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28 November 2015

Press review 28-11-2015 - The other side of the barricade

I was born during the last years of the cold war, and even though I was quite young, I remember vividly the permanent tension between East and West, in particular through the conflicts in Africa and the Middle East. Even considering those times, I can not recall a military incident bringing these secular blocks so close to an armed conflict as that lived this week.

In this sort of events there are usually two different sides of the same the story, not being easy to tell who is who. However, in this particular occasion it is rather easy, especially after the publication by the Turkish military of the map reproduced here. The invasive trajectory claimed in the Turkish account of events stretches for no more than two nautical miles. Even if this trajectory is correct, and even if the Su-24 was cruising at sub-sonic speeds, the Russian aircraft spent less than 15 seconds in Turkish air space. The Su-24 was shot down over Syrian territory and in all likelihood the Turkish F-16 entered there to do so.

Turkey is sending a message, not only to Russia, but in particular to its European NATO partners. Turkey is not willing to give hand of its acquired position in the region. It is not willing to give hand of the human, petroleum and arms trafficking businesses; it is not giving hand of its will to remove the Shiites from power in Syria; it is not willing to allow the rise of an autonomous Kurdistan; it is not giving hand of the will to expand further the territory it took from Syria after the II World War.

It is becoming clearer who is on the other side of the barricade. Rest to know if Europe remains committed to fight and win this war.

The Independent
Beware Turkey's real reasons for shooting down a Russian plane
Ranj Alaaldin, 25-11-2015

The Kurds in Syria, meanwhile, have established themselves as a reliable Western ally and have created, in the process, an autonomous Kurdish region that has reinvigorated Kurdish nationalism in Turkey and across the region - much to Turkey’s dismay as it continues a brutal military campaign to repress the Kurds.

In other words, Turkey has no interest in the peaceful settlement to the conflict in Syria that world powers are negotiating. As it gets desperate, Turkey will attempt to bring focus back on the Assad regime and reverse the losses it has made both in Syria and geopolitically. The decision to bring down the Russian jet is, therefore, likely to have had other political factors behind it - particularly since the jet, as far as we know, posed no immediate threat to Turkey’s national security.

Domestically, Erdogan thrives on a climate of fear and uncertainty. This worked for him in the country’s snap elections earlier this month, during which he regained the majority he lost in June after months of bombings, violence and divisive rhetoric.

Ankara’s downing of the Russian jet may provide a useful diversion as it seeks to intensify its military campaign against the Kurds, particularly in the Kurdish-dominated Mardin province, where MPs were assaulted in recent days. Two days ago, Selahattin Demirtas, head of the pro-Kurdish People’s Democratic Party (HDP) who shot to international acclaim in the country’s national elections, survived an assassination attempt in Kurdish-dominated Diyarbakir.
One may always wonder why were Russian bombers operating in an area supposedly controlled by Turkmen, and where there are no reports of the presence of Chechen jihadists. But it is very clear Turkey is not only protecting a territory that now regards as its own.
The Guardian
Is Vladimir Putin right to label Turkey ‘accomplices of terrorists’?
Martin Chulov, 24-11-2015

[...] Despite that, links to some aspects of Isis continued to develop. Turkish businessmen struck lucrative deals with Isis oil smugglers, adding at least $10m (£6.6m) per week to the terror group’s coffers, and replacing the Syrian regime as its main client. Over the past two years several senior Isis members have told the Guardian that Turkey preferred to stay out of their way and rarely tackled them directly.

Concerns continued to grow in intelligence circles that the links eclipsed the mantra that “my enemy’s enemy is my friend” and could no longer be explained away as an alliance of convenience. Those fears grew in May this year after a US special forces raid in eastern Syria, which killed the Isis official responsible for the oil trade, Abu Sayyaf.

A trawl through Sayyaf’s compound uncovered hard drives that detailed connections between senior Isis figures and some Turkish officials. Missives were sent to Washington and London warning that the discovery had “urgent policy implications”.
A most obvious outcome of Turkey's bellicose action is an immediate end to the Turkish Stream. Construction was to start in a few months time, but it can not possibly go ahead now. Bad news for Europe, especially Greece, that was to be a major benefiter of this new pipeline. Can Greece remain an gateway for an alternative Gas route?
Turkish Stream Falls Under Russia's Restrictive Measures Against Turkey

"This project is no different from any other, we are talking about our investment cooperation [with Turkey], it is one of the most perspective investment projects, and, just like any other project, it falls under the law on special economic measures," Ulyukayev said, commenting the fate of the Turkish Stream.

Construction on Turkish Stream was scheduled to begin in June, but was postponed pending a formal agreement. According the Russian Energy Ministry, Russia and Turkey were expected to sign the pipeline agreement no earlier than December 2015.

The restrictions against Ankara may also include the Akkuyu Nuclear Power Plant, which is currently under construction in the southern province of Mersin in Turkey, Alexey Ulyukayev said.

Russia and Turkey signed an agreement in 2010 to construct and operate Turkey’s first nuclear power plant at the Akkuyu site.
For now, Russia does not seem to have military retaliation in its plans, but it is stepping up its defences in the region. Another incident of this kind is not discardable; it might actually be inevitable.
The Independent
Russia deploys advanced S-400 air-defence missile system in Syria after Turkey downed one of its jets
Laura Pitel and Nadia Beard, 26-11-2015

The surviving pilot from the Russian jet shot down by Turkey while conducting a mission in northern Syria has insisted his aircraft had received no warnings and had not violated Turkish airspace.

Konstantin Murakhtin, who parachuted from the plane and was rescued by Syrian special forces working with the Lebanese militia Hezbollah, said he knew exactly the plane’s location when it came under fire. “Our entire flight, to the moment we were attacked, was under my command,” he told Russian state television.

Turkish media claimed that Russian jets had also struck a convoy of trucks on the Syrian side of a rebel-held border crossing with Turkey, killing seven people. The nationality of those hit was unclear. Syrian jets have struck the area before but, if confirmed as Russian, the attack would be one of the closest strikes by Moscow to Turkish soil and would further aggravate tension.
Here is the odd dive in English language into the political consequences of this incident for Europe. It is high time for Europe to rethink NATO and create a proper military policy of its own.
Action Man
The Plane Incident in Syria
Pater Tenebrarum, 25-11-2015

[...] Turkey immediately asked for a special NATO meeting to be convened to discuss the incident. It is interesting that NATO, while affirming its support for a member, reacted by calling for immediate “deescalation”. It can probably be assumed that the recent attempt to coordinate the fight against IS with Russia is seen as an urgent priority, at least by some NATO members (especially the big continental European ones like France and Germany). The incident has thrown this effort off course, at least temporarily.

Possibly there is even a rift within NATO regarding the willingness to cooperate with Russia against IS. Prominent neo-conservatives in the US have openly agitated for an “alliance with Al Qaeda”, so as to fight IS and Assad simultaneously (yes, they really are that stupid and callous). Their opinions are presumably shared by at least some members of NATO alliance (though not, we believe, by the Obama administration). It all depends on how deep a government’s mistrust of Russia is, resp. what its assessment of Assad is. Mr. Erdogan’s priorities in Syria are not exactly a secret.

Here is what Sigmar Gabriel, Germany’s vice-chancellor had to say (our translation) – which confirms to us that the Germans were actually looking forward to burying the hatchet and cooperating with Russia again. They are evidently quite unhappy:
“First of all, the incident shows that we have a player in this game who is, according to statements from various sources in the region, unpredictable: and that is Turkey, not Russia. The fact that the Russians may have triggered the confrontation by violating Turkish airspace must not blind us to the fact that Turkey is playing a difficult role in this conflict”
Recent developments in this conflict have created space for the media to expose the positioning of certain players. Even if the mainstream media is so willing to do so, there are always voices able to question the established discourse.
Consortium News
The Saudi Connection to Terror
Daniel Lazare, 20-11-2015

How does ISIS pay for its operations? This is the key question as the war against the terror organization advances to a new level in the wake of the Paris atrocities. But the mainstream’s approved answer is part of the problem.

That approved answer, from many political leaders and assorted “terrorism experts,” is that ISIS (also known as ISIL, Islamic State and Daesh) funds its operations through a variety of illicit activities such as illegal antiquity sales, kidnapping for ransom, holding up banks, and peddling crude from

[...] Contain and decapitate – this the essence of the U.S. strategy. Hence, the more the Obama administration tries to contain ISIS militarily, the more it puts out word that it is also self-sustaining economically.

But what if it isn’t? In fact, there is every reason to be skeptical of the U.S. position – and not only because American leaders have been claiming success for close to two decades in various struggles against Islamic terrorism even as it has morphed from a few scattered cells to a va
There are more grave news in another conflict front involving Russia. The Ukrainians are not willing to let Crimea return to Russian sovereignty easily and dashed a severe blow to living conditions in the peninsula.
Straits Times
Crimea declares state of emergency over blackout as power lines from Ukraine are 'blown up'

Crimea declared a state of emergency on Sunday (Nov 22) after its main electricity power lines from Ukraine were blown up, leaving the Russian-annexed peninsula in darkness after the second such attack in a matter of days.

The authorities in Crimea, which is dependent on Ukraine for electricity, said they had managed to partially reconnect the cities of Simferopol, Yalta and Saki using generators after two pylons were brought down.

The Russian Energy Ministry did not say what had caused the outages, but Russian media reported that two pylons in the Kherson region of Ukraine north of Crimea had been blown up by Ukrainian nationalists.
Apart from the blackouts in Crimea, these actions to cut the peninsula from the mainland have an immediate impact on Ukraine itself. This shows the extent of strategic thinking in Ukraine.
Russia Today
Ukraine nuclear power plants ‘dangerously’ without power as towers feeding energy to Crimea blown up

In an eerie reminder of a possible nuclear catastrophe, a senior Ukrainian energy official revealed that the attack on transmission towers that cut off the delivery of electricity from Ukraine to Crimea also created an emergency situation at nuclear power plants.

The apparent act of sabotage in Ukraine’s Kherson region forced an emergency power unloading at several Ukrainian nuclear power plants, which can be extremely dangerous, according to the first deputy director of Ukraine’s energy company Ukrenergo, Yuriy Katich.

Russia’s Crimea was forced to switch to autonomous reserve power after transmission towers in the adjacent Ukrainian region were blown up, causing a blackout. Meanwhile, the repairs were delayed by Right Sector and Crimean Tatar “activists” attempting to block crews from getting to the scene. None of the groups have accepted responsibility.

“All of these events have led to an additional emergency shutdown of the electrical network of two units at thermal power plants – the Dnieper and Uglegorskaya – and the emergency unloading by 500 MW of nuclear power plants in Ukraine. This includes Zaporozhskaya NPP and the South Ukrainian NPP. I want to stress that such emergency unloading of a nuclear plant – it is very dangerous,” 112. Ukraine online portal quoted Katich as saying.
Almost immediately, Gazprom announced it was again halting gas deliveries to Ukraine. It is yet to be clear if this is a direct sanction or just an outcome of a warmer than usual Autumn in Ukraine.
Russia expected to end gas deliveries to Ukraine

The Russia-Ukraine gas supply dilemma could see a new development as the countries continue political and commercial retaliation, Kallanish Energy learns.

Russian Energy Minister Alexander Novak said Monday Gazprom will end gas deliveries to Ukraine’s state-owned gas company, Naftogaz, as Kiev had not prepaid for more gas.

The prepaid supply, agreed to through European Union (EU)-brokered negotiations, may end this week, but with Ukraine reporting “minimum consumption,” its underground stockpiles are expected to be sufficient to cover its needs through the end of the year.
As for Coal, the halting of supplies to Ukraine is openly stated as a sanction.
Russia stops coal supplies to Ukraine

Russia has stopped coal supplies to Ukraine. However, the fuel that goes via Ukraine to third countries does not see any obstacles.

According to the Kommersant newspaper, the Russian Customs does not pass either energy or coking coal to Ukrainian consumers.

Russian Energy Minister Alexander Novak, the newspaper wrote, previously suggested that the termination of coal deliveries to Ukraine is likely to become Russia's response to Ukraine's actions to cut supplies of electricity to the Crimean Peninsula.
In news directly related to energy, there is the renewed weakness of the Petroleum market, that is now showing another contango formation in the futures curve. As they say in the financial media, these are "bearish" news. The industry is yet to take in further losses.
Oil prices have moved into 'super contango'
John Kilduff, 25-11-2015

[...] The vast crude oil glut or mega-glut is manifest in the West Texas Intermediate and Brent crude oil price curves, which have moved into a "super-contango." (Yup, there are lots of superlatives needed to describe the current state of the market.) Rusted out 'pump-jacks' in the oil town of Luling, Texas. Chart: $29 oil? Technician says that's the target

Contango refers to when the front-month or near-term futures contract are trading less than or at a discount to longer-dated futures contracts.

The difference between Brent crude-oil contracts, one year apart, recently hit a record $8 a barrel. The January 2016 WTI futures contract is trading at a hefty discount of $1.50 per barrel to the February contract. In tightly-supplied markets, when crude oil prices are strong, that spread value is the complete opposite.
And here we return to the Persian Gulf, where 40 $ per barrel is raising all sorts of questions. I always have the felling these news pieces in a way try to cover the much direr situation of the western petroleum companies, but the numbers are starting to fatten quite a bit.
Kuwait Times
Gulf braces for austerity as oil income slump bites – GCC states face record deficit of $180bn in 2015

Faced with heavy losses from low oil prices, Gulf states have embarked on belt-tightening measures to cut spending and boost non-crude revenues, but analysts warn much more needs to be done. After more than a decade of abundant surpluses thanks to high oil prices, the six Gulf Cooperation Council (GCC) states are projected to post a combined record budgetary shortfall of $180 billion in 2015 and the drought is expected to continue for years. Some countries have already cut subsidies, while others are considering measures to reduce their spending.

International Monetary Fund chief Christine Lagarde told GCC finance ministers in Qatar this month that “global energy prices could remain low for years” and urged them to adjust their budgets. Lagarde warned that the GCC, which has relied on energy income for 90 percent of their revenues, should reduce dependence on oil and gas. In 2014, GCC states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – posted a small surplus of $24 billion, down from $182 billion the previous year, according to IMF figures.
Petrobras remains at the forefront of the troubled petroleum industry. Bond yields are rising fast and some sort of intervention from the Brasilian government seems close to inevitable - it the political and popular wills are found to do so.
Petrobras's Dangerous Debt Math: $24 Billion Owed in 24 Months
Jonathan Levin and Peter Millard, 19-11-2015

The debt clock is ticking down at Brazil’s troubled oil giant, Petrobras. Next up: $24 billion of repayments over 24 months.

That’s a towering hurdle for a company that hasn’t generated free cash flow for eight years and whose borrowing rates are soaring. Annual debt servicing costs have doubled to 20.3 billion reais ($5.4 billion) in the past three years.
While in Europe our governments forbid renewable energies to sustain dependence on Petroleum fetched from totalitarian governments, Gas that must cross all sorts of conflict zones to get here or Coal with dire environmental impacts, elsewhere the policy is different. Europe spent thousands of millions to bring down renewable energy prices to where they are today, but now it is up to others to get the benefit. It is naturally a good thing for developing countries to gain access to affordable and sustainable energy, the question is rather why should not we do the same.
Mother Jones
China Is Absolutely Destroying the US on Clean Energy
Tim McDonnell, 24-11-2015

When world leaders convene on Monday in Paris for two weeks of high-stakes climate negotiations, one of the top items on the agenda will be how developing nations should prepare for and help to slow global warming. Opponents to President Barack Obama's climate agenda, such as GOP presidential contender Marco Rubio, like to argue that anything the United States does to curb greenhouse gas emissions will be pointless because countries like India and China aren't doing the same.

But new data from Bloomberg New Energy Finance shows that this argument is just hot air: For the first time ever, over the last year the majority of global investment in clean energy projects was spent in developing countries. In fact, clean energy investment in China alone outpaced that in the United States, the United Kingdom, and France combined, BNEF found. Across 55 major non-OECD countries, including India, Brazil, China, and Kenya, clean energy investment reached $126 billion in 2014, a record high and 39 percent higher than 2013 levels.

The chart below shows how that level of investment is opening up a market for wind, solar, and other clean energy projects in non-OECD countries that is now larger than the market in the traditional strongholds of the United States and Europe. In other words, the very countries Rubio likes to malign as laggards are actually leading the charge.

Winding down with more light-hearted news. After introducing an electrical car race series in 2014, the FIA has now laid out plans to introduce a self driving car series in 2016. After years of paralysis, the world motor sport association is now very willing to not only enable research towards the future of road transport, but actually to be an agent shaping it.
The Guardian
Roborace: Formula E launches initiative to race driverless electric cars

Lewis Hamilton and his Formula One peers may soon become a commodity of yesteryear after plans were announced to launch a series for driverless electric cars. Formula E, the FIA-backed electric series, launched the initiative on Friday and says a race will take place as early as next year.

The global championship is set to be called Roborace, and will feature on the undercard of Formula E. Ten teams, with two driverless cars, will compete in one-hour races at circuits used by the electric series.

[...] “Roborace is a celebration of revolutionary technology and innovation that humanity has achieved in that area so far. It’s a global platform to show that robotic technologies and AI can coexist with us in real life.
In the same vein, the press reported a successful self driving car test in public roads in Spain. This is the longest test of the kind to ever take place in the Iberian Peninsula. This car company now expects to introduce this technology to the market no later than 2018.

Have a great weekend.

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