MARK P. MILLS
Can American Producers Head Off Looming Oil Shortages?
A legislative embrace of policies allowing increased hydrocarbon production could move world energy markets.
Europe Is Losing the Energy War
Here’s how the continent can fight back.
Germany Takes Control of Russian-Owned Refineries Amid Energy Crisis
The German government seized control of three refineries (FT) owned by Russian oil company Rosneft before a European Union embargo on Russian crude oil takes effect in December. Operations at the refineries were disrupted (WSJ) after some banks and firms stopped doing business with Rosneft amid Western sanctions. Rosneft accounts for about 12 percent of Germany’s oil refining capacity.
Germany has worked to ensure its energy security and control soaring energy prices ahead of the embargo, passing a law to bring back coal-fired power plants, among other actions. It is also considering taking over three of its largest gas companies, Bloomberg reported.
“The Schwedt refinery [one of the three seized] was the biggest obstacle to Germany accepting the ban on Russian oil imports because thousands of jobs in the region depend on it,” the Wall Street Journal’s Georgi Kantchev and Bojan Pancevski write.
“The first German companies have begun throwing in the towel and consumption is collapsing in response to the fallout from exploding energy prices. The economy is sliding almost uncontrolled into a crisis that could permanently weaken the country,” Der Spiegel writes.
This video looks at Europe’s energy bind.
America's Strategic Oil Reserves by Lawrence Kadish
Egypt as an Eastern Mediterranean power in the age of energy transition
The emergence of Egypt as an Eastern Mediterranean energy hub resulted from a culmination of years of deliberate efforts. Increasingly, Egypt will be able to re-export Israeli natural gas or convert it into blue hydrogen, generate green electricity for export, or utilize its growing wind and solar power capacity to produce green hydrogen.
Turkey and Sudan: An enduring relationship?
Germany Bails Out Gas Importer Uniper. German gas importer Uniper received a state bailout of 15 billion euros ($15.2 billion) after reduced Russian gas supplies crippled the company. As part of the bailout, the German government will take a 30 percent stake in Uniper. Uniper’s majority share-holder Fortum, a Finnish energy firm, will hold 56 percent in the company down from 80 percent currently. Al Jazeera Deutsche Welle
Russia Denies Pipeline Turbine In Transit. Russia on Friday rejected a Reuters report that a turbine for the Nord Stream 1 pipeline is stuck in transit. The report alleges that Moscow has yet to approve the return of the turbine from Germany to Russia. Kremlin spokesperson Dmitry Peskov called the report “nonsense” and “groundless.” Russia blames reductions in gas flows through the pipeline on the turbine, which was in Canada for repairs and initially blocked by Western sanctions. Germany instead says Russia is using gas as a political weapon. Bloomberg Reuters
Meanwhile, energy consumers around the globe continue to feel a squeeze. U.S. natural gas production has slowed over the past few months despite supply shortages. Across the pond, UK lawmakers have offered energy-intensive industries a relief package after the country experienced a massive uptick in energy costs. However, soaring energy bills for businesses and families alike has not discouraged a bipartisan group of lawmakers from proposing a “border carbon adjustment” tariff. Writing for City Journal, Mark Mills criticizes that proposal as one that would fuel inflation at a particularly terrible time while not addressing its purported climate-related goals. Instead, Mills points to next-generation nuclear power and other technological innovation as a more viable path toward addressing the country’s energy needs.
The Biden administration has floundered over how to respond to rising gas prices—but a solution to the problem is simple.
Europe and UK Gas Shortage May Accelerate Inflation
Allison Schrager, E21
Europe and the UK are experiencing a gas shortage that threatens to undermine its goals, and wide-spread support, for a zero-emissions future. It also leaves them more dependent on Russia. Energy operates in global markets, which means gas prices in the US are also on the rise. Read more here....
Oil prices continue to rise as Saudi Arabia and Russia talk production
The price of Brent crude continued to increase above its pre-pandemic levels during the OPEC+ meeting Thursday.
Germany's Empty Pipeline Logic
by Josef Joffe via Project Syndicate
Nord Stream 2, the almost-finished pipeline running directly from Russia to Germany, is not really about securing cheap natural gas. It is about personal gain and these two countries’ national interest.
Energy Policy Insight
featuring Admiral James O. Ellis Jr., Michael J. Boskin, James L. Sweeney, Daniel Heil
Over the last quarter century, the United States has experienced a dramatic transformation. With little fanfare, an energy revolution has occurred that has profoundly altered the nation’s economy, its national security, and its environment.
"Nord Stream 2 Sanctions Present an Early Test for the Biden Administration,"
Matthew Zweig and John Hardie, FDD Policy Brief
Saudi Aramco sees massive drop in third quarter profits
The Saudi oil giant's slump is indicative of the crisis in Middle Eastern and global oil as the COVID-19 pandemic continues.
JONATHAN A. LESSER
The “Transition from Oil” and Other Fairy Tales
Politicians promising a painless switch to renewables are deluding themselves—or more likely you.
Russia, Iraq face OPEC+ cuts, look to new deals
While Iraq's dependence on imported Iranian electricity continues to worry Washington, the key to breaking this energy dependence lies in the development of its own gas fields.
Gulf economies face major challenges in post-COVID 19 world
Signals indicate the embargo imposed on Qatar could come to an end, but can the Gulf Cooperation Council play a coordinating role vital to diversify Gulf economies post-pandemic?
Ephraim Sneh writes: The practical sides of this alliance are Israel’s import of half of its demand of crude oil through the Baku-Tbilisi-Ceyhan pipeline, and the export of $5 billion in sophisticated Israeli military equipment, according to President Ilham Aliyev’s public statement. But the alliance is not about oil and arms. Azerbaijan, with its vast majority Shi’ite Muslim population, aspires to be a secular, modern, enlightened independent state. Neither of its neighbors agree that Azerbaijan should have all these attributes together. Israel is the country that fully supports all the aspirations of the Azerbaijan people and government. – Jerusalem Post
Turkey: Ankara Raises Black Sea Gas Estimates. Turkey has raised the estimated reserves in a gas field off its Black Sea coast after finding an additional 22,500 billion gallons approximately 100 nautical miles north of the Turkish coast. The discovery could transform Turkey’s dependence on Russia, Iran and Azerbaijan for energy imports, as last year’s imports totaled more than $41B. Turkey expects the first gas flow from the field in 2023. Al Jazeera Deutsche Welle
Turkey resumes energy research in disputed waters
ISTANBUL — A Turkish seismic research ship escorted by naval frigates began energy prospecting activities Wednesday in contested tracts of the eastern Mediterranean, renewing disputes between Ankara and Athens over maritime boundaries.
Following a brief pause for maintenance, Turkey’s Oruc Reis vessel redeployed Monday and reached an area near the Greek island of Kastellorizo two miles off the Turkish coast, where it began conducting gas discovery activities Wednesday, according to Turkish Energy Minister Fatih Donmez.
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Chevron's Deal for Noble Energy Marks a Major Shift in Mideast
By JONATHAN TOBIN, Special to the Sun | October 14, 2020
OILCRAFT: How the myths of scarcity and security haunt U.S. energy policy and keep it tied to the puppet strings of the House of Saud.
Fiscal sustainability and social cohesion in the face of demographic change
Karen E. Young et al. | T20 Saudi Arabia
Creative destruction works unless undermined by crony capitalism
James Pethokoukis | AEIdeas
Iran at Risk From Spillover of Armenia-Azerbaijan Clashes
Brenda Shaffer | Senior Advisor for Energy
Critical Minerals and New Geopolitics
Sophia Kalantzakos, Project Syndicate
The Myth of the Great Energy Transformation
Mark Mills, Manhattan Institute
For those who profess the belief that a great “energy transition” is underway, Tesla is the talisman. And why not? No single product that we use in everyday life consumes more energy than a car. The furnace in the average home basement is a distant second, and there are far more cars than homes. The car, with its ubiquity and importance, epitomizes how and why energy is used everywhere. It also epitomizes just how difficult and expensive it will be. Read more here.... (Photo: Justin Sullivan/Getty Images)
The Value of the U.S.-Saudi Relations
By Clare M. Lopez, RealClearDefense: "Changes underway within the Kingdom of Saudi Arabia under Crown Prince Mohammed bin Salman's leadership are significant and substantive. It is in the U.S. national security interest to acknowledge and encourage those changes, even while urging more progress in areas that concern America’s ethical foundations, like human rights."
How Western Institutions Benefit from Corrupt Islamists in Saudi Arabia
By Irina Tsukerman, August 27, 2020
EXECUTIVE SUMMARY: The recent revelations about Sa’ad Jabri, an Islamist and corrupt former Saudi intelligence officer, highlight the discrepancy between Western institutions’ criticism of Saudi Arabia in the name of human rights and their support for the former officials most responsible for human rights abuses and security threats associated with the Kingdom. A tangled web of relations between pro-Brotherhood Muhammad bin Nayef regime apparatchiks, pro-Qatar members of US law enforcement (like Ali Soufan), and ideologically sympathetic intermediaries (like Jamal Khashoggi) are threatened by Muhammad bin Salman’s reforms.
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Turkey’s new gas find in the Black Sea won’t save the economy
Michael Rubin | The National Interest
Pulling Back the Curtain on Turkey’s Natural Gas Strategy by John V. Bowlus
How Mediterranean standoff complicates Turkey's natural gas agenda
Too many factors — especially tensions with Greece — are at play to determine whether recent gas discovery in the Black Sea will translate into massive commercial and political gains for Ankara.
BEIJING NEEDS OIL, SO IT DOMINATES VENEZUELA & THE ARMENIA-AZERBAIJANI CONFLICT HITS EURO ENERGY MARKETS BADLY
Armenia-Azerbaijan Conflict Poses Threat to European Energy Security
Brenda Shaffer | Senior Advisor for Energy
OPEC continues oil export cuts in June
Global oil prices continue to hold up relative to earlier in the year as oil-producing countries in the Middle East struggle economically.
Image: Major existing and planned natural oil and gas pipelines supplying Russian oil and gas to Europe. Public domain.
Gregory Copley, Defense and Foreign Affairs, in re: The energy re-think in the balance of the Twenty-first Century. Russia in a superior position. Hard to see how, and it’s unlikely that, Russia will be displaced in oil, gas, nuclear, and hydroelectric. Sophisticated energy structure. Its gas will save PRC. Russia is now the most advanced in the world in selling nuclear. Russia is a very stable player because its industries are controlled by the Kremlin. The last thirty years: free trade meant that the world gave its mfrg to China; we all became dependent on it. Now, China is becoming existentially dependent on Russia, incl for LNG. China is equally dependent on China for food from the USA and elsewhere. Russia has been a critical supplier of defense and space for China.
The one thing Riyadh asked of Moscow as to keep Teheran off its back, which Russia has not done. Russia’s ma ally is Iran; is the geopolitical linchpin in the Middle East and Central Asia. Saudi is a dwindling power. Germany abandoned nukes out of morality; is wholly dependent on Russia for power. The Russia-US competition visible in Belgrade, where intell services abound. Russia succeeding in Germany and Serbia which the US has treated badly. Squared off in Montenegro.
Libya says oil blockade has cost $5 billion in lost revenue
The Tripoli-based National Oil Corporation said the closure of oil facilities in January has led to billions in losses.
Are the foreign patrons of the Libyan war ready to end it?
Absent major military escalation by his foreign patrons, Khalifa Hifter has now lost the war he initiated against Libya’s internationally recognized government in Tripoli. The question remains, however, of how to end Libya’s proxy war and restart the necessary political process to bring about sustained peace. A sustainable end to the proxy war would have to address arms shipments by land through Egypt and from Sudan involving Russia and/or the UAE, as well as Turkish shipments by sea, and transport by air of military materiel by the principal patrons of the war. It would also have to address the respective parties’ asserted economic interests in Libya, including Turkey backing off from its plans to begin drilling for oil in the eastern Mediterranean in derogation of other — especially Greek — interests.
How the battle over energy will reshape Eurasia relationships
One of the driving forces behind Turkey’s Libya policy is a desire to redraw the maritime boundaries in the eastern Mediterranean established by Greece’s agreements with Egypt and Cyprus.The conflict between Turkey and the anti-Turkey bloc is hurting everyone’s energy interests, making investment in the region costlier for energy companies. Without compromises, everyone stands to lose.
Natural gas in the Black Sea: Strengthening cooperation and balancing power
After the collapse of the Soviet Union, Russia used its dominant position as a natural gas supplier to wield outsized influence in the region. But recent changes in the natural gas market have eroded that dominance. Under increasingly globalized natural gas markets, Russia has been losing its ability to use its dominance as a gas supplier to influence the region.
The Global Economy’s Fuel Gauge
Oil powers almost all transportation—and Covid-19 will only intensify its dominance.
Saudi Arabia's Problems: Coronavirus, the Economy, and Geopolitics
By Dr. James M. Dorsey, May 18, 2020
EXECUTIVE SUMMARY: Combatting the coronavirus pandemic and coping with its economic fallout may be Saudi Crown Prince Muhammad bin Salman’s most immediate challenge. Equally urgent is repairing strained relations with the US and ensuring the kingdom’s competitiveness with Iran as the two rivals compete for China’s favor.
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Saudi Minister of Finance Mohammed al-Jadaan forewarned his citizens about their economic future post-COVID-19. While the reckoning was bound to come sooner or later, the pandemic has hurried the future along. What then does a drastic reduction in public spending look like in Saudi Arabia? Karen Young took to Al-Monitor to argue that Saudi Arabia and other Gulf Cooperation Council states will need to make cuts in megaprojects, defense spending, and public-sector wages as unsustainably large annual deficits have arrived. Learn more here.
Lebanon is on the brink of collapse: People are starving, the nation’s de facto Hezbollah government is still doing Iran’s bidding, and vultures from Beijing are circling. So why do we care? In a Dispatch op-ed, Danielle Pletka argues that if not for the people, for the selfish reason that the country unmanaged would become an operational beachhead for terrorism, a field for great-power rivals, and a black hole from which no good can emanate. If not, Lebanon promises to join the ranks of Afghanistan, Libya, Yemen, and others in becoming another nexus of global threat and local misery. And Lebanon is well on its way. Read here.
As governments seek to reopen economies from lockdown restrictions, the trajectory of recovery remains unknown. In an op-ed for the King Faisal Center, Karen Young notes that for the Gulf states, economic recovery will depend a great deal on global oil market demand to stabilize. However, for the Gulf states, a lot is on the line in China, and it will be Beijing’s economic recovery that will set the pace for the Gulf. Continue here.
Southwest Asian political economy analyst, Radio & Media Personality.