns running Saudi Arabia.

harrylaw | Jun 23, 2017 2:36:39 PM | 10
Gaddafi's speech to the Arab League in Syria 2008 was so prescient..

"We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend.

Along comes a foreign power, occupies an Arab country [Iraq] and hangs its President,and we all sit on the sidelines laughing. Any one of you might be next, yes.

https://www.youtube.com/watch?v=VZZvPlGCt_8

okie farmer | Jun 23, 2017 2:37:39 PM | 11
https://www.theguardian.com/world/2017/jun/23/close-al-jazeera-saudi-arabia-issues-qatar-with-13-demands-to-end-blockade
Qatar given 10 days to meet 13 sweeping demands by Saudi Arabia
Gulf dispute deepens as allies issue ultimatum for ending blockade that includes closing al-Jazeera and cutting back ties with Iran
Juggs | Jun 23, 2017 2:41:55 PM | 13
Peter AU "Is Qatar, like Turkey, already heading for a multi-polar world? For 25 years, the US was the only game in town, but with Russia's move into Syria there are now options."

Hard to see the world heading in that direction:

I wonder if Qatar is already in talks with China about joining the Silk Road Initiative now that it is openly moving into the Russia and Iran sphere.

karlof1 | Jun 23, 2017 3:06:36 PM | 16
Juggs 13--

"I wonder if Qatar is already in talks with China about joining the Silk Road Initiative..."

You'll find the answer's yes as Pepe explains, https://sputniknews.com/columnists/201706161054701807-west-cannot-smell-what-eurasia-cooking/ and http://www.atimes.com/article/blood-tracks-new-silk-roads/

dh | Jun 23, 2017 3:20:35 PM | 19
@17 The best is yet to come. There's a chance Netanyahu will fly into Riyadh to tell everybody what to do. I'm sure he wants what's best for the region.
L'Akratique | Jun 23, 2017 3:29:54 PM | 20
I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character.

Quote from Thomas Nipperdey:

"...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother."

cankles | Jun 23, 2017 4:05:49 PM | 25
@Laguerre #23
I have difficulty in seeing a relationship with the Silk Road Initiative, other than that Qatar exports a lot of LNG to China.

China Eyes Qatar in its Quest to Build a New Silk Road

Last month at the China-Arab Cooperation Forum in Doha, Chinese Foreign Minister Wang Yi postulated that Qatar should take part in the realization of China's Silk Road Initiatives.
Laguerre | Jun 23, 2017 4:42:05 PM | 27
@cankles | Jun 23, 2017 4:05:49 PM | 25

Yeah, you're right. I hadn't looked into the question sufficiently. Of course the Chinese are looking for more external finance for the project. They don't want to be the only ones who pay. Fat chance, though. The Qataris have been in austerity since the decline in the oil price. Someone I know who works in the Qatar Museum has seen all her colleagues let go. And now the crisis with Saudi.

The Qataris may even have signed contracts with China. But if you know anything about the Gulf, there's a wide gap between signing a contract, and actually getting paid. It depends upon how the prince concerned feels about the project when the question of payment comes up. A company I worked for in the 80s took two years to get payment, even though they were experts in Gulfi relations.

AtaBrit | Jun 23, 2017 4:51:40 PM | 28
Great piece.

The issue of the threat regarding the Turkish base didn't surprise me much, though. I think it's clear that if MB is the target, then of course Turkey has to become a target, and Qatar - Turkey ties have to be broken. It stands to reason.

It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front.

Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet.

On a slightly different note there's a scandal going on in western Turkey, in Duzce, at the moment because the local authority has unveiled a statue of Rabia - the four fingered Muslim Brotherhood salute! :-)

Mina | Jun 23, 2017 5:09:45 PM | 29
http://english.ahram.org.eg/NewsContent/2/8/271450/World/Region/UN-blames-warring-sides-for-Yemens-cholera-catastr.aspx
let's blame underfed guys in skirts for fun
karlof1 | Jun 23, 2017 5:16:47 PM | 30
Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region.

'"It's unfortunate that Saudi Arabia is the head of terrorism and today it's holding its neighbors accountable for supporting terrorism," Nasrallah said, hinting to the recent economic sanctions against Qatar.' https://www.dailystar.com.lb/News/Lebanon-News/2017/Jun-23/410688-nasrallah-says-regional-conflicts-seek-to-serve-israel-interest.ashx

Al-Manar provides this report, http://english.almanar.com.lb/292250

Unfortunately, I cannot locate an English language transcript, although one might become available eventually as is usually the case.

Piotr Berman | Jun 23, 2017 6:42:14 PM | 36
Piotr Berman

Aljazeera evil? Are you joking? ....

@Anon | Jun 23, 2017 3:47:56 PM | 24

You did not address the argument I made, namely, that Aljazeera editors apparently belong to "Muslims, who immediately set out to support it [Darwinian theory of evolution] unaware of the blasphemy and error in it." These guys pretend to be nice Wahhabis, dressing in dishdashas, their womenfolks in abayas, but in fact they spread heretical and blasphemous doctrines. However, I am more of a Khazar than a Wahhabi and I do not treat this argument seriously.

It is the fact that compared to other government supported TV/online venues, say RT or PressTV, Aljazeera is well written and edited, has plenty of valuable material, etc. It is a worthwhile place to check when you want to get a composite picture on some issues. And it irritates KSA potentates in a myriad of ways, precisely because it targets "politically engaged Muslim".

It is a good example that pluralism has inherent positive aspects, devils that quarrel are better than "One Ring to rule them all, One Ring to find them, One Ring to bring them all, and in the darkness bind them."

====

Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran.

One pattern in Syrian civil war were persistent and bloody feuds between jihadists that formed roughly four groups:

  1. "salafi", presumably funded by KSA,
  2. "brothers", presumably funded by Qatar and Turkey,
  3. al-Qaeda/al-Nusra/something new that was forcing the first two groups to surrender some weapons (and money?),
  4. and ISIS that had more complex sources (or more hidden).

Medium term strategy of Syrian government and allies for the near future is to "de-escalate" in the western part of the country and finish off ISIS, partitioning hitherto ISIS territories in some satisfactory way, while maintaining some type of truce with the Kurds. Then finish off the jihadists, except those most directly protected by Turkey. Finally, take care of the Kurds. Some sufficiently safe federalism can be part of the solution, but nothing that would lead to enclaves with their own military forces and their own foreign policy, like Iraqi Kurdistan.

That requires the opposing parties to exhibit somewhat suicidal behavior. A big time official feud between "brothers" and "salafi + Kurds" (a pair that shares some funding but with scant mutual affection" can help a lot. Most of all, a big time feud between Turkey and KSA can stabilize the situation in which jihadists from Idlib and northern Hama observe a truce/de-escalation, while their colleagues from south Syria get clobbered, and definitely will induce them to refrain from attacking Syrian government while it is busy against ISIS. After Erdogan was prevented from marching onto Raqqa, he has two options: "Sunnistan" in eastern Syria under domination of YPG or a much smaller YPG dominated territory that can be subsequently digested. Option one is a true nightmare for Erdogan, more than a mere paranoia. However, Erdogan is also "pan-Sunni" Islamist, so he could be tempted to backstab infidels from Damascus, as he was doing before. An open feud with Sunnistan sponsors should help him to choose.

likklemore | Jun 23, 2017 6:49:14 PM | 37
Cankles @ 25 Is that really you? If so, you should know -

Look behind the curtain. This has to do with maintaining the price of oil in US$.

Qatar launches first Chinese yuan clearing hub in Middle East .

Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies.

"The launch of the region's first renminbi clearing center in Doha creates the necessary platform to realise the full potential of Qatar and the region's trade relationship with China," Qatar's central bank governor Sheikh Abdullah bin Saud al-Thani said at a ceremony.

"It will facilitate greater cross-border renminbi investment and financing business, and promote greater trade and economic links between China and the region, paving the way for better financial cooperation and enhancing the pre-eminence of Qatar as a financial hub in MENA (Middle East and North Africa)."
Industrial and Commercial Bank of China's (ICBC) Doha branch is the clearing bank for the centre, which intends to serve companies from around the Middle East.

A clearing bank can handle all parts of a currency transaction from when a commitment is made until it is settled, reducing costs and time taken for trading.

The centre "will improve the ease of transactions between companies in the region and China by allowing them to settle their trade directly in renminbi, drawing increased trade through Qatar and boosting bilateral and economic collaboration between Qatar and China," said ICBC chairman Jiang Jianqing.

At present, Qatar and the Gulf's other wealthy oil and gas exporters use the U.S. dollar much more than the yuan. Most of their currencies are pegged to the dollar, and most of their huge foreign currency reserves are denominated in dollars.

Laguerre @27

Date of article April 24, 2017

In April 2015, Qatar opened Qatar Renminbi Centre (QRC), the region's first clearing centre for the Chinese currency. This allows for trades priced in RMB to be cleared locally in Qatar rather than in other centres such as Shanghai or Hong Kong.ICBC has since become the designated clearance bank servicing the QRC, which has handled more than 350bn yuan ($52.6bn) since its inception.
http://emerge85.io/blog/the-middle-kingdoms-big-four-and-the-gulf

~ ~ ~ ~
Trending and not very far to seeing what is now held under the table. Oil will also be priced in RMB because KSA, to maintain their share of exports to China, will need to get on board. For now, it's been reaffirmed, SA does the whipping and USA protects the Royals.

rawdawgbugfalo | Jun 23, 2017 6:54:19 PM | 38
Well said, I still think this is all dreamlike. Having natural gas and sharing it with Iran is a mf.

Qatar: Is it about Trump, Israel or Nascent Influence? http://wsenmw.blogspot.com/2017/06/qatar-is-it-about-trump-israel-or.html

Piotr Berman | Jun 23, 2017 7:34:43 PM | 40
About Sunni-Shia split. My impression is that this is mostly KSA + UAE obsession. For example, there is a substantial Shia minority in Pakistan, but the dominant thinking among the Sunnis seems to be "Muslim solidarity". There is a minority that is virulently anti-Shia, but they are politically isolated and despised exactly on the account of breaking that solidarity. After all, Pakistan forms the boundary of the Umma with non-Muslim India. I base that opinion on comments in online Pakistani newspapers, and what I have heard from an acquaintance who was a religiously conservative Sunni Pakistani. To him, the attack on Yemen by KSA was wrong "because they are Muslim". So even if Pakistan is to a certain extend in Saudi pocket, and its deep state has an extremist Sunni component, overt siding against "fellow Muslim" is out of the question.

Egypt is another case. One can find rather isolated anti-Shia outbursts, like writings of some fossils in Al-Azhar (who are responsible for the state religion), but the government steers away from that, and in spite of hefty subsidies, it joined Yemen war only symbolically and for a very short time (unlike Sudan that really needs the cash for its mercenaries). As you move further away from the Persian Gulf, the indifference to the "split" increases. As far as Qatar and Aljazeera are concerned, probably no one detests them more than Egyptian elite, as they were valiantly fighting Muslim Brotherhood for the sake of progress with some occasional large massacres (killing several hundreds of protesters, issuing hundreds of death penalties to participants in a single protest, in absentia! incredible idiocy+cruelty). That explains why al-Sisi joined KSA against Qatar.

However, the civil war in Libya that embroils Egypt is a classic case of unexpected alliances. Egypt with a help from Russia, KSA and UAE supports the "eastern government" that bases legitimacy on democratic parliament re-assembled in Tobruq on Egyptian border, and dominated by military strongman Haftar. The latter has the best chance of all people to become a military strongman of all Libya, but apparently has meager popularity and thus, too few troops. He patched that problem by an alliance with a Salafi group that had a numerous militia, currently partitioned into smaller units and incorporated into Haftar's brigades. Even with that, his progress on the ground is very, very gradual. Against him is the government in Tripolis, legitimized by a more fresh parliament and UN/EU, plus a military force that includes several militias. Part of the parliamentary support stems from Muslim Brotherhood, and some part of military support comes from Salafi militias. There are also aspects of a "war of all against all", seems that Saharan tribes collected a lot of fresh blood feuds.

Thus Qatari+Turkish support for Tripoli government is aligned with EU, and Egyptian support for Tobruq government is aligned with Russia and KSA.

Dusty | Jun 23, 2017 7:38:26 PM | 41
I thought I might just throw this out there and see what sticks. US policy is based on power and control. Saudi Arabia has been a good ally but it does not serve use policy or strategic goals any longer. Not really. I think the grand prize for destabilizing the middle east is Saudi Arabia. It would be the only way to truly control the development of other nations or more specifically, to control their rivalries and save the the US from complete economic breakdown. The Saudi's are being plumbed by the best of them, telling them they are you friends, we have your back and so long as Saudi Arabia loses more money and keeps lossing money in needless wars etc.

The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. Of course, it would be a rough go for them for a while, but in the end, a slight change in outlook and the unfair advantage given to the US would go a long way, economically to stabilizing large blocks of countries. They also could of course change their outlook on the world, but that is certainly a difficult challenge. If the Muslim world came together based on their similarities, they could be a very powerful block.

The US no longer has the financial velocity it once maintained and this is much more due to insane ideas about being a hegemon. I never thought revolution would be possible in the US, but it is coming and it won't take much. The country does not appear to have intelligence peddle back a number of policies, drunk on its own poison, it makes capitalism look disgusting. A new business model is needed, one that developes mutual trade based on respect from within the exchange itself. Saudi Arabia needs to cultivate multi-channel support for its biggest resource so that when the returns are no longer there, they will have also developed multiple avenues to prosperity. Just a thought.

[Jun 20, 2017] The US intervention in EU gas market is even more pathetic than it seems

No LNG carriers are currently registered under the US flag, and if the USA plans to be a serious exporter it is going to need about 100 new LNG carriers over the next 30 years, something which is frankly not practically achievable considering it takes about 2 years to build one, at a cost of about $200 Million apiece". Of course, miracles can be made to happen if you pour enough money into them.
Jun 20, 2017 | marknesop.wordpress.com
et Al , June 16, 2017 at 1:30 am
The US's intervention is even more pathetic than it seems.

This is not a stand alone anti-Russia bill which would signal strength from the US, but an adjunct to the anti-I-ran sanctions bill that continues to seek to punish I-ran in the vague hope that it will pull the plug on the cast-iron nuclear deal it has signed with international partners. The irony there is that I-ran Air is recapitalizing with both Airbus & Boeing (also ATR), 100 odd a piece, not to mention other significant investment opportunities for western firms.

They're quite the Gordian Tits!

Not only is there the potential of the Levianthan gas field off Cyprus/Israel/whatever, brutal dictator Azeri gas will also be arriving in (larger, but not gigantic) quantities. Not to mention that significant buyers of LNG, like the UK, have it come straight from Qatar. Is the US prepared to sell LNG at a discount compared to Qatar that has strategic agreements and its own fundamental interests to be protected by the Western (European) states as well?

So if this plan seems to damage not only the USA's allies but the USA itself, then what is its purpose? Stick it to Trump. Mire any plans to re-balance relations with Russia almost at any cost . It's a no brainer for Democrats as they neither hold a majority in the House or the Senate, and there seem to be enough dog whistle Republicans willing to go along with it, including those with mental problems like John 'Insane' McCaine. Ukraine is almost peripheral except as a convenient tool. It think the US accepts they've screwed the pooch on the Ukraine so its only value is to be used as a festering sore on Russia's frontier. Kiev mops up the completely free public political support whilst it is being kicked in the bollox by the same people.

[Jun 17, 2017] We will probably never find out what truly was discussed between Trump, the Saudis and the Israelis, but there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations by The Saker

Notable quotes:
"... Besides, was there ever a time with the Trump Administration's policies in the Middle-East made any logical sense at all? During the election campaign they were, shall we say, 50/50 (excellent on ISIS, plain stupid about Iran). But ever since the January coup against Flynn and Trump's surrender to the Neocons all we have seen in one form of delusional stupidity after another. ..."
"... I see this latest crisis as yet another desperate attempt by the Three Rogue States to prove that they are still the biggest and baddest guys on the block and, just like the previous ones, I think that it will fail. For example, I just don't see the Qataris shutting down al-Jazeera, one of their most powerful "weapons". ..."
"... The Three Rogue States have the same problem: their military capability to threaten, bully or punish is rapidly eroding and fewer and fewer countries out there fear them. ..."
"... I will end this column by comparing what Presidents Putin and Trump are doing these days as I find this comparison highly symbolic of the new era we are living in: Trump, after bombing a few "technicals" (4×4 trucks with a machine gun) and trucks in Syria, the proceeded to tweet that Comey was a liar and a leaker. As for Putin, he participated the latest meeting of the Shanghai Cooperation Organization (SCO) which welcomed both Pakistan and India as full members. The SCO now represents over half of all the people living on our planet and one quarter of the world's GDP . You can think of it as the "other G8", or the "G8 that matters". ..."
"... the semi-official strategy of the Russian Foreign Ministry which is to "turn enemies into neutrals, neutrals into friends, friends into allies" ..."
"... The West simply has no diplomacy any more, only the airforce and the bombs. Diplomacy has always been a highly rational means of achieving your own goals, where military should only be its extension tool, not a complete substitute. The Western MIC has made the Western countries forget this. ..."
"... I don't think "because Trump said so" can be regarded as credible evidence of anything. Even his own most die-hard supporters rarely bother pretending his word is worth anything (they just claim when he lies that it's a cunning subterfuge based upon some complex strategerising). ..."
"... the jury is still out on whether Trump actively and consciously "greenlit" the Saudi move to its full extent, or whether he just didn't understand what the implications would be of his toadying to Riyadh. ..."
"... This is still just a political crisis, and given the stakes for both sides it must be most likely that it will remain such, and a resolution will ultimately be found that involves the Qataris conceding enough for the Saudis to claim victory. ..."
"... But given that neither side can afford to be seen to lose completely, it only needs one side to be a bit too obdurate or a bit too greedy, and the crisis could move beyond the merely political. In that case we would see perhaps an attempted coup or uprising in Qatar, an occupation by the Saudis with US complicity, or perhaps Turkish or even Iranian troops guaranteeing Qatar against those events, which would mean genuinely significant shifts in Qatar's strategic position. ..."
"... if Turkey formally "guarantees Qatar's independence" I'm going to start getting WW1 flashbacks, and seeing the ME as the new Balkans ..."
"... The analogy is perhaps tenuous, but this affair reminds me slightly of Austria-Hungary's demands on Serbia in 1914. Didn't that end well? ..."
"... How significant is the Shanghai Cooperation Organization? Just joining an organisation doesn't reveal its impact. Pakistan and India will never get along. I acknowledge Russia has good leadership. Though, what happens when Putin retires? China is strong, but much rests on the future leadership of China. ..."
"... You are ever so wrong to call these God-fearing states "Rogue States"! Please, call them The Axis of Kindness. They specialize in dropping beautiful, democratic, humanitarian bombs. ..."
"... In perhaps 2015, when Lavrov was constantly in the Middle East, I remember a report, perhaps in Russian on a meeting in Qatar with Khalid bin Mohammad al-Attiyah. Lavrov had promised Qatar a pipeline to be built through Syria in exchange for a $10 Bn investment in the RDIF, which has indeed happened. (Although, so has a similar KSA deal). At this time, presumably, success in Syria and investment mattered more than Gazprom's commercial interest. It could be that Qatar has cut off support for Syrian ISIS and Hamas. ISIS seems to be fading fast. The pipeline was to be Qatar's not the Iran-Russia-Turkey scheme to which Qatar has also been invited. ..."
"... There have been other discussions about a Qatar, Iranian pipeline operated by Russia which makes more sense for Russia but is less of a bribe. Qatar Investment Authority funded Glencore to buy 19.5% of Rosneft this year. Sechin is pushing Putin to allow Rosneft to build and operate gas pipelines so Russia takes a stake in the Qatari pipeline through Rosneft rather than Gazprom? ..."
"... In a nutshell, the situation of Qatar appears to be a symptom of the struggle between the political Islam and the hereditary/religious Islam, in which Qatar plays a part of the more progressive, and potentially more dangerous in the long run, political Islam . ..."
"... Therefore, the Muslim lands of ME have added yet another schism to an already rich list, to the delight of Israel. Finally, it is simply sad how uninformed and bumbling the American version of Lawrence of Arabia, the saber dancer Donald Trump, is in all this, completely out of his depth. ..."
"... Trump's attack on Syria was either a blunder, or just political show. The last possibility to me seems the most probable. Making Iran the threat to the ME might be meant to give Saudi Arabia the leading position in the ME, just as abandoning NATO by the USA may be meant to deliver the USA from the burden, imagined, to defend Europe against Russia. I still wonder if Trump is far more cunning than his enemies think he is. ..."
"... As Russia had no intention of giving up Sebastopol, the USA will not give up Qatar. There is no business like show business. ..."
"... The Israelis and Saudis have been in a defacto anti-Shiite alliance for years against Lebanon, Iraq, Syria, and Iran. I keep waiting for evidence of discontent among the Muslim masses over this the Custodian of the Two Holy Mosques allied with Israel against other Muslim countries that now includes Qatar. ..."
"... But no evidence of discontent. Perhaps this is due to the Wahhabi fundamentalists concluding that Muslim apostates like the Shiites are worse than Jews and Crusaders. Déjà vu the deadly European Thirty Years' War (1618 to 1648) between Catholics and Protestants all over again. ..."
"... The article is correct when stating Iran is the target. ..."
"... Anyway, the Saud family will last as long as the petrodollar enables them to bribe their own people (and having young, male, single, radicalized potential troublemakers-of whom the numbers are increasing-make trouble outside the borders rather than within the Kingdom) and CENTCOM allows them to keep the Shi'a in the Eastern Provinces in check. Once one or both of those factors go away, hell breaks loose in Riyadh. Unfortunately, contrary to what many Western liberals say, what will likely to replace the Saud family in the event of a revolution is probably going to be far worse than what exists today, if public opinion polls in the Kingdom and zakat donations from private donors in Saudi Arabia to jihadist groups are a barometer. ..."
"... On the Thirty Year's War: very astute analogy, one that I agree with to an extent. However, a big difference is that the Sunni drastically outnumber the Shi'a in a way that the Protestants didn't the Catholics, around 7 to 1. That is what makes Beltway overestimation of Iranian capabilities so ludicrous. ..."
"... Saudi Arabia and Israel spend a *lot* of money to keep the Beltway view of the world akin to what they want. Gulf money permeates our think tanks, both on the Left and the Right: and if Trump had an iota of intelligence last year, he would have hammered home the Clinton Foundation's connection to shady Gulfie donors when she paraded her feminism. ..."
"... I think both the Left and Right give Trump way too much credit. He's neither a Russian controlled, closet white supremacist dictator in the making, nor a new Marius, heroically despised by the Establishment, who actually wants to keep his promises to those who voted him into power. Trump is exactly what he appears to be: the American Berlusconi, a corrupt billionaire mogul who just makes it up as he goes along. No more, no less. ..."
"... The common people of the United States, like the same class of people in every other country, mean well, but they are ill-informed. Floundering about in their ignorance, they are tricked and robbed by those who have the inside information and who therefore know how to take advantage of every turn wheel of fortune. ..."
Jun 11, 2017 | www.unz.com

First, a quick who's who

We will probably never find out what truly was discussed between Trump, the Saudis and the Israelis, but there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations. How do I know that? Because Trump himself said so -- As I mentioned in a recent column, Trump's catastrophic submission to the Neocons and their policies have left him stuck with the KSA and Israel , another two rogue states whose power and, frankly, mental sanity, are dwindling away by the minute.

While the KSA and Qatar have had their differences and problems in the past, this time around the magnitude of the crisis is much bigger than anything the past. This is a tentative and necessarily rough outline of who is supporting whom:

Supporting the Saudis ( according to Wikipedia ) Supporting Qatar (according to me)
United Arab Emirates , Bahrain , Egypt , Maldives , Yemen (they mean the pro-Saudi regime in exile), Mauritania , Comoros , Libya (Tobruk government), Jordan , Chad , Djibouti , Senegal , United States , Gabon. Turkey , Germany , Iran.

Questions, many questions

The situation is very fluid and all this might change soon, but do you notice something weird in the list above? Turkey and Germany are supporting Qatar even though the US is supporting the KSA. That's two major NATO member states taking a position against the USA.

Next, look at the list supporting the Saudis: except for the USA and Egypt they are all militarily irrelevant (and the Egyptians won't get militarily involved anyway). Not so for those opposing the Saudis, especially not Iran and Turkey. So if money is on the side of the Saudis, firepower is on the side of Qatar here.

Then, Gabon? Senegal? Since when are those two involved in Persian Gulf politics? Why are they taking sides in this faraway conflict? A quick look at the 10 conditions the Saudis demand that the Qataris fullfil does not help us understand their involvement either

... ... ...

More interestingly, why is ISRAEL not listed as a country supporting the KSA?

As always, the Israelis themselves are much more honest about their role in all this. Well, maybe they don't quite say "we done it" but they write articles like " Five reasons why Israel should care about the Qatar crisis " which lists all the reasons why the Israelis are delighted:

That kind of honesty is quite refreshing, even if it is primarily for internal, Israeli, consumption. Quick check with a Palestinian source – yup, the Israelis are backing the KSA. This is hardly surprising, no matter how hard the western corporate media tries to not notice this.

What about the USA? Do they really benefit from this crisis?

The USA has what might possibly the largest USAF base worldwide in Qatar, the Al Udeid Air Base . Furthermore, the forward headquarters of United StatesCENTCOM are also located in Qatar. To say that these are crucial US infrastructures is an understatement – one could argue that these are the most important US military facilities anywhere in the world outside the United States. Thus one would logically conclude that the very last thing the US would want is any type of crisis or even tensions anywhere near such vital facilities yet it quite clear that the Saudis and the Americans are acting in unison against Qatar. This makes no sense, right? Correct. But now that the US has embarked on a futile policy of military escalation in Syria it should come as no surprise that the two main US allies in the region are doing the same thing.

Besides, was there ever a time with the Trump Administration's policies in the Middle-East made any logical sense at all? During the election campaign they were, shall we say, 50/50 (excellent on ISIS, plain stupid about Iran). But ever since the January coup against Flynn and Trump's surrender to the Neocons all we have seen in one form of delusional stupidity after another.

Objectively, the crisis around Qatar is not good at all for the USA.

... ... ...

What about Russia in all that?

The Russians and the Qataris have butted heads many times over, especially over Syria and Libya where Qatar played an extremely toxic role in being the prime financiers of various takfiri terrorist groups. Furthermore, Qatar is Russia's number one competitor in many LNG (liquefied natural gas) markets. There were also other crises between the two countries, including what appears to be a Russian assassination of the Chechen terrorist Leader Zelimkhan Yandarbiyev and the subsequent torture and trial of two Russian Embassy employees accused of being involved in the assassination (they were sentenced to life in prison and eventually sent back to Russia). Still, the Russians and the Qataris are eminently pragmatic peoples and the two countries mostly maintained a cordial, if careful, relationship which even included some joint economic ventures.

It is highly unlikely that Russia will intervene directly in this crisis unless, of course, Iran is directly attacked. The good news is that such a direct attack on Iran is unlikely as none of the Three Rogue States really have any stomach to take on Iran (and Hezbollah). What Russia will do is use her soft power, political and economic , to slowly try to reel Qatar into the Russian orbit according to the semi-official strategy of the Russian Foreign Ministry which is to " turn enemies into neutrals, neutrals into friends, friends into allies ". Just like with Turkey, the Russians will gladly help, especially since they know that this help will buy them some very precious influence in the region.

Iran, the real target of it all

The Iranians are now openly saying that the recent terrorist attack in Tehran was ordered by Saudi Arabia . Technically speaking, that means that Iran is now at war . In reality, of course, as the real local superpower, Iran is acting with calm and restraint : the Iranians fully understand that this latest terrorist attack is a sign of weakness, if not desperation, and that the best reaction to it is to act the same way the Russians reacted to the bombings in Saint Petersburg: stay focused, calm and determined. Just like the Russians, the Iranians have now also offered to send food to Qatar, but it is unlikely that they will intervene militarily unless the Saudis really go crazy. Besides, with Turkish forces soon deployed in Qatar , the Iranians have no real need for any displays of military might. I would argue that the simple fact that neither the USA nor Israel have dared to directly attack Iran since 1988 (since shooting down by the US Navy of the Iran Air Flight 655 Airbus ) is the best proof of the real Iranian military power.

... ... ..

...As for the Qataris, they have already clearly indicated that they are unwilling to surrender and that they will fight . The Saudis have already taken the outrageous decision to impose a blockade of a fellow Muslim country during the holy month of Ramadan. Will they really now further escalate and commit an act of aggression against a fellow Muslim country during that month? They might, but it is hard to believe that even they could be that ignorant of the Muslim public opinion. But if they don't, then their operation will lose a lot of momentum while the Qataris will be given time to prepare politically, economically, socially and militarily. Qatar might be small, and the Qataris themselves not very numerous, but their immense pockets allow them to quickly line up any amount of suppliers and contractors willing to help them out. This is case where the famous "market forces" will act to Qatar's advantage.

The Qatari Foreign Minister is expected in Moscow on Saturday and it is pretty obvious what the talks will be about: while Russia will not put all her political weight to support the Qataris, the Kremlin might accept becoming a mediator between the KSA and Qatar. If that happens, that would be the ultimate irony: the main outcome of the Saudi-Israeli-US operation will make Russia an even more influential player in the region. As for Qatar itself, the outcome of this crisis will probably articulate itself along Nietzschean lines: " That which does not kill us, makes us stronger ."

Conclusion

I see this latest crisis as yet another desperate attempt by the Three Rogue States to prove that they are still the biggest and baddest guys on the block and, just like the previous ones, I think that it will fail. For example, I just don't see the Qataris shutting down al-Jazeera, one of their most powerful "weapons". Nor do I see them breaking all diplomatic relations with Iran as those two states are joined at the hip by the immense South Pars gas condensate field . The immense wealth of the Qataris also means that they have very powerful supporters worldwide who right now, as I write these lines, are probably on the phone making calls to very influential people and indicating to them in no unclear terms that Qatar is not to be messed with.

If anything this crisis will only serve to push Qatar further into the warm embrace of other countries, including Russia and Iran, and it will further weaken the Saudis.

The Three Rogue States have the same problem: their military capability to threaten, bully or punish is rapidly eroding and fewer and fewer countries out there fear them. Their biggest mistake is that instead of trying to adapt their policies to this new reality, they always chose to double-down over and over again even though they fail each time, making them look even weaker and their initial predicament even worse. This is a very dangerous downward spiral and yet the Three Rogue States seem unable to devise any other policy.

I will end this column by comparing what Presidents Putin and Trump are doing these days as I find this comparison highly symbolic of the new era we are living in: Trump, after bombing a few "technicals" (4×4 trucks with a machine gun) and trucks in Syria, the proceeded to tweet that Comey was a liar and a leaker. As for Putin, he participated the latest meeting of the Shanghai Cooperation Organization (SCO) which welcomed both Pakistan and India as full members. The SCO now represents over half of all the people living on our planet and one quarter of the world's GDP . You can think of it as the "other G8", or the "G8 that matters".

I submit that this quick comparison of agenda really says I all.

UPDATE1 : Secretary of State Rex Tillerson is now telling the Saudis to 'cool it' . The Saudi-Israeli plan is beginning to collapse.

Kiza June 10, 2017 at 6:42 am GMT

The real Qatari 'crime' was to refuse, on purely pragmatic reasons, to join into the massive anti-Iranian campaign imposed on the region by Saudi Arabia and Israel.

This is why it is worth reading this good article. I suspected this to be the reason from the start of the crisis: Qatar has been an active supporter of ME terrorism (including ISIS) just like KSA, US, Israel, UAE and Turkey. But they were never as anti-Iranian as the other members of this Coalition of the Lovers of Terrorism.

Also, I liked this sentence on the diplomatic skill forgotten in the West:

the semi-official strategy of the Russian Foreign Ministry which is to "turn enemies into neutrals, neutrals into friends, friends into allies"

The West simply has no diplomacy any more, only the airforce and the bombs. Diplomacy has always been a highly rational means of achieving your own goals, where military should only be its extension tool, not a complete substitute. The Western MIC has made the Western countries forget this.

Randal June 10, 2017 at 11:46 am GMT

there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations. How do I know that? Because Trump himself said so!

I don't think "because Trump said so" can be regarded as credible evidence of anything. Even his own most die-hard supporters rarely bother pretending his word is worth anything (they just claim when he lies that it's a cunning subterfuge based upon some complex strategerising).

As far as I can see the jury is still out on whether Trump actively and consciously "greenlit" the Saudi move to its full extent, or whether he just didn't understand what the implications would be of his toadying to Riyadh. Perhaps he really is so profoundly ignorant that he really believes what his words imply: that the Qataris sponsor terrorism (they do) but the Saudis (and his own regime) don't, remarkable as that would be in a national leader.

As for the Qataris, they have already clearly indicated that they are unwilling to surrender and that they will fight.

This is still just a political crisis, and given the stakes for both sides it must be most likely that it will remain such, and a resolution will ultimately be found that involves the Qataris conceding enough for the Saudis to claim victory.

But given that neither side can afford to be seen to lose completely, it only needs one side to be a bit too obdurate or a bit too greedy, and the crisis could move beyond the merely political. In that case we would see perhaps an attempted coup or uprising in Qatar, an occupation by the Saudis with US complicity, or perhaps Turkish or even Iranian troops guaranteeing Qatar against those events, which would mean genuinely significant shifts in Qatar's strategic position. The odds are against that, because all parties have too much at stake to lightly go far down those roads, but such crises can spiral out of control. And on the way we could see all kinds of destructive economic warfare, lawfare, and hardball pressurising, together with lots of hanging out of each side's dirty laundry by the other.

Popcorn time. But if Turkey formally "guarantees Qatar's independence" I'm going to start getting WW1 flashbacks, and seeing the ME as the new Balkans

  1. UPDATE1: Secretary of State Rex Tillerson is now telling the Saudis to 'cool it'. The Saudi-Israeli plan is beginning to collapse.
  2. UPDATE2: Trump promptly undermines Tillerson's position ( Tillerson Scrambles to Undo Trump's Qatar Blunder )
dearieme June 10, 2017 at 12:20 pm GMT

The analogy is perhaps tenuous, but this affair reminds me slightly of Austria-Hungary's demands on Serbia in 1914. Didn't that end well?

Weaver June 10, 2017 at 12:41 pm GMT

How significant is the Shanghai Cooperation Organization? Just joining an organisation doesn't reveal its impact. Pakistan and India will never get along. I acknowledge Russia has good leadership. Though, what happens when Putin retires? China is strong, but much rests on the future leadership of China.

The US isn't exactly in competition with China, because the US doesn't want to grow stronger. The US wants to help Israel expand. And the US wants to help enrich defence contractors and expand pork spending. So, the US and China have two very different goals. Also, the US and Europe are dedicated to undermining their European populations.

So, while China and Russia pursue power, the US has very different objectives.

Thales the Milesian June 10, 2017 at 3:08 pm GMT

Saker:

You are ever so wrong to call these God-fearing states "Rogue States"! Please, call them The Axis of Kindness. They specialize in dropping beautiful, democratic, humanitarian bombs.

The Scalpel Website June 10, 2017 at 7:55 pm GMT

@Weaver "The US isn't exactly in competition with China, because the US doesn't want to grow stronger. The US wants to help Israel expand. And the US wants to help enrich defence contractors and expand pork spending."

ROFL!!!! Great writing. Funny, but so much truth there

Philip Owen June 10, 2017 at 11:13 pm GMT

In perhaps 2015, when Lavrov was constantly in the Middle East, I remember a report, perhaps in Russian on a meeting in Qatar with Khalid bin Mohammad al-Attiyah. Lavrov had promised Qatar a pipeline to be built through Syria in exchange for a $10 Bn investment in the RDIF, which has indeed happened. (Although, so has a similar KSA deal). At this time, presumably, success in Syria and investment mattered more than Gazprom's commercial interest. It could be that Qatar has cut off support for Syrian ISIS and Hamas. ISIS seems to be fading fast. The pipeline was to be Qatar's not the Iran-Russia-Turkey scheme to which Qatar has also been invited.

I was monitoring so much Russian media at the time (hundreds of stories a day and this was not relevant to my task) I can't place it exactly but it was very memorable because of the reversals involved and the mass of implications. How did they reconcile interests. There have been other discussions about a Qatar, Iranian pipeline operated by Russia which makes more sense for Russia but is less of a bribe. Qatar Investment Authority funded Glencore to buy 19.5% of Rosneft this year. Sechin is pushing Putin to allow Rosneft to build and operate gas pipelines so Russia takes a stake in the Qatari pipeline through Rosneft rather than Gazprom?

Kiza June 11, 2017 at 4:17 am GMT

If you are interested in another objective view of the Qatari situation here is an article by Oliver Miles in the London Review of Books: https://www.lrb.co.uk/blog/2017/06/08/oliver-miles/whats-behind-the-saudi-blockade-of-qatar/ .

It is very interesting that even Al ash-Shaikh has denounced Qatar because of its insubordination to Saudi commands and interests.

In a nutshell, the situation of Qatar appears to be a symptom of the struggle between the political Islam and the hereditary/religious Islam, in which Qatar plays a part of the more progressive, and potentially more dangerous in the long run, political Islam .

Therefore, the Muslim lands of ME have added yet another schism to an already rich list, to the delight of Israel. Finally, it is simply sad how uninformed and bumbling the American version of Lawrence of Arabia, the saber dancer Donald Trump, is in all this, completely out of his depth.

jilles dykstra June 11, 2017 at 6:57 am GMT

Trump's attack on Syria was either a blunder, or just political show. The last possibility to me seems the most probable. Making Iran the threat to the ME might be meant to give Saudi Arabia the leading position in the ME, just as abandoning NATO by the USA may be meant to deliver the USA from the burden, imagined, to defend Europe against Russia. I still wonder if Trump is far more cunning than his enemies think he is.

jilles dykstra June 11, 2017 at 7:00 am GMT

@Kiza

As Russia had no intention of giving up Sebastopol, the USA will not give up Qatar. There is no business like show business.

Talha June 11, 2017 at 9:56 am GMT

@anon Let's look at the numbers again from an angle that makes more sense:

Israeli expansion (relative to its size): 2500/8522 = 29%
Indonesian expansion (relative to size): 130,000/735,358 = 18%
Moroccan expansion (relative to size – keeping in mind it only occupies 2/3 of Western Sahara):
68,660/274,460 = 25%
Russian expansion (relative to size): 14,000/6,592,800 = <1%

Nice try. Peace.

The Alarmist June 11, 2017 at 10:05 am GMT

"The SCO now represents over half of all the people living on our planet and one quarter of the world's GDP. You can think of it as the "other G8", or the "G8 that matters"."

Very clever! Unfortunately the other G8 will only matter around 2040 or so, when the last of the West as we know it is finally subsumed into the Great Caliphate, at which point it will then turn on the other half of the planet.

TheJester June 11, 2017 at 10:57 am GMT

Nothing new. The Israelis and Saudis have been in a defacto anti-Shiite alliance for years against Lebanon, Iraq, Syria, and Iran. I keep waiting for evidence of discontent among the Muslim masses over this the Custodian of the Two Holy Mosques allied with Israel against other Muslim countries that now includes Qatar.

But no evidence of discontent. Perhaps this is due to the Wahhabi fundamentalists concluding that Muslim apostates like the Shiites are worse than Jews and Crusaders. Déjà vu the deadly European Thirty Years' War (1618 to 1648) between Catholics and Protestants all over again.

mcohen June 11, 2017 at 11:43 am GMT

@Philip Owen Thanks for that .2015.a lot has happened including the opening up of gas reserves on the Mediterranean. both turkey and Qatar have us airbases so that is leverage. regardless it Is one thing building a pipeline and another keeping it secure. Qatar has been trying to build up leverage on Israel via the Palestinians but that has come to and end with trumps push for peace. ideally peace does not suit qatars plans so gaza could explode soon. hence qatars flirtation with iran hoping to stir up trouble in s.lebanon via hezb. Al thani ran from Syria. maybe they can send him to s.lebanon for some character building

Agent76 June 11, 2017 at 1:14 pm GMT

The article is correct when stating Iran is the target.

Sep 11, 2011 General Wesley Clark: Wars Were Planned – Seven Countries In Five Years

"This is a memo that describes how we're going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran." I said, "Is it classified?" He said, "Yes, sir." I said, "Well, don't show it to me." And I saw him a year or so ago, and I said, "You remember that?" He said, "Sir, I didn't show you that memo! I didn't show it to you!"

nebulafox June 11, 2017 at 1:36 pm GMT

@TheJester

The Saud family has managed to make themselves even more unpopular (if that were even possible) on what we might term "Arab Street" due to their relatively newfound comfort with the Israelis, of course, but nobody can deny that it is smart politics. Saudi Arabia isn't Egypt, they've got plenty of money to ease the unemployment problem. For all its flaws, its nowhere near "pseudo-failed state" status like so many other Arab countries, despite the demographic and social pressures.

Anyway, the Saud family will last as long as the petrodollar enables them to bribe their own people (and having young, male, single, radicalized potential troublemakers-of whom the numbers are increasing-make trouble outside the borders rather than within the Kingdom) and CENTCOM allows them to keep the Shi'a in the Eastern Provinces in check. Once one or both of those factors go away, hell breaks loose in Riyadh. Unfortunately, contrary to what many Western liberals say, what will likely to replace the Saud family in the event of a revolution is probably going to be far worse than what exists today, if public opinion polls in the Kingdom and zakat donations from private donors in Saudi Arabia to jihadist groups are a barometer.

On the Thirty Year's War: very astute analogy, one that I agree with to an extent. However, a big difference is that the Sunni drastically outnumber the Shi'a in a way that the Protestants didn't the Catholics, around 7 to 1. That is what makes Beltway overestimation of Iranian capabilities so ludicrous.

(IMO: the Shi'a have shrines and their own version of saints, both of which are considered heathenish by Wahhabists. They also have an organized structure. To become a mullah in Shi'a Islam, you have to train for decades, rigorous education in philosophy, logic, astronomy, et all, much like a rigorous classical education was required for Catholic orders -- not at all like modern Sunni Islam where any random guy can declare a fatwa. So they are akin to the Catholics in all this, whereas the Sunni are the Protestants. Not a perfect analogy, but makes the most sense for Westerners.)

Seamus Padraig June 11, 2017 at 1:44 pm GMT

The Zionist Entity and the Wahhabist Entity. With friends like these

nebulafox June 11, 2017 at 1:48 pm GMT

@jilles dykstra Saudi Arabia and Israel spend a *lot* of money to keep the Beltway view of the world akin to what they want. Gulf money permeates our think tanks, both on the Left and the Right: and if Trump had an iota of intelligence last year, he would have hammered home the Clinton Foundation's connection to shady Gulfie donors when she paraded her feminism.

>I still wonder if Trump is far more cunning than his enemies think he is.

I think both the Left and Right give Trump way too much credit. He's neither a Russian controlled, closet white supremacist dictator in the making, nor a new Marius, heroically despised by the Establishment, who actually wants to keep his promises to those who voted him into power. Trump is exactly what he appears to be: the American Berlusconi, a corrupt billionaire mogul who just makes it up as he goes along. No more, no less. The secret to Trump is that there is no secret. And right now, unfortunately for his base, he happens to be surrounded by Republican people who haven't learned a thing from the Bush debacle and the last few decades in general, policy-wise. Get ready for pure McConnell fantasies for the next few years.

He's not un-clever in his own way when it comes to manipulating the media and public ratings, but he just clearly does not know a lot about actual policy-making. Trump is at his best when the Establishment wisdom is very clearly in the wrong, yet they can't figure it out due to their own social bubble and worldview. In that case, Trump calls them out, as he regularly did last year. But it isn't because Trump has a plausible alternative to offer, it is more a gut reaction in the instant of the moment that he forgets a few minutes later.

Anonymous June 11, 2017 at 1:57 pm GMT

@jilles dykstra Trump-cunning?

Give me a break. It is obvious that the Syria attack and also the Moab Afganistan bomb was purely a show of force to pressure Xi into taking out N Korea.

This is so sloppy and ham handed it is criminal. Trump is not negotiating with another CEO where that kind of leverage works. He is negotiating with world leaders who aren't going to be pushed off because of a few missle strikes.

This just showed Xi that Trump is an amateur.

And yeah, letting Saudi Arabia have free reign over the Middle East? Nothing could go wrong there right?

Anonymous June 11, 2017 at 2:12 pm GMT

Is it known when the President first learned that there were major US bases in Qatar? Not the #30 Anonymous – just for accuracy not as implied criticism.

Che Guava June 11, 2017 at 2:29 pm GMT

@Carlton Meyer Agree, but would say better before good. and Iran is better than any Arab state, excepting embattled Syria and Lebanon.

It is strange to me how the Qataris are to be in this situation, maybe just because it is a very small polity, essentially just a takeover bid.

jacques sheete June 11, 2017 at 2:33 pm GMT

@Kiza Then there's something called "secret diplomacy."

The common people of the United States, like the same class of people in every other country, mean well, but they are ill-informed. Floundering about in their ignorance, they are tricked and robbed by those who have the inside information and who therefore know how to take advantage of every turn wheel of fortune.

The people voted for Roosevelt be cause he talked of "trust-busting" at the same time that he was sanctioning the purchase of the Tennessee Coal and Iron Company by the Steel Trust. They supported Wilson "because he kept us out of war" at the same time that Wilson was making preparations to enter the war.

The rulers can negotiate "secret treaties" at home and abroad. The people, knowing nothing of either the theory or the practice of secret diplomacy, commit all sorts of follies for which they themselves must later foot the bill.

- R. F. PETTIGREW, TRIUMPHANT PLUTOCRACY, The Story ofAmerican Public Life from 1870 to 1920.

https://archive.org/stream/triumphantpluto00pettrich/triumphantpluto00pettrich_djvu.txt

The wonder is that the* hoi polloi trust the hoi oligoi at all. Perhaps it's because today we are generally misinformed rather than merely uninformed.

*Note to any lurking snarkmeisters. I realize that the words "the" and "hoi" are technically redundant, but I am entering the borrowed phrases in accepted English.

survey-of-disinfo June 11, 2017 at 2:41 pm GMT

@The Alarmist

[Europe becomes a "Khalifate"] at which point it will then turn on the other half of the planet.

It is not clear if the quoted contributer is uneducated, misinformed, or merely channeling historic Western insistence on lording over the rest of planet in guise of an insecure alarmist.

It is not news that Europe and the West (without any ideological basis in a Muslim Khalifate) have for the past few hundred years been treating both halves of the planet as their prey. Keep boo hoo hooing over those gates of Vienna episode but seriously how many HUNDREDS of millions of people have you lot killed in the past few hundred years? Let's get real. Enough of this bullshit.

Talha June 11, 2017 at 2:48 pm GMT

@anon And the fact remains that Israel is proportionally greedier for land than they are.

If a linebacker eats a whole five course meal of pot roast – it's not that amazing. If a five year old does it – it's a thing of astonishment.

You can also explain why Israel sells weapons to nations like Morocco and Indonesia.

Peace.

Ulfberth June 11, 2017 at 3:10 pm GMT

The countries who support Qatar are Iran and Russia only. Turkey has been in a swing state of being the US vassal, getting mad at it, flirting with Russia, etc
Germany is a joke.

jilles dykstra June 11, 2017 at 3:14 pm GMT

@Anonymous If you want to demonstrate that Trump is an amateur you must know what his objectives are, now, then afterwards you may be able to show that he failed.
At present there is doubt about what he really wants.

The analysis of prof Laslo Maracs, UVA, Amsterdam, of the Trump objectives is that Trump, and his rich friends, understand that going on with the Obama way will lead to their ruin, and the USA's.
Obama caused close economic cooperation between China en Russia.

In Khazakstan an enormous installation has been built, they call it a land port, where containers can be transferred from the Chinese railway system to the Russian.
Containers now can be transported from China to St Peterburgh in a few days.

The USA cannot subjugate the world militarily, politically and economically impossible.

Therefore Trump is at war with Deep State, those who still want the USA to militarily subjugate the world.
I still think that Trump's behavior can be explained by the mentioned analysis.

If Maracs is right, then it is greatest change in political course of the USA since Roosevelt in 1933 won the elections.
And of course a decisive change in world history.
Therefore the whole western world, and all countries dependent on the USA, such as Israel and Saudi Arabia, is in deep confusion.

jacques sheete June 11, 2017 at 3:46 pm GMT

@Talha Speaking of imperialist ( aggressive) expansion, "we" were warned against it time and again, but our lovely leadership has routinely ignored it.

I like this quote from the Republican anti-imperialist of a century ago.:

The American flag went up on Hawaii in dishonor; it came down in honor, and if it goes up again now it will go up in infamy and shame and this Government will join the robber nations of the world .

-R. F. Pettigrew, "Pettigrew's Speech". The Herald. Los Angeles. July 3, 1898 . p. 4.

The US would join the robber nations of the world? Ya think?

Ludwig Watzal Website June 11, 2017 at 4:13 pm GMT

"The Saker" is absolutely right about the characterization of the "Axis of Evil" that contains finally the right three rogue states: The US Empire, Israel, and Saudi Arabia. For sure, it's all about Iran but the time is over to attack this country, although the Israelis and the Saudis would love, it the US would do it. But even the Trump administration is not that stupid. To attack Iran would be the "stupidest thing I've ever heart", said the late Israeli Mossad chief Meir Dagen, when the two crazies in Tel Aviv, Netanyahu, and Barack, tried to convince or rather push the US into attacking Iran's nuclear installations, knowing that Iran is light years away from a nuclear device.

It speaks volumes that the US supports Saudi Arabia's open aggression and genocide in Yemen. But the failure shows that the Saudis are incapable of dealing with a bunch or Huthi rebels or just take Syria where they are just capable of financing foreign mercenaries and terrorist to overthrow an elected President. To rely on the Saudis is a lost cause.

That Russia wants to mediate in the created crisis and the Iranians and the Turks want to deliver goods, the later are even ready to send troops, is a good sign that this criminal endeavor of the three terror states, the US, Israel, and Saudi Arabia, is going to fail.

The Trump administration, however, is the first to blame because President Trump gave all the Muslim despots a free hand when he delivered his bizarre speech in Riadah and singled out Iran as the main "sponsor of Terrorism". After this grotesque performance, he visited the main terrorist state in the region, Israel. As long as the US is unconditionally loyal to Israel, they can't pursue their national interests. That such interests are identical or the relations between the two states are "unshakable" is just rhetoric. But that the US can't escape the deadly embrace shows whose interest the US political class is truly serving.

jacques sheete June 11, 2017 at 4:16 pm GMT

@jilles dykstra If you want to demonstrate that Trump is an amateur you must know what his objectives are, now, then afterwards you may be able to show that he failed.
At present there is doubt about what he really wants.

The analysis of prof Laslo Maracs, UVA, Amsterdam, of the Trump objectives is that Trump, and his rich friends, understand that going on with the Obama way will lead to their ruin, and the USA's. Obama caused close economic cooperation between China en Russia.

In Khazakstan an enormous installation has been built, they call it a land port, where containers can be transferred from the Chinese railway system to the Russian.
Containers now can be transported from China to St Peterburgh in a few days.

The USA cannot subjugate the world militarily, politically and economically impossible.

Therefore Trump is at war with Deep State, those who still want the USA to militarily subjugate the world. I still think that Trump's behavior can be explained by the mentioned analysis. If Maracs is right, then it is greatest change in political course of the USA since Roosevelt in 1933 won the elections. And of course a decisive change in world history. Therefore the whole western world, and all countries dependent on the USA, such as Israel and Saudi Arabia, is in deep confusion.

At present there is doubt about what he really wants.

I doubt that he knows beyond the license to strut around in our faces like the big cock of the dung heap.

Paradoxically, Trump's vast holdings make him extremely vulnerable. So, effectively, he's trapped unless he's prepared to lose much, and I highly doubt that he's into martyrdom in any form or degree.

Much about his running for office reminds me of Jesse Ventura's win in Minnesota back in '99.

I'm quite certain that Jesse put his money where his (also rather big) mouth was and ran for office, never expecting to win, but merely to use the bully pulpit to show the other money bags the middle finger. To his, and everyone else's shock, he won. Unfortunately, he was opposed by unopposable forces and though he did manage to push through some good legislation (!), it's all been undone. Jesse was a one term governor.

Anyway, it's: Hail, Humpty Trump! Sterquilinus has risen, again! Isn't he byoo-tiful? Cock-a-doodle- doo-doo!!!!!!

Yes, sumpin sitnks, but Hexen Hillary would've been MUCH worse Yuck!

Full disclosure.: I'm still a Ventura policy fan, though I could do without the pink boa!

[Jun 17, 2017] The draft bill of the new sactions for Russia is surprisingly candid about what is actually at stake, namely selling American liquified natural gas and ending the supply of Russian natural gas to the European markets

Jun 17, 2017 | www.moonofalabama.org

james | Jun 16, 2017 2:47:41 AM | 36

daily us press briefing thursday june 15th..

some interesting info on the sale of jets to qatar worth 12 billion and stuff like that..

and this

"QUESTION: Switching gears, Germany and Austria sharp – have sharply criticized the U.S. Senate today for moves aimed at advancing a new legislation packaging new sanctions against Russia, which tangentially deal with European countries as well. Austrian federal chancellor and German foreign ministry released a joint statement, and I wanted to read one line from it to get your response to this particular line: "The draft bill of the U.S. is surprisingly candid about what is actually at stake, namely selling American liquefied natural gas and ending the supply of Russian natural gas to the European markets."

MS NAUERT: Sorry, back up for a second? What did you say about the liquefied natural gas?

QUESTION: That the bill is trying to basically peddle U.S. LNG to the – to the European markets – markets instead of the Russian natural gas. The bill aims to protect U.S. jobs and the natural gas and petroleum industries. So what's your response to that?

MS NAUERT: Well, first, I'm not going to comment on anything that those nations said and their criticism of anything going on on Capitol Hill. We would see it – and we talked about this last week – we welcome the shipment of liquefied natural gas to Poland, to countries in that region, if that were to come – become available to them, because it helps give them another option, another option to get natural gas from other countries that are perhaps more stable or other countries that can perhaps provide a regular flow of natural gas.

Much of the natural gas in Poland, as I understand it, comes from Russia, and that can be inconsistent. Russia has the ability, as you well know, to turn off that natural gas, and that puts the Polish people in a very difficult situation. So the U.S. provided another option. A regular source of natural gas, especially in the winter months, we see as important for the United States and for our allies."

our allies... lol...

[Jun 17, 2017] Turkey is having its problems, but the Russian pipeline is moving along and managed by Russia; Syria, Iraq and Iranian gas could all become clients of the pipeline, generating significant revenue and jobs for Turkey as its hub

Notable quotes:
"... Although unlikely, it would be amusing if support for Qatar led to an improvement in the Iran/Turkey relationship. ..."
Jun 17, 2017 | www.moonofalabama.org

frances | Jun 17, 2017 7:44:31 PM

Although unlikely, it would be amusing if support for Qatar led to an improvement in the Iran/Turkey relationship.
Posted by: Hoarsewhisperer | Jun 17, 2017 3:00:24 PM | 34

I agree Turkey is having its problems, but the Russian pipeline is moving along and managed by Russia; Syria, Iraq and Iranian gas could all become clients of the pipeline, generating significant revenue and jobs for Turkey as its hub. Far better that Turkey looks to Russia with its sane international policies than to the the US's EU puppet.

virgile | Jun 17, 2017 11:04:12 AM | 32
Turkey has fallen in yet another trap set by the USA to weaken Erdogan. Turkey has no more 'neighbors' friends, no more European friends, little american sympathy, and now it is about to loose his rich Gulf friends.

Erdogan's foreign policy is close to total disaster. The AKP success came from the economical reforms stimulated by the EU promises of adhesion and to the smart and peaceful influence of Gulen in Turkey's institutions and foreign policy.

Now Gulen and his allies are enemies. Turkey has gradually become a rogue state controlled exclusively by a megalomaniac man blinded by religion and money.

After the Syria quagmire, the Qatar-Saudi conflict and its impact on Turkey's economy, may turn to be fatal to Erdogan ruling.

[Jun 16, 2017] New Russia Sanctions Are All About Forcing the EU to Buy Overpriced US Gas

Jun 16, 2017 | marknesop.wordpress.com

Any Darwin Awards fans out there? For those few who have never heard of them, the Darwin Awards celebrate those individuals who have rendered a significant service to mankind by taking themselves out of the global gene pool. In preparing to discuss today's subject, I am reminded of unfortunate 1999 award-winner 'James' from Missouri, who became so fixated upon his love interest that he tried to lop off his own head with a chainsaw to demonstrate his commitment to an outcome on his terms. Although he was ultimately unsuccessful on both counts, he did fatally injure himself, and died in hospital. Ashes to ashes; dust to dust.

My intent today is to demonstrate clear destructive similarities between the above emotional decision and the equally simpleminded decision of the US Senate to impose further economic sanctions on Russia, this time explicitly tying them to penalizing of European companies which do business with Russia – moreover, in a clear attempt to stop the latter from proceeding with the Nord Stream II gas pipeline project. This, in turn, is clearly an attempt by the USA to make Europe a captive market for its own energy products, in the form of shipborne LNG. Significantly, that goal is also finally becoming clear to Europe; or at least to the parts of it that matter, such as Germany (thanks for the tip, James!) Try to put aside, for the moment, the insufferable arrogance of American meddling in Europe's energy market, with a view to restricting its choice while – laughably – pretending it is broadening European energy options.

The readers and commenters of this blog will be well aware, since it has been a topic of discussion for years here, that a critical underpinning of the western plan to seize Ukraine and wrest it into the western orbit was the premise that Russia would be forced by simple momentum to go along with it. As long as events continued to unfold too quickly to get ahead of, Russia would have to help supply the sinews of its own destruction. And a big part of that was the assumption that Russia would help to finance Ukraine's transition to a powerful western fulcrum upon which to apply leverage against it, through continued trade with Ukraine and continued transit of Europe's energy supply through Ukraine's pipeline system. But Russia slapped a trade embargo on most Ukrainian goods, and rescinded its tariff-free status as it became clear Brussels planned to use it to stovepipe European trade goods into the Russian market, through Ukraine – thus crushing domestic industries which would not be able to compete on economically-favourable terms. The armchair strategists nearly shit a brick when construction of the South Stream pipeline commenced, bypassing Ukraine and depriving it of about $2 billion annually in transit fees. But pressure ultimately forced Bulgaria to throw a wrench into the works, and the pipeline plans were shelved, to much victory dancing in the west. There was not quite as much happy-dancing in Bulgaria , but they were only ever a pawn anyway.

Sidebar for a moment, here; while the $2 Billion annually in transit fees is extremely important, Ukraine's pre-crisis GDP was $163 Billion. The funds realized for transit fees are important because (a) Russia has to pay them and (b) the west will have to come up with the equivalent in aid if Ukraine loses out on them. But the real value intrinsic to Ukraine as a transit country is its physical reality as an interface for Russian gas transit to Europe – what is a bridge can be easily turned into a wall.

Any time Washington thinks Russia needs some more shit on its face, Ukraine can be prodded to announce a doubling of its transit fees, or to kick off some other dispute which the popular press will adroitly spin to make Russia appear to be an unreliable supplier. Therefore, it is essential to western strategy that significant amounts of Russian gas continue to transit Ukraine. Sufficiently so that Europe continues to evolve ever-more-desperate contingency plans in order to keep receiving gas through the country which was known to have provoked the previous shutoff of European supplies by siphoning Europe-bound gas for its own use. That's despite the assurances of Germany and western partners of Gazprom in the Nord Stream line that it will mean cheaper gas prices for Europe.

But we knew this was coming, didn't we? Yes, we did, because as recently as last month, Democratic senator Jean Shaheen, who sits on the Senate Foreign Affairs Subcommittee on European Affairs, announced that the United States was considering involving itself in the Nord Stream II pipeline project , with a view to killing it stone dead. The purpose, as already mentioned, is to make way for LNG cargoes to Europe, cutting Russia out of the business, on the assumption that without energy sales the Russian economy will crumble and the country will collapse. Destroying Russia remains Washington's overriding strategic objective.

So the stakes are high; high enough to provide context for Washington's bizarre and aggressive behavior, and for its continued ridiculous insistence that Russia tampered with the 2016 US presidential election. What are the chances Washington will succeed with its latest adventure in global bullying?

Not good, according to multiple sources. Let's take a look at how Platts views the prospects; Platts, a division of S&P Global , is headquartered in London and employs over 1,000 people in more than 15 offices worldwide. These include global business centers such as New York, Shanghai and Sao Paulo, and major energy centers such as Houston, Singapore and London, where Platts is based. Having hopefully established the firm's credentials as someone who knows what they are talking about in the energy business, let's see what Platts has to say about the potential American LNG market in Europe . Mmmm .the review is mixed. At the outset, Platts is admiring of Cheniere Energy's go-to-hell expansion. But a couple of things about that are cause to curb enthusiasm. One, only 8 American LNG cargoes had gone to Europe so far; that was as of April this year, when the report was released. Of those, 4 went to Spain, 3 to Portugal and 1 to Italy. Two, the Iberian Peninsula is acknowledged by Platts as not particularly significant in terms of gauging Europe's welcome of American LNG.

"Indeed, the fact that Portugal and Spain were the first European countries to import LNG from the US is telling The Iberian Peninsula is considered an "island market" with poor interconnection to the rest of Europe, so the delivery of US LNG into the region is not likely to be seen as a sign that it will take hold in the wider European market."

The same passage points out that Russia does not supply the Iberian Peninsula with pipeline gas, and so is unlikely to be very concerned about the impact of US LNG on that market.

Three, Cheniere's rapid expansion has come at a terrifying cost, and the company is currently – as of fall 2016 – overleveraged with approximately $20 Billion in long-term debt . It is unprofitable, with interest payments representing 60% of revenues, the living embodiment of 'bicycle economics'; the second you stop pedaling, you crash.

For what it's worth, few great business breakthroughs have occurred without risk, and while Cheniere is plunging ahead with what seems like recklessness, it could just as easily pay off with complete domination of the North American export market. That's a hell of a debt load, though; not much margin for bad news. That does expose a flaw in the American strategy, as well – wrestling control of the European supply market from Russia would be frighteningly expensive.

a little better than 3 Billion Cubic Feet (BcF) of natural gas, which is mostly methane. That equates to about .85 Billion Cubic Meters (BcM). But Europe uses about 400 BcM per year , assuming LNG could supply the whole European market, which is of course unrealistic. Especially considering the entire global LNG shipping fleet consists of about 410 vessels .

No LNG carriers are currently registered under the US flag, and if the USA plans to be a serious exporter it is going to need about 100 new LNG carriers over the next 30 years , something which is frankly not practically achievable considering it takes about 2 years to build one, at a cost of about $200 Million apiece . Of course, miracles can be made to happen if you pour enough money into them. But we've already somewhat nervously mentioned how much all this is costing – how does the likely return on investment shape up?

Well, what the fuck? Platts comes right out and says that Russia has the option of cutting its prices to ensure it undercuts LNG costs in order to keep its share of the European market!

"Russia clearly does have the option to undercut the US LNG price to ensure it keeps its share of its key European markets and could flood the market with cheap gas, maximizing revenues and cash flow at a time when producers worldwide are suffering from the impact of such low prices."

So, let me get this straight. All the attempts by the west, led as usual by Washington, to force energy prices down and keep them low actually benefit Russia by putting the USA in an unacceptable profit/loss loop so that it cannot afford to sell its LNG to Europe and still make money? That appears to be pretty much how it shakes out.

"Russia, thanks to the bearish oil price environment and an enhanced export strategy from Gazprom, increased its exports to Europe by 15% (through the Nord Stream, Yamal, and Brotherhood pipelines) to 118 Bcm, taking back its place as Europe's largest gas supplier in the process."

Wait! I think I see a solution. All the USA needs to do is apply its global leverage to make energy costs rise!

"But US LNG could face problems of its own – the current low prices are forcing ever growing numbers of US producers into bankruptcy. According to a recent report by Haynes and Boone, 90 gas and oil producers in the US and Canada have filed for bankruptcy between January 2015 and the start of August 2016."

Oh, hey; I just realized – if forcing energy prices back up were an option, how is that going to hamstring an opponent who was already able to undercut you at the lower price, and still turn a profit?

Platts closes out this dismal synopsis with the consolation prize that, while US LNG is less competitive with pipeline gas given narrow Henry Hub-NBP spreads, it is coming to Europe regardless. More of that old American can-do. It will have to be, though, on what is described as a short-run marginal cost basis. Would you feel comfortable with that forecast if you were carrying, say, $20 Billion in debt?

And it's not just Platts who sounds a warning; Forbes has a similar, if slightly more mocking outlook of the situation .

"Most of this is just political posturing and noise. The U.S. is not now and nor will it be in the near future a key resource for Europe's energy needs According to EIAs Annual Energy Outlook, published in April, the United States remains a net importer of fuels through 2040 in a low oil price scenario. In a high oil and gas price scenario, the United States becomes a net exporter of liquid fuels due to increased production by 2021. A lot can happen in seven years. By then, Exxon will likely be back to its deal with Rosneft in Russia's Arctic Circle."

As well, Forbes adds the interesting perspective that foreign sales of American gas will be a tough sell domestically if the pressure remains on the American leadership to achieve greater energy self-sufficiency and reduced dependence on foreign sources. This situation can only be exacerbated by a rise in anti-American sentiment around the world, and is likely to spike if energy prices rise. But if they stay low, American LNG exports won't make any money. If they go up, pipeline gas will undercut LNG prices and make it noncompetitive. Jeez, we just seem to be going around in circles. Say, did you notice that little item in there, in which the author mentions the only possible way the USA could compete with Russia in the natural gas market in Europe would be if it had national rights to substantial supplies of gas abroad? Did that give your memory a little tickle, and make you think of Burisma Holdings, and Hunter Biden ?

The Brookings Institute, for God's sake, warned that US LNG could not compete price-wise before the first LNG cargo ever left the USA. Given its sympathies, it seems probable it was intended as a sobering restraint meant to keep the United States from doing something stupid that might expose it to failure and even ruin; it is much less likely to have been an endorsement of Russia's global business practices.

As so often happens, an unhealthy fixation on taking down a largely imagined enemy results in increased risk-taking and a totally unrealistic appraisal of the likelihood of success – it becomes worth doing simply to be doing something. The costs in this instance have included the alienation and infuriating of Germany, the European Union's anchor economy, and angry murmurs from the Gulf States that Washington negotiated production cuts simply to make its own product more competitive. All for nothing, as it happens, because a nation with surplus swing production can always undercut your price, and the nation with the world's lowest production costs should be last on your list of "People I Want To Start A Price War With".

If you were opposed to official Washington's swaggering, bullying modus operandi , this whole unfolding of events probably seems pretty delicious to you. But I've saved the most delicious for last – Trump dares not make any effort to overrule the Senate vote, or get it reframed, because of the successful media campaign to portray him as Putin's secret agent. Any effort to mollify Germany's fury will be seized upon by the reality-challenged Democrats as an opportunity to further discredit the Trump government, by making it appear to be negotiating in Russia's behalf.

You couldn't make it up. PaulR , June 15, 2017 at 5:29 pm

One should never underestimate peoples` willingness to spend vast sums of money on worthless projects. Witness the Canadian government's recent announcement of its plans to increase defense spending by 70%.

When the dust finally settles, the Chinese will end up on top.

marknesop , June 15, 2017 at 5:47 pm
I think you're probably right about that. And if it turns out to be the case, British Columbia will turn out to be the most progressive province in Canada, with its large numbers of Chinese citizens and its Chines-language television stations. At bottom I am mostly a peaceful guy and I don't really care very much who rules the world so long as it doesn't impact my lifestyle.

Once I would have argued strongly for American global leadership, based on a perception that it offered the best chance for prosperity and enlightenment for everyone, but events since have changed my view. Now I think other countries should be left alone in terms of interference, helped where you can lend a hand, and global leadership is an unrealistic aspiration for any country led by humans, since human nature tends to favour self-interest.

I don't know what the Liberals think they are doing, pushing what is essentially an unachievable Conservative platform where defense is concerned. To what end? So we can interfere more effectively on the USA's behalf? We have a good military. There's nothing wrong with keeping it up to date and well-supplied and trained. But a 70% increase is impractical and is only likely to incur the wrath of the non-military portion of the electorate, since the money has to come from somewhere.

PaulR , June 15, 2017 at 5:38 pm
I hadn't been aware of the connection between the sanctions and LNG, so thanks for pointing that out.

Meanwhile, I read this:

'Germany and Austria on Thursday sharply criticized the U.S. Senate's plan to add sanctions on Russia, describing it as an illegal attempt to boost U.S. gas exports and interfere in Europe's energy market. [ ]

"We cannot accept a threat of extraterritorial sanctions, illegal under international law, against European companies that participate in developing European energy supplies," [German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern said in a joint statement]. "Europe's energy supply is Europe's business, not that of the United States of America."'

https://www.the-american-interest.com/2017/06/15/the-us-is-exposing-europes-divide-on-nord-stream-2/

marknesop , June 15, 2017 at 5:58 pm
After all, many other European leaders have publicly clamored for U.S. LNG imports as a way to ease their dependence on Gazprom.

Who? The Baltics? Thanks for that. It's mostly a rehash of the other article, but it does include some interesting insights, and it has a little more credibility than ZeroHedge, although there's little in that with which I can find fault and its breaking news is usually accurate.

That the EU's energy policies are completely outside the USA's remit is correct, but it's a surprise to hear someone of Gabriel's stature actually say it. It seems the USA has decided that forcing Germany to abandon its support for the project is worth trying. That will turn out to be a disastrous mistake, because the business community in Germany contains some of America's staunchest supporters, while anti-Americanism among the German population – especially its youth – is a growing problem. This will do nothing to help it, and it most certainly is not going to persuade Germany to order American LNG.

I urge you to digest the Platts Report in detail, at your leisure – it's illuminating, and I'm sure you will note that Russia's LNG export capability is already far, far ahead of the USA's. So even if pipeline gas proved only competitive with LNG, why would anyone depend on supplies which have to cross the ocean rather than supplies that can come from Kaliningrad?

PaulR , June 15, 2017 at 7:12 pm
As if on cue, Evgeniia Chirikova denounces North Stream II in The Guardian: https://www.theguardian.com/world/2017/jun/14/gas-pipeline-nord-stream-2-funnel-billions-putin-bypass-sanctions
ucgsblog , June 15, 2017 at 7:23 pm
She's funny: "How can you shout about the transition to renewable, environmentally safe energy and at the same time make plans to increase gas flows into Europe?"

Uhh, Zhenichka, Russia is part of Europe, you can shout about it if you are increasing your energy dependence on both, and if one pipeline is simply replacing another. That's how. That was easy.

"Five European companies are involved but for some mysterious reason, 100% of the shares belong to Gazprom."

Because GazProm is paying $$$ for it. Zhenichka, in a Capitalist Society, those who pay for the shares, get the shares. Did I solve that mystery for you?

marknesop , June 15, 2017 at 10:23 pm
"Five European companies are involved but for some mysterious reason, 100% of the shares belong to Gazprom."

There is nothing mysterious about it; in fact, it is typical Guardian dishonesty. The Nord Stream II Project originally included minority shareholders as shown here . Then Poland introduced its anti-monopoly action and announced the pipeline could not be built. The partners dropped out, and left Gazprom to take the heat alone. When Poland failed in its bid to stop the project and it became clear the EU was all out of arrows – having never had a defensible legal basis – the partners hopped back on, but as investors only. I daresay they stand to make a good return on their investment even without being shareholders. Meanwhile, American meddling is only likely to make Europeans grateful attempts to stop the pipeline failed. I would not like to see their reaction if it ever became clear their governments had committed them to paying higher gas prices just to spite Russia, particularly in view of the USA's limited ability to provide reliable and constant supply.

The Guardian is just being a good American footsoldier, and trying to throw mud in the works for Uncle Sam.

yalensis , June 16, 2017 at 3:37 am
Chirikova works for the Estonian government now.
ucgsblog , June 15, 2017 at 7:16 pm
Beautiful article, and great timing Mark! I love it. This was one of the dumbest bills ever passed. It aimed at Russia, but it's just a take down of Germany. Reminds me of a recent Russian joke:

Obama: "America is mighty! Because of us, Russia's Economy is in ruins!"
Poroshenko: "not Russia's, sir. Ukraine's."
Obama: "Who gives a shit! It's in ruins!"

Also, here's what I'm wondering – can't Russia deliver it by truck or train? Won't that still be less expensive than delivering it by ship?

Jen , June 15, 2017 at 8:39 pm
Nordstream 2 is primarily a gas pipeline project under the Baltic Sea.

The main attraction of Nordstream 2 is it avoids transit through countries where tolls and transit fees would have to be paid, whether through land-based pipes, truck or train, and all these expenses added to the eventual cost that would be paid by the end consumer (ie the general public). Plus trucks and trains can be held up or subjected to attacks and gas in land-based pipelines can be siphoned off and diverted as was being done when the gas was passing through Ukraine originally. No such problems if the gas were being delivered through underwater pipelines though we can be sure that Swedish naval submarines (how many of those are there – one?) will be watching them very closely for phantom Russian subs.

marknesop , June 15, 2017 at 10:28 pm

I thought you were talking about LNG, from Kaliningrad. And if so, yes; it certainly could be transported by train, and probably would be.
Jen , June 16, 2017 at 5:46 am
Ah, I thought UCGS' original comment referred to your original post, not the one you sent at 5:58 pm yesterday.

Wouldn't transporting LNG by underground pipeline under its own pressure be a less risky and cheaper option than sending it by train? Trains carrying LNG can only carry so much and have to be specially adapted to transporting it. Plus they share rail networks with other trains so there are issues like how saturated the rail networks supporting LNG rail traffic, other cargo traffic and passenger traffic become, and the pressure this puts on drivers and maintenance of railway tracks, and building more rail lines in and through areas where pipelines could be laid down instead.

marknesop , June 16, 2017 at 8:56 am
It's possible; I'm afraid I don't know enough about it. It seems that when they speak of an LNG 'train', it refers to the liquefaction and purification facility , not a transport vehicle. In order to transport LNG it must be liquefied, which implies freezing it to below -161C. Naturally it must be maintained at a temperature which guarantees its stability as a liquid, until it is appropriate to return it to its gaseous form for use in that form. That's the purpose of the huge container vessels on an LNG tanker – you have to get it cold and then keep it cold.

I just don't know how you would do that in a pipeline. And obviously it would be wildly impractical for a train, I don't know what the hell I thought I was talking about. It could be done, but why? You'd need a hundred miles of teeny little flatcar-sized container vessels to equal what you can transport in an LNG carrier.

Your pipeline would have to originate at an LNG 'train' and terminate at another, somewhere else, so that the liquefaction/gasification process could be practically carried out, much as current NG pipelines use pumping stations. But you would also have to keep the LNG below -160C all the time it was in the pipeline. That's probably physically possible, too, if expense is no consideration, but it seems terribly impractical when NG already goes by pipeline safely at a fraction of what it would cost to transport LNG the same way.

Jen , June 16, 2017 at 2:30 pm
Ah, I see now of course you wouldn't need to transport NG in liquid form under 160C through pipelines. To transport it by ship or train though, it must be in liquefied form, presumably because as a liquid NG can be measured and quantified, and then exporters can work out how much they can charge for producing and transporting LNG. Not to mention of course that transporting commodities in gaseous form by train and ship is harder and riskier than transporting them as liquids.
marknesop , June 16, 2017 at 3:38 pm
As well, it needs to be liquefied in order to be compressed, to get the volumes you are looking for . One of those container vessels full of uncompressed NG wouldn't be much more than a good-sized European town would need for its barbecues.

LNG achieves a higher reduction in volume than compressed natural gas (CNG) so that the (volumetric) energy density of LNG is 2.4 times greater than that of CNG or 60 percent that of diesel fuel. This makes LNG cost efficient to transport over long distances where pipelines do not exist. Specially designed cryogenic sea vessels (LNG carriers) or cryogenic road tankers are used for its transport. LNG is principally used for transporting natural gas to markets, where it is regasified and distributed as pipeline natural gas.

That does highlight, as well, that if you can use road tankers there really is no reason you could not use trains. But anywhere it is practical to use trains or road transport, you would be asking yourself, "why can't I use a pipeline here?"

et Al , June 16, 2017 at 1:30 am
The US's intervention is even more pathetic than it seems.

This is not a stand alone anti-Russia bill which would signal strength from the US, but an adjunct to the anti-I-ran sanctions bill that continues to seek to punish I-ran in the vague hope that it will pull the plug on the cast-iron nuclear deal it has signed with international partners. The irony there is that I-ran Air is recapitalizing with both Airbus & Boeing (also ATR), 100 odd a piece, not to mention other significant investment opportunities for western firms.

They're quite the Gordian Tits!

Not only is there the potential of the Levianthan gas field off Cyprus/Israel/whatever, brutal dictator Azeri gas will also be arriving in (larger, but not gigantic) quantities. Not to mention that significant buyers of LNG, like the UK, have it come straight from Qatar. Is the US prepared to sell LNG at a discount compared to Qatar that has strategic agreements and its own fundamental interests to be protected by the Western (European) states as well?

So if this plan seems to damage not only the USA's allies but the USA itself, then what is its purpose? Stick it to Trump. Mire any plans to re-balance relations with Russia almost at any cost . It's a no brainer for Democrats as they neither hold a majority in the House or the Senate, and there seem to be enough dog whistle Republicans willing to go along with it, including those with mental problems like John 'Insane' McCaine. Ukraine is almost peripheral except as a convenient tool. It think the US accepts they've screwed the pooch on the Ukraine so its only value is to be used as a festering sore on Russia's frontier. Kiev mops up the completely free public political support whilst it is being kicked in the bollox by the same people.

Lyttenburgh , June 16, 2017 at 9:03 am
Whoop-whoop! A new article so soon!

"Try to put aside, for the moment, the insufferable arrogance of American meddling in Europe's energy market, with a view to restricting its choice while – laughably – pretending it is broadening European energy options."

"Invisible Hand of the Market" [nod, nod].

"And a big part of that was the assumption that Russia would help to finance Ukraine's transition to a powerful western fulcrum "

At first I read it as "western furuncle". That's what it became in the end.

First Rule of the Ukraine: "Every Peremoga turns into Zrada".Want to hear about yet another zrada ? Russia (okay – Mikhail Friedman) bought a German firm Rheinisch-Westfälisches Elektrizitätswerk (RWE) for $5.72 blns in 2015 . Why it's important? Well, because this firm carries out the reverse gas transition to the Ukraine, thus ensuring its [ha-ha, sorry, sorry!] "Energy Independence" which was officially proclaimed in the same 2015 A.D.

"No LNG carriers are currently registered under the US flag, and if the USA plans to be a serious exporter it is going to need about 100 new LNG carriers over the next 30 years, something which is frankly not practically achievable considering it takes about 2 years to build one, at a cost of about $200 Million apiece". Of course, miracles can be made to happen if you pour enough money into them.

Something-something-something Elon Musk something-something Super-technologies something-something-something Innovations! Progress!

And usual stuff, said by the people who believe that the Free Market will "Get the Things Straight" without governmental meddling. Like, Musk will invent cheap multi-use drone-rackets which will deliver gas to the clients across the Ocean. Why not?! They believe in all kinds of stupid stuff already!

The article is fresh breeze of actual facts and hard data – not your usual hurr-durring opinion pieces, passed as "analytics" by the esteemed think-tankers.

P.S. Mark, do you have the same e-mail address?

marknesop , June 16, 2017 at 1:19 pm
Thanks very much, NS!! I read a book some time ago which used newspaper and wire reports of the various times to thoroughly debunk most of the incidents of ships and aircraft 'disappearing without a trace' in the Bermuda Triangle. In incidents which resulted in total losses of the crew, the author also offered reasonable explanations for what likely happened. I have sailed through it many times myself and observed nothing untoward, although that does not mean much considering the amount of marine traffic which routinely does the same without incident.

Owners of LNG Carriers likewise play up how safe they are, and to the best of my knowledge there has never been a serious accident. However, on the scale of supply the USA is suggesting it wishes to achieve for itself, there could be no days taken off for bad weather, and carriers would have to transit the North Atlantic in winter – which is not generally a fun place to be. Most of my concern with the shipped method is its inherent unreliability compared with pipeline gas.

Northern Star , June 16, 2017 at 12:31 pm
"But Gazprom could block a lot of those cargoes by stepping up export volumes and selling them at prices below what can be achieved by U.S. LNG. Gazprom can export pipeline gas to Europe for $3.50 per million Btu (MMBtu) while American LNG would need prices of $4 to $5/MMbtu. Currently, Gazprom sells gas to Europe at a price of about $5.80/MMBtu on average, but could lower the price to beat U.S. LNG"

I do not see how the USA could begin to economically prevail over the Russians in a
"gas' war..given the above numbers.

"Of course, viewed another way, the growing U.S. export capacity – the mere existence of a competing source of supply – should push down the price that Gazprom is able to charge, a victory for Europe and a blow to Gazprom. Without U.S. LNG, its proponents argue, Russia would not be forced to accept lower prices. "It's the start of the price war between U.S. LNG and pipeline gas," said Thierry Bros, an analyst at Société Générale, according to the WSJ."

Moreover doesn't keeping a lid (cap) on what the Russians can charge for Gazprom gas ipso facto prevent the Americans from competitively pricing their LNG product..particularly in view of the first quote????
Either I'm a little dense today,or the American strategy here makes no sense whasoever.!!!!

http://oilprice.com/Energy/Energy-General/US-To-Undermine-Russias-Gas-Monopoly-In-Europe.html

marknesop , June 16, 2017 at 1:51 pm
The latter – the American strategy makes no sense, and its proponents are so high on can-do that you might have to shoot them to get them down. The USA cannot supply either the volume or the consistency of supply to snatch the gas market from Russia, and that must be evident to all but the crazy. As usual, Washington just hopes to get itself into the mix so it will have a seat at the table, because it cannot bear being left out of things and has long been of the opinion that America makes its own reality. Once again, if America owned or controlled substantial gas reserves on the continent and it were practical for the USA to run its own pipeline to Europe, it might be in with a chance if it had sufficient supply, and it is attempts to do that that we should be watching out for. There was speculation much earlier that control of substantial gas holdings was exactly what Burisma Holdings and Hunter Biden were up to in Ukraine, but gas extraction is not practical there right now and id assay results had been positive you can bet there would be a lot more American pressure to bring the war to a close.

On that note, I noticed over at Sputnik yesterday that Turchynov was pressuring Poroshenko to bag the ATO and turn it into a full-press military operation, which is just what recent reports said they did not dare to do in case the Ukrainian Army loses. The same report said Poroshenko is about to sign legislation which orders by decree that Donbas resume its place as part of Ukraine. If they say "Pound sand up your ass" as we know they will, Poroshenko may have little alternative to throwing everything he has at them. Of course, I can't find it now; I knew I should have drawn attention to it when I saw it.

I'm sure Russia is watching carefully.

Northern Star , June 16, 2017 at 12:49 pm
I assume the (shipped) American LNG would have to be regasified at a european import terminal. Consulting page six at the link, is it not problematic to then transport the regasified lng product to its (receiving) nation destination. The whole scheme smacks of going around the well to get an expensive cup of water!!!!!
http://documents.jdsupra.com/c6c4403f-ad9f-4740-b184-9fc1f88550ab.pdf
marknesop , June 16, 2017 at 1:53 pm
The liquid LNG can only be unloaded at an LNG terminal, and so far as I am aware a feature of them is that they are connected to a gas hub, so that they can regasify the product directly into the system.
likbez says: June 16, 2017 at 9:05 pm
What I do not understand is why Russians can't increase natural gas consumption dramatically and need to export that much: is it so difficult to build several large chemical plants, increase usage in city transport as less polluting fuel to 100%, promote dual fuel private cars, etc.

In this case they can export saved oil instead using regular tankers which is much simpler then LNG.

I think the current suppression of oil prices by Wall Street (and the new US method of production using along with production of shale oil a parallel production stream of junk bonds which will never be repaid) can't last forever. "Break even" oil price for most shale wells is probably over $60 per barrel. If not $80.

Also without capital investment the annual decline of conventional fields is around 5% a year (most of those fields are really old). Which means approximately 5 million barrels per day are taken off the market automatically each year (no OPEC action is needed), if zero capital investment are done.

Of course Sechin is IMHO a corrupt player here, who cares mostly about his own pocketbook (and stupidly increased investment just before the crash, which later required bailout of the company by the government), but still Russian government has the means to enforce its will even on rogue players.

[Apr 12, 2017] Denmark seeks to change law on pipelines amid Nord Stream 2 divisions

Apr 12, 2017 | marknesop.wordpress.com

et Al , April 10, 2017 at 5:00 am

Euractiv with Neuters: Denmark seeks to change law on pipelines amid Nord Stream 2 divisions
http://www.euractiv.com/section/energy/news/denmark-seeks-to-change-law-on-pipelines-amid-nord-stream-2-divisions/

Denmark's government is proposing amending legislation to allow it to ban pipeline projects on the grounds of foreign and security policy, due to concerns raised by Russian efforts to build a disputed gas pipeline through Danish waters.

"We want to have the possibility to say yes or no from a perspective of security and foreign policy," the minister of energy and climate, Lars Christian Lilleholt, told Reuters, adding that it was currently only possible to veto such projects on the grounds of environmental concerns .

Denmark and Sweden earlier this year requested that the European Commission intervene in Nord Stream 2 before the two states agree on permits for the pipeline to pass through their waters. EU diplomats said there was little scope for either nation to block the plan.

The current regulatory framework does not allow Denmark to say "no" to the construction of transit pipelines in territorial waters on the basis of foreign policy considerations, the ministry said in a statement .

EU sources have said the Commission, sensing that there may ultimately be no legal basis to block approval of Nord Stream 2, is delaying it as long as possible .

Denmark's right-wing minority government would now negotiate with other parties to win support for the proposal.
####

' sensing that there may ultimately be no legal basis to block approval..' – Well that's quite a polishing of the EU turd when we know that the EU has no legal way to block the pipeline, sic the opinion of the EU's own Legal Service. How delicate the EU stuffed suits are that they cannot just admit it outright. Oh, but that would be a propaganda victory for Russia. They should be grateful because if they had blocked it, it would have been a very clear message that the EU's Rule of Law which it proudly pronounces around the world is barely a fig leaf that is dropped as the slightest political pressure. It's a joke already, but with a project as big as . as it has done with much political decisions

marknesop , April 10, 2017 at 5:56 am
While they're creating magic out of whole cloth, why not a law that anyone who discovers significant gas deposits anywhere must immediately hand them over to the EU for their exclusive use and disbursement? Or a law that orders massive new gas deposits be discovered in Denmark?
et Al , April 10, 2017 at 6:43 am
I suspect that the government is having a slow news day and as there is absolutely no consequence to Russophobia as it is essentially a free gift that keeps on giving when and wherever is needed, i.e. to distract from domestic politics.

The Whole G7 'How can we f/k up Russia further' conveniently segues with the improvement of Russia's economy and the continued failure of G7 sanctions against Russia. I'm not really sure what else they can do without shooting themselves in the foot.

There's already been some whinging that the West's actions have only further driven it in to China's arms, so WTF? I guess they have to come up with something that looks tough, but isn't. After all, they will need to put out a key statement signed by them all. IN short, 'This spade is far too small. Let's go and get another one!'.

[Feb 06, 2017] Crazy propaganda from Fedbook, sorry Facebook about Russia oil transportation and discovery

Notable quotes:
"... US and EU sanctions only affect Russian offshore projects in the Arctic and development of Russia's tight oil. If sanctions are lifted, projects with foreign participation in these two areas will be able to produce meaningful quantities of oil not before 2025. But these volumes will not be sufficient to flood the market. ..."
"... Russia is participating in OPEC-non-OPEC supply cuts and certainly is not interested in flooding the market and exerting a downward pressure on prices. ..."
"... The only Russia's offshore Arctic project is Prirazlomnoye field developed by Gazpromneft without foreign participation (already producing oil). ..."
"... In general, even if there were no sanctions, Arctic projects would be developed relatively slowly, due to high costs and environmental issues. Russia's long-term energy program anticipates more or less meaningful volumes of oil production in the Arctic offshore only in the 2030s. ..."
"... Everything in that stuff you wrote is baloney. Russia's Black Sea exports go through Novorossysk and Tuapse. There isn't an oil pipeline going to Crimea. Furthermore, putting an oil loading port in Crimea is nutty (because the oil comes from the East and it makes much more sense to load as far to the East as possible). There used to be some oil loaded in Odessa, but that was never a big deal. ..."
"... Regarding the Exxon deal, that's also baloney. But I don't feel like trying to explain the basics to somebody who picks up information from Facebook. ..."
"... From all that I've read, I would conclude that a "flood of oil" out of Russia is about as likely as a "flood of new fracked oil from shales in the United States, not yet drilled." That is, it's rather low on the probability meter. ..."
"... Why target Russia? Is it because of an impending Seneca cliff in Saudi Arabia? They were supposed to peak 10 years ago but water and nitrogen injections kept them afloat. Now? ..."
"... Thus, what the United States is playing at here is trying to install a different "regime" in Russia. That being, one that Vladimir Putin does not control or have any influence over. This is easier said than done and the United States knows this. But the stakes are quite a bit higher than controlling the dwindling oil supply in the Middle East. Russia is obviously in control of most of the world's remaining oil reserves. The United States needs a puppet regime in Russia to have access to that oil without paying the correct market price for it. ..."
"... At some point, this gambit will fail. Russia is not the Middle East. A war with Russia cannot be won or cease-fired out of. Nor can a United States-backed "regime change" succeed over there. This is not the 1990s Russia of Boris Yeltsin. The United States, however, cannot come clean with the truth to the American people. The reason is because if the American people knew the truth, they'd never sleep nights anymore. The truth is this: Our entire economic system is based on petroleum and low-cost petroleum at that. But the actual nightmare is that our entire agricultural system is based on cheap oil." ..."
Feb 06, 2017 | peakoilbarrel.com
Boomer II says: 02/05/2017 at 3:59 pm
I saw this on Facebook. Can anyone respond?

"Exxon Mobil, under Rex Tillerson, brokered a deal with Russia in 2013 to lease over 60 million acres of Russian land to pump oil out of (which is five times as much land as they lease in the United States), but all that Russian oil would go through pipelines in the Ukraine, who heavily tax the proceeds, and Ukraine was applying for admission into NATO at the time.

Putin subsequently invaded Ukraine in 2014, secured the routes to export the oil tax-free by sea, and took control of the port where their Black Sea Naval Fleet is based, by taking the Crimean peninsula from Ukraine by force. This was Hitler style imperialism that broke every international law in the free world.
After Obama sanctioned Russia for the invasion, Exxon Mobil could only pump oil from approximately 3 of those 60+ million acres. But now Rex Tillerson is soon to be our Secretary of State, and as of today, there's information circulating that Donald Trump will likely unilaterally remove all sanctions against Russia in the coming days or weeks.

The Russian government's oil company, Rosneft, will make half a trillion (500 Billion) dollars from that much untapped oil, all pumped tax-free through Crimea, stolen from Ukraine, now owned by Russia. Putin may have subverted our government just for this deal to go through."
______

Now, a flood of oil on the market from Russia would likely keep US oil prices down, thus hurting US drillers right?

If one is conspiracy-minded, could that be part of the deal, too? Russia uses low oil prices to take down US oil production, and then tries assert itself as one of the countries left standing.

clueless says: 02/05/2017 at 4:53 pm
In about 1780, Catherine the Great and the Ottoman Empire agreed that the Crimea was a part of Russia. [Yes, there was conflict for years prior (as with any other piece of land in the world).] In 1954, in honor of the 300th Anniversary of the Republic of Ukraine being a part of Russia, Nikita Krushchev "gave" the governance of the Crimea to the Republic of Ukraine. It was not constitutional under the Russian constitution. The UN said nothing about it, nor any other international law body. Krushchev later trumped up an approval without even a quorum.

So the Republic of Ukraine seceded from Russia and took the Crimea with it. In the US, when states (republics) seceded [having been states for much less than 100 years, let alone over 300 years] the rest of the states killed as many people as they could until they "agreed to rejoin the union." People might not like it, but the vast majority of people living in the Crimea had ties to mother Russia, and they voted to go back to being governed by Russia. So, Putin accepted. And please, let's not get into an argument about the fairness of elections, unless your candidate wins.

So, what would we do if Obama gave South Carolina to Florida, and then Florida seceded. I guess that the rest of the states would just say "shucks, we lost South Carolina too." Especially if South Carolina had the only warm water port in the US [the Crimea has the only warm water port in Russia]. The rest of the ports are in the North Sea, etc. And, yes, that is a critical military point.

"This was Hitler style imperialism that broke every international law in the free world." That is a pathetic joke! Okay – let's let the US South secede again, since the Cival War broke every international law in the free world and was exactly the same as Hitler's imperialism.

AlexS says: 02/05/2017 at 6:12 pm
clueless, thanks for the answer.

Just one clarification: the ports in Crimea are not the only warm water ports in Russia.
Russia has several other ports in the Black Sea and Azov Sea.
Other ports are in the Baltic Sea, Arctic seas and the Pacific; not in the North Sea

clueless says: 02/06/2017 at 1:59 am
Perhaps I am wrong, but are those other ports large enough and deep enough for military use [which I failed to state clearly]? I beleive that Russia still operated their huge military port in the Crimea even after the Ukraine seceded and prior to Russia taking back the Crimea.
AlexS says: 02/06/2017 at 6:17 am
Sevastopol, the largest port in Crimea, was founded by Catherine the Great as Russia's main military port in the Black Sea.

It had special status when Crimea was part of the Soviet Ukraine, and also when Ukraine became independent. Russia had a long-term arrangement with Ukraine for using Sevastopol.

Russia also has a large military port in Novorossiisk (Russian part of Caucasus); but you are right, Sevastopol is deeper, bigger and more convenient.

Duncan Idaho says: 02/06/2017 at 9:18 am
Also, the Russian State originated in the Ukraine.
See https://en.wikipedia.org/wiki/Rurik_dynasty

Rurik set up rule in Novgorod, giving more provincial towns to his brothers. There is some ambiguity even in the Primary Chronicle about the specifics of the story, "hence their paradoxical statement 'the people of Novgorod are of Varangian stock, for formerly they were Slovenes.'" However, archaeological evidence such as "Frankish swords, a sword chape and a tortoiseshell brooch" in the area suggest that there was, in fact, a Scandinavian population during the tenth century at the latest.[3] The "Rurikid Dynasty DNA Project" of FamilyTreeDNA commercial genetic genealogy company reports that Y-DNA testing of the descendants of Rurikids suggests their non-Slavic origin.

Kiev was the Capital of Russia when Moscow was still a hunting camp

AlexS says: 02/05/2017 at 5:38 pm
Boomer II,

It's your choice to use Facebook as the main source of information on the oil and gas industry, but please don't repost this BS on the oil-dedicated thread.

Exxon Mobil didn't lease any land in Russia. It is the operator of the Sakhalin-1 project in Russia' Far East (very far from Ukraine); and oil produced from this project is exported by sea (Pacific ocean).

Exxon's JV with Rosneft has also found an oil field in Kara Sea (Russian Arctic), but this project was suspended due to the sanctions.

In the past Russia was exporting a small part of its oil by the "Druzhba" ("Friendship") pipeline through Ukraine and was paying normal transporation fee, not taxes.

Now all Russian oil is exported via Russian oil terminals near Novorossiisk (Black Sea) and Ust-Luga and Primorsk (on the Baltic Sea). New transporation routes include East-Siberia – Pacific Ocean (ESPO) oil pipeline linking Russian oil fields in Siberia with the ports on Pacific Ocean and with China's Daking; as well as oil terminals in the Arctic (Varandey).

If US sanctions on Russia are lifted, Rosneft and Exxon will be able to develop their joint project in the Artcic, but oil found there certainly is not worth "half a trillion (500 Billion) dollars', and cannot seriously change the global supply-demand balance.

clueless gave you a good answer on Crimea

BTW, 1) there is no oil terminal in Crimea;
2) Russian oil is taxed in Russia

Boomer II says: 02/05/2017 at 5:59 pm
"It's your choice to use Facebook as the main source of information on the oil and gas industry, but please don't repost this BS on the oil-dedicated thread."

I never use Facebook as a source of information on the oil and gas industry. The topic never comes up among my Facebook friends or my news sources on Facebook. When I want gas and oil info, I use Google to look at legitimate news sources from industry observers.

I just wanted some people's thoughts on that. Your reaction actually tells me a lot about how you think about it.

We've had quite a few discussions here about how politics, both domestic and international, shapes oil production, so I was just inquiring about any insight. I'm rather surprised that you are telling me not to even post a question on the subject. Touchy, maybe?

The relationship between Trump and Russia has triggered some questions, not just among Democrats, but also the GOP. And some people are wondering if there is some tie in about oil.

I just asked, that's all.

AlexS says: 02/05/2017 at 6:31 pm
"some people are wondering if there is some tie in about oil."

The only "tie in" is Exxon's frozen investments in the Pobeda (Victory) field in the Kara Sea. But that's no secret; you can find information on this project on Exxon's and Rosneft's websites and in international business media.

The Sakhalin-1 project is not covered by the sanctions and is being successfully developed.

Boomer II says: 02/05/2017 at 6:08 pm
And basically what I was asking is this? Will a flood of Russian oil affect US oil prices?

If you are playing US politics, do you want to put more foreign oil on the market?

AlexS says: 02/05/2017 at 6:23 pm
"Will a flood of Russian oil affect US oil prices?"

US and EU sanctions only affect Russian offshore projects in the Arctic and development of Russia's tight oil. If sanctions are lifted, projects with foreign participation in these two areas will be able to produce meaningful quantities of oil not before 2025. But these volumes will not be sufficient to flood the market.

Russia is participating in OPEC-non-OPEC supply cuts and certainly is not interested in flooding the market and exerting a downward pressure on prices.

Boomer II says: 02/05/2017 at 8:56 pm
So is it possible that the time frame is so far in the future that it's dead to Exxon even if the sanctions are lifted?
AlexS says: 02/06/2017 at 6:05 am
I think Exxon could re-enter the project if the sanctions are lifted. If sanctions are not lifted for several years, Rosneft will likely develop this field independently, but it would take more time as Rosneft lacks experience in offshore projects.

The only Russia's offshore Arctic project is Prirazlomnoye field developed by Gazpromneft without foreign participation (already producing oil).

In general, even if there were no sanctions, Arctic projects would be developed relatively slowly, due to high costs and environmental issues. Russia's long-term energy program anticipates more or less meaningful volumes of oil production in the Arctic offshore only in the 2030s.

Watcher says: 02/05/2017 at 5:53 pm
Politics aside, it's just factually inaccurate.

"Exxon Mobil, under Rex Tillerson, brokered a deal with Russia in 2013 to lease over 60 million acres of Russian land to pump oil out of (which is five times as much land as they lease in the United States), but all that Russian oil would go through pipelines in the Ukraine"

Almost all pipelines through Ukraine are nat gas. Not oil. There is some minor oil flow. "All" is just profoundly absurd.

Russia's oil output is going to Asia and northern Europe via Transneft lines to Poland and Belarus. Not through Ukraine. Haven't looked for where those Exxon leases are, but I'm pretty sure that's the Rosneft joint venture up around the Arctic.

Nowhere near Ukraine. This is all just completely wrong.

Boomer II says: 02/05/2017 at 6:10 pm
Ok. This response is much more helpful.

Now back to my question about prices. What happens when the sanctions are lifted?

Duncan Idaho says: 02/05/2017 at 6:45 pm
Why, sometimes I've believed as many as six impossible things before breakfast.
– Alice in Wonderland
Survivalist says: 02/06/2017 at 12:56 am
FedBook, er I mean Facebook, is a ghetto of sentimentality. I suggest deleting from it. I joined Facebook once for a very short time and the only thing I learnt from it was that most of my friends are idiots.
Fred Magyar says: 02/06/2017 at 2:01 pm
+10
Duncan Idaho says: 02/06/2017 at 3:06 pm
Also +10
One has to be an idiot to be on Facebook
Fernando Leanme says: 02/06/2017 at 9:36 am
Everything in that stuff you wrote is baloney. Russia's Black Sea exports go through Novorossysk and Tuapse. There isn't an oil pipeline going to Crimea. Furthermore, putting an oil loading port in Crimea is nutty (because the oil comes from the East and it makes much more sense to load as far to the East as possible). There used to be some oil loaded in Odessa, but that was never a big deal.

Regarding the Exxon deal, that's also baloney. But I don't feel like trying to explain the basics to somebody who picks up information from Facebook.

GreenPeople's Media says: 02/06/2017 at 1:14 am
From all that I've read, I would conclude that a "flood of oil" out of Russia is about as likely as a "flood of new fracked oil from shales in the United States, not yet drilled." That is, it's rather low on the probability meter.

Again from what I've read (numerous sources) the Russian oil fields are being extracted just about as heavily as they can be at this time, as are the Saudi fields, again relying on a number of different sources.

Without getting too "tinfoil-hatty" I'd say most of the stories about the global oil markets which promise big bursts of production from (heretofore undisclosed) big new oil fields are in the category of "fake news." These stories serve to boost U.S. consumer confidence and U.S. automobile and light truck sales, but contradict what people in the industry (such as Art Berman, Tadeusz Patzek et al.) are saying about future supply.

VK says: 02/06/2017 at 7:20 am
Why target Russia? Is it because of an impending Seneca cliff in Saudi Arabia? They were supposed to peak 10 years ago but water and nitrogen injections kept them afloat. Now?

https://www.lewrockwell.com/author/jack-perry/?ptype=article

"I've gotten a couple emails from people who have asked me what I think the "end game" is in regards to Russia. And, indeed, the government is going into extra innings with this whole Russia vilification project. This is worse than someone who has held on to a grudge for years. The government does that, too, but they haven't done it over ideology (as with Cuba) for quite some time now. What, then, is the motive?

The motive is perfectly clear: Oil. You see, Russia has already eclipsed Saudi Arabia as the world's biggest oil producer. This means the big Saudi oil fields are drying up. And the government knows that, but they can't tell us this because it'll create a panic. One would think this would motivate the United States to get cozier with Russia. However, what the United States government fears is that if we do that, Russia will twig to the motive for it, and realize it has the United States over a barrel. An oil barrel. At which point the price goes up. Not to mention extracting concessions in the global sphere of influence.

Thus, what the United States is playing at here is trying to install a different "regime" in Russia. That being, one that Vladimir Putin does not control or have any influence over. This is easier said than done and the United States knows this. But the stakes are quite a bit higher than controlling the dwindling oil supply in the Middle East. Russia is obviously in control of most of the world's remaining oil reserves. The United States needs a puppet regime in Russia to have access to that oil without paying the correct market price for it.

At some point, this gambit will fail. Russia is not the Middle East. A war with Russia cannot be won or cease-fired out of. Nor can a United States-backed "regime change" succeed over there. This is not the 1990s Russia of Boris Yeltsin. The United States, however, cannot come clean with the truth to the American people. The reason is because if the American people knew the truth, they'd never sleep nights anymore. The truth is this: Our entire economic system is based on petroleum and low-cost petroleum at that. But the actual nightmare is that our entire agricultural system is based on cheap oil."

George Kaplan says: 02/06/2017 at 2:50 pm
Saudi has had water injection for much longer than ten years on pretty well all it's fields and I don't think they are using nitrogen injection anywhere, there may be some small CO2 EOR projects though. Their production has been maintained by developing three old, heavy oil fields that were mostly dormant (Manifa, Khurais and Shaybah), by using a lot of in-fill drilling and intelligent wells (where water breakthrough can be controlled) on maturing fields and by extensively redeveloping offshore fields with new wellhead platforms and adding artificial lift. I don't think their fields are anywhere near drying up; they may be hitting some limits in surface facilities – probably to do with water injection or treatment of produced water which means they have to continually choke back so as not to damage the reservoirs.

[Oct 29, 2016] European Union on Friday lifted limits on Gazproms use of a link from its offshore Nord Stream pipeline to Germany

Notable quotes:
"... Hello …According to Reuters , the European Union on Friday lifted limits on Gazprom's use of a link from its offshore Nord Stream pipeline to Germany, allowing Russia to pump more gas to Europe and bypass its usual routes via Ukraine. ..."
Oct 29, 2016 | www.nakedcapitalism.com
abynormal October 28, 2016 at 7:48 pm

Hello …According to Reuters , the European Union on Friday lifted limits on Gazprom's use of a link from its offshore Nord Stream pipeline to Germany, allowing Russia to pump more gas to Europe and bypass its usual routes via Ukraine.

…soooooo they're going to begin rebuilding Syria

[Oct 25, 2016] The Next Ukraine

Notable quotes:
"... The Russian-Turkish plan to pipe Russian gas through Turkey and then on to Macedonia and thence into southern Europe has long been opposed by the West, which is seeking to block the Russians at every turn. Now the Western powers have found an effective way to stop it: by overthrowing the pro-Russian government of Macedonian Prime Minister Nikola Gruevski . ..."
"... Speaking of which: the government of President Petro Poroshenko is leading the country into complete financial insolvency and veritable martial law. ..."
"... which makes it a crime to criticize the Organization of Ukrainian Nationalists and the Ukrainian Insurgent Army (UPA) that fought on the side of the Germans during World War II. ..."
May 22, 2015 | Antiwar.com
The Russian-Turkish plan to pipe Russian gas through Turkey and then on to Macedonia and thence into southern Europe has long been opposed by the West, which is seeking to block the Russians at every turn. Now the Western powers have found an effective way to stop it: by overthrowing the pro-Russian government of Macedonian Prime Minister Nikola Gruevski.

The original plan was for the pipeline to go through Bulgaria, but Western pressure on the government there nixed that and so the alternative was to pipe the gas through Macedonia and Greece. With the Greeks uninterested in taking dictation from the EU – and relatively impervious, at the moment, to Western-sponsored regime change – the Macedonians were deemed to be the weak link in the pro-Russian chain. That was the cue for the perpetually aggrieved Albanians to play their historic role as the West's willing proxies.

After a long period of dormancy, suddenly the "National Liberation Army" (NLA) of separatist Albanians rose up, commandeering police stations in Kumanovo and a nearby village earlier this month. A 16-hour gun battle ensued, with 8 Macedonian police and 14 terrorists killed in the fighting. The NLA, which reportedly received vital assistance from Western powers during the 2001 insurgency, claimed responsibility for the attacks.

Simultaneously, the opposition Social Democratic Union party (SDSM) – formerly the ruling League of Communists under the Stalinist Tito regime – called for mass demonstrations over a series of recent government scandals. SDSM has lost the last three elections, deemed "fair" by the OCSE, with Gruevski's conservative VMRO-DPMNE (Internal Macedonian Revolutionary Organization – Democratic Party for Macedonian National Unity) enjoying a comfortable majority in parliament. But that doesn't matter to the "pro-democracy" regime-changers: SDSM leader Zoran Zaev declared "This will not be a protest where we gather, express discontent and go home. We will stay until Gruevski quits."

Sound familiar?

Macedonia has a long history of manipulation at the hands of the NATO powers, who nurtured the Muslim-Kosovar insurgency to impose their will on the components of the former Yugoslavia. As in Kosovo, the Albanians of Macedonia were willing pawns of the West, carrying out terrorist attacks on civilians in pursuit of their goal of a "Greater Albania."

During the 2001 Albanian insurgency, an outgrowth of the Kosovo war, the EU/US used the NLA as a battering ram against the Slavic authorities. The NLA was never an authentic indigenous force, but actually an arm of the US-armed-and-trained "Kosovo Liberation Army," which now rules over the gangster state of Kosovo, crime capital of Europe. A "peace accord," the Ohrid Agreement, was brokered by the West, which kept the NLA essentially intact, albeit formally "dissolved," while the Macedonian government was blackmailed into submission. I wrote about it at the time, here and here.

Follow that last link to read about the George Soros connection. Soros was originally a big booster of Macedonia, handing them a $25 million aid package and holding the country up as a model of multiculturalism. However, the Macedonians soon turned against him when he sided with the Albanians in their demands for government-subsidized Albanian-language universities and ethnic quotas for government jobs. When he told them to change the name of the country to "Slavomakejonija," they told him to take a walk. Soros, a longtime promoter of Albanian separatism – he played sugar daddy to a multitude of front groups that promoted the Kosovo war – is now getting his revenge.

Prime Minister Gruevski, for his part, charges that the sudden uptick in ethnic violence and political turmoil is the work of Western "NGOs" and intelligence agencies (or do I repeat myself?) with the latter playing a key role in releasing recordings of phone conversations incriminating several top government officials. A not-so-implausible scenario, given what happened in neighboring Ukraine.

Speaking of which: the government of President Petro Poroshenko is leading the country into complete financial insolvency and veritable martial law. Aid money from the West is going into the prosecution of the ongoing civil war, and the country has already defaulted on its huge debt in all but the formal sense. Opposition politicians and journalists are routinely murdered and their deaths reported as "suicides," while it is now illegal to describe the ongoing conflict with the eastern provinces as anything but a "Russian invasion." Journalists who contradict the official view are imprisoned: Ruslan Kotsaba, whose arrest I reported on in this space, is still being held, his "trial" a farce that no Western journalist has seen fit to report on. Kotsaba's "crime"? Making a video in which he denounced the war and called on his fellow Ukrainians to resist being conscripted into the military. Antiwar activists throughout the country have been rounded up and imprisoned. Any journalist connected to a Russian media outlet has been arrested.

Yes, these are the "European values" Ukraine is now putting into practice. Adding ignominy to outrage, a law was recently passed – in spite of this Reuters piece urging Poroshenko to veto it – which makes it a crime to criticize the Organization of Ukrainian Nationalists and the Ukrainian Insurgent Army (UPA) that fought on the side of the Germans during World War II. As Ha'aretz reports, a group of 40 historians from major Western academic institutions issued an open letter protesting this outrage:

"Not only would it be a crime to question the legitimacy of an organization (UPA) that slaughtered tens of thousands of Poles in one of the most heinous acts of ethnic cleansing in the history of Ukraine, but also it would exempt from criticism the OUN, one of the most extreme political groups in Western Ukraine between the wars, and one which collaborated with Nazi Germany at the outset of the Soviet invasion in 1941. It also took part in anti-Jewish pogroms in Ukraine and, in the case of the Melnyk faction, remained allied with the occupation regime throughout the war."

Ukraine is showing its true colors, which I identified last year, to the point where even the usually compliant Western media is forced to admit the truth.

[Sep 10, 2016] Oil and gas crunch pushes Russia closer to fiscal crisis

It is pretty interesting and educational to read such articles one year after they are published.
Notable quotes:
"... Russia is already in dire straits. The economy has contracted by 4.9pc over the past year and the downturn is certain to drag on as oil prices crumble after a tentative rally. Half of Russia's tax income comes from oil and gas. ..."
"... Core inflation is running at 16.7pc and real incomes have fallen by 8.4pc over the past year, a far deeper cut to living standards than occurred following the Lehman crisis. ..."
"... This man "forecasted" Russia's demise last year. He has to show that that forecast is still liable to happen ..."
"... What Colby said is palpably true. That is why we don't hear real news and instead we are bombarded with news about their "celebs" ..."
"... He should know. And certainly, Western media coverage of the Ukraine crisis demonstrated to many millions of people in the West that major Western media is almost all controlled by the US neocons. Anyone with half a brain can see that - but clearly not you. ..."
"... Russia is not interested in invading anyone. The US has tried to force Russia to invade Ukraine in an iraq style trap but it didn't work. So they had to invent an invasion, the first in living memory without a single satellite, video or photo image of any air campaign, heavy armour, uniformed soldiers, testimony from friends & family of servicemen they could pay to get a statement, not even a mobile photo of a Russian sitting on a tank. ..."
"... As the merkins tell us a devalued dollar is your problem.. the devalued rouble is the EUs problem! ..."
"... So the political sanctions are bankrupting Russia because they dared to challenge EU expansion. Result millions of poor Russians will start to flow West and the UK will have another flood of Eastern Europeans. But at least we showed them our politicians are tough. ..."
"... Spelling it out for Russia (or Britain) that would mean giving up Byzantine based ambitions and prospering through alliances with the Muslim Nation or Countries, including Turkey. In the short term such a move would quell internal dissent of the 11m immigrants in Russia, reduce unsustainable security expenditure with its central Asian neighbours, open and expand market for Russian goods in the Middle East, Far East and North Africa, and eventually form and provide a military-commercial -political alliance (like NATO) for the Muslim nations with Russia (with partner strength based upon what is mostly commercial placed on the table (see the gist in the Vienna Agreement between P5+1 and Iran). ..."
"... The formation of such an alliance would trump Russia's (or Britain's) opponents ambitions and bring prosperity. ..."
"... Propaganda. Laughable coming from the UK hack when the UK has un-payable debt and Russia has little external debt plus we have no Gold and Russia has probably 20,000 tonnes. NATO surrounds Russia yet they are the aggressors. ..."
"... In the end, Ambrose is too ideological to be credible on the issue. Sure, Russia has couple lean years ahead, but it will come out of this ordeal stronger, not weaker. There are already reports of mini boomlets gathering steam under the surface. ..."
Jul 23, 2015 | Telegraph

Russia is already in dire straits. The economy has contracted by 4.9pc over the past year and the downturn is certain to drag on as oil prices crumble after a tentative rally. Half of Russia's tax income comes from oil and gas.

Core inflation is running at 16.7pc and real incomes have fallen by 8.4pc over the past year, a far deeper cut to living standards than occurred following the Lehman crisis. This time there is no recovery in sight as Western sanctions remain in place and US shale production limits any rebound in global oil prices.

"We've seen the full impact of the crisis in the second quarter. It is now hitting light industry and manufacturing," said Dmitri Petrov from Nomura.

"Russia is going to be in a very difficult fiscal situation by 2017," said Lubomir Mitov from Unicredit. "By the end of next year there won't be any money left in the oil reserve fund and there is a humongous deficit in the pension fund. They are running a budget deficit of 3.7pc of GDP but without developed capital markets Russia can't really afford to run a deficit at all."

A report by the Higher School of Economics in Moscow warned that a quarter of Russia's 83 regions are effectively in default as they struggle to cope with salary increases and welfare costs dumped on them by President Vladimir Putin before his election in 2012. "The regions in the far east are basically bankrupt," said Mr Mitov.

Russian companies have to refinance $86bn in foreign currency debt in the second half of this year. They cannot easily roll this over since the country is still cut off from global capital markets, so they must rely on swap funding from the central bank.

Dave Hanson

For once, Flimflambrose paints a fairly accurate picture. His formula is to take a few facts and stretch them to their illogical conclusion to create a story that sells subscriptions to the Telegraph. Sort of like the National Enquirer. He does that well. He only mentions the other side of the story in a sentence or two, usually at the end of his column. The scary headline at the top comes true perhaps one in a thousand times, just enough to keep readers from totally dismissing him as a fruitcake. Not yellow journalism. Clever journalism.

steph borne

jezzam steph borne •a day ago

''Under Putin Russia has progressed from a respectable rank 60 on the transparency international corruption index to an appalling rank 140. It is now one of the most corrupt countries in the world, entirely due to Putin.'' http://www.theguardian.com/wor...
.
jezzam is using the Corruption Perceptions Index as fact?
but it is ''Perceptions''???
''The CPI measures perception of corruption due to the difficulty of measuring absolute levels of corruption.[8]'' Wiki
Just more nonsense from Jezzam

soton

my wife is russian, she speak's to her mother on the phone every day, from what she tell's me nothing has changed economically for the "average joe" no doubt some of the abramovich types have seen the value of their properties plunge

Rosbif2

So if Russia is financially sinking below the waves, how come AEP in other articles claimed that Russia could buy themselves into Greece and menace Europe?
It seems like Greece & Russia are two drowning men who would grab onto each other & drown even faster
AEP seems to lack "joined up thinking" in his articles

giltedged

This man "forecasted" Russia's demise last year. He has to show that that forecast is still liable to happen

What Colby said is palpably true. That is why we don't hear real news and instead we are bombarded with news about their "celebs"

Real news to show that a new world economy is being built totally outside the control of US Neocons and Globalists, that the world is now multi-polar, that for example this journalist's capital city, London, now has officially a majority of the population not merely non-British in origin, but non-European, that his own country survives because of London property sales

Richard N

And isn't AEP rubbing his hands with glee at this supposedly desperate situation of Russia!

Colby, the ex-boss of the CIA, said in retirement that there is no journalist of consequence or influence in the Western media that the CIA 'does not own'.

I often find myself remembering that, when I read Ambrose pumping out the US neocon / CIA propaganda standard lines about 'Russian aggression' in Ukraine, and so on - choosing to ignore the fact that Russia's action in Crimea was in direct response and reaction to the US Neocons' coup in Ukraine, which overthrew an elected government in a sovereign state, to replace it with the current US puppet regime in Kiev.

Of course, this collapse of oil and gas prices are no accident at all - but are part of America's full-scale economic war against Russia, aiming to get Putin overthrown, and replaced by someone controlled by the US Globalists, leaving then
China as the only major power centre in the world outside the Globalists' control.

Richard N > jezzam • a day ago

If you bothered to read what I wrote carefully, you would see that, with reference to journalists, I was simply repeating what ex-head of the CIA Mr. Colby said.

He should know. And certainly, Western media coverage of the Ukraine crisis demonstrated to many millions of people in the West that major Western media is almost all controlled by the US neocons. Anyone with half a brain can see that - but clearly not you.

steph borne

''Russian bear will roar once more, says World Bank''

01 Jun 2015

''Russia economy forecast to grow by 0.7pc next year, reversing negative growth
forecast''

http://www.telegraph.co.uk/fin...

steph borne > TheBoggart

Do you understand what a trade surplus is?

Russia recorded a trade surplus of 15309 USD Million in May of 2015 http://www.tradingeconomics.co...

Halou > steph borne

Carried on to the absurd extreme at which all the dollars are held outside of America, the US simply prints more money thus devaluing it's currency and favoring exports (which are then cheaper to produce and cheaper buy) people giving their currency to the US in return for goods and services and restoring economic balance.

I can understand that Russia doesn't have much experience with the 'boom and bust' cycles of market economies. They've had less than 20 years experience at it.

Did you know that in the 19th century China's trade surplus with Europe was so vast that Europe almost went bankrupt and ran out of precious metals buying Chinese goods, surely by your thinking it was truly a golden age of eastern supremacy, western failure. Ask any Chinese person what the 19th century means to them, you might be surprised.

steph borne > Halou

Shame you can't provide a link or two to back up your thoughts on trade surpluses.. altho I know amongst bankrupt countries they tell you that money/assets leaving the country is a good thing....

Strange that the Germans don't agree --

''Germany recorded a trade surplus of 19600 EUR Million in May of 2015. Balance ...reaching an all time high of 23468.80 EUR Million in July of 2014...'' http://www.tradingeconomics.co...

Obviously another country heading for financial self-destruction

steph borne

02 Oct 2014 http://www.telegraph.co.uk/new... 02 Oct 2014
Russias-economy-is-being-hit-hard-by-sanctions.html

01 Sept 2014 http://www.telegraph.co.uk/new... 01 Sept 2014 Cameron-we-will-permanently-damage-Russias-economy.html
cameron says.??? Aha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha
ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha
ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha
ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha

29 Dec 2014 http://www.telegraph.co.uk/fin... 29 Dec 2014 /Recession-looms-for-Russia-as-economy-shrinks-for-first-time-since-2009.html

24 Nov 2014 http://www.telegraph.co.uk/fin... 24 Nov 2014 Russia-faces-recession-as-oil-crash-and-sanctions-cost-economy-90bn.html

22 Dec 2014 http://www.telegraph.co.uk/fin... 22 Dec 2014 Russia-starts-bailing-out-banks-as-economy-faces-full-blown-economic-crisis.html

http://www.telegraph.co.uk/fin... 29 Apr 2015
Ukraines-conflict-with-Russia-leaves-economy-in-ruins.htm
.
Still going!!!

Graham Milne

Russia has physical assets (oil, minerals and so on); we don't. It is the UK which is toast, not Russia.

billsimpson > Graham Milne

Russia is way too big & resource rich to ever be total toast. And the people are educated, even if they do drink a lot. But they could get a bit hungry in another economic collapse. All the nukes they have is the real problem. Those need to be kept secure, should another revolution occur, or the country break apart after an economic collapse.
The US & Canada would never sit back and watch the UK melt down. Witness the Five Eyes communal global spying system.
Electrify all the rail system that you can, so people can still get around on less oil. Some oil is essential for growing and transporting food.

Sal20111

Russia can't just blame it on sanctions, or price wars in oil and gas. They have not reinvested the proceeds of their prodigous fossil fuel sales smartly and neither have they diversified quickly enough - the gas sales to China was an afterthought after Ukraine.

Putin cracked down on some of the oligarchs but not all - national wealth has clearly been sucked out by a few. Nepotism and favouritism seem to be rife. They should have learnt the lesson from their communist history not to concentrate power in state contriolled organisations. Not sure whether there is much of a small to medium business culture.

With the amount of natural resources it has, and a well educated public, particularly in math and technical skills, Russia should be doing much better.

rob22

Russia is not interested in invading anyone. The US has tried to force Russia to invade Ukraine in an iraq style trap but it didn't work. So they had to invent an invasion, the first in living memory without a single satellite, video or photo image of any air campaign, heavy armour, uniformed soldiers, testimony from friends & family of servicemen they could pay to get a statement, not even a mobile photo of a Russian sitting on a tank.

Russia is too busy building up an independent agriculture and import substitution, not to mention creating economic and trade links with its Eurasian neighbours like China & India via the silk road, BRICS, Eurasian Ecconomic Union and the Shanghai Cooperation Organisation.

A total nightmare for the US which once hoped to divide & dominate the region (see new American century doc)

Putin enjoys about 85% approval ratings (independent foreign stats) because it knows to surrender to the US means a return to the 90`s where the nations oil revenue went to wall st and everything else

If things get bad they`ll just devalue the ruble, get paid in dollars and spend in rubles.

This is why most Russians are willing to dig in and play the long game.

Londonmaxwell

Over the top with Ambrose, as usual. Words like "depression", "crisis", "plummet", and "shrivels"; and these only in the first two paragraphs! Moscow looks absolutely normal to me: traffic jams, packed malls and restaurants, crowded airports and train stations. Unemployment is low, inflation is tolerable.

Ambrose misses some key points.

Russia's present situation is not glorious, but it is not as precarious as Ambrose portrays it to be. Be wary of writing off Russia. The great game is just beginning.

energman58 > Londonmaxwell

Except that the slack has to be taken up by inflation and declining living standards - Russia isn't unique; in Zimbabwe dollar terms almost every company there did splendidly but the place is still bust. The problem is that most of the debt is USD denominated and without the investment blocked by sanctions they are looking at a declining production, low oil prices and an increasing debt service burden. Presumably they could revert to the traditional model of starving the peasants that has served them so well in the past but I am not sure if the people with the real stroke will be quite so happy to see their assets wither away...

Londonmaxwell > energman58

Comparing Russia with Mugabeland is a stretch, but I see your point. If the sanctions stay and the oil price goes south permanently, then Moscow has problems. But I question both assumptions. Merkel/Hollande/Renzi already face huge pressure from their business leaders to resume normal relations with Russia; i.e., drop the sanctions. As for oil prices, the USA's shale sector is already in trouble. Russia's debt burden (both public and private) is manageable and can scarcely worsen since it is cut off from the credit markets. While the oil price slump certainly hurts Russia's economy, I don't see the wheels falling off anytime soon.

AEP writes well and is always thought-provoking, but his view that Russia is facing Armageddon because of oil prices and sanctions is way off the mark.

steph borne

Here come the Ukrainian Nazis.. You lot must be very happy
http://www.bbc.co.uk/iplayer/e... 18 minutes in..
Maidan number 3 on the way as I predicted a year ago.

midnightrambler

Amazing how the narrative for military action is being fostered by articles such as this one.

So many people eager for something they have no intention of getting involved in themselves

snotcricket

It is rather odd the posts on this thread accusing any & all who question the obvious US gov line in such articles.

Could it be that some have better memories ie the Ukrainian crisis was in fact created by the support of the US & EU for but a few thousand sat in Independence Sq just two years after the country had voted in the target with a majority the likes of Cameron, Obama could only dream of.

Only an idiot could not have seen the Russki response to a situation that could in but a very short timescale see NATO troops & kit but a literal footstep from Russki soil....while the ports used by the Russki fleets would be lost overnight usurped no doubt by a 'NATO' fleet of US proportions.....plainly the US knew the likely outcome to the deposing of the elected leader & replaced by the EU puppets....the Russki's had little option.....Putin or no Putin this would have been the outcome.

With regard to the US led attack on the Russki economy with sanctions....well those sanctions hurt the UK too...but of course not the US (they have lobbyist for such matters) our farmers were hurting afore the sanctions....that became a damn sight worse after the imposition.

The US attempts to turn off the oil/gas taps of Putin has done damage to the Russkis, similarly its done damage to W. Europe thus ourselves as oil prices are now held at a level by the sanctions reducing world supplies (the US have lobbyists for such matters) thus the god of the US, the market is skewed & forecourt prices too sighed Osborne as the overall taxation gathers 67% of what goes through the retailers till.

This has been rumbling for over 3 years since the BRICS held their meeting to create a currency that would challenge the $ in terms of the general w.w economy but specifically oil. They did mistime the threat & should have kept their powder dry as the US economy like our own lives on borrowed time & money.....but they made the mistake the US was in such decline they couldn't respond....of course the US have the biggest of all responses to any threat....its armed forces & their technology that advances far more rapidly than any economy.

Incidentally I write this sat at my laptop in the North of England in between running my own business & contacting clients etc..........I suspect my politics would make Putin wince.....however the chronology, actions/outcomes & the general logic of the situation has now't to do with supporting one or t'other.......& do remember the US grudgingly acknowledge without the Russkis the er, er agreement with Iran & non-proliferation would still be a can yet to be kicked down the road.

Personally I'd be more worried that Putin has made fools of the US/EU leaders so many times thus wonder just what is the intent in assisting the brokering of any deal? With the West & Iran.

steph borne

If Russia was worried about the oil price they would not have been so helpful in getting the usa & Iran together on a deal which will put more downward pressure on the oil price! http://www.telegraph.co.uk/new... Barack Obama praises Putin for help clinching Iran deal

oleteo

Reading this article I saw only one message to be sent to the Russians:"Russians,surrender!" The rumours about the desease and the ongoing decease of the Russian economy are greatly exaggerated.

steph borne

June 17, 2015 at 1:44 pm Boeing said it struck a $7.4 billion deal to sell 20 of its 747-8 freighters to Russia's Volga-Dnepr Group, providing a much-needed boost to the jumbo-jet program amid flagging demand for four-engine aircraft. http://www.seattletimes.com/bu...
MOSCOW, Russia (May 26, 2015) – Bell Helicopter,
a Textron Inc. (NYSE: TXT) company, announced today an agreement with
JSC Ural Works of Civil Aviation (UWCA) for the development of final
assembly capabilities by UWCA for the Bell 407GXP in order to support
UWCA in obtaining Russian registry to facilitate their operations. http://www.bellhelicopter.com/...
.
Oh business as normal at Bell looks like sanctions only to be paid heed by the useful idiots in the EU

snotcricket > steph borne

Yes the sanctions do seem to TTIP more in the US favour than their Western, er, er partners

Sonduh

Just like Brown Osborne is reducing borrowing but encouraging consumer debt which is close to 120% GDP. By the end of next year household debt will be 172% of earnings.Once household debt reaches saturation point and they start defaulting on their debt as they did in 2008 -- Game over. I hear the Black Sea is nice this time of year.

steph borne

A report by Sberbank warned that Gazprom's revenues are likely to drop by almost a third to $106bn this year from $146bn in 2014, seriously eroding Russia's economic base.''

Last year $146 billion bought 4672 billion pybs this year $106 billion will buy 6148 Billion pybs
Gazprom alone generates a tenth of Russian GDP and a fifth of all budget revenues. the Pyb devaluation vs. $ has led to a 31% increase in revenues..

Something Salmond should take notice of should the SNP want to go for independence again. Inflation at 16% may well be but its the price of imported stuff pushing up the prices.. mainly EU goods for sale .. that won't be bought!

As the merkins tell us a devalued dollar is your problem.. the devalued rouble is the EUs problem!

Nikki Santoro

What is happening is the Anglo-Muricuns are actively provoking the Chinese and Russkies into a war. However once it is all said and done, they are going to need a cover story. People are going to ask why the Russkies attacked. And then the Anglo-Muricuns are going to say that Putin put all his eggs in one basket. Yeah that is what happened but really if Putin does attack, it will be because of the endless Anglo-Muricun provocations. Just as they provoked Hilter to no end and Imperial Japan as well.

steph borne

Russian companies have to refinance $86bn....''

So what are you going to do if they default.. go in and repossess..You and who's army? They are struggling trying to get Greece to comply..

Russia's trade surplus is still in the Billions of Dollars while the usa's & UKs is mired in deficit.. Russia recorded a trade surplus of 17.142 USD Billion in May of 2015 http://www.tradingeconomics.co....

Debt public/ external debt ratios

U. K..................92%........317%
usa...................74%......... 98%
And
Russia...............8%..........40%

''And while UK growth could reach 3pc this year, our expansion is far too reliant on rising personal and government debt. ''
''The UK, with an external deficit now equal to 6pc of GDP, the second-largest in half a century,''
http://www.telegraph.co.uk/fin...
As ever the west points to Russia and says Look over there (for God's sake don't look here!)

Sonduh > steph borne

And don't forget all their gold reserves. And all their natural resources.

Skalla

Prosperous countries are usually benevolent (the US being the exception to the rule). Hungry countries get to be greedy and aggressive. The US with its economic and financial manipulations will turn a sleepy bear into a very awake and ravenous one, and after hibernation, the first thing bears do is FEED --

vandieman

A cynic could say that the US is driving the oil prices down to push Russia into a war.

Anth2305 > vandieman

Wait until Iranian oil comes fully on stream, which I heard some pundit on TV say could drive the cost down to < $30 a barrel, forcing the Saudis into having to eat massively into their foreign reserves.

gardiner

When the old USSR 'collapsed', what we call the 'Oligarchs' ( a collection of the most highly influential State officials who pocketed practically all the old State assets) corruption was at the very highest level, and society was at its weakest.

The economy became dependant on resource exports.

Because the country's capital was so concentrated, there was practically no 'middle class' of entrepreneurs who could invest capital in job creating, internationally competitive industry.
Although a lot further down this road than the UK - the warning is stark!

beatonthedonis > gardiner

Abramovich wasn't a state official, he was a rubber-duck salesman. Berezovsky wasn't a state official, he was an academic. Khodorkovsky wasn't a state official, he was a PC importer. Gusinsky wasn't a state official, he was an unlicensed cab driver. Smolensky wasn't a state official, he was a blackmarketeer. Fridman wasn't a state official, he was a ticket tout.

daddyseanicus

So the political sanctions are bankrupting Russia because they dared to challenge EU expansion. Result millions of poor Russians will start to flow West and the UK will have another flood of Eastern Europeans.

But at least we showed them our politicians are tough.

Busufi > Jonathan

In the East there is a saying: Why use poison when sugar delivers the same result. Or say as Deng said, It doesn't matter whether the Cat is black or white, so long it catches the mice.

Spelling it out for Russia (or Britain) that would mean giving up Byzantine based ambitions and prospering through alliances with the Muslim Nation or Countries, including Turkey. In the short term such a move would quell internal dissent of the 11m immigrants in Russia, reduce unsustainable security expenditure with its central Asian neighbours, open and expand market for Russian goods in the Middle East, Far East and North Africa, and eventually form and provide a military-commercial -political alliance (like NATO) for the Muslim nations with Russia (with partner strength based upon what is mostly commercial placed on the table (see the gist in the Vienna Agreement between P5+1 and Iran).

The formation of such an alliance would trump Russia's (or Britain's) opponents ambitions and bring prosperity.


Sonduh

" They are running a budget deficit of 3.7pc of GDP but without developed capital markets Russia can't really afford to run a deficit at all."
We are able to have a budget deficit of 4.8% and 90% national debt, 115% non financial corporate debt , 200% financial corporate debt and 120% household debt due to voodoo economics ie. countries can print money to buy your debt.

PS we also have unfunded liabilities like pensions which amounts to many hundred pc of GDP.
The results showed the extraordinary sums that Britain has committed to pay its future retirees. In total, the UK is committed to paying £7.1 trillion in pensions to people who are currently either already retired or still in the workforce.

This is equivalent to nearly five times the UK's total economic output. Such a figure may be hard to put into proportion, as a trillion – a thousand billion – is obviously a huge number.

And we think Russia is in a bad state.

georgesilver

Propaganda. Laughable coming from the UK hack when the UK has un-payable debt and Russia has little external debt plus we have no Gold and Russia has probably 20,000 tonnes. NATO surrounds Russia yet they are the aggressors.

Laughable but idiots still believe the propaganda.

tarentius > georgesilver

The entire world combined has 32,000 tonnes of gold reserves. Russia has 1,200 tonnes.

Russia has government debt of 18% to GDP, a contracting GDP. It is forced to pay interest of 15% on any newly issued bonds, and that's rising. And it has a refinancing crisis on existing debt on the horizon.

Russia's regions are heavily in debt and about 25% of them are already bankrupt. The number is rising.

And we haven't even gotten into the problem with Russian business loans.

Turn out the lights, the party's over for Russia.

Bendu Be Praised > mrsgkhan

The issue is the medias portrayal of Putin .. If the UK media was straight up with the people and just said .. "our friends in the US hate the Russians .. The Russians are growing too big and scary therefore we are going to join in destroying the Russian economy before they become uncatchable " the people would back them ..

Lets be honest .. The Russians don't do anything that we don't .. Apart from stand up to the US that is

Jim0341

Yesterday, AEP spread the gloom about China, today it is Russia. As ever, he uses quotes from leading figures in banks and finance houses, which are generally bemoaning low returns on investments, rather than the wellbeing, or otherwise, of the national economy..
Whose turn is it tomorrow, AEP? My bet is Taiwan.

Bendu Be Praised > FreddieTCapitalist

I think you will find that the UK are just pretending the sanctions and wars are not hurting us ..

Just look at the budget .. 40% cuts to public services .. America tried to destroy the Russian economy by flooding the market with cheap oil but it will come back to bite them ..

The UK should just back off .. lift sanctions against Russia and let the US squabble with them by themselves ..

I sick of paying taxes for the US governments "War on the terror and the rest of the world"

alec bell

This article makes no sense. First of all, there is no way that Gazprom is responsible for 1/10th of Russia's GDP. That is mathematically impossible. 1/20th is more like it. Second, if push comes to shove, Russians are perfectly capable of developing their own vitally-important technologies. Drilling holes in the ground cannot be more complicated than conquering space.

Whatever problems Russia has, engineering impotence is not one of them.

And third, if Russians' reliance on resourses' exports has led to "the atrophy of their industry" as AEP rightly points out, then it must logically follow that disappearance of that revenue will inevitably result in their industrial and agricultural renaissance.

In the end, Ambrose is too ideological to be credible on the issue. Sure, Russia has couple lean years ahead, but it will come out of this ordeal stronger, not weaker. There are already reports of mini boomlets gathering steam under the surface.

alec bell > vlad

vlad, JFYI: According to research conducted by the World Economic Forum (which excludes China and India due to lack of data), Russia leads the way, producing an annual total of 454,000 graduates in engineering, manufacturing and construction. The United States is in second position with 237,826 while Iran rounds off the top three with 233,695. Developing economies including Indonesia and Vietnam have also made it into the top 10, producing 140,000 and 100,000 engineering graduates each year respectively.

Nikki Santoro

Don't mess with the Anglo-Muricuns. They will jack you up bad. Unless you are thousands of miles away and posting anonymously. But even still they can lens you out and cleanse you out should you take it too far. However their dominance is not some much because of their brilliance. They don't have any despite their propaganda. But rather the depths they are willing to stoop to in order to secure victory. Like blowing up an airliner and then pinning it on you for instance. Or poisoning their own farmland.

steve_from_virginia

Futures' traders got burned earlier this year betting that oil prices would rise right back to where they were a year previously. Now they have 'gotten smart'. They know now the problem isn't Saudi Arabia but billions of bankrupt consumers the world around.

Customers are bankrupt b/c of QE and other easing which shifts purchasing power claims from customers to drillers -- and to the banks. As the customers go broke so do the banks: instead of gas lines there are ATM lines.

At the same time, ongoing 'success' at resource stripping is cannibalizing the purchasing power faster than ever before. Soon enough, the claims will be worthless! When the resource capital is inaccessible, so is the purchasing power -- which is the ability to obtain that resource capital.

Business has caught itself in the net of its own propaganda; that there is such a thing as material progress out of waste ... that a better future will arrive the day after tomorrow.

Turns out tomorrow arrives and things get worse. Who could have thunk it?

Brabantian

If AEP is as right about Russia as he was about the Yank shale gas 'boom' - now collapsing into a pile of toxic bad debt -

Then our Russian friends have nothing to worry about

midnightrambler > Guest

The largest military spend - the US - bigger than the next 20 countries combined
The most bases - the US with 800, including many in Germany
Nobody wants war - but the US needs it as their largest industry is defence - apart from manipulative banking.
We are heading for a point of rupture between those who are peaceful and those whose main aim is control and conflict.
Take your pick
A few leaders choose war - most people (who will fight those wars) choose peace.
And of course all wars are bankers' wars - it is only they who profit

Timothy D. Naegele

Both Putin and Russia are in a spiral, from which they will not recover.

See https://naegeleblog.wordpress.... ("Putin Meets Economic Collapse With Purges, Broken Promises")

Tony Cocks > Timothy D. Naegele

"Both Putin and Russia are in a spiral, from which they will not recover."

This from someone whose former President and gang of criminal henchmen lied to the world on a monumental scale about WMD in Iraq , and waged an illegal war on that country killing hundreds of thousands in the process . Following that it was Libyas turn , then Syrias . Now its Russia the US neo con warmongers are hounding, the difference being that Russia holds the worlds biggest nuclear arsenal.
The US forces had their kicked out of Vietnam and were thoroughly beaten despite throwing everything they had at the conflict save the nuclear option.
Imagine what will happen if it eventually comes to armed conflict with Russia.

midnightrambler > Timothy D. Naegele

A yank lawyer advocating killing.
From the land of citizen killers
What a surprise
Stay away

stephenmarchant

Instead of demonising Putin and banging on about the problems of the Russian economy the MSM should be worried about indebted Western economies including the UK and US. Russian Govt finances are not burdened with nearly £2trn of debt that has funded unsustainable nominal growth. Here in the UK the real GDP growth per capita is declining at over 3% per anum so as a nation the UK is continuing its decline:-

Govt deficit at 5% per anum
Govt debt at about 80% GDP
Private debt and corporate debt each of a similar order
Record current account deficit of about 5% per anum
A deteriorating NIIP (Net International Investment Position)
Uncontrolled immigration

Our whole debt based fiat system is on the brink but few can see it whilst they party with asset and property bubbles. A few of us foresaw the first crash of 2007/8 but we now face a systemic collapse of our fiat system because of the resulting 'extend and pretend' policy of Govts and central bankers.

In the final analysis the true prosperity of a nation will depend upon its natural resources, infrastructure, skills of its workforce and social cohesion.

Graham Milne > JabbaTheCat

The scale of Russian kleptocracy pales into vanishing insignificance beside the criminality of western banks (and the government who 'regulate' them). Europe and the USA are regimes run by criminals; worse than that, they are run by traitors. At least Putin isn't a traitor to his country.

Busufi

The best way for Russia to beat the downturn in it's oil and gas is to invest in down-stream strategic production of petroleum products that would give Russia a competitive advantage on a global scale.

Selling raw natural resources is the Third World way of exports. Not smart.

[Aug 12, 2016] Poland just completed an LNG import terminal and talking about sending Qatari gas from the LNG terminal to Lithuania and the rest of Europe, to reduce horrible dependence on Russian gas, even if LNG gas is priced 3X higher than piped GAZPROM gas

peakoilbarrel.com
Watcher , 08/10/2016 at 1:32 am
GAZPROM wins. Gas will flow thru Turkey to Europe. The amounts will increase. Ukraine will soon no longer be a conduit, and lose all clout when they try to dodge paying the bill for their own.

Probably back in the Russian sphere of influence in a few years, assuming the EU won't pay their gas bill, and the present leadership will be wards of the EU somewhere in Germany. Actually, were Russia wise, they would just refuse gas to the Ukraine at any price. Surrender or freeze. Maybe needlessly heavy handed. Just impose increasingly crushing conditions. With a smile.

https://www.rt.com/business/355245-turkey-restart-tukish-stream/

Watcher , 08/11/2016 at 1:32 am

Europe Nat Gas consumption:
1.132 billion cubic meters/day (from mazama and converted to m^3)

minus Europe Nat Gas production –> about 570 million cubic meters/day imported (9.5% increase in 2015) X 365 = 208 billion cubic meters/yr

Nordstream pipeline 55 billion cubic meters/yr plans to double by 2019 to 110 billion m^3/yr. That's Gazprom thru Germany.

Ukraine pipeline(s) into Europe presently: 142 billion cubic meters/year.

Belarus pipeline(s) into Europe presently: 38 billion cubic meters/year

Adds to 235 billion cubic meters/yr which is 20 some billion more than the Euro number above because some is going to Macedonia, Serbia and other none EU countries. Relatively inconsequential.

Note that the popular phrasing that Russia only provides 31% of Europe's gas is almost certainly bogus. More like 45-50%.

Now then, Nordstream 2 (that's all GAZPROM gas) will be chopped from Ukraine's flow. Because GAZPROM can just force Belarus gas to be used by not flowing enough thru Ukraine.

The TANAP pipeline is to flow only 16 billion cubic meters/yr of gas from a non Russia source thru Turkey.

The agreement just reached between Putin and Erdogan is for a pipeline carrying Russian gas at 63 billion cubic meters/yr. Turkey will burn 14 of that (they burn 45 billion m^3 /yr) leaving 49 to flow to Europe.
The EU is already trying to interfere, saying there is insufficient capacity in pipelines north thru Greece and other countries, but clearly Greece will burn it and that reduces what's left going north.

Bottom line. Nordstream 2 will be a new 55 billion m^3/yr of GAZPROM gas. TurkeyStream will flow another 49 billion m^3/yr. This will be new from present flows. And Ukraine's flow is 142. They'll be reduced to under 40.

And that TANAP flow will cut them to 25ish.

They might as well surrender now.

Greenbub , 08/11/2016 at 2:20 am
Well, if the Russians and Turks can be best friends, maybe the Saudis and Iranians can too?
GoneFishing , 08/11/2016 at 8:17 am
It's one big family until the valves start to close.
Watcher , 08/11/2016 at 10:18 am
Ukraine gets almost $3 billion/yr in transit fees.

They have demanded just about a double of that 5 mos ago. GAZPROM has not agreed. The Ukraine transit pipeline system apparently also needs $19B in maintenance work GAZPROM had planned to pay for before Ukraine broke relations with Russia. No longer.

Ukraine GDP 90B in 2015 and is falling this year.

So either the EU picks up the $19B plus the $3B/yr in transit fees Ukraine will lose starting late next year (plus cost of Ukraine's consumption itself(they are 5th largest in Europe)), or the fat lady sings.

BTW Poland just completed an LNG import terminal. Look at those flow numbers above in the thread. Now . . . understand Poland is talking about sending Qatari gas from the LNG terminal to Lithuania and the rest of Europe, to reduce horrible dependence on Russian gas, even if LNG gas is priced 3X higher than piped GAZPROM gas. But yes, Poland is going to send gas to other countries from their LNG terminal.

Oh, and the new LNG terminal has a capacity of 5 billion m^3/yr. Repeat. 5 billion m^3/year. That's max in its final form.

Poland burns 16.

[Aug 08, 2016] China openly offers Russia an alliance against NATO

Chairman Xi Jinping is making Russia an offer that Russia can't refuse?
Notable quotes:
"... "We are now seeing the aggressive actions on the part of the United States, regarding both Russia and China. I believe that Russia and China could create an alliance toward which NATO will be powerless and which will put an end to the imperialist desires of the West." ..."
www.fort-russ.com

jfl | Aug 7, 2016 4:36:20 AM | 45

"The world is on the verge of radical change. We see how the European Union is gradually collapsing, as is the US economy -- it is all over for the new world order. So, it will never again be as it was before, in 10 years we will have a new world order in which the key will be the union of China and Russia."

"We are now seeing the aggressive actions on the part of the United States, regarding both Russia and China. I believe that Russia and China could create an alliance toward which NATO will be powerless and which will put an end to the imperialist desires of the West."

V. Arnold | Aug 7, 2016 5:07:56 AM | 46

jfl | Aug 7, 2016 4:36:20 AM | 45

Great link, thanks.
Given the real world politic, I don't see that Russia has much choice. The lack of pressure by the PRC is an important note; Russia isn't being coerced but rather romanced.
My fear has been, and remains, the bat shit crazy neo-cons and their inability to let go of the imperialist dream of world hegemon.

[Aug 07, 2016] Neocon from Foreign Policy magazine are still dreaming about dismembering and colonizing Russi

Notable quotes:
"... No kidding; Kiev's ability to interrupt gas flows to Europe – which the west previously would not even discuss, since it was obviously Russia using energy as a weapon – is presented as just kittenish playfulness, and such an interruption is not a big problem because it's so amusing to watch the clever Ukrainians tweak Moscow's nose. All in good fun, of course, and transit fees are a right. There's just nothing about going around Ukraine to prevent that from happening which could be described as good fun, or tweaking Kiev's nose. Because the Ukrainians are cute, and the Russians are savages. ..."

ucgsblog, August 5, 2016 at 1:08 pm

Waaa! Waaa! Waaa! http://foreignpolicy.com/2016/08/05/poland-takes-aim-at-putins-pipe-dreams/

"This summer hasn't seen a lot of setbacks for Russia, not even for its Olympic hopefuls. Crimea has been annexed and fully absorbed, with the blessing of Republican presidential front-runner Donald Trump, who also calls NATO "obsolete." Russian intelligence services have allegedly been pawing through the emails of U.S. political parties, and releasing them at their leisure. Turkey, in the wake of a failed coup attempt, is rushing to mend fences with Moscow."

Couple of things, my unfellow whiner. First, Crimea has been annexed and absorbed prior to Trump's statement. Ergo it could not have happened with his blessing, since his blessing could only come after the events took place, but what's temporal physics to a "journalist" from FP? Second, at this point I think it's safe to conclude that every intelligence service of any powerful countries studied those e-mails, no need for allegedly. And we don't know if it's the Russians that are releasing them. Third, Turkey rushed to mend ties with Moscow before the coup, not after, but then again, what's temporal physics to a "journalist" from FP? This article promises to deliver mirth, let's read on!

"All of which makes last month's decision by the Polish antitrust regulator to file a formal objection against Russia's proposed "Nord Stream 2" gas pipeline more noteworthy. That regulatory spanner could be Europe's last and best chance to halt construction of a pipeline that critics say will divide Europe, beggar Ukraine, and reinforce Moscow's energy dominance for another generation."

That's a big deal? Poland's opposition to Nord Stream 2 has been well document throughout the ages. Ukraine is already beggared, but let's all blame that on Russia. Moscow's energy dominance comes from the EU being a voracious money swallowing pit, and not enough solar/wind/nuclear powerplants being built, due to, wait for it… lack of funding! Those funds are in places like Syria and Iraq. Oh, and won't the lack of construction divide Europe? Cause I doubt that Russia's going to prop up Ukraine, so if Southern Europe has no gas and Northern Europe has some, won't that be divisive?

"For years, Russia has sought to keep Europe dependent on its exports of energy, especially through natural gas pipelines. But Moscow is also desperate to cut out potentially meddlesome middlemen, like Ukraine, which sits smack between Russia's natural gas fields and millions of European consumers. That gives Kiev the ability to interrupt Russian gas flows headed to Europe, infuriating Moscow, but also earns Ukraine billions of dollars in much-needed transit fees."

Oh really? So Kaliningrad's border with EU member states are somehow attached to Ukraine? Intriguing, very intriguing, did someone skip his geography class?

"A decade ago, Russia enlisted former German Chancellor Gerhard Schröder to help it build a pipe across the Baltic from Russia to Germany, sidestepping Ukraine: Nord Stream. Then Russia tried to build another pipeline, "South Stream," across the Black Sea from Russia to Bulgaria, also bypassing Ukraine, but that was quashed by the European Union in 2014. Then, Moscow invented the idea of a "Turkish Stream," another proposed Black Sea pipe, one landing in Turkey, outside of Brussels's reach. But last fall, Turkish F-16s shot down a Russian jet, and with it hopes of any immediate Russo-Turkish energy cooperation."

Really? Because in the beginning, the article claimed that "Turkey…is rushing to mend fences with Moscow." So they're rushing to cooperate, ergo there won't be cooperation? Stellar "journalism" absolutely stellar.

*drops mic*

Jen, August 5, 2016 at 2:34 pm
'… But the Polish Office of Competition and Consumer Protection last month determined that Nord Stream 2 - which wouldn't even touch Polish territory - could harm consumers. "The Office found that the concentration might lead to restriction of competition," it tentatively concluded, adding that the project could "further strengthen" Gazprom's "dominant position." …'

Looks as if the Poles and the FP writer have a strange idea of what free market competition is. Their idea seems to be that the more middlemen there are, taking their cut, oops, share of the transit fees, and passing the costs down the pipeline, the more competition there is. Plus the journalist fails to see what's wrong with Ukraine interrupting the flow of gas from Russia to the EU to get transit fee income, unless of course he thinks extortion is a legitimate way of doing business.

Patient Observer, August 6, 2016 at 11:11 am So many succulent quotes but my favorite is:

That gives Kiev the ability to interrupt Russian gas flows headed to Europe, infuriating Moscow, but also earns Ukraine billions of dollars in much-needed transit fees.

So, when Ukraine interrupts gas flow to Europe to "infuriate" Moscow, Europe is not infuriated to contend with a crippling gas shortage? And how long is Russia expected to rely on a transit country that likes to infuriate its customer? Gawd, this guy is stupid.

marknesop , August 6, 2016 at 1:54 pm
No kidding; Kiev's ability to interrupt gas flows to Europe – which the west previously would not even discuss, since it was obviously Russia using energy as a weapon – is presented as just kittenish playfulness, and such an interruption is not a big problem because it's so amusing to watch the clever Ukrainians tweak Moscow's nose. All in good fun, of course, and transit fees are a right. There's just nothing about going around Ukraine to prevent that from happening which could be described as good fun, or tweaking Kiev's nose. Because the Ukrainians are cute, and the Russians are savages.

It looks like Russia is not going to be told that it must continue transiting gas through Ukraine, although Ukraine has been on its best behavior where transit is concerned over the last little while (to show how reliable it can be), and transit through Ukraine has actually increased, a fact they lose no opportunity to point out (as if to say, you need us now more than ever). But Kiev reserves the right to hike the transit fees whenever it needs a little more struttin' money, and while the obstructive talk is on hold for now, the Ukrainians love to shoot their mouths off and have made it clear they will simply take gas intended for Europe if Russia restricts Ukraine's supply (although they have brought their Russia supplies way, way down by buying Russian gas from other European countries, bought with gas money given it by the IMF.

Russia would very likely agree to continue supplying Ukraine through its own pipeline network, probably even at a quite attractive price – but if Ukraine started any of its special-needs antics, Russia would not have to worry about Europe's supply going through Ukraine's decrepit pipeline system. Ukraine could be cut off without a second thought, as any reasonable supplier would do if it is not getting paid or is otherwise abused by its customer – and as Europe would do in a second if it were the other way round and Russia was spending billions for European gas transited through Ukraine, which the Ukrainians poached at their leisure.

[Aug 07, 2016] Why does Nord Stream operate at less than 100% capacity?

Notable quotes:
"... Expect this issue to take center stage in the coming months, because northwest Europe, with declining production of its own gas, is going to need a reliable solution, and should be getting pretty tired of propping up Ukraine, Romania and Poland the perennial malcontents. At the present time Poland's regulatory commission is holding up Nord Stream II just because it can – but don't expect that to last. The EU is soon going to be faced with the choice of a Russian gas pipeline in whose operation they will at least have input and in whose construction European companies will share some of the lolly – or a Russo-Turkic pipeline in which they have no say at all and the gas delivery point is at the border. ..."
"... Expect Brussels to accuse Russia of 'dumping' gas on the EU market, regardless of any truth. Russia could still reduce price and make a profit, ergo not 'dumping' in any sense. I would then expect all those new gas reservoirs being built by Germany, Gasprom and others to fill up on cheap Russian gas. ..."
marknesop.wordpress.com

marknesop , August 3, 2016 at 11:11 pm

Why does Nord Stream operate at less than 100% capacity? Because of capacity restrictions imposed by Brussels – just remember that the next time that poxy twat Sefcovic starts blabbering on about why do we need Nord Stream II when the original pipeline only operates at half-capacity? And he will, be sure of it. If Nord Stream could operate at 100% capacity, it would be half the cost of transiting through Ukraine. Just how much charity is Russia expected to offer, especially considering Ukraine imposed a transit rate hike last year for the privilege of using its leaky, whistling, rotting pipeline network?

Expect this issue to take center stage in the coming months, because northwest Europe, with declining production of its own gas, is going to need a reliable solution, and should be getting pretty tired of propping up Ukraine, Romania and Poland the perennial malcontents. At the present time Poland's regulatory commission is holding up Nord Stream II just because it can – but don't expect that to last. The EU is soon going to be faced with the choice of a Russian gas pipeline in whose operation they will at least have input and in whose construction European companies will share some of the lolly – or a Russo-Turkic pipeline in which they have no say at all and the gas delivery point is at the border.

And really, the EU's arguments make it look like it was dropped on its head as an infant. If Turkish Stream goes ahead, the story goes, it will increase dependency on Russian gas, but block Caspian supplies. How? Caspian supplies (Azerbaijan) are supposed to come via the Southern Gas Corridor, which the EU keeps saying it is pressing on with but has yet to lay a foot of. Remind you of the talking-shop that Nabucco became? How much money was pissed away on that, and they didn't build any of it. But the argument seems to be that if Turkish Stream is built, the Southern Gas Corridor cannot be. Why not? What's stopping you?

Price. The EU is scared it cannot do it as cheaply as Russia. And it probably can't. How does that bear on the consumer? Sefcovic already told you – it's not all about price. What price freedom, my friends? Aren't you willing to pay more for your gas so you can say it is Azerbaijani gas instead of Putin's gas? What do you say, European consumer? But it keeps going on about how Turkey and everybody else will get cheap gas, but is still trying to frighten Europeans that if they depend on Russian gas it will go up. Why would it, if it's costing Russia less to ship it?

Kiev should be getting scared. Because there is an increased chance Brussels will cave on the Nord Stream II issue, considering the factors I've already laid out. Or else Putin will build Turkish Stream, and the EU will have to build its own infrastructure to hook up at the border, and either solution will bypass Ukraine – through which, incidentally, transit was up 21% in the first months of 2016, as the Ukrainians try to showcase what reliable partners they are. But that route fails on price. Wah wah wahhhhhh….sorry, Kiev.

Jeremn , August 4, 2016 at 1:38 am
I think EU dithering will force the price of gas up, and then the US will rush to save us with LNG and fracking. But, then, I'm a pessimist.
marknesop , August 4, 2016 at 6:45 am
But even if the price of gas did rise due to EU dithering, Russia could still undercut American LNG price. It comes down to how much are you willing to pay to proudly say "No thank you, Mr. Putin"? It's like Sikorski and his Polish LNG terminal, where he said it costs more, but at least it flies the Polish flag, or like how you could probably sleep with the starlet of your dreams…if you were willing to do anything to get her. Prostitute yourself, sell drugs, move to another country, completely change your lifestyle, whatever it took. A lot of things that are attainable in the abstract are simply not worth it. the UK might be able to get by with no gas imports at all – it still has a little, and they could go back to coal and wood-burning fireplaces like on "Upstairs, Downstairs" (my ex loved that program", and theoretically they could do it, with just a little of that famed British pluck and a stiff upper lip. But nobody wants to do it, because the illusion of independence is not worth behaving so stupidly. It has become a game to see who can get their people deeper in self-denial so that their leader can thumb his nose at Putin.
Jeremn , August 4, 2016 at 7:54 am
It is a bit like Hinckley Point – the UK can't be reliant on Chinese involvement for security reasons (although the French suffered too when the agreement was frozen). Our elites try to get away with it by keeping the population in a state of fear. But they also reward their own chums with contracts, no matter what the cost.

So, yes, I do think they'll try to get away with it, whatever the cost (they'll just blame the utility companies).

marknesop , August 4, 2016 at 8:10 am
There would be the entry of an opposition political figure, telling the populace as much as it would listen to about how an alternate source which is cheaper is available but our political masters make us pay more in order to score political points with their master and perhaps advance themselves and their positions…if the situation were reversed and Russia were dependent on European gas, and Putin was trying to wean the Russians off of it in favour of a more-expensive but more exclusionary alternative.

In my opinion, Russia needs to do that more. Sponsor opposition politicians in enemy countries, I mean. It's a go-to western tactic.

et Al , August 4, 2016 at 9:13 am
Expect Brussels to accuse Russia of 'dumping' gas on the EU market, regardless of any truth. Russia could still reduce price and make a profit, ergo not 'dumping' in any sense. I would then expect all those new gas reservoirs being built by Germany, Gasprom and others to fill up on cheap Russian gas.

I have a question though. If gazprom fills up its CEEC/Balkan reservoirs when gas is X price at X time, is that the fixed price of the gas or if the world price drops, it can sell it for less without it technically being 'dumping'? Does anyone know what the mechanism is?

Fern , August 4, 2016 at 5:07 pm
Here's those good ole western values again on display here, this time directed at the peons in Europe. You wouldn't know it from our posturing politicians but fuel poverty is a massive problem in Europe affecting between 50 to 125 million people. The health consequences are dire from thousands of excess deaths in winter's maw to increases in chronic lung and respiratory diseases. And would you believe it but the Baltic chihuahuas, ever-reliably yapping at all things Russian, have large numbers of their populations living in fuel poverty. Ever read anything by Edward Lucas on this? No, me neither. So, I couldn't really do justice to how angry the behaviour of these morons makes me….people die before their time every year because they can't afford to properly heat their homes and these geniuses in Brussels paid for by us are totally OK with rocketing fuel prices as long as they can say they poked a finger in Vladimir Putin's eye. Reply

[Jul 28, 2016] Ambassador Pyatt hallusinations

marknesop.wordpress.com
Moscow Exile , July 26, 2016 at 1:30 pm
Russia can no longer use gas for manipulating Ukraine – Pyatt

Ukraine has managed to get rid of its gas dependence on Russia, thus destroying the "energy weapon" of the Kremlin, U.S. Ambassador to Ukraine Geoffrey Pyatt has said.

The Ukrainian authorities over the past few years have in fact destroyed Moscow's energy weapon, which used gas in this way, Pyatt said during a meeting of the discussion club "Open World" on the transformations in Ukraine, progress and tasks for the future in Kyiv on Tuesday.

The diplomat said that Ukraine's national gas company Naftogaz Ukrainy currently purchases gas only if it finds the price acceptable, but the natural gas has ceased to be the instrument of manipulation. Ukrainians are no longer in the situation when the Kremlin uses energy resources as a weapon, as an instrument of manipulating Ukrainian politicians, so that they should take certain decisions, he said.

Pyatt also said that the Ukrainian energy sector is undergoing serious transformations and this is very important to bring these changes to completion.

What? Buying the cheapest gas on the market is more economical than not paying for it at all, which is what they did as regards gas directly supplied by Russia?

And where does this cheaper alternative supply come from - originally, not through an intermediary?

Moscow Exile , July 26, 2016 at 1:36 pm
Reverse supply, Pyatt! Ever heard f it?

And the wonderful terms and conditions for EU "association" that Yanukovich could only refuse?

Remember them, you twat?

And billions that the Ukraine owes Gazprom?

Moscow Exile , July 26, 2016 at 9:45 pm
Perhaps Pyatt lauds this action of the Ukrainians as regards their good business practice concerning energy supplies:

На Украине не видят причин возвращать России долг в $3 млрд

Украина не должна возвращать России $3 млрд, которые были получены во времена Виктора Януковича. Об этом в программе "О политике" с Сергеем Руденко в эфире Еспресо [sic].TV заявил министр финансов Александр Данилюк. "Это был политический кредит, который нас заставили взять",- пояснил министр.

По словам господина Данилюка, эти средства в то время могли пойти на различные выплаты в государстве. "Наша позиция заключается в том, что мы не должны возвращать эти деньги",- сказал Александр Данилюк.

In the Ukraine they see no reason for paying back their $3 billion debt to Russia

The Ukraine is not obliged to return to Russia the $3 billion debt that was accrued during Victor Yanukovych's presidency.This is what Finance Minister Alexander Danyluk said live on air to Sergei Rudenko during the Espresso TV programme "On Politics". "Our position was that we were politically forced to accept this credit. Therefore, our position is that we do not have to return this money", explained the minister.

According to Mr. Danyluk, at the time they were able to use the money for the payment of various state benefits. "Our position is that we should not return the money", said Alexander Danyluk.

On December 16 last year, the IMF Executive Board recognized the official status of the $3 billion Russian loan to the Ukraine. In response, the Ukraine announced a moratorium on the payment of any debts to the Russian Federation.

Which is good business practice, according to Pyatt Twat, I presume.

marknesop , July 26, 2016 at 10:17 pm
They evidently believe Daddy Pyatt's muck that they are getting off the Gazprom tit just because they are buying Gazprom gas from someone else. I would have a quiet word with those people to warn them of the possibility that they might have to suddenly find 45% to 90% of their gas supplies somewhere else if they did not put pressure on Ukraine to pay its debts. Because it has evidently not occurred to Ukraine where they would get their gas if their brotherly suppliers did not have any to sell, and were scrambling to find enough for themselves. America would crow that Russia was using energy as a weapon, of course, but Russia should be past caring what America thinks or says because they are never going to be anything like friends no matter what Russia says or does.

Meanwhile, Daddy Pyatt is going to have some 'splainin' to do when Gazprom refuses to sell Ukraine any more gas until they pay. Because they're still getting more than 10% directly. Russia is being nice, and usually sells them gas as soon as they pay in advance for that amount. But maybe they should say, "You know what? I think you should pay all your past dues before you get any more". And they wouldn't have a leg to stand on, because it doesn't matter what 'their position' is; the debt has been recognized as legal and binding.

Moscow Exile , July 26, 2016 at 10:31 pm
Посол США на Украине Пайетт – дурак или всё же идиот?

The United States Ambassador to the Ukraine - a fool or just an an idiot?

I thought he'd been moved to some Stan-republic?

marknesop , July 26, 2016 at 11:32 pm
He would take any criticism from Russia as an accolade, an indicator that he is doing something right, because getting up Russia's nose is his stock in trade and the reason he's posted in there. He's there to provoke confrontation between Russia and Ukraine, the more the better, and he could not care less what will happen to Ukrainians after he's gone.
marknesop , July 26, 2016 at 1:48 pm
As usual, Pyatt is trumpeting nonsense, although I would love for some intrepid journalist to ask him why the USA is so resistant to Nord Stream II and preserving Ukraine's transit fees for Russian gas. If it's so easy to cut your imports of Russian gas by more than half that the poorest country in Europe can do it, why couldn't anyone do it?

Such as the countries from whom Ukraine now buys its gas – Slovakia, Hungary and Poland. Of the three Slovakia is 90% dependent on Russian gas, Hungary 44%, and Poland 45%. These are the countries that scream Nord Stream II must not be built – what would happen if Russia stopped supplying them with gas? Where would Ukraine get its gas then? Where would its suppliers make up their shortfall? American LNG? Ah ha, ha, ha!! Yes, I'm sure; forgive me for laughing, I couldn't help it.

Russia is not making as much money, that's certainly true and will remain true for as long as the west can force the price down through oversupply. Who will run out first? I guess we'll see. But although profits are undeniably lower, Gazprom's exports to Europe increased by approximately 16% between January and May of this year. I think Europeans should be asking themselves how important Ukraine really is in their gas-distribution network. But bravo to Ukraine! See if you can reduce your Gazprom imports to zero! Now, there's a worthy target. Just ask Daddy Pyatt from time to time how you're doing.

Cortes , July 26, 2016 at 5:50 pm
Excellent.

Back in the day contracts were "consensus in idem" or, my version = "agreement in all essentials".

The "partners" ought to be aware that the RF (and its "emanations of the State" (c) EU Law) appears to be relying on that, hmmm, understanding of "the rule of Law".

Chihuahua yelps and Banderastan yowls and EU poodle elite yips aside, the rest of the wide world sees reality as the RF does.

[May 17, 2016] Work starts on new pipeline bringing Azeri gas to Italy

bakken.com

Construction work is starting on a new pipeline project bringing Azeri gas through northern Greece and Albania to Italy, reducing Europe's energy dependency on Russia.


The Trans Adriatic Pipeline will run for 878 kilometers (550 miles), from Greece's border with Turkey to southern Italy, and includes a 105-kilometer (65-mile) stretch under the Adriatic Sea. First deliveries to Europe are expected in 2020.

Greek Prime Minister Alexis Tsipras said the project would create 8,000 jobs in his financially struggling country, which has more than 24 percent unemployment.

He spoke at a ceremony Tuesday to mark the beginning of the pipeline's construction in the northern port city of Thessaloniki.

TAP is a joint project by Britain's BP, Azerbaijan's SOCAR, Italy's Snam, Belgium's Fluxys, Spain's Enagas and Swiss Axpo.

[Mar 27, 2016] In 2015, the seven biggest publicly traded Western energy companies replaced just 75 percent of the oil and natural gas they pumped

peakoilbarrel.com
Greenbub, 03/27/2016 at 8:27 pm
http://www.marketwatch.com/story/oil-giants-draining-reserves-at-faster-pace-2016-03-27

"In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. It was the biggest combined drop in inventory that companies have reported in at least a decade."

[Mar 11, 2016] Energy Crisis As Early As 2016

This author was probably one year early in his forecasts, but the direction was right -- we might face oil shortages in 2017.
Notable quotes:
"... "In permitting low oil prices, the Saudis seek to bring the market back into equilibrium. At present, our calculation of break-even system-wide is in the $85–$100 a barrel range on a Brent basis." ..."
December 30, 2014 | OilPrice.com

Low oil prices today may be setting the world up for an oil shortage as early as 2016. Today we have just 2% more crude oil supply than demand and the price of gasoline is under $2.00/gallon in Texas. If oil supply falls too far, we could see gasoline prices doubling within 18 months. For a commodity as critical to our standard of living as oil is, it only takes a small shortage to drive up the price.

On Thanksgiving Day, 2014 Saudi Arabia decided to maintain their crude oil output of approximately 9.5 million barrels per day. They've taken this action despite the fact that they know the world's oil markets are currently over-supplied by an estimated 1.5 million barrels per day and the severe financial pain it is causing many of the other OPEC nations. By now you are all aware this has caused a sharp drop in global crude oil prices and has a dark cloud hanging over the energy sector. I believe this will be a short-lived dip in the long history of crude oil price cycles. Oil prices have always bounced back and this is not going to be an exception.

To put this in prospective, the world currently consumes about 93.5 million barrels per day of liquid fuels, not all of which are made from crude oil. About 17% of the world's total fuel supply comes from natural gas liquids ("NGLs") and biofuels.

One thing that drives the Bears opinion that oil prices will go lower during the first half of 2015 is that demand does decline during the first half of each year. Since most humans live in the northern hemisphere, weather does have an impact on demand. I agree that this fact will play a part in keeping oil prices depressed for the next few months. However, low gasoline prices in the U.S. are certain to play a part in the fuel demand outlook for this year's vacation driving season.

Related: Ten Reasons Why A Sustained Drop In Oil Prices Could Be Catastrophic

Global Demand For Hydrocarbon Based Liquid Fuels

Brent oil prices are now hovering around $60 a barrel. In my opinion, this is quite a bit lower than Saudi Arabia thought the price would go and may lead to an "Emergency" OPEC meeting during the first quarter. But for now, I am assuming that Saudi Arabia is willing to let the other OPEC members suffer until the next scheduled OPEC meeting in June.

The commonly held belief is that Saudi Arabia is doing this to put a stop to the rapid growth of production from the U.S. shale oil plays. Others believe it is their goal to crush the Russian and Iranian economies. If the oil price remains at the current level for a few months longer it will do all of the above.

My forecast models for 2015 assume that crude oil prices will remain depressed during the first quarter, then slowly ramp up and accelerate as next winter approaches. I believe that by December we will see a much tighter oil market and significantly higher prices. In a December 24, 2014 article in The National, Steven Kopits managing director of Princeton Energy Advisors states that, "In permitting low oil prices, the Saudis seek to bring the market back into equilibrium. At present, our calculation of break-even system-wide is in the $85–$100 a barrel range on a Brent basis."

Mark Mobius, an economist and regular guest on Bloomberg TV recently said he sees Brent rebounding to $90/bbl by the end of 2015.

Since 2005, only North America has been able to add meaningful crude oil supply. Outside of Canada and the United States (including the Gulf of Mexico), the rest of the world's crude oil production netted to a decline of a million barrels per day from December, 2010 to December, 2013. More than half of the OPEC nations are now in decline. We've been able to supplement our fuel supply during the last ten years with biofuels, but that is limited since we need the farmland for food supply.

Liquids Supply Since 2005

I believe the current low crude oil price could be overkill and result in the next "Energy Crisis" by early 2016. Enjoy these low gasoline prices while they last.

The upstream U.S. oil companies we follow closely are all announcing 20% to 50% cuts in capital spending for 2015. We will start seeing the impact on supply at the same time the annual increase in demand kicks in. Our model portfolio companies are all expected to report year-over-year increases in production, but at a much slower pace than the last few years.

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A study released by Credit Suisse two weeks ago shows that U.S. independents expect capital-expenditure (Capex) cuts of one-third against production gains of 10 per cent next year. This would imply production growth of 600,000 bpd of shale liquids, and perhaps another 200,000 bpd from Gulf of Mexico deepwater projects. At the same time, U.S. conventional onshore production continues to fall. I have seen estimates of 500,000 to 700,000 bpd declines within twelve months. If these forecasts are accurate, U.S. oil production growth would be barely positive next year and headed for a material downturn in 2016.

North American unconventionals (oil sands, shale and other tight formations) have been almost all of net global supply growth since 2005. If unconventional growth grinds to zero and conventional growth is falling outright, the supply side heading into 2016 looks highly compromised. At today's oil price, only the "Sweet Spots" in the North American Shale Plays and the Canadian Oil Sands generate decent financial returns to justify the massive capital requirements needed to continue development. Global deepwater exploration is rapidly coming to a halt.

Were demand growth muted, this might not matter. Demand for liquid fuels goes up year-after-year. It even increased in 2008 during the "Great Recession" and ramped up sharply during 2009 and 2010 despite a sluggish global economy. Low fuel prices are increasing demand today and my guess is that, with U.S. GDP growth now forecast at 5% in 2015, we could see demand for fuels increase by close to 1.5 million barrels per day this year. The current IEA forecast is for oil demand to increase by 900,000 bpd in 2015.

If this plays out, the oil markets will be heading into a significant squeeze in the first half of 2016.

The last extended period of low oil prices was 1985 to 1990. In 1985, when oil prices collapsed similar to what's happening now, the world had 13 million bpd of spare capacity, with 7 million bpd in Saudi Arabia alone. OPEC was well-positioned to comfortably meet any increase in demand.

Today, just about all of the world's discretionary spare capacity resides in Saudi Arabia and amounts to an estimate 2 million bpd. Lou Powers, an EPG member and author of "The World Energy Dilemma," has said that Saudi Arabia will have difficulty maintaining production at over 10 million bpd for an extended period. If we do swing to a supply shortage, Saudi Arabia may find itself in the position of needing to run the taps full out for much of 2016. In such an event, the world will be headed right back into an oil shock and we will see much higher oil prices than $100/bbl.

[Mar 11, 2016] Manking probably has 50 years to go on fossil fuel

Notable quotes:
"... If consumption is 10 million metric tons burned each day, it is 3,652,500,000 tonnes per year consumed by the gaping maws of industry to allow civilization be in the gluttony mode, with half of it gone, 150,000,000,000 tonnes to go, then there is a fifty year supply in the ground and under the seas and oceans. ..."
peakoilbarrel.com
R Walter, 11/08/2015 at 12:21 pm
With regard to peak oil book publications:

Permanent Oil Schock, L.F. Ivanhoe

"The two basic factors of the world's oil supply are (1) geologic (discoveries) and (2) economic (distribution). Petroleum geologists have done such a good job of finding oil that it looks as easy as growing crops, and our engineers deliver the petroleum like clockwork. Consequently, the public and many planners consider global distribution to be the only supply problem and attribute all price swings to simple economics. They erroneously ignore critical long-term geological facts and assume that cash spent = oil found. This premise is invalid where no oil exists or where prospects are poor. Most people are unaware that the global quality of geological/oil prospects has declined so much that the amount of new oil found per wildcat well has dropped 50% since a 1969 peak. Discoveries of the most critical but easiest to find giant fields (each with over 500 million bbl of recoverable oil) are now stalled at 315 known worldwide. We are simply no longer finding enough new crude oil to replace the world's huge consumption of 20 billion bbl (840 billion gal) per year."

http://www.searchanddiscovery.com/abstracts/html/1987/annual/abstracts/0571a.htm?q=%2BtextStrip%3Aopec+textStrip%3Astatistics

Looks like the troubles are here to stay.

R Walter, 11/09/2015 at 11:32 am
2200 Gb would be 300 billion metric tons.

2,200,000,000,000/7.3=301,369,863,014 metric tons of total oil extracted, yet of be extracted, past production and future production.

If consumption is 10 million metric tons burned each day, it is 3,652,500,000 tonnes per year consumed by the gaping maws of industry to allow civilization be in the gluttony mode, with half of it gone, 150,000,000,000 tonnes to go, then there is a fifty year supply in the ground and under the seas and oceans.

The metric system is of an advantage when calculating the numbers, IMO.

Thanks to Robert Wilson for the links to L.F. Ivanhoe's findings and conclusions, appreciate it.

R Walter, 11/09/2015 at 11:32 am
2200 Gb would be 300 billion metric tons.

2,200,000,000,000/7.3=301,369,863,014 metric tons of total oil extracted, yet of be extracted, past production and future production.

If consumption is 10 million metric tons burned each day, it is 3,652,500,000 tonnes per year consumed by the gaping maws of industry to allow civilization be in the gluttony mode, with half of it gone, 150,000,000,000 tonnes to go, then there is a fifty year supply in the ground and under the seas and oceans.

The metric system is of an advantage when calculating the numbers, IMO.

Thanks to Robert Wilson for the links to L.F. Ivanhoe's findings and conclusions, appreciate it.

Schinzy, 11/08/2015 at 6:28 pm
https://www.project-syndicate.org/commentary/debt-threatens-global-economy-by-richard-kozul-wright-2015-11#9bVidMsfaVX73OEz.99

Global debt has grown some $57 trillion since the collapse of Lehman Brothers in 2008, reaching a back-breaking $199 trillion in 2014, more than 2.5 times global GDP, according to the McKinsey Global Institute. Servicing these debts will most likely become increasingly difficult over the coming years, especially if growth continues to stagnate, interest rates begin to rise, export opportunities remain subdued, and the collapse in commodity prices persists.

Much of the concern about debt has been focused on the potential for defaults in the eurozone. But heavily indebted companies in emerging markets may be an even greater danger. Corporate debt in the developing world is estimated to have reached more than $18 trillion dollars, with as much as $2 trillion of it in foreign currencies. The risk is that – as in Latin America in the 1980s and Asia in the 1990s – private-sector defaults will infect public-sector balance sheets.

Dennis Coyne, 11/08/2015 at 6:48 pm
Hi Schintzy,

If global growth stagnates, interest rates won't rise by much. So high interest rates and low GDP growth is not a very realistic scenario. Very poor monetary policy could accomplish it (like Volcker in the 80s), but we may have learned something since then about monetary policy.

[Mar 04, 2016] In their fanatical crusade against Russia, the EU countries have opted for a catastrophic energy policy that has rendered them global economic growth laggards

peakoilbarrel.com

Ulenspiegel, 03/03/2016 at 7:10 am

"The EU, which gets 30 percent of its gas from Russia, was equally hungry for the pipeline, which would have given its members cheap energy and relief from Vladimir Putin's stifling economic and political leverage."

That is nonsense. The issue is that Russia has quite limited leverage: They can not replace the European customers on short notice – pipeline chain producer to certain custrumers – and they urgently need the income.

The more interesting question for Russia is how to cope with a customers who may reduce the demand for NG by 1% per year for the next few decades.

Ves, 03/03/2016 at 8:25 am
"The issue is that Russia has quite limited leverage: They can not replace the European customers on short notice"

Leverage is always mutual in the gas trade that involves long term contracts and long gas supply lines. It is like marriage :-)

"The more interesting question for Russia is how to cope with a customers who may reduce the demand for NG by 1% per year for the next few decades."

I am not sure that this is the case.
"Gazprom's gas exports to Europe – including Turkey – had increased to 158.6 billion cubic meters in 2015 with a 8.2 percent increase compared to 2014."

Stavros H, 03/04/2016 at 2:51 pm
@Ulenspiegel : No it is anything BUT nonsense.

The EU's domestic production of natural gas, including non-EU member Norway, is already in terminal decline and will be declining into the future by almost 2% per year until it reaches zero.

Unless the EU can find alternative sources of natural gas at competitive prices, Russia remains the only economical option, hence the extremely high stakes over the Syrian War.

Moreover, the EU's "Green Energy" policies are an outright, insolvent disaster. Windmills and solar panels can never and will never compete with hydrocarbons and don't let any muppet claim otherwise. If wind and solar were anywhere remotely viable sources then why would anyone give a toss over the Middle East at all? The degree to which "alternative energy" is uneconomical can be seen from the EU's extremely high energy costs, far and away the highest in the world. In their fanatical crusade against Russia, the EU countries have opted for a catastrophic energy policy that has rendered them global economic growth laggards. All this, just so that Russia's gas exports could be kept at the absolute minimum.

What Russia seeks to achieve vis-a-vis Europe, is to force/encourage/compel the EU to integrate by as much as possible with Russia. What NATO (and especially the US and Euro-Atlanticists) most fear is that a Russia rich in capital and technology would be the world's dominant geopolitical player.

This is what is at stake in the current Global Hybrid War.

[Mar 04, 2016] shale gas production will peak in 2017 nationwide and then begin a rapid productivity decline

peakoilbarrel.com

ezrydermike , 03/04/2016 at 12:29 pm

from Desmogblog of all places…

"It was a tumultuous week in the world of hydraulic fracturing ("fracking") for shale oil and gas, with a few of the biggest companies in the U.S. announcing temporary shutdowns at their drilling operations in various areas until oil prices rise again from the ashes."

http://www.desmogblog.com/2016/02/28/top-drillers-us-shut-down-fracking-operations-oil-prices

ezrydermike , 03/04/2016 at 12:33 pm
And if the sordid news for the frackers were not bleak enough on the bottoming out of oil prices, David Hughes - a former oil industry geoscientist and current fellow with the Post Carbon Institute - recently delivered sworn testimony to the North Carolina Utilities Commission that shale gas production will peak in 2017 nationwide and then begin a rapid productivity decline.

http://desmogblog.com/sites/beta.desmogblog.com/files/J%20David%20Hughes%20Affidavit-2-19-16.pdf

AlexS , 03/04/2016 at 1:26 pm
Despite strengthening oil prices, U.S. oil and gas rig count is down 13 units.
Oil rigs: -8
Gas rigs: -5

Horizontal rigs: -8
Directional: -5
Vertical: unchanged

All key LTO basins have lost oil rigs:
Permian: – 6 (to 156)
Bakken: -3 (33)
Eagle Ford: -1 (40)
Niobrara: -1 (15)

Cana Woodford: +5 oil rigs ; -4 gas rigs (apparently same rigs were re-classified)

[Mar 03, 2016] The meeting of oil-producing countries will be held on March 20th in Russia

Notable quotes:
"... The meeting of oil-producing countries will be held on March 20th in Russia, the Minister of oil of Nigeria, Emmanuel Kachikwu, announced. According to him, it will be attended by representatives of countries who are OPEC members and countries that are not members in the organization. Mr. Kachikwu noted that producers seek to restore oil prices to $50 per barrel ..."
peakoilbarrel.com
Ves, 03/03/2016 at 8:36 am
SS,

here is some good news. You have heard it first from me here on POB 2 weeks ago. We are moving in direction of restoring the prices to acceptable level that major producers can live temporarily.

"The meeting of oil-producing countries will be held on March 20th in Russia, the Minister of oil of Nigeria, Emmanuel Kachikwu, announced. According to him, it will be attended by representatives of countries who are OPEC members and countries that are not members in the organization. Mr. Kachikwu noted that producers seek to restore oil prices to $50 per barrel."

[Mar 03, 2016] Russia can not replace the European customers but US neocons are trying to kick Russia out of Europe

Notable quotes:
"... Instead, it reprieved the fading remnants of the military-industrial-congressional complex, the neocon interventionist camp and Washingtons legions of cold war apparatchiks. All of the foregoing would have been otherwise consigned to the dust bin of history. ..."
"... The Saudis geopolitical goal is to contain the economic and political power of the kingdoms principal rival, Iran, a Shiite state, and close ally of Bashar Assad. The Saudi monarchy viewed the U.S.-sponsored Shiite takeover in Iraq (and, more recently, the termination of the Iran trade embargo) as a demotion to its regional power status and was already engaged in a proxy war against Tehran in Yemen, highlighted by the Saudi genocide against the Iranian backed Houthi tribe. ..."
"... But the Sunni kingdoms with vast petrodollars at stake wanted a much deeper involvement from America. On September 4, 2013, Secretary of State John Kerry told a congressional hearing that the Sunni kingdoms had offered to foot the bill for a U.S. invasion of Syria to oust Bashar Assad. In fact, some of them have said that if the United States is prepared to go do the whole thing, the way weve done it previously in other places [Iraq], theyll carry the cost. Kerry reiterated the offer to Rep. Ileana Ros-Lehtinen (R-Fla.): With respect to Arab countries offering to bear the costs of [an American invasion] to topple Assad, the answer is profoundly yes, they have. The offer is on the table. ..."
"... Gazproms gas exports to Europe – including Turkey – had increased to 158.6 billion cubic meters in 2015 with a 8.2 percent increase compared to 2014 ..."
peakoilbarrel.com
Longtimber , 03/02/2016 at 7:35 pm
Stockman's Tales of western intervention into the ME Oil Puzzle.
"The Trumpster Sends The GOP/Neocon Establishment To The Dumpster"
"And most certainly, this lamentable turn to the War Party's disastrous reign had nothing to do with oil security or economic prosperity in America. The cure for high oil is always and everywhere high oil prices, not the Fifth Fleet"

http://davidstockmanscontracorner.com/the-trumpster-sends-the-gopneocon-establishment-to-the-dumpster/

likbez , 03/02/2016 at 10:50 pm
Longtimber,

Thank you.

It goes all the way back to the collapse of the old Soviet Union and the elder Bush's historically foolish decision to invade the Persian Gulf in February 1991. The latter stopped dead in its tracks the first genuine opportunity for peace the people of the world had been afforded since August 1914.

Instead, it reprieved the fading remnants of the military-industrial-congressional complex, the neocon interventionist camp and Washington's legions of cold war apparatchiks. All of the foregoing would have been otherwise consigned to the dust bin of history.

Yet at that crucial inflection point there was absolutely nothing at stake with respect to the safety and security of the American people in the petty quarrel between Saddam Hussein and the Emir of Kuwait.

Compare with the recent article by Robert F. Kennedy, Jr. in Politico:
http://www.politico.eu/article/why-the-arabs-dont-want-us-in-syria-mideast-conflict-oil-intervention/

Having alienated Iraq and Syria, Kim Roosevelt fled the Mideast to work as an executive for the oil industry that he had served so well during his public service career at the CIA. Roosevelt's replacement as CIA station chief, James Critchfield, attempted a failed assassination plot against the new Iraqi president using a toxic handkerchief, according to Weiner. Five years later, the CIA finally succeeded in deposing the Iraqi president and installing the Ba'ath Party in power in Iraq. A charismatic young murderer named Saddam Hussein was one of the distinguished leaders of the CIA's Ba'athist team.
… … …

The EU, which gets 30 percent of its gas from Russia, was equally hungry for the pipeline, which would have given its members cheap energy and relief from Vladimir Putin's stifling economic and political leverage. Turkey, Russia's second largest gas customer, was particularly anxious to end its reliance on its ancient rival and to position itself as the lucrative transect hub for Asian fuels to EU markets. The Qatari pipeline would have benefited Saudi Arabia's conservative Sunni monarchy by giving it a foothold in Shia-dominated Syria. The Saudis' geopolitical goal is to contain the economic and political power of the kingdom's principal rival, Iran, a Shiite state, and close ally of Bashar Assad. The Saudi monarchy viewed the U.S.-sponsored Shiite takeover in Iraq (and, more recently, the termination of the Iran trade embargo) as a demotion to its regional power status and was already engaged in a proxy war against Tehran in Yemen, highlighted by the Saudi genocide against the Iranian backed Houthi tribe.

Of course, the Russians, who sell 70 percent of their gas exports to Europe, viewed the Qatar/Turkey pipeline as an existential threat. In Putin's view, the Qatar pipeline is a NATO plot to change the status quo, deprive Russia of its only foothold in the Middle East, strangle the Russian economy and end Russian leverage in the European energy market. In 2009, Assad announced that he would refuse to sign the agreement to allow the pipeline to run through Syria "to protect the interests of our Russian ally."
… … …

But the Sunni kingdoms with vast petrodollars at stake wanted a much deeper involvement from America. On September 4, 2013, Secretary of State John Kerry told a congressional hearing that the Sunni kingdoms had offered to foot the bill for a U.S. invasion of Syria to oust Bashar Assad. "In fact, some of them have said that if the United States is prepared to go do the whole thing, the way we've done it previously in other places [Iraq], they'll carry the cost." Kerry reiterated the offer to Rep. Ileana Ros-Lehtinen (R-Fla.): "With respect to Arab countries offering to bear the costs of [an American invasion] to topple Assad, the answer is profoundly yes, they have. The offer is on the table."

Ulenspiegel , 03/03/2016 at 7:10 am
"The EU, which gets 30 percent of its gas from Russia, was equally hungry for the pipeline, which would have given its members cheap energy and relief from Vladimir Putin's stifling economic and political leverage."

That is nonsense. The issue is that Russia has quite limited leverage: They can not replace the European customers on short notice – pipeline chain producer to certain customers – and they urgently need the income.

The more interesting question for Russia is how to cope with a customers who may reduce the demand for NG by 1% per year for the next few decades.

Ves , 03/03/2016 at 8:25 am
"The issue is that Russia has quite limited leverage: They can not replace the European customers on short notice"

Leverage is always mutual in the gas trade that involves long term contracts and long gas supply lines. It is like marriage :-)

"The more interesting question for Russia is how to cope with a customers who may reduce the demand for NG by 1% per year for the next few decades."

I am not sure that this is the case.

"Gazprom's gas exports to Europe – including Turkey – had increased to 158.6 billion cubic meters in 2015 with a 8.2 percent increase compared to 2014."

[Mar 01, 2016] Russia is ready for the implementation of the freeze of oil production

peakoilbarrel.com
likbez, 03/01/2016 at 8:25 pm
Looks like Russian bear after being hit in the head and robbed at gun point starts slow awakening from hibernation. The honchos of Russian oil companies are now officially onboard for the freeze and some of them want more drastic measures. They have a discussion of "stabilization of Russian economy" (which means stabilization of oil prices) with President Putin, which means that Putin got his marching orders from oil oligarchs, some of which wants "quid pro quo" from the government (not to increase taxes on oil despite budget deficit). Details are scarce. But previously hapless head of Rosneft Igor Sechin lamented about the situation he drove his company into, being completely unprepared to the oil price crush. May be he got promises of additional loans to keep the company afoot.

Generally Russian performance in this crises leaves to me the impression of complete incompetence on high level. Especially unimpressive is Alexander Novak – the Russian Minister of Energy. He speaks like a typical neoliberal. This is when more centralized economy should score points and they instead were taken for the ride and continued to buy the US Treasuries. Why not to buy Russia oil for the strategic reserve instead, like China did ? I think Russia still does not have any state strategic oil reserves (the only major country in such a position).

Russia is ready for the implementation of the freeze of oil production

Slightly edited Google translation

Izvestia.ru

President Vladimir Putin and the heads of major Russian oil companies discussed implementation of decisive measures to stabilize the Russian economy in view of increased volatility of world markets.

As a start Russia is ready to join the group of countries within and outside OPEC, which approved the proposal to freeze the level of production of oil in 2016 at January level. Such production limits can be implemented by a joint agreement of key countries, that is already was put on table on Feb 16, 2016 by Saudis, Russia, Qatar and Venezuela and now is at the stage of multilateral discussion with other oil exporting countries. The final decision is expected somewhere in March on a new meeting of Ministers of oil producing countries.

This meeting at the Kremlin was chaired by Vladimir Putin and was attended by all key representatives of the Russian oil industry - the Chairman of the Board of "LUKOIL" Vagit Alekperov, the General Director "Surgutneftegaz" Vladimir Bogdanov, the head of Board "Gazprom oil" Alexander Dyukov, the President of the company "Bashneft" Alexander Korsik, the General Director of Zarubezhneft Sergey Kudryashov, the head of "Tatneft" Nail Maganov, President of "Rosneft" Igor Sechin, the head of the Independent oil and gas company Eduard Khudainatov.

In addition, the Russian minister of energy Alexander Novak and the head of the presidential administration Sergei Ivanov, as well as aide to President Putin Andrei Belousov also participated in this meeting.

This year Alexander Novak held a series of meetings with Ministers of oil-producing countries. In February, the negotiations in the Qatari capital and it was proposed to fix the production at the level of January. In January, Russia produced 46,006 million metric tons of oil with gas condensate. This is 1.5% more than in January 2015. Average daily production amounted to 10.9 million barrels.

Before the meeting, when everybody was sitting at the table, Vladimir Putin held a short private consultation with Alexander Novak. After that Putin opened the meeting with the following statement:

"As the Minister reported to me, some of you have more radical suggestions (for the countries - exporters of oil. - Izvestia) for the stabilization of oil markets, but about this particular measure (fixation of production at the level of January. - "The news") as I understand something close to a consensus already exists.

The purpose of our meeting today is to hear from each of the heads of the companies represented here personally the opinion of each of you on the subject of the discussion. How do you really feel about the current situation and measures that need to be taken ?"

CEOs of major Russian companies remained silent while journalists were present. Only the General Director "Tatneft" Nail Maganov and Chairman of the Board "Gazprom oil" Alexander Dyukov start grinning, because these companies in January of this year recorded a growth of production relative to January of last year (by 4.2% and 5.6% respectively, according to the Central Department of Control of Fuel and Energy Complex).

After those introductory remarks journalists were asked to leave the meeting.

The meeting did not last long. After the meeting ended, Minister Alexander Novak in a press conference said to journalists that all heads the Russian companies who were present supported this international initiative. He stated that:

The implementation of this freeze should give a positive impulse on oil markets. It increases the predictability of behaviors of key market participants, which should lead to the reduction of volatility…

Today, the total surplus of world oil production is estimated to be around 1.5 million barrels per day. If you freeze the level of production on the level of January, 2016 and the demand increases by 1.3 million to 1.5 million barrels a day, the oversupply in the market will be eliminated at the end of the year. And we already saw some signs of stabilization of the market after this measure was announced.

Alexander Novak also noted that this freeze may not only reduce price volatility but also shorten the period of depressed oil prices to the end of 2016, when in his opinion oil prices can return to the $50-60 per barrel range. He noted that as of today 15 oil producing countries have publicly declared his readiness to sign the agreement.

According to the Minister, they represent around 73% of world oil production. The exact format of the agreement, in which the key is the method of monitoring of compliance, is yet to be determined.

The sighing of the freeze agreement can happen at another meeting of oil ministers in March. According to Alexander Novak, even if Iran does not join the agreement, the market will still stabilize, as Iran still has a very low level of production and can't increase it fast. Due to this countries-signers of the agreement can make an exception for Iran and increase its ceiling over the January 2016 level.

Freezing production at least will stop flooding the market with new volumes of oil in the delusionary pursuit of "market share", commented on the event the analyst of FC "Discovery Broker" Andrei Kochetkov. It will more be influenced by the financial strength of companies and countries as well as the real costs of production from the depleting fields. On average, traditional oil wells lose 3-5% of production volume each year, he said. Accordingly, if the flow of new investments in the field slow down to a halt, the global market might lose another 3-4 million barrels per day of the production at the end of the year. This drop even if less drastic as stated will increase the pressure on oil prices said the expert.

There should not be any major problem for Russian companies with freezing the production of oil on January, 2016 level said the head of the analytical company of the Small Letters Vitaly Kryukov. We should not fear that this measure damage our fields, given that in Western Siberia production continues to fall, he said.

That, of course, might lead to less drilling in some places but will not affect the commissioning of new projects that were under construction. For example, LUKOIL is expected to launch new projects this year in the Caspian sea, but at the same time they are quickly losing the volume of production in Western Siberia.

The second topic discussed at the meeting with the President was the taxation of Russian oil companies. The heads of the companies have asked the head of state in the medium term, not to raise taxes and to keep the current system of taxation while the current turmoil with oil prices exist. In his after the meeting interview Alexander Novak stated that Vladimir Putin is now aware about the position of the heads of Russian oil companies on this subject, but this issue still needs to be discussed inside the government.

[Feb 28, 2016] No sign of Peak Oil

Notable quotes:
"... Once this project is completed DECC will be able to better quantify system costs to inform policy decisions. Any future policy development, such as future renewable support, will be informed by the improved evidence base developed through this project . ..."
"... The additional costs of having variable generation on the system are low and for the most part renewable generators already pay these costs, said Renewable UKs director of policy, Dr Gordon Edge. If were going to talk about system costs, then we also need to talk about the undoubted economic benefits that wind generators also bring, he added. ..."
"... At a White House meeting between the CIAs director of plans, Frank Wisner, and John Foster Dulles, in September 1957, Eisenhower advised the agency, We should do everything possible to stress the holy war aspect, according to a memo recorded by his staff secretary, Gen. Andrew J. Goodpaster. ..."
"... When oil is selling for below its full life cycle production cost; when the industrys revenue has fallen by $2.3 trillion per year in the last two years; when the Saudis are borrowing money to pay their bills; when the nation with the largest petroleum resource on the planet cant afford toilet paper for its citizens; when hundreds of US producers are going out of business; when the world is using petroleum eight times faster than it is finding it; when the Etp Model said that this was going to happen years ago -– yep, I believe it. ..."
Peak Oil News and Message Boards

Nor, for that matter, of peak coal or gas. Fossil fuels, said to be on the path for an effective demise in the rich world later this century, will actually continue to fulfil the major part of our energy needs for the foreseeable future. So says the latest BP Energy Outlook .

... ... ...

...As oil prices dropped steeply in 2014, the once-dominant OPEC producers kept the taps open, looking to maintain market share in the face of surging US competition, rather than cutting production to force prices up. However, the forecasters were wrong in this case as well. Rather than decimating the North American shale oil producers, the weaker ones went to the wall but many carried on pumping.

The costs of fracking (and re-fracking) and drilling multiple horizontal wells from a single well-head had come down to a point at which losses were bearable, albeit further drilling was discouraged. Breakeven cost for US oil in general is about $36 per barrel, although the average for shale is around $58 (see breakeven cost for top oil exporters ). The figure for Saudi Arabia, in contrast, is just $9.90.

Nevertheless, the consequences of continuing low oil prices are worse for Middle Eastern countries and other 'cheap' oil producers because their economies are also heavily dependent on oil exports. So, while a single industrial sector may take a hammering in the USA, Saudi Arabia needs about $105/barrel to balance its budget ( Fiscal breakeven cost for the top oil-dependent economies ). For such countries, the economic and social costs could be severe, while shale oil production can be scaled back but then quickly revived when the market picks up.

On a more parochial note, plans in EU member states for continued expansion of renewable energy were based on a projected reducing need for subsidies as conventional energy prices rose steadily. Now, however, it begins to look as though subsidies will escalate for the foreseeable future. In the UK, for example, the realities of photovoltaics having very limited potential at such a high latitude and the building of more onshore wind farms meeting continued resistance from local communities has made offshore wind an increasingly attractive proposition politically.

Politically attractive maybe, but hardly so economically. As last week's newsletter pointed out, offshore wind farm operators are being offered energy prices of at least £115 per MWh, over £20 more than the much-criticised strike price for electricity from the proposed Hinkley C nuclear plant ( (Guaranteed) power to the people ). Even these inflated prices, paid for by consumers, don't take account of the additional costs of transmission, grid strengthening and conventional backup.

The result is a rethink of at least some aspects of the subsidy regime and a somewhat lukewarm attitude to renewables in the UK (although Germany seemingly is set to push ahead with yet more wind and solar, seemingly oblivious to the negative consequences of the policy instruments chosen: replacement of clean and flexible gas by new lignite stations). The much-vaunted prospects of carbon capture and storage (CCS), always just over the horizon and apparently destined to remain so, has had yet another false start as funding for a demonstration project has been pulled.

Even the renewable energy industry itself if not united. Power firm Drax urges biomass subsidy rethink puts the case for biomass being a more cost-effective option than other renewables, taking into account additional costs not normally included in the headline figures. The £105 per MWh paid to Drax for energy generated mainly from imported American wood pellets is certainly higher than the maximum of £82.50 paid for the latest onshore wind farms. However, an analysis conducted for the energy generator by NERA Economic Consulting and Imperial College argues that the overall cost to consumers of decarbonisation could be £2bn lower if biomass power stations were allowed to bid for new renewable energy contracts.

The precise figures can be criticised, but the thrust of the argument is undeniable: the only valid way of comparing competing technologies is to analyse the overall system cost. The Department of Energy and Climate Change is said to be looking into the use of whole system costing, with work due to finish shortly. According to energy minister Angela Leadsom, "Once this project is completed DECC will be able to better quantify system costs to inform policy decisions. Any future policy development, such as future renewable support, will be informed by the improved evidence base developed through this project".

Let's hope so. The wind and solar industries will doubtless put up strong resistance, because the higher-than-reported overall costs of their technologies is a secret they would rather was not made public. We can expect to hear much more of this kind of thing: "The additional costs of having variable generation on the system are low and for the most part renewable generators already pay these costs," said Renewable UK's director of policy, Dr Gordon Edge. "If we're going to talk about system costs, then we also need to talk about the undoubted economic benefits that wind generators also bring," he added.

What those 'undoubted economic benefits may be to those other than the foreign-owned suppliers of wind turbines and photovoltaic panels, we wait to find out.

Martin Livermore

The Scientific Alliance

Cambridge Network


Harquebus on Sat, 27th Feb 2016 7:42 pm

The massive global debt bubble is the surest sign yet that we have reached peak oil. Without growth in oil production, there can not be economic growth.

Debt was used to buy today's oil yesterday. Facilitated by cheap credit, we are currently producing tomorrow's oil today. Tomorrow's oil, the last of the easy stuff, will have been depleted and the debts will not only have not been paid but, will have gotten bigger.

Peak oil mates, peak oil. This is it. We are living it now. As I have stated previously, those that deny peak oil do not understand it.

Plantagenet on Sat, 27th Feb 2016 8:48 pm

As long as global oil production continues to go up, we are not at peak oil.

We'll see a global peak in oil production sometime in the next 10 years, but we aren't quite there yet.

CHEERS!

Harquebus on Sat, 27th Feb 2016 9:32 pm
Yeah but, oils ain't necessarily oils. A lot of oil production is called oil but, it isn't sold on the oil market so, it isn't really oil.
Truth Has A Liberal Bias on Sat, 27th Feb 2016 9:45 pm
Global oil production is down. July 2015 exceeds January 2016. And it will continue to decline as we go forward.
Apneaman on Sat, 27th Feb 2016 9:53 pm
Yergin's a fuctard cheerleader and any prize can be bought. Pulitzer – Big fucking deal. Obama has a Nobel and drone bombs babies and their mommas daily.
Apneaman on Sat, 27th Feb 2016 10:01 pm
Middle Eastern Wars Have ALWAYS Been about Oil

"Robert Kennedy Jr. notes:

For Americans to really understand what's going on, it's important to review some details about this sordid but little-remembered history. During the 1950s, President Eisenhower and the Dulles brothers - CIA Director Allen Dulles and Secretary of State John Foster Dulles - rebuffed Soviet treaty proposals to leave the Middle East a neutral zone in the Cold War and let Arabs rule Arabia.

Instead, they mounted a clandestine war against Arab nationalism - which Allen Dulles equated with communism - particularly when Arab self-rule threatened oil concessions.

They pumped secret American military aid to tyrants in Saudi Arabia, Jordan, Iraq and Lebanon favoring puppets with conservative Jihadist ideologies that they regarded as a reliable antidote to Soviet Marxism [and those that possess a lot of oil].

At a White House meeting between the CIA's director of plans, Frank Wisner, and John Foster Dulles, in September 1957, Eisenhower advised the agency, "We should do everything possible to stress the 'holy war' aspect," according to a memo recorded by his staff secretary, Gen. Andrew J. Goodpaster."

more

http://www.globalresearch.ca/middle-eastern-wars-have-always-been-about-oil/5510640

twocats on Sat, 27th Feb 2016 10:05 pm

Rising debt might be a sign of approaching peak oil – excess energy is diminishing and therefore unable to general excess capital production in society in order to pay interest and principal.

But in and of itself Debt is not definitive. Even if the return on energy were between 1 and 0 (costs more input than you get out), which would result in ginormous debts, but we could still produce more total volume on a consistent basis, by the standard definition, no peakum oilum.

Now, its been at least six years that many have suggested we need to change the definition of peak oil to mean: amount of Net Energy Available (from oil) to Society (nate hagens, et al). And from that perspective, we've almost certainly reached peak net available energy or peak oil.

the question also about the different "liquids" going into the number is a solid question.

http://www.rsc.org/chemistryworld/2014/02/peak-oil-not-myth-fracking

Will any of these questions make a difference to the MSM or doubters on this site? No.

rockman on Sat, 27th Feb 2016 10:53 pm

And again if folks keep allowing themselves to be baited into debates about PO dates and the silly position that supply won't always meet demand (which it will thanks to the modulation effect of pricing) then the reality of the complexity of the Peak Oil Dynamic will be ignored.

Just consider how few citizens don't understand that the current low oil prices are a result of the diminishing capacity to develop meaningful new long term reserves.

shortonoil on Sun, 28th Feb 2016 7:07 am
"Breakeven cost for US oil in general is about $36 per barrel, although the average for shale is around $58 (see breakeven cost for top oil exporters). The figure for Saudi Arabia, in contrast, is just $9.90."

Crude stayed in the $100 range for almost four years. According to the quote above the industry was making incredible profits during that period; so incredible that one would have to be an absolute idiot to believe it? At $36 the profit margin on gross sales would have been 278%. On $58 it would have been 172%, and on $9.90 it would have been 1010%.

That very easily explains how the Shale industry managed to accumulate over a $1 trillion in debt to build annual sales of $360 billion. A 172% profit margin on gross sales will do that using a combination of the New Math, and some very creative accounting. These guys are quoting EBITDA numbers, not break even numbers. Of course, they think they have enough stupid, credulous readers that they can get away with it.

Put it in print, and someone is dumb enough to believe it!

eugene on Sun, 28th Feb 2016 9:31 am

Another of the endless debates amongst people with little or no knowledge of the energy situation but lots of opinions with each convinced their opinion is absolutely the correct one. I'd add mine but I'm just an old man sitting in the woods with an "opinion" based on very limited knowledge. One thing I do "know", oil is vital to our lifestyle and is a finite resource of which we have extracted most of the cheap, easy stuff so will have to produce ever more expensive stuff. I like the word "stuff" as it appears to me the definition of oil is changing according to the agenda of the person speaking.

onlooker on Sun, 28th Feb 2016 11:21 am

"Just consider how few citizens don't understand that the current low oil prices are a result of the diminishing capacity to develop meaningful new long term reserves." But some even here say it is a glut. Hahaha. Funny isn't Rockman. Oh and for those who may not know Rockman is in the Oil business he is not just some armchair pundit.

shortonoil on Sun, 28th Feb 2016 11:49 am

When the world is burning 32 Gb per year, and discovering 4Gb to replace the 32 it just used, you apparently have a "glut". Is that the result of how you use your Facebook account? Maybe its a Twitter brain thing?

onlooker on Sun, 28th Feb 2016 12:09 pm

Short thanks. Another person in the trenches. Not some denier, BAU cheerleader or shill. Because they are the only ones harping on how Shale/Tar will bring about a revolution of new energy. Of those 4Gb, I wonder now much of that per year we will even be able to bring to market. I think depletion and the fizziling out of LTO will make in short term a mockery of the so called glut and its advocates.

JuanP on Sun, 28th Feb 2016 2:12 pm

Russian oil production is at post soviet peak. http://oilprice.com/Energy/Energy-General/Russian-Production-Is-At-A-Post-Soviet-High-Despite-Oil-Freeze.html

Apneaman on Sun, 28th Feb 2016 2:26 pm
Cambridge Network

"The Cambridge Network is a commercial business networking organisation for business people and academics[1][2] working in technology fields in the Cambridge area of the UK."

"Activities[edit]
The organisation's mission is "We raise the game for business in Cambridge, and through that we try to raise the game for economic growth in the UK."

https://en.wikipedia.org/wiki/Cambridge_Network

http://www.cambridgenetwork.co.uk/directories/?atoz=A

rockman on Sun, 28th Feb 2016 2:43 pm

Looker – I wish I didn't have to result to an worn anology but it works so perfectly: the blind men trying to ID an elephant by each analyzing individual parts of the critter. PO (or more correctly the POD…peak oil dynamic) is more than the date of global max oil production, storage volumes at Cushing, KSA production levels, debt incurred by the US shale players, frac'ng costs, US oil exports, a lot of dilbit made with Eagle Ford condensate, etc, etc, etc.

It's no different the arguing that critter is a snake because only it's trunk has been analyzed. We see the same approach here: PO isn't a factors because we see XXX or PO is the end of life as we know it because YYY is happening.

Some don't like the POD because it's to inclusive. Which is the same as saying we shouldn't study the entire anatomy of the elephant in order to ID it because that data is "too inclusive".

As I've stated before: the oil price spike which lead to the shale boom which led to increased US oil production while cooling the global economy and leading to consumers who were unable/unwilling to pay more then $40 per bbl which led to a drastic decline of shale rigs and a slew of oil companies pushed to and over the brink of failure: collectively these events along with others indicate to true nature of the PO dynamic.

At this point if one can't grasp the entire picture I doubt they ever will.

IOW it's a f*cking elephant. LOL.

onlooker on Sun, 28th Feb 2016 2:58 pm

Thanks for the clear explanation of recent peak oil dynamics Rock. I being a layman have tried to understand what is going on relative to PO and other matters affecting the planet as the least we can do is know what the heck is really going on in the world we live. Now if they still don't understand then they are dense or have an agenda.

shortonoil on Sun, 28th Feb 2016 3:17 pm
"Short thanks. Another person in the trenches."

When oil is selling for below its full life cycle production cost; when the industry's revenue has fallen by $2.3 trillion per year in the last two years; when the Saudis are borrowing money to pay their bills; when the nation with the largest petroleum resource on the planet can't afford toilet paper for its citizens; when hundreds of US producers are going out of business; when the world is using petroleum eight times faster than it is finding it; when the Etp Model said that this was going to happen years ago -– yep, I believe it.

It's not that hard to get your head wrapped around, unless your head is made out of concrete.

Anonymous on Sun, 28th Feb 2016 3:37 pm

That was my point Ape

The word 'Cambridge' is intended to be associated with Cambridge University. Thus=Academic, credible source.

And 'Science' of course, is pretty self explanatory. It is there to reinforce the 'Cambridge' association.

Sort of doubling up on the implications that this source is a credible, rational, impartical scientific org. (LOL). And not,(its hopeed) as you point out, basically, a high sounding cheerleader for UK commercial energy corporations. And others I am sure…

makati1 on Sun, 28th Feb 2016 7:01 pm
Recent signs of oil's peak…

"Global Trade Is Collapsing--Chinese Exports To Brazil Down 60% In January Y/Y; All Containerized Shipments To LatAm Down 50%"
"Bond Vigilantes Push $258 Billion of Oil Debt Past Junk"
"Halliburton to cut 5,000 jobs in new round of layoffs"
"Slashing Start for European Energy Sector"
"Apache Slashes 2016 Budget By More Than Half, Sees Lower Output"
"World outside US and Canada doesn't produce more crude oil than in 2005"
"Shale Oil Architect Predicts Doom for Some Drillers Amid Slump"
"UK Oil Industry At The "Edge Of A Chasm"
"Mansion sales and discount dining: oil rout hits Houston's rich"
"Watch Five Years of Oil Drilling Collapse in Seconds"

And for chuckles:
" Former Mexican President To Donald Trump: 'I'm Not Gonna Pay For That [Expletive] Wall,' Vicente Fox Says"
"Clinton Defends Ongoing Anarchy In Libya: We Are Still In Korea, We Are Still In Germany"

http://ricefarmer.blogspot.fr/

[Feb 28, 2016] Russia predicts a shortage of oil in four years

Looks like Russian oil minister decided to play the role of a regular supply and demand jerk, may be intentionally. Generally Russians unlike Chinese's behaved like idiots in this situation. Inread of building state petroleum reserves like Chinese did and later selling oil later at reasonable prices they continued to dump the oil on market helping Saudis to crash the price. Russia is still buying US treasures instead as if oil is not as reliable as currency. Russia is the only major country that does not have strategic oil reserves.
Alexander Novak mostly sounded like a regular member of the neoliberal cosmopolitan elite not as a Russian oil minister who is interested in well-being of Russian citizens. As Soros aptly mentioned such people have more in common with Wall Street financial oligarchs that with interests of their own country.
Whether this was intentional of this is a his assumed position for Die Welt I do no know.
Notable quotes:
"... Given the pricing environment we expect in 2016 further reductions of 15-40%. Thus, this year 30 largest companies in the world can cut $200 billion from capex budgets . At the same time, we see that rise in in the price of the credit for oil producers in the US hinders their access to financial markets. ..."
"... On a global scale in the short term, these effects will be minimal. However, in the medium and long term they will be dramatic, because many of the cancelled projects were important for stability of oil supply from the point of view of growing global demand, have been postponed or frozen. So we can assumed that after 2020 a stable supply of oil is under threat. In this regard, Russia seeks to remain a stable supplier of oil globally. ..."
24.02.2016 | Die Welt/InoSMI

Russia is suffering from extremely low oil prices. Energy Minister Alexander Novak warned us against the dramatic consequences of falling oil prices for the entire world. After the oversupply of oil, according to him, a severe deficit is coming.

Die Welt: You have agreed with the oil Minister of Saudi Arabia on the limitation of oil production. At first the market reacted to the results of your negotiations negativity and oil prices continued to fall. What, in general, gives us this arrangement?

Alexander Novak: I Think our meeting with the colleagues from Saudi Arabia, Qatar and Venezuela were very productive. The main result was a preliminary agreement on limiting oil production in 2016 at the level of January of this year. The final decision will be made when this initiative will join most other oil producers. In our view, this approach would gradually reduce the oversupply and stabilize prices at a level that will ensure the stability of the industry in the long term.

- Let's assume that others will agree with this. However, experts believe that price stabilization is necessary not just freeze, and a reduction in oil production.

- Such proposals are periodically received. But we think that this may soon lead to an abrupt artificial increase in prices. Because such a rise in prices entails the inflow of speculative money into capital-intensive projects, for example, in the production of shale oil that, in turn, will lead to rapid increase of oil production and as a result another round of oil prices fall. Of crucial importance is the level of prices at which US shale oil is unprofitable. If the oil price moved higher higher, we will again be faced with the effect of plummeting oil prices. That is why we need mutual consultation in order better to access the current supply and demand situation.

- But the decline in prices over the last 18 months ago is already having a serious negative impact on producers with higher costs.

- Yes, albeit slower than expected. This is a change from previous oil price cycles, when only the oil exporting countries influenced the market by voluntarily reducing the production. But after the invention of the technology for shale gas extraction in 2009, the situation has changed.

- So you agree with the International energy Agency, believes that in 2016, contrary to expectations, oil prices stabilize?

- In general yes. Because when in mid-2014 oil prices began to decline, many thought that soon shale oil will fall prey of it. However, this did not happen. We can see that the price at around $100 per barrel was too high, but shale oil companies for more then a year managed to withstood the falling oil prices and continue oil extraction is volumes comparable with the volume at peak. Demand and supply grow equally, and the gap between them did not became smaller. That's why in 2016 everyone is adjusting their predictions about the end of low oil prices regime.

Limited access to funding by high cost producers and delay in implementation of capital intensive projects will play a role in the alignment of supply and demand in the market and the volume of oil production outside OPEC, primarily in North America, will be reduced. For example, in the US, the number of drilling rigs already has declined by two-thirds.

- Not only in the United States. All the world's leading oil companies reduced their investment programs by 10-35%. What reductions we can expect in 2016?

- Given the pricing environment we expect in 2016 further reductions of 15-40%. Thus, this year 30 largest companies in the world can cut $200 billion from capex budgets . At the same time, we see that rise in in the price of the credit for oil producers in the US hinders their access to financial markets.

- What can be the consequences of reducing investments in the foreseeable future?

- On a global scale in the short term, these effects will be minimal. However, in the medium and long term they will be dramatic, because many of the cancelled projects were important for stability of oil supply from the point of view of growing global demand, have been postponed or frozen. So we can assumed that after 2020 a stable supply of oil is under threat. In this regard, Russia seeks to remain a stable supplier of oil globally.

- Can Russia to help stabilize prices, "selling" to OPEC and other major producers the idea to reduce production?

- We haven't made exact calculations. For Russia, this is a difficult question due to the technological aspects of oil extraction, the current state of the projects under construction and climatic conditions. You can understand our situation from a simple fact: Russia has more than 170 thousand wells, and to reduce their number very difficult. And in the middle East much less wells: Saudi Arabia produces the same amount of oil as we do, with only 3500 wells. In addition, our oil companies are independent joint-stock companies which are independently planning the level of their own production.

- The head of the second largest Russian oil company LUKOIL Vagit Alekperov said recently that the Russian oil sector is most afraid that the government will change tax rules for him.

- I share the opinion of the head of the Lukoil concern. We needs a stable tax system. Oil prices, along with the ruble and so fell and to this created for oil companies the problems of financing of the oil extraction. If in addition we change the rules of taxation, the future would become impossible to predict and the companies would be unable to plan their activities for more then one year. We in the last two years had introduced some tax breaks which should encourage the production at new fields in Eastern Siberia and the far East. Their effect is already noticeable: in 2015, we got from those fields additional 60 million tons.

- And in the Arctic region?

- This region now is off-limit due to the costs. But the investments in the extraction of Okhotsk and Caspian seas have risen because they are attractive from the point of view of taxation. In the long run we are - regardless of the dynamics of oil prices - will have to change the tax system. Together with the Ministry of Finance we will develop in the course of this year proposals.

- Russia, as you know, is struggling with declining production in current fields. If the investment will be reduced, won't this mean that in 2017 the volume of oil production will fail?

- Much will depend on the situation with oil prices and the ruble exchange rate. All our major companies confirm that they will be able to maintain production at the current fields at the current level. However, at the current oil prices, investment in new projects will be reduced - at least by 20-30%.

- In the medium to long term additional load on unconventional and expensive projects will fall and Western sanctions. How noticeable the effect of them now?

- Impact on overall production is extremely small. In the last two years we have extracted from these "difficult" fields were we do need western technology just 18 million tons, or around 3% of our total production. The growth of their share is a matter of the future.

- However, without the Western technologies to achieve it will be difficult.

- I expect the opposite effect. Since our companies cannot cooperate with the West in this area, they had to do this work independently and to develop new technologies in Russia.

- Let me get this straight: in the next few years Russia can't eliminate technological handicap with the West. This will not work.

At least, we achieve our goals. In three years we seriously upgraded the level of our current technology. Professionals, scientific and practical basis of all that we have. Many companies are working on it.

- As for the gas sector, the European Commission seeks to obtain access to all of the gas contracts. What is that in your shows?

- It's hard for me to comment on it. We believe that commercial contracts are a matter between the two companies.

- Are you concerned about the behaviour of the EU?

- European authorities want the contract on deliveries was coordinated by the European Commission. However, many countries disagree. Much will depend on them.

- Differences between the EU and Gazprom have a long tradition. For a long time Gazprom attitude to the EU's was aggressive and disrespectful. Now his tone was softer. How do you evaluate the bilateral relations at the moment?

- We believe that Russia is a reliable supplier and that the relationship is beneficial to both parties. Thus the entire current infrastructure was created. Now, however, we have to expand it taking into account the fact that production in Europe will decrease and demand will increase.

But differences remain. Can we call the position of Europe a constructive policy ?

- Political aspects now take precedence over the economic aspect of natural gas and oil supplies. So, for political reasons the project "South stream" was blocked . For political reasons, there are attempts to prevent the expansion of Nord stream. It is obvious that the construction of the first two lines of the "Nord stream" conformed to European legal norms. However, the attitude to the two new branches is different. In addition, we see that in the new energy strategy of the EU does n mention relations with Russia. How can this be considering the fact that we are the main supplier of energy to EU? We hope, however, that pragmatism will prevail. We need to develop relations based on mutual interests, guarantees and long-term prospects.

- I can assume that you are counting on the support of Germany to expand the "Nord stream".

- We presume that we are talking, primarily, about economic project. Major energy companies of Europe are interested in him. Because this is a long term project. And we will compete with other suppliers of natural and liquefied gas, which is the rate now.

[Feb 28, 2016] The USA want to limit Russian supplies of energy to Europe by all means possible

Notable quotes:
"... the Saudi Arabia of natural gas ..."
fuelfix.com
It has been an historic week for the US energy market, as hot on the heels of US oil exports is the first US LNG export cargo – leaving from the Sabine Pass terminal. Yet while this is viewed as a game-changer for the US – as it can now truly live up to its moniker as 'the Saudi Arabia of natural gas' – exports could be just as big a game-changer for parts of Europe.

By reducing its reliance upon Russia, Europe will not only see benefits from a pricing perspective, but it will also help limit the political power that Russia holds over many countries. The chart below starkly illustrates Russia's dominance in Europe, with a number of countries leaning on it for the majority of its gas needs.

In total, Russia supplies a third of Europe's natural gas. Nonetheless, some estimates suggest that the US could catch up with Russia within a decade in terms of exports into Europe. Estimates also suggest that US exports could drop European LNG prices by 25% over the next two years. This benefit would be widespread across the continent; Germany relies on Russia for half of its gas needs, Italy for a third, while countries such as Bulgaria lean on Russia for the vast majority of its supplies.

eu natural gas

[Feb 27, 2016] Gazprom plant weitere Pipeline nach Europa

Google translation.
welt.de
Gazprom is under time pressure

Since the Gazprom long-favored pipeline project South Stream by the end of 2014 due to the European resistance was abandoned, Russia tirelessly seeks for new Pipelinevarianten to secure its dominant position in the lucrative European market. It also tries to hedge supplied. But suppied to Chinese market are not so quick to occur.

From the point of view of the Russians, time is short, because the Kremlin and Gazprom have decided, the problematic gas transit through Ukraine to Europe from 2019 to shut down, and on other routes to redirect. The fundamental plan does not change, even if Russia's energy Minister last week in an Interview with the "world" did not exclude "that part of the deliveries to continue over the Ukraine is running".

As a substitute for South Stream was Russia has been an Alternative at the ready: the "Turkish Stream" Pipeline should Gas through the Black sea and via Turkey to the EU border. But it has not been more than a flash in the pan, because the project since the Russian-Turkish upheavals of the past few months has been put on hold.

New Pipeline plans to increase the pressure on Brussels

The revival of the Poseidon Pipeline is therefore to become more important. Also as a Signal to the Mediterranean countries. The namely were recently very angry about the Gazprom group, the majority of its energy in the intended Expansion of the Nord Stream Baltic sea pipeline (Nord Stream 2) to Germany to invest in it.

Nord Stream 2 should the Plan to the existing capacity of 110 billion cubic meters of double, which the majority of Europe in particular Russian gas in Germany would arrive. For comparison: ITGI Poseidon has the original concept after only eight billion cubic meters of capacity, equal to one tenth of the German annual consumption. In total, Gazprom delivered in the previous year 158,56 billion cubic meters of Gas to Europe and, thus, eight percent more than in the weak Exportjahr 2014.

For Nord Stream 2 has Gazprom, with Shell, BASF, E. on, very interesting to count and OMV five leading European gas companies for a consortium and won the support of individual EU member States. The EU Commission is, however, resists this project, because it is a violation of the EU energy Package, and sees the dependence on Russian Gas supplies anyway would rather like to reduce. With the Poseidon project would have Gazprom at least a small lever to the participants of Nord Stream 2 to get your pressure in Brussels to increase.

[Feb 20, 2016] US shale gas bluff: combined net natural gas exports from the US and Australia to Europe would be approximately zero.Such a replacement for Russian gas

Notable quotes:
"... And as I commented on another post, a couple of years ago Citi Research put the gross decline rate from existing US gas production at about 24%/year. This would be the rate of decline in the absence of new wells. Note that Louisiana showed a 20%/year net rate of decline in total marketed gas production from 2012 to 2014 (this was the net rate of decline after new wells were put on line). So, the Louisiana case history would seem to confirm the CIti estimate. ..."
"... The estimated volumetric loss of US gas production from existing wells, about 17 BCF/day per year, matches or exceeds the 2014 annual dry gas production of every country in the world, except for the US Russia (2014 BP data). ..."
peakoilbarrel.com

Jeffrey J. Brown , 02/20/2016 at 12:31 pm

Oilpro.com had an article about the EU importing LNG from the US and Australia, in order to reduce their reliance on Russian gas. My response:

Based on production and consumption data through 2014 (BP), and ignoring changes in storage volumes, in 2014 Russia had net natural gas exports of 16 BCF/day, Australia had net natural gas exports of 2.5 BCF/day and the US had net natural gas imports of 3 BCF/day. So, as of 2014 anyway, combined net natural gas exports from the US + Australia would be approximately zero.

And as I commented on another post, a couple of years ago Citi Research put the gross decline rate from existing US gas production at about 24%/year. This would be the rate of decline in the absence of new wells. Note that Louisiana showed a 20%/year net rate of decline in total marketed gas production from 2012 to 2014 (this was the net rate of decline after new wells were put on line). So, the Louisiana case history would seem to confirm the CIti estimate.

The estimated volumetric loss of US gas production from existing wells, about 17 BCF/day per year, matches or exceeds the 2014 annual dry gas production of every country in the world, except for the US & Russia (2014 BP data).

So, while the Marcellus/Utica Play has some very impressive wells, in round numbers it seems likely that we need the productive equivalent of a new Marcellus Play every year, or the productive equivalent of all of Qatar's gas production every year, just to offset the declines from existing US wells–as the overall US rig count has declined about 70% from the rig counts we have seen in recent years.

[Feb 13, 2016] Armenia-Iran Deal May Threaten Russia's Natural Gas Market

11 February 2016 | OilPrice.com
By Eurasianet

Economic hopes are rising in Armenia that the country can serve as a trade conduit for Iran now that international sanctions against Tehran are being lifted.

Armenia has long-standing ties to Iran, and is a member of the Russia-led Eurasian Economic Union (EEU), a factor that potentially increases its attractiveness as a trade partner for Tehran. Yerevan is "an important avenue for both Iran to export through Armenia into that large combined market [EEU], and as a platform for Western engagement in the now opening Iranian market," noted Richard Giragosian, director of the non-governmental Regional Studies Center in the Armenian capital, Yerevan.

The World Bank's country director for Armenia, Laura Bailey, told RFE/RL's Armenian service in January that stalled energy partnerships between Iran and Armenia could be the first sector to take off.

Indeed, National Iranian Gas Exports Company Managing Director Alireza Kameli announced on February 7 that Iran is considering increasing five-fold the 1 million cubic meters of gas it sends daily to Armenia, state-run Iranian media reported. At the same time, plans for a new power line to increase Armenia's electricity exports to Iran are developing.

The gas deal appears to fit into a larger, regional scheme. In December, quadripartite talks took place during which Armenia, Iran, and the Black Sea countries of Georgia and Russia agreed to establish a coordinating group on establishing an energy corridor linking the four countries.

"We should spare no efforts to connect the Persian Gulf with the Black Sea [via Georgia, Armenia's northern neighbor]," Iranian President Hassan Rouhani told his Armenian counterpart, Serzh Sargsyan in a January 24 phone conversation, Iran's MehrNews agency reported.

Negotiations already have occurred between Iran and the Georgian government about sending Iranian gas to Georgia via Armenia, Iranian state media reported Kameli, the Iranian gas official, as saying in early January.

Some Armenian experts are tempering their optimism with caution. Russian-owned companies control an estimated 80 percent of Armenia's energy sector. Energy giant Gazprom runs the gas pipelines from Iran and on to Georgia, and it tends to look askance at competitors who might try to muscle in on their markets. At the same time, no clear sign has emerged that Moscow opposes an increase in Iranian gas exports to Armenia. The Sputnik news agency, a Kremlin mouthpiece, promptly reported Kameli's announcement on February 7.

Iranian affairs specialist Armen Vardanian at Yerevan's Armenian Institute of International and Security Affairs believes that "Russia will embrace the projects that will not contradict its national interests."

[Feb 08, 2016] Slowdown of the oil biz in North Dakota and Eagle Ford with depeletion rates as high as twelve percent. Depletion never slips

Shale economics have significantly changed over the last two years to worse as depletion never sleeps
Notable quotes:
"... In my view shale economics have significantly changed over the last two years. The monthly decline rate (see below chart) reached in the Eagle Ford oil basin nearly 12%. ..."
"... Legacy decline is close to 150 kb/d and month since a few months now and production is declining and currently stands at around 1.2 mill b/d. The above decline rate is legacy decline divided by actual production. ..."
"... Of course the actual decline is lower as there is also production from new wells, yet my chart shows the internal decline which has to be replaced by companies and is just an indicator how fast the Red Queen has to run. ..."
"... It is in my view exactly the increasing demand for capital to keep oil and gas production stable, which weakens the bond market, which then spills over to the economy and stock market. As companies did not want to curb production voluntarily, they are forced now to do so over a collapsing bond market. ..."
"... The real wall is when it takes 1 unit of energy to get 1 unit of energy out. Ehh – no – that cant be. What equipment would they use to get that out? So we need a functioning steel industry. We actually need a bit more than that. An oil platform incorporates pretty much everything modern in this world, engines and motors of all kinds. Computers. And we might want to get to the platform. So we need some helicopters. A complicated machine. ..."
"... Depletion never sleeps. ..."
"... The 10% decline rate without continuous infill drilling is particularly worrying. Mostly infill drilling accelerates production but does little for overall capture (sometimes a bit of increase in recovery, but sometimes it can have the opposite effect) so the more they are used the more the decline rate will increase after the peak. I know the 10% figure is for offshore fields but a) this is not encouraging for the prospects of deepwater development b) there have been recent large infill drilling programs in Russia and ME – if the result is that their declines tend towards 10% rather than 2 or 3 in the near term then look out. ..."
"... The export issue is also relevant to consider. Say a 10% reduction in production would likely be a 20% reduction in export availability (maybe a bit more because of EROI issues and growing domestic use, especially if wars and social unrest escalate) – which would crush most European and a good few developing countries economies even if they were looking reasonably healthy, which they obviously arent, and without the ever increasing waves of refugees coming their way. ..."
peakoilbarrel.com
Heinrich Leopold, 02/08/2016 at 5:32 am
Daniel, Ron, shallow sand,

In my view shale economics have significantly changed over the last two years. The monthly decline rate (see below chart) reached in the Eagle Ford oil basin nearly 12%.

Although Marcellus has somewhat stabilized and Utica, which is still in its infancy, even improved, it is in my opinion just a matter of time when decline rates increase for all shale plays.

This trend has not been baked into many economic and forecasting models – quietly assuming constant decline rates – and comes now as a surprise for many analysts and investors.

Ron Patterson , 02/08/2016 at 8:21 am
Heinrich, what's the source of your Eagle Ford data?
Heinrich Leopold , 02/08/2016 at 1:41 pm
Ron,

It comes from the EIA drilling report. Legacy decline is close to 150 kb/d and month since a few months now and production is declining and currently stands at around 1.2 mill b/d. The above decline rate is legacy decline divided by actual production.

Of course the actual decline is lower as there is also production from new wells, yet my chart shows the internal decline which has to be replaced by companies and is just an indicator how fast the 'Red Queen' has to run.

It is in my view exactly the increasing demand for capital to keep oil and gas production stable, which weakens the bond market, which then spills over to the economy and stock market. As companies did not want to curb production voluntarily, they are forced now to do so over a collapsing bond market.

As Eagle Ford is one of the most mature plays, it serves in my opinion as a blueprint for more recently started basins such as Marcellus and Utica.

gwalke , 02/08/2016 at 9:53 am
Interested in this, as North Dakota's decline rate stalled (i.e. many years stopped declining all together, or even grew) in October and November as operators opened the chokes on their old wells.
Ron Patterson , 02/08/2016 at 10:03 am
That can't be right. Got a link for that bit of information?
Anton Koffield , 02/07/2016 at 10:59 pm
Interesting article about the slowdown of the oil biz in North Dakota:

http://www.nytimes.com/2016/02/08/us/built-up-by-oil-boom-north-dakota-now-has-an-emptier-feeling.html?action=click&contentCollection=Opinion&module=MostPopularFB&version=Full&region=Marginalia&src=me&pgtype=article

This was completely predictable; I just didn't think it would slow down by 2015/2016…I thought the head of steam might have lasted till ~ 2018-2021 or so.

Will the boom times come roaring back, bigger and crazier than ever?

None of us know.

What we do know: The Earth is finite, the amount of FFs in the ground is finite, and depletion never sleeps, and the distribution of FF deposits (size, frequency) seems to follow the power law…and the cost to raise each bbl of oil and mcf of methane and ton of coal will continue to rise.

Barring a breakthrough which produces inexpensive, compact, ubiquitous 'Mr. Fusion' power reactors, the outlook looks bleak. Even with a 'Mr. Fusion' breakthrough, other source and sink limits would end up eating humanity's lunch if population increase was no slowed, stopped, and reversed at some point, and the seemingly endless increase in per capita consumption slowed and then reversed as well. But a 'Mr. Fusion' breakthrough would sure give us some breathing room to mature as a species and figure out how to bring our existence into some kind longer-term sustainable future, one in which we do not exterminate many of the other species on Earth.

I would bet that Ron's "lead pipe cinch" prognosis will turn out to be correct.

Volvo740 , 02/08/2016 at 12:25 am

As grim as the depletion curves from Campbell et al looked like, those were best case scenarios.

The real wall is when it takes 1 unit of energy to get 1 unit of energy out. Ehh – no – that can't be. What equipment would they use to get that out? So we need a functioning steel industry. We actually need a bit more than that. An oil platform incorporates pretty much everything modern in this world, engines and motors of all kinds. Computers. And we might want to get to the platform. So we need some helicopters. A complicated machine.

And even if we have all of that, we still done have any energy left for the rest of the economy.

Depletion never sleeps.

George Kaplan , 02/08/2016 at 9:10 am
Volvo740 –

"As grim as the depletion curves from Campbell et al looked like, those were best case scenarios."

That was pretty much my thought as well. This is one of the more depressing posts here. I've been thinking we'd muddle through for a good few more years even as oil depleted but if these figures are born out I'm not so sure.

The 10% decline rate without continuous infill drilling is particularly worrying. Mostly infill drilling accelerates production but does little for overall capture (sometimes a bit of increase in recovery, but sometimes it can have the opposite effect) so the more they are used the more the decline rate will increase after the peak. I know the 10% figure is for offshore fields but a) this is not encouraging for the prospects of deepwater development b) there have been recent large infill drilling programs in Russia and ME – if the result is that their declines tend towards 10% rather than 2 or 3 in the near term then look out.

In addition for the ME – I cannot see how the ruling regimes can be maintained once serious decline sets in and is recognised as such by the populace (i.e. that there will be no recovery). As the cradle to grave social programs have to be continuously cut then there must be some kind of uprising, which you'd expect would lead to significant, and maybe permanent, disruption of production (and therefore less overall recovery).

The export issue is also relevant to consider. Say a 10% reduction in production would likely be a 20% reduction in export availability (maybe a bit more because of EROI issues and growing domestic use, especially if wars and social unrest escalate) – which would crush most European and a good few developing countries' economies even if they were looking reasonably healthy, which they obviously aren't, and without the ever increasing waves of refugees coming their way.

[Feb 08, 2016] Chesapeake has hired Kirkland and Ellis as its bankruptcy attorney which a typical step before formal Chapter 11 filing

Signs of troubles for the USA natural gas production. This is a larger player and if it is in trouble the whole US shale gas industry is in trouble too.
Notable quotes:
"... Keep oil at $30 and gas at $2 through summer and there will be a very long list of these. ..."
"... Note how the Dow/S P continues to trade lockstep with crude. ..."
"... Not until the executives have configured themselves to the extent possible within insider trading regs. After that, maybe theyll have plans . ..."
"... A total of 74 energy companies, including Energy XXI Gulf Coast Inc. and Halcon Resources Corp., are expected to have significant difficulties sustaining their debt, according to the report. ..."
"... BTW, Halcon is down 12.8% today, 67.5% year-to-date, and 96% in one year. ..."
peakoilbarrel.com

George Kaplan , 02/08/2016 at 10:05 am

Zero hedge info. so treat accordingly:

http://www.zerohedge.com/news/2016-02-08/chesapeake-plummets-over-20-report-it-has-hired-bankruptcy-attorneys

shallow sand , 02/08/2016 at 10:35 am
Accurate report, shares about halved, currently $1.77.

Keep oil at $30 and gas at $2 through summer and there will be a very long list of these.

Note how the Dow/S&P continues to trade lockstep with crude.

How long is it going to take the corns to realize these prices are going to take the whole sucker down?

Longtimber , 02/08/2016 at 11:55 am
Trading halted. No Bueno for Shareholders.
http://seekingalpha.com/symbol/CHK
shallow sand, 02/08/2016 at 1:39 pm
Question. How many of the rigs still left in onshore lower 48 are contracted out to companies that have filed for BK protection in 2015 or 2016?

For example, how many rigs does Samson have running? Magnum Hunter, etc?

AlexS, 02/08/2016 at 2:20 pm
Chesapeake Energy Says It Has No Plans to Pursue Bankruptcy

http://www.bloomberg.com/news/articles/2016-02-08/chesapeake-says-it-has-no-plans-of-pursuing-bankruptcy

Watcher, 02/08/2016 at 3:26 pm
Not until the executives have configured themselves to the extent possible within insider trading regs. After that, maybe they'll have "plans".

AlexS, 02/08/2016 at 2:35 pm

U.S. Companies at Risk of Default Near Crisis Peak, Says Moody's

http://www.bloomberg.com/news/articles/2016-02-03/u-s-companies-at-risk-of-default-near-crisis-peak-says-moody-s

The number of U.S. companies that have the highest risk of defaulting on their debt is nearing a peak not seen since the height of the financial crisis.
With the energy industry crumbling amid record low oil prices, the number of companies with the lowest credit ratings reached 264 as of Feb. 1, just shy of the high of 291 set in April 2009, according to a report by Moody's Investors Service Wednesday. That's a 44 percent jump in the past 12 months, Moody's said.
"The majority of new additions came from oil & gas ….

A total of 74 energy companies, including Energy XXI Gulf Coast Inc. and Halcon Resources Corp., are expected to have significant difficulties sustaining their debt, according to the report."

BTW, Halcon is down 12.8% today, 67.5% year-to-date, and 96% in one year.

[Feb 03, 2016] Global gas market braced for price war

Do FT honchos know that the USA is importer of natural gas and will stay as such in foreseeable future due to decimation of shale oil/gas sector. See http://www.eia.gov/dnav/ng/ng_move_impc_s1_a.htm
Notable quotes:
"... Finally, like Saudi Arabia in oil, Gazprom is one of the lowest-cost gas producers. According to calculations by Mr Henderson at OIES, the cost to Gazprom of delivering its gas to Germany is $3.5 per mmbtu (million British thermal unit) - compared with an estimated $4.3 per mmbtu break-even for US LNG supplies despite US gas prices trading near 16-year lows. ..."
"... Gazprom's contract prices, which are largely tied to oil prices, have kept pace with the spot gas market decline and are likely to fall further in the next six to nine months. ..."
FT.com

... ... ...

Just as Saudi Arabia is the main swing producer for the global oil market thanks to its ability to ramp up production if needed, Gazprom is the main holder of spare capacity in the global gas market.

According to Gazprom executives, the company has about 100bn cu m of spare production capacity - thanks largely to investments made on over-optimistic assumptions about future gas demand - equivalent to almost a quarter of its production and about 3 per cent of world output.

And just as Saudi Arabia has been unnerved by the prospect of US shale oil producers eroding its market share, Gazprom faces a similar prospect in the gas market. The flood of cheap gas unleashed by the US shale boom has prompted a wave of US LNG projects in recent years. The first cargo of LNG from the "lower 48" contiguous states of the US is due to be shipped in the next two months, and the total export capacity under construction is equivalent to two-thirds of Gazprom's exports to Europe.

Finally, like Saudi Arabia in oil, Gazprom is one of the lowest-cost gas producers. According to calculations by Mr Henderson at OIES, the cost to Gazprom of delivering its gas to Germany is $3.5 per mmbtu (million British thermal unit) - compared with an estimated $4.3 per mmbtu break-even for US LNG supplies despite US gas prices trading near 16-year lows.

Chart - Gazprom has the lowest production costs

Put all those facts together, and it would seem to make sense for the Russian company to push down prices to keep US LNG out of the market.

"Now the market is getting excited about it; but also the Russians have done their maths and they know they can win if it happens," says Thierry Bros, European gas analyst at Société Générale in Paris.

Such a move would be cheaper to implement now because European gas prices have already fallen dramatically - spot UK gas prices are down 50 per cent in the past two years. Gazprom's contract prices, which are largely tied to oil prices, have kept pace with the spot gas market decline and are likely to fall further in the next six to nine months.

Mr Bros estimates it would cost Gazprom $1.3bn in lost revenues to price US LNG out of the market this year - less than 1 per cent of its historical annual sales.

Gazprom executives have studied the economics of the price war approach and are discussing the issue, according to people familiar with the company's thinking.

At a meeting with investors in New York this week, Alexander Medvedev, Gazprom's deputy chief executive, argued that low spot prices in Europe had already made US LNG supplies uneconomical. "Despite the prevailing view on the market that North American LNG can change the current pricing model in Europe, in reality this is not the case at all," he said.

... ... ...

[Dec 30, 2015] Moscow to supply coal, electricity to Ukraine without prepayment

Dec 27, 2014 | RT Business
Russia will supply coal and electricity to Ukraine without prepayment, Vladimir Putin's spokesman said. Ukraine is trying to cope with energy problems amid an ongoing crisis in the industrial east.

This proves the president's political goodwill and support, "particularly before New Year," said presidential spokesman Dmitry Peskov on Saturday, as quoted by TASS.

"Against all the odds as President Putin said earlier in the hard times he had never given up the consistent policy towards supporting the Ukrainian people and providing real and not eventual support, due to the critical energy situation Putin took a decision on such supplies regardless the absence of prepayment, which is the condition of making them," he added.

Moscow will supply 500,000 tonnes of coal to Ukraine per month, according to Russian Vice-Premier Dmitry Kozak.

"If an additional corresponding agreement may be reached, we're ready to supply another 500,000 tonnes, totally 1 million tonnes of coal, to Ukraine in order to help it solve energy problems," Kozak told Rossiya24 TV channel.

He added that energy carriers will be supplied to Ukraine on easy terms. However, the amount of electricity planned to be transferred to Ukraine is unclear.

The decision comes in response to Ukraine's request, he said. Previously, Ukraine's President Petro Poroshenko ordered the Energy Ministry to discuss the supply issue with Russia.

Earlier on Saturday, the Ukrainian Regional Development Ministry said on its website that Kiev will begin receiving Russian coal without prepayment, citing the presidential press service. However, the ministry's spokeswoman, Nadezhda Petruniak, later said that the website had been hacked and the ministry did not have any information about energy supplies from third countries.

Kozak expressed hope that Russia's decision will help ensure reliable energy supplies to Crimea. On Friday, Ukraine again fully ceased electric power supplies to Crimea without any notification, said Crimea's fuel and energy minister, Sergey Yegorov. Power cuts started on Wednesday.

Though Crimea joined Russia in March, it is still dependent on power supplies from Ukraine. It is suffering from supply disruptions due to a production deficit in Ukraine.

Ukraine is experiencing a shortage of gas and coal for public utilities such as heating and electricity. The gas shortage was prompted by Ukraine's debt to Russia, while the lack of coal is related to military operations in the Donetsk Basin, which houses most of the country's coal mines.

[Dec 24, 2015] European Leaders Cry Foul Against Germany's Support for Gas Pipeline

Dec 21, 2015 | OilPrice.com
There is a growing chorus in Europe against Germany's support to expand a major natural gas pipeline from Russia over fears that it will leave Europe more dependent on their eastern neighbor.

The Nord Stream 2 would build on the existing Nord Stream pipeline, a conduit that delivers Russian natural gas to Germany via the Baltic Sea. Crucially, the project cuts out Ukraine, a key strategic objective for Russia since the original project's inception.

The latest $11 billion expansion would double the pipeline's current capacity of 55 billion cubic meters of gas per year. From Russia's perspective, the project will increase market share and gas sales; from Germany's point of view, the project increases sources of supply. Nord Stream 2 was originally conceived of years ago, but in June 2015 Gazprom signed a memorandum with Royal Dutch Shell and OMV to move forward.

Nick Cunningham is a Vermont-based writer on energy and environmental issues. You can follow him on twitter at @nickcunningham1

[Dec 04, 2015] Turkish Stream is now officially cancelled. All the eggs are now in the same basket: Nord Stream II.

Notable quotes:
"... "Firstly, Ukraine is an energy-deficient country and the tendency we observe today will continue and develop: gas production in Ukraine will decline and consumption will grow. We proceed from the assumption that the Ukrainian economy will develop successfully. The present-day level of gas consumption clearly shows that Ukraine has not solved all of its economic problems. In this regard, gas supplies to Ukraine will increase in the medium and long term. Secondly, if a merger takes place, we will load Ukraine's gas transmission system to the extent possible and it surely means additional income that is significant for the Ukrainian budget. At the same time, if the Ukrainian gas transmission system is loaded with some 95 billion cubic meters of gas per year, we know well that it may deliver 120 and even 125 billion cubic meters with a particular level of investments in modernization and reconstruction, of course. And if small investments are made in new compressor stations and pipeline loops, we may probably speak of 140 billion cubic meters of gas. However, we realize that European gas consumption will grow. According to our estimates, gas demand in Europe may grow up to 130-140 billion cubic meters of gas by the turn of 2020." ..."
"... Remember the story with biogas, wonderful – 20 per cent by 2020, and mass media start writing that it will enable escaping from dependence on Russia. Then we find out that biogas is there, together with food supply problems, etc. Then we observed the European Union's wonderful program – "20-20-20". I think, there's no need of deciphering it – everyone knows about it. And again mass media say that it will enable reducing dependence on Gazprom and Russia. The same thing is with shale gas. First, no one will cope with shale gas transportation, because it is too expensive, add transport – and it is already a business with no prospects. I have a plea for mass media – would you please stop frightening Europe, stop frightening everyone around with Russia and Gazprom. For Europe it is a real blessing that it has such a powerful neighbor with such conventional gas reserves. Exploration of non-conventionals [N.B.: Non-conventional energy resources] may end with no results, as experience of certain countries shows. So let's live in peace and friendship and contribute to strengthening Russia's contacts and ties with the European Union and Ukraine . ..."
marknesop.wordpress.com
karl1haushofer, December 3, 2015 at 9:42 am
Turkish Stream is now officially cancelled. All the eggs are now in the same basket: Nord Stream II. Hopefully the US/UK/Baltics/Poland front will not be able to stop it. Because otherwise Russia is stuck with Ukraine as a transit country.
marknesop, December 3, 2015 at 10:45 am
Well, I don't think they want to stop it. They want the gas the same as before – they just want it on their own terms. Brussels wants to exercise control over whose gas goes through the pipeline, so that if they are have a "spat" with Russia, they can stop orders of Russian gas and bring some at-this-moment-unknown supplier's gas through the same pipeline, probably Azerbaijan.

Read this 2011 press conference with Gazprom; I found it while looking for a layman's explanation of what the Third Energy Package actually entails. Because it appears what is most unappealing to it from Gazprom's point of view is that it limits vital investment in gas futures, considering it would substantially restrict long-term contracts. They could be happy with you today, buying off your competitors tomorrow. According to Brussels, that's healthy competition which ensures the customer gets the best price, while Gazprom naturally prefers to deal in long-term contracts which lock the customer in, although they are usually willing to talk out a deal if it looks like the customer is really unhappy because unhappy customers are bad for business, even in the gas industry.

Right away, you notice that Europe accepts long-term contracts, but nonetheless takes the position that long-term capacity supply orders upset the market. As Gazprom correctly points out, these two views cannot reasonably coexist.

In 2011, Gazprom was still considering a joint venture with NaftoGaz Ukraine, and intended to actually increase gas transit through Ukraine while simultaneously building South Stream. They were also considering a merger, and Miller said if that came about, Ukrainian gas consumers would pay the same prices as Russia. Look how far they are away from that now – funny old world, innit? Here was Miller's vision, at the time, for a Gazprom-NaftoGaz merger:

"Firstly, Ukraine is an energy-deficient country and the tendency we observe today will continue and develop: gas production in Ukraine will decline and consumption will grow. We proceed from the assumption that the Ukrainian economy will develop successfully. The present-day level of gas consumption clearly shows that Ukraine has not solved all of its economic problems. In this regard, gas supplies to Ukraine will increase in the medium and long term.
Secondly, if a merger takes place, we will load Ukraine's gas transmission system to the extent possible and it surely means additional income that is significant for the Ukrainian budget. At the same time, if the Ukrainian gas transmission system is loaded with some 95 billion cubic meters of gas per year, we know well that it may deliver 120 and even 125 billion cubic meters with a particular level of investments in modernization and reconstruction, of course. And if small investments are made in new compressor stations and pipeline loops, we may probably speak of 140 billion cubic meters of gas. However, we realize that European gas consumption will grow. According to our estimates, gas demand in Europe may grow up to 130-140 billion cubic meters of gas by the turn of 2020."

You can see, I'm sure, why Brussels didn't like it. Under the Third Energy Package, the operator of the gas transit system will be elected by the European Union on a tender basis. You can see, I'm sure, why Gazprom didn't like that. If the merger between Gazprom and NaftoGaz Ukraine had come about, Ukrainians would have paid Russian domestic prices, in a word, forever.

What Europe's position boils down to is it wants a system whereby its suppliers do not own anything of the transit system, and the operator could be anyone depending on who sucks up to Europe the most, so that it can make its suppliers fight with one another and be assured of the cheapest prices. Until that magical sugar-daddy supplier appears that can provide steady and sustained competition to Russia, Europe is not in a very good bargaining position. But you bet that would change fast if the western alliance could get rid of Assad, partition Syria and get a Qatari gas pipeline laid across it.

Here's a poignant reminder of what might have been, which serves to point up who are the real troublemakers:

"Remember the story with biogas, wonderful – 20 per cent by 2020, and mass media start writing that it will enable escaping from dependence on Russia. Then we find out that biogas is there, together with food supply problems, etc. Then we observed the European Union's wonderful program – "20-20-20". I think, there's no need of deciphering it – everyone knows about it. And again mass media say that it will enable reducing dependence on Gazprom and Russia. The same thing is with shale gas. First, no one will cope with shale gas transportation, because it is too expensive, add transport – and it is already a business with no prospects. I have a plea for mass media – would you please stop frightening Europe, stop frightening everyone around with Russia and Gazprom. For Europe it is a real blessing that it has such a powerful neighbor with such conventional gas reserves. Exploration of non-conventionals [N.B.: Non-conventional energy resources] may end with no results, as experience of certain countries shows. So let's live in peace and friendship and contribute to strengthening Russia's contacts and ties with the European Union and Ukraine."

kirill , December 3, 2015 at 2:17 pm
See above. It is time for Russia to lay down the law. Russia can go without the $25 billion per year of lost revenues. But whole EU economies will crash into epic depressions without this energy supply. In other words, the EU is looking at TRILLIONS of DOLLARS in economic damage. The Brussels Uncle Scam cocksuckers will have to justify their actions. Russia does not have to since it is the vendor. If you are not happy, then shop the fuck elsewhere, idiots.

[Sep 27, 2015] Kiev professes itself "satisfied" with the gas price deal

Sep 27, 2015 | marknesop.wordpress.com

marknesop, September 25, 2015 at 12:34 pm

Kiev professes itself "satisfied" with the gas price negotiated in the deal, in which the fact that Ukraine's gas supply will be entirely paid for by Europe is spun as a victory for Naftogaz and Demchysin personally, after he wrestled Russia into submission and made them drop their prices.

"As customers, we're interested in a lower price". Dear God, you could laugh until you died. As customers who have to beg our boss for money because we're broke, we're interested in at least the appearance of being in control of something. Anything.

marknesop, September 25, 2015 at 3:22 pm
Ha, ha, ha!! If you were thinking "Nord Stream II in Ukrainian Perspective" could be summarized as "Wahhhh!!! I Went Crazy And Now Russia Won't Talk To Me!" crackpottery, you would be right.

Standout points are (1) Raising transit fees is normal procedure when transit volumes drop, and (2) Ukraine's transit system will register a net loss if transit drops below 40 BCm a year. The volume in 2015, while Ukraine is still being used as a transit country, is expected to top out at 51 BCm.

I would say the writing is on the wall there, and the message does not…ummm…look positive for Ukraine. You pissed in the pickles one time too often. Notably, however, although some of the reduced transit volume is due to Europe taking less gas, a stronger limiting factor is more gas being sent through Nord Stream. You can see why Europe was desperate to stop South Stream, and why it is now trying out a tough-guy approach as if it can force Russia to continue using Ukraine as a transit country, to a background of despairing wails from Ukraine.

[Aug 08, 2015] How Russian energy giant Gazprom lost $300bn

Notable quotes:
"... Since the Russians haven't rolled over the first time, the US is trying again. These days, the price of oil is determined by activity in the futures market impacting the spot price. Likewise, I expect for shares and wouldn't be surprised if someone is shorting the stock. Any oil and gas not pumped today is available to be pumped tomorrow - possibly at higher prices. Gazprom isn't going bankrupt. Neither are any of the other major oil companies. ..."
"... Therefore, he said, "today there are no conditions under which all thought that if tomorrow Russia will cease to supply gas, this same gas would be supplied by Iran." "Our production is still far from this stage", - said the president. ..."
"... "Competition should not be problematic, it should be healthy competition, should not do so to the profit only for the buyer, and the exporters suffering damage ". ..."
"... the recent Security Council vote ending the Iran sanctions also enabled was the release of ~$150 billion that was held in foreign accounts. ..."
"... When Russia responded at the sanctions by its sanctions in the agriculture I heard here the malevolent sneers there'd be a famine in Russia. Now the collapse of Gasprom, the failure of the deal with China. What a shame for The Guardian to become an yellow shit ..."
"... Seems the author is a warrior in the camp of the unnamed competitor which would like to supply its liquid costly gas.I know one direction where his bid will be welcomed at any price but for free- Ukraine ..."
"... What is happening in the oil market is a very complicated process. Do not simplify the process of digestion by eating only the headlines. The headlines are not very high-calorie product, if you certainly do not pursue the goal to lose weight. Including lose money. ..."
"... Putin has tried to shrug off the economic sanctions as no big deal, but the secret agreement between the West and Saudi Arabia to keep oil supplies high and gas prices low is really hurting Russia. ..."
"... Kuwait and Abu Dhabi can live with crude at its current level: Saudi Arabia cannot. It requires an oil price of $106 a barrel to balance the books... Not $20 ..."
www.theguardian.com

...energy giants ExxonMobil and Petro China, Gazprom's financial contemporaries back in mid-2008, have remained top performers . Norway boosted its market share and overtook Russia as western Europe's top gas supplier over the 2014-2015 winter.

... ... ...

Russia is looking to channel gas through Turkey and adding two new lines to the Baltic Nord Stream network, transporting gas over the top of Europe.

The total costs of the projects, without taking into account overruns, will reach about $25.4bn.

Beyond the construction expenses, transit costs for North Stream appear to be significantly more expensive than through Ukraine. Experts estimate that in 2014 it cost Gazprom $43 to transport1,000 cubic metres via Nord Stream compared to $33 via Ukrainian . Factored over the tens of billions of cubic metres that Gazprom wants to send through the Baltic pipes, that's a mighty extra cost just to avoid Ukraine.

Willinilli 8 Aug 2015 02:36

Lazy, lazy, lazy journalism.. Even for a business /economics journalist .. Saudi Aramco has a much larger potential market cap..

Though to be fair, it was the original FT study that was lazy.. This is just uninformed churnalism..

annamarinja airman23 8 Aug 2015 09:09

Poor airman23. Have you ever heard about Dick Cheney? Have you ever looked at the Wolfowitz Doctrine? If not, then you are very much behind the nowadays understanding of fascism and fascists. On the other hand, you are such a concrete success of Mrs. Nuland-Kagan' (and likes) travails.

annamarinja -> psygone 8 Aug 2015 09:03

Fracking? Are you serious to monger this this barbaric technique that has spurred a mass movement in the US and Canada against the ecological dangers generated by fracking? Each and every of your posts is in line with MSM "reports." It seems that you value FauxNews above else.

yemrajesh -> psygone 8 Aug 2015 07:36

Difficult to say. If the costs are true'ly low it would have reflected at the Pump. But it hasn't. Another flaw is how can oil pumped from deeper well ( Fracked Oil) is cheaper than conventional oil. It looks more like US flexing its muscles to subdue Russia. Besides its not Just Gazprom , shell, BP, Exxon , Gulf, Mobil etc also many of US vassal states are affected. It would be interesting to see how long this artificial price drop continue with zero benefit to the customers.


Kaiama 8 Aug 2015 06:07

Since the Russians haven't rolled over the first time, the US is trying again. These days, the price of oil is determined by activity in the futures market impacting the spot price. Likewise, I expect for shares and wouldn't be surprised if someone is shorting the stock. Any oil and gas not pumped today is available to be pumped tomorrow - possibly at higher prices. Gazprom isn't going bankrupt. Neither are any of the other major oil companies.

AlbertEU -> alpamysh 7 Aug 2015 17:09

The crisis of one industry necessarily will hurt other sectors. Hard-hit banking sector, which is credited US shale industry. The effect can be like an avalanche. Especially if it is strengthened by additional steps. I think for anybody is not a secret the existence of a huge number of empty weight of the dollar, which is produced by running the printing press. Oil trade is in the dollar, which in turn keeps the volume of the empty weight of the dollar. Now imagine a situation where part of the oil market has not traded more in dollars. It is equally affected, the USA and Russia.

But there is one important detail. Russia has never in its history, was a rich country (if you count all the inhabitants of Russia, not individuals). In the country there is no cult of consumption. The traditional religions of Russia, that is, those that have always existed in Russia (Orthodox Christianity, Islam and Buddhism) did not contribute to the emergence of such a cult.

Orthodoxy says plainly that material wealth is not important for a man. Wealth is only supplied in addition to achieve the main goal in the life of an Orthodox Christian. Therefore, to be poor in Russia is not a problem. This is a normal way of life. Hence the stoic resistance to any hardship, challenges, wars and so on. Expectations of great social upheaval in Russia, caused by the lowering of the standard of living is a little naive. Russia used to run in the marathon. Who would have more strength, intelligence and endurance is a big question. Geopolitics is a very strange science...

airman23 7 Aug 2015 16:31

Ooops, It's just been announced that the U.S. is adding the Yuzhno-Kirinskoye oil and gas field that belongs to Gazprom to it's sanctions list. It looks like Gazprom is gonna loose even more money. This is certainly not what the Fuehrer had in mind when he started his imperialist war of conquest in Ukraine and illegally annexed Crimea. Unintended consequences to be sure but what comes around, goes around.

John Smith -> William_Diaz 7 Aug 2015 16:05

From Iranian president from October last year:

Therefore, he said, "today there are no conditions under which all thought that if tomorrow Russia will cease to supply gas, this same gas would be supplied by Iran." "Our production is still far from this stage", - said the president.

He also said that Iran is ready to cooperate with Russia in the gas sector. "For several years we have been making efforts that countries that export gas would be able to cooperate" - he recalled. - "Competition should not be problematic, it should be healthy competition, should not do so to the profit only for the buyer, and the exporters suffering damage ".

John Smith -> William_Diaz 7 Aug 2015 15:56

Your ignorance only, with whom do you think Iran will coordinate their actions?
Who brokered them a deal? Do you think Russians are stupid?
Turkey will be not just a transit country but a hub. The EU got to built they own pipeline if they want Russian gas in 2019. Turkey will set prices.

William_Diaz -> John Smith 7 Aug 2015 15:13

Your ignorance is astounding, lol. Iran doesn't need anyone else to 'jump in', among the other things that the recent Security Council vote ending the Iran sanctions also enabled was the release of ~$150 billion that was held in foreign accounts.

There is more than enough money available for domestic investment, including a natural gas pipeline to Europe.

Have a great day!

oleteo -> JanZamoyski 7 Aug 2015 14:23

When Russia responded at the sanctions by its sanctions in the agriculture I heard here the malevolent sneers there'd be a famine in Russia. Now the collapse of Gasprom, the failure of the deal with China. What a shame for The Guardian to become an yellow shit

oleteo 7 Aug 2015 14:12

Seems the author is a warrior in the camp of the unnamed competitor which would like to supply its liquid costly gas.I know one direction where his bid will be welcomed at any price but for free- Ukraine

AlbertEU 7 Aug 2015 12:59

To kill a competitor, had to endure their own pain. Are you sure that these actions will kill the Russian oil production instead of US shale oil? In this case, Saudi Arabia has nothing to lose by increasing oil production, the same does and lowering the price of Russian oil. Recently, the Crown Prince of Saudi Arabia visited Russia.

They have a lot of something talked with Putin. Russia, the USA, Iran, Saudi Arabia are competitors.

Over the past year the United States increased the number of purchased crude oil from Russia. Saudi Arabia's oil squeezed out of the US market by their own shale oil. If Saudi Arabia could bankrupt the US oil shale industry, it (Saudi Arabia) will regain US market.

What is happening in the oil market is a very complicated process. Do not simplify the process of digestion by eating only the headlines. The headlines are not very high-calorie product, if you certainly do not pursue the goal to lose weight. Including lose money.

Yankee_Liberal 7 Aug 2015 11:37

Putin has tried to shrug off the economic sanctions as no big deal, but the secret agreement between the West and Saudi Arabia to keep oil supplies high and gas prices low is really hurting Russia. Eventually the Russian people will realize that a lot of economic pain will go away when Putin goes and they start respecting their neighbors boundaries.

andydav 7 Aug 2015 11:18

The Guardian has no idea what it is printing. Fact's are not a requirement in there story's any more EG:: Like many oil-producing countries, Saudi had got used to an era of high oil prices.

Kuwait and Abu Dhabi can live with crude at its current level: Saudi Arabia cannot. It requires an oil price of $106 a barrel to balance the books... Not $20

[Jul 29, 2015] UPDATE 1-Russia's Gazprom gas output seen at all-time low in 2015 By Vladimir Soldatkin

Jul 28, 2015 | Reuters

* Economy ministry sees Gazprom's 2015 gas output at 414 bcm

* Gazprom's gas exports down 6.2 percent in H1

* Gazprom hit by sluggish gas demand, row with Ukraine

* Average gas exporting price down to $249.7 in Jan-May

MOSCOW, July 28 (Reuters) - Russia's Economy Ministry said on Tuesday it expected gas production at Gazprom to decline to 414 billion cubic metres (bcm) this year, an all-time low, due to sluggish demand and a decline in upstream investments.

... ... ...

The ministry, citing Gazprom data, said investments into gas production in January-April fell by more than 60 percent at current prices.

... ... ...

The Kremlin-controlled company also lost its position as western Europe's top gas supplier to Norway earlier this year.

[Jul 01, 2015] Today is July 1 and Ukraine did not pay her gas bill on time

"...So now, acting according to what it believes are "European values", the Ukraine will buy gas from suppliers that have previously bought it … from Russia, which purchase is illegal, in that it acts in breach of contract with Gazprom. But such a petty matter is of no consequence to those who swear obeisance to "European values". "
vzgliad.ru
Moscow Exile, July 1, 2015 at 3:41 am
As from today, July 1, 2015, the Ukraine refuses to buy gas from Russia:

Not that the Ukraine has ever bought gas from Russia, namely paid in full for that which has been delivered to that country by the aggressor state: the Ukraine, however, has stolen plenty.

So now, acting according to what it believes are "European values", the Ukraine will buy gas from suppliers that have previously bought it … from Russia, which purchase is illegal, in that it acts in breach of contract with Gazprom. But such a petty matter is of no consequence to those who swear obeisance to "European values".

yalensis, July 1, 2015 at 3:48 am
Today is July 1 and Ukraine did not pay her gas bill on time.

(She is supposed to pre-pay for the month of July.)

Therefore, according to Gazprom Chief Alexei Miller, Ukraine has been cut off from the gas utility.

Ukrainian government responded with open blackmail:

They say if they don't get the gas, then they will cut off all electricity to Crimea!

In response, Crimean authorities convened emergency meeting. They will provide diesel generators to the most important objects on the peninsula. They will also set up mobile gas-turbine stations to supply the inhabitants with electricity.

Article goes on to quote an analyst named Mikhail Remizov. Remizov points out, that Ukraine possesses 2 major points with which it can blackmail Russia:
(1) Being a gas-transit station to Europe; and
(2) Controlling electricity supply to Crimea.

The second point is their best weapon, and it will be quite some time before Crimea can be electrically independent of mainland Ukraine. So, maybe Khrushchev wasn't such a fool, after all??

[Jun 29, 2015]Could Armenia Be The Next Ukraine

Jun 29, 2015 | finance.yahoo.com

...As in other former Soviet countries, the energy behemoth ENA remains a heavily mismanaged enterprise. This was confirmed by a recent probe, in which the energy regulator has found that suppliers and traders often use shady intermediaries to push energy managers to inflate procurement costs or steal electricity. This has led to more than EUR 70 million in losses for the company in just the last three years, according to the energy ministry.

The company's overall debt has reached $250 million. Initially, ENA has suggested a 40 percent increase in electricity tariffs in order to cover its obligations. The government of the pro-Russian president Serge Sargsyan and the quasi-independent energy regulator initially refused but ultimately had to accept a 16.7 percent rise after a series of high-level visits from Moscow. Although the government has confirmed the results of the regulator's investigation, it has decided to look the other way.

Even after the hike, power tariffs would still be just EUR 0.11 cents/kWh, or about half of what average EU households pay. At purchasing power parity, though, their impact on household budgets is much greater. According to a World Bank study, Armenians spend around 8% of their income on energy use, while consuming three times less energy per capita than people in Central and Eastern Europe, also a region where energy poverty is a widespread phenomenon.

In addition, if accepted, this would be the third consecutive power price hike in two years at a time when the economy is facing slow growth and high unemployment rate. The Armenian economy, which is heavily dependent on Russia, has faced a major downturn since the start of economic troubles for its powerful neighbor to the north. Russia is the key destination for labor migrants, who contributed more than 20% of the national income in the form of remittances in 2013 and 11 percent in 2014. In the first five months of 2015, cash transfers have halved.

The economic link with Russia is most profound in the energy sector. Apart from ENA, the Russian state, through Gazprom, owns 100 percent of the country's wholesale gas supplying company. The bulk of FDI inflows also have Russian origin, and 40 percent of them are targeting the energy sector.

In addition, Armenia imports almost all of its gas from Russia and natural gas imports comprise around 80 percent of all energy imports. Furthermore, 60 percent of the country's total primary energy supply is derived from natural gas, which is responsible for the majority of residential energy use, especially in big cities.

However, the increase in gas import prices in 2010 and the subsequent 40 percent hike in household gas tariffs pushed some urban residents to switch from natural gas to electricity for heating, which became comparatively cheaper (about one-fifth of Armenia's electricity is generated from natural gas, with the rest supplied by a number of hydro power plants and a nuclear power plant, which is currently being modernized). Hence, when power prices began to increase, the outrage in the capital, Yerevan, was easy to understand.

According to the protest leaders, the rallies are not anti-Russian in nature and the main demand of the people is a reversal to the government's power price decision. President Sargsyan seemed have backed down after he told senior officials on 26 June that the government will cover the difference between the old and the new price with budget subsidies until the end of a comprehensive audit of the ENA's activities.

Protesters, however, seem determined to stay on the streets. Deep-seated mistrust in the government's ability to implement reforms could trigger an impulse for a regime change. This is the biggest fear in Moscow, which sees the current Armenian government as an important ally in its natural backyard. Russia has been able to preserve its influence in the small Caucasian state by expanding its control over key economic sectors. This was done by recruiting senior government officials, who used Russia's influence to limit outside competition and preserve the dominant position of Russian companies in the energy sector.

If there is a change of guard in Yerevan, the established connections that have served Moscow so well, could crumble. Not surprisingly, similar to the aftermath of Ukraine's Maidan rally in early 2014, Moscow's propaganda has presented the street protests in Yerevan as a Western plot to contain Russia's influence.

In a sign of full support, Moscow provided the government with $200 million in military aid on 26 June. Armenia relies for its security on the 3,000 Russian troops stationed in the country, which have so far deterred efforts by Azerbaijan to try to reclaim the separatist republic of Nagorno Karabakh, occupied by Armenia during a bloody five-year war in the early 1990s.

Paradoxically, Russia's attempts to secure its influence and, more importantly, its energy interests in the neighborhood could backfire. While Armenian demonstrators have largely limited, domestic aims, the Russian insistence on turning the protests into an East-West clash could incite protesters to demand that the Armenian government take a sharp turn away from Moscow.

Faced with such a choice, president Sargsyan might have to abandon his close ties with Kremlin in an attempt to stay in power. This is likely to lead to economic retaliation from Russia such as gas supply cuts. The alternative, though, may be to follow the path of Ukraine's former president, Victor Yanukovych.

By Martin Vladimirov for Oilprice.com

Lithuania LNG terminal fiasco

"...Some would say there was a fine line between proud and stupid. "
yalensis, June 23, 2015 at 5:40 pm
Article about Liquified Natural Gas (LNG) terminal in Lithuania.
In Klaipėda, Lithuania, there is this LNG terminal named "Independence". The name intending to signify Lithuania's independence from Russian gas.
It was originally planned that the LNG would be sold to Estonia and Latvia. But the latter 2 countries don't want to buy it, since this LNG is one and half times more expensive than good old-fashioned Russian gas.
Not being able to sell the LNG, the company which owns the terminal, which is called "Klaipėdos nafta", turned to the Norwegian company named Statoil, which is actually the source of the natural gas, in the first place. (Turns out the gas is Norwegian, and then the Liths do something to it.)
So, "Klaipėdos nafta" asked Statoil if the latter could not sell them quite as much gas, since they can't re-sell all of it.
However, it seems they are stuck, because they have a long-term contract, whereby Norwegian Statoil delivers to Lithuania annually 540 million cubic meters of natural gas. This is the minimum required amount that Lithuania MUST buy annually, according to the contract, whether they need it or not.

Coming out of the pipe, Norwegian gas only costs between 328.9 and 365.5 dollars for 1,000 cubic meters. However, doing whatever they do it at the terminal adds a cost of 145 dollars for each 1,000 cubic meters. This includes the cost of renting the terminal and also the amortization cost of the equipment. The process of liquifying and compressing adds a cost of additional 60 dollars per 1,000 cubic meters. After that, to squeeze a very tight margin, the Lithuanian company must charge between 539 and 576 dollars per 1,000 cubic meters. Compare that to the Gazprom price for regular Russian gas, which comes to $370.

marknesop, June 23, 2015 at 10:28 pm
You have to hand it to Grybauskaitė – she certainly has a nose for business. Unfortunately, it's on the front of a big oval of cedar. Good luck with that, Lithuania. It's a good example for Poland's terminal, which Sikorski pointed out might generate gas which is more expensive, but at least they can put a Polish flag on it. I'm sure the consumers who see their gas prices achieve escape velocity will appreciate the sentiment, and smile in approval as they pay their new gigantic bills.
et Al, June 24, 2015 at 2:16 pm
I think that Poland did something similar with Qatar.

http://www.reuters.com/article/2013/09/09/poland-energy-lng-idUSL6N0H22WR20130909

…Szczesniak estimated the Qatari price to be 40-50 percent higher than that charged by Russian gas producer Gazprom .

A senior energy executive in Poland suggested the premium was even higher…
###

Dipshitz.

marknesop, June 24, 2015 at 6:23 pm
An extra $325 Million a year, if the price doesn't go up. Fookin' brilliant, that. Pride cometh expensive, what?

Some would say there was a fine line between proud and stupid. And many of those rendering such a judgment would be Poles, reading their gas bill. If they were going to lose their minds altogether on a diet of their hate, why didn't they go for a non-hydrocarbon-based energy supply?

marknesop, June 24, 2015 at 7:47 am
Ooooooo….Mr. Sahra Wagenknecht (Oskar Lafontaine, the lucky stiff) says "Fuck U.S. Imperialism!!" Is that the tide I hear, turning?

Seriously, this gives the people a clear choice – same old same-old, with national leaders pretending to govern while taking their orders from Washington on the down-low in support of strictly American strategic objectives, or a true break with America as an economic partner only.

The USA has pooh-poohed the notion of Europe actually rejecting it as ridiculous, but it wants to tread very lightly, because a lot of people are getting very fed up with a "Great Game" which is focused entirely on American benefit and in which the European members are expendable.

Putin can make hay with this if he does not get too cocky.

et Al, June 24, 2015 at 4:08 pm

…so that bridges between Russians and Europeans can be proverbially burned.

I disagree. Like over burnt toast, if you scrape off the inedible bits (all the PR fluff and bs statements vs. quite carefully selected 'smart' sanctions that are remarkably limited), most of it is still good. so, Paradise is somewhat postponed…if you will.

US and EU strategic interests are fundamentally divergent. All the papering over the cracks with the lowest common denominator actions whether by Brussels, NATO or the local dogs and cats shelter are just that. The five stages of grief, innit?

I hope I'm not wrong, but my feeling is that the US is channeling Nixon playin' crayzee.

[Jun 22, 2015] The Russian Pipeline Waltz

Jun 22, 2015 | naked capitalism
Gaylord June 20, 2015 at 3:47 am

Does anybody know what Russia's plans are to try to prevent runaway climate change? Or is Russia's government oblivious to the catastrophic effects of continued greenhouse gas emissions? Their aggressive plans for oil drilling in the Arctic indicate the latter.

Barry Fay June 20, 2015 at 6:33 am

"Or is Russia's government oblivious to the catastrophic effects of continued greenhouse gas emissions?" Sounds like a typical cheap shot against Russia to me. The country most oblivious to the catastrophic effects, and one of the two the biggest contributors (with China), is the good ole USA. Russian is at 6%, USA at 20%! Your propaganda driven prejudice is showing!

Macon Richardsonn June 20, 2015 at 7:35 am

Thank you Barry Fay! Well said.

Nick June 20, 2015 at 9:06 am

With Russia's utter dependence upon oil and gas, plus lack of FDI, they have no alternative but to drill baby drill. Eventual regime change may increase their long term prospects.

Gio Bruno June 20, 2015 at 12:48 pm

Careful now. This could encourage blow-back from Barry Fay.

Let me just say that Russia is not a static society (education is prized). They can, and likely will, create a more diversified/un-stratified economy going forward. As for regime change, that's an habitual fantasy of folks who read only MSM propaganda. Putin, despite the grandstanding of American representatives (98% return rate) has the support of 80% of the Russian population. Russians are not stupid (See USA for comparison.)

Steve H. June 20, 2015 at 9:21 am

http://www.nakedcapitalism.com/2015/06/naomi-oreskes-the-hoax-of-climate-change-denial.html#comment-2458611

Externality June 20, 2015 at 12:28 pm

1. Russian- – unlike some Western nations – has submitted a detailed carbon-reduction plan to the upcoming climate conference. http://newsroom.unfccc.int/unfccc-newsroom/russia-submits-its-climate-action-plan-ahead-of-2015-paris-agreement/

2. At a time when China and parts of Eastern Europe remain dependent on highly polluting coal-fired power plants, Germany is returning to coal following its phase-out of nuclear power, cash-strapped EU countries are phasing out renewable energy subsidies, and many Eastern European nuclear plants are overdue for retirement, natural gas remains a necessary – and environmentally friendly – energy alternative. The only question then is where the gas to come from. The UK's oil and gas industry is in terminal decline, large-scale imports from North America and the Middle East are a decade or more away, and efforts to promote fracking-related gas production in Europe has failed for a variety of reasons. To borrow a favorite line of the neo-liberals, "there is no alternative" (TINA) to Russian gas.

3. Since the end of the Cold War, the West has aggressively used the WTO, investor-state dispute tribunals, sanctions, propaganda campaigns, and "regime change" to punish resource-exporting nations who limit, or attempt to limit, exports for environmental reasons. To the WTO, for example, environmental laws in countries outside of Western Europe, the US, and Canada are illegal "non-tariff trade barriers." Russian attempts to protect its old growth forests against timber exporters and Chinese attempts to limit the environmentally disastrous (and often illegal) mining of rare earth ores were both struck down by the WTO at the request of the West. If Russia were to limit oil and gas exports for environmental reasons, the resulting legal, political, and military confrontation with the West would dwarf the Cuban missile crisis.

Rex June 20, 2015 at 1:33 pm

Burning any hydrocarbon produces carbon dioxide, so natural gas is not "environmentally friendly." There is clear evidence, too, that natural gas exploration and production release huge quantities of methane into the atmosphere. EPA has proposed rules on that for producers (late and weak, of course). Methane in atmosphere is over 20X as damaging as CO.

Russian scientists contribute much to Climate Mayhem knowledge, especially in the rapidly changing arctic and on the threat of methane release.

Russian Academy of Sciences, Far Eastern Branch, Pacific Oceanological Institute, 43 Baltiiskaya Street, Vladivostok 690041, Russia
Natalia Shakhova, Igor Semiletov, Anatoly Salyuk, Denis Kosmach & Denis Chernykh

Russian Academy of Sciences, Far Eastern Branch, Institute of Chemistry, 159, 100-Let Vladivostok Prospect, Vladivostok 690022, Russia
Valentin Sergienko

To name a few.

One wonders if Russian climate scientists are censored and hounded as much as are U.S. and U.K. researchers, especially in the US government (USGS, NOAA, NASA, etc.). Persecution and censorship of US scientists is above McCarthey-esque proportions today.

Ian June 20, 2015 at 8:37 pm

What about thorium reactors. I am aware that at least China is investing in the technology.

Lune June 20, 2015 at 3:08 pm

Just like the War on Drugs is most successful when it focuses on reducing demand (drug users) rather than fighting/bombing the suppliers (Mexico, Colombia, etc), the War on greenhouse gases is best fought by reducing demand. If the Europeans find a way to no longer need so much natgas, then Russia wouldn't be selling it to them. Otherwise, someone else will sell it to them regardless.

That doesn't completely exonerate Russia, of course, and given their history with the Aral Sea, I'm not sure that they would put environmental concerns very high on their list of priorities (certainly not higher than their economic security). But right now, the problem with greenhouse gases is on the other end of all these pipelines.

Otter June 20, 2015 at 8:15 am

The abandonment of South Stream was not much of a surprise to anybody with even a passing interest in the energy politics.

Brussels and Washington were both adamant that it would never pass through Bulgaria.
I suppose some people were surprised at how quickly negotiations progressed with Turkey. Possibly there is some quid pro quo regarding Iranian and Kurdish hydrocarbons.

Serbia and Hungary are anxious for access. The Austrians are even talking money. Greece of course needs gas and transit fees. Italia, Slovakia, Czech would welcome shares. The only problem is some people have suddenly taken an interest in organizing a colour revolution in Makedonia.

Jackrabbit June 20, 2015 at 1:03 pm

I questioned the author's perspective as soon as I saw this (in the second sentence) :

Six months ago Russian President Vladimir Putin surprised the energy world by dismissing the long-prepared South Stream project in favour of Turkish Stream.

Russia re-routed South Stream to Turkey (now called "TurkStream") because Bulgaria rejected South Stream under pressure from US/EU. OIFVet, a frequent commentator at NC, has written loads of good and inciteful comments with respect to this farce (he is Bulgarian).

The author refers to a "Russian Waltz" which casts aspersions on Russian intentions. Their intentions are clear. To by-pass a Ukraine that is hostile to Russia. Period. Their efforts to do so are being blocked (first by pressuring Bulgaria, now with a color revolution in Macedonia). Russia's 'waltz' partner is the EU which created the rule that pipeline ownership must be independent of supplier. This rule has dubious value when applied to large suppliers like Russia/Gazprom.

The author artfully guides us to three possibilities but ignores the most logical and intuitive one. Russia is likely to be taking this move now to hedge against the developing brinkmanship whereby Russia is blamed for causing European suffering by refusing to transit gas through Ukraine – despite the US/EU's irresponsible blocking of South Stream / Turk Stream as a delivery platform.

=

I believe that one must be very careful about sources when dealing with issues that are sensitive to the US/EU establishment.

Brugel is nominally an independent think tank but it is governed by, led by, and staffed with establishment figures and technocrats. From their annual report:

The idea to set up an independent European think tank devoted to international economics stemmed from discussions involving economists, policymakers and private practitioners from many European countries. The initiative subsequently found support from 12 EU governments and 17 leading European corporations, who committed to the project's initial funding base and participated in the election of its first Board in December 2004. Operations started in 2005 and today Bruegel counts 18 EU governments, 33 corporations and 10 institutions
among its members.

It is difficult to trust "experts" that have a vested interest in culling favor with the establishment. This article proves that such skepticism is very much warranted.

David in NYC June 20, 2015 at 1:13 pm

Putin's plan, to maintain a chokehold of the distribution of gas, mimics John Rockefeller's strategy for Standard Oil to control the distribution of oil in the late 19th century.

susan the other June 20, 2015 at 1:14 pm

Syria has really taken a hit for Russia. Until the conflict there is resolved the the Saudis/Arab natgas cannot build their pipeline. And by the time it is resolved Russia will have already established its network. It looks like this leaves the Saudis and other MidEast natural gas suppliers at the mercy of China and India. The BRICS.

Raj June 20, 2015 at 7:50 pm

You already know this, but Israel wants to send the gas production from the Levantine Basin to the Europe market and Assad stands in the way for the time being. Once Assad is toppled and a new puppet regime is put in place, I think we'll see the construction of the pipeline through Syria. Qatar & Saudi Arabia will connect through the same artery to reach the Europe market…and then Russia finds itself with competition. This is the key for the West to gain greater control of the Russian economy, and eventually profit from Russia's resources. So, in the short term (~10 yrs), Russia may have its infrastructure in place (whether via Nord, Turkish or South stream), but in the long term (~20+ yrs), we'll see Israel, Saudi Arabia and Qatar enter the Europe market and Russia will no longer be the only game in town. We think we're seeing the squeeze put on Russia now, but it will only get worse with time. The West looks at Russia's resources and sees dollar signs.

Gerard Pierce June 20, 2015 at 5:29 pm

In the current political situation, there should be a natural alliance between Russia and Greece, but it can't be a declared alliance – that leads to retaliation that neither one wants to deal with right now.

A covert alliance with Russia could put Greece in a position to obtain finance through China. Without any overt declarations, the European countries might figure out "on their own" that continued sanctions against Russia are counter-productive.

Even in default, if Greece can maintain any kind of economy, the wily Varoufakis gets to sit back and smile while the EU ministers try to explain to southern Europe why their policies are necessary and correct.

The US gets to continue with its unprofitable wars in the mid-East while trying to avoid major embarrassment from the fascists in DonBass. The major problem for the Russians is watching as Russians in Ukraine are ethnically cleansed.

If the Russians can avoid a military response all that is needed is someone to maintain the body count. The overall death count would probably be a lot less than a military response.

Susan Pizzo June 20, 2015 at 8:49 pm

An MOU with Greece has been signed, providing significant investment funds, a route around Ukraine, and a potential clinker in the Russian sanction vote on Monday. Further complications for debt negotiations? Greece is also reportedly "drawing up a default plan, which would see the country institute capital controls and nationalize its banking industry" (ibtimes). It ain't over till it's over…

http://www.ibtimes.com/greece-russia-reach-preliminary-gas-pipeline-deal-greek-debt-woes-continue-1976077

http://money.cnn.com/2015/06/19/news/greece-russia-gas-deal/index.html

http://www.zerohedge.com/news/2015-06-18/russia-greece-ink-pipeline-deal-gazprom-boosts-ukraine-bypass

[Jun 22, 2015] Greece might be a new transit country for Russian gas, if Turkish stream materialize

marknesop, June 21, 2015 at 2:59 pm
Russia and Greece sign deal on Greek extension to Turkish Stream. Comment by Terry Ross; "By effectively financing Greece to be a joint owner in the pipeline, Russia has sidestepped the 3rd Energy package monopoly provisions and ensured that the Troika cannot confiscate what would have been a wholly owned Greek pipeline. From Russia's point of view it gets the pipeline built without EU interference. Clever stuff."

And even if the west engineers a colour revolution of the Greek government one day and replaces it with a pro-western anti-Russian government, the most they could do once the pipeline is built is threaten to jack up transit fees. Providing Europe hooks up to Turkish Stream – and I don't see any practical alternative. And Russia could always say "OK; it's your pipeline. The new delivery point is the Turkish border", like they originally were going to do. But I think the Greeks will see which side their bread is buttered on, and being a gas hub for Europe is much more attractive than being scolded and lectured by Europe.

ThatJ, June 21, 2015 at 4:42 pm

The only alternative in Greece is the Golden Dawn, a nationalist pro-Russian party. Unless the conservatives - who lost the last election to Syriza - are somehow attractive to the electorate again and get voted into power, an unlikely event.

For being real nationalists and not shabbos goyim ("useful cattle" in Yiddish parlance, e.g. the Ukrainian government and its cannon fodders are shabbos goyim), and with the party's rising popularity in polls, the leadership was rounded up and arrested following "American" orders. The persecution also extended to other party members of the parliament (their immunity had to be lifted before). The arrests on trumped-up charges started after the previous conservative PM visited Washington.

marknesop, June 21, 2015 at 3:43 pm
According to NATO, Russia's sale of gas to Europe at much cheaper prices than it would pay for LNG shipped in in uncertain quantities is an example of "Russia's destabilization efforts", while paying much higher prices for a less certain supply would be an example of Europe's "political will and strategic vision". You might think that is an easy choice, but it reckons without the desperately inbred gits in Brussels who do not spend their own money and are incapable of thinking within that framework.
kirill, June 21, 2015 at 6:01 pm
Russia should wean itself off the EU market, ASAP. These idiots are irredeemable. I am not happy that Russia is going to build another pipe to Germany. This is a mistake.
marknesop, June 21, 2015 at 6:05 pm
Not necessarily. Russia wants to encourage close ties with Germany in the hope that it can inspire a business revolt against the German government. Washington, which is pulling all the strings behind the scenes, cares nothing about Germany's economic interests so long as it does what it is told and helps America against Russia. Besides, it's not as if Germany is taking gas for free – it's a moneymaker.

However, I'm pleased to see Russia take a harder line on Europe as gas customers, and make them build their own infrastructure if they want to hook up to Turkish Stream. Europe needs to know Russia has alternatives, because at present Europe is puffed with its own importance and figures "You need us".

[Jun 12, 2015] The West opens a second front against the Russian elite in Ukraine - Fort Russ

June 12, 2015 | Pravoye Delo

Translated by Kristina Rus

In addition to sanctions, Western-controlled Ukraine increases pressure on the Russian elite, by going after their property.

We already wrote about the Ukrainian junta making moves primarily, legal, on the seizure of Russian state property in Ukraine - http://pravoe-org.livejournal.com/521470.html
Perhaps the most serious take over was a pipeline in Western Ukraine of the Russian state corporation "Transneft".

Now, however, the situation has changed. Ukraine started seizing the property of the Russian oligarchs. The hype just increased in the last few days, especially on June 10 and 11, when it became clear that the Minsk-2 is going down the drain. Basically, the flood gates had opened.

In the period from June 8 to 11 a process of requisition of property of the Russian oligarchs began in Ukraine. First of all, Oleg Deripaska lost (in favor of the state) the Zaporozhye Aluminum plant, and Viktor Vekselberg, with a combination of pressure from the Prosecutor's office and an armed takeover, is losing the Pobuzhsky Ferronikel plant.

However, ukies honestly warned about such scenario by the raider №1 in Ukraine - Gennady Korban (a person close to "Benya" Kolomoisky [Korban is former deputy governor of Dnepropetrovsk region - KR], and Korban had the experience of seizing the Russian property in the pre-Maidan era). At the end of May, Korban announced his plan on how to repossess the Russian property:

"Russian banks on the territory of Ukraine shall be confiscated in the first place. They can affect both the exchange rate and loan servicing and property of state corporations. Today a number of Ukrainian state corporations just service the enemy credits".

"If these or other capitals, originating from Russia, are related to specific individuals, directly or indirectly involved in the funding or facilitating terrorism, separatism and the war in our country, then, on the basis of this law, their property on mainland Ukraine must be confiscated," - said Korban, and as an example, listed a number of large Ukrainian enterprises, owned by Russian oligarchs:

http://dnpr.com.ua/content/korban-potreboval-konfiskovat-rossiyskie-banki-i-sobstvennost-rossiyskih-oligarhov

Today, the "Cunning Plan of Korban", unlike the CPP [the Cunning Plan of Putin], is being implemented. Actively implemented. Here are the facts:

First, nationalization

On June 9, junta has completed the process of "nationalization" of Zaporozhye Aluminium plant: ZALK was adjudged from the holding "RUSAL" of Russian Oleg Deripaska. The controlling stake, which is 68.01% of the total number of shares was credited to the account of the State Property Fund of Ukraine. State raiding by the junta became possible after March 11, when the supreme court upheld the "legitimacy" of demands for the return of shares to the state due to the failure by the investor (Deripaska's holding company) to fulfill obligations (formally, the Russian "AVTOVAZ-Invest" and Cyprus company Velbay Holdings could not settle a debt). The official message of junta Prosecutor General can be found here: http://www.gp.gov.ua/ua/news.html?_m=publications&_c=view&_t=rec&id=157430

It's also important to note that Korban's gang set its sights on ZALK since the end of last year:

"In early November, the plant (ZALK) came under the cross-hairs of fighters of battalion "Aidar", the financing of which is connected to the Governor of Dnepropetrovsk region, Igor Kolomoisky. On the night of November 9, 2014 the fighters of Aydar barricaded themselves in the building of Zaporozhzhye Aluminium plant, allegedly "to prevent looting". Zaporozhye police had to aid in liberating the plant from the patriots.

http://rian.com.ua/analytics/20141113/359497708.html

But it was too rough, now they decided to maintain the facade of legitimacy.


Second, revocation of licenses and liquidation


On June 11, in the afternoon, the National Bank of Ukraine adopted the decision on revocation of the banking license and liquidation of "Energobank", according to the resolution of the board of the National Bank of Ukraine (NBU) No. 370, dated June 11.

http://bank.gov.ua/control/uk/publish/article?art_id=18299746&cat_id=55838

Formally "Energobank" is owned by a Russian businessman, Anatoly Danilitskiy. Previously, it belonged to the group of oligarch Alexander Lebedev, the one who likes to engage in publishing activity in London. However, two years ago information surfaced, that there is a written obligation of the new owner Anatoly Danilitsky on reissuance of shares of the bank to the "National Reserve Company" (NRK) of Lebedev. Thus, Danilitsky owns "Energobank" nominally, but the real owner is still Alexander Lebedev. Security services of Ukraine considered the bank a financial "wash" of the Russian oligarchs.

http://sled.net.ua/kievskiy/energobank/kak/moyka/rossiyskogo/oligarkha/2013/06/02 )

But now the bank is liquidated.

Third, a take over with a shoot out

June 11, in the evening. A capture of Pobujsky Ferronickel plant (PFC). This is the only enterprise in Ukraine and the former Soviet Union, producing ferronickel on an industrial scale from poor oxidized nickel ores. Located on the territory of Kirovograd region, on the border with Nikolaev region.

Here is the sequence of events:

1. In Golovanevsk district, Kirovograd region, at around 21:00 a group of armed men tried to enter the Pobuzhsky Ferronickel plant, at the moment they were negotiating with the administration, reported the head of the village council of Dolgaya Pristan of the Nikolaev region, Sergey Titarenko (this settlement is adjacent to the Kirovograd region). "About an hour ago armed men tried to enter the Pobuzhsky Ferronickel plant. Our town is a mile from the plant. We could hear shooting. At the moment there is information on negotiations between the invaders and the administration, " said Sergey Titarenko.

In Pobuzhye, the village head, Sergey Slobodyanyuk explained: "Even this morning the representatives of the prosecutor and tax authorities of Kirovograd region, accompanied by the detachment of police, tried to enter the territory of the enterprise, but only a tax investigator went into the plant. At 9 p.m. about 50 people with guns in black uniforms arrived on buses. They failed to get inside, facing resistance from the staff and the guards. Meanwhile, armed men accompanied the man, who declared that according to the decision of the court, he is the new owner of the Ferronickel plant", - said Sergey Slobodyanyuk. He also added that tomorrow morning, to avoid bloodshed a meeting for the employees, the current administration and the alleged new owner of the enterprise will be held in Pobuzhye House of Culture to determine the fate of the plant.

http://nikvesti.com/news/incidents/70619

2. In the evening, at a press conference in Kiev, the CEO of the Pobuzhsky Ferronickel plant, Oleg Bespalov has informed that on June 11, unknown persons were trying to block the products of Pobujsky Ferronickel plant in Kirovograd region, the investor of which is Solway Investment Group:

"Actions by unknown persons to block the import of a large batch of nickel ore and ferronickel and the prosecutor's office of Kirovograd region conducting simultaneous search actions, we consider as an attempt of illegal seizure of the property of the group"

Deputy director of the PFC on legal affairs, Rustam Dzhamgurov, in turn added that accusations towards PFC are absurd, because PFC provides processing services and does not produce the product, and added that enforcement proceedings opened against PFC were opened due to a claim of a physical person, who has no relation to the company. Dzhamgurov clarified that this individual has never appeared in court and did not provide explanatory materials on the case:

"In this case we are talking about an organized judicial arbitrariness and lawlessness ... 72 thousand tonnes of ore and 7 thousand tons of ferronickel were arrested. The company is carrying huge losses."

http://comments.ua/politics/517228-rukovodstvo-pfk-zayavilo-zahvate.html

3. The products of PFC are shipped through the port of Ilyichevsk, and there it was detained. (Ilyichevsk - is Odessa region, where Saakashvili is now governor). It is important that on June 8 a scandal was raised claiming the products of PFC are used for defense purposes and are illegally shipped to Russia:

"Press service (of the port) stated that on Monday, June 8, false information was circulated about the alleged illegal shipment of ferronickel products used in the defense industry, in particular, in the production of alloy steel for armored vehicles. At the port this media campaign to discredit the head of the enterprise, Yury Kruk, was connected to the search for the position of director of the Ilyichevsk Commercial Sea Port, conducted by the Ministry of Infrastructure. On June 8, some online media, indeed, reported that allegedly the arrested batch of 7 thousand tons of ferronickel was being loaded on the ship "Seldonis" at terminal 4 of Pier 18 of the Ilyichevsk port. ... The shipment of ferronickel is allegedly owned by "Bowring Trading", and it was going to be transported to Russia."

http://www.04868.com.ua/article/851529

Oh, and by the way, who is watching TV? Is there anything on Russia-24 or the Channel 1 on the an armed seizure of a Ferronickel plant, which essentially belongs to Russian investors? And on the liquidation of a Russian Bank? Nothing? Let's pretend, it's not ours?... Oh, well...

And more. Such an attack on the property of the Russian oligarchs (Deripaska, and most importantly, Vekselberg, and the attack will likely continue) is going on with the full support of the state - Prosecutor General. Therefore, it is planned. Consequently, it's a part of a master plan. A plan of pressure on their property, in addition to the sanctions of the West against Russia, which were largely intended to cause discontent in the Russian oligarchy. Today, yesterday, the day before yesterday a second front was opened in this direction.

[Jun 02, 2015]The Current Overproduction Crisis And War

Ian Welsh makes Fourteen Points on the World Economy as the US GDP Drops .7 Percent. He believes that the economy is again turning towards a global recession. This recession comes even as there has not been a real recovery from the last global economic crisis:

Let me put this another way: The developed world is in depression. It has been in depression since 2007. It never left depression. Within that depression, there is still a business cycle: There are expansions, and recessions, and so on. Better times and worse times.

The business cycle is again turning down and is doing so sharply. Not only in the U.S. but also in Europe and Asia.

Every central bank has been throwing money at the local economies but that money finds no productive use. Why would a company invest even at 0% interests when nobody will buy the additional products for a profitable price? How could consumers buy more when wages are stagnant and they are already overburdened with debt taken up in the last expansion cycle? The central banks are pushing on a string while distorting normal market relations. This intensifies the original crisis.

My believe is that the global crisis we see is one of overproduction, an excess or glut of supplies and on the other side a lack of consumption. The exceptional cheap money created by the central banks makes investment in machines preferable over employment of a human workforce. The result: Manufacturing hub starts work on first zero-labor factory

Chen predicted that instead of 2,000 workers, the current strength of the workforce, the company will require only 200 to operate software system and backstage management.

The (Central) bank gave Mr. Chen cheap money and at an interest rate of 0% a complete automation of his company may indeed be profitable. It is unlikely though that he would make the same move at an interest rate of 10%. But on the larger macro economic scale Mr Chen needs to ask this question: "How will the 1,800 laid off workers be able to buy the products my company makes?" Some of the laid off people may find marginal "service" job but the money they will make from those will likely be just enough to keep them alive. And over time flipping burgers will also be automated. And then?

Karl Marx described such overproduction crises. Their cause is a rising share of an economy's profits going to an ever smaller class of "owners" while the growing class of marginal "workers" gets less and less of the total pie. In the last decades this phenomenon can be observed all over the developed world. The other side of the overproduction crisis is an underconsumption crisis. People can no longer buy for lack of income.

While a realignment of central bank interest rates to historical averages, say some 6%, would help to slow the negative process it would not solve the current problem. Income inequality and overproduction would still increase though at a lesser pace. The historic imperialist remedy for local overproduction, capturing new markets, is no longer available. Global trade is already high. There is little land left to colonize and to widen the markets for ones products.

There are then two solutions to such an crisis.

One is to tackle the underconsumption side and to change the distribution of an economy's profits with a much larger share going to "workers" and a smaller share going to "owners". This could be achieved through higher taxes on "owners" and redistribution by the state but also through empowerment of labor unions and like means. But with governments all over the world more and more captured by the "owners" the chance that this solution will be chosen seem low.

The other solution for a capitalist society to a crisis of overproduction is the forced destruction of (global) production capabilities through a big war. War also helps to increase control over the people and to get rid of "surplus workers".

The U.S. was the big economic winner of World War I and II. Production capacities elsewhere got destroyed through the wars and a huge number of global "surplus workers" were killed. For the U.S. the wars were, overall, very profitable. Other countries have distinct different experiences with wars. In likely no other country than the U.S. would one find a major newspaper that arguing that wars make us safer and richer.

I am therefore concerned that the intensifying crisis of overproduction and its seemingly casual preference for war will, in years to come, push the U.S. into starting a new global cataclysmic conflict.

Neoconservatives like Victoria Nuland tried to goad Russia and the EU into a big war over Ukraine. The top lobbyist of the military industrial complex, U.S. Secretary of Defense Ash Carter is trying to instigate a war between China and its neighbors over some atolls in the South China Sea. The U.S. is at least complicit in the rise of the Islamic State which will leave the Middle East at war for the foreseeable future.

Are these already, conscious or by chance, attempts by the U.S. to solve the problem of global overproduction in its favor?

Posted by: r@rtalk.com | Jun 1, 2015 2:05:50 PM | 2

Marx's early writings, including the Communist Manifesto, did indeed focus on crises of overproduction. But, in Capital, he explained that falling rates of profit are the key dynamic. For a popular blog on these issues, see Michael Roberts:

https://thenextrecession.wordpress.com/

Of course, there is plenty of debate on these matters within Marxian political economy. The best academic source is the journal, Historical Materialism:

http://booksandjournals.brillonline.com/content/journals/1569206x

Posted by: Mike Maloney | Jun 1, 2015 2:38:15 PM | 5

I think you're right, b. The U.S. will not allow regional hegemons who are not clients let alone a global one to challenge its unipolar world. That's why we're seeing all these wars in various stages -- hot in the Middle East; hot and cold in Ukraine; cold in Southeast Asia. The U.S. prefers smashed failed states to anything remotely challenging its full-spectrum dominance.

The neoliberal prescription for low growth/no growth is the complete cannibalization of the state. Privatized health care is being exported to Europe, while in the U.S. public education is being devoured by corporations.

Posted by: VietnamVet | Jun 1, 2015 3:01:36 PM | 7

Since the subject is blacked out by corporate media, we have to decipher the news to try to figure what is actually happening. The only stimulus acceptable to the elite and their politicians is war. 2,300 Humvees seized by Islamic State. Instead of containment, ship thousands of anti-tank missiles to Baghdad; more money in the pocket of the Military Complex.

The problem is that it is psychotic. The Islamic State's end game is Mecca. The shutoff of 11% of the world's oil supply will collapse the world economy. Yet, this is not an aberration.

A civil war was started in Ukraine right on Russia's border; a nuclear power who has said they will use them if there is a shooting war with NATO.

The Greeks are being pillaged to pay debts that cannot ever be paid back. Unless the debt is written off, the Eurozone will splinter asunder.

The only description for this is greed. Get rich today; the hell with tomorrow and the rest of mankind.

Posted by: Mike Maloney | Jun 1, 2015 3:57:03 PM | 9

The good news is that this U.S.-led neoliberal hegemony (what Tariq Ali calls the "Radical Center") is rapidly losing any popular legitimacy. Syriza in Greece, Podemos in Spain, Sinn Fein in Ireland, SNP in the UK, even Bernie Sanders in the U.S. His first day of campaigning last week in Iowa 700 hundred people showed up to hear him speak, compared to 50 for Martin O'Malley, another corporate shill.

Sanders is no antiwar crusader, but his basic ideas -- cutting military spending, breaking up the big banks, raising marginal tax rates on the wealthy, creating jobs by investing in infrastructure -- have proven the most popular, at least based on turnout, in Iowa of any candidate, Republican or Democrat, so far.

Posted by: tom | Jun 1, 2015 4:17:23 PM | 10

We have to look at the perspective of the class war too, where the corporate and elite class have growing contempt for the lower/middle classes more than they already do. So, how can one grow the economy, when the elite and corporate class are exploiting, growing inequality, and hate for us even more ?

Posted by: Bill | Jun 1, 2015 5:15:09 PM | 12

The prime vote holder of the IMF himself states the IMF has "served US National and economic interests" since it's inception, across Latin America, Europe and the world, and that "US Leadership" in the IMF is "critical".

http://www.foreign.senate.gov/imo/media/doc/Sobel_Testimony.pdf

The ideas behind the institutions that came out of Bretton Woods were already in the mind of FDR and Keynes long before the conference. One of FDR's key advisors was James Warburg whose father had funded Hitler as well as the USSR, and founded the Federal Reserve Bank.

https://www.voltairenet.org/IMG/pdf/Sutton_Wall_Street_and_Hitler.pdf
https://www.voltairenet.org/IMG/pdf/Sutton_Wall_Street_and_the_bolshevik_revolution-5.pdf

US financiers funded Russian manufactured trucks which went to the North Vietnamese forces, and today BP hold stakes in Russian energy firms while Hilary Clinton sells Russia the US Uranium supply.

As Major General Smedley Butler said in 1935 "War is a Racket". All that has changed is the quality of the supporting propaganda.

Posted by: Piotr Berman | Jun 1, 2015 5:50:10 PM | 16

I think that it is not "overproduction", but the result of improved transportation, communication and more free trade. What is the advantage of paying wages in USA or Western Europe if you can put all labor consuming operations in China, where there is good infrastructure, or in countries where infrastructure is not as good but the labor much cheaper, like Bangladesh? The answer is that while some advantages do exists, there are less and less frequent. Even automation can be performed elsewhere.

Historically, in 16-th century The Netherlands were the chief European center of non-agricultural production, international trade and banking, and afterwards there was less and less production, but the country retained for a while its position in trade and banking. That cycle affected northern Italy earlier, and England, later. I think that one part of the solution would be a moderate, and yet effective, policy supportive of domestic production and domestic employment.

But there is also a bit of overproduction. Average American could perfectly well live in a smaller home, drive a smaller vehicle, buy fewer gadgets etc. with hardly decreasing the quality of life. Those below the average income can be out of luck, but they do not consume much anyway. Additionally, there is an excessive gap between "micro-economic" and "macro-economic" optimum behavior.

Most American household has so little savings that the suffer a crisis very easily, so it would be better for them to spend less, e.g. by cooking more and eating out less, cutting down impulse buying etc. However, the cut in demand is recessionary on a macro-scale. It would be sensible to have policies that would concentrate not on "growth" but on satisfaction of needs.

Posted by: PokeTheTruth | Jun 1, 2015 6:11:12 PM | 18

America is drowning in the sewer of the national political system. There is no candidate or incumbent in Washington, DC who serves the country. These elitists rape our liberties, steal our wealth, entice our grandchildren into killing people in foreign lands and subject the future of the nation to be slaves to the debt masters.

The American people must exercise the only peaceful option left to restore the federal republic which is rapidly being transformed into a unitary style government like much of Europe. On November 8, 2016, the nation must stay home and not give its consent to continue being abused by the plutocracy of puppets bribed by the global bankers, multinational corporations and foreign state lobbyists.

Abstinence is not benign as some would believe, it is a very powerful check on government when it becomes so infested with opportunists who pursue their own self-serving aggrandizement through the passage of law and regulation to benefit themselves and their criminal syndicate. Without a democratic mandate the cabal cannot hold power and therefore the legislative function of law making is extinguished. The bureaucracy remains in place until the fiscal budget ends in October of the following year which means social security payments will still be made, Medicare claims will still be processed and other central government functions will continue. During those 10 months, the people must demand from the governors of each of their respective States new elections with candidates who are independent of the two-party dogma that has corrupted Washington, DC.

An implied vote of 'No Confidence" or "None of the Above" is the only sensible way to end this long running nightmare of tyrannical fascism and nationalism that is destroying the country.

The motto of new liberty must be, "Dissolve it, start over!"

Posted by: chuckvw | Jun 1, 2015 7:26:53 PM | 19

So much for the surplus value of labor... All surplus and no labor... The global capitalist system has become bulimic.

Posted by: Tom Murphy | Jun 1, 2015 8:59:08 PM | 20

I remember in school in the early 1980's a teacher said something really disgusting to the class: "want to boost an economy, have a war" (clearly the powers that be have made sure that there propaganda gets fed to the public) another ugly thing a teacher tried to push was the notion that WWII's economic effect was some sort of special boost yet at the same time trying to obscure the basic fact that it was government spending that took us out of the depression so war was not needed at all. A lot of work has gone into pushing the manipulative propaganda which is meant to manipulate and sell the agenda of the powerful.

How it was presented was "FDR tried the New Deal but it took WWII to get us out of the Great Depression." The framing of it that way is intentionally manipulative in order to obscure the role government spending had in getting us out of the depression and it is phrased that way to sell war.

Posted by: rufus magister | Jun 1, 2015 9:08:58 PM | 21

in re 14 --

Nor did they suffer from overproduction of T-34's,, even though they cut cost and production time in half. But they still had sufficient to defeat Hitler, thank Ford! The Space Station is in trouble if there are shortages of Proton rockets. And the Federation is still enjoying some Union leftovers in education and healthcare, see Lisa Marie White's accounting of why American liberals are wrong about Russia.

For an artistic take on overproduction in capitalism, see Brave New World. Ending is better than mending!

Whatever happened to waste not, want not? Just a throwaway line....

Posted by: Copeland | Jun 1, 2015 9:12:41 PM | 22

Piotyr Berman @ 16

I think you're on the right track. Before capitalism ran amok and metastasized into a global zombie, there were guilds. I believe the Netherlands had a rich history of those organizations. These were created to protect the rights and privileges of members (to be sure); but they also preserved and improved the skills, and passed these on through apprenticeship. The obsession in consumerism is about having something brand new, and also relies on planned obsolescence, which needs to produce shoddy goods such as plastic footwear, that will be discarded as junk in a few months. Having things made which are durable enough to go through several cycles of repair, would moderate the overheated production.

If labor is expunged by automation-crazed corporations; then war or revolution, or even both at once, is possible. The cataclysmic outcome that b sketched out is then possible. Of course it's all very short-sighted; but I once read somewhere that at the onset of the 1930s Great Depression, the capitalists examined the option of reducing working hours for everyone so that workers might still muddle through.

On closer examination, capitalists calculated that dumping workers into the trash heap would add a few dollars more to the corporate bottom line, and be more agreeable to shareholders.

Posted by: Lone Wolf | Jun 1, 2015 9:46:47 PM | 23

@b

Since you mentioned Karl Marx, the exclusion of a very valid third option, revolutionary war/class struggle, makes itself evident. From the trend we witnessed after WWII, we cannot expect as you correctly noted, a redistribution of wealth out of the greedy and gluttonous transatlantic empire and its minions, since concentration, centralization and consolidation of capital has been the order of the day ever since. The other major trend after WWII has been imperial wars, either by proxy or direct intervention, fought against countries that followed the path to independence from colonial powers by means of revolutionary wars, in Asia, Africa and Latin America. The potential for another period of revolutionary war is real, given the abject misery of the wretched of the earth, which have been left with nothing to lose but their chains. The main obstacle they face is the lack of a scientific tool to interpret their current predicament, and at the same time provide them with a vision of the social paradigm they aspire at, out of the ruins left of their societies. With its inherent limitations given by dogma, Marxism was that tool for Mao, Lumumba, Ben-Bella, Ho Chi Minh, Castro, and many other African, Asian and Latin American leaders who took upon their shoulders to shake their peripheral dependency. Many of them were successful in their revolutionary endeavors, and were able to trace an independent path for their societies, even if burdened with all the problems typical of the "third world." Nevertheless, even before the fall of the Soviet Union, Marx and Marxism were thrown under a pile of dead dogs, even more after the fall, which was attributed to the utter failure of Marxism as a social science.

Marx and Marxism were part of the "end of history," a thing of the past, a post-Hegelian utopian philosophy whose ultimate results were the creation of dystopian societies…until the crisis of 2007, when suddenly everybody wanted to understand WTF is a cyclical crisis, and why do they happen. Das Kapital became a best seller in Germany and beyond; becoming a model for new works tailored after Marx's statistically saturated magnus opus, e.g. Thomas Piketty's "Capital in the Twenty-First Century, " and others. Despite all the intellectually gifted resisters to the empire, and the vast expansion of knowledge of the digital age, no new revolutionary theory has appeared, able to inspire the masses of dispossessed as Marxism did at the turn of the XIX c., one that changed the course of history forever during the XX c.

It is in this vacuum, a modern epistemological crisis, that the neocons, bastard children of Trotskyism, took ownership of Trotsky's "Theory of Permanent Revolution," and turned it into a counterrevolutionary instrument for their nefarious global domination purposes. Hence revolutions became bastardized, categorized by "colors" or "seasons" according to the whims of the vulgar ruling elites, and lost their power to change societies from the bottom up. This crisis of knowledge of their own socio-economic/political conditions are having a profound effect on the masses worldwide, who in many instances rise up against their oppressors, e.g. Egypt/Arab "Spring," without a leadership, without a clear vision of their goals, without a social agenda that guides their movements, and they end up getting crushed or coopted by the new rulers, toys for the empire games of regime change. These are the "Twitter" and "Facebook" so-called "revolutions," mass movements with no direction, no aim, and no strategy for social change. What kind of society did the Egyptians, Tunisians, et al want? Did they have a program for the society they wanted to build? Was there a clear strategy and tactics to achieve their goals? "Crisis," say Gramsci, that giant of Italian Marxism, "is when the old has not died and the new has not been born." Humanity is now facing an epistemological crisis of galactic proportions, in serious need of a new revolutionary theory that, like Marxism in the XIX/XX c., gives the masses a vision of a future to build with their own hands, and hope there is a better world other than sweat-shops, slavery, toiling without rewards, exploitation, misery, crime, and an ever-growing gap between the ruling elites and the working masses.

Posted by: Nana2007 | Jun 1, 2015 10:11:44 PM | 24

There could be a helicopter drop ala Ben Bernanke.

I like Gail Tverberg on diminishing returns/oversupply.

I like Andrew Kliman on the declining rate of profit.

Thanks for connecting the dots on this B.

Posted by: ruralito | Jun 1, 2015 10:11:54 PM | 25

@12, Sutton is an ass. He pushes the theory that Communism and Fascism are equally bad and what is needed is some mystical third way: Libertarians with their squirrel rifles hunkerin down behind cotton bales. So Wall St. offered Lenin free cash, and he took it! Well, duh!

Posted by: Nana2007 | Jun 1, 2015 10:19:49 PM | 26

The motto of new liberty must be, "Dissolve it, start over!"

PokeTheTruth@18- I tend to agree, with the caveat that plenty people need to be held accountable.

Texas might be getting that idea.

Posted by: rufus magister | Jun 1, 2015 10:44:18 PM | 27

PB @ 16, Copeland at 22

Historians of the United Provinces point out that Holland and her allied provinces lacked a sufficient population base to administer and defend the holdings she gained in her revolt against Spain ("The Eighty Years War"). With the loss of revenue, croqetten and circuses became less affordable. The House of Orange were elevated from elected Statholders to Kings, the thinking being a monarchy would better keep the lower classes down than a republic. This environment proved conducive to the spread of revolutionary ideas in the Low Countries after 1789.

Historian of the later Renaissance attribute the decline of the urban republics to several factors. The prevailing aristocratic values induced merchant families to move their capital from commercial and industrial operations to urban and rural real estate -- especially country tracts that came with patents of nobility. Failing that, you could, like the Medici, subvert the Republic with wealth and buy a title from the Papacy or Holy Roman Emperor. And a more mundane factor -- they ran out of good shipbuilding timber.

England for her part had a large population. It had plenty of timber -- North America was a shipwright's wet dream, and before this, measures prioritized available timber for maritime uses.

When elites think protecting domestic markets and workers will add to their bottom line, they will. But if the see money to be made in "outsourcing" and "off-shoring", well, away the factories, jobs, salaries, and purchases from suppliers go.

England began to lose her superiority in textiles and iron and steel to cheaper American and German production. And these two rivals took advantage of what Gershenkron has called "the advantage of the latecomer." The major industrial expansions of both took place in the Second Industrial Revolution, where steel, chemicals, and electrics were the new driving technologies, and both were leaders in these fields. After a rearguard action up to World War II, they accepted de-industrialization whole-hearted under Thatcher.

PTT at 18 -- The elite will be totally fine with abstention. Less voters to bribe. Not only will things continue as they were, we'll have to endure fools like David Brooks lecturing us on our lack of civic engagement.

Go to the polls. If you can't bring yourself to vote for the left(over) parties down the ballot, write in you favorite choice -- "none of the above" will do. And not just for President, do it for all the races. The rightists will bring more of the same, only with more Pharisee-style false piety or boring Ayn Rand novels. Friends don't let friends vote Tea Party.

Lone Wolf at 23 -- Time permits me only to say -- Gramsci Rules!

Posted by: meofios | Jun 1, 2015 10:55:26 PM | 28

I think the over-production we see is caused by zombie companies all around the world, that don't generate any profit, sustained by zero interest rate loans, over produce goods, causing a glut of products, and cause price deflation.

Posted by: Wayoutwest | Jun 1, 2015 11:58:39 PM | 29

RM@27

The 'elites' spend billions of dollars every election cycle to encourage or frighten people into the voting booth. Without that 'consent of the people' their minions have no mandate or legal right to rule over us. Throwing your vote away by voting for or against someone or even writing FU on the ballot is still supporting the corrupt system that they will continue to use to rule and if voting could change anything, it would be illegal.

This doesn't mean that elections and voting may not someday be useful again but there is no possibility they can now be used to change our corrupt system.

Posted by: Hoarsewhisperer | Jun 2, 2015 1:32:21 AM | 30


Posted by: Wayoutwest | Jun 1, 2015 11:58:39 PM | 29

I agree with that.
Lone Wolf @ #23's Gramisci perspective is on the money.

Russell Brand, my favourite non-revolutionary revolutionary, makes the (laboured) point that a govt elected by less than 50% of eligible voters cannot claim legitimacy.

But Gramisci was righter than everyone else in pointing out that "Crisis is when the old has not died and the new has not been born."

It should be obvious to everyone, by now, that Twitter and Facebook "revolutions" aren't revolutions, or journeys, and have no useful or coherent destination.

Posted by: Chipnik | Jun 2, 2015 7:25:37 AM | 31

b

This is the 'atto-fox problem' in biology, addressed by the Lotka-Volterra equation in Brauer, F. and Castillo-Chavez, C., Mathematical Models in Population Biology and Epidemiology, Springer-Verlag, (2000), and many others, the bifurcation relationship allowing two mutually independent steady-state solutions, one with higher predation and lower prey population used to justify higher resource extraction rates, ...but it remains just a theory and requires a rigorous definition of who is the 'prey'.

Is the prey the poor and downtrodden? No, those are the losers.

We can all agree the 'prey' is ultimately the energy needed to continue surviving for another day, not the staid pedantic 19thC Marxist 'Das Kapital', but just the 'real' value of evolutionary currency and trade. We've transferred the value of energy into gold, then fiat paper today 1's and 0's, and now there's too many of them. They'really part of a non-viable fractional-reserve usury-based ecosystem that's running out of balance, Koyaanisqatsi.

The rich prey on the energy developed by the poor through usury and credit, but also, the socialist state preys upon the destitute as a source of $Bs public program, using public tax extraction to generate private wealth in much the same way as usury and credit. More rice tents!!

If we de-anthropomorphize the Marxist class-struggle dialectic, and the rabbinical Maker-Taker meme, the answer pops right out like a jujube: not overproduction, not QEn, not oligarchs and monopolies, but usury and taxes.

Wah-lah. Usury. Taxes. Same as it ever was. Que sera, sera.

Posted by: rufus magister | Jun 2, 2015 8:16:58 AM | 32

Wayout at 29 --

The standard line of us reds is that participation in elections is a useful tool for educating the masses and marshaling and mobilizing progressive forces. And that mass action, e.g., the general strike, is the real means of social change.

Bhagavan Chippy at 31 --

I'd stick to physics and Eastern mysticism.

Predation occurs between, not within species. Socialism is about the workers controlling the means of production that they service. Social welfare capitalism bought their birthright for "a mess of pottage" (Gen. 25: 29-34). But austerity is taking that off the table.

I find the overtones of the "rabbinical meme" and the emphasis on usury and taxes disturbing. See this handy comparative chart; fascism is "Strongly against international financial markets and usury." The Abolition of Income Tax and Usury Party is recent spawn of that brood.

Our own home-grown TeaBaggers don't feel too good about it either.

You might consider a clarification or restatement of your position.

Posted by: paulmeli | Jun 2, 2015 8:28:43 AM | 33

"We've transferred the value of energy into gold, then fiat paper today 1's and 0's, and now there's too many of them"

Well, there's too much savings (accumulated financial wealth) but not enough spending. We know this because we have too much unemployment. Properly targeted spending cures unemployment.

Spending is a function mainly of money printing, existing money (previously created) mostly just earns interest and so is parasitic to the system in the net (economic rent), which leads to a paradox.

In the old days in the U.S. between 1933 and the mid-1960's the top marginal tax rate remained around 90% and then around 70% until Reagan was elected.

This maintained some sort of balance between money printing and saving. Now, money creation just piles up at the top which creates huge inequalities of power.

Posted by: geoff29 | Jun 2, 2015 9:24:35 AM | 34

It's simple to conclude that the "ruling class" and their spokes-people are if not absolutely greedy and mendacious, then at least criminally stupid.

But I think that's short-sighted. The financial crisis could be resolved in a moment's notice, since money is more or less an "imaginary" construct, especially now that it's just 1s and 0s, as was mentioned. The population is clamoring for "higher wages," but if we here were the small ruling class, we must know that "higher wages" means more mouths to feed from a growing population. Or, it means more disgruntled minions crying for "revolution" carrying pitch forks to the very gates of the gated communities and wilderness tracts where the very wealthy keep themselves concealed, when calamity strikes and food is scarce.

And the "ruling class" despite their equivocations, surely discusses amongst themselves the growing unsustainability of the ever encroaching environmental calamities, and dwindling resources, etc. What wars are being threatened between great powers, are are not about the resolution of world wide perils in terms of repairing the global over indulgence in carbon based technologies, in fact they seem to be based on increasing their use and further extracting scarce resources and more rapidly burning down the house.

Intelligent discussions are conducted here at MOA, it would be foolish to conclude that some semblance of intelligent discussions are not also held in the upper rooms and chambers of power, stripped of pretense and falsehood. If so, if one of us were sitting with those chosen few, I'm sure we would come to the conclusion that we were in a serious fix. And our backs are up against the wall. "Austerity" would be pushed to its extremities to decrease productivity and reduce the population through Urie's principle of immiseration.

Put yourself in the shoes of this ruling class, our primary MO would no doubt be self-preservation from the encroaching revolutions and chaos, and destruction, and a preservation of some kind of status quo. Otherwise, all that we had, were we sitting on the porch overlooking our estate, would be gone.

If nothing else works like the current financial immiseration to reduce the current state of affairs to a simpler and more manageable system where our ruling class rank and stature in society remained permanent and secure (because really our whole being has been reduced to measuring ourselves by our imagined sense of self-worth determined by our wealth, etc.) but the elimination of so many annoying minions through some kind of controlled burn, like a war, then certainly we would go about that?

I'm sure nothing pleases these folks more but for us to deride them constantly and poke fun at their ineptitude and call them all sorts of "evil," because that would just be so much more grist for the mill.

===

Posted by: ralphieboy | Jun 2, 2015 10:25:43 AM | 36

There is a famous anecdote about a General Motors executive showing off their newest automated assembly line to a United Auto Workers Union boss and remarking "Not one of them is a union member!"

To which the UAW boss replied, "And not one of them is a GM customer, either."

Posted by: Willy2 | Jun 2, 2015 11:15:49 AM | 40

There's a lack of demand worldwide because since say 1981 workers/employees have received wage increases below inflation. In that regard workers have seen their purchasing power being reduced for over 30 years. No wonder, households/workers aren't able or willing spend lots of money.

From 1981 up to 2008 households/workers were willing to increase their debtload. By going deeper into debt those households were able to keep their spending at a reasonable level.

But since 2008 households are reluctant to go deeper into debt and that has weakened the worldwide economy.

As long as workers don't get wage increases at or above inflation (levels) or are willing increase their debtloads (again) there's no chance for a economic recovery.

Posted by: HnH | Jun 2, 2015 11:23:22 AM | 41

b,

you normally publish highly insightful analyses and information nuggets that I have trouble finding elsewhere. On this topic, however, you jumped short.

Yes, we are struggling with overproduction and lack of consumption, but it is important to know where this development comes from. If you look at historical data, then you might realize that the purchasing power of people in the Western World started decreasing at the start of the 80s last century. The *growth* in purchasing power decreased since the 1960s. And debt is a significant, but small, part of it. The average growth in GDP has been consistently shrinking since the 1960s. Can you even remember a time, when the economy in one of the Western countries has been growing by more than 4% YoY? I don't. For Germany you have to go back to before the 70s oil crisis to find two years with a consecutive growth of 4% for more than one year. I wasn't even born then.

The main problem is this: We have to invest more and more energy to pump the same amount of oil, mine the same amount of ores and produce the same amount of food. And there are more and more people living right now.

This main problem, the diminishing returns, makes it that people have to spend more and more to afford the basic necessities. Corporations and enterprises react to their diminishing sales by cutting their costs to pay their loans. The easiest way to cutting costs is letting go of workers.

Since 2008, the crash happened after the crash of the oil price, Western Central Banks needed to keep their interest rates a 0%, because there was no growth. If they are ever crazy enough to raise interest rates, they will be blamed for the worst market crash in human history.

The reason is that we have reached the limits to growth. There is no more growth to be had for the industrialized civilization. That is over. For good. Unless we find an unlimited energy source that is very, very cheap. None is on the horizon so far.

Currently, a country can only produce growth, for a very short time, at the expense of others. That too will stop. Then, in a few years at the latest, global GDP will start to shrink. That is when the wars will start in earnest. That is when the killing and dying will start in earnest.

That killing and dying will not stop, until the world will have found a means to reduce its energy consumption to the physical and geological realities out there. That will take a while, and I have no clue how the world will look like.


Best wishes,
HnH

Posted by: ǝn⇂ɔ | Jun 2, 2015 11:38:36 AM | 43

Sorry, but I again disagree.

First of all, the robots in the example are there because there the Chinese labor pool has been growing slower than the economy for years now.

Secondly, robots need to be made by somebody. They cost lots of money. They have to be maintained and often upgraded. The physical operation of the plant might take 90% less workers, but the remaining workers are paid as much or more as the previous entire work force.

Thirdly, the production noted in the article isn't for China - at least, not yet. It is for the 1st world. Thus the "replacement" of the worker is a dynamic of cheaper labor elsewhere rather than actual replacement with mechanization.

As for economics: an entire series of fallacies.

a) Overproduction. While I will certainly agree that the 1st world can do with less, this is irrelevant. Every labor saving device ever created has ultimately had the labor savings spent on higher standards of living. There is nothing to indicate any change in this dynamic. Thus while we no longer have tens and hundreds of thousands of workers making automobiles, we now have tens and hundreds of thousands of workers doing other things like fracking oil and natural gas, servicing the cars via a nationwide array of repair, refueling, and upkeep (car washes, etc). Equally, we don't drive Model T's anymore. Ford used to be nearly entirely self sufficient outside of the metals - this is no longer true. Ford doesn't make computer chips or any of hundreds of parts in present day Fords.

b) Labor isn't the problem - consumption is. In terms of overall productivity, Americans as a whole are producing more than ever before. Hours worked has been inching down, but hours of work isn't what dictates the actual output - it is a function of productivity times hours worked, and that product continues to increase overall.

The primary difference between today and post World War II is that of the economic rewards. Americans who aren't in the managerial class get paid a smaller percentage of the overall production created than ever before. This also has been decreasing for decades.

Thus the problem isn't one of too much productivity or too much automation - the problem is one where the rich get all the money.

Posted by: Lone Wolf | Jun 2, 2015 12:08:31 PM | 44

Right on cue...

Why America's color revolution strategy of global domination is doomed to fail: the case of Egypt

Posted by: paulmeli | Jun 2, 2015 12:16:13 PM | 45

"The main problem is this: We have to invest more and more energy to pump the same amount of oil, mine the same amount of ores and produce the same amount of food."

This may well be true, but if one looks at the history of spending growth (or more accurately public investment) by the U.S. federal government one will see that spending growth suddenly dropped by 1/3rd in the early 1980's (around the beginning of Ronald Reagan's presidency). This can be observed visually very easily by looking at the FRED series FGEXPND on a log scale…the breakpoint is obvious and so is the one at around 2010.

U.S. federal spending has averaged 7% since WWII overall…about 9% through 1985 dropping to about 5% thereafter. Since 2010 growth has been an anemic 1.6%.

It's no wonder GDP growth has been on decline since the 80's, and it's no wonder we are experiencing a slowdown now.

Posted by: james | Jun 2, 2015 12:34:50 PM | 46

@43 ǝn⇂ɔ quote.. "Thus the problem isn't one of too much productivity or too much automation - the problem is one where the rich get all the money."

who is buying the produce ǝn⇂ɔ ?

Posted by: dh | Jun 2, 2015 12:38:22 PM | 47

@46 A lot of money goes into remodelling. Look at the proliferation of home improvement stores.

Posted by: james | Jun 2, 2015 1:22:48 PM | 48

@47 dh.. the big money is in the mic/fic complex... chump change in most other areas relatively speaking.. i think the big money is coming from gov't spending.. it is a self sustaining vicious circle for everyone.. that's my simplistic rendition of it! who pays for those orange jump suits anyway?

Posted by: dh | Jun 2, 2015 1:33:19 PM | 49

@48 Not everybody in the US is in jail or on food stamps. There is a lot of disposable income in the US. People buy new vehicles, improve their homes, upgrade their entertainment systems, send kids to college, go on trips. The trick is to keep interest rates low and keep printing money. So far it seems to be working.

Posted by: Lone Wolf | Jun 2, 2015 3:09:14 PM | 52

@geoff29 @34

And the "ruling class" despite their equivocations, surely discusses amongst themselves the growing unsustainability of the ever encroaching environmental calamities, and dwindling resources, etc.

I am sure they discuss those and many other subjects under heaven, problem starts with their conclusions. Ever heard of the "smart idiot effect"?

(...)Buried in the Pew report was a little chart showing the relationship between one's political party affiliation, one's acceptance that humans are causing global warming, and one's level of education. And here's the mind-blowing surprise: For Republicans, having a college degree didn't appear to make one any more open to what scientists have to say. On the contrary, better-educated Republicans were more skeptical of modern climate science than their less educated brethren. Only 19 percent of college-educated Republicans agreed that the planet is warming due to human actions, versus 31 percent of non-college-educated Republicans.

For Democrats and Independents, the opposite was the case. More education correlated with being more accepting of climate science-among Democrats, dramatically so. The difference in acceptance between more and less educated Democrats was 23 percentage points.

This was my first encounter with what I now like to call the "smart idiots" effect: The fact that politically sophisticated or knowledgeable people are often more biased, and less persuadable, than the ignorant. It's a reality that generates endless frustration for many scientists-and indeed, for many well-educated, reasonable people.(...)

I'm sure nothing pleases these folks more but for us to deride them constantly and poke fun at their ineptitude and call them all sorts of "evil," because that would just be so much more grist for the mill.

Well, their lack of awareness is legendary, and their indifference to their damage on the planet and the suffering of others is their trademark. They might laugh all the way to the bank, in total ignorance of the legacy their greed and possessiveness are leaving in their wake.

Posted by: Lone Wolf | Jun 2, 2015 3:52:00 PM | 53

From Cooperation to Competition -
The Future of U.S.-Russian Relations


May 2015

A Report on an Interdisciplinary Wargame conducted by the
U.S. Army War College

Carlisle, Pennsylvania

Posted by: james | Jun 2, 2015 4:04:04 PM | 54


@49 dh.. i know that but thanks for the reminder..almost zero interest rates is the name of the game and has been for some time.. if people had a different interest rate on their line of credit - the jig would be up.. for now it is 'free money' with anyone silly enough to not 'invest' in the wall st casino, or is in any way pragmatic financially - will watch what money they have devalue quicker then you can say 'quicksand'..and, i am always reminded of the racial divide when i think of the states - food stamps verses big brand new automobiles.. what a weird culture.. canada isn't a lot different in some regards.. it is and it isn't..

Posted by: okie farmer | Jun 2, 2015 4:13:02 PM | 55

http://www.truthdig.com/report/item/karl_marx_was_right_20150531
by Chris Hedges

Karl Marx exposed the peculiar dynamics of capitalism, or what he called "the bourgeois mode of production." He foresaw that capitalism had built within it the seeds of its own destruction. He knew that reigning ideologies-think neoliberalism-were created to serve the interests of the elites and in particular the economic elites, since "the class which has the means of material production at its disposal, has control at the same time over the means of mental production" and "the ruling ideas are nothing more than the ideal expression of the dominant material relationships … the relationships which make one class the ruling one." He saw that there would come a day when capitalism would exhaust its potential and collapse.
~~~
The final stages of capitalism, Marx wrote, would be marked by developments that are intimately familiar to most of us. Unable to expand and generate profits at past levels, the capitalist system would begin to consume the structures that sustained it. It would prey upon, in the name of austerity, the working class and the poor, driving them ever deeper into debt and poverty and diminishing the capacity of the state to serve the needs of ordinary citizens.
~~~
The corporations that own the media have worked overtime to sell to a bewildered public the fiction that we are enjoying a recovery. Employment figures, through a variety of gimmicks, including erasing those who are unemployed for over a year from unemployment rolls, are a lie, as is nearly every other financial indicator pumped out for public consumption. We live, rather, in the twilight stages of global capitalism, which may be surprisingly more resilient than we expect, but which is ultimately terminal. Marx knew that once the market mechanism became the sole determining factor for the fate of the nation-state, as well as the natural world, both would be demolished. No one knows when this will happen. But that it will happen, perhaps within our lifetime, seems certain.

"The old is dying, the new struggles to be born, and in the interregnum there are many morbid symptoms," Antonio Gramsci wrote.

What comes next is up to us.

Posted by: ToivoS | Jun 2, 2015 8:18:47 PM | 57

lonewolf #52

Your comment reminds me of something once said by a retired law professor. "We spend considerable effort looking for bright young students for admittance into law school. Then we spend the next three years beating out their common sense".

Having been involved in graduate school education during my career that statement also applies to grad student education in English and Social Science departments.

[Jun 02, 2015] Tumbleweed Town: Kiev Post-Gas Transit

In Western MSM the 17.6% year on year GDP drop in Ukraine is mentioned as a just a number without any context. But during the Great Depression the US GDP contracted "only" 25%. In any given year of that depression it did not drop 17%. Also, in the case of Ukraine, it has already underwent its first Great Depression, which was worse than the US depression during the 1990s. So we are looking at The Second Great Depression in Ukraine. This is the meaning of this 17.6 drop. Ukrainian pensioners are brought by brave Western neocons with the help of local fifth column to the real starvation level. This is an important story and yet Western MSM ignore it much like they ignore now flight MH17. Instead we have overoptimistic "confidence enhancing" forecasts from Moody's, the World Bank, the IMF, and other western agencies. Which are pure political fluff. when in reality we need to state that USA neocons (see Nulandgate) destroyed the Ukraine economics and plunge the country into another Great Depression.
Ukraine earns around $3 Billion a year from gas transit fees. How is the loss of this income going to impact Ukraine, in view of its medium-term economic forecast?
Jun 01, 2015 | marknesop.wordpress.com

Anyone who has not sleepwalked through the gas-price squabble between Russia and Ukraine since the Great Freedom Jubilee known as EuroMaidan is aware that Russia has grown fed up with Ukraine's posturing and loose grip on reality – neither being a quality that is endearing or inspirational of confidence in its reliability as a gas-transit country for Europe. Russia has had projects underway for some time to gradually reduce its reliance on Ukraine as a gas-transit corridor for Russian gas since the stand-off in 2009, in which Ukraine was siphoning off gas intended for Europe for its own use free of charge, while Russia was expected to just make up the difference – Ukraine was confident Russia was without alternatives, since it would not dare shut off Europe's gas. Which it did, of course, initiating a panic and a lasting reputation for Russia as an unreliable energy partner. Nothing much was ever said about Ukraine stealing gas; Europe made a few comments to the effect that there was wrong on both sides, and left it at that, and ever afterward the narrative was that they knew Russia accused Ukraine of stealing gas, but where was the evidence?

Russia constructed the Nord Stream pipeline, and partially completed South Stream, the two of which together would handle the entirety of gas shipped to Europe, without going through Ukraine. The EU dug in its heels, and went on about how everyone needs rules and Russia would have to abide by the Third Energy Package which said the same company cannot own both the gas and the pipeline, and lots of other twaddle although it simply hands out exemptions to its own suppliers, and Russia canceled South Stream. The EU was jubilant – it had put those Russkies in their place, by God!

Which brings us, skipping over many other details which are of great import but not germane to the gas situation, to where we are now. Russia has announced it will construct Turkish Stream instead, delivering the same amount forecast for South Stream – 63 BCm – to the Turkish/Greek border. If Europe wants gas, it can build pipeline infrastructure to take it from that point. If not, fine – start busting up Granny's piano for firewood. And none – as of 2019 at the latest but probably around 2017 – will go through Ukraine.

Ukraine earns around $3 Billion a year from gas transit fees. How is the loss of this income going to impact Ukraine, in view of its medium-term economic forecast?

As a starting point, it would be hard to envision a more dramatically effective program of economic ruin than what has been done to Ukraine by its western friends. The currency has fallen off a cliff, averaging 7.29 to the U.S. dollar between 2002 and 2015, spiking to a record low value of 33.5 to the dollar in February of 2015 and currently at a ruinous 20.44. Whoever wrote the summary apparently wanted to camouflage the moment of disaster by averaging the value of the hryvnia from 2002 to 2015, because the value declined steadily throughout 2014 and can be traced almost to the minute to the Euromaidan demonstrations, accelerating to a screaming power dive after they turned violent and cratering with the collapse of the Debaltseve cauldron. The stock market has fallen to a quarter of its value in 2008. The most recent GDP Growth Rate is a contraction of 3.8% in the final quarter of 2014 – certainly worsening since then – and annually is a jaw-dropping contraction of 17.6%. Helpfully – I meant that sarcastically – the official unemployment rate has soared to 9.7% over 2013's low of 7.6%, and has been over 9% since the beginning of 2014, while inflation has bulleted its way up to 60.9%. All these are figures the state statistics service will admit to. Meanwhile, its hapless government merrily enacts a debt moratorium, authorizing itself to put a hold on payments to its creditors, even as it doubles "defense spending".

Anyway, on to the sometimes comical dynamics of the European gas business. I think my favourite is the smirking strut executed by various countries as they claim to be "weaning themselves off of Russian gas" by importing gas from some other European country that is a net importer of Russian gas. Like Poland, for example. Kiev was quite proud of itself when, in 2012, it reduced its imports of Russian gas by taking delivery of gas from RWE in Poland on a trial basis. These imports continued into 2013 – a year in which Poland (which is also "weaning itself off of Russian gas") took 60% of its gas from Russia. They've wised up now, though, and plan to import significantly more gas from Germany…which gets 38% of its gas from Russia. Oh, and they're building an LNG terminal into which they plan to import LNG from Qatar via tankers. More expensive than pipeline gas, of course, which is just good economics by European standards, but at least they can fly a Polish flag on the LNG terminal. You just can't put a price on national pride, can you? And they'll be able – in their dreams – to say goodbye to gas imports someday from that evil undemocratic Stalin dictatorship of Russia in favour of freedom gas from the smiling Qataris, ruled through a constitutional monarchy in which the Emir exercises absolute power and whose heirs come from the male branch of the al-Thani family.

Meanwhile, Ukraine itself remains the fifth-heaviest consumer of natural gas in Europe, at some 55 BCm annually. Mind you, it should realize significant savings in consumption by the almost-complete loss of its heavy industry sector, most of which is in the east – every cloud has a silver lining, what? But Ukraine's domestic production peaked at 68 BCm forty years back, has been in decline since then and now amounts to about 20 BCm – less than half its current consumption. So in order for Ukraine to wean itself off of Russian gas, it is going to have to either cut its consumption in half or buy reverse-flowed gas from other European countries – using mostly handout money, since it is going to lose $3 Billion off the top of its GDP which is currently contracting at a rate of more than 17% per year. Put that way, it doesn't sound too hopeful, does it? Mind you, the EU is doing its bit to help by insisting on reforms which have doubled the price of gas for household use, even as the currency has shrunk to about a third of its previous value.

kirill , June 1, 2015 at 7:05 pm

Good article. It is peculiar how the 17.6% year on year GDP drop in Ukraine is mentioned as a ho-hum statistic without any context. The US GDP contracted 25% during the Great Depression. In any given year of that depression it did not drop almost 18%. Also, in the case of Ukraine, it has already underwent a Great Depression worse than the original during the 1990s and has *not* fully recovered. So we are looking at an epic economic contraction since 1990. This is a big story and yet there is no spotlight on it whatsoever. Instead we have those retarded "forecasts" from Moody's, the World Bank, the IMF, and other western agencies which are pure political fluff.

On another forum a well informed poster was confused by what year on year meant. As you correctly note in your article it is basically a measure of the relative change in the GDP after one year. The only way Ukraine's GDP could hit those western "forecasts" in 2015 would be if it had a surge of growth in the second half of the year. This ain't gonna happen. In fact the decline will continue into the second quarter and the rate of decline will decline in the second half due to the fact that it is compared to the second half of 2014 which was already in full bore recession. The first quarter of 2015 dropped almost 7% compared to the fourth quarter of 2014. I expect there to be quarter to quarter drops in Ukraine's GDP during all of 2015. This translates into a GDP drop in 2015 of between 20% and 30% depending on how rapidly the collapse slows later this year.

As for the EU and its racist, delusional hate aimed at Russia. It will reap what it has sown. For some reason some analysts think that if Iran is allowed to ship gas to the EU this will undermine Russia. They are missing the mark. Russia will be happy to have the EU supplied with its gas from the Middle East. Everyone with a clue will see the implications. Russia's own production will decline in the long run as is inevitable and Russia has now the access to the huge Chinese market at a reasonable price. The stooges in Brussels will be remembering the good old days of Russian supply.

[May 28, 2015] USA and EU playing politics with gas

et Al, May 28, 2015 at 8:27 am
hAPpy: AP Interview: Under US pressure, Serbia ready to reduce dependence on Russian gas supplies
http://hosted.ap.org/dynamic/stories/E/EU_SERBIA_US?SITE=PAREA&SECTION=HOME&TEMPLATE=DEFAULT

In a major policy shift, the Serbian prime minister said his country will accept U.S. calls to reduce dependency on Russian gas by adding an American-backed pipeline that would bring gas to Europe from Azerbaijan.

"Regarding energy safety, energy security, we are ready to diversify the sources of gas for Serbia, which is very important for our American friends as well," Aleksandar Vucic told The Associated Press in an interview.

The United States has been encouraging Balkan and other states to move forward with the Trans-Adriatic Pipeline, which will take Azeri gas from the Caspian Sea to Italy, rather than setting its hopes on another project that would pipe Russian gas through Turkey.

The West has accused Russia of using gas as a tool to increase its political influence over countries like Serbia…

###

Poor Vucic, I wonder what they threatened him with to get him to get this empty propaganda statement victory for The Empire? Another visit from Fruit Cake McCain, or maybe that they'd let the Albanians tear another strip of Serbian land for their Naturalist Albania project (where Albanians can walk naked freely and their corrupt politicians, institutions and organized crime syndicates can hold naked bbqs together without fear of arrest). If he played his role sensibly, he would have pretended to resist and got something decent in return. I doubt it.

Still, as I wrote here a few days ago: https://marknesop.wordpress.com/2015/05/12/is-it-too-early-to-just-call-the-game-for-putin/comment-page-5/#comment-106537

…As far as I can see and from what I have read so far, all pipelines within Europe will be interconnected, regardless of transit agreements or energy packages. Russia doesn't care once it is in as you have already pointed out…

And most of us here (unlike the West) understand fully that once the Russian gas arrives at the Turkish/Greek border, that's it. They don't care what happens next.

So, the news is just fluff and doesn't change the fundamentals. Serbia did not say it would dump TESLA for TAP. There still needs to be a pipeline and thus interconnection of pipelines now looks inevitable. If Moscow is funding TESLA, then it will be a straight forward commercial deal.

On another level, the timing does say a lot. As quite a few people have pointed out already, the current problems in Macedonia also have extremely convenient timing for The Empire's geopolitical goals, so it would be remiss of the US not to take advantage (whether they are behind the crisis in Macedonia or not) and put the squeeze on the US. Still, it seems like an awful amount of effort for very little in concrete result. I suppose on this level it is just "If you don't use it, you lose it".

marknesop, May 28, 2015 at 11:03 am
Mmmm, yes; we've discussed that on several occasions, and this is just more ludicrous posturing by Captain Indispensable. As discussed in the final paragraph of this post, 25% of the natural gas consumed in Europe comes from Russia, by far the largest supplier. Azerbaijan is not even mentioned as a supplier, but as discussed here, its president – Ilham Aliyev – was awarded the unenviable title of Most Corrupt Person of 2012 by the Organized Crime and Corruption Reporting Project. The flows Europe will be looking for exceed the Shah Deniz field's capacity.

Perhaps someday Europe will come to rue the day it allowed its decision-making to be done in Washington and rubber-stamped by Brussels, although it is likely to make Aliyev a happy man in the short term. But that day is evidently not today. And so Europe will blunder about, trying to do the will of its master, until the time to engineer hookup to Russian gas supplies has run out. Then it will squeal that Putin is using energy as a weapon. It has failed to note that if Russia really needed to deliver gas directly to the consumer – paying all transit expenses itself – it would do so, and its present unconcern is not affected, but an actual reflection of its lack of concern whether Europe wants gas or not. Because it knows that Europe will want gas, because it can't get it anywhere else in the volumes it needs, and nothing will bring prices up like a little healthy panic. Predictable as death and taxes.

Perhaps in the near future, the coming of spring will be reflected as much by Europe's cockiness regarding its gas requirements as much as the appearance of robins. Cocky in spring, desperate in autumn. Not this year, because its gas will still come through Ukraine. But keep an eye on the volume it takes. An interesting note here is that of the 63 BCm Turkish Stream is expected to carry annually (construction started earlier this month), only 47 BCm of it is expected to be made available to Europe at the Turkish/Greek border.

If you look at the language Sefcovic used back in March, he spoke of Europe as "a big client" and moaned about Russia making all these decisions without consulting "Gazprom's long-term European customers". It is fairly obvious that Europe knows all its mouthing off about weaning itself off of Russian gas is just lip service to please Washington – wean itself on to…what? As an old naval saying goes, don't let your mouth get your face in trouble.

kat kan, May 28, 2015 at 11:59 am
With all the messing around, they will not get ANY pipeline ready in time. Then Russia will generously sell them (at THEIR price) through Ukraine, by then run out of bullets; they'll let Ukraine have some transit money, otherwise they'll start burning bodies for heat.

EU of course will still squeal about "playing politics with gas".

marknesop, May 28, 2015 at 12:12 pm
Yes, a couple of observations on that note: one, Miller says Gazprom expects to increase its gas exports to Europe this year by something like 5% over 2014, and forecasts Russia's share of supply to Europe may increase to 35% of the total, based on the decline in production in European countries. The writing is on the wall, Europe; I don't know how much clearer it needs to be that you must stop fannying about and pretending to have all these alternatives, you just can't make up your mind so everybody should be paying court to you to gain your favour. Two, Europe is still trying to sweeten the pill for Bulgaria to repay it for standing up to South Stream and getting it cancelled – they're going to be a hub of gas distribution for Romanian gas. We'll see.
et Al, May 28, 2015 at 2:26 pm
There was a piece the other day that Russia's gas supply decreased to about 23% whilst Norway's increased to 29 odd percent. I can't find the source now obviously, but in my brief search for the source, I came across this:

The Independent: Gas imports from Russia's Gazprom giant to soar after new Centrica deal
http://www.independent.co.uk/news/business/news/gas-imports-from-russias-gazprom-giant-to-soar-after-new-centrica-deal-10248692.html

Britain's dependence on Russian energy is set to grow after Centrica announced a deal to increase significantly the amount of gas it buys from Gazprom to 4.16 billion cubic metres (bcm) a year.

The agreement is the direct result of dwindling North Sea supplies and will see the British Gas owner increase the amount of the gas it imports from the Russian state-controlled giant by 70 per cent.

The UK needs about 70 bcm of gas a year for heating and electricity and the deal means Gazprom will be meeting nearly 5 per cent of the country's demands….

…However, because Centrica has struck its agreement with Gazprom's UK subsidiary, which can source supplies from outside Russia if need be, it is expected to be less vulnerable to problems relating to Russia.

A Centrica spokesman said he was confident that the subsidiary, Gazprom Marketing & Trading, would be able to fulfil its contract: "Russia provides about 30 per cent of Europe's gas imports of about 440bcm a year," he said. "Without Russian volumes, Europe's supply and demand balance would change significantly, impacting the ability of the UK to import materially from continental Europe, or impacting the cost of doing so."…

…Russia has been a "reliable supplier of gas all the way through the Cold War", and it needed European demand too, he added.

Well, well, well dear readers! In to the mouth of the beast… And after the UK is forcing Fridman to sell his North Sea assets he bought from the Germans.

I would guess that ..can source supplies from outside Russia if need be.. would be from storage in Germany and all the new storage in Europe (some of which Gazprom has funded) built since the Ukraine cut off supplies in 2009. I also guess that as I've read Germany is only using <~50% of Nord Stream capacity, Russia could simply more in to available storage. Add to that recent plans to double Nord Steam's capacity and Gazprom has supplies covered whatever the Uke's try, though dependent on transmission from Germany, Byelorussia etc.

It is all quite hilarious though. For a laugh and If Europe pays for it, Russia could also ship LNG to Europe (the proposed new terminal at Krk, Lithuania and other terminals) It will still be cheaper than the stuff coming from elsewhere too and for a long time before the Leviathan field starts development.

Honestly, this news shows what a massive gulf there is between what the business people do and what we hear from the PPNN and the porkiticians. One only makes sense if your completely ignore the other! Crazy mofos.

As for Brussels, they can continue doing a fine job of feeding their private parts in to their own meat-grinder whilst whistling Ode to Joy happily. They're quite good at doing it!

marknesop, May 28, 2015 at 2:38 pm
It's hard to imagine Norway's share increasing significantly – and if so, not for long – since its own supplies are in rapid decline and it is taking rapid steps to diversify away from dependence on energy sales. But an increase for Russia over 2014 is really just getting things back up to where they were, as 2014 marked a noticeable drop in European imports from Russia. Perhaps that's what they were talking about.
kirill, May 28, 2015 at 3:03 pm
Real world constraints don't apply to the propaganda lala land that the west is living in. It looks more and more Orwellian every day. "Our dependence of Russian gas is declining" as the actual consumption increases. The same as "the rations have been raised again this week".

[May 27, 2015] Ukraine is out of options

Jeremn, May 27, 2015 at 8:07 am

There may be trouble ahead. Ukraine's gas prices are set to stay high:

Vovk said, "if the price of gas bought in Europe is multiplied by the forex rate of the dollar [against the Ukrainian hryvnia] and all the taxes are added, the final price will be higher than the highest gas rate for households."

http://en.interfax.com.ua/news/economic/268268.html

marknesop, May 27, 2015 at 10:11 am

Heads up – it looks as if Ukraine might be getting increasingly interested – by virtue of being out of options – in the "odious debt" escape, announcing more frequently through its official channels that the government should not have to take responsibility for "loans borrowed by a kleptocratic regime".

The $3 Billion owed to Russia is due at the end of this year, but if Ukraine does not manage a debt-restructuring deal by end-June – which will entail many of its creditors taking a big haircut or simply forgiving debt altogether – it may be ineligible for its next tranche of handouts from the IMF and default may be all that's left.

I would just remind again at this point that all Russia has to do is nothing more than has been done already, and Ukraine will collapse absent some heroic intervention such as the west offering to just give it free money forever.

[May 25, 2015] Their knowledge of geography is so abysmal that perhaps there is a prevailing belief in the west that Macedonia is part of Turkey, or stands between Turkey and the Black Sea.

marknesop,

May 23, 2015 at 10:50 pm

The west persists with its capering and grinning, convinced that it is stirring up a shitstorm in Macedonia and that this has Putin very worried. Get the net, for God's sake. They are apparently incapable of reading; although on reflection, their knowledge of geography is so abysmal that perhaps there is a prevailing belief in the west that Macedonia is part of Turkey, or stands between Turkey and the Black Sea.

From an interview Alexei Miller gave to Russia 24 in December of last year, select quotes:

"[Bulgaria] will bear significant losses due to the South Stream cancellation. Approx. €3bn will not be invested in Bulgaria. More than 6.000 jobs will not be created. Moreover, Bulgaria will lose its status of a transit country. For the time being, Bulgaria transits 18bcm of gas to Turkey, Macedonia and Greece. Once the new pipeline is built, these gas volumes will go via Turkey."

"Once the new pipeline becomes operational, the role of Ukraine as a transit country will be reduced to zero. We will of course continue providing Ukraine with the volumes it needs for the domestic consumption, but gas deliveries to Europe will go through the alternative routes.Gas will not pass through Ukraine or Bulgaria, but will be delivered to the EU from another side. Once the pipeline reaches the EU, European consumers can pick up gas at the Turkey-Greece border. In this case, the Third Energy Package norms will not be applied to these deliveries."

"In principle, the decision to abandon South Stream is the beginning of the end of Gazprom's model when the company focused on direct gas deliveries to the end consumer in the European market. If the consumer doesn't want the goods to be delivered to his home directly, then he has to get dressed and go to the shop. In our case, the shop is the delivery point, which will be on the Turkish-Greek border."

What part of "pick up gas at the Turkish-Greek border" is not sinking in? Stir up all the shit in Macedonia you like; all it will accomplish is making it difficult for Europe to run pipeline infrastructure itself. And if Brussels thinks it is going to be able to get enough gas, come winter of 2018 or so, from Azerbaijan via the unicorn-patrolled Southern Gas Corridor to supply Europe's needs, it is even more inbred and simple than I thought.

[May 23, 2015]Slovakia, Hungary, Romania and Bulgaria embark on gas pipeline project

May 22, 2015 | marknesop.wordpress.com
et Al, May 22, 2015 at 12:24 pm
euractiv: Slovakia, Hungary, Romania and Bulgaria embark on gas pipeline project
http://www.euractiv.com/sections/energy/slovakia-hungary-romania-and-bulgaria-embark-gas-pipeline-project-314793

At the Riga summit yesterday (21 May) Slovakia, Hungary, Bulgaria and Romania signed a Joint Declaration backing the idea of building the Eastring gas pipeline, designed to link Central with Southeastern Europe. However the name Eastring doesn't appear in the document…

..Eastring is a proposed pipeline, a version of which is 832 kilometres long, and runs across Slovakia, Hungary and Romania, while another version is 1274 kilometres long, and reaches Bulgaria.

One of its advantages is that Eastring uses the existing infrastructure of Eustream on Slovak territory, which was completely renovated after the 2009 gas crisis.

It is designed to transport gas in both directions, with a capacity of 20 billion cubic metres a year (bcm/y) at the first stage and 40 bcm/y at the final stage. Potential gas sources for forward flows are Azerbaijan, Turkmenistan, Iraq, Cyprus and Russia, while for the reverse flow, it is gas from Western European hubs.

The optimistic target date for building the first stage of the pipeline is 2018…
####

Who's paying for it?

kat kan, May 22, 2015 at 1:41 pm
I think Hungary was already started on South Stream, before Bulgaria got trodden on to pull out of their end.

In theory Turk Stream can be slightly redesigned to terminate in Bulgaria instead of Greece but…. Russia has likely promised this and other help to Greece, and won't want to let them down to benefit Bulgaria, which was weak enough to cancel South Stream. Russia did say though that Bulgaria could get a spur line for their own needs. .But one current plan also goes through Macedonia, and that route is a powerful shove to make them agree with Greece about the name.

Anyway having 4 EU countries agree on something the EU is against is a big first.

The only likely reverse flow customer is Ukraine, whose credit rating would not inspire me to spend a few billion to serve just them.

[May 23, 2015] Porky and Yats repeatedly state that Russia is an aggressor state, and with the same breath they ask Russia for a discount on further gas supplies, for which Ukraine owes billions

"...And don't forget folks: Porky and Yats and a host of other shits that are part of the Kiev "government" repeatedly state that Russia is an aggressor state, is at war with the Ukraine and has invaded its eastern territory, where the Russian army presence numbers thousands. And with the same breath they ask Russia for a discount on further gas supplies, for which previously supplied Russian natural gas the Ukraine state owes billions."
"...Bear in mind, with their continuous shameless mendacity and double talk they may simply be mimicking the behaviour of their mentors, whose blatant hypocrisy has long been evident,"
Moscow Exile, May 23, 2015 at 6:50 am
Ukraine asks to extend discount on Russian gas by end of year

And don't forget folks: Porky and Yats and a host of other shits that are part of the Kiev "government" repeatedly state that Russia is an aggressor state, is at war with the Ukraine and has invaded its eastern territory, where the Russian army presence numbers thousands.

And with the same breath they ask Russia for a discount on further gas supplies, for which previously supplied Russian natural gas the Ukraine state owes billions.

Some aggressor!

Moscow Exile, May 23, 2015 at 6:55 am

They need a decent English proofreader: "by the end of the year" means a discount extension should be agreed upon before this year ends.

What the RT headline should is, I suspect: "Ukraine asks to extend discount on Russian gas up to the end of the year", meaning they want their present discount extended up to and including 31 December 2015.

Moscow Exile, May 23, 2015 at 7:19 am

Remember the "Are Slavs Stupid" thread of a while back?

I'm seriously beginning to believe that Ukrainians are, or at least many of their public figures are, in that they consistently make contradictory statements in almost the same breath, which might indicate that they have a very short memory span (surely a sign of being slow witted) or that they are so stupid not to recognize that the clear stupidity of their contradictory statements must surely be recognized by most people who are in possession of a normal intellect.

Bear in mind, with their continuous shameless mendacity and double talk they may simply be mimicking the behaviour of their mentors, whose blatant hypocrisy has long been evident, e.g. the statement: "We hold these truths to be self-evident, that all men are created equal …" was composed by slaveowners almost to a man, in that several of the Founding Fathers of the USA were in possession of hundreds of human beings that were listed in their account books as personal property and worked for them as slaves, namely George Washington, Benjamin Franklin, Thomas Jefferson, James Madison, and Patrick Henry were all slave-owners. And Hilary Clinton "misspoke" when saying publicly that she had been fired upon by a sniper when arriving at Belgrade airport with her daughter; not forgetting the US lies concerning Iran and Iraq, of course, and the destruction of the USS Maine at Havana; and the role of the US Marine Corps in maintaining "freedom and Democracy" for the benefit of United Fruit and Wall St. in Central and Southern America, as revealed by General Smedly Butler …

[May 17, 2015] This May Just Be The Start Of The Oil Price War Says IEA

05/16/2015 | Zero Hedge
Submitted by Andy Tully via OilPrice.com,

Saudi Oil Minister Ali al-Naimi may be one of the most powerful individuals in the global oil industry. After all, as the top oil official in arguably the world's most influential oil-producing country, he has enormous influence.

But for all his power, is he the most ingenious? That question arises from the release of two reports on the current state of the oil industry that look at whether or not OPEC's strategy of forcing US shale to cut back is succeeding.

The first, issued on May 12 by OPEC, says, in essence, that Saudi Arabia's effort to keep its own oil production at near-record highs is succeeding in wresting market share back from US producers of shale oil, also called "light, tight oil" (LTO). The second, issued a day later by the International Energy Agency (IEA), agrees, but only up to a point.

"In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked," the IEA reported. "Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating."

But the report from the Paris-based IEA, which advises 29 industrialized countries on energy policy, also pointed to a rebound in oil prices that could benefit US shale producers.

As both the OPEC and IEA reports point out, the decline in US shale oil output has somewhat reduced the oil glut and led oil prices to rally up to about $65 per barrel. And the IEA adds that this brings LTO back above the threshold where its production becomes profitable again.

But that, evidently, isn't good enough for both domestic and foreign shale drillers in the United States, and this is where ingenuity enters the picture. "Several large LTO producers have been boasting of achieving large reductions in production costs in recent weeks," the report said.

For example, Statoil, Norway's huge state-owned energy company, is trying out new techniques of hydraulic fracturing, or fracking, in Texas' Eagle Ford shale field. They include using different grades of sand to mix with water and chemicals, and drilling at varying depths, to increase oil yields.

"There's a proverb in Norway that says necessity teaches the naked woman how to knit," Bjorn Otto Sverdrup, a Statoil vice president, told The New York Times, during a tour of the company's shale operations in Kennedy, Texas.

Evidently this mother of invention is showing some success. Statoil may have cut the number of its rigs at Eagle Ford from three to two in 2014, but its production from the shale field is up by one-third. The new fracking method has also cut the cost of extraction from an average of $4.5 million per well to $3.5 million, in part because it's been able to reduce drilling time from an average of 21 days to 17.

Against this backdrop, then, it's not surprising that the IEA isn't so sure that OPEC in general, and al-Naimi in particular, have the upper hand – yet. "It would thus be premature to suggest that OPEC has won the battle for market share," the agency's report said. "The battle, rather, has just started."

[May 17, 2015]Dumping only works if you destroy, buy or otherwise acquire control on your competitor s

astabada, May 14, 2015 at 9:06 pm
This article is from Sputnik News.

Six months ago, OPEC, led by Saudi Arabia, announced a surprising decision to counter rivals' energy production. Instead of cutting back on oil production to match global demand, member states would hold steady.

[…] by flooding the market, global prices would plunge, and more high-priced competitors would be forced to respond. The main target, US shale companies, would hopefully collapse as they were forced to cut spending.

Six months later, the plan seems to be working.

Well done Saudi Arabia, well done. Except oil is a finite resource, so US oil (and Venezuelan, Russian, Iranian oil, …) are still there, and eventually will get sold at even higher prices.

Dumping works if you destroy, buy or otherwise acquire control on your competitors.

If you had ten canvas from van Gogh, would you sell them at half price to prevent your competitors from selling theirs?

If you answered yes to the above question, congratulations! You are eligible to be Oil Minister of the Kingdom of Saudi Arabia! Contact us immediately (please outside lunch hours).

[May 15, 2015] Emerging Market Week: India & Brazil Stall; Risk Up in Venezuela, Ukraine

May 15, 2015 | Barrons.com

UKRAINE: Default risk appears to be rising. Talks between the main creditor group and the Ukraine government have stalled, with both sides taking a less conciliatory tone in the media. The key area of disagreement is write-down on principal. …

The IMF has said that a debt deal was "vital" before it completes its next review in mid-June."

[May 08, 2015] Obamas Real Motive Behind The Iran Deal A Backdoor Channel To Sell Weapons To Saudi Arabia

Notable quotes:
"... Cooperation and coordination between China and Russia are needed to maintain the international balance of power and preserve the post-war world order. The participation of the leaders of the two countries in mutual events dedicated to the 70th anniversary of the Victory in World War II indicates that Russia and China, as the largest countries in the world and members of the United Nations, intend to maintain international order. ..."
May 06, 2015 | Zero Hedge
For a long time there was confusion about the "quo" to the Saudi Arabian "quid" over its agreement to side with the US on the Iranian "nuclear deal" (which incidentally looks like it will never happen simply due to the Russian and Chinese UN vetoes).

Then over the weekend we finally got the answer thanks to the the WSJ, which reported that "Gulf States want U.S. assurances and weapons in exchange for supporting Iran nuclear deal."

The details are quite familiar to anyone who has seen the US Military-Industrial Complex in action: the US pretends to wage an aggressive diplomatic campaign of peace while behind the scenes it is just as actively selling weapons of war.

Leading Persian Gulf states want major new weapons systems and security guarantees from the White House in exchange for backing a nuclear agreement with Iran, according to U.S. and Arab officials.

The leaders of the six-nation Gulf Cooperation Council, including Saudi Arabia, the United Arab Emirates and Qatar, plan to use a high-stakes meeting with President Barack Obama next week to request additional fighter jets, missile batteries and surveillance equipment.

They also intend to pressure Mr. Obama for new defense agreements between the U.S. and the Gulf nations that would outline terms and scenarios under which Washington would intervene if they are threatened by Iran, according to these officials.

The Persian Gulf countries say they need more drones, surveillance equipment and missile-defense systems to combat an Iranian regime they see as committed to becoming the region's dominant power. The Gulf states also want upgraded fighter jets to contain the Iranian challenge, particularly the advanced F-35, known as the Joint Strike Fighter.

A senior U.S. official played down chances that the administration would agree to sell advanced systems such as the F-35 fighter to those nations-though the planes will be sold to Israel and Turkey-because of concerns within the administration about altering the military balance in the Middle East.v

There is much more but a question already emerges: why does the "Gulf Cooperation Council" need so many ultramodern weapons to "defend" against an Iran which is supposedly halting its nuclear program and is in the process of showing its allegiance to the west by endorsing a peace process.

Unless it was all merely a ruse to arm the Middle East from the very beginning?

And now the "end" is near because when it comes to matters of revenue and profitability for the US Military-Industrial complex, seek and ye shall find. According to Reuters, "Obama is expected to make a renewed U.S. push next week to help Gulf allies create a region-wide defense system to guard against Iranian missiles as he seeks to allay their anxieties over any nuclear deal with Tehran, according to U.S. sources."

The offer could be accompanied by enhanced security commitments, new arms sales and more joint military exercises, U.S. officials say, as Obama tries to reassure Gulf Arab countries that Washington is not abandoning them.

Not only is Obama not abandoning "them", but the entire Iran "negotiations" farce increasingly appears to have been produced from the very beginning to give the US a diplomatic loophole with which to arm the biggest oil exporter in the world. Sure enough:

Gulf Arab neighbors, including key U.S. ally Saudi Arabia, worry that Iran will not be deterred from a nuclear bomb and will be flush with cash from unfrozen assets to fund proxies and expand its influence in countries such as Syria, Yemen and Lebanon.

U.S. officials with knowledge of the internal discussions concede that Obama is under pressure to calm Arab fears by offering strengthened commitments. "It's a time to see what things might be required to be formalized," a senior U.S. official said.

All of this should come as a surprise to precisely nobody as the US takes advantage of its waning years as a global hegemon, and seeks to sell US weapons far and wide to the benefit of a select few Raytheon, General Dynamics and Lockheed shareholders.

And yet something peculiar emerges: in the Reuters piece we read that "Obama is all but certain to stop short of a full security treaty with Saudi Arabia or other Gulf nations as that would require approval by the Republican-controlled Senate and risk stoking tensions with Washington's main Middle East ally Israel."

Which brings up another interesting regional player: Israel. Because while we now know the real reason for Saudi's complicity in the Iran "nuclear deal", a key middle east player is none other than Israel, which under Netanyahu's control has puffed and huffed against the Iran deal, and yet has done nothing. Why? Here Bloomberg provides some very critical perspective which introduces yet another major player in the global military exports arena.

Russia.

Bloomberg has the details:

Last month, when President Vladimir Putin of Russia announced plans to sell a powerful anti-missile system to Iran before the lifting of international sanctions, Israel was quick to join the U.S. in expressing shock and anger.

But behind the public announcements is a little-known web of arms negotiations and secret diplomacy. In recent years, Israel and Russia have engaged in a complex dance, with Israel selling drones to Russia while remaining conspicuously neutral toward Ukraine and hoping to stave off Iranian military development. The dance may not be over.

...

One of those issues is Israel's neutrality toward Ukraine, where Russian-backed separatists have waged war over the past year. Israel has held back from selling weapons to the government in Kiev, which is backed by the U.S. and European Union, in the hope of keeping Russia's S-300s away from Iran.... "Israel has come under a lot of pressure for not joining the all-Western consensus on the Ukrainian crisis," said Sarah Feinberg, a research fellow at Tel Aviv's Institute for National Security Studies. "It was a difficult decision for the Israeli government, which was concerned about possible Russian retaliatory moves in the Mideast - such as selling the S-300 to Iran."

The issue at hand is the delivery of Israeli drones: whether to Ukraine, where such a deal was recently scuttled following internal dissent by opposition within the Israel government, or to Russia, which already has received Israel UAVs.

Russia expressed interest in buying Israeli drones after coming up against them during the 2008 war with Georgia. In 2010 Russia concluded a deal to purchase 15 of them from IAI, and to set up a joint venture to produce drone technology.

An Israeli familiar with the matter said the drone deal with Russia carried an unwritten quid pro quo: It would proceed only if the Kremlin suspended its announced S-300 sale to Iran. Now having gotten the Israeli technology, the Israeli said, that promise is no longer a factor in Russian considerations.

In other words, now that Israel - which is the world's largest exporter of Unmanned Aerial Vehicles - no longer has leverage over Russian military needs as Moscow has long ago reverse-engineered the Israeli technology, Israel may have no choice but to provoke Russia in the middle east.

"Sending drones or other arms to Ukraine would be an ineffective, even inconsequential Israeli response to Russia selling the S-300s to Iran," said Feinberg. More effective, she said, would be for Israel to lift its political neutrality on the Ukrainian conflict, or take actions in the Middle East against Russian regional allies such as the Bashar al-Assad regime in Syria.

For now however, Israel's full on engagement in Syria (or Iran) appears to have been prevented: "On April 23 Russia did appear to backtrack somewhat on its earlier announcement of the S-300 sale to Iran, with Deputy Foreign Minister Sergei Ryabkov telling the Interfax news agency that delivery won't occur soon, and would only happen after political and legal issues were resolved. In his April 16 call-in show on Russian television, Putin acknowledged that Israeli objections had scuttled a potential S-300 sale to another Mideast nation, reportedly Syria."

To attempt a summary: under the pretext of Iran negotiations for peace, the US is preparing to quietly arm virtually all Gulf states with the latest US military technology, even as Israel has given Russia some of its latest drone technology which means Russia may at any moment proceed to arm Iran and Syria with modern Surface to Air missiles, while Israel is contemplaring retaliation not only against Iran but Syria as well: the country which nearly led to a global proxy war in the mdidle east in the summer of 2013.

In other words, we have, for the past few years, been on the edge of a razor thin Middle Eastern balance of power equilibrium which prevented any one nation or alliance from garnering an outsized influence of military power.

All of that is about to change the moment the MIC figurehead known as president Obama greenlights the dispatch of billions of dollars in fighters, drones, missile batteries, and surveillance equipment to Saudi Arabia and its peers, in the process dramatically reshaping the balance of power status quo and almost certainly leading to yet another middle eastern war which will inevitably drag in not only Israel and Russia at least in a proxy capacity, but ultimately, the US as well.

Just as the US military industrial complex wanted.

Because as every Keynesian fanatic will tell you: in a world saturated by debt, and where organic growth is no longer possible, there is only one remaining option.

War.

* * *

And just to assure the required outcome, moments ago John Kerry arrived in Riyadh to conclude the deal.

Kerry arrives in Riyadh #Saudi Arabia.

pic.twitter.com/2CPIP69Ut0

- Conflict News (@rConflictNews) May 6, 2015

Pool Shark

Why do they need a 'backdoor,' when they've been selling arms to the Saudis through the front door since time began?...

Skateboarder

Barry insists there be a backdoor, for uh, personal reasons.

Looney

Reggie Love: Did I hear "Backdoor Channel"? ;-)

weburke

the real question is how does Israel view it. Netanyahu has not endorsed any of this. I would guess Israel has no friend in Obama and his controllers, and will soon take action of their own.

What possible gain is it for Israel to have the fucking tyrant insane neighbors get all armed up? hello war.

Oh regional Indian

This is very good insight.

Bastids...

By the way, India is totally thumbing it's nose at the US led non-coalition of the unwilling in continuing to deal with Iran for all manner of goods and services. Big barter deals, gold payments via Turkey for oil...

So there is that going on in Iran's Eastern flank. Iran, by the way, was rumored to have a "Perfect Plate" from the US mint via Henry Kissinger (or some spook) and during Shah of Iran time were the world's largest counterfeiters of the USD, only thing, they had a perfect Plate. Obviously CIA controlled.

All that money, EuroDollars, Petrodollars....black money, drug dollars (Iran is a major heroine transit point).

Nothing is as it seems...

Sequence 15 for discerning ears ;-)

https://www.youtube.com/watch?v=aP4NGb8HJbk

jdtexas

Simply idiotic war propaganda

Jumbotron

Reagan just called from the grave. He wants his Iran Contra back.

F0ster

PetroDollar = Defending Saudi Arabia with US military.

PetroDollar now collpasing thanks to Russia, China, Iran which forces Saudi Arabia to spend their USD's with the MIC to defend themselves.

Endgame for the PetroDollar system.

Mike Masr

The backdoor, wasn't this the aircraft used to covertly bring all the Saudi's back home on 911 when all the other aircraft were grounded?

TahoeBilly2012

Anyone with a brain could guess the Iran deal was always a scam of some sort. Why? Well, because everything is a scam from these people and there is no peace, ever, not the goal. It amazes me the rest of the world even engages with the Zionist shitshow called the USA.

Anunnaki

President Peace Prize needs MOAR war in the Middle East before he "leaves" office. He is at proxy war (for now) with Russia. That was quite a feat so:

Why not take on Iran while he is at it. Two birds with one big stone and all that.

Bill of Rights

Hmm is this like the Clinton China for Arms deal...Face it folks all US Politicians are scum of the earth, sum are just more scummy than the others.

Kaiser Sousa

Cooperation between Russia and China is necessary to maintain the balance of power in the world, China's Vice Minister of Foreign Affairs Cheng Guoping said Monday.

The high-ranking Chinese diplomat said that Russian-Chinese relations had reached a new level of development and the forthcoming visit of Xi Jinping to Moscow would facilitate further cooperation between Beijing and Moscow. The Chinese president will pay a three-day visit to Moscow on May 8-10, attending the Victory Day Parade on May 9 at the invitation of Russian President Vladimir Putin. "Cooperation and coordination between China and Russia are needed to maintain the international balance of power and preserve the post-war world order. The participation of the leaders of the two countries in mutual events dedicated to the 70th anniversary of the Victory in World War II indicates that Russia and China, as the largest countries in the world and members of the United Nations, intend to maintain international order."

http://sputniknews.com/politics/20150504/1021703550.html#ixzz3ZCuelpFm

Farmer Joe in Brooklyn

9/11 exposed the unholy alliance between the US and the Saudis (for anyone with enough intellectual curiosity to seek the truth). This true axis of evil has a symbiotic relationship that knows no moral bounds.

Nothing new here...

Monty Burns

In 9/11 the Saudis provided the finance and the patsies. The event was organized by Mossad and Ziocons in the USA.


juicy_bananas

Just in time for next year's SOFEX, bitchez! The war economy has to get paper somehow. Peace Prizes for EVERYBODY!

https://www.youtube.com/watch?v=QL_3Qg-SADY

g'kar

2010: "US Congress notified over $60bn arms sale to Saudi Arabia"

http://www.theguardian.com/world/2010/oct/21/us-congress-notified-arms-s...

They didn't backdoor that sale. Whatever President Jarret is trying to sell, it isn't to the Saudi's.


Jacksons Ghost

Anyone that thinks the House of Saud will go quietly is fooling themselves. We sell them out, how quickly will they pivot towards China and Russia. We abandon The House of Saud, you can guarentee that they will abandon the Dollar. Reserve Status of Dollar is most important to our money printers...

falak pema

No amount of US material will save the Sunni Kingdoms from their fate, as the bigger the Military spending becomes the bigger