Posts Tagged ‘gas’

Now Things Are Starting To Make Sense

July 26, 2014

It is now known that the uprising in Ukraine early this year that saw the elected government, which was cooperating far too well with Russia for the liking of the western powers overthrown and replaced by a US and EU sponsored gaggle of gangsters, thugs and neo – fascists whose task was to serve western interests rather than those of Ukraine’s population.

Many commentators have suggested that if we join up the dots the picture that emerges reveals a push by powerful interests to establish a USA led global hegemony. And when we look at regime change wars and civil unrest in other countries the screams of “conspiracy theory” from those who yearn to live under a global totalitarian government take on a hollow tone.

Libya, Iraq, Afghanistan, Syria and Ukraine have all been destabilised by international action led by the United States. Libya, Iraq and Syria all have oil So how do Afghanistan and Ukraine fit in.

Afghanistan is the key to opening a pipeline route from the Caspian and former Soviet Republics in central Asia to the Indian Ocean. And there are rumours of possible untapped oil and gas reserves in Afghan teritory.

Ukraines strategic location on the pipeline routes from oil and gas fields in the Caucasus and around The Caspian Sea into Europe. And then there’s this:

from zero hedge
Company In Which US Vice President Joe Biden’s Son Is Director Prepares To Drill Shale Gas In East Ukraine

Recall what we said earlier today: the proxy war Ukraine conflict, just like that in Syria preceding it, “is all about energy.” Recall also the following chart showing Ukraine’s shale gas deposits, keeping in mind that the Dnieper-Donets basin accounts for approximately 90 per cent of Ukrainian production. Finally, recall our story from May that Joe Biden’s son, Hunter, just joined the board of the largest Ukraine gas producer Burisma Holdings. Now put it all together and you will like figure out what will happen next.

Well maybe not what will happen next but certainly why the USA is so desperate to drive a wedge between Russia and Europe and to demonise Vladimir Putin while in the same move gaining control of Ukraine’s oil and gas reserves. And that offers some insight into why Obama was on TV blaming pro Russian separatists for downing Malaysia Airlines flight MH17 almost before it was hit.

It also demonstrates that the pro EU Ukrainian government and western interests had a lot to gain from politicising such an outrage. So ignoring any outbursts from certain Professorial pricks who can’t understand that when I said there was no evidence last Thursday that the separatists were responsible that is not the same as saying the separatists were not responsible or that somebody else was.

I know it is incomprehensible to childbrains who try and give their words authority by announcing “I’m a scientist”, or “I work in a university”, but in the real world there are often more than two possible answers to a question. (Actually I can truthfully say I have worked in three universities, Manchester, Liverpool and Corpus Christi, Cambridge; IT consultants get around.)

And so sensible people take a step back and wait for the details to emerge before jumping to conclusions. We’re still waiting.

Ukraine’s gas / oil deposits (source)

ukraine gas oil deposits

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Petrodollar Alert: Putin Prepares To Announce ‘Holy Grail’ Gas Deal With China

March 22, 2014

If the West has been trying to force Russia and China to recreate a twenty first century version of the old communist bloc, the alliance of a natural resource superpower and the other a fixed capital, low labour cost high output economic powerhouse and to give these two every possible incentive to create a new global reserve currency to marginalize the dollar and encourage Rouble and Renminbi bilateral trade, then this weeks events show the plan is going beautifully

While there have been no major developments or stock / currency trading crises as a result of the shift in the geopolitical axis that has shifted power away from the USA and the G7 (most insolvent nations) as a result of the bungled regime change attempts in Syria and Ukraine the chess board is looking very different. The west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement and limp wristedness (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 moves ahead.

While Europe is furiously scrambling to find alternative sources of energy should Gazprom turn off the tap until Ukraine gives back the pipelines and the territory through which they run, to a government owned by The Kremlin,(the surge in Ukraine gas prices by 40% is probably the best predictor of that), Russia is preparing the announcement of the “Holy Grail” energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis.

Read more at The wall Street Journal

Meanwhile The EU, with head somewhat in the sand (as the democratic Euopean nations were in the summers of 1914 and 1939, is preparing for a trade war with Russia over Crimea (they are going to impose a fifteen point penalty on Roman Abramovitch’s Chelsea in the Premier League).

Europe began preparations for a trade war with Russia on Friday 21st March, with the EU executive in Brussels ordered to draft plans for cancelling all marks and Spencers gift voucher bought with Roubles. Much more substantive sanctions will be imposed against Moscow if Vladimir Putin presses ahead with Russian territorial expansion.

Unfortunately the bigger and more economically stable EU countries; Germany, Netherlands, France (stable? have to query our source about that,) and Britain, have major but very different interests at stake in Russia. This has led to disagreements over the tactics for a campaign of economic measures. Fears that a trade war would be highly risky and potentially ruinous are leading many political figures to advise caution.

A two-day summit of EU leaders from countrie that could afford Ryanair tickets to send delegates to Brussels was dominated by the Crimea crisis and ended with a further 12 Russian politicians and military figures being added to a list of 21 so far subjected crossed off the EU Christmas Card list.

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USA, Russia and Sanctions: The Real Situation

March 14, 2014

Yesterday someone commented on my post about the threat of the Ukrsine dispute turning into economic warfare, that the USA would be immune to economic fallout from any trade war because the world trades in US dollars. Now knowing what I do about the dross printed and broadcast by US mainstream media, I could not criticise anybody for clinging to this piece of propaganda, but in reality the situation has been changing for some years.

So when you read reports that Russia is ready to hit back with counter sanctions against the EU and US should they try to use economic measures to force the Kremlin’s hand on the Ukraine issue, be afraid. Since the start of the Iraq war, the economic landscape has changed enormously. The USA is no nearly as dominant as it was, due to the actions of the last two US administrations Uncle Sam has little goodwill to trade with. China has already recealed plans to replace the US$ with a new reserve currency and simlar plans have been discussed in G20 sessions because of fears about the systemic weakness of the US economy.

The President and Scooby Doo villain Secretary Of State Kerry are not in a strong enough position to indulge in sabre rattling.

“We hope that there will only be targeted political sanctions, and not a broad package affecting economic trade, “Our sanctions will be, of course, similar, ” Deputy Economic Development Minister Aleksey Likhachev the Russian Economic Ministry has said .

One way Russia will use to protects its economy from sanctions is by shifting settlements of bilateral trades to other currencies. China and Iran have already taken the lead in this, following a move by the late Saddam Hussein which I blogged on some years ago (How Saddam May Yet Win The War ) The old tyrant was merely giving the finger to bill Clinton’s White House but he established a precedent that others noted.

America’s vulnerability to attacks on the dollar is summed up in this comment made by Aleksey Ulyukaev, the Minister of Economic Development said in an interview with the Vesti 24 TV channel.

“We need to increase trade volume conducted in national currencies. Why, in relation to China, India, Turkey and other countries, should we be negotiating in dollars? Why should we do that? We should sign deals in national currencies- this applies to energy, oil, gas, and everything else,”

The Duma, Russia’s parliament, is drafting legislation to allow Moscow to freeze assets of Western companies and individuals in the event sanctions are imposed following the Crimea referendum vote on March 16.

#Such a law would give The Kremlin “opportunities to defend our sovereignty from threats,” according to its author, Andrey Klishas, as quoted by RIA Novosti on March 5.

With Russia and China already dumping dollar reserves and US Treasury bonds this could easily spell trouble if Obama and Kerry are not careful. The US Congress has already denounced Russia’s actions in Ukraine. Last Tuesday, congress approved a resolution that urges The White House to “to work with our European allies and other countries to impose visa, financial, trade and other sanctions on senior Russian Federation officials, majority state-owned banks and commercial organizations, and other state agencies, as appropriate.”

Earlier this week the European Union threatened to impose further sanctions on Russia starting on March 17, after the referendum in Crimea takes place on Sunday. Speaking to the German parliament, Chancellor Angela Merkel hinted sanctions would be needed if Russia “continues its efforts to annex crimea or bring down the EU supported rebel government of Ukraine. Merkel warned that if Russia does not back down the result would be to change the European Union’s relationship with its neighbour. She is right of course, Germant depends on Russian gas, if Putin turns off the tap it would quickly cripple the German economy.

The real clincher in determining how the Ukraine confrontation will play out is China. Seemingly far removed from this dispute, China would appear to have little to gain from involving itself in a dispute between the western powers and Russia. China’s ambassador to Germany Shi Mingde, has warned however of the global economic affect sanctions against Russia could hold. Mingde said the geo-political tiff between Russia and the West could “spiral” into chaos (by whih he probably means a shooting war or an economic crisis to make 2008 look like a short term cashflow problem).
President Putin and the Russian foreign ministry have both said sanctions against Russia could backfire, and spill over into the global economy and Moscow’s Foreign Minister Sergey Lavrov denounced any “hasty and ill-considered” sanctions as being likely to cause “mutual damage”.

Iran-style sanctions on Russian trade appear impossible because the EU would be much more exposed than the US and as Putin has warned, the American economy would be massively exposed should Russia decide to dump the dollar reserves it has built during years of exporting gas and oil.
The European Union nations import around a third of their gas and many other natural resources from Russia, and several nations are completely dependent on Russian gas. The US and Russia trade very little so it is difficult to see what harmful effect US sactions could have (but since when did Barack hussein Obama, the ego on legs, think through such foreign policy subtleties), but Russia is Europe’s biggest customer, and the $13 trillion EU economy would de devastated if trade with Russia was halted overnight.

So to summarise, collapse of the dollar, crippling of the EU economy and global financial chaos and the presentation to China of an enormous opportunity; does anyone still think the US has no need to fear the consequences of economic conflict with Russia? On the other hand, Russia is not truly a democracy, The Kremlin will simply tell citizens any hardships they face are due to the evil western nations and anyone who questios that had best get their affairs in order. Simples.

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E Bomb? Putin Has Obama Over A Fracking Barrel Again

March 7, 2014

putin responds to obama
Putin Responds To Obama’s Latest Ultiumatum. Source

In the wake of Barack Obama’s latest complete humiliation at the hands of Vladimir Putin as the Ukraine crisis drags on, mainstream media in the west has continues to provide The Rent Boy President with the journalistic equivalent og Immaculate Body Service (look it up if you must, but not on a full stomach 😀 )

Take this article by Fraser Nelson in The Daily Telegraph for example:

For decades it has seemed as if God has played a great joke on mankind, granting the best fuel reserves to the worst places. Iran, Russia, Saudi Arabia, Turkmenistan [ … ]– As Vladimir Putin has found, if you own the gas which the rich world needs, then you can get away with murder.

Europe is a recession-struck continent dependent on a Kremlin-controlled energy price. Putin cleverly cut Gazprom tariffs to the region last year, ramping up its dependence on Russian gas to record levels. And in so doing, he effectively bought EU foreign policy.

He’d find it harder to buy America’s nowadays. As Barack Obama considers his options, he has a substantial new weapon that he is not sure how to deploy. In the last few years, the shale revolution has utterly transformed America’s energy fortunes. (Read all)

Poor little Fraser, even if his belief in shale were justified, he assumes Obama would have the nous or the balls to use America’s mythical abundance of gas to outmanoeuvre Putin.

Meanwhile, in a rare attack of journalistic integrity, Huffington Post reported this:

Deepening Doubts About Fracked Shale Gas Wells’ Long Term Prospects”

“The oil and gas industry has propagated a vision that fracking unleashes vast amounts of gas which then flows relatively steadily for decades. But a growing mountain of evidence suggests that nothing could be further from the truth. Shale gas wells dry up, sometimes long before they have produced enough gas to cover the costs of drilling and fracking them.”

In the oldest shale formation, Texas’s Barnett shale, many aging wells have had to be re-fracked multiple times to keep them from runningdry. Re-fracking costs millions of dollars and requires millions of gallons of water.

A review last year by the New York Times found that less than ten percent of 9,000 Texas shale wells had recouped their estimated production costs within their first seven years.

Continue reading at Huffington Post

Added to that, there is a huge body of opposition to fracking building up in the USA, with many far fetched horror stories about blazing rap water and awakening demons being given credibility.

The economic letown will be the deal breaker of course, when shale gas turns out to be no more viable a solution for our energy needs than windmills, a lot of people are going to lose a lot of money.

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