Home  |   About  |   Energy  |   Politics  |   Software  |   Music

21 November 2015

Press review 21-11-2015 - War

In the space of ten days, Daesh was able to successfully attack civilian targets from three different countries well outside its territory. The death toll of these three attacks sums almost 400 and could unfortunately pass that number. It is sad to see pragmatism towards Daesh settling in only after such events.

I live a few hundred meters from the French border, the state of emergency has been quite visible: heavily armed police in train stations, chronic traffic jams imposed by border checks. President Hollande was not exaggerating when he used the term war. But in face of the precipitous bombing of assorted targets in Raqqa, I wonder if the French government is exactly aware of the kind of war it is fighting.

I have postulated various times that geo-political events have more potential to shape the petroleum extraction curve in the short term than geology by itself.

After the rage of the first couple of days, the French intelligentsia started thinking beyond muscled actions. The first and obvious question: where is the Daesh budget coming from? The pipeline projected to link Iran to Syria, going through Iraq, has popped up in the alternative press during the past two years. The French mainstream media is now willing to bring the story up, without fear of pointing fingers.
France Inter
Daesh : la fabrique d’un monstre

[...] Dans une région dont la complexité sociale politique et religieuse est séculaire, des projets économiques contemporains ont cristallisé la situation : en 2010, l’Iran projette de construire un pipe-line qui passerait par l’Irak et la Syrie pour acheminer du pétrole et du gaz vers la méditerranée. Cela redistribuerait les cartes de la production pétrolière dans le golfe. Or le Gaz pour le Qatar, et le pétrole pour l’Arabie Saoudite, c’est vital.

Selon Alain Juillet, ancien directeur du renseignement de la DGSE :
L’Arabie saoudite et le Qatar prennent très mal l’idée d’un pipeline qui pourraient concurrencer leurs livraisons de pétrole. Ils vont se dire : mais dans le fond le problème c’est Bachar. Il est en train de signer un accord qu’il ne devrait pas signer avec l’Iran. Donc c’est un personnage extrêmement dangereux. Donc il faut renverser Bachar .
[...] Un financement souterrain existerait toujours. C’est ce que soutient Loic Le Floch Prigent, l’ancien patron d’Elf qui a longtemps travaillé dans la région et qui reste très informé:
Le pétrole de Daech ne peut sortir et ne peut être payé que par des gens qui sont prêts à le payer et à étouffer son existence
Il ajoute :
Il y a forcément derrière des Turcs et des Saoudiens qui le recyclent dans leur propre pays.
In the G20 meeting, scheduled to days after the attacks in Paris, president Putin was haste in seizing the opportunity. Once more Russia emerges as the only world power with a thorough strategy towards the region.
Russia Today
Putin: ISIS financed from 40 countries, including G20 members

President Vladimir Putin says he’s shared Russian intelligence data on Islamic State financing with his G20 colleagues: the terrorists appear to be financed from 40 countries, including some G20 member states.

During the summit, “I provided examples based on our data on the financing of different Islamic State (IS, formerly ISIS/ISIL) units by private individuals. This money, as we have established, comes from 40 countries and, there are some of the G20 members among them,” Putin told the journalists.

"I’ve shown our colleagues photos taken from space and from aircraft which clearly demonstrate the scale of the illegal trade in oil and petroleum products," he said.

“The motorcade of refueling vehicles stretched for dozens of kilometers, so that from a height of 4,000 to 5,000 meters they stretch beyond the horizon," Putin added, comparing the convoy to gas and oil pipeline systems.

It’s not the right time to try and figure out which country is more and which is less effective in the battle with Islamic State, as now a united international effort is needed against the terrorist group, Putin said.
What is more, Putin seems to have managed a non humiliating way out for Saudi Arabia (or so they want us to believe). In any case, Rusia seems again the only power fully engaged in defeating Daesh.
Asia Times
Saudi Arabia’s Syrian adventures may soon be over
Salman Rafi, 13-11-2015

Reports of Saudi king’s possible visit to Russia indicate that Saudi Arabia’s adventurism in Syria is coming to a close.

According to the Russian presidential press secretary, Dmitry Peskov, the visit of Saudi King Salman bin Abdulaziz Al Saud to Russia is being worked out and agreed through diplomatic channels.

This shows Riyadh is ready to reach a ‘compromised solution’ on the Syrian crisis – a solution that may not be what the US seems to be attempting to achieve through its renewed engagement in Syria and Iraq and its (possible) policy of balkanization of Syria into different “safe zones.”

As is evident, the kingdom’s engagement in Syria and Yemen has rather grown overstretched. Military fatigue in Yemen and resource fatigue in Syria seem to be getting the better of its establishment that no longer seems ‘energetic’ enough to keep itself embroiled in the conflict, especially when no ‘rational’ and balanced solution, as far as the Saudi position is concerned, is available in the hindsight.
With pragmatism sinking in, France selects different allies, clearly at odds with the general laissez faire posture of NATO towards Syria. Even if in an informal way, France seems set to join the Russian led military coalition against Daesh.
France Sends Charles de Gaulle Carrier Against ISIS
Pierre Tran, 19-11-2015

[...] The French Navy’s Charles de Gaulle aircraft carrier sailed Wednesday from Toulon naval base, south of France, and headed for the eastern Mediterranean to support coalition operations in Iraq and Syria.

[...] The nuclear-powered vessel up anchored at 11:00 in the morning Paris time with 26 fighter jets on board and will arrive on station in the next few days, France Info radio reported.

[...] Russian President Vladimir Putin has asked the Russian Navy to sail with the Charles de Gaulle as a sign of political support. The Russian intelligence service has concluded that ISIS used a homemade bomb to bring down an Airbus 321 airliner flying over the Sinai desert, killing all 224 on board.

Russia also launched attacks Tuesday against ISIS bases in Raqqa, flying long-range bombers and firing cruise missiles, Reuters reported.

Hollande is due to meet Putin in Moscow on Nov. 26, and US President Barack Obama in Washington two days before, in a bid to build a united effort against ISIS, Reuters reported.
The US sticks to its ambiguous policy, training al sorts of Sunni militants in Syria and Jordan to bomb them in Iraq. This now results in the fall of Sinjar back to Kurdish control. This city sits on an important supply route linking Raqqa to Mosul.
International Business Times
Sinjar Offensive: Kurdish Forces Wrest Control Of Key Iraqi Town From ISIS
Avaneesh Pandey, 13-11-2015

Iraqi Kurdish forces, aided by the U.S.-led coalition’s fighter jets, entered the city of Sinjar in northern Iraq early Friday and were “clearing the area of remaining ISIL [also known as the ISIS or the Islamic State group] terrorists,” the Kurdistan Regional Security Council said in a tweet. The gains come on the second day of a major offensive to retake Mount Sinjar and the surrounding regions from ISIS, which seized the territories in August last year.

“ISIL defeated and on the run,” the Kurdistan council said in a separate tweet.
And speaking of the devil, there are as usual some interesting news bits related to the so called "shale oil boom". The Brent index dropped further this week to settle at 44 $/b, matching the lows set previously this year. Even in such scenario the US banking industry keeps re-financing the energy sector, providing more funds to companies that are mostly dead by now.
Struggling U.S. oil producers get credit lifeline amid downturn
Edward McAllister, 16-11-2015

An autumn credit crunch was expected to hit many independent U.S. oil producers, starving the industry of billions of dollars and further denting company budgets and drilling plans.

But banks that adjust their loans to energy companies every six months based on the oil price and volumes of reserves were more lenient than many expected this time, leaving producers with more cash for drilling and allowing them to supply more oil to a market already flush with excess crude.

The biannual process, known in the industry as redetermination, shaved only 4 percent off bank loans to oil and gas companies, according to a Reuters analysis of loan data, surprising experts who had expected deeper cuts because of a protracted oil price rout.

It offers cash-starved energy firms a lifeline right when oil prices are back near six-year lows around $40 per barrel because of global oversupply.
If cash keeps flowing by the barge load, the same can not be said of petroleum itself. The Permian basin is holding for now, but the remainder of the "shales" are in decline.
Financial Times
Future of US shale oil lies in Permian basin
Ed Crooks and Gregory Meyer, 15-11-2015

[...] US production peaked in April and has since been drifting lower, dropping 274,000 barrels a day to 9.324m b/d in August, as a result of the sharp slowdown in drilling that followed last year’s crash in oil prices.

The slowdown would have been sharper but for two factors: projects coming on stream in the Gulf of Mexico, where lead times are longer and reactions to price movements are slower; and the strength of production in the Permian basin.

Output from the other two principal US tight oil “plays” — the Bakken formation of North Dakota and Eagle Ford in south Texas — has been falling. By December the US government’s Energy Information Administration thinks oil production in the Bakken will be down 12 per cent from its peak at the end of last year, while production in Eagle Ford will be down 25 per cent from its peak in March.

Production in the Permian, however, is expected to be down just 1 per cent from its level in September.
The socio-economic impact of the "shale oil" bust is being felt in various ways. The rise of organised crime cannibalising the remnants of a dying industry is a most alarming signal.
Oil Theft Soars as Downturn Casts U.S. Roughnecks Out of Work
Lauren Etter, 16-11-2015

The moon was a waning crescent sliver Sept. 9 when a man emerged from an oil tanker, sidled up to a well outside Cotulla, Texas, and siphoned off almost 200 barrels. Then, he drove two hours to a town where he sold his load on the black market for $10 a barrel, about a quarter of what West Texas Intermediate currently fetches.

“This is like a drug organization,” said Mike Peters, global security manager of San Antonio-based Lewis Energy Group, who recounted the heist at a Texas legislative hearing. “You’ve got your mules that go out to steal the oil in trucks, you’ve got the next level of organization that’s actually taking the oil in, and you’ve got a gathering site -- it’s always a criminal organization that’s involved with this.”

From raw crude sucked from wells to expensive machinery that disappears out the back door, drillers from Texas to Colorado are struggling to stop theft that has only worsened amid the industry’s biggest slowdown in a generation. Losses reached almost $1 billion in 2013 and likely have grown since, according to estimates from the Energy Security Council, an industry trade group in Houston. The situation has been fostered by idled trucks, abandoned drilling sites and tens of thousands of lost jobs.

“You’ve got unemployed oilfield workers that unfortunately are resorting to stealing,” said John Chamberlain, executive director of the Energy Security Council.
The effects on employment of the present petroleum market are not only felt in the US. 2015 is running for a total loss of a quarter of a million jobs. This downturn looks now much worse than that of 1998.
Zacks Investment Research
233K Global Energy Jobs D-isappear on Oil Market Collapse
- Nilanjan Choudhury, 18-11-2015

Job cuts reaching into the hundreds of thousands have affected staff working at the world's largest energy firms.

Per energy recruiter Swift Worldwide Resources, around 25,000 jobs have disappeared globally over the past 2 months, bringing the sector’s workforce reduction to roughly 233,000 since international crude prices collapsed last year. At this pace, layoffs in the petroleum industry will likely exceed 250,000 this year with more jobs lost over the coming year if oil prices remain depressed.
The Coal story is still alive, with the mainstream media struggling to cope with the new reality. Propaganda is rife, with familiar arguments: "it is not a peak, it is a plateau", "India will fill in for China", etc. Nowhere is to be seen an admission of failure to anticipate limits to growth.
Associated Press
Coal not going away anytime soon despite renewables push
Louise Watt, 16-11-2015

[...] An analysis released Monday by the Institute for Energy Economics and Financial Analysis suggests coal consumption peaked globally in 2013 and is set to decline a further 2 to 4 percent in 2015 because of declining consumption by China and other big coal consumers.

The institute said China's coal consumption had fallen 5.7 percent from January to September. In the U.S., domestic consumption was down 11 percent and coal's share of the electricity market has fallen to 35 percent, from 50 percent a decade ago. Record-low U.S. gas prices, record expansion of renewable energy and a decoupling of electricity demand from economic growth are "permanently eroding" coal demand in the U.S., the Cleveland, Ohio-based IEEFA said.

Still, coal provides more than 40 percent of the world's electricity and 29 percent of its energy supply, second only to oil at 31 percent, according to the Paris-based International Energy Agency. The agency projects coal consumption to continue growing somewhat in coming years, largely owing to increased coal demand in India and Southeast Asia.
The electricity generation scare lived in the UK earlier this month is still in the news. Simple math shows an increasingly grimmer picture, with the relentless retirement of outdated infrastructure unmet by a proper replacement programme.
Are the lights going out? Experts worry about the future of UK energy supply
Peter McCusker, 18-11-2015

[...] November 5th’s ‘power cut’ scare was effectively the result of the temporary closure of some 5GW (gigawatt) of coal-fired power plants for maintenance, in what is called the ‘shoulder period’ before winter truly gets under way.

But three of the UK’s 10 coal-powered plans will close for good in March next year and the winter of 2016 looms as the real test for the Government’s energy policy.

[...] Paul Verrill, of Yarm-based energy analysts EnAppSys, said: “If such a situation happens this time next year, the reduction in capacity margin as the result of the loss of some 7GW of coal capacity could mean we are in real trouble.
On different news, not much has happened in Portugal since I last wrote on the subject. This means the country still lacks a government with full powers and a budget for 2016 looks increasingly remote. I expect this status quo to drag on until President Aníbal Cavaco Silva leaves office next March.
With no one at helm, Portugal faces instability and strife
Angus MacSwan, 19-11-2015

In the Portuguese town of Almada, Communist activists are handing out leaflets that bear the hammer-and-sickle logo and triumphantly proclaim: "Government destroyed, victory for the workers' struggle".

It seems like a throwback to a bygone era. But a leftist alliance could soon be in charge of Western Europe's poorest country - a prospect that alarms the business and conservative political elite just as it seemed Portugal had weathered economic crisis.

The different sides are staking out hard positions and many are calling this Portugal's most critical political moment since the Carnation Revolution of 1974, when a dictatorship was overthrown by young army officers and democracy brought in.

After an inconclusive election led to the ousting of the center-right government, President Anibal Cavaco Silva is weighing up his choices and it is not yet certain that a leftist alliance led by the Socialist Party (PS) will take power.
Since this review is read by a good number of folk from the US and Canada, I finish this edition with another non-energy related piece. Stefan Grobe is the Euronews correspondent in New York and provides here a rare example of the European perspective on Bernard Sanders, a pre-candidate to the Presidential elections in the US next year. The Democratic party (with which Sanders is affiliated) is many times portrayed in the European press as a left wing party. The coming primary election might provide an interesting test to that concept.
Meet Bernie Sanders, the democratic socialist who wants to be US president
Stefan Grobe, 20-11-2015

In the US 2016 presidential campaign, one candidate stands out as running on a platform that would make him almost undistinguishable from any European Social Democrat, Senator Bernie Sanders of Vermont.

He calls himself a “democratic socialist” – nothing spectacular in Europe, but in America, chances are that half the country may consider him a dangerous left-wing freak and thus unelectable.

But his campaign’s bet is that things have changed. In a much-anticipated speech at Washington’s Georgetown University on Thursday, Sanders went on the offensive to explain precisely what this label means.
As the first snow of this winter falls amid the rain, I wish you a pleaset weekend.

No comments:

Post a Comment