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11 January 2014

Press review 11-01-2014 - ISIL expands its territory

The territory controlled by the ISIL according to the Wikipaedia.
The Islamic State of Iraq and the Levant (ISIL), there's a name every one should know by now. This organisation has become the most visible facet of the aspirations by the Sunni folk in the Near and Middle East. Their aim is simple: create a Sharia ruled caliphate for the Sunni in the region, similar to those existing south of the Gulf.

The information coming out of the newly acquired territories by the ISIL in Iraq is scant, but the western media has still managed to join the fray. Earlier this week the American media was reporting that "tribesmen" where helping the Iraqi army fighting the ISIL; days later the French press claimed that "tribesmen" had helped the ISIL taking full control of Fallujah.

The slowness of the Shia-led government to fight back may mean on the one hand that the local population is not on their side and on the other that the ISIL may have more resources than reported by the mainstream media. One remarkable aspect of this conflict is that so far it has produced a relatively limited number of refugees, 15 000, when compared to the estimated 320 000 living in Fallujah alone.

Al Qaeda controls more territory than ever in Middle East
Peter Bergen, 08-01-2014

From around Aleppo in western Syria to small areas of Falluja in central Iraq, al Qaeda now controls territory that stretches more than 400 miles across the heart of the Middle East, according to English and Arab language news accounts as well as accounts on jihadist websites.

Indeed, al Qaeda appears to control more territory in the Arab world than it has done at any time in its history.

The focus of al Qaeda's leaders has always been regime change in the Arab world in order to install Taliban-style regimes. Al Qaeda's leader Ayman al-Zawahiri acknowledged as much in his 2001 autobiography, "Knights Under the Banner of the Prophet," when he explained that the most important strategic goal of al Qaeda was to seize control of a state, or part of a state, somewhere in the Muslim world, explaining that, "without achieving this goal our actions will mean nothing."

Now al-Zawahiri is closer to his goal than he has ever been. On Friday al-Qaeda's affiliate in Iraq seized control of parts of the city of Falluja and parts of the city of Ramadi, both of which are located in Iraq's restive Anbar Province.
Some news outlets point to other spots of violence across the country, even outside Anbar.
CBS News
Militant attacks in Iraq spread beyond Anbar

Authorities say gunmen have attacked an Iraqi army barracks north of Baghdad, killing 12 soldiers, the Associated Press reports.

The attack happened Wednesday in the town of Udaim in Diyala province, just north of the capital.

A police officer said gunmen also used mortar fire in their attack, which also wounded seven soldiers.

A medical official confirmed the casualty figures. Both officials spoke on condition of anonymity as they weren't authorized to publicly release the information.

The attack comes as the government grapples with al Qaeda-linked Sunni militants taking control of the western cities of Fallujah and Ramadi in Anbar province, where most of the militant activity had taken place recently.
The mainstream media is reluctant in using the terms "civil war", but they do not shy from questioning the petroleum production targets envisioned by the Iraqi government and the IEA.
Iraq's Oil-Fueled Comeback Story Threatened by Anbar Violence
Matt Egan, 08-01-2014

As the U.S. steps up much-needed support for the Maliki government in Baghdad, the latest instability could scuttle Iraq’s attempt to build out oil exports, the centerpiece of any economic expansion.

The evolving situation also threatens to drive up energy prices around the world and create new geopolitical headaches for the U.S.

“Iraq has not only a weak economy, but a fracturing political system and social fabric,” said Paul Christopher, chief international strategist at Wells Fargo Advisors (WFC).

Iraq’s economy had been showing signs of stability and prospects for increased oil production in 2014.

In fact, a special report issued by the International Energy Agency in late 2012 predicted Iraq would more than double its oil production of three million barrels per day by 2020 and reach over eight million barrels by 2035, overtaking Russia as the world’s No. 2 oil exporter.
It is yet to be recognised that beyond the military situation there's a much deeper reason to doubt of the political reliability of Iraq. In fact these bold actions headed the ISIL are a consequence of a political failure to deal with the Sunni minority. The resignation of the Sunni representatives from Parliament mean that Nuri al-Maliki's government no longer has full political legitimacy, and that can't simply be restored any time soon.
Wave of Violence Threatens Ambitious Iraqi Oil Goals
Nick Cunningham, 05-01-2014

The conflict has yet to affect Iraq’s oil fields, and production hit 3.2 million barrels per day (bpd) in December, the most since August 2013, according to Bloomberg. To be sure, the violence does not pose an immediate threat to Iraq’s oil output, as three-fourths of the country’s production comes from the South, and much of the rest from Kurdistan in the North. In fact, according to the EIA, a majority of Iraq’s oil production comes from three fields – Kirkuk, and the North and South Rumaila fields near Basra. The latest violence is not located near these areas.

Still, the instability and the loss of control of key cities by the Iraqi government underscores the intense security challenge facing the country as it seeks to ramp up oil production in the coming years. Iraq has a stated goal of tripling oil production to 9 million bpd by 2020. In a 2012 special report on Iraq, the IEA estimates a slightly less rosy figure of 6.1 million bpd by the end of the decade in its central scenario.
Finally on Iraq, a further reason for the slow response by the Shia government may be Saudi Arabia's involvement. In Syria the ISIL has shown great proficiency in holding power over conquered territories, not only instating their own security but also providing essential services to the local population: food, water, health care, even electricity. Acknowledging that the ISIL took hold of petroleum and gas resources in Syria to support financially these operations, external funding is also a well known secret. No one takes hold of a 300 000 folk city for week on a shoe lace.
Oil Money Supports Middle East Uprising
Claude Salhani, 05-01-2014

[...] But of late the usually discreet Saudis have gone public with their views of the battle taking place in Syria as opposition forces made up of an amalgam of parties, tribes, factions, families, clans and religious mercenaries have descended upon the Syrian front lines, attracted to the action of the civil war now raging in the country much like flies are attracted to sweet and often not so sweet droppings.

It is therefore no accident or sheer coincidence to learn that just this last Sunday the Syrian government, the very ones Saudi Arabia is tying to oust, has declared Saudi as its number one enemy and accuses it of trying to destroy the country by arming jihadists and other rebels fighting to depose President Bashar al-Assad.

The oil-rich Gulf monarchies have sided with the opposition from the start of Syria's conflict in March 2011, with Riyadh leading calls for the fall of Assad.

Syrian Deputy Foreign Minister Faisal Muqdad told AFP this week that Saudi Arabia was providing unfettered support for "terrorist groups" in Syria, while other nations had reviewed their positions. Last week former CIA chief Michael Hayden said that perhaps the US had backed the wrong side in supporting the rebels and that at the end of the day the regime may be the lesser of two evils.
Tunisia, Libya, Egypt, Syria, Iraq, are all different planes of what is essentially the same conflict: a clash between two opposite interpretations of Islam. And underneath is the petroleum that we still need, loads of it. In Libya events get ever more awkward, with a clear entrenching between the major territories in the North. Days ago a military vessel loyal to the Tripolitana government shelled a Maltese petroleum container on tack to Cyrenaica; the Tripoli government now threatens to sink any container on a similar course.

Libyan oil crisis swells as militias refuse to end shutdown

Libya's battered oil industry crisis appears to be escalating again, with armed separatist militants who have shut down vital facilities in the east since July now seeking to sell oil from rebel-controlled terminals, while the navy drove off with shellfire a Maltese-flagged tanker that tried to illegally load at one of the blockaded ports.

The militias, who have set up their own "official government of Cyrenaica," named after the Roman province that covered eastern Libya, vowed in a letter sent to major international oil trading companies that they would "fully ensure the security and safety of any ship or tanker that will enter Libyan waters for oil lifting" at the major eastern port of es-Sider.

That pledge rang a little hollow Sunday after the Libyan navy, controlled by the government in Tripoli in western Libya, fired warning shots at the tanker Baku and intercepted as it sought to enter es-Sider at 3.a.m. The vessel turned tail and fled toward Malta.
The pre-salt in the South Atlantic is running out of steam quite fast. It is now clear the Brasilian government hyped the reserves estimates to lure international investors in. These should have known better, it is not the quantity of petroleum reserves that makes profits, rather the difference between the resource's cost and marginal cost. As it happens, pre-salt is presently a marginal producer, meaning that at current prices not all reserves are profitable.
Washington Post
Brazil’s oil euphoria hits reality hard
Juan Forero, 06-01-2014

The country’s deep-sea bonanza has suddenly become less alluring to big, rich oil companies. Other promising energy sources have emerged around the world, including fields in Africa, tar sands in Canada and shale gas deposits unlocked by hydraulic fracturing technology, also called fracking, in the United States.

“These companies have the financial muscle and engineering capacity and technologies to move around the world,” said Ramón Espinasa, an oil specialist at the Inter-American Development Bank in Washington. “They are able to pick and choose. And that explains why they are not in Brazil.”

Some oil experts say Brazilian energy planners, who spoke of unproven reserves that could rival those of some of the biggest oil powers, may have vastly oversold the deep-sea bounties, which are called “the pre-salt” because the oil is under a shifting cap of salt.

“There were a lot of government authorities saying the reserves of Brazil were 50 billion barrels, 100 billion barrels, even 240 billion barrels, more than Saudi Arabia,” said Wagner Freire, an oil geologist who worked for 35 years at Petrobras, where he oversaw exploration and production. “Lots of wells have been drilled in the pre-salt area, and the well comes up dry.”
Another resource setting marginal petroleum costs today seems to be the heavy petroleums mingled in the Canadian sands. Again, current prices may not guarantee profits, and less diligent investors can easily find themselves in the red.
Thai PTTEP says reviewing oil sands project in Canada

Thailand's top oil and gas explorer, PTT Exploration and Production Pcl (PTTEP) said on Tuesday it is reviewing its investment in the KKD oil sands project in Canada due to higher costs.

Chief Executive Tevin Vongvanich told reporters he expected to make a conclusion about the loss-making project this year.
In this environment some dream with relevant price dips in the wake of the lifting of sanctions on Iranian exports. Before any more hype one should note what these major exporters are saying and the targets they have on the table.
Tehran Times
Iran’s return to oil markets will not lower prices: minister

The return of Iran to oil markets will not lead to a decrease in prices, Iranian Oil Minister Bijan Namdar Zanganeh said on Monday.

In a message to members of the Organization of Petroleum Exporting Countries (OPEC), Zanganeh also said that unconventional oil production from shale reserves by non-OPEC countries will not be a threat to OPEC.

He supported OPEC’s policy for stabilizing its ceiling output at 30 million barrels per day.

“We believe it is our right to try to increase our exports,” Zanganeh said. “I hope that all OPEC countries show wisdom, and when member countries, after limitation, return to the market, they understand that they should open the doors.”
The stabilisation of petroleum prices (apparently coordinated by the IEA) over 100 $/b has been having a profound impact on the civil aviation industry. Contrary to what some believe, it does not spell the demise of this sector, but many things will change in the next few years. The main risk is if profits translate into cuts on safety.
Associated Press
Airlines go on buying spree for 8,200 new jets; old planes get sent to desert chop shop
Scott Mayerowitz, 09-01-2014

Airlines are on the largest jet-buying spree in the history of aviation, ordering more than 8,200 new planes with manufacturers Airbus SAS and The Boeing Co. in the past five years. There are now a combined 24 planes rolling off assembly lines each week, up from 11 a decade ago. And that rate is expected to keep climbing.

The new planes allow the airlines to save on fuel, now their biggest cost, while offering passengers more amenities - some for a fee. Passengers can plug in to work or be entertained by a seat-back TV and fly some international routes nonstop for the first time. And the commercial divisions of Boeing and Airbus get a steady stream of cash for years, which is a key reason investors have doubled the companies' stock price in the past year.

The bulk of the planes are going to new or quickly-growing airlines that serve an expanding middle class in India and the rest of Asia. The International Air Transport Association expects the number of passengers worldwide to grow 31 percent to 3.9 billion in the next four years.
Finishing the energy news something a bit more on the bright side. I have been reporting on the blocks the Spanish government has been trying to put on renewable energy in the country, but there are still positive numbers to go about.
Global Post
Spain was powered primarily by wind last year
Sarah Wolfe, 07-01-2014

For the first time last year, Spain got a majority of its electricity from wind power.

The country's wind farms produced 21.1 percent of Spain's power in 2013, narrowly edging out nuclear power for the first time, according to a new report from grid operator Red Electrica de Espana.

Nuclear power accounted for 21 percent of Spain's electricity, followed by coal and hydroelectric power.

The 53,926 gigawatt hours of electricity produced by wind power in 2013 marked a 12 percent jump from 2012, when 18.1 percent of Spain's energy came from wind power, according to the report.
It is not every day Portugal is on the mainstream media, although the country probably has had more air time than usual the past few years. This article from NPR is generally good, touching most of the important points. In 2013 over 130 000 Portuguese left the country, most of them certainly in their working age.
National Public Radio
Portugal's Baby Bust Is A Stark Sign Of Hard Times
Lauren Frayer, 01-01-2014

In Lisbon, the waiting area of Portugal's biggest maternity hospital is empty. You can hear the hum of soda machines across the hall. There's just one expectant father, pacing the room.

Mario Carvalho, 40, has a toddler son and now awaits the birth of his baby girl. An elderly woman sits near the Tejo River in Lisbon on Oct. 17, 2011. Portugal's population is aging rapidly, due to a drop in births coupled with growth in emigration.

"Today, I hope!" he says with a nervous smile.

The birth of a new baby is a joyous occasion. But in Portugal, it's an increasingly rare one. Since the economic crisis hit, the country's birthrate has dropped 14 percent, to less than 1.3 babies per woman — one of the lowest in the world.

Rising unemployment and poverty mean people are putting off having kids, or moving abroad. Portuguese schools and maternity hospitals are closing. They just don't get enough business anymore.
These days one can read the most incredible things on the web. In the early XVIII century George Hadley offered a theory explaining the trade winds based on the earth's rotation and the temperature differential between poles and equator. This theory was corrected several times and the satellite era showed that the interfaces of circulation cells are highly variable in space, but the physical principles remained the same. At least up to recently, today Physics seems a mere nuisance for some.
Common Dreams
Is 'Polar Vortex' Attributable to Climate Change? Yes.

As temperatures plummet, a reminder: 'Every weather event in the modern world is attributable to climate change.'

Weather isn't climate and the climate isn't weather, but if someone asks whether the 'polar vortex' now being experience by tens of millions of people across the country is driven by climate change, you don't have to wait for the next wave of scientific research to come out. The answer is 'Yes.'
Closing, the growing momentum the European elections next May are gaining. The far right seems to have a head start at the moment, which is forcing the traditional parties laying out their cards on the table. There will be formal candidates to the Commission presidency for the first time, it seems, which on its own is already a major progress. On the other hand, the Christian Democrats seem finally willing to fully embrace the Union. A thrilling and crucial moment for sure.
The Telegraph
We want a United States of Europe says top EU official
Bruno Waterfield, 08-001-2014

A campaign for the European Union to become a "United States of Europe" will be the "best weapon against the Eurosceptics", one of Brussels' most senior officials has said.

Viviane Reding, vice president of the European Commission and the longest serving Brussels commissioner, has called for "a true political union" to be put on the agenda for EU elections this spring.

"We need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a "Senate" of Member States," she said.

Mrs Reding's vision, which is shared by many in the European institutions, would transform the EU into superstate relegating national governments and parliaments to a minor political role equivalent to that played by local councils in Britain.
Have a pleasant weekend.

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