EXCLUSIVE: “The Dark Day: Europe's Energy Crisis Unveiled…

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The Delicate Balancing Act of Political Reckoning: “The Unpredictable Consequences of Delicate Political Matters

In the realm of politics, there exist certain matters so sensitive, so inherently fragile, that their mere existence can send shockwaves through the social and political fabric of a nation. These issues, oftentimes underpinned by deep-rooted historical, cultural, or ideological tensions, have the potential to disrupt the delicate balance that holds societies together.

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—War, Death, Hunger, Pestilence, and Disinformation—

The series of events surrounding Russia's actions towards Ukraine and the mysterious explosion of the Nord Stream pipeline have sent shockwaves through the global economy. These events have significant implications not only for the countries directly involved, but also for the global economic landscape. In addition, the "mystery" explosion at the Nord Stream pipeline has added to the economic fallout. Nord Stream, a major energy pipeline between Russia and Europe, plays a crucial role in the supply of natural gas to European countries. The explosion has exacerbated the precarious gas supply, caused energy price spikes and disrupted supply chains across the region. The incident was a stark reminder of the deep vulnerability of energy infrastructure resulting from a series of poor geopolitical decisions, and ultimately of the global dependence on stable and secure energy supplies.

The last three years have been a tumultuous period for Ukraine and its impact on the global economy. In the midst of a post-pandemic recovery, the Russian invasion and subsequent aggression have added a new dimension to the challenges facing Europe and the world. The conflict between Russia and Ukraine has caused immense war-related devastation, resulting in loss of life, displacement of communities and damage to infrastructure. The ongoing war is exacerbating the economic burden on Ukraine and has far-reaching implications for neighbouring countries and international stability.

Death: Tragically, the conflict has led to the loss of numerous lives. The human toll, driven by violence and instability, creates an immense humanitarian crisis. The impact of death and destruction on families and communities further deepens the wounds of this ongoing struggle.

Hunger: The prolonged conflict, coupled with the disruption of vital supply chains, has severely affected food security in Ukraine and the world.

Pestilence: Already grappling with the aftermath of a catastrophic pandemic, the world faces additional challenges due to the ongoing conflict.

Disinformation: The spread of inconsistent information has been an alarming aspect of the conflict between Russia and Ukraine. This disinformation affects not only the people directly involved but also the perceptions and decision-making of the international community.

The confluence of these five factors—war, death, hunger, pestilence, and disinformation—underscores the immense challenges faced by Ukraine and the broader impact on the international community.

A Secret But Not a Secret: From a Time Until Now...

According to Spiegel International today (read the full article below), the explosion of the Nord Stream pipelines in the Baltic Sea indicates that Kyiv—supposedly—may be responsible. This revelation may alarm the international community and prompt some adjustments in world politics that would ultimately benefit Germany. Investigators have spent the last year tirelessly searching for the truth behind the explosion. The blast was a significant event that unfolded and shook the foundations of Germany's energy sector with serious implications across Europe's economy.

An initial disturbance grew into a disaster orchestrated by an elusive command to cripple Germany's energy supply.

This secret corps demonstrated incredible prowess somewhere in the shadows, skilfully evading detection as they infiltrated the heart of Germany's energy infrastructure. Their mission was to expose the vulnerabilities embedded in Europe's energy network. With surgical precision, they executed their plan, leaving a trail of destruction and millions of unsuspecting citizens without access to vital gas supplies.

The impact was staggering. Millions of homes were plunged into darkness as radiators ceased their steady hum and cold penetrated their walls. Vital industries heavily reliant on gas ground to a halt, exacerbating an already struggling economy. As patients shivered in hospitals, the gravity of the situation became painfully clear - the security of Europe's energy infrastructure had been critically compromised.

The colossal scale of this event could not be underestimated. It was a wake-up call, a stark reminder of our vulnerability in an interconnected world. The once-trusted system that kept the lights on and the wheels turning was now exposed.

As the initial shockwaves reverberated, questions rained down from all corners. How could such a brazen attack have gone unnoticed? Was it an intelligence failure or a profound lapse in security measures? Europe's energy landscape, once considered robust, was now shaken...

Nations across the continent scrambled to deal with the immediate crisis. Emergency measures were implemented as authorities worked tirelessly to restore broken gas lines and strategise for a future where energy security became imperative. Government agencies undertook an arduous task, compounded by the need to restore confidence in a system that had been shaken to its core.

The incident sent ripples of uncertainty across the continent. It was a moment that challenged Europe's collective identity, questioning its unity and resilience. It brought the energy debate to the fore, calling for massive investment in renewable technologies, diversified sources and reliable back-up systems.

In the darkest hour, however, clarity emerged. Europe, no stranger to adversity, would be

The investigation has led the authorities to some politically sensitive findings. According to the evidence collected thus far, it appears that a commando consisting of divers and explosives specialists chartered a vessel named the Andromeda, which departed from Warnemünde in northern Germany. The ship sailed unnoticed across the Baltic Sea before executing its mission on September 26, 2022, by causing significant damage to three pipes belonging to the Nord Stream 1 and Nord Stream 2 gas pipelines.

While initially the identities and motives of the culprits were shrouded in mystery, all the evidence now seems to be pointing towards Kyiv. This revelation is sure to have far-reaching consequences and could potentially strain international relations. The implications of an attack on Germany's energy infrastructure are severe, and accusations are not taken lightly in the political arena.

One thing is certain: the explosion of the Nord Stream pipelines has sent shockwaves throughout the international community and has thrust Kyiv into the spotlight. Whether this is a carefully orchestrated plan or a coincidental twist of events, the implications are vast, and the world will be watching closely as the truth unravels.

Given the circumstances described, it is vital to emphasize that the Nord Stream consortium companies have discreetly engaged with insurance companies to establish their entitlement to compensation that they believe they deserve is almost certain. Nevertheless, we must also prioritize the rights and well-being of individuals globally who have been adversely impacted by the launch of non-traditional inflationary products, the shortages of vital supplies such as food and fuel, resulting in substantial increases in electricity costs that weigh heavily on individuals and economies.

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After the attack: damage to the Nord Stream 2 pipeline/ Foto: blueye / Editions by Germán & Co.

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Investigating the Nord Stream Attack All the Evidence Points To Kyiv

It's a spy thriller that has the potential to change the course of international politics: A year ago, a secret commando blew up the Nord Stream pipelines in the Baltic Sea. Since then, investigators have been searching for the perpetrators. The leads they have found are extremely politically sensitive.

SPIEGEL By Liliana Botnariuc, Jürgen Dahlkamp, Jörg Diehl, Matthias Gebauer, Hubert Gude, Roman Höfner, Martin Knobbe, Roman Lehberger, Frederik Obermaier, Jan Puhl, Alexandra Rojkov, Marcel Rosenbach, Fidelius Schmid, Sandra Sperber, Thore Schröder, Thomas Schulz, Gerald Traufetter, Wolf Wiedmann-Schmidt und Jean-Pierre Ziegler, Auguat 26, 2023

The Andromeda is a decrepit tub. The sides of the vessel are dented and scraped from too many adventuresome docking maneuvers while the porous pipes in the head exude a fecal stench. The 75 horsepower diesel engine rattles like a tractor and the entire boat creaks and groans as it ponderously changes course. The autopilot is broken. Other sailors hardly take any notice at all of the sloop: Just another worn charter vessel like so many others on the Baltic Sea.

The perfect yacht if you're looking to avoid attracting attention.

According to the findings of the investigation thus far, a commando of divers and explosives specialists chartered the Andromeda almost exactly one year ago and sailed unnoticed from Warnemünde in northern Germany across the Baltic Sea before, on September 26, 2022, blowing holes in three pipes belonging to the natural gas pipelines Nord Stream 1 and Nord Stream 2. It was a catastrophic assault on energy supplies, a singular act of sabotage – an attack on Germany.

The operation was aimed at "inflicting lasting damage to the functionality of the state and its facilities. In this sense, this is an attack on the internal security of the state." That's the legal language used by the examining magistrates at the German Federal Court of Justice in the investigation into unknown perpetrators that has been underway since then.

Unknown because – even though countless criminal investigators, intelligence agents and prosecutors from a dozen countries have been searching for those behind the act – it has not yet been determined who did it. Or why. The findings of the investigation thus far, much of them coming from German officials, are strictly confidential. Nothing is to reach the public. On orders from the Chancellery.

"This is the most important investigation of Germany's postwar history because of its potential political implications," says a senior security official. Those within the Federal Criminal Police Office (BKA) who are responsible for the Nord Stream case, members of Department ST 24, are even prohibited from discussing it with colleagues who aren't part of the probe. Investigators are required to document when and with whom they spoke about which aspect of the case – a requirement that is extremely unusual even at the BKA, Germany's equivalent to the FBI.

There is a lot at stake, that much is clear. If it was a Russian commando, would it be considered an act of war? According to Article 5 of the North Atlantic Treaty, an attack on the critical infrastructure of a NATO member state can trigger the mutual defense clause. If it was Ukraine, would that put an end to Germany's ongoing support for the country with tank deliveries or potentially even fighter jets? And what about the Americans? If Washington provided assistance for the attack, might that spell the end of the 75-year trans-Atlantic partnership?

"It immediately raised the question for me: How can we better protect ourselves."

German Interior Minister Nancy Faeser

Beyond that, as if more critical questions were needed, the Nord Stream attack has provided a striking blueprint for just how easy it can be to destroy vital infrastructure like pipelines. "It immediately raised the question for me: How can we better protect ourselves," says German Interior Minister Nancy Faeser. "The disruption of critical infrastructure can have an enormous effect on people's lives."

There are plenty of targets for such attacks: internet nodes, oil pipelines, nuclear power plants. One can assume that close attention is being paid in North Korea, Iran and other terrorist states on what exactly will happen now. If the perpetrators are not found, if the sponsors of the attack are not sanctioned, if there is no military reaction – then the deterrents standing in the way of similar attacks in the future will be significantly fewer.

But there are leads. DER SPIEGEL, together with German public broadcaster ZDF, assembled a team of more than two dozen journalists to track them down over a period of six months. Their reporting took them around the globe: from the Republic of Moldova to the United States; from Stockholm via Kyiv and Prague to Romania and France. Much of the information comes from sources who cannot be named. It comes from intelligence agencies, investigators, high ranking officials and politicians. And it comes from people who, in one way or another, are directly linked to suspects.

At some point in the reporting, it became clear that the Andromeda had played a critical role, which is why DER SPIEGEL and ZDF chartered the boat once the criminal technicians from the BKA had released it. Together, six reporters followed the paths of the saboteurs across the Baltic Sea to the site of one of the explosions in international waters.

This voyage on its own did not reveal the secrets of the attack, but it made it easier to understand what may have happened and how – what is plausible and what is not. And why investigators have become so convinced that the leads now point in just one single direction. Towards Ukraine.

That consensus in itself is striking, say others – particularly politicians who believe the attack from the Andromeda may have been a "false flag" operation – an attack intentionally made to look as though it was perpetrated by someone else. All the leads point all-too-obviously towards Kyiv, they say, the clues and evidence seem too perfect to be true. The Americans, the Poles and, especially, the Russians, they say, all had much stronger motives to destroy the pipeline than the Ukrainians.

Still others believe that too many inconsistencies remain. Why did the perpetrators use a chartered sailboat for the operation instead of a military vessel? Why wasn't the Andromeda simply scuttled afterwards? How were two or three divers on their own able to blow up pipelines located at a depth of around 80 meters (260 feet) beneath the waves?

The story of the operation is a preposterous thriller packed full of agents and secret service missions, special operations and commando troops, bad guys and conspiracy theorists. A story in which a dilapidated sailboat on the Baltic Sea plays a central role.

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The Search

It's a chilly January day in Dranske, a town on the northwest tip of the German Baltic Sea island of Rügen. The law enforcement officials show up at 9:45 a.m. for the search, 13 of them from the BKA and Germany's Federal Police, including IT forensic experts, a crime scene investigator and explosives specialists. Their target on this morning are the offices of Mola Yachting GmbH, and they tell the shocked employees that they have a search warrant for a boat that was chartered from the premises. The punishable offense listed on the warrant: "The effectuation of an explosive detonation, anti-constitutional sabotage."

They demand to know where the Andromeda is. The technical chief of Mola tells them it is in winter storage, a few hundred meters away. He leads the group of law enforcement officials along a secluded private road to a former East German army facility, as a confidential memo documents. The Andromeda is sitting on blocks out in the open, with workers sanding down the hull. The search begins at 11:05 a.m. It lasts three days.

The investigators are lucky. Mola didn't clean the boat before storing it for the winter, and the saboteurs were the last people to charter the vessel. A plastic bottle "with apparently Polish labeling" is found next to the sink. Beneath the map table is a single "barefoot shoe." According to the BKA's search log, file number ST 24-240024/22, the officials remove the marine navigation system, a model called Garmin GPSMAP 721.

The sailing yacht Andromeda in the Baltic Sea / Foto: Christian Irrgang / DER SPIEGEL

The next day, the federal police bring two bomb-sniffing dogs onboard; they have to be hoisted up using a kind of winch. They spend more than an hour sniffing around onboard the Andromeda. With success, as forensics experts would later confirm in the lab. On a table belowdecks and even on the toilet, they are able to find substantial traces of octogen, an explosive that also works underwater.

Ever since the search of the ship on those days in January, German investigators have been certain that the Andromeda is the key to the Nord Stream case. Finally, a breakthrough.

Early in the investigation, it seemed that such a breakthrough would never come. The few leads the detectives had all turned up nothing of substance, and they had no clear indications of who the perpetrators might be. But then, a few weeks after the attack, intelligence was passed to the BKA indicating that a sailboat was involved.

To avoid causing concern and attracting unwanted attention, the investigators contacted boat rental companies in Rostock and surroundings one at a time – ultimately zeroing in on Mola and the Andromeda.

It was a rather surprising development for the public at large, particularly given that other scenarios seemed so much more likely: submersibles, specialized ships, at least a motorboat or two. But a single sailboat as the base of operations for the most significant act of sabotage in European history?

German officials were also skeptical at first. The federal public prosecutor general commissioned an expert analysis with a clear question of inquiry: "Whether such an act could be carried out with a completely normal yacht or if a much, much larger vessel was necessary." Such was the formulation used by Lars Otte, the deputy head of the Federal Public Prosecutor's Office, during a confidential, mid-June session of the Internal Affairs Committee of German parliament, the Bundestag. Speaking to the gathered parliamentarians, he stressed: "The assessment of the expert is: Yes, it is also possible with a completely normal yacht of the kind under consideration."

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The Andromeda

On September 6, 2022, the Andromeda was bobbing in the waves along with dozens of other boats in a marina in Rostock's Warnemünde district waiting to be taken out by its next renters. For the last decade, it has been plowing through the Baltic Sea every few days, with a new charter crew at the helm. The Andromeda is a Bavaria 50 Cruiser, built in Bavaria in 2012 and frequently belittled by sailors as the "Škoda of the seas." Not exactly elegant, but practical, a bit like a floating station wagon: 15.57 meters (roughly 51 feet) long and a beam of 4.61 meters, it is rather affordable for its size.

Belowdecks, it has five small cabins with space for a maximum of 12 people, if you don't mind a bit of crowding. The double berths are hardly 1.2 meters wide. By contrast, though, there is plenty of storage space and the kitchenette is relatively spacious, complete with a gas stove and a banquette surrounding a varnished dining table. A swimming platform can be folded down from the stern, making it easy to take a dip. It is ideal for divers with their heavy equipment.

The marina Hohe Düne is located around 10 kilometers from the Rostock city center as the crow flies, a strangely lifeless place with a giant wellness hotel and a solitary pizzeria. Long piers wind their way out into the water to 920 morages, with a small wooden structure right in the middle of Pier G. Those who have chartered a yacht with Mola Yachting must register here, complete with identification, sport boat license and a 1,500-euro deposit.

On September 6, according to reporting by DER SPIEGEL and ZDF, a sailing crew checked in at the Mola shack in the early afternoon to take out the Andromeda. The charter fee had apparently been paid by a Warsaw travel agency called Feeria Lwowa, a company with no website or telephone number.

According to the Polish commercial registry, the company is headed by a 54-year-old woman named Nataliia A., who lives in Kyiv. She completed a course of study in early childhood education, but has no recognizable experience in the tourism industry. She has a Ukrainian mobile phone number. If you call it, a woman answers – before immediately hanging up once you identify yourself as a journalist. A few days later, a Ukrainian "police officer" called back, threatening the reporter with charges of "stalking," citing a rather flimsy justification. Feeria Lwowa's address in Warsaw likewise leads nowhere. There is no office and there are no local employees. It looks as though it is a shell company.

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Who Is Ştefan Marcu?

And something else would soon prove to be extremely challenging for investigators: When the saboteurs showed up at the Mola shack to check in for their rental of the Andromeda, they apparently presented a Romanian passport. It had been issued to a certain Ştefan Marcu, as official documents indicate. But who was he? Did he have anything to do with the attack?

Marcu opens the steel gate to his property wearing shorts and flipflops. It is the middle of July, a hot day in Goianul Nou, a village in Moldova just north of the capital of Chiᶊinǎu. The Ukrainian border isn't even 50 kilometers from here.

Ştefan Marcu is a sturdily built man with a deep tan and a black moustache, an engineer with his own company. A team from DER SPIEGEL and ZDF along with reporters from the investigative networks Rise Moldova and OCCRP managed to track him down. The two-story home where he lives with his family is the most attractive one on their street. Marcu stares down at the note the reporters show him, bearing the number 055227683.

He recognizes it immediately. He says he is a citizen of Moldova, but that the number belonged to his old Romanian passport, which expired the previous October. The last time he used the passport, he says, was in 2019 for a vacation in Romania and then, a couple months after that, for a trip to Bulgaria. He says he has no idea how his name got mixed up in the pipeline story. It's the first time he's heard about it, he insists. Aside from the reporters, nobody else has asked him about it, he says, no police officers and no intelligence agents.

After he received his new passport, he says, the woman at the office invalidated his old one. "When I got home, I burned it. I threw it in the oven," Marcu says.

But the data from his passport, officials believe, seems to have been used to produce another document, a falsified passport that was then used to charter the Andromeda. Complete with a new photo. The photo, though, is not of Ştefan Marcu, the 60-year-old from Moldova, but of a young man in his mid-20s with a penetrating gaze and military haircut. The man in the photo is very likely Valeri K. from the Ukrainian city of Dnipro. He apparently serves in the 93rd Mechanized Brigade of the Ukrainian army.

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A Stop in Northern Rügen

It's not possible to determine precisely when the saboteurs left the Hohe Düne marina. But the very next day, on September 7, they made their first stop just 60 nautical miles away in Wiek, a tiny harbor on the north coast of Rügen. Under normal circumstances, it is part of a long but idyllic sailing trip along the coast of Mecklenburg-Western Pomerania, past the Fischland-Darss peninsula and the island of Hiddensee.

It takes the team of reporters around 12 hours to sail this first leg of the journey, in pleasant, mid-July weather and calm seas. For most of that distance, the Andromeda is propelled by its motor, at a relatively constant clip of seven to eight knots. In a strong wind, when the mainsail can be set on the 22-meter-tall mast along with the jib, the ship can reach speeds of 10 to 11 knots.

In contrast to Warnemünde, Wiek is a solitary, isolated place, vastly different from the busy Rostock marina. Those wishing to load up their boat in Rostock have to push a handcart back and forth across long piers past dozens of other boats and crews. In Wiek, though, it is possible to drive a delivery truck right up to one of the few moorages that are large enough for a vessel the size of Andromeda. When the skipper of the DER SPIEGEL/ZDF voyage called ahead to reserve a moorage, the harbormaster asked: "Do you want the same spot as the terrorists?"

Still, during our visit, marina staffers prove reluctant to talk about the Andromeda and its stopover, at least not on the record. One of the workers who has clear memories of the sailboat's layover and who dealt directly with the crew says that the people on board seemed physically fit and familiar with each other, and that they spoke in a language he was unfamiliar with.

The crew was made up of five men and a woman, says the harbormaster, who filled up the fuel tank of the Andromeda for the saboteurs. That was during the boat's second stop in Wiek, on the return trip to Warnemünde. He wrote down the amount paid for the diesel in a black notebook, the same one he uses to record the fuel purchased by the crew of reporters.

The harbormaster flips back through his notebook and finds two entries that may have been for the diesel purchased by the team of saboteurs: one for 665.03 euros and one for 1,309.43 euros on September 22 and 23, respectively. In addition to filling the boat's tank, though, he recalls, he was also asked to fill up several canisters. One of the men paid for the fuel in cash, pulling a striking number of large-denomination euro bills out of his pocket to do so – but he didn't leave a tip.

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On the Pea Islands

After the first stopover in Wiek, the Andromeda disappeared for an extended period. With the help of a meter, investigators have determined that the crew didn't sail the ship and used the motor instead. Around 10 days later, the vessel apparently reappeared off the island of Christiansø, not much more than a rock jutting out of the waves near Bornholm, so small that it is sometimes called Pea Island. The port lies attractively below defensive fortifications built in 1684. The island, located near the easternmost point of Denmark, is home to hardly more than 100 residents, but it is a popular destination for day-trippers who sail over from the vacation island of Bornholm for a lunch of kryddersild.

It seems safe to say, though, that the saboteurs weren't there for the pickled herring: Christiansø is the nearest port to the site of the detonations. And a chartered sailboat doesn't stand out at all, with almost 50 vessels sailing in and out on busy days, says Søren Andersen. The chief of administration for the tiny islands, Anderson is sitting among portraits of the Danish royal family in a white-plastered building with a green door made of wood and a sign reading "Politi," police. "In December, the Danish police requested us to share all the port data" from September 16 to 18, 2022, says Anderson.

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An Inspection in Poland

That was when the commando on board the Andromeda made a brief detour – directly south to Poland. On September 19, exactly one week before the pipelines were blown up, the Andromeda docked in Kołobrzeg, Poland, a Baltic Sea resort known for its saline springs and usually packed with tourists during the summer months. And with sailboats. The Andromeda only stayed for 12 hours.

Poland was always one of the most adamant opponents of Nord Stream 2 and vociferously demanded over the course of several years that the project be stopped. Warsaw long viewed Germany's dependence on energy from Moscow as an existential threat. It would be fair to say that Poland had a strong interest in eliminating this threat to its security right off its coastline once and for all.

In May, German investigators traveled to Poland for a "meeting at the level of the prosecutor's offices conducting the investigation," as it would later be described. One question addressed during that meeting was whether the saboteurs had received any support while in Kołobrzeg, either of a material nature, or in the form of personnel. They wanted to know if the port may have been used as a logistical hub.

The responsible public prosecutor in Danzig, from the department for organized crime and corruption, vehemently denies such a scenario when asked. "There is absolutely no evidence for the involvement of a Polish citizen in the detonation of the Nord Stream pipelines," he says. "The investigation has found that during the stay in a Polish harbor, no objects were loaded onto the yacht." In fact, he notes, "the crew of the yacht was checked by Polish border control officials" because they had raised suspicions. Perhaps because of the falsified documents used by the crew? Whatever triggered their concerns, the border control officials made a note of the personal information they had presented.

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Image by Germán & Co.

The Pipelines

By September 20, the Andromeda had already departed from Kołobrzeg. By this time, the explosives had likely already been laid and equipped with timed detonators. Christiansø, the sailboat's previous port of call, is, in any case, the closest to the main detonation site. It is located just 44 kilometers – less than a three-hour voyage to the northeast – from the coordinates 55° 32' 27" north, 15° 46′ 28.2" east.

The Baltic Sea gets rather lonely to the east of the Pea Islands. There are fewer ferries, fewer tankers and not too many sailboats either. For miles around, there is nothing but water and sky.

There is, however, something to see on the sonar, some 80 meters below: Four pipes, each with an inside diameter of 1.15 meters, wrapped in up to 11 centimeters of concrete which keeps them on the sea floor, and a layer to protect against corrosion. Beneath that is four centimeters of steel and a coating to ensure the natural gas flows more freely on its long journey from Russia to Germany.

Nordstream 1 begins in the Russian town of Vyborg and runs through the Gulf of Finland and crosses beneath the Baltic Sea before reaching the German town of Lubmin, located near the university town of Greifswald.

The double pipeline is 1,224 kilometers long and consists of 200,000 individual segments, most of which were produced by Europipe in Mühlheim, Germany. During construction, 15 freight trains per week rolled into the ferry port of Sassnitz, where the pipe segments were loaded onto a ship. The project's price tag was 7.4 billion euros, with most of it paid for, directly or indirectly, by the Russian state.

It went into operation in 2012, sending almost 60 billion cubic meters of natural gas from the Russian fields Yuzhno-Russkoye and Shtokman, located on the Barents Sea, to Germany. In 2018, the pipeline accounted for 16 percent of all European Union natural gas imports. Nord Stream 1 was one of the most important pipelines in the world.

In spring 2018, dredgers again sailed into the Bay of Greifswald to make way for Nord Stream 2, also a double pipeline. This one starts a bit further to the south, in the town of Ust-Luga, located in the Leningrad Oblast – but most of it runs parallel to the first pipeline. It was planned to carry 55 billion cubic meters of Russian natural gas per year to Germany. Taken together, the two pipelines were able to transport far more than Germany consumed each year. Most Germans were in favor of the new pipeline project, blinded to their country's growing dependency on Moscow by the cheap price of Russian gas. A 2021 survey among supporters of all political parties found that an average of 75 percent of Germans were in favor of Nord Stream 2.

Security policy experts and many of Germany's international allies, by contrast, were aghast. Nord Stream 1 had already tied Germany far too closely to Russia, they felt. And now Berlin wanted to import even more energy from Vladimir Putin's empire? The Americans, in particular, were vocal about their opposition to the project. Indeed, Washington thought Nord Stream 2 was so dangerous that it warned Germany that its completion would significantly harm U.S.-German relations.

Ukraine was also radically opposed to the new pipeline. Significant quantities of Russian natural gas flowed to Western Europe through overland pipelines across Ukrainian territory. A second pipeline beneath the Baltic would make parts of the Ukrainian pipeline network obsolete. Kyiv saw Nord Stream as a direct threat to the country.

In September 2021, Nord Stream 2 was completed, but it did not go into operation. And a few months later, the Russian invasion of Ukraine put an end to the political debate – and left Germany scrambling to free itself from dependency on energy imports from Russia as quickly as possible. The initial plan called for continuing to import natural gas through Nord Stream 1 for a time, but the second pipeline was essentially dead in the water.

For the time being, at least. But politics can be fickle, consumers and industry have a fondness for cheap energy and Putin wouldn't be around forever, would he? The four pipes lay on the seabed, ready to be put back in use once that time came.

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Explosions in the Baltic Sea

At 2:03 a.m. on September 26, a blast wave rippled through the bed of the Baltic Sea, powerful enough to be recorded by Swedish seismographs hundreds of kilometers away. The welded seam between two segments of pipe A of Nord Stream 2 was shredded. It was a precise cleavage, likely caused by a relatively small amount of perfectly placed specialized explosive material: octogen. Exactly the same explosive of which forensics experts would later find traces onboard the Andromeda. The explosion initially ripped a roughly 1.5-meter gap in the pipe, but the gas gushing out enlarged the leak.

Seventeen hours later, at 7:04 p.m., there was another blast wave, this time 75 kilometers to the north. It was much stronger, and there were several explosions. Above water, the muffled blast could be heard several kilometers away. This time, both pipes belonging to Nord Stream 1 were destroyed: a 200-meter section of pipe A and a 290-meter segment of pipe B. A 3-D visualization based on underwater camera footage and sonar readings shows deep craters, piles of rubble and bits of pipeline sticking up diagonally from the seafloor.

Initially, nobody knew just how dramatic the situation was, not even the operators of the two pipelines, Nord Stream AG and Nord Stream 2 AG. Both companies are majority owned by the Russian natural gas giant Gazprom. Initially, they only registered a drastic fall in pipeline pressure, but technicians were immediately concerned that something might by wrong, as were military representatives in the region. On the morning of September 27, a Danish F-16 fighter discovered strange bubbles on the surface of the water, and the Danish military published the first images that afternoon: Natural gas rising up from the bottom of the Baltic had formed circles of bubbles up to 1,000 meters across on the water's surface not far from Bornholm.

It's not yet possible to say with complete certainty how the perpetrators went about their business. But the findings of the international investigation make it possible to reconstruct much of what took place. Data from geological monitoring stations, videos and sonar data from the seafloor provide additional clues. That data comes from a Swedish camera team and from Greenpeace, both of which launched their own surveys using underwater devices. For experts, the publicly available information paint a largely consistent picture, according to which the group of saboteurs was likely made up of six people – five men and a woman. Likely a captain, divers, dive assistants and perhaps a doctor.

According to former military and professional divers, the operation would have been possible, though challenging, with such a team. "It's pitch black down there, cold, and there are currents," says Tom Kürten. As a technical diver and expedition leader, he has been inspecting wrecks on the bottom of the Baltic Sea for many years. With the correct equipment, it is possible to dive to depths of 100 meters or more, and he believes it would be impossible to locate the pipelines without technical assistance. Indeed, with a small DownScan, a sonar device, it would be relatively simple, he says. And once the spot has been identified, all you have to do, he says, is throw a "shot line" overboard, a rope with a weight on the end that guides the divers into the depths.

For challenging dives, Kürten also uses a rebreather, which recycles exhaled air and replenishes it with oxygen for the next breath. The advantage is that no tanks are needed, and such devices also produce fewer bubbles, which can be helpful if you are seeking to avoid unwanted attention. Still, such an operation takes time. For 20 minutes spent working at a depth of 80 meters, a total of three hours of dive time is necessary, Kürten estimates. During the ascent, decompression stops are vital so that the body can adjust from the high pressure on the seafloor to the lower pressure at the surface. It's a rather complex undertaking, but certainly possible during a long trip.

The pipe tore open along a length of approximately 100 meters. A so-called "cutter charge" was likely used, directly over a welded joint.

Later, when German investigators undertook a closer examination of the detonation sites, specialists from the maritime division of the German special forces unit GSG 9 dived down to take a look.

However you look at it, the operation could not have been performed by amateur divers – nor by hobby sailors. When the team of reporters in the Andromeda arrived at the site above where the explosions took place, a force 5 or 6 wind was blowing, it was raining, and the swells were significant. Standard Baltic Sea weather, in other words – in which it is difficult to keep a sailboat in one spot. According to weather data, mid-September 2022 was similar for several days, though it was calmer both before and afterward.

Explosives expert Fritz Pfeiffer produced an expert opinion for Greenpeace regarding the potential destructive power of the detonations, since the environmental group was interested in knowing how much damage had really been done to the pipeline and what that might mean for the environment.

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An Operation Straight Out of Hollywood

On underwater images of Nord Stream 1, Pfeiffer identified craters that he believes were created by large amounts of explosives detonating next to the pipeline. Investigators, though, think that a total of less than 100 kilograms of explosives were used and that the sudden release of the highly pressurized natural gas caused much of the damage.

Not far from the long stretches of destroyed pipes belonging to Nord Stream 1, the A pipe of Nord Stream 2 was attacked a second time – the same line that had already been severed 17 hours earlier further to the south. The pipe tore open along a length of approximately 100 meters. A so-called "cutter charge" was likely used, directly over a welded joint. Pfeiffer believes that just eight to 12 kilograms of octogen would have been necessary for such a detonation.

The B pipe of Nord Stream 2, meanwhile, wasn't harmed at all – and could easily be put into use even today. But why did the perpetrators leave one of the four pipes undamaged? There are some indications that the saboteurs confused the A and B pipes of Nord Stream 2 in the darkness and unintentionally attacked the same pipe twice.

Whatever the case, experts seem to agree on one salient fact: specialized submarines or remote-controlled submersibles were not necessary for the operation. But there are several questions to which no answer has yet been found. How were the bombs detonated? Why did so much time pass between the first explosion and the three that followed? Some experts believe that they might have had difficulties in activating the explosives – either via a delayed detonator or a remote detonator.

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The Warnings

Perhaps the attack could have been prevented in the first place. It didn't come as a complete surprise, after all. It had been announced several months beforehand, in detail. But the warning wasn't taken seriously enough in the right places.

An encrypted, strictly confidential dispatch from an allied intelligence agency was received by the Bundesnachrichtendienst (BND – Germany's foreign intelligence agency) in June 2022. Such dispatches are hardly an anomaly, but this one contained a clear warning. It was from the Netherlands' military intelligence agency, which goes by the initials MIVD and is well known for its expertise in Russian cyberwarfare techniques. On this occasion, though, the agency's alarming information seemed to have come from a human asset in Kyiv.

The Dutch also informed the CIA – which, just to be on the safe side, also forwarded it onward to the Germans.

The confidential dispatch sketched out an attack on the Nord Stream pipelines. The plan called for six commando soldiers from the Ukraine, concealed with fake identities, to charter a boat, dive down to the bottom of the Baltic Sea with specialized equipment and blow up the pipes. According to the information, the men were under the command of Ukrainian Commander-in-Chief Valerii Zaluzhnyi, but President Volodymyr Zelenskyy had apparently not been informed of the plan. The attack was apparently planned to take place during the NATO exercise Baltops on the Baltic Sea. The content of the secret dispatch was originally reported on by the Washington Post in early June.

The BND forwarded the warning to the Chancellery, but at German government headquarters, it was deemed irrelevant. After all, it only arrived at the Chancellery after the NATO maneuver had come to an end, and nothing had happened. That is why nobody sounded the alarm, says one of the few people who learned of the warning when it arrived. Most German security officials believed the information contained in the dispatch was inaccurate.

As a result, no protective measures were introduced, no further investigations were undertaken and no preparations were made to potentially prevent an attack at a later point in time. The Federal Police, the German Navy and the antiterrorism centers never even learned of the warning.

Nor did the German agency responsible for the oversight of Nord Stream.

In the early morning hours of September 26, Klaus Müller, president of the Federal Network Agency, received a telephone call. His agency is responsible for regulating Germany's electricity and natural gas grids. Christoph von dem Bussche, head of the company Cascade, which operates 3,200 kilometers of Germany's natural gas pipelines, was on the other end of the line. According to sources in Berlin, Bussche told Müller that one of the Nord Stream pipelines had just experienced an inexplicable loss of pressure.

Washington carefully approached Kyiv with a clear message: Don't do it! Abort the operation!

The head of the Federal Network Agency must have immediately realized how important that phone call was. He called German Economy Minister Robert Habeck.

Habeck, who is also the vice chancellor, was the first cabinet member to learn of the attack on the pipelines. Sources indicate that he was just as surprised as Müller had been. Neither of them had apparently known about the warning that had been received three months before.

It had also apparently not been discussed in the German Security Cabinet, the smaller group of ministers that has been meeting regularly in the Chancellery since the Russian invasion of Ukraine. Müller, though, is the first person who should have been informed of increased risks posed to the pipeline: He is in charge of ensuring the smooth operation of Germany's numerous pipelines, and of protecting them if need be.

The U.S., by contrast, apparently sprang into action in summer 2022, even if the Americans didn't initially trust the Netherlands' source. Washington carefully approached Kyiv with a clear message: Don't do it! Abort the operation! The German weekly newspaper Die Zeit and public broadcaster ARD were the first to report on Washington's warning to Kyiv. But the message from the American's apparently wasn't taken seriously. Perhaps Washington lacked a certain amount of credibility, particularly given how clear they had made it in the past that they were deeply opposed to the gas pipelines connecting Germany and Russia.

Was there perhaps even more information that wasn't passed along? Did the well-informed Dutch military intelligence agents know even more than they shared, such as who was to be on board the ship and perhaps even from which Ukrainian unit they came from? If so, that information is no longer available. Leaving the German investigators to assemble the puzzle pieces on their own.

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Searching For Clues In Ukraine

One lead stems from the falsified passport of Ştefan Marcu. And from the man whose photo is apparently on that document: Valeri K.

Back in June, Lars Otte, the federal prosecutor, told members of the Internal Affairs Committee at the Bundestag that investigators had been able to "almost certainly identify a person who may have taken part in the operation."

The lead takes us to a large city in central Ukraine, to an abominable Soviet-era prefab residential building on the outskirts of Dnipro. The structure has eight, not entirely rosy-smelling entrances, a bar and a minimarket called Stella on the ground floor.

On the third floor of the first entrance is an apartment that is registered to the father of Valeri K. He, too, is called Valeri – and both are members of the military, say neighbors.

Nobody opens the door, despite extended knocking. Instead, the neighbors peek out, an elderly married couple. They say that the Valeris actually live in the building next door and that they only rent out this apartment. The younger Valeri K.'s grandmother, the couple says, used to work at Stella, and suggested dropping by there.

It's stuffy inside the store, and smells of dried fish. The saleswoman says that the grandmother is now the janitor of the neighboring building. Five minutes later, Lyubov K. sets aside her broom and sits down on a bench. She's a small woman with red-dyed hair and speaks Russian. She says she doesn't want to speak with the press, but remains seated on the bench. When asked if her grandson Valeri is in the army, she says "yes." What does he do there? "I don't know." She does say, though, that her son and grandson had only been called up a few months before. The conversation remains brief, ending with the grandmother claiming that her grandson couldn't have been onboard the Andromeda because he doesn't have a passport and is unable to travel overseas.

Another neighbor, a retiree with gray curls and wearing a blue shirt, is more talkative. Her son, she says, went to school with Valeri senior and they also worked together. The two of them had taken a job at a shipyard in Turkey several years before.

Then, the neighbor says, Valeri senior embarked on a completely different career path, smuggling migrants across the Mediterranean on a sailboat. But the operation was busted and the Ukrainians involved arrested. The neighbor says that the younger Valeri K. wasn't involved though.

The neighbors don't have much to say about him. His presence on social media is also limited, apparently limited to VK, a Facebook clone that is popular in Ukraine and Russia.

The most striking thing about the younger Valeri K. is that he is a follower of the openly nationalist youth organization VGO Sokil. It offers young men training in shooting and diving.

His most recent active VK profile is under the name "Chechen from Dnipro," and it is linked to a telephone number. If you enter the number into an App like Getcontact, you can see the names under which the number is saved in other people's contact lists. Among the names for Valeri's number is: "K. 93rd Brigade."

There are also leads to his long-time girlfriend Inna H. The two apparently aren't together any longer, but they have a son together. The mother and child no longer live in Dnipro, but in the German city Frankfurt an der Oder.

They live in a gray housing block just a few hundred meters from the Polish border. There are a number of Ukrainian refugees living in the building, including several relatives of Valeri K.: Inna H., the ex-girlfriend who is the mother of his son, his younger sister Anya K. and apparently also his maternal grandmother Tetyana H.

In May, they received a visit from the police, who searched the apartment. A DNA sample from Valeri K.'s son was then compared with traces found on the Andromeda. But there was no match.

Inna H. lives on one of the upper floors of the apartment block, but the door is opened by an elderly lady when a team of reporters from DER SPIEGEL rings the doorbell. She doesn't give her name, but she looks like the grandmother, Tetjana H., in photos. She doesn't want to talk to journalists.

If people have something to say, she says, they should discuss it with the authorities.

Asked about the accusations against Valeri K., she says only: "We are a simple family, the Germans saved us. Why would we want to do them any harm?"

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Little Doubt

Officially, politicians and the Office of the Federal Prosecutor are still holding back with any conclusions. Currently, it is not possible to say "this was state-controlled by Ukraine," Federal Prosecutor Otte says. "As far as that is concerned, the investigation is ongoing, much of it still undercover."

Behind the scenes, though, you get clearer statements. Investigators from the BKA, the Federal Police and the Office of the Federal Prosecutor have few remaining doubts that a Ukrainian commando was responsible for blowing up the pipelines. A striking number of clues point to Ukraine, they say. They start with Valeri K., IP addresses of mails and phone calls, location data and numerous other, even clearer clues that have been kept secret so far. One top official says that far more is known than has been stated publicly. According to DER SPIEGEL's sources, investigators are certain that the saboteurs were in Ukraine before and after the attack. Indeed, the overall picture formed by the puzzles pieces of technical information has grown quite clear.

And the possible motives also seem clear to international security circles: The aim, they says, was to deprive Moscow of an important source of revenue for financing the war against Ukraine. And at the same time to deprive Putin once and for all of his most important instrument of blackmail against the German government.

But crucial questions remain unanswered. From how high up was the attack ordered and who knew about it? Was it an intelligence operation that the political leadership in Kyiv learned about only later? Or was it the product of a commando unit acting on its own? Or was it a military operation in which the Ukrainian General Staff was involved? Intelligence experts and security policy experts, however, consider it unlikely that Ukrainian President Zelenskyy was in on it: In cases of sabotage, the political leadership is often deliberately kept in the dark so that they can plausibly deny any knowledge later on. In early June, when the first indications of Kyiv's possible involvement came to light, Zelenskyy strongly denied it. "I am president and I give orders accordingly," he said. "Nothing of the sort has been done by Ukraine. I would never act in such a manner."

In any case, it is difficult terrain for the BKA, not only politically, but also in practical terms. The German criminal investigators cannot conduct investigations in Ukraine, and it isn't expected that Kyiv will provide much support. The German authorities have also shied away from submitting a request to Ukraine for legal assistance because doing so would require that they reveal what they know. That could provide Ukraine the opportunity to cover up any traces that may exist and to protect the people responsible. Asked whether there will be arrest warrants one day, an official familiar with the events replies: "We need a lot of patience."

"Everyone is shying away from the question of consequences."

Senior German government official

A Ukrainian commando carried out an attack on Germany's critical infrastructure? Officials at the Chancellery in Berlin have been discussing intensively for months how to deal with the sensitive findings of the investigation. Chancellor Olaf Scholz has also been debating possible consequences with his closest advisers. Of course, there aren't many options available to them. A change of course in foreign policy or the idea of confronting Kyiv with the findings seems unthinkable.

The situation changed in March, when the New York Times, Germany's Die Zeit and Berlin-based public broadcaster RBB first reported on the evidence pointing to Ukraine. A little bit later, the Süddeutsche Zeitung newspaper also published its own investigative report. Soon after, Jens Plötner, an adviser to the chancellor, openly addressed the articles in a phone call with Andriy Yermak, one of President Vlodymyr Zelenskyy's closest confidants. The answer was clear: Yermak apparently assured the Germans that the Ukrainian government had not been involved in the plot and that no one from the security apparatus knew who was behind it.

Few in Berlin want to think right now about what action should be taken if the involvement of Ukrainian state agencies is proven. On the one hand, Germany couldn't simply brush off such a serious crime. But suspending support for Ukraine in its war against Russia also wouldn't be an option. "Everyone is shying away from the question of consequences," says one member of parliament with a party that is a member of the German government coalition.

The fact that politicians who normally might at least speak off the record are remaining silent and simply ignoring inquiries is an indicator of just how delicate the situation is. Inquiries about the situation regarding the attack on the Nord Stream pipeline - in ministries, at party headquarters and in parliamentary offices - as to how it is being discussed within the parties or whether the government is already thinking through scenarios for the eventuality that the Ukrainian leadership knew about the operation, go nowhere.

"No," says Irene Mihalic, the first parliamentary secretary of the Green Party, there was almost no discussion about the issue before the summer legislative recess. She says her party will wait for the outcome of the investigations, and that anything else would be pure speculation.

In fact, the information available to members of parliament in this case is also extremely thin. On the one hand, the federal public prosecutor naturally provides only scant information about ongoing investigations. More importantly, the federal government is keeping all the findings under wraps. Even most members of Scholz's cabinet as well as the deputies in the Parliamentary Control Committee, which is tasked with oversight of the work of the intelligence services, don't know much more than what is publicly reported about the attack.

The gatekeeper for information flows sits on the seventh floor of the Chancellery, diagonally opposite Olaf Scholz. Wolfgang Schmidt, the chancellor's closest confidant and head of the Chancellery, maintains intensive contact with the investigators. He is also briefed each week by the intelligence services and is happy to pick up the phone to make inquiries of his own. When asked, Schmidt says he doesn't want to comment on the Nord Stream case.

Sources within the investigation say they have been amazed by the level of interest the Chancellery head has shown in the progress of the proceedings. And at the same time, how little Berlin seems to care about shedding light on this unprecedented attack on the backbone of Germany's energy supply as quickly as possible.

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The Investigators

The BKA has three main offices. One is in Wiesbaden, where investigators deal with organized crime, narcotics offenses, targeted searches and such things. Another, in Berlin, provides headquarters for its experts on issues including Islamist terrorism. And then there's the one in Meckenheim near Bonn, in a gray 1970s, box-like building surrounded by orchards and fields, with red-tiled hallways inside. This is the place where one of the most sensational crimes in German criminal history is to be solved, and it looks like some random rural school.

This is where the BKA's State Protection Department is housed, where the investigators tasked with solving politically motivated crimes work: offenses like attacks, assassinations, espionage and sabotage. In the past, the office investigated the Red Army Faction, domestic left-wing radicals who perpetrated numerous terror attacks in Germany in the 1970s. And the National Socialist Underground, a neo-Nazi cell that killed immigrants, mostly of Turkish descent, across Germany in the early 2000s. More recently, they have been focused on the Reichsbürger movement of militant protesters who deny postwar Germany's right to exists. Now it has the Nord Stream saboteurs in its crosshairs.

The responsible department is ST 24: State Terrorism. One might assume that dozens of criminologists are working here around the clock researching, searching, and following up on every little lead.

For a time, hundreds of BKA agents were investigating the right-wing extremist madmen around Heinrich XIII Prince Reuss, who had been planning an absurd coup attempt to topple the German government. But only a handful of investigators at most have been assigned to work on the Nord Stream case on a full-time basis.

Sources in Berlin say that a small, dedicated group of skilled investigators should be sufficient. Directing more staff wouldn't be of much use anyway, they argue, since there are no large groups to observe and they aren't allowed to conduct investigations in other countries. And if necessary, more BKA people could also be called in addition to support from the Federal Police.

But the perception among investigators is that the will to solve the case is not particularly pronounced in the capital. Politically, it is easier to live with what happened if it remains unclear who is behind the attacks. The process is not being hindered, but neither is there much support from the overarching government ministries. Meanwhile, it is clear to career-oriented ministry officials that there is no glory to be had with this case. If only because the culprits will likely never have to answer for their actions in Germany. Even if they could be identified, it's very unlikely they would be extradited.

So Berlin is looking away, and that is definitely being registered in agencies where staff is constantly in short supply and procedures have to be prioritized. All of which leads to the investigation falling down the priority list.

Regardless, the BKA unit is led by a chief inspector, an experienced veteran in his mid-50s who is considered a shrewd criminologist by his colleagues.

The German investigators frequently exchange information with officials in Sweden and Poland, and traveled to Warsaw and Stockholm in the spring. However, no agreement has been reached on forming a joint procedure, called a Joined Investigation Team in legal vernacular. Ostensibly because the intelligence agencies involved don't want to be constantly sharing their information internationally.

Still, sources in all three countries involved say there is tight coordination. Swedish Nord Stream experts are acting more assertively than the Germans, and it is possible charges could be filed before the end of the year. Mats Ljungqvist, the Swedish prosecutor responsible for the investigation there, recently told Radio Sweden that he believes they may be approaching the final phase of the case.

International investigators and agents also say that all the intelligence has been pointing in one direction: towards Kyiv. At least those who are familiar with the evidence and clues.

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Alternative Scenarios

In the rest of the world, however, alternative scenarios are still circulating – some spurred by half-baked intelligence, some by amateur military experts and others driven more by domestic political or geostrategic interests.

The American journalist Seymour Hersh, 86, caused quite a stir, for example, when he accused the U.S. of committing the attacks. He claimed that a Norwegian naval vessel had secretly transported American combat divers into the Baltic Sea. The alleged motive: To make sure Russia would no longer be in a position to blackmail Germany with gas supplies. But Hersh didn't provide any evidence to back up his theory and essential parts of his article later turned out to be false. Hersh justified his reporting by saying that the information had been supplied to him by a source in Washington. The Russian government, though, was delighted and vaunted the baseless story as proof that the U.S. was the real warmonger.

Still others claim that such theories are extremely convenient for the Russians because they distract from the fact that they themselves are the perpetrators. As evidence of this, Russian ship movements in the Baltic Sea, reconstructed by journalists from the public broadcasters of Denmark (DR), Sweden (SVT), Finland (Yle) and Norway (NRK), are frequently cited.

On the night of September 21-22, for example, the Danish Navy encountered a conspicuous number of Russian ships east of Bornholm in exactly the area of the later blasts. The automatic identification systems on the boats had been turned off and they were traveling as unidentifiable "dark ships."

The 86-meter-long Sibiryakov, a hydrographic research vessel equipped for underwater operations, was also in the area. According to experts, it often accompanies Russian submarines on their secret test dives in the Baltic Sea. Some micro-submarines also have grabber arms that can be used to perform underwater work. Tasks like placing explosive charges.

But why would the Russians blow up their own pipeline? Especially given that they could simply block it at the push of a button? Why deprive yourself of a lever that still might be useful - at least a few years down the road – to resume blackmailing a Germany that is starving for cheap energy?

It's possible to find reasons, but they are all rather convoluted. One theory holds that Moscow wanted to save itself billions in damages after it violated its own contracts by cutting off promised Nord Stream gas supplies to Germany. If, on the other hand, the pipeline had been blown up by unknown persons, it would be considered a force majeure.

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Was It the Russians After All?

The next theory, somewhat more widespread even among Berlin politicians, goes like this: Russia destroyed the pipelines with the aim of later blaming it on the Ukrainians in a way that could undermine Western support for Kyiv. The Andromeda and all other evidence pointing to Ukraine was planted by Russian agents, they say, to throw the Europeans off the scent.

The theory that it was a "false flag" operation performed by the Russians is considered probable by Roderich Kiesewetter, the security and defense policy point man for the center-right Christian Democrats in the Bundestag. Kiesewetter says it would totally fit with Russia's style to pull off an operation like that perfectly and make it look like the trail leads to Kyiv.

"Of course, we're following up on those leads as well. But we don't have any evidence or confirmation of that so far."

Public prosecutor Lars Otte

Conversely, many other intelligence experts consider it highly improbable that Russian agents, who have show a predilection in recent years of more rustic methods - such as brazen and easily exposed political assassinations - could execute such a complex deception maneuver flawlessly.

German Federal Prosecutor Otte emphasized to the Bundestag's Internal Affairs Committee that they were definitely considering the "working hypothesis" that "state-directed perpetrators from Russia" could be responsible. "Of course, we're following up on those leads as well," Otte said. "But we don't have any evidence or confirmation of that so far."

Agents tend to believe there is a different, more straightforward explanation for the Russian Navy's clear presence in the Baltic last late summer: They suspect that Moscow, like the Dutch and the CIA, was not unaware of the plans to attack Nord Stream, and that the ships were there to patrol along the pipeline to protect it from the expected sabotage.

Particularly given that Ukraine apparently had plans to attack another Russian gas pipeline. Sources within the international security scene say that a sabotage squad had plans to attack and destroy the Turkstream pipelines running from Russia through the Black Sea to Turkey. A corresponding tip-off had also reached the German government together with the first warnings of an attack on the Nord Stream pipelines

It is unclear why there was no follow-up on the suspected plot to attack Turkstream.

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The Agents

One man who should be in a position to know could be found standing in the ballroom of the British Embassy in Prague on a hot July morning. Sir Richard Moore, the head of Britain's MI6 intelligence service, had arrived to discuss the global situation with selected intelligence colleagues and diplomats.

Moore is probably one of the best-informed men in the world. If anyone can gain access to all the available data about what happened in the run-up to the explosions under the Baltic Sea, it's the man with the gray crew cut and narrow reading glasses. DER SPIEGEL was able to ask him a quick question about the Nord Stream attack.

It is one of the few official, and thus mentionable encounters with an intelligence service for this story. Another takes place under similar conditions with CIA head William Burns in the posh American ski resort Aspen in the Rocky Mountains. Each year, the Who's Who of the U.S. security apparatus gathers there for the Aspen Security Forum. Burns was joined by senior U.S. armed forces officials and national security adviser Jake Sullivan.

When they spoke on the record on the subject of Nord Stream, the top intelligence officials were monosyllabic. Moore said in Prague that he didn't want to interfere in the investigations of Germany, Denmark and Sweden. And in Aspen, when asked about Nord Stream, only security adviser Sullivan responded, and briefly at that. "As you know, there is an ongoing investigation in multiple countries in Europe," Sullivan said coolly. "We'll let that play out, we'll let them lay out the results of the investigation."

The British MI6 chief at least provided a bit of context. He said that we have to be prepared for the fact that underwater attacks are now part of the arsenal of modern warfare. His service therefore informs the British government about its own Achilles' heels, adding that there are quite a few of them. "Seabed warfare," as such underwater operations are called in military jargon, is not just about pipelines for oil and gas. The power lines of offshore wind farms and especially undersea internet cables are also targets – and potentially even easier to destroy since you don't need explosives, just the right tools.

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Germany's Response

On September 23, three days before the explosive charges went off, the Andromeda returned to its home port in Rostock. The saboteurs, it is assumed, packed their things, handed in the boat key at the Mola Yachting charter base and walked away via Pier G.

It was one of the most amazing twists in this criminal case, at least at first glance. Why not just sink the boat, including the explosive residue and DNA traces?

Presumably because the investigators would have the been on the trail of the commando much sooner than three months later, because it was precisely such anomalies that they initially searched for: things like rented dive boats. Or charter boats that had suddenly disappeared. But the Andromeda remained just one yacht for hire among hundreds, long since back in port when the seabed shook. And the saboteurs had more than enough time to leave the country and cover their tracks.

Nine months later, on a Saturday afternoon in June, German Interior Minister Nancy Faeser (SPD) was standing at the harbor quay in Rostock's Warnemünde district. In the background, the masts swayed in the marina; in the foreground the BP84 Neustadt ship towered over everything, 86 meters long, with a 57 millimeter shipboard gun. The Neustadt is the Federal Police force's newest ship. It's also in part a response to the Nord Stream attack.

"Increasingly, the lines between internal and external security are becoming blurred, and nowhere is that more conspicuous than here," the interior minister said. She explained that the attack showed how vulnerable we are. "The Baltic Sea has become a geopolitical hotspot."

In the background, the Federal Police Orchestra played the maritime anthem "Save the Sea." It was time for the vessel's christening. Faeser pulled on a rope and a champagne bottle swung toward the Neustadt. The bottle hit the ship's hull with a dull clonk, without breaking. A murmur went through the crowd. Sailors believe it is bad luck if the bottle doesn't break.

Correction: In an earlier version of this story, CIA-Chief William Burns was called "Richard Burns”. We corrected the mistake.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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"Prime Minister Modi's announcement of five critical goals for India in the next 25 years reflects his vision and determination to lead the country towards becoming a developed nation by 2047. These ambitious goals, if achieved, will undoubtedly transform India's social, economic, and technological landscape.

Firstly, the goal of ensuring clean water and sanitation for all is a crucial step towards improving public health and hygiene. Access to clean water and proper sanitation facilities is not only a fundamental human right, but also a necessity for a nation's overall well-being and development. The government aims to prioritize this goal and improve the overall quality of life for its citizens.

Additionally, a key objective set by PM Modi is to strengthen infrastructure and ensure integrated logistical networks throughout the country. Lastly, PM Modi's objective to promote sustainable development and leverage renewable energy sources demonstrates India's dedication to counteracting climate change. By shifting to clean energy, India endeavors to diminish its carbon footprint and tackle the urgent issue of environmental deterioration. This objective conforms to India's promise to the worldwide community to decrease greenhouse gas emissions and guarantee a stable, sustainable future."

Julian Nebreda

Fluence's President and CEO

Jan Teichmann

SVP & President, APAC

During his recent trip to India, Julian Nebreda, Fluence's President and CEO, and Jan Teichmann, SVP & President, APAC, discovered the extensive potential of the Indian market and its impressive clean energy objectives. With its skilled workforce committed to innovation and a resolute focus on renewable energy targets, India is rapidly becoming a leader in the international energy transformation. Understanding the importance of enhancing energy storage capabilities to support this transition, Julian held productive discussions with crucial stakeholders during his visit.

In a video, Mr. Julian Nebreda and Mr. Jan Teichmann, SVP & President, APAC, share the valuable insights gained from these discussions, shedding light on the path forward for India's energy sector. They emphasize the critical role that energy storage systems, particularly Fluence's, play in ensuring a robust and reliable electric system. Julian's visit to India showcased Fluence's commitment to supporting its energy needs alongside its ambitious renewable energy goals.

Fluence, as a prominent player in the energy storage field, acknowledges the significance of a consistent electrical system in meeting India's ambitious objectives. Together, India and Fluence can forge a dependable electrical system, paving the way for excellence and progress across the nation. We, at Fluence, are excited to further augment our commitments and bolster the Indian energy storage industry.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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AES Sending Love to Hawaii in the Wake of Recent Events…

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“Throughout history, the Hawaiian Islands have stood as a symbol of resilience and the unwavering determination of its people. Today, we witness this strength again as communities unite to support those in need. AES Hawaii stands in solidarity with our Hawaiian sisters and brothers, pledging to stand alongside Maui as they confront this challenging period. We recognize the magnitude of the devastation caused by the infamous fires, and it is during such times that we must unite to assist. Our sympathies extend to all those impacted by the destructive fire in Maui and their loved ones. Although we acknowledge that there are no words to ease the pain and sorrow they are experiencing adequately, we would like to offer assistance and aid to these individuals during this trying time.

Andrés Gluski, AES President and Chief Executive Officer

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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News Round-Up, August 28, 2023

A Phoenix's Resilience…

Former President Donald Trump finds himself embroiled in a multitude of legal battles, reminiscent of the destructive wildfires that plague our planet. These disputes, varying in intensity, resemble an unyielding inferno, with some posing greater challenges than others. Yet, President Trump has shown his resilience, refusing to be easily defeated and persisting with unwavering determination.

There is a growing concern across Europe about the possibility of President Trump returning to power. Many people fear that he may rise from the ashes like the legendary phoenix and once again wield his influence in the political arena. Understandably, people are worried about the potential consequences of such a scenario, given the impact of his previous presidency. The thought of him returning to power is like the lingering smoke of a smoldering wildfire - a constant reminder of the danger that could still be lurking just beneath the surface.

Ironically, it could be argued that President Trump's adversaries have unintentionally strengthened his position by transforming him into a symbol of martyrdom. In denying him a peaceful exit from the political stage, they have inadvertently created an apparently insurmountable obstacle, -a hard nut to crack. This unintended consequence has opened the door for his —-triumphant—- return.

The legal disputes faced by former US President Donald Trump have undoubtedly resulted in a multifaceted and financially draining process for the "good luck" of the defense lawyer of the former president. In today's world, it has become increasingly apparent that not all disputes are equally significant. Some have far-reaching consequences, impacting ordinary individuals without financial support, unfortunately. In light of this realization, it is essential to recognize that this is a challenging legal system task.

Finally, it is only through the revelation of the ultimate truth that we can effectively chart a course toward a more transparent future for the former or next president and the fairness of European governments.

Moreover, the only sure thing in life is that the final word will always be the second to last. As we publish this report, a new twist has emerged in the legal case against the former president. U.S. Judge Tanya Chutkan has scheduled the federal trial in Washington for March 4th—one day before "Super Tuesday," which could decide the Republican presidential nomination process. Chutkan's decision implies that Trump will probably have to face trials in at least three different criminal cases while he campaigns for his party's nomination to challenge Democratic President Joe Biden in the November 2024 election.

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Most read…

The U.S. is pumping oil faster than ever. Republicans don’t care

GOP presidential candidates are blaming pump prices on President Joe Biden’s clean energy policies, even though the U.S. is churning out record amounts of oil.

POLITICO:COM By BEN LEFEBVRE, 08/28/2023 

Great power rivalries: the case for realism

When assessing the geopolitical landscape, the primary aim of any state, whether democratic or authoritarian, is to ensure its own survival. That comes down to military might and alliances.

Le Monde Diplomatique by *John J Mearsheimer, Today

The World Is Contemplating a Second Trump Administration

Possibility that former president will win next year’s election has capitals across globe on edge

WSJ by Stacy Meichtry in Paris, Austin Ramzy in Hong Kong, and Bojan Pancevski in Berlin, August 28, 2023.

Hawaiian Electric says power lines were shut off hours before wildfire

Reuters, August 28, 20234 an hour ago

Bloom Energy Can Finally Live Up to Clean Power Buzz

Power-starved data center owners are knocking at the door of the Californian maker of fuel-cell electricity generators

WSJ By Carol Ryan, Aug. 28, 2023 

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“Throughout history, the Hawaiian Islands have stood as a symbol of resilience and the unwavering determination of its people. Today, we witness this strength again as communities unite to support those in need. AES Hawaii stands in solidarity with our Hawaiian sisters and brothers, pledging to stand alongside Maui as they confront this challenging period. We recognize the magnitude of the devastation caused by the infamous fires, and it is during such times that we must unite to assist. Our sympathies extend to all those impacted by the destructive fire in Maui and their loved ones. Although we acknowledge that there are no words to ease the pain and sorrow they are experiencing adequately, we would like to offer assistance and aid to these individuals during this trying time.

Andrés Gluski, AES President and Chief Executive Officer

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Image by Germán & Co. 

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The U.S. is pumping oil faster than ever. Republicans don’t care

GOP presidential candidates are blaming pump prices on President Joe Biden’s clean energy policies, even though the U.S. is churning out record amounts of oil.

POLITICO:COM By BEN LEFEBVRE, 08/28/2023 

The late-summer surge in gasoline prices is heightening the risks that inflation poses for President Joe Biden, and offering Republicans a new chance to pin the blame on his green agenda.

The GOP narrative has a major hole: U.S. oil production — already the highest in the world — is on track to set a new record this year, and will probably rise even more in 2024. But the ever-increasing flow of U.S. crude has failed to keep a lid on gasoline prices, showing once again that a global market drives the fuel prices that shape presidents’ political futures.

And that means events far beyond the nation’s borders will play a sizable role in voters’ verdict on “Bidenomics” — as global oil prices rise and fall in response to banking conditions in Europe, China’s slumping real estate market, Vladimir Putin’s war in Ukraine and the latest maneuvers by Saudi Arabia.

“The U.S. consumer blames whoever is in the White House” for high gasoline prices, Quincy Krosby, chief global strategist for financial advisory firm LPL Financial said in an interview. “Biden’s people have to be watching this despite a stronger economy, which is an irony.”

It’s not the outcome that some experts had hoped for from the United States’ rise to energy superpower. Wall Street Journal opinion columnist Walter Russell Mead predicted in 2018 that abundant U.S. energy supplies would enable energy markets to “shrug off geopolitical shocks,” while Ed Morse, a long-time oil market analyst, foresaw in 2015 U.S. oil production would drive prices down sharply and herald “the end of OPEC.”

Instead, while the United States’ reliance on OPEC for oil imports has diminished, the country’s fuel market is still dependent on decisions made at the oil cartel’s meetings in Vienna — no matter how much oil comes out of U.S. shale fields.

U.S. oil production is forecast to average an all-time high of 12.8 million barrels a day this year and keep growing to 13.1 million in 2024, the federal Energy Information Administration said in its latest forecast. That’s up from the most recent trough of 5 million barrels a day in 2008, and probably enough to help the U.S. to keep its title as the No. 1 global crude oil producer.

Global forces, meanwhile, could cause pump prices to ease next year, with the Paris-based International Energy Agency forecasting that oil supply next year will outstrip demand.

That hasn’t stopped GOP White House hopefuls from lambasting Biden and his energy policies, including the green incentives included in the climate law he signed a year ago.

In one campaign ad, former Vice President Mike Pence pretends to fill his pickup truck and blames Biden’s energy policy for “causing real hardship” for Americans, while ex-South Carolina Gov. Nikki Haley has vowed to bring oil production back to the United States.

And Sen. Tim Scott (R.-S.C.) railed last month on the Biden administration, which he asserted “has shut down energy production in America.”

“Why won’t this President tap into our abundant energy resources here at home and bring down prices at the pump?” he asked.

In fact, though, oil production from federal lands and waters has risen on Biden’s watch, reaching past 3 million barrels per day last year. The high mark during President Donald Trump’s term was 2.75 million barrels a day.

That’s data the White House rarely trumpets since it contradicts Biden’s 2020 campaign pledge to end new drilling on federal land, something his administration has not done.

“We remain focused on prices for American consumers, and prices have come down significantly since last year,” a spokesperson for the White House National Security Council said in an email. “We will continue to work with producers and consumers to ensure energy markets support economic growth and to lower prices for American consumers.”

Behind this rhetoric is the jump in the national average price for regular gasoline to $3.87 a gallon last week, up more than 30 cents in a month, according to the American Automobile Association. Prices had held near $3.50 for most of the year, but it may be a while before drivers see that level again, especially after an explosion forced the shutdown of the nation’s third largest refinery on Friday.

The price has caught the attention of drivers and political commentators, even if it’s far less dramatic than the surge to the all-time high of $5.02 per gallon in June 2022. The Biden administration responded at the time by releasing some 200 million barrels of crude oil from the Strategic Petroleum Reserve, draining nearly half of the federal government’s stockpile, a move that the Treasury Department has credited with helping shave 40 cents a gallon off gasoline prices.

The U.S. wasn’t supposed to be this exposed to the global market’s whims.

The advent of fracking that kicked off the U.S. oil boom in the late 2000s raised hopes of a new era of so-called energy independence. In this scenario, the newly oil-rich United States could pull back from the Middle East, insulate itself from volatile market shifts and retreat into a comfortable shell of energy self-sufficiency.

The reality has been far different, said Ben Cahill, a senior fellow at the Center for Strategic and International Studies.

“People assumed [the shale boom] would bring a massive change in geopolitics and that this would fundamentally change the U.S. relationship with OPEC and we’d chart this path towards energy independence that would really upend energy geopolitics,” Cahill said in an interview. “That just hasn’t happened.

“We’re the largest oil producer in the world,” he said. “We’re the largest natural gas producer in the world. But the reality is that energy prices in the U.S. are still dependent on global markets.”

That’s because even as oil fields in states like Texas, New Mexico and North Dakota have propelled the United States to the top of the oil producer charts, regional markets still find it easier to import certain grades of crude oil from Canada, Mexico, Saudi Arabia and elsewhere. The U.S. still imports about 40 percent of the oil it consumes, even though exports of crude and petroleum products continue to outstrip those shipments.

No matter how much oil the United States produces, it’s still a familiar story, said Amy Jaffe, a global affairs professor at New York University: Gasoline prices rise when the world’s major economies run hot, and fall when they’re not.

“We believed because the U.S. could drill and be successful that we were in this permanent age of abundance,” Jaffe said in an interview. ”But we’re still facing this fundamental question of how cyclical will this industry continues to be.”

The 2022 run-up in fuel prices occurred after a rare one-two punch when U.S. fuel demand rebounded after a pandemic-driven market crash, and after the invasion of Ukraine led European nations to cut imports from Russia, scrambling trade flows.

This summer’s rally, however, has largely been driven by the decision by OPEC and Russia to withhold supplies to ensure prices don’t weaken. And the cuts by Saudi Arabia in particular of 1 million barrels per day on top of the OPEC+ agreement have put a spotlight on Washington’s fraught relationship with the kingdom.

The United States’ growth transformation into a production heavyweight may lead some politicians to believe they could be more aggressive with Saudi Arabia when it came to human rights — Biden had promised in 2020 to make Crown Prince Mohammed bin Salman a “pariah” over the regime’s murder of a dissident journalist. But that attitude only goes so far once prices at the pump tick up, analysts said.

“The U.S./Saudi relationship has deteriorated since the U.S. has become less energy dependent on the Middle East, but they are still viewed as strategic partners,” Tamas Varga, market analyst at PVM Oil Associates, said via email. “Saudi Arabia plays an important role to represent U.S. interests in the region and the U.S. is a significant supplier of weapons to the Kingdom. Saudi Arabia, however, has its own agenda in the oil market which is contradictory to U.S. interest.”

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Image by Germán & Co.

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In international relations, better to be Godzilla than Bambi

Great power rivalries: the case for realism

When assessing the geopolitical landscape, the primary aim of any state, whether democratic or authoritarian, is to ensure its own survival. That comes down to military might and alliances.

Le Monde Diplomatique by *John J Mearsheimer, Today

Three decades ago, many experts in the West believed we had reached the end of history and that great-power war had been relegated to the dustbin of the past. That illusion has been shattered. The world faces not just one great-power rivalry, as it did during the cold war, but two: the US vs Russia in eastern Europe (over Ukraine) and the US vs China in East Asia (over Taiwan). Both security competitions could easily turn into hot wars.

In essence, there has recently been a great transformation in international politics, which is bad news for the West. What went wrong? What explains this change and where is the world headed? Answering these questions requires a theory of international relations: a general framework that can explain why states act as they do and help us make sense of a complicated and uncertain world

Realism is the best theory for understanding world politics. States are the key actors in the realist story, and they coexist in a world where there is no supreme authority that can protect them from each other. This situation forces them to pay close attention to the balance of power, because they understand that being weak can leave them vulnerable. Thus, states compete among themselves for power, which is not to say they do not cooperate when their interests are compatible. But relations among states — especially great powers — are competitive at their core. Moreover, realist theory acknowledges that war is an acceptable instrument of statecraft and that states sometimes start wars to improve their strategic position. As Clausewitz argues, war is a continuation of politics by other means.

Realism isn’t popular in the West

Realism is not popular in the West, where war is widely considered an evil that can only be justified as a means of self-defence, as it is in the UN charter. Politics by other means? No way. It is also unpopular because it is so pessimistic: it assumes that security competition among the great powers is an unalterable fact of life and inevitably leads to tragic results. Finally, realism maintains that all states — whether they are liberal democracies or not — act according to the same logic. In the West, however, most people believe that regime type matters greatly and that liberal democracies are the good guys while authoritarian states are the main instigators of war.

Unsurprisingly, liberal theory, which is the main alternative to realism, is privileged in the West. Nevertheless, the US has almost always acted according to the dictates of realism and disguised its behaviour with a more moral rhetoric. It allied with the Stalinist Soviet Union during the second world war, and it backed a host of ruthless autocrats during the cold war — Chiang Kai-shek in China, Mohammad Reza Pahlavi in Iran, Rhee Syngman in South Korea, Mobutu Sese Seko in Zaire, Anastasio Somoza in Nicaragua and Augusto Pinochet in Chile.

The one exception is the ‘unipolar moment’ (1991-2017), when both Democratic and Republican administrations abandoned realism and tried to create a global order based on the values of liberal democracy — rule of law, market economies and human rights — under the benign leadership of the US. Unfortunately, this strategy of ‘liberal hegemony’ was a near-total failure, and it played a major role in creating the troubled world of 2023. Had American policymakers adopted a realist foreign policy after the cold war ended in 1989, the world would be considerably less dangerous today.

Self-help world

There are different realist theories. The political scientist Hans Morgenthau famously argues that human nature drives states to pursue power. Leaders, he maintains, possess an animus dominandi — an innate desire to dominate others. In contrast, the principal driving force in my theory is the structure or architecture of the international system. Its defining features push states — especially the great powers — to compete relentlessly for power. In effect, states are trapped in an iron cage.

The starting point is recognising that states operate in an anarchic system, where there is no all-powerful protector to call upon if another state threatens them. Therefore, states must take care of themselves in what is essentially a self-help world. This task is complicated by two other aspects of the international system. All great powers have offensive military capabilities, although some more than others, which means they can cause considerable mutual damage. Furthermore, it is difficult if not impossible to be certain that another state has benign intentions, mainly because intentions — unlike capabilities — are hidden inside the minds of policymakers and cannot be fully discerned. It is even harder to anticipate what another state might do in the future, because one cannot know who will be in charge, and a state’s intentions will almost certainly change if the circumstances it is facing are altered.

Ukrainian entry into NATO is the brightest of all red lines for the Russian elite, not just Putin. I have yet to find anyone who views Ukraine in NATO as anything other than a direct challenge to Russian interestsUS envoy to Moscow, 2008.

States operating in a self-help world where they might confront a powerful rival bent on attacking them are naturally going to fear each other, although the level of fear will vary across cases. The best way for a rational state to survive in such a dangerous world is to be especially powerful relative to other states, and certainly to make sure it is not weak. As the Chinese experience during the ‘century of national humiliation’ (1839-1949) shows, when a country is weak, more powerful states are likely to take advantage of it. In international relations, it is better to be Godzilla than Bambi.

The European Union might appear to be an exception, but it is not. It emerged under the protection provided by the American security umbrella, which made war among member states impossible and freed them from the need to worry about each other. This basic fact of life explains why European leaders of all stripes live in fear that the US will pivot to Asia and leave Europe in the rear-view mirror.

In short, great-power politics is characterised by relentless security competition, where states not only look for opportunities to gain relative power, but also seek to prevent the balance of power from shifting against them. This latter behaviour is called ‘balancing’, which can be done by building up one’s own power or forming an alliance against a dangerous opponent with other threatened states. In a realist world, power refers mainly to a state’s military capabilities, which ultimately depend on having an advanced economy and a large population.

Advantages of a regional hegemon

The ideal situation for a great power is to be a regional hegemon — to dominate its area of the world — while making sure that no other power, medium or great, is able to challenge it. The US is the paradigm of this logic at play. During the 18th and 19th centuries, it worked assiduously to achieve hegemony in the Western Hemisphere. During the 20th century, it helped prevent imperial Germany, imperial Japan, Nazi Germany and the Soviet Union from becoming regional hegemons in either Asia or Europe.

Survival, of course, is the primary goal of states, because if a state does not survive, it cannot pursue any other goals, such as prosperity or spreading an ideology. Relatedly, great powers can cooperate if they have mutual interests and cooperation does not undermine their position in the balance of power. For example, the superpowers cooperated during the cold war in signing the 1968 Nuclear Non-Proliferation Treaty, although US-Soviet relations remained competitive at their core. Moreover, there was substantial economic intercourse among the European great powers before the first world war, but there was also significant security competition among those same countries, which trumped economic cooperation and eventually led to war. These examples point up that great-power cooperation always takes place in the shadow of security competition.

Some critics maintain that realism is dismissive of international institutions, which are the key building blocks of a rules-based international order. This view is incorrect: realists recognise that institutions are essential for waging security competition in an interdependent world — as NATO and the Warsaw Pact did during the cold war — and for facilitating economic and political cooperation — as the WTO and the UN do today. They emphasise, however, that the great powers write the institutions’ rules to suit their own interests, and under no circumstances can institutions coerce a great power to act in ways that threaten its security. In such cases, a great power will simply violate the rules or rewrite them in its favour.

That logic flies in the face of the widely held belief in the West that liberal democracies behave differently from authoritarian states. Authoritarian states, so the argument goes, are the real threat to the rules-based order and more generally the chief obstacle to creating a peaceful world. But this is not how international politics works. Regime type matters little in a self-help world where states constantly worry about their survival. The US is the quintessential liberal state, for example, but its leaders illegally attacked Yugoslavia in 1999 and Iraq in 2003, and waged a covert proxy war against Nicaragua during the 1980s. Great powers of all types act ruthlessly when they think their vital interests are threatened.

Some scholars argue that the ‘nuclear revolution’ has made realism less relevant today. Nuclear weapons, they suggest, guarantee a great power’s survival — who would dare attack the homeland of a nuclear-armed state? — thus eliminating the need to compete for power. Relatedly, they maintain that the fear of nuclear escalation will also deter two countries with nuclear arsenals from fighting a major conventional war. There is no evidence, however, that the great powers have ever embraced this logic. The Soviet Union and the US spent trillions of dollars competing for power throughout the cold war, and China, Russia and the US are doing the same today. These nuclear-armed great powers feared for their survival and prepared for conventional war against their rivals. This is not to deny that great-power war is less likely in a nuclear world, but it remains an ever-present threat, thus keeping realism as relevant as ever.

Where should the US fight?

Realism also suggests that the only areas of vital strategic interest to great powers — beside their own region — are those containing other great powers or an abundance of some critical resource on which the world economy depends. Thus, American realists maintained during the cold war that there were just three areas of the world outside the Western hemisphere where the US should prepare to fight: Europe, Northeast Asia, where the Soviet Union was located, and the oil-rich Persian Gulf. Almost every realist opposed the Vietnam war, because it was fought in Southeast Asia, a region of little strategic significance at that time. Today, however, Southeast Asia matters greatly to the US, because China has become a great power. This explains why Washington is prepared to defend the status quo in Taiwan and the South China Sea.

Liberalism, in contrast, does not prioritise among different regions of the world. Its primary goal is to spread democracy and capitalism as widely as possible. Although liberal rhetoric emphasises the evils of war, proponents of a liberal foreign policy are often willing to use force to achieve this ambitious objective. The Bush Doctrine, which aimed to democratise the greater Middle East at the end of a rifle barrel, was a manifestation of this. It is no accident that almost every prominent realist opposed the 2003 Iraq war. That war was the brainchild of neoconservatives, who are especially hawkish advocates of spreading liberalism abroad, and was widely supported by proponents of liberal hegemony.

Ironically, liberal approaches to foreign policy contain a decidedly illiberal element. At its core, liberalism emphasises the need for tolerance, because it recognises that individuals will never fully agree on the best way to live or be governed. Accordingly, liberal societies try to create space for individuals and groups to operate as much as possible according to their own beliefs. But when liberals turn to foreign policy, they act as if they know for certain what type of regime would be best for every country. Specifically, they believe the rest of the world should become like the West and they use the various tools at their disposal to push them in that direction. This illiberal approach to dealing with the world is doomed to fail, not only because there is no consensus about the ideal political system, but also because of realist logic. States are sovereign entities that defendtheir vital interests against threats, especially those which come from a competing state that is trying to change their system of government.

When the Soviet Union collapsed in 1991, the bipolar world that underpinned the cold war gave way to a unipolar system centred on the US. Unipolarity then turned into multipolarity in around 2017, with China’s rise and the resurrection of Russian power. The US is still the most powerful country in this new world, but China, with its formidable economy and growing military might, is a peer competitor. Russia is clearly the weakest of the three. Two new rivalries have emerged in this multipolar system, each operating according to a different realist logic. Like the US-Soviet antagonism after the second world war, the US-China security competition is mainly about regional hegemony, even though it could, like the US-Soviet antagonism, spread worldwide. The current US-Russia rivalry is due not to any fear that Russia could dominate Europe, but rather to the US’s aggressive behaviour.

The US-China rivalry

Throughout the 19th and 20th centuries, China was not considered a great power. It certainly had the population size to qualify, but it did not have the wealth needed to build sufficient military forces. That situation began changing in the early 1990s, when the Chinese economy started growing rapidly. Today, China has the second largest economy in the world and the capability to develop cutting-edge technologies. Predictably, Beijing is using its economic might to build up its military.

China’s goal is to become by far the most powerful state in Asia and to gradually push the US military out of East Asia, thereby establishing itself as a regional hegemon. Beijing is also building a blue-water navy, which indicates it is committed to projecting power all around the globe. In essence, China is imitating the US, which makes perfect sense as that is the best way for a country to maximise its security in an anarchic world. Chinese leaders have another reason for wanting to dominate Asia. They have territorial goals based on nationalist logic — like taking back Taiwan and dominating the South China Sea — that can only be achieved if China is a regional hegemon.

The US has long sought to prevent any other country from achieving regional hegemony, as it demonstrated repeatedly throughout the 20th century. Thus, it is fashioning a containment policy to prevent China from dominating Asia. That balancing effort has both a military and economic dimension.

Regarding the former, Washington is refashioning alliances originally forged to contain the Soviet Union into a coalition to contain China, and creating new arrangements to reinforce it. This campaign includes building — or reviving — security pacts like AUKUS (Australia, the UK and US) and the QUAD (Quadrilateral Security Dialogue: US, Australia, Japan and India), and strengthening the longstanding bilateral alliances the US has with Japan, the Philippines and South Korea.

Transatlantic rift

On the economic side, Washington seeks to limit China’s development of cutting-edge technologies in a bid to ensure that the US controls the commanding heights in this all-important sector. This economic competition could create a serious rift in transatlantic relations because European countries — which are already hurt by the cut-off of economic intercourse with Russia — are looking for customers in China.

China and the US are destined to compete ever more intensely for power in the foreseeable future. That struggle will be fuelled in part by the famous ‘security dilemma’, where what one side does to defend itself is interpreted by the other side as evidence of offensive intentions. There are two additional reasons this security competition will be especially dangerous. First, it centres on Taiwan, which almost every Chinese person considers sacred territory that China should control, but which the US is determined to keep as a de facto independent state allied with Washington.

Second, any future war between these bitter rivals is likely to be fought over islands in the waters off China’s coast, largely by air, missile and naval forces. It is not difficult to imagine plausible scenarios where a war breaks out in that geographical setting, even by accident. A China-US war on the Asian mainland would be far more deadly and thus much less likely, as was the case with a possible war between NATO and the Warsaw Pact in the heart of Europe during the cold war. A major land war in Asia therefore seems unlikely, but it will still take astute diplomacy on both sides to avoid one.

The US helped to create this perilous rivalry by ignoring realist principles. In the early 1990s the US faced no rival great powers and China was economically underdeveloped. As liberalism prescribes, American leaders embraced a policy of engaging with China: helping fuel its economic growth and seeking to integrate it into the international order. They assumed that a wealthy China would become a ‘responsible stakeholder’ in that American-dominated order and eventually evolve into a liberal democracy. In short, a powerful but democratic China would be a peaceful China that would not challenge the US.

Engagement was a colossal strategic blunder. If American policymakers had been guided by realist logic, they would not have sought to speed Chinese growth and would have tried to maintain the power gap between Washington and Beijing instead of reducing it.

The conventional wisdom in the West regarding the Ukraine war makes it sound like Russia is behaving in Europe the way China is acting in Asia. Putin is said to have imperial ambitions that begin with creating a greater Russia along the lines of the old Soviet Union and then re-conquering the former buffer countries of the Warsaw Pact, ultimately threatening the security of all Europe. Ukraine, which he purportedly aims to conquer and integrate into Russia, is his first but not his last target. In this view, what NATO is doing in Ukraine is containing Russian power, much the way it prevented the Soviet Union from dominating all of Europe during the cold war.

This story, no matter how often it is repeated, is a myth. There is no evidence that Putin wants to incorporate all of Ukraine into Russia or seeks to conquer any other country in eastern Europe. Furthermore, Russia does not have the military capability to achieve that ambitious goal, much less become a European hegemon.

While there is no question Russia attacked Ukraine, it is equally clear that the conflict was provoked by the US and its European allies when they decided to make Ukraine a Western bulwark on Russia’s borders. They sought to bring Ukraine into NATO and the EU and turn it into a pro-Western liberal democracy. Russian leaders have repeatedly emphasised that this policy is an existential threat to Moscow and will not be tolerated. There is no reason to think they do not mean it.

The US ambassador to Moscow in April 2008, when the decision was made to bring Ukraine into NATO, said in a memo to then secretary of state Condoleezza Rice, ‘Ukrainian entry into NATO is the brightest of all red lines for the Russian elite (not just Putin). In more than two and a half years of conversations with key Russian players ... I have yet to find anyone who views Ukraine in NATO as anything other than a direct challenge to Russian interests.’ Angela Merkel, Germany’s chancellor at the time, opposed bringing Ukraine into NATO: ‘I was very sure ... that Putin [was] not going to just let that happen. From his perspective, that would be a declaration of war.’

The Ukraine conflict

The conflict in Ukraine began in February 2014, six years after NATO declared it would become a member. Putin subsequently tried to settle the conflict diplomatically by convincing the US, which was driving the policy, to abandon the idea of bringing Ukraine into the alliance. But Washington refused and instead doubled down at every turn — arming and training Ukraine’s military and including it in NATO military exercises. Fearing that Ukraine was fast becoming a de facto NATO member, Russia sent letters on 17 December 2021 to President Biden and NATO itself demanding a written commitment that Ukraine would not join the alliance and instead be a neutral state. Secretary of state Antony Blinken tersely replied on 26 January 2022, ‘There is no change; there will be no change.’ A month later, Russia attacked Ukraine.

From a realist standpoint, Moscow’s reaction to NATO expansion into Ukraine is a straightforward case of balancing against a dangerous threat. Putin is committed to preventing a military alliance dominated by the most powerful state in the world, which was a mortal foe of the Soviet Union, from making Ukraine, which ‘is on the doorstep of our house’, a member. In fact, Russia’s position is akin to America’s Monroe Doctrine, which says that no distant great power is allowed to station military forces in its backyard. Given that diplomacy failed to deal with what the Russians saw as an existential threat, Putin launched a preventive war aimed at keeping Ukraine out of NATO. Moscow views this as a war of self-defence, not a war of conquest. Of course, Ukraine and its neighbours see it quite differently. To say this is not to justify or condemn the war, but simply to explain why it happened.

Given the myth that Putin is committed to open-ended expansion, one might think NATO enlargement, too, was based on realist logic: the US and its allies were aiming to contain Russia. But that view would also be wrong. The decision to enlarge NATO was made in the mid-1990s, when Russia was militarily weak, and the US was well-positioned to force expansion on Moscow. Again, we see the perils of being weak in the international system. Nor did Russia pose a threat to Europe in 2008, when the decision was made to bring Ukraine into the alliance. So, there was no need to contain it then or now. Indeed, the US has a deep interest in pivoting out of Europe to East Asia, and enlisting Russia in the balancing coalition against China, not getting bogged down in a war in eastern Europe and driving the Russians into the arms of the Chinese.

Like the misguided policy of engagement with China, NATO enlargement was a component of the liberal hegemony project. The aim was to integrate eastern and western Europe, ultimately turning all of Europe into a giant zone of peace. Realists like George Kennan opposed NATO expansion because they recognised it would threaten Russia and lead to disaster.

Europe would be in far better shape today if realist logic had carried the day and NATO had not expanded eastward, and especially not committed itself to eventually including Ukraine. But the die is now cast: unipolarity has given way to multipolarity and the US and its allies are now engaged in serious geopolitical rivalries with both China and Russia. These new cold wars are at least as dangerous as the original one, and maybe more so.

*John J Mearsheimer is professor of political science at the University of Chicago. He is the co-author (with Sebastian Rosato) of How States Think: the Rationality of Foreign Policy, Yale University Press, 2023.

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Just Exceptional...

“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced…

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Ilustrations by Germán & Co.

The World Is Contemplating a Second Trump Administration

Possibility that former president will win next year’s election has capitals across globe on edge

WSJ by Stacy Meichtry in Paris, Austin Ramzy in Hong Kong, and Bojan Pancevski in Berlin, August 28, 2023.

President Donald Trump appearing on a Beijing TV screen as U.S. votes were counted in November 2020. PHOTO: KEVIN FRAYER/GETTY IMAGES

The U.S. presidential election is more than a year away, but allies and adversaries around the world have already begun to contemplate—and even plan for—the return of Donald Trump to the White House.

For many foreign capitals, the possibility of a second Trump administration is a source of anxiety. Allies from Paris to Tokyo regard Trump as an erratic leader with little interest in cultivating long-term ties to counter Russian and Chinese expansionism.

Others, including Beijing and Moscow, see potential benefits from Trump, whom they view as a transactional leader who might be willing to strike deals to ease tensions in hot spots such as Ukraine and Taiwan, according to analysts. Nationalist and populist politicians also voice support for Trump’s ambitions.

Policy makers and politicians were reluctant to make public statements that might rile the current administration or an incoming one. But officials interviewed by The Wall Street Journal did share their thoughts about what a Trump return to the world stage would mean for geopolitics.

Among the most widespread fears is that Trump would spark a global trade war. The candidate has threatened to impose fresh tariffs on all goods imported into the U.S.—hitting friend and foe alike—a move that risks sowing divisions in trans-Atlantic relations in a time of war.

Trump has also threatened to withdraw the U.S. from the North Atlantic Treaty Organization, a move that his former national security adviser John Bolton recently described as a near certainty if he is elected again.

Some governments are moving to lock in military assistance to Ukraine to strengthen security there in case a newly elected Trump scales back U.S. support. Members of the Group of Seven wealthy nations are trying to reach bilateral agreements with Kyiv to provide weapons that meet NATO standards.

“There’s a strong possibility Trump might be re-elected,” said Benjamin Haddad, a French lawmaker from President Emmanuel Macron’s party. “It forces us Europeans to read the writing on the wall and take more responsibility.”

With Russia digging in for a long fight in Ukraine, the Kremlin is waiting out the Biden administration in the hope that Trump, if elected, would back away from helping Kyiv. U.S. support for Taiwan could waver under Trump, according to analysts, if Beijing dangles concessions on trade.

“Trump values U.S. allies less, and Beijing therefore expects that U.S. alliances and coalitions would fray and ease pressure on China,” said Bonnie Glaser, managing director of the Indo-Pacific program at the German Marshall Fund of the United States.

Those scenarios send a chill down the spine of allies in Europe and the Pacific.

The Biden administration has worked to corral allies in Asia, deepening military cooperation and helping mend relations between Japan and South Korea. And Washington has sent billions of dollars in arms and humanitarian aid to Ukraine, allowing Kyiv to hold its own on the battlefield against Russia.

French officials have been warning European allies that the possibility of Trump’s return requires the continent to significantly expand arms production, from artillery to missile defense systems, so it can supply Ukraine on its own.

Eastern European countries and France are also pushing allies to admit Ukraine into NATO, a move that would significantly raise the stakes with Russia by providing Kyiv with security guarantees.

“We’ve been lucky with Ukraine to have an American administration that helped us,” Macron recently told Le Point magazine. “Can we let Ukraine lose and Russia win? The answer is no…We have to hold out over time.”

Military expenditures are rising across the continent, but Europe has struggled to wean itself off American hardware. Macron was blindsided when a German-led coalition announced plans to spend billions of euros on a program to buy Patriot missile systems from the U.S., snubbing a rival system developed by France, Italy and the U.K.

Macron has long been skeptical that President Biden’s election in 2020 signaled the end of the Trump era, according to Biden. Biden has recounted arriving at his first G-7 summit as president, declaring to his peers: “America’s back.” Macron replied: “For how long?”

Macron’s office declined to comment.

Trump has vowed to impose sweeping new tariffs, stating in a recent interview that he would set an automatic 10% tariff on all foreign imports to the U.S.

“When companies come in and they dump their products in the United States, they should pay, automatically, let’s say a 10% tax,” Trump said in an interview with Fox Business. “I do like the 10% for everybody.”

Economists were quick to warn that Trump’s proposal could ignite a global trade war and raise prices for U.S. consumers. The White House slammed Trump’s comments, saying Biden strongly opposes the plan.

Germany, Europe’s economic powerhouse, is focused on forging channels of communication in an effort to avoid the experience of 2016, when Trump’s election took world leaders by surprise. The government of Angela Merkel, who was then chancellor, struggled to gain access to the White House as Washington aimed a barrage of tariffs at Germany and other countries in Europe. Relations between Trump and Merkel quickly soured.

Leading members of the three parties of German Chancellor Olaf Scholz’s governing coalition have been jetting across the Atlantic ever since they took power in late 2021, meeting with GOP officials and Trump confidants. A key Scholz aide, Wolfgang Schmidt, has made regular visits to Washington, forging links with key Republicans. In September, German Foreign Minister Annalena Baerbock will embark on a 10-day visit to the U.S., including an extended visit to Texas, a GOP bastion, to familiarize herself with the party.

Some governments welcome the possibility of Trump’s return. Hungarian Prime Minister Viktor Orban, who maintains a friendly relationship with Russian President Vladimir Putin and opposes Western arms deliveries to Ukraine, has said on numerous occasions he hopes Trump wins the next election, even as Trump’s legal woes have mounted. “Keep on fighting, Mr. President! We are with you,” Orban wrote in a recent social-media post.

For China, Trump was the leader who ignited trade tensions with the U.S. while a Biden presidency held out the prospect of a return to the previous era of relations, when many U.S. policy makers supported free trade in the belief that it would liberalize China.

But Biden maintained much of his predecessor’s tough policies toward Beijing. Tariffs remained in place. Restrictions on Chinese technology companies expanded, including a U.S. ban on sales of advanced semiconductors and chip-making equipment to China last year.

“On policy substance, even though Trump kicked off the trade war, it was Biden that implemented policy more effectively and was able to bring in important allies that Trump had alienated,” said Mary Gallagher, a political-science professor at the University of Michigan.

South Korea and Japan this year turned the page on years of historical quarrels, allowing for deeper military coordination with Washington.

South Korean President Yoon Suk Yeol forged a personal bond with Biden during an official state visit in April to the White House and on a recent trip to Camp David. That contrasts with Trump, who criticized Seoul for not paying enough for the roughly 28,500 U.S. military personnel stationed in South Korea. Trump even suggested a troop drawdown.

Yorizumi Watanabe, a former Japanese diplomat, said he expects support for Trump to rise in Japan if he moves decisively to calm tensions with China. “When all is said and done, we need a strong American president.”

In the Middle East, the leaders of Israel and Saudi Arabia are weighing whether their push to establish diplomatic ties have a better shot with Biden in office or Trump. While leaders in both countries have had chilly relations with Biden, they are wrestling with the possibility that the Democratic president might be better positioned than Trump to broker a pact.

Trump remains broadly popular with the Israeli public and aligned with Prime Minister Benjamin Netanyahu’s government, which bills itself as the most right-wing and religious in the country’s history. But Trump was critical of Netanyahu after the prime minister congratulated Biden on his 2020 victory.

In an interview this summer, Netanyahu praised Trump, but he declined to say whether he had been in close contact with him. “I think he did things that were superb for Israel’s security,” Netanyahu said. “So I value that.”

Iran is moving to release U.S. detainees in a bid to gain access to around $6 billion in oil revenue. The money, which was effectively frozen in South Korea under U.S. sanctions, is being transferred through Switzerland to Qatar for possible release to Iran.

This month, Iran moved four U.S. citizens from prison to house arrest, the first step in a hoped-for prisoner release agreement between Tehran and the Biden administration. Trump as president withdrew from the 2015 deal that placed limits on Iran’s nuclear program in return for lifting sanctions. He ratcheted up sanctions on Iran and criticized the release of frozen Iranian funds by the Obama administration.

Securing the funds is now a key objective for Tehran, a visible signal to ordinary Iranians that the regime is seeking to improve the country’s troubled economy, said Alex Vatanka, director of the Iran program at the Middle East Institute, a nonpartisan think tank. “They’re trying to get as many concessions as they can out of the Biden team,” he said.

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Hawaiian Electric says power lines were shut off hours before wildfire

Reuters, August 28, 20234 an hour ago

Homes damaged by fire are seen in Lahaina on the island of Maui in Hawaii, U.S., August 14, 2023. REUTERS/Jorge Garcia/File Photo Acquire Licensing Rights

Hawaiian Electric's (HE.N) shares jumped more than 40% on Monday after the utility said its power lines in West Maui had been shut down for more than six hours before wildfires started in the area during the afternoon.

The company's shares were trading at $13.55, after at least two trading halts since the markets opened on Monday. The stock has lost more than half its value since the Aug. 8 wildfires.

Hawaiian Electric said the lawsuit filed against it by the county of Maui was "factually and legally irresponsible," pointing to the county's responsibility in the Hawaii wildfires.

The county of Maui last week sued Hawaiian Electric, accusing the utility of acting negligently by failing to shut down its equipment despite warnings that hurricane winds could knock power lines down, sparking wildfires.

The county said downed power lines started the wildfires that destroyed the historic town of Lahaina earlier this month, killing at least 115 people and displacing hundreds more.

Hawaiian Electric said on Monday that a morning fire on Aug. 8 caused by power lines that fell in high winds was subsequently reported "100% contained" and later declared "extinguished" by the Maui County Fire Department.

The utility said another afternoon fire started in the same area more than six hours after all of its power lines in West Maui had been de-energized, which could not be contained by the fire department and spread out of control toward Lahaina.

"We were surprised and disappointed that the County of Maui rushed to court even before completing its own investigation," said Shelee Kimura, president and CEO of Hawaiian Electric.

The lawsuit alleging negligence was "particularly troublesome," Wells Fargo analyst Jonathan Reeder said on Friday, adding that the brokerage viewed the lawsuit as an attempt to shift blame rather than sticking to an earlier narrative that it was a weather-induced tragedy.

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Bloom Energy Can Finally Live Up to Clean Power Buzz

Power-starved data center owners are knocking at the door of the Californian maker of fuel-cell electricity generators

WSJ By Carol Ryan, Aug. 28, 2023 

Data centers can’t get enough power from the main grid, even before generative AI makes them hungrier for electricity. It’s good news for one Californian clean energy stock.

Bloom Energy BE 2.01%increase; green up pointing triangle, generated a lot of excitement when it went public in 2018 and its shares surged more than 60% on their first day of trading. But the stock has turned out to be a disappointing investment, delivering average annual shareholder returns of minus 9% since that first close, compared with the 10% gains of the S&P 500 over the same period.

The fast-growing business has never managed to turn a profit, although it has ambitious plans for a 15% operating margin by 2025. One reason is that the promising technologies Bloom Energy is betting on, such as green hydrogen and carbon capture, are taking longer than expected to develop. The company sells electrolyzers that split water to produce hydrogen, but orders in this part of its business aren’t expected to be significant until 2025 at the earliest. 

Demand from data centers will come sooner. Bloom Energy makes fuel-cell servers that generate electricity on site, so customers can be less dependent on the traditional grid. They run on natural gas or biogas, and users will be able to switch to green hydrogen once there is more plentiful supply. Hospitals and military facilities that can’t risk a power outage have been early adopters of on-site electricity generation.  

These “micro grids” could solve a major problem for power-sucking data centers. In Northern Virginia, which is the world’s most important data center market, the state’s main utility company recently said it could take up to three years to build the transmission lines necessary to meet demand for new data center projects.

The same problem is cropping up in Europe. Amsterdam and Dublin have slowed or halted some new data center projects because their local electricity grids can’t cope. Data centers and data transmission networks consume around 3% of the world’s electricity, based on data from the International Energy Agency. This is expected to at least double as more smart devices are connected to the internet and generative AI takes off. 

Constraints on the mainstream electricity supply should make Bloom Energy’s product more appealing. The company has struggled to pick up business in states such as Texas, where very cheap grid electricity makes Bloom’s power uncompetitive. This may change over time if companies are willing to pay a bit extra for reliable electricity, or as wait times to get connected to main power lines grow longer. 

“Grid congestion is becoming a bigger problem. If you’re a data center or hospital that needs 24/7 power now, you will be looking for alternatives,” says Sangita Jain, analyst at KeyBanc Capital Markets. 

Growing demand from data centers isn’t the only challenge that traditional power suppliers face. At this year’s Edison Electric Institute conference, Elon Musk told utility bosses that electricity demand is set to triple as more electric cars hit the road and industrial processes are electrified to help companies reduce their fossil fuel use.  

And climate change will make the grid less reliable, as storms and wildfires damage overhead lines more frequently. Based on the latest data from the Energy Information Administration, U.S. electricity customers experienced seven hours of power interruptions in 2021 on average, almost double the levels seen a decade ago. Because of these stresses, the U.S. market for micro grids is expected to grow by 19% a year through 2027, according to Wood Mackenzie research.

Meanwhile, Bloom Energy’s valuation has come down after several years of disappointment. The company’s enterprise value is equivalent to 2.5 times projected sales, compared with eight times in early 2021, when clean energy stocks were on a tear.

And losses are narrowing, thanks to rapid growth. The company expects a positive adjusted operating margin this year, and free cash flow is forecast to follow next year, according to FactSet. That and the roughly $900 million of cash on Bloom’s balance sheet limit the risk that it needs to raise additional funds from shareholders. 

Investors seem to have become resigned to disappointment from Bloom just as its focus on a promising growth market is finally showing signs of paying off.

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Rising Long-Term Rates Loom Over Autumn on Wall Street… (WSJ)

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Ilustrartions by ALEXANDRA CITRIN-SAFADI/WSJ

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WSJ, By Karen Langley, August 27, 2023

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Futures markets show a growing expectation that interest rates could stay higher for longer, exerting pressure on stocks markets show a growing expectation that interest rates could stay higher for longer, exerting pressure on stocks

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Jerome Powell’s much-anticipated speech Friday did little to resolve the conflict gripping markets late this summer: whether a rapid climb in interest rates spells doom for the surprising 2023 stock-market rally.

The Federal Reserve chair said inflation remains too high and officials are open to raising rates again, if needed, in his address at the Kansas City Fed’s annual symposium. He suggested that interest rates could stay high for the foreseeable future, keeping borrowing costs elevated and, in turn, pressuring stocks as investors more deeply discount the value of future corporate earnings.

The message wasn’t terribly different from his previous comments, analysts and investors said. But it wasn’t music to the ears of the many portfolio managers who have been crossing their fingers that the fastest rate cycle in decades is finally at an end. 

Stocks rose Friday afternoon, a rare advance in an August slog for U.S. indexes, but futures markets showed a growing expectation that rates could stay higher for longer. Higher yields typically dent the attractiveness of risky investments such as stocks by providing opportunities for returns elsewhere in the markets.

Federal Reserve Chair Jerome Powell signaled during his address Friday at the Kansas City Fed’s annual symposium in Wyoming that additional action on raising interest rates could be necessary. Photo: Nathan Howard/Associated Press

“At what point does the bond market provide competition to the stock market in the eyes of investors?” said David Donabedian, chief investment officer of CIBC Private Wealth US.

Although U.S. indexes remain in the green for the year, this month has been difficult for investors in riskier assets. Signs of continued strength in the U.S. economy, a flood of Treasury debt sales and expectations that the Fed could keep rates higher for longer lifted government bond yields to decade-plus highs.

Traders on Friday assigned a 54% probability to the central bank lifting rates again by the end of the year, up from the 32% chance they estimated a week earlier, according to CME Group’s FedWatch tool. 

Investors are also foreseeing a longer horizon before the central bank starts to reverse course. By next June, traders see a 62% chance that the Fed will have cut rates from current levels, down from the 83% probability they assigned one week earlier.

Investors will parse a new release Thursday of the Fed’s preferred gauge of inflation, the personal-consumption expenditures price index, as well as Friday’s monthly jobs report, as they try to anticipate the market’s next turn. They will also review earnings reports from the likes of Best Buy, Salesforce and Dollar General. 

The creeping shift in the rates picture coincides with signs that the AI trade is fizzling. Nvidia, the graphics-chip maker at the heart of the AI boom, gave another blockbuster forecast on Wednesday while reporting record sales for the latest quarter. But the numbers failed to power a broader market rally. Some analysts have suggested that even a very rosy earnings picture is reflected in the shares.

The recent climb in long-term bond yields, meanwhile, has accentuated concerns that the stock market as a whole is trading at lofty valuations that leave it vulnerable to disappointing news. While buzz about AI and growing confidence in the economy have driven stocks higher this year, forecasts for corporate earnings have risen more modestly. The stronger growth in share prices has left the market looking richly valued compared with history.

“U.S. stocks are really in a difficult position,” said James St. Aubin, chief investment officer at Sierra Mutual Funds. “They’ve been bid up to the point where the earnings multiple is extended and fundamentals will have to validate that move.”

That is especially true, many investors argue, given the recent climb in long-term interest rates. The yield on the 10-year U.S. Treasury note rose to as high as 4.339% in recent days, its highest settle since 2007 and up from 3.956% at the end of July. Rising yields drive up borrowing costs throughout the economy and tend to reduce the prices that investors are willing to pay for investments, such as stocks, that are valued based on future cash flows.

Some analysts place a particular significance on moves in real yields, a measure of the return on Treasury bonds that is adjusted for inflation. Based on 10-year Treasury inflation-protected securities, real yields recently hit 2%, a level not seen since 2009. 

Since companies are often able to pass along higher input costs to customers by raising their own prices, these analysts believe that real yields are the appropriate rate to use in gauging stock valuations. Others say real rates are especially important because they show the true cost of money in the economy, aside from fluctuating inflation.

In any case, rising interest rates threaten share prices by offering investors competing ways to earn a return—a major shift in the financial landscape after years of rock-bottom rates led many to believe there were no meaningful alternatives to stocks. Higher rates also ding the worth of future earnings in widely used pricing models. The result, if the market accepted those trimmed-down prices, would be stocks trading at lower multiples of their projected earnings.

“Valuations at some point are going to have to acknowledge the move in interest rates and the real rates,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. “As your cost of capital goes up, your valuation multiples go down. It is just math.”

The broad stock index is trading at 18.6 times its projected earnings over the next 12 months, according to FactSet. That is up from 16.6 at the start of the year and above the 15.8 multiple at which it has traded on average over the past 20 years.

“In a 2% real-yield world, can you justify a 19 multiple on the market? It seems a little rich,” Donabedian said.

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Utilities Are Becoming a Risky Business Thanks to Climate Change

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TIME BY JUSTIN WORLAND, AUGUST 24, 2023 

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It’s been a long-standing investor assumption for decades: the electric utility sector acts as a ballast in a well-balanced portfolio. Investor-owned utilities are generally less volatile than companies in other sectors, and they tend to generate consistent profits, which they return to shareholders via dividends.

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The Maui wildfires, which killed more than 100 people and caused billions in damages, are the latest in a string of similar catastrophes to test that assumption. The cause of the devastating inferno in Hawaii remains under investigation, but residents have suggested that the local utility’s power lines may have come into contact with dry vegetation, sparking the fire. If that turns out to be the case, Hawaiian Electric Industries may be held liable for billions in damages, a sum that could wipe out equity investors in potential bankruptcy proceedings. As of Aug. 24, the company’s stock was down nearly 70% from a month ago and ratings agencies have downgraded the company to junk status.

This wouldn’t be the first time that a wildfire has financially devastated a utility. In 2019, Pacific Gas & Electric, a utility that provides electricity for much of California, declared bankruptcy after being held liable for $30 billion in wildfire damages caused by the company’s powerlines. In June, Colorado officials released a report laying at least partial blame on Xcel Energy, a Colorado electric utility, for fires that destroyed more than 1,000 homes in Boulder County in 2021. The company has since said that it faces at least eight lawsuits stemming from the fire and that the potential damages could exceed what its insurance will cover.

Other utilities in wildfire zones are disclosing similar risks. Edison International, which provides electricity to much of Southern California, noted in a regulatory filing this year that it is working to reduce the risk of fires caused by its equipment but that insurance may not be sufficient to cover the costs of such events. Similarly, Berkshire Hathaway Energy Company, another west-coast operator, said in a December regulatory filing that its financial performance also depends on reducing the risk of and effectively insuring against potential wildfires caused by its infrastructure.

This growing risk for utilities is concerning for investors. The sector in the U.S. has a total market cap of more than $1.5 trillion, according to data from Fidelity, and is a component of many pensions and retirement accounts. (California pension funds CalPERS and CalSTRS both lost tens of millions of dollars in the PG&E bankruptcy, for example).

But there are broader lessons to draw for both investors and companies. For investors, the utility sector’s climate woes should serve as a reminder that climate change will challenge long held assumptions about risk and return. Agriculture, energy, and insurance, for example, all face steep climate-related risks. That’s not to say that these sectors will become uninvestable. To the contrary, companies in these industries will require capital to adjust to climate change. But it does mean investors should think of these sectors and how to assess their potential risk and return a little differently.

Businesses across all sectors can take lessons from utilities’ recent experience. For years, as wildfire risk grew, utility companies moved slowly to implement adaptation plans that would cut their risk. Taking a short term view, it’s easy to understand why. Such measures—like burying power lines underground or installing stronger poles—are costly and can disrupt operations. But those short-term costs pale in comparison to the long-term cost of the wildfires we’re seeing today and will continue in the coming years. Across sectors, executives would be well served to look at their operations and ask: what climate risk should I be adapting to right now? It may save them in the long run.

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Fluence Energy in the Amazing Voyage of India's Metamorphosis…

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Courtesy of Fluence

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By Germán & Co, Karlstad, Sweden, August 26, 2023

India, a land of vibrant colours, rich traditions, marvelous cuisine, and diverse cultures, is embarking on an extraordinary journey of metamorphosis- a transformation that will redefine its energy landscape.

India's transformation over the past seventy years is nothing short of remarkable. Once classified as a third-world country reliant on Western aid, India has ascended to a flourishing IT hub and become the world's start-up centre.

India's reputation underwent an incredible metamorphosis, departing from the Western world's portrayal of snake charmers, cows roaming the streets, and individuals travelling on elephant backs. These outdated stereotypes no longer represent the reality of modern India.

India has gained recognition in various fields, showcasing its proficiency and expertise. The country has made significant advancements in space technology, telecommunications, agriculture, energy production, and biotechnology. These strides have placed India on the global map and cemented its position as a formidable player.

One of the most outstanding measures of India's progress is the overwhelming number of internet users. With more than 750 million users, India has wholeheartedly embraced the digital era and now reaps the rewards of its advancements. This vast user base is indicative of the increasing connectivity and accessibility of technology throughout the country.

India's recent achievement of landing on the moon's southern pole stands testimony to its determination, tenacity, and adaptability to evolving circumstances. The exceptional development and growth of the nation can be attributed to the collaborative efforts of the government, private sector and skilled individuals.

The Indian government, in particular, has played a crucial role in driving this outstanding progress. Through its targeted efforts, India has implemented effective policies and initiatives that have propelled the nation to unprecedented heights. One such example is the Indian Space Research Organisation (ISRO), which has consistently demonstrated its competence and innovation in space exploration. The recent successful moon landing vividly demonstrates India's scientific and technological capabilities.

Moreover, India's private sector has aided the country's transformation. Committed to investing in the nation's growth, Indian enterprises have played a crucial role in enhancing vital infrastructure and promoting innovation. They have shown impressive adaptability, understanding worldwide opportunities and greatly contributing to India's economic strength.

Julian Nebreda, Fluence's President and CEO

During his recent trip to India, Julian Nebreda, Fluence's President and CEO, acknowledged the extensive potential of the Indian market and its impressive clean energy objectives. With its skilled workforce committed to innovation and a resolute focus on renewable energy targets, India is rapidly becoming a leader in the international energy transformation. Understanding the importance of enhancing energy storage capabilities to support this transition, Julian held productive discussions with crucial stakeholders during his visit.

In a video, Mr Julian Nebreda shares the valuable insights he gained from these discussions, shedding light on the path forward for India's energy sector. He emphasises the critical role that energy storage systems, particularly Fluence's, play in ensuring a robust and reliable electric system. Julian's visit to India showcased Fluence's commitment to supporting its energy needs alongside its ambitious renewable energy goals.

Fluence, as a prominent player in the energy storage field, acknowledges the significance of a consistent electrical system in meeting India's ambitious objectives.

Together, India and Fluence can forge a dependable electrical system, paving the way for excellence and progress across the nation.

We, at Fluence, are excited to further augment our commitments and bolster the Indian energy storage industry.

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Cooperate with objective and ethical thinking…

Dear readers,

Here at Germán & Co., we highly value objective and ethical thinking. We are committed to delivering high-quality and precise information. To achieve this, we have invested in thorough research, necessary software licenses, and appropriate venues. Our blog has a loyal readership that admires our dedication to journalism.
Yet, maintaining this standard requires financial support. We kindly ask our readers to stand in solidarity and provide support, even a minimum contribution of 2 euros. Your contribution helps uphold our blog, improve our content, and reach a larger audience. Each donation, regardless of size, greatly assists us in fulfilling our mission. With your support, we can continue to operate independently and uphold unbiased journalism.

We sincerely express our gratitude to you,

The Team

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Prigozhin’s lesson for Trump & Co: Don’t trust Putin’s promises…

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Trump, Vivek Ramaswamy, and Macron should all be thinking at least twice after Prigozhin's death about pinning hopes on deals with Putin.

POLITICO EU BY VERONIKA MELKOZEROVA, AUGUST 25, 2023

KYIV — U.S. Republican presidential hopeful Vivek Ramaswamy has joined ex-President Donald Trump in believing that there are deals in good faith to be made with Russian President Vladimir Putin.

That’s a position that was also taken last December by French President Emmanuel Macron, who held out the prospect of negotiating security guarantees for Russia with Putin under a new security architecture for Europe.

You try telling Yevgeny Prigozhin that the Kremlin keeps its word in deals. Two months ago, after Prigozhin’s abortive coup, Russia’s security services said they wouldn’t be pressing charges and Prigozhin was tricked into a false sense that he had received security guarantees. Putin’s real verdict was served up as an explosion in a private jet at 28,000 feet.

Any Ukrainian can tell you Russia’s assurances that it’s not going to invade are worth zero. Moscow was meant to respect Ukrainian sovereignty and grant Kyiv security guarantees according to the terms of the 1994 Budapest Memorandum, under which Ukraine handed over its nuclear arsenal, but Putin has shown no interest in abiding by that international agreement.

Prigozhin sure did no good for Ukraine — sending his convict recruits into “meat wave” attacks at the battle of Bakhmut. His killing, however, may provide a sobering, cautionary lesson for politicians around the world, who glibly believe that you can trust Putin and do deals with him.

“There is no way anyone can reach an agreement with a serial liar like Putin and expect it to be respected. The U.N. Charter, the Russian-Ukrainian Friendship Treaty, the Minsk Agreements, the Black Sea Grain Initiative — how many more treaties must Putin violate before everyone realizes that talking to him is pointless?” Ukraine’s Foreign Minister Dmytro Kuleba told POLITICO. 

Ramaswamy recently explained to CNN he would freeze the current lines of control and make a commitment that NATO will not admit Ukraine. He said the U.S. can even push Ukraine to make concessions as it “is paying the bills.” In return, he would just ask Putin to withdraw from military alliances with China.

And he would trust Putin on all this?

“Whether he is dealing with his own war-criminal commander or an outside power, the Russian president will use any means necessary to achieve his goals. Only a solid Russian military defeat in Ukraine can bring about a just and lasting peace,” Kuleba argued. “Those who argue that Ukraine should agree to a quick cease-fire, a concession of territory, or freezing the conflict are not seeking an end to the war. They are inviting Ukraine to die. It is the path to a larger war after Putin is given a respite.”  

For a year, Ukraine won an opportunity to transport its grain to the world and stabilize food prices, but Russia kept claiming the grain deal should include more perks for the Kremlin and was constantly complaining about the ineffectiveness of the initiative, until it withdrew in July 2023.

Since then, the Kremlin has shelled Ukrainian ports and grain terminals, destroying food that was destined for emerging nations.

“This is a clear demonstration that negotiating anything with Putin is like asking a serial rapist to promise he won’t do it again. This does not work, and Prigozhin is evidence of that,” Ukrainian political scientist Mykola Davydiuk told POLITICO.

In public, Putin claims he is ready for peace negotiations, and that the U.S., NATO, and Ukraine are the ones pressing to continue the war. However, his spokesman Dmitry Peskov on August 2 said those negotiations must be on Russian terms. On August 6, he claimed there were no grounds for peace and that Russia wants to keep the five Ukrainian regions it has illegally annexed, even though it does not fully control four of them.  

“For me, the attempt to annex part of the Ukrainian territories was yet another confirmation of the Kremlin’s complete inadequacy in assessing both the political and the military situation,” Ukraine’s State Security and Defense Secretary Oleksii Danilov told POLITICO. 

Ukrainian officials warned the Kremlin that the decision to annex Ukrainian regions in 2022 would destroy the possibility of ending the war at the negotiating table. But the Kremlin did it anyway.  

“Negotiations and concessions to Putin will be a geostrategic fiasco for the West, and will start the countdown to the beginning of the anti-democratic counter-revolution and the advance of autocracies along the entire front from Latin America to China,” Danilov said.

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Putin Had Every Reason to Want Prigozhin Gone (NYT)

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The Fate of the Romanov Family: How Did Rasputin Play a Role in Their Demise?

Conspiracy... The dissatisfaction towards the Romanovs and Rasputin's control peaked as Russia confronted serious socioeconomic difficulties and the looming shadow of World War I. A group of aristocrats and political figures, keen for change, devised a malevolent scheme to eliminate Rasputin and weaken the Romanovs' hold on power. Rasputin's participation in scandalous affairs and meddling in political affairs served as the impetus for this plot to gain momentum.

Although Grigori Rasputin's role in the fate of the Romanov family is undeniable, it is crucial to consider the wider context surrounding their demise. The destiny of the Romanovs: the political and social atmosphere of early 20th century Russia, coupled with Rasputin's mysterious influence, established the setting for the tragic downfall of the Romanov dynasty. Understanding this intricate interplay of factors enables us to comprehend the vast impact Rasputin had on the downfall of the last imperial family of Russia.
The Romanov dynasty, who were the final imperial rulers of Russia, faced a tragic and premature fate during the tumultuous years of the Russian Revolution. The complex web of events leading to their demise included a plot that implicated the mysterious persona of Grigori Rasputin, a mystic and purported counselor to Tsarina Alexandra. In this article, we examine the events that occurred and shed light on how Rasputin's influence ultimately impacted the fate of the Romanov family.

Grigori "Rasputin" appeared in early 20th-century Russia, presenting himself as a self-proclaimed holy man and healer. His alleged ability to cure Tsarevich Alexei's severe hemophilia won Rasputin the favor of Tsarina Alexandra, who desperately searched for a cure for her son's condition. The Tsarina's unwavering trust in Rasputin eventually resulted in his growing influence over the Romanov family, causing great dissatisfaction among the Russian aristocracy and political elite. As Rasputin became more ingrained within the Russian court, whispers about his immoral lifestyle and manipulation of the Tsarina started to spread. His unethical behaviors and debauchery stained the reputation of the Romanov family, exacerbating the discontent brewing within Russia. Concerns regarding Rasputin's true intentions and whether he was leveraging his power for personal gain were raised due to his immense influence over the Tsarina.

On the evening of December 29, 1916, Rasputin was invited to the residence of Prince Felix Yusupov, one of the primary conspirators, pretending to be a friendly gathering. Little did Rasputin know, he had walked into a carefully designed trap. Poisoned cakes and wine were offered to him, but as Rasputin showed no signs of being affected by the poison, he was shot several times. Despite sustaining serious injuries, Rasputin persevered and fought back until he ultimately met his fate by drowning in frigid waters.

The Fall of the Romanovs... while Rasputin's death briefly halted the rising opposition, it failed to rescue the Romanovs. The plot against Rasputin compounded the public's increasing disillusionment with the Romanov dynasty and fueled demands for reform. In 1917, the Russian Revolution erupted, resulting in Tsar Nicholas II's abdication and the eventual execution of the Romanov family.

By Germán & Co

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NYT by Tatiana Stanovaya, August 26, 2023

Ms. Stanovaya, a senior fellow at the Carnegie Russia Eurasia Center, writes about Russian domestic politics and foreign policy.

Very few were taken aback by Yevgeny Prigozhin’s presumed death, even if the means — plunging from the sky in a plane crash — were undeniably dramatic. Such an eventuality had been widely discussed in both Russian and Western circles ever since the mercenary leader’s short-lived mutiny in June. No matter that Mr. Prigozhin subsequently met with the Kremlin and seemed to come and go where he pleased. To many, it was only a matter of time until he got his comeuppance.

Wednesday’s events remain shrouded in mystery. Was Mr. Prigozhin’s jet shot down, or was there an explosion onboard? To what extent were the Russian authorities and, more pointedly, President Vladimir Putin himself involved in the incident? If Mr. Prigozhin was assassinated, was it a snap decision or a well thought-out plan conceived after the rebellion? The Kremlin, for its part, denies any involvement in the crash. Whatever the truth, it’s clear that Mr. Putin had ample reason to wish for Mr. Prigozhin’s demise, and not just as a matter of rehabilitating his reputation.

Mr. Putin believes fervently in a powerful state. Western audiences often downplay this fundamental conviction, emphasizing instead Mr. Putin’s personal interests and individual priorities. It’s true, of course, that there’s a large dose of self-interest in the president’s conduct. But one of Mr. Putin’s gravest nightmares is the state becoming vulnerable, unable to address domestic challenges and on the brink of disintegration. That’s precisely what Mr. Prigozhin threatened. For that transgression, he may have paid with his life.

It’s a popular notion that Wagner’s ventures were all directed by the Kremlin, but in fact Mr. Prigozhin was consistently the driving force. He proactively identified areas where Russia was faltering or ineffective and offered his services as a stopgap, always in a way that could be construed as serving the national interest. Though Mr. Prigozhin collaborated closely with the Kremlin, he pursued his own private priorities. Yet while Mr. Putin undoubtedly sanctioned and funded these endeavors, for him the primacy of the state always took precedence. Nothing could be allowed to undermine it. Mr. Prigozhin would be permitted his ventures as long as he remained subservient to the state apparatus.

That bargain held for years. But the war in Ukraine unsettled the balance. Mr. Prigozhin, sensing an opportunity to advance his career, began to challenge the military leadership. When the conflict between the two became untenable, Mr. Putin’s preference was plain: He unambiguously sided with the army. In January, he emphasized that the war ought to be fought in line with the general staff’s strategy, a clear hint that Wagner should be subordinate. By June, all Wagner fighters who wished to remain in Ukraine were expected to formalize contracts with the defense ministry and accept the supervision of its generals. It proved to be the final straw. Rebellion soon followed.

It was a humiliating blow to Mr. Putin’s regime. The pain came less from the betrayal by Mr. Prigozhin, who’d always been erratic, than from Mr. Putin’s personal responsibility for the disaster. On the state’s dime, the president had nurtured an entity that he didn’t keep in check. The mutiny, following Mr. Putin’s inability to manage the escalating tensions between the defense ministry and Wagner, was a direct result of this fundamental failure.

The political toll was considerable. In the fallout, Mr. Putin found himself yielding to Mr. Prigozhin, compromising his own stature and enduring public indignity. He was now confronted with a thorny dilemma: how to dismantle a private army without provoking political backlash or violence. In the rebellion’s aftermath, the Kremlin’s primary concern was to neutralize Wagner, both politically and militarily, with the aim of restoring the stability of the state.

The first step was to play for time. Under the agreement that quelled the mutiny, Mr. Prigozhin secured his freedom and Wagner members were protected from being charged for their participation, astonishingly enabling them to travel freely as if nothing had happened. This approach, in hindsight, appears logical: Mr. Putin aimed to mollify Mr. Prigozhin, giving him the sense that he was irreplaceable and that he enjoyed the state’s protection.

This was critical in ensuring Mr. Prigozhin’s exit from Russia. That allowed the clamping down on some of his Russian assets and the stripping back of access to lucrative contracts (even though his business did not collapse entirely). More important, Mr. Prigozhin’s departure was a prelude to the disbanding of Wagner. The most dedicated Wagner troops, a contingent of around 5,000, were coerced to relocate to Belarus under a new leader, the loyal and compliant Andrei Troshev; the group’s heavy artillery was returned to the defense ministry; and the hesitant were forced either to enlist with the military or to return home. In Africa and Syria, Wagner forces have been put under close oversight with a plan to gradually absorb their projects into the security services and defense ministry.

Throughout this initial phase of drawing down Wagner, Mr. Prigozhin’s involvement was deemed necessary. His input ensured smooth access to key individuals, facilitated personnel assessments and aided decision-making. But once his fighters relocated from Russia, effectively disarmed and preoccupied with training Belarusian forces, things changed. He became only a living testament to the state’s frailty and an acute reminder of Mr. Putin’s flawed handling of the very behemoth he helped create. From the Kremlin’s perspective, there ceased to be a point to his existence.

Regardless of the actual cause of Mr. Prigozhin’s reported demise, the Russian public is sure to see it as an act of retribution and revenge. Few will doubt Mr. Putin’s involvement, a perception that aligns well with the image of a strongman president. Some analysts argue there are potential drawbacks. First, Mr. Putin showed his weakness in failing to respect the guarantees of safety he supposedly made to Mr. Prigozhin. Second, there could be backlash from patriotic circles, outraged over the blatant execution of someone they viewed as a war hero. Third, Wagner soldiers, surely appalled by the assassination, could stage another rebellion.

These concerns seem overblown. After all, there were no explicit, public guarantees of Mr. Prigozhin’s safety, only assurances — which were fulfilled — that he would leave Russia for Belarus safely and that the criminal charges against him would be dropped. What’s more, Mr. Prigozhin’s popularity plummeted after the mutiny as many former supporters denounced his behavior. As for Wagner, a widely circulated video that purported to depict its commanders vowing vengeance has been debunked, with official channels instead urging restraint.

While Mr. Prigozhin’s death would not entirely restore Mr. Putin’s standing as a decisive leader — a destroyed business jet is hardly the most persuasive symbol of strength — it could offer some solace to hard-liners concerned about the president becoming out of touch, hesitant or unable to manage his own circle. For Russia’s elites, the incident serves as a clear warning. Challenging the regime, whatever your achievements, inevitably leads to your downfall.

TIME BY JUSTIN WORLAND, AUGUST 24, 2023 

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News Round-Up, August 24, 2023

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Thanks to all for the amazing support... 106K on Twitter in the last 28 days...

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Picture of the day...

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Most read…

How Oil and Tech Giants Came to Rule a Vital Climate Industry

Generous government support helps carbon removal play a crucial role in neutralizing emissions

WSJ by Amrith Ramkumar, Aug. 24, 2023 

Opinion: India’s brilliant moon landing illuminates Russia’s drastic decline

TWP by David Von Drehle, Deputy opinion editor and columnist, August 23, 2023 

Who won, who lost and who fizzled in the first Republican debate

Ron DeSantis was a non-factor as Republicans piled on Vivek Ramaswamy, instead.

By POLITICO STAFF, August 24, 2023

Washington drafts proposal for Venezuela's oil sanction easing

Reuters by Marianna Parraga, Vivian Sequera and Timothy Gardner, August 24, 2023

All eyes are now on the Federal Reserve

US economy has remained unexpectedly robust – but markets could be volatile again

The Telegraph, TOM STEVENSON24 August 2023

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Climeworks deploys a carbon-removal technology known as direct-air capture and sells carbon credits to big companies. PHOTO: ARND WIEGMANN/REUTERS

How Oil and Tech Giants Came to Rule a Vital Climate Industry

Generous government support helps carbon removal play a crucial role in neutralizing emissions

WSJ by Amrith Ramkumar, Aug. 24, 2023 

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The technology to remove carbon from the atmosphere is unproven at scale and the economics are just taking shape. What has become clear this year is that carbon removal is now the realm of giant companies and big government support.

The Energy Department this month committed $1.2 billion to create two carbon-removal hubs in Texas and Louisiana, home to a large portion of the U.S. fossil-fuel industry. The biggest competitor in the Texas project will be Occidental Petroleum, which has its own billion-dollar bet on the technology.

Three deals this year cemented corporate involvement in the sector: Exxon Mobil is buying one of the biggest operators of pipelines that move carbon to sites where it can be stashed underground; Occidental is buying one of the two most established carbon-removal technology companies; and the other experienced carbon-removal startup completed the first third-party verified process and cashed in on it by selling carbon credits to Microsoft and other big companies.

Climeworks has created a giant vacuum cleaner to capture carbon dioxide from the air, helping companies offset their emissions. WSJ visits the facility to see how it traps the gas for sale to clients such as Coca-Cola, which uses it in fizzy drinks. Composite: Clément Bürge

The most prominent carbon-removal technology favored by the government, Occidental and these startups is called direct-air capture. It employs vacuum-like devices and fans to suck in air, pull out the carbon and bury it underground. The process is a man-made variation of what trees do every day. 

It differs from carbon capture, which grabs carbon from smokestacks. This effort is considered easier because those emissions are far denser with carbon than the open air.

The Energy Department money, which is a record investment in the sector and the largest from a government, is designed to create an industry that is seen as vital to limiting climate change. Even the most optimistic scenarios of the transition away from fossil fuels don’t forecast sufficient emissions progress without removing some of what is there already and mitigating unavoidable emissions in the future. 

“We have to get these projects up and running so there’s a commercial wave that follows them,” said David Crane, the Energy Department’s undersecretary for infrastructure. He previously was chief executive of power-generation company NRG. 

If funded and completed, the two carbon-removal hubs would remove roughly 1 million metric tons of carbon dioxide from the atmosphere annually and store it underground. That amount is equivalent to the annual emissions of about 220,000 gasoline-powered cars, which is a fraction of what is needed overall to limit climate change. Each project would be roughly 250 times bigger than the only direct-air capture facility currently in commercial operation. 

The Energy Department is also trying to spur a feasible business model for the industry by pledging to pay $35 million for carbon that the companies remove from the air. These are the same type of carbon-credit purchases that Microsoft and JPMorgan Chase have made recently to kick-start the industry. That funding also isn’t limited to direct-air capture, potentially boosting other promising approaches. 

Large fossil-fuel companies have long been interested in technologies that remove carbon from the atmosphere because they could neutralize the emissions their products create.

Occidental, the most aggressive fossil-fuel giant in carbon removal, is spending billions of dollars on the effort. Chief Executive Vicki Hollub has said direct-air capture would enable the company to keep producing oil for decades. 

The company said recently that it is buying one of its technology partners on the Texas hub, startup Carbon Engineering, for $1.1 billion, the largest such transaction in the industry. 

Many climate analysts remain skeptical of carbon removal, worrying that it is too expensive while fearing it could give fossil-fuel producers a social license to continue polluting. Critics argue that removing carbon from the atmosphere just to offset new carbon pumped in by fossil fuels won’t help fight climate change.

“It really does raise some fundamental questions about the political sustainability of these efforts,” said Danny Cullenward, a research fellow at American University’s Institute for Carbon Removal Law and Policy. “People are increasingly assuming that oil production and [direct-air capture] go together. That’s not healthy if your goal is to separate those things.”

Cumulative amount of carbon-dioxide removals completed, monthly.

Source: CDR.fyiNote: Data provider aggregates data from public sources and private sector

Direct-air capture will have a crucial role in helping the world reach its climate goals, Hollub said in a written statement, adding that her company’s selection shows that it has the technology and project expertise to neutralize carbon emissions. 

A White House spokeswoman declined to comment.

Exxon Mobil, meanwhile, agreed in July to pay almost $5 billion for Denbury, a pipeline operator that moves carbon dioxide. Denbury’s pipelines typically carry carbon captured in smokestacks rather than the open air, but its infrastructure could be used for both efforts. The company also injects carbon into aging oil fields to boost output using the process known as enhanced oil recovery. 

The carbon-removal hubs were funded in the 2021 infrastructure law. The companies have to contribute funds equivalent to the government grants and would be responsible for any cost overruns. The Energy Department will soon award billions of dollars for hydrogen hubs using more infrastructure-law funding, another step to jump-start a critical climate sector.

The key company in the Louisiana carbon-removal hub is Climeworks, which runs the world’s first commercial direct-air capture facility in Iceland. In addition to selling credits to big companies, the company raised $650 million privately from large investors early last year, another financial milestone for the industry.

Businesses are eager to mitigate their own emissions, and popular carbon credits such as forest preservation or renewable energy have been criticized for failing to reduce carbon in the atmosphere. 

Carbon removal has become increasingly popular for businesses because it provides certainty that companies are helping the climate, though many consumers remain hesitant. 

“There’s no illusion that the taxpayers rose as one and asked for a direct-air capture program,” said the Energy Department’s Crane.

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Indian students and families gather to watch the Birla Industrial and Technological Museum (BITM) live telecast of the Chandrayaan-3 Mission landing on the moon in Kolkata, India, on Wednesday. (Piyal Adhikary, EPA-EFE/Shutterstock)

Opinion: India’s brilliant moon landing illuminates Russia’s drastic decline

TWP by David Von Drehle, Deputy opinion editor and columnist, August 23, 2023 

India’s Chandrayaan-3 lunar lander arrived right on schedule near the moon’s south pole on Wednesday, ready to release a robotic laboratory to explore this little-known real estate. The dark side of the moon, as it is called (especially by fans of Pink Floyd), is home to high hopes for many of those who dream of interplanetary travel. They believe the south polar region might contain abundant water that could be used to make rocket fuel at a future permanent base, allowing the moon to serve as a sort of truck stop en route to Mars.

Others speculate that the frozen, shadowed dark side is rich in minerals needed for high-tech applications on Earth. For them, the Indian rover will be a 21st-century version of the pick-wielding miner of American frontier lore — scratching away in hopes of starting a gold rush.

It’s a marvelous achievement for India’s space program — and symbolic of an important moment in geopolitics. For the successful landing came just days after a Russian mission to the same region went haywire and smashed into the lunar surface like a hammer coming down on the last nail in the coffin of Russia’s decline.

Hyperbole? Not for the nation that made its space program a billboard for its rise to global influence. As the dominant republic of the Soviet Union, Russia was first to put a satellite into orbit, first to send a human into space and first to land a spacecraft on the moon, among other pioneering missions. Luna 9 touched down lightly on the dust of the lunar Oceanus Procellarum (the “Ocean of Storms”) in February 1966, more than three years before the United States finally surpassed the Soviets by landing two men on the moon and bringing them home safely.

But 1966 was a long time ago. It’s the year Hewlett-Packard developed its first computer. It’s the year Fresca and Twister debuted. Frank Sinatra released “Strangers in the Night,” dooby, dooby, doo. Today’s Russia is trying to replicate an achievement from 1966 — and failing. It speaks volumes about the reckless waste of a once-great nation’s capabilities.

Of course, there’s nothing to learn from the lunar crash site that the world hasn’t seen already on the battlefields of Ukraine, where the once-fearsome Russian tank columns were wiped out by Ukrainian volunteers, or in the looting of the Russian economy, which has seen pitiful net growth (in constant dollars) since the collapse of the Soviet Union more than 30 years ago. Here, too, a comparison with India is illuminating: India’s economy was about half the size of Russia’s when the Berlin Wall came down in 1989. Today, India’s economy is 50 percent bigger than Russia’s. Forget about keeping pace with the United States; Russia can’t keep up with India.

The point is important because the modern world was designed with Russia as a major pillar. China’s rise has somewhat mediated the instability created by the pillar’s collapse. But China has its own mismanagement problems that have turned a roaring economy into a sputtering mess. Poorly run countries can be dangerous, as Russia has shown in Ukraine. They latch on to bad ideas and pursue them past the point of failure. When this happens to a major nation, the consequences are felt worldwide.

Russia’s demise as a world power and China’s suddenly clouded future demand new thinking from Winston Churchill’s “indispensable nation,” the United States. Americans and their leaders have been egging each other on for some 20 years in a race to the depths of despair. On both the left and the right, a narrative of national corruption and decline has taken hold. Don’t look to the center for leadership: Everyone there is ducking and covering.

This won’t do, because the world is once again turning to the United States for stability and competence. Russia’s appalling brutalization of Ukraine has driven Europe more firmly toward NATO than ever before. China’s serial missteps have strengthened U.S. alliances throughout the eastern Pacific. Fortunately, the United States has the economic vitality to take on the challenges. Despite sharply higher interest rates to battle unwelcome inflation, the world’s largest economy continues to grow, and is once again nearly 40 percent larger than second place. While other nations attempt to visit the moon, U.S.-led missions have flown a helicopter on Mars, placed a telescope in deep space, probed the weather on Jupiter and sailed beyond the solar system.

Voters should demand — and leaders should deliver — an end to the sniveling and doom-saying that have passed for public discourse in the United States for most of a generation. This can be another American century, in which more people in more places enjoy more freedom and more prosperity than ever before. We just have to be worthy of it. Our rivals are stumbling when they aren’t cutting their own throats; for us, the sky’s the limit.

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The debate may have reset the race a bit, but only for candidates not named Donald Trump. | Francis Chung/POLITICO

Who won, who lost and who fizzled in the first Republican debate

Ron DeSantis was a non-factor as Republicans piled on Vivek Ramaswamy, instead.

By POLITICO STAFF, August 24, 2023

Largely ignored for two hours by his lower-polling rivals on Wednesday, the Florida governor watched as the first debate of the GOP primary turned into a pile on Vivek Ramaswamy, the 38-year-old biotech entrepreneur rising in polls.

Mike Pence tangled with Ramaswamy. So did Nikki Haley and Chris Christie. DeSantis, still polling second to former President Donald Trump — but with his campaign floundering — was all but reduced to an afterthought, while Pence, Haley and Christie dominated the stage.

The debate may have reset the race a bit, but only for candidates not named Trump. Who came out the best? Who had a bad night? And did we even learn anything new?

We asked five POLITICO campaign reporters for their takeaways from the first Republican primary debate of 2024.

Who had the best night? Who had the worst night?

Natalie Allison: He took all the hits — seriously, almost all of them — but Vivek Ramaswamy got all he could have wanted out of tonight: attention and the opportunity to reinforce the idea the party’s establishment is out to get him. If you were a Republican who still hadn’t seen a clip of Ramaswamy on social media or TV, you learned who he was tonight. And the fact all knives were out for him shows that the other candidates see him not just as an annoyance, but as a threat right now as they’re trying to break through themselves.

Ron DeSantis’ team, for what it’s worth, was thrilled he wasn’t the one under fire (“didn’t get caught up in the infighting,” is what one of his campaign advisers noted to me afterward), following two months straight of negative headlines, disappointing polling and much more scrutiny and criticism than the rest of the field.

It wasn’t a particularly great night for Tim Scott. He made sure to talk about his childhood, mentioning as often as he could his hardworking single mother to explain how his family pulled themselves up from a difficult place. But none of his answers were that catchy. Recently, Scott has been viewed as someone in the running to overtake DeSantis for the No. 2 spot, but he will need to make more of an impression the next time he’s on stage.

Sally Goldenberg: Mike Pence had the best night. Pence — who has struggled to break out of the pack and was eviscerated by Tucker Carlson in a one-on-one interview this summer — showed more than a little fight with Ramaswamy. He distinguished himself with a clearly articulated foreign policy position on the Russian invasion of Ukraine, courting traditional conservatives. He reminded viewers of his Christian faith, quoting from the Bible and appealing to anti-abortion groups with his support for a federal ban. Finally, he got the support of nearly every opponent on stage for his actions certifying the 2020 election, despite the violent reaction to his decision at the time.

Bottom-tier candidates Asa Hutchinson and Doug Burgum didn’t have the break-through moments they needed — and with the next debate rules setting higher polling thresholds, that may be the last time we see them on stage. Similarly, Tim Scott did not do enough to make a case for himself as the religious conservative in the race.

Steven Shepard: Given the stakes for his sputtering campaign, DeSantis had the best night. He was able to articulate his positions on the issues central to his candidacy. He didn’t face the ire of the others on stage the way Ramaswamy did.

Even when the moderators tried to stoke fights between some of the candidates and DeSantis, they mostly took a pass on punching up at the Florida governor, who was the top-polling candidate on the stage.

Wednesday night didn’t fix all of DeSantis’ problems. But if he does end up back on his feet, it will be a big reason why.

Look, Ramaswamy was the center of attention — and maybe attention is a good thing. But he was at it with a different volume and level of caffeination than everyone else, and the candidates who went after him landed some body blows, whether it was Pence calling him a “rookie” or Haley hitting him on Ukraine.

Adam Wren: Pence had a great night. He seemed to win the exchange over what is supposed to be his biggest weakness: His actions on Jan. 6. Christie, Scott and DeSantis all sided with Pence and his actions on that day. DeSantis tried to sidestep the question, but Pence brought him to heel. “There’s no more important duty,” Pence said. “So answer the question.” He is struggling in the polls, but he projected an adult-in-the-room presence that his campaign has been aiming at for months now.

Mike Pence garnered the support of nearly every opponent on stage for his actions certifying the 2020 election. | Francis Chung/POLITICO

Meanwhile, it seemed like Scott disappeared for stretches throughout the night. And Ramaswamy was clearly a bigger target for the field than DeSantis. That tells you a lot about how the rest of the field assesses the calculus of the race.

Holly Otterbein: All in all, it was a pretty good night for President Joe Biden. Most Republicans on stage raised their hands when asked if they would support Trump in the general election even if he was convicted. Several spoke in favor of a national abortion ban. Those are issues that play in a GOP primary. But they are vulnerabilities next November.

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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An oil rig is seen on Lake Maracaibo, in Cabimas, Venezuela October 14, 2022. REUTERS

Washington drafts proposal for Venezuela's oil sanction easing

Reuters by Marianna Parraga, Vivian Sequera and Timothy Gardner, August 24, 2023

CARACAS/WASHINGTON, Aug 23 (Reuters) - U.S. officials are drafting a proposal that would ease sanctions on Venezuela's oil sector, allowing more companies and countries to import its crude oil, if the South American nation moves toward a free and fair presidential election, according to five people with knowledge of the plans.

Washington has been trying to encourage negotiations between President Nicolas Maduro and the political opposition over elections in Venezuela and other demands. Sanctions were imposed following Maduro's 2018 reelection, which many Western nations considered a sham.

Easing sanctions has been a carrot held out in the past by the U.S., but which so far has resulted in very few authorizations, including one to Chevron Corp (CVX.N) that has allowed the firm to expand operations in Venezuela and export its oil to the United States since November.

Washington continues to insist that further easing will depend on progress toward elections. U.S. President Joe Biden's government is prepared to provide Venezuela sanctions relief if the country moves to restore democracy, the White House said on Wednesday.

"Should Venezuela take concrete actions toward restoring democracy, leading to free and fair elections, we are prepared to provide corresponding sanctions relief," a spokesperson for the White House's National Security Council said.

A new round of talks began last November in Mexico including Maduro's representatives, the opposition and U.S. officials, but have shown little progress. A White House spokesperson said Venezuela has not yet taken the necessary steps to restore democracy.

The White House declined to comment on the oil sanctions reframing proposal. Venezuela's negotiation leader, Jorge Rodriguez, and the U.S. State Department did not immediately reply to requests for comment.

MORE OIL FOR MORE PEOPLE

The U.S. is this time considering a specific offer to reframe oil sanctions on the country so crude buyers in Europe and other regions also can resume imports of Venezuelan oil in a structured, organized way, the people said.

The proposal could require Biden to amend U.S. executive orders on Venezuela issued by his predecessor Donald Trump in 2019, or issue new ones.

If parties agree to it and to a series of political demands including the presidential election, the new sanction framework would only maintain restrictions to trade Venezuelan oil with countries including China, Iran and Russia, which are under separate U.S. sanctions, they added.

An early version of the proposal was rejected in July by Dinorah Figuera, head of Venezuela's opposition-led National Assembly which controls the country's foreign assets, after discussions with Venezuela's main opposition parties, two of the people said.

The reason for rejecting the draft proposal, which could become one of the powerful U.S. negotiation tools in future meetings with Maduro's envoys, was the lack of concrete steps by Maduro so far toward fair elections in the country, two of the people said.

Figuera's office did not reply to a request for comment.

Rodriguez said in July that Venezuela would not accept international observation for any elections. The government has also banned prominent politicians from participating in an eventual election as opposition candidates.

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No-one should expect any immediate talk about rate cuts, even if there is less finger-wagging from Jerome Powell this year CREDIT: Jacquelyn Martin/AP

All eyes are now on the Federal Reserve

US economy has remained unexpectedly robust – but markets could be volatile again

The Telegraph, TOM STEVENSON24 August 2023

As we head into the bank holiday weekend, the last days of the summer will as usual be dominated by a smallish gathering of very important people in a high-end fly-fishing resort in Wyoming. The annual Jackson Hole economic symposium might look like a talking shop for policy wonks, but it has evolved over the past 45 years into a key market event.

All investors’ eyes will be on this beautiful spot in the Rocky Mountains when Fed chair Jerome Powell stands up to speak at 3pm UK time tomorrow.

This year’s summit is particularly important because it is expected to provide guidance on the key market questions facing investors today. What happens next for US interest rates and when? Is the Fed done with the remarkable monetary tightening cycle that has overshadowed markets for the past couple of years?

And if it is, how long before the US central bank believes it can safely call time on the post-pandemic inflation surge and take its foot off the interest rate brake?

We should know a lot more by the weekend. But if last year is any guide, markets could be volatile as investors dig into the details of Mr Powell’s keynote speech.

A year ago, the S&P 500 hit an air pocket as markets assessed a short but punchy message from the Fed chair. His words took the wind out of the sails of a powerful rally in the middle of 2022’s bear market, setting up the final down leg to October’s low point.

What he said was really just a statement of the blindingly obvious – that getting on top of inflation would require higher for longer interest rates, a slowdown in the economy and rising unemployment. Just as had been the case 40 years earlier when Powell’s predecessor at the Fed, Paul Volcker, won his battle with inflation, victory would not be painless, he said.

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US inflation was transitory after all

US CPI index, three month percentage change

Volcker casts a long shadow over Jackson Hole. When the symposium moved to its current home in 1982, it was in large part to ensure that the Fed chair would attend the event. He was a keen fly fisherman when he wasn’t busy clearing up the mess left by former chair Arthur Burns.

It was Burns who allowed prices to spiral out of control in the post-Vietnam inflation crisis of the 1970s. Powell’s task is arguably easier than Volcker’s, but no less important. He knows that his legacy, and the credibility of the central bank he heads, is at stake this week.

Powell’s speech is not the only thing happening at Jackson Hole this week. The summit is an opportunity for policy makers from around the world to get together to discuss the weighty matters of the day, and this year’s focus is on “Structural Shifts in the Global Economy”.

So, there will no doubt be plenty on China, Russia, AI and much else. But what most investors are tuning in for is the subtle hints that Powell’s carefully crafted words will convey. They will be hoping for something more reassuring than last year’s nine-minute cold shower.

What should we expect this year? Things have certainly moved on in 12 months but not exactly as Powell or the markets might have anticipated. The reason the market reacted so badly to Powell’s words a year ago was the not unreasonable assumption that the Fed was prepared to push the US into recession if that is what was required.

But the US economy has proved unexpectedly robust since last August. And investors have had to get used to a different narrative. A year ago, it seemed plausible that the Fed would tighten hard but then pivot rapidly to easier policy as it became clear that it had squeezed too aggressively. Today, with a still hot labour market and a US consumer that refuses to lie down, it remains valid to ask whether the Fed has squeezed hard enough.

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Americans earn more

 Average wages in G7 countries

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The run up in bond yields this week indicates to me that the market thinks interest rates could rise a bit further yet. With the ten-year yield at 4.3pc and the two-year touching 5pc, investors seem to be pricing in another quarter point hike, perhaps at the November meeting.

And no-one really expects rates to start coming down again until next summer at the earliest in the absence of a more significant slowdown than now looks likely. The relationship between those short and long bond yields – the yield curve – continues to point to a recession, but there’s precious little evidence on the ground.

The trajectory of interest rates this year has been a salutary reminder of the risks of trying to time the market. At the start of 2023, it looked reasonable to expect the Fed to be toying with a first interest rate cut by now. The pivot has been pushed out by at least a year and the peak will be higher than previously thought.

The idea was that government bonds would be a good investment thanks to the double whammy of locking in an attractive yield and then benefiting from a capital gain as rates started to fall again. The thinking looks good, the timing less so.

The minutes from the last Fed meeting gave us a clue to the Fed chair’s current thinking. “We’ll be comfortable cutting rates when we’re comfortable cutting rates, and that won’t be this year I don’t think”, was how he framed it.

So, no-one should expect any immediate talk about rate cuts, even if there is less finger-wagging from Powell this year. He’s done the hard part for any central banker, managing expectations. Time to enjoy the mountains.

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EXCLUSIVE: "The Wagner Mercenary Chief's Fall: A Twisted Tale of Power and Betrayal"

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Russia's mysterious summer solstice of 2023 took an unforeseen turn today as the infamous "Wagner's Little Mad Army" experienced a significant setback in the form of a "Röhm-Putsch." The mastermind behind the mercenary operation, Yevgeny Prigozhin, suffered a tragic fate when the aircraft he was travelling on allegedly crashed or was shot down by a Russian missile for violating restricted airspace in the northwest of Moscow, leaving behind a slew of uncertainties and queries.

Being no stranger to controversy, Prigozhin had become the chief orchestrator behind the deployment of Wagner mercenary forces in the ongoing conflict in Ukraine. The Kremlin had close ties with the businessman, elevating his position to a prominent role within Russia's military landscape.

The crash signals the end of a turbulent chapter in Prigozhin's life. Having previously worked closely with President Vladimir Putin and the military leadership, he embarked on an audacious revolt a few months ago. The brief insurrection has failed to produce any substantial result.

While there is limited information available about the plane crash incident, the emergency ministry of Russia has confirmed that Prigozhin was aboard and it is highly unlikely that he survived. The death of this Kremlin-associated figure will certainly have repercussions across the political landscape of the country and the ongoing conflict in Ukraine.

The downfall of Prigozhin and his hired soldiers will have both immediate and long-term implications. In the immediate future, the departure creates a gap which may disrupt the current activities and plans of Wagner's Little Mad Army. The absence of their mysterious leader is likely to lead to disorientation and decreased morale among the remaining troops.

On July 28, this blog featured an in-depth review of Russia's ambiguous summer solstice in 2023.

Read the full article by clicking the link.

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The "Wagner's Little Mad Army" and Russia's Cryptic Summer Equinox of 2023

What It’s really unleash —2023 Russian Equinox started — is still in limbo, but there is no doubt that it was not a “coup”. In fact, all signs point to a "putsch," a "self-coup," or a "Röhm purge."

BY GERMÁN & CO, JUNE 28, 2023

A "putsch" is a political and military maneuver carried out by a minority group with the goal of overthrowing a government or gaining control. In 1960-61, French soldiers, especially the legionnaires, were perplexed by President de Gaulle's proposal to abandon Algeria. Algeria had been a part of France since 1848. Despite the military victories achieved between 1958 and 1960, the soldiers were confused. In May 1958, the French Army successfully staged a coup in Algiers to install de Gaulle as President and maintain French control over Algeria. The Putsch —des généraux—, also known as the “April 1961 Generals' Putsch of Algiers”, was an unsuccessful military coup aimed at preserving French Algeria, the insurrections group was led by Challe, a French legionnaire.

A “self-coup”, also known as an autocoup (derived from the Spanish term "autogolpe"), or coup from the top, refers to a type of coup d'état wherein the leader of a nation, who initially assumed power through legitimate channels, attempts to retain power through unlawful methods. The leader has the potential to dissolve or incapacitate the national legislature, thereby unlawfully acquiring extraordinary powers that are not typically granted under normal circumstances. Other potential measures could involve the nullification of the nation's constitution, the suspension of civil courts, and the assumption of dictatorial powers by the head of government.

The “Röhm-Putsch” is a disinformation strategy in which false information about an ongoing coup was purposefully disseminated in order to justify violent acts (Assassinating the Insurgents). The Röhm-Putsch, also known as the Night of the Long Knives, occurred in Germany in 1934 and had significant political ramifications. Adolf Hitler and the Schutzstaffel carried out a purge of the Sturmabteilung (SA) leadership (SS).

1991 failed Soviet coup marked —decisive moment—

The hardliners within the Communist Party assumed power over Gorbachev and orchestrated a coup d'état due to their perception of diminishing authority. Their actions can be seen as a desperate attempt to regain control over the nation and impede Gorbachev's reform agenda.

The coup took place amidst a period of economic and social turmoil in the Soviet Union, which left a significant portion of the populace disenchanted and disheartened with the government. Gorbachev had devised a dual-pronged reform strategy with the objective of modernizing both the Soviet economy and political structure. The prolonged suppression of the freedom of speech and expression resulted in a surge of social upheaval, as a significant number of individuals demanded greater political autonomy and participation in the governance of their nation.

“Nevertheless, their strategy had unintended consequences as widespread protests erupted across the Soviet Union, with the populace mobilizing to demand the liberation of Gorbachev and the reinstatement of democratic governance. Ultimately, the attempted coup d'état was unsuccessful, leading to the dissolution of the Soviet Union on December 31, 1991.

The occurrence of that summer marked the end of a significant era and the beginning of a new chapter in the historical trajectory of Russia. The collapse of the Soviet Union had profound and far-reaching consequences for the international community, as it signified the conclusion of the Cold War and inaugurated a new era of global politics. (2)

Wagners Demands to the State of the Russian Federation...

Who is Yevgeny Prigozhin?

Yevgeny Prigozhin was born on June 1, 1961, in Leningrad (now Saint Petersburg), Soviet Union, has been a subject of interest in academic circles. His mother, Violetta Prigozhina, provided financial support for him and his sick grandmother by working at a nearby hospital, as his father died early.

It is noteworthy that Prigozhin's paternal and maternal lineage can be traced back to Jewish ancestry. During his formative years, he harbored aspirations of becoming a professional cross-country skier and subsequently enrolled in renowned athletics boarding school, from which he successfully completed his studies in 1977.

However, his professional trajectory in sports proved to be unsuccessful in the end. In 1990, Prigozhin commenced vending hot dogs at the Apraksin Dvor open-air market in Leningrad, in collaboration with his mother and stepfather.

Following the dissolution of the Soviet Union, Prigozhin initiated or participated in numerous entrepreneurial ventures. In 1995, Mr. Prigozhin commenced his foray into the restaurant industry.

The mercenary group leader is a key figure in Russia's escalating domestic conflict.

During the conflict in Ukraine, the paramilitary force experienced a significant expansion, with tens of thousands of combatants under its command. Instances of conflict have arisen between Prigozhin and high-ranking military officials in Russia. He has produced videos that challenge Russia's portrayal of a triumphant military campaign. He frequently claims that his forces have played a leading role in the conflict in Ukraine. Additionally, they have expressed doubts regarding the capabilities of the Russian military, specifically directing harsh criticism towards the Minister of Defense, Sergei Kuzhugetovich Shoigu.

“For Prigozhin It is worth noting that Shoigu is known for his close relationship with President Vladimir Putin, whom he considers a trusted confidant. Shoigu was a member of President Boris Yeltsin's inner circle of advisors, like President Vladimir Putin. It is worth mentioning that President Boris Yeltsin was betrayed by his Dauphin, i.e. Vladimir Putin on the same night he was elected premier and this made it unjustifiable that Yeltsin had deposited his succession in his hands four months earlier.

In addition to the criticisms, Prigozhin further escalated tensions in May by releasing a video depicting deceased individuals in military attire and denouncing the leadership for their lack of preparedness.

What is Prigozhin's relationship with Putin?

Putin and Prigozhin hail from the same hometown of St. Petersburg. Putin rose from KGB insider to Russian leader, while Prigozhin served a decade in prison as a teenager before starting a hot dog stand.

During the first decade of the 21st century, Prigozhin established a closer relationship with President Vladimir Putin. In 2003, he left his business partnerships and proceeded to establish independent restaurants. It is worth mentioning that Concord Catering, a company owned by Prigozhin, has been successful in securing multiple government contracts. In 2012, a contract was awarded to him for the provision of meals to the Russian military, with a total value of US$1.2 billion for a duration of one year.

He quickly gained influence in hospitality and caught Putin's attention. Prigozhin earned the nickname "Putin's chef" for assisting in serving state dinners, including one with then-President George W. Bush in 2006, while Putin was in the highest echelons of the Russian government. Putin provided state-funded loans to help Prigozhin open a school-lunch factory. Prigozhin partially owned Concord Management and Consulting, which was suspected of funding pro-Trump trolling during the 2016 election.

What drove Prigozhin's actions?

In a video on Telegram, Prigozhin criticized Russia's leadership for starting the war and admitted that Ukrainian forces were successfully pushing back against the Russian army. On Friday, Prigozhin claimed that Russian military leaders had ordered strikes on his men, resulting in thousands of deaths.

Prigozhin claimed that the war was a chance for scumbags to display their military might and for the defense minister to get promoted.

Russia’s response?

Russian officials launched a criminal probe against Prigozhin for his controversial statement. A Russian military leader warned of a "state coup."

State officials believe that Prigozhin's statement and actions could incite armed civil conflict in Russia.

Who is the much-hated defense minister for Prigozhin?

Serguei Kuzhugetovich Shoigu, the Minister of Defense, is a multilingual individual and a talented artist. He has achieved a remarkable career progression within the communist party, starting from a lower position and advancing to a higher position.

The bad news for Prigozhin is that Shoigu has been close to President Vladimir Putin since 2008, whom he considers a trusted confidant. In addition, he was a member of President Boris Yeltsin's inner circle of advisors, like President Vladimir Putin. Shoigu was born on May 21, 1955, in Chadan, Tuvan Autonomous Oblast, which is his birthplace.

Shoigu has a diverse ethnic heritage. His mother is of Russian origin but has Ukrainian roots, while his father is a newspaper editor with Tuvan ancestry. Alexandra Shoigu resides in Kadiivka. She became a member of the Tuva Regional Council of People's Deputies, and his father was a prominent figure in the Communist power structure of the Tuvan Republic. Everything indicates that Prigozhin miscalculated politically by demanding the removal of such a notorious defense minister.

In this unexpected and extraordinary performance, two political figures take the stage.

If we're talking about two —political animals— with battle scars from the countless political conflicts they've experienced.

The first...

The rise of Recep Tayyip Erdogan…

President Erdogan's rise to prominence is a compelling story that began with modest beginnings of selling lemonade and sesame buns. For an extended period, he has been a vocal proponent of Islamist causes, concurrently demonstrating a proclivity to stifle his detractors and adversaries and assert Turkey's influence as a regional hegemon. Despite causing division within his population, Erdogan has consistently exhibited his proficiency in winning elections, thereby earning him the endearing title of "reis" or "chief" from his devoted followers. The culmination of his political career resulted in his status as a powerful figure, leading Turkey for a period of twenty years.

1. Despite encountering numerous crises and accusations of worsening Turkey's already dire cost-of-living situation, Erdogan has emerged victorious in the 2023 presidential election.

2. Putin-Erdogan relationship complex, involving Russia-Turkey dynamic interplay.

3. A $100 billion deal to…  And all this for what?

The transportation of Gazprom natural gas through a hub in Turkey, which is financed by Russia, as well as the trade of strategic weapons and their mutual participation in conflicts, have substantial implications for both nations and the global political environment.

And what is its goal?

Prevent Finland and Sweden from joining NATO...

Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan convened in Sochi, Russia for a meeting. During these discussions, the two leaders have augmented their partnership and reached a consensus on economic collaboration that has the potential to reach a value of $100 billion.

The current relationship between Erdogan and Putin has elicited concerns from Erdogan's NATO allies, who are apprehensive that Erdogan's actions may provide Putin with a substantial means of circumventing the sanctions that have been imposed against him by the West.

The have raised doubts regarding Erdogan's genuine allegiance, which extends beyond his personal interests.

Despite the existing concerns, the current relationship between Putin and Erdogan seems to be mutually advantageous. Putin derives advantages from the sale of energy and arms, in addition to investment prospects. Furthermore, the affiliation of Russia with a member of NATO offers significant strategic benefits.  Turkey is currently experiencing several benefits, including cash infusions, access to affordable energy, global significance, a vast export market, and apparent support from Russia in its endeavors to quell Kurdish separatism in Syria. It is noteworthy to mention that the two leaders maintain a relationship of both friendship and enmity, commonly referred to as "frenemies," which is of significant magnitude. Both individuals exhibit characteristics of authoritarian leaders, having accumulated significant authority and maintaining a closed circle of advisors. Additionally, they are known for their assertive and uncompromising demeanor. The bilateral relationship between the two nations is contingent upon the rapport established between their respective leaders. It is noteworthy that the discussions held between them are treated with utmost confidentiality.

It is evident that President Erdogan could not passively accept the risk of losing all the geopolitical and economic gains he had obtained from President Putin.

According to reports, during a complex phone call between the Turkish president and his Russian counterpart, it is claimed that the former emphasized the importance of utilizing —common sense—.

The second one is…

Who is Alexander Lukashenko, the President of Belarus?

He has been in power since 1994. Alexander Lukashenko was born in northern Belarus after World War II. His father left the family, leaving him and his mother to fend for themselves. Alexander Lukashenko's early dedication to Leninist ideology led him to attend the Mogilev Teaching Institute after high school.  Before politics, he was in the Soviet Army and directed a state-owned farm. Lukashenko spent three years as a political officer in the Soviet Border Guards after graduation.  Lukashenko married his childhood sweetheart upon returning home. Lukashenko led the Communist Youth Wing's Komsomol. Lukashenko joined a state-owned farm to support his family.

Lukashenko had a successful career managing a construction materials plant and state-run farm complex before becoming a deputy to the Supreme Soviet of the Republic of Belarus. He later chaired an anti-corruption committee.

A year after the Soviet Union's collapse, Lukashenko's anti-corruption stance led to his unexpected win in Belarus' first independent presidential election. Lukashenko has held onto power for decades by relying on his ideological beliefs from his youth,

Europe’s last autocrat leads Belarus. Lukashenko has been president for almost 29 years, starting in July 1994.Lukashenko, 68, started his sixth term after the controversial August 2020 Belarusian presidential election. Western countries deemed the Belarus election fraudulent, leading to widespread protests by hundreds of thousands of Belarusians against Lukashenko's power grab.

“Lukashenko is a close ally of Putin…

Putin offered military support to Lukashenko after the 2020 Belarusian election. Lukashenko backed Russia’s invasion of Ukraine and allowed the Russian military to enter Ukraine through Belarus.

In reciprocity, Lukashenko acts as a mediator..., preventing Russian bloodshed.

Today, Reuters published a note stating that Lukashenko claimed Putin wanted to "wipe out" Wagner chief Prigozhin during a mutiny attempt. And New York Times, post at Russian General Knew About Mercenary Chief’s Rebellion Plans, U.S. Officials Say.

Yevgeny Prigozhin, the head of Wagner, may have believed he had support in Russia’s military.

In response to what the Kremlin portrayed as a mutiny that could have led to civil war, Belarusian President Alexander Lukashenko claimed that he persuaded Russian President Vladimir Putin not to eliminate mercenary leader Yevgeny Prigozhin.

Putin initially promised to put down the mutiny, comparing it to the wartime chaos that led to the 1917 revolution and subsequent civil war. However, a deal was struck shortly afterwards that allowed Prigozhin and some of his fighters to relocate to Belarus. On Tuesday, Prigozhin flew from Russia to Belarus.

During his conversation with Putin on Saturday, Lukashenko used Russian criminal slang, using a phrase that means to kill someone, like the English phrase "wipe out."

I also understood that a harsh decision had been made (which was implied in Putin's address) to eliminate the mutineers," Lukashenko stated during a meeting with army officials and journalists on Tuesday, as reported by Belarusian state media.

"I advised Putin to take his time."

He said to me, "Listen, Sasha, it's pointless." "He refuses to answer calls and avoids all conversations. “Putin used the same Russian verb in 1999 to describe his determination to eliminate Chechen militants, stating that he would "wipe them out in the shithouse."

*These remarks have since become a widely quoted symbol of his strong personality.

*The Kremlin has not yet commented on Lukashenko's remarks, which provide a rare glimpse into the discussions within the Kremlin as Russia, as stated by Putin, faced a level of turmoil not witnessed in decades.

Lukashenko remark at this is the most highly trained unit in the army," quoted Lukashenko by the BelTA state agency.  

"Who would argue with this?"

Later, Lukashenko informed his military that "people do not comprehend that we are taking a practical approach to this... Wagner, who has experienced it firsthand, will provide us with insights on the effectiveness of different weapons - what worked well and what didn't. Prigozhin stopped what he referred to as the "march of justice" on Moscow from the southern city of Rostov-on-Don, which is about 200 kilometers away from the capital, after Lukashenko intervened.

Conclusions:

Based on the information provided in the Reuters and New York Times report, it can be inferred that the current Russian Summer Equinox bears similarities to a "Röhm purge" that is currently in progress.

The definitive outcome of the Russian Summer Equinox provides strong indications regarding the fate of Nicholas II and Rasputin, with a significant level of certainty.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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News Round-Up, August 23, 2023

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By the way, the BRICS summit is ongoing in South Africa…

All five countries have their own agenda of political and economic interests…

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However, there seems to be a "friendly" but intense rivalry between China and Russia over Africa's new colonization.

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Furthermore, Russia's connection with Europe has played a pivotal role in its modernization over the past three centuries. The progress made by Western and Central Europe in science and technology has acted as a crucial catalyst for Russia's development. At this time, BRICS membership is crucial for Russia as it has become increasingly isolated, leading to a desire for closer cooperation and integration. It aims to establish itself as a noteworthy contender on the European platform while preserving its identity as a BRICS member.

Nevertheless, the Ukraine crisis and subsequent imposition of sanctions by the EU notably transformed Russia's relationship with Europe. These incidents led to tense relations defined by mutual mistrust and antagonism. Russia's exceptional stance within the BRICS group regarding matters concerning the EU became more conspicuous during this period.
Russia understands the significance of engaging with the EU, whether positive or negative, as a crucial player in global affairs. The country recognizes the importance of the economic cooperation, trade, and investment shared between the two entities, particularly in Russia's European region, which boasts immense resources and growth potential.

Although Russia's distinctive position within the BRICS group still influences its approach to the EU, it endeavors to balance its BRICS identity with its aspirations of forging closer ties with Europe, such as finding unique solutions to the present conflict. But, Russia must recognize that its relationship with Europe should be based on mutual respect, shared values, and common interests. This aims at overcoming outstanding grievances and establishing a more constructive and productive partnership in the future.

The historical context between Russia and the EU indeed carries immense significance. As the EU remains a vital partner for Russia, establishing an urgent and comprehensive channel for effective communication is of utmost importance. It is essential to remember the wise words of Mr. Henry Kissinger when he spoke about President Vladimir Putin's fondness for Dostoyevsky. By understanding this facet, we can gain valuable insight into Russia's perspective and develop a more nuanced understanding of its actions. Russia must recognize the criticality of the moment and set aside any remnants of imperial pride. It is imperative to end the ongoing foolish war, which has caused numerous casualties and extensive destruction. The gravity of the situation suggests that the recovery process will be lengthy, spanning several years.

Finally, unless an extraordinary event occurs in the current war dispute, the world will be subject to the high interest rates established by central banks. Though deemed a blessing by private banks, these rates provide them with huge profits, raising alarms today for the conservative British government led by Prime Minister Rishi Sunak. This issue is even more pressing given the serious economic crisis currently faced by the country and the entire world.

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Most read…

Mining Companies Want to Turn Scrap Metal Into Green-Energy Treasure

Rio Tinto, Glencore and others seek to burnish environmental credentials, gain competitive edge as energy transition stokes demand for commodities

WSJ By Rhiannon Hoyle  in Adelaide, Australia and Julie Steinberg in London, August 23, 2023 

Solar Boom Spreads to Timberlands and Self-Storage Rooftops

Last year’s climate bill sparked a solar bonanza for big property owners

WSJ by Ryan Dezember, Augus 21, 2023

A Nightmare for Trump's Defense Team: Everything He Says Can Be Used Against Him

Donald Trump and 18 Allies Have Been Indicted in Georgia for Election Interference Scheme 

Vivek Ramaswamy, the millionaire son of Indian immigrants looking to shake up the Republican debate

In the absence of Donald Trump, the entrepreneur is hoping to use Wednesday's televised debate to close in on Ron DeSantis, currently in second place in the polls.

Le Monde by Piotr Smolar (Washington (United States) correspondent), Published today 

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The AES Corporation is committed to accelerating the future of energy transitions by delivering greener and more innovative solutions. AES firmly believes that energy infrastructure plays a crucial role in ensuring the sustainability of our sector. Recently, the AES President and CEO, Andrés Gluski, had the privilege of moderating a captivating discussion titled "Harnessing Diplomacy for the Energy Transition and Universal Access" at the @EEI_Intl panel. This engaging conversation highlights the importance of collaboration and innovative approaches in driving the energy transition forward.

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Lithium-ion batteries are recycled at a Li-Cycle facility in Canada. Recycled lithium could comprise 39% of the global market for the metal by 2050, according to one estimate. PHOTO: CHRISTINNE MUSCHI/BLOOMBERG NEWS

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Mining Companies Want to Turn Scrap Metal Into Green-Energy Treasure

Rio Tinto, Glencore and others seek to burnish environmental credentials, gain competitive edge as energy transition stokes demand for commodities

WSJ By Rhiannon Hoyle  in Adelaide, Australia and Julie Steinberg in London, August 23, 2023 

Some global mining companies are taking their hunt for materials that can power the energy transition to city scrapyards.

Rio Tinto and Glencore GLNCY 1.78%increase; green up pointing triangle have signed deals this year to expand critical metals recycling, branching out from investments over the past decade that involve running giant mines in countries including the U.S., Australia and Congo.

They and others are betting that makers of cars and consumer electronics will increasingly demand sustainably sourced metals for their products. They are also seeking to turn a potential threat from rising scrap-metal supply into an opportunity.

Rio Tinto last month agreed to buy a 50% stake in Matalco, a supplier of recycled aluminum owned by Canada’s Giampaolo Group, for $700 million. Rio Tinto is the world’s second-largest miner by market value and a major producer of aluminum, used to make electric vehicles, solar panels and wind turbines.

Off the Scrap Heap

Increasing demand for critical metals, emissions goals and supply chain concerns are expected ​to boost scrap-metal use.

Source: Wood Mackenzie

Glencore in May agreed with Li-Cycle Holdings to study and create a recycling hub in Europe that could produce enough recycled material for up to 36 gigawatts of lithium-ion batteries annually. It would be Europe’s largest source of recycled battery-grade lithium, cobalt and nickel, according to the companies.

The moves come as the resources sector fights to change investors’ perceptions that mining is problematic and threatens the environment, including by contributing to climate change. The industry’s record on emissions, waste and deforestation is challenging efforts by some companies to get new projects permitted and attract skilled workers.

“You use less energy when you recycle, and you have less impact on nature,” said Jakob Stausholm, Rio Tinto’s chief executive officer. “So I do think that anywhere where we can do that, we should try to do that.”

Miners also see an opportunity for profit. Several decades of industrialization in China is expected to start throwing off more secondhand metal than ever before, which companies hope can be recycled and sold again.

The cost to set up aluminum-scrap processing facilities is typically one-tenth of what is needed to build plants to produce the commodity new, said Wood Mackenzie, a U.K.-based consulting firm.

Policy makers in some parts of the world have set ambitious targets for recycling. The European Union’s executive body this year proposed a goal of getting at least 15% of some critical raw materials from its own recycled sources.

“If you’re not going into recyclability, we will keep on being cannibalized by recycling because the world will see more and more,” said Stausholm.

Globally, 42% of aluminum will be sourced from scrap come 2050, compared with 26% in 2022, Wood Mackenzie estimates. For lithium, recycled metal could comprise 39% of the market by then, from 2% last year.

Some executives say big Western mining companies will need to get involved in scrap-metal supply in some way to stay relevant. But several also highlighted drawbacks, including margins that are typically thinner than running large mining pits.

For BHP Group, the world’s No. 1 mining company by market value, recycling metal doesn’t offer the same scale, returns or require the same skills as its core business digging up commodities such as iron ore and coal in the Australian Outback.

“The fact is, it’s not as easy to do as everyone thinks,” said Duncan Wanblad, CEO of London-based mining company Anglo American, which is looking for partnerships. “It’s not like you can just take a smelter or a refinery that you’ve currently got” and start feeding it scrap, he said.

Many customers still also need new metal. Aluminum made from scrap can have significant impurities that mean it doesn’t meet the standards for some aerospace, electronics and defense products.

Recycling alone can’t fill demand projected for the global energy transition either, miners say. Electric cars and renewable energy infrastructure use several times more copper than gas-powered vehicles and coal plants.

An International Energy Agency report on EV battery supply chains last year estimated another 50 average-size lithium mines, 60 nickel mines and 17 cobalt mines would be required by 2030 to meet climate pledges.

But developing a mine takes time—16 years on average, according to the IEA—and recycled metal has significantly fewer carbon emissions. Recycled aluminum production typically has a carbon footprint five to 25 times lower than new metal, according to Wood Mackenzie.

“Recycling won’t be able to completely substitute mining—that goes without saying,” Emmanuel Katrakis, secretary-general of the European Recycling Industries’ Confederation, said earlier this year. “Yet, recycling is essential to de-risk supply chains and drive sustainability of raw materials, be them base metals or critical ones.”

The recent deals involve partnerships with companies experienced in collecting scrap, sometimes called urban mining—a task that is outside the expertise of miners such as Rio Tinto.

Mining companies that are branching out are so far only really doing so where they have existing smelting or refining processing capacity, said Wood Mackenzie global mining research director Nick Pickens.

Major producers of iron ore and copper are making bumper profits from their existing operations, Pickens said. “And at the moment it doesn’t make a whole lot of sense for them to enter businesses with thinner margins and in which they have limited operating experience,” he said.

Some mining companies already have a sizable foothold. For Glencore, a big player that has been recycling metals for decades, its recent agreement with Li-Cycle shows how the company is positioning for the energy transition. The recycling business contributes between $200 million and $250 million, or less than 1%, to earnings before interest, taxes, depreciation and amortization. Executives expect it to be a multiple of that within five years.

“We see all these tailwinds,” said Kunal Sinha, Glencore’s global head of recycling, pointing to regulatory changes and consumer demand, such as from the fashion industry.

Mark Cutifani, chairman of Brazilian mining company Vale’s VALE 3.17%increase; green up pointing triangle base metals business, says there has been an evolution in the way miners are thinking about their role in the energy transition and a so-called circular economy. Vale’s base metals business spends up to $200 million each year buying scrap for recycling.

Before ending his nearly decadelong tenure as CEO of Anglo American last year, Cutifani told The Wall Street Journal that miners needed to start talking more about being materials suppliers and not just about digging.

“Are you a stagecoach company,” he said, “or are you in transportation?”

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Extra Space Storage had solar systems at 55% of its wholly owned properties at the beginning of the year. DAVID SWANSON/BLOOMBERG NEWS

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Solar Boom Spreads to Timberlands and Self-Storage Rooftops

Last year’s climate bill sparked a solar bonanza for big property owners

WSJ by Ryan Dezember, Augus 21, 2023

The U.S. solar boom has electricity producers popping up in unusual places: self-storage buildings, Southern pinelands, even outlet malls.

Solar development has surged since last year’s climate and healthcare bill, which boosted tax breaks for renewable-energy projects. In the year since the bill became a law known as the Inflation Reduction Act, U.S. companies have announced plans for more than $100 billion of domestic projects, including solar installations, energy storage systems and panel factories, according to a report by the Solar Energy Industries Association and research firm Wood Mackenzie.

Solar installations made up 35% of all new utility-scale generation capacity in the first half of the year, according to the Energy Information Administration. It expects the U.S. to add 25.2 gigawatts of solar capacity in 2023, enough to power upwards of five million homes and more than from new wind, natural gas and nuclear generation combined.

That doesn’t count small-scale installations, often on rooftops, which account for about a third of U.S. solar output, the EIA estimates. Those are proliferating, too.

Cumulative new U.S. generating capacity

Source: U.S. Energy Information Administration
Note: Utility-scale; July through December is planned.

Greater solar-generating capacity has helped keep prices for natural gas and coal down this summer and power bills in check despite all the electricity needed for air conditioning. When triple-digit temperatures baked Texas last month, record solar production in the state kept its least efficient natural-gas plants offline and held local fuel prices below the national benchmark. 

Development plans could be scuttled by the difficulty of adding long-haul transmission lines, legislators who favor fossil fuels, rising prices for renewable power and supply-chain problems. 

But tax breaks that can add up to 70% of development costs and market share left by retiring coal plants and inefficient gas-burners have solar developers looking for places to tilt photovoltaic panels toward the sun.

They are finding receptive hosts among the country’s biggest property owners, such as timber companies PotlatchDeltic PCH 0.86%increase; green up pointing triangle and Weyerhaeuser WY 0.86%increase; green up pointing triangle and self-storage giants Extra Space Storage EXR -0.65%decrease; red down pointing triangle and Public Storage PSA 0.16%increase; green up pointing triangle, which have thousands of acres of rooftops.

A solar developer paid PotlatchDeltic about $7,500 an acre, a $14 million total, last year in the forest-product company’s first deal. The price was roughly 10 times greater than what the land was worth growing trees. Plus, the trees had to go, so PotlatchDeltic made its usual money on the logs.

The company now has about $200 million of land sales and leases lined up with solar developers on roughly 20,000 acres and is searching its 1.6 million acres in the Southern U.S. for additional sites near transformers and high-voltage lines, Chief Executive Eric Cremers said.

Those deals will take roughly 1% of the company’s land out of wood growing, but the $200 million amounts to about 4% of the value of its stock and debt, Cremers told investors on a call earlier this month. “That’s a pretty good trade,” he said.

Weyerhaeuser, America’s largest private landowner, expects its first utility-scale solar project to go online at year-end and is scouting locations for more, a spokesman said. 

Rayonier RYN -0.10%decrease; red down pointing triangle, another big timber owner, has long-term leases and options with solar developers on about 26,000 acres in six Southern states, including Texas, where workers are installing an array on 583 acres, said CEO David Nunes. Before striking deals, Rayonier studies the financial and environmental trade-offs of replacing its pine plantations with solar farms. 

“The efficiency from an emissions-reduction standpoint is so high because you’re basically replacing coal-fired or natural-gas-fired electric generation,” Nunes said. “It’s many times more beneficial than the lost carbon sequestration you would otherwise be getting growing timber.”

In towns and cities, where there is much less room than in the rural South, solar developers are covering the roofs of self-storage buildings.  

Extra Space started the year with solar systems at 55% of its wholly owned properties and many more on the drawing board.

Public Storage has about 150 million square feet of vacant rooftop space—more than 3,400 acres—and needs only about 15% of it to generate enough electricity for its own needs. An initiative is under way to put panels on another 1,000 roofs by 2025.

“That’s an important program to offset our utility costs, lower our carbon emissions and to drive rental income from the vacant rooftops,” Public Storage finance chief Tom Boyle told portfolio managers at a recent real-estate investing conference.

Source: U.S. Energy Information AdministrationNote: Solar includes small- and utility-scale.

Public Storage said this month that it would install arrays at 133 properties in Maryland, New Jersey and Illinois and make discounted power available to nearby low- to moderate-income households, projects that are encouraged by the climate bill with additional tax credits. Extra Space has a similar program in New Jersey. 

At Tanger Factory Outlet Centers SKT -1.08%decrease; red down pointing triangle, more than a million square feet of solar panels share rooftops with gardens and beehives, all part of the outdoor-mall operator’s effort to appeal to green investors and environmental-minded customers while cutting its utility bills. 

The power is used on site, and Tanger expects to have enough installed by the end of next year to offset 20% of its energy consumption, said operations chief Leslie Swanson. 

Tanger used to lease its rooftops to developers, she said, but has lately installed its own arrays atop malls in Florida, Texas and Arizona, and it also shaded the Arizona parking lot with panels.  

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Just Exceptional...

“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced…

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Illustration by Germán & Co.

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A Nightmare for Trump's Defense Team: Everything He Says Can Be Used Against Him

Donald Trump and 18 Allies Have Been Indicted in Georgia for Election Interference Scheme 

TIME BY ERIC CORTELLESSA, AUGUST 21, 2023 

At some point last week, Donald Trump’s lawyers got through to him. One day after a Georgia grand jury indicted him for trying to overturn the 2020 election, the former president announced on Tuesday that he would hold a press conference the following week to rebut the charges. The plan didn’t last for long. By Thursday, the whole thing was nixed. "My lawyers would prefer putting this, I believe, Irrefutable & Overwhelming evidence of Election Fraud & Irregularities in formal Legal Filings as we fight to dismiss this disgraceful Indictment," Trump wrote on Truth Social.

In other words, Trump’s attorneys seemingly convinced him of one of his most sacred rights as a criminal defendant: Mr. President, you have the right to remain silent.

But while his legal team may have dodged a bullet, for now, the problem isn’t going away. Trump is famous for his impromptu and incendiary pronouncements, whether through his rambling speeches or his social media tirades. Over the course of a long and arduous campaign, he will have ample opportunity to pontificate on his many prosecutions, meaning his lawyers, in all likelihood, won’t be able to protect Trump from himself for long. “No one has been able to manage Donald Trump, including Donald Trump,” says Whit Ayres, a veteran GOP strategist. “The effort to do so is virtually hopeless. I can't imagine being his defense attorney in one of these trials. You'd have to drink a case of Maalox every morning just to get through the day.”

Still, Trump has proven himself adept at turning scandal into political advantage. His mastery of survival and showmanship could help him clinch the Republican nomination—with each indictment, he has soared only further in the polls—but it also comes with a distinctive risk, as Trump’s comments could potentially be used against him in court.

“I think that the statements he's making can, and likely will do, substantial damage to him,” says Norm Eisen, who served as counsel for House Democrats on Trump’s first impeachment. “Additional statements can incriminate you. They can be the basis of worsening existing charges or superseding charges. They can be utilized as admissions while the trial is being prosecuted, whether or not Trump testifies. They run the risk of witness intimidation or harassment, which violate the terms of release for federal and state law.” 

Attorneys for Special Counsel Jack Smith have already alerted the judge overseeing the federal election subversion case against Trump about a Truth Social post that appeared to threaten prospective witnesses. “If you come after me, I’m coming after you,” Trump wrote in all caps. While Trump’s campaign insisted the post was meant as a warning to the former President’s political enemies, it was written in a way that left his intent open to interpretation. That kind of language from Trump could also become a problem for him in Georgia, where the conditions of a new $200,000 bond agreement stipulate that he refrain from intimidating a witness or co-defendant, including on social media.

It’s a dynamic that reveals the double-edged nature of Trump’s ploy to consolidate his political and legal strategies. “I think they're going to have a field day, because any prosecutor would tell you there are few things more powerful than using a defendant’s own statements in court,” says Temidayo Aganga-Williams, a former federal prosecutor who was a staff member on the Jan. 6 Committee. “You would tell jurors to act like this is any other person—if this were your son, your brother, your co-worker.” 

Trump has cast the four separate indictments against him as a partisan witch-hunt to stop him from reclaiming the White House. In both the federal and Georgia cases that allege he knowingly spread lies of election fraud to stay in power, Trump’s attorneys have argued that he was acting within his First Amendment rights to challenge the election outcome. They also insist that Trump believed his own claims and was therefore not operating with criminal intent. 

But while his lawyers are trying to exonerate him in court, his campaign has been using his predicament to capitalize on the campaign trail, sending out a stream of fundraising blasts after each arraignment and selling merchandise with fake Trump mug shots. The tactic has worked; the former President is currently leading the GOP field by 30-to-40 points in most surveys. “President Trump is dominating every single poll—both nationally and statewide—and his numbers keep going up,” Steven Cheung, a spokesperson for the Trump campaign, tells TIME. “The latest polls conducted after the last indictment show the American people are standing firmly with him against out-of-control Democrats.” 

Trump’s grip on the Republican base is one reason why most of his opponents haven’t attacked him over his legal woes. Instead, they seem to have made a calculation that the myriad prosecutors bringing criminal charges against Trump in the middle of an election year present the greatest threat to his Oval Office aspirations. A looming question that will be hanging over the first GOP primary debate Wednesday night is whether any of these cases will be resolved before voters head to the polls next year. 

Smith has requested the election case go to trial in January, while the federal judge overseeing the Mar-a-Lago documents case has already set a trial date for May 2024. Former prosecutors suspect that Smith is trying to move these cases along swiftly to avoid the possibility that Trump could put an end to them should he win the election, either by attempting to pardon himself or appointing an attorney general to squash the matter altogether. The Justice Department’s long-standing policy of avoiding even the appearance of interfering in an election adds another level of urgency to bring these cases to a conclusion.

Fani Willis, the Fulton County District Attorney, has more latitude. As a state prosecutor, she operates independently of the federal government, which allows her to keep prosecuting Trump even if he’s the sitting President of the United States. That helps to explain why she’s pursuing a more sprawling and complicated case, bringing racketeering charges against Trump and 18 allies with whom he allegedly conspired to nullify Joe Biden’s election victory. It may well be another reason why Trump’s lawyers tried to put the kibosh on his planned press conference, in which he was expected to propagate the disproven election fraud claims that sit at the heart of the Georgia indictment.

“In my more than three decades principally acting as a criminal defense lawyer,” Eisen says, “the first instruction I gave my client at the very first meeting was: Shut up about this case. Do not talk to anyone. You do not know how that is going to come back to harm you.” 

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Entrepreneur and U.S. Republican primary candidate Vivek Ramaswamy, in Atlanta, Georgia, August 19, 2023. CHENEY ORR / REUTERS

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Vivek Ramaswamy, the millionaire son of Indian immigrants looking to shake up the Republican debate

In the absence of Donald Trump, the entrepreneur is hoping to use Wednesday's televised debate to close in on Ron DeSantis, currently in second place in the polls.

Le Monde by Piotr Smolar (Washington (United States) correspondent), Published today 

The cards are stacked. It's over before it even begins. They may as well call Republican primaries a wrap. This is what Donald Trump would like to have us believe when justifying his refusal to join the Republican primary debate. The former US president will not be taking part in the first televised debate between the contenders of his camp in Milwaukee, Wisconsin, on Wednesday, August 23 (to be aired by Fox News). Nor will he take part in the next one, due to be held on September 27. Trump's explanation is that Republican voters already know him and that his lead over his main rival, Florida Governor Ron DeSantis, is irreversible. It stood at 46 points on Sunday, according to a CBS News poll.

Over the course of the summer, one indictment after another has been brought against the former president yet not one of his rivals has used this to their advantage. Trump is therefore taking the – fairly limited – risk of letting others talk about him, in front of the cameras, as he prepares to appear on Thursday before a judge in Fulton County, Georgia, for his key role in attempting to interfere with the 2020 presidential election. No other Republican candidate has been able to offer a credible alternative. With so many contenders, the debate is likely to resemble a public speaking competition for second place. Among the candidates, only newcomer Vivek Ramaswamy has drawn the interest of commentators, particularly because he symbolizes the party's transformation.

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News Round-Up, August 22, 2023

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China's Economic Dilemma: An “Insatiable Dragon” at a Crossroads

By Germán & Co, Karlstad, Sweden, August 21, 2023.

China, renowned as the "insatiable dragon," has undoubtedly emerged as a global economic powerhouse. However, the present epoch has witnessed the emergence of formidable challenges that have compelled this mighty dragon to reassess its position on the world stage. A combination of factors, including an ailing economy, the impact of the COVID-19 pandemic, and Russia's invasion of Ukraine, have shaken China's long-held wisdom of presenting itself as a Maoist nation embracing capitalism. China's economic success has been driven by its manufacturing, exports, and investment. Its ability to balance socialism and capitalism has been a critical factor in its meteoric rise as an economic superpower.

However, recent times have tested its adaptability. The COVID-19 pandemic has hit China hard and revealed vulnerabilities in its economic and political systems. The substantial disruption to global supply chains and decreased consumer spending and investment inflicted a severe blow on China's economy. The formerly smooth flow of goods and services ceased, affecting domestic production and decelerating economic growth. China's impressive manufacturing system encountered obstacles as factories closed and trade volumes dropped.

Additionally, the crisis in Ukraine and Russia's invasion caused a ripple effect throughout the international community. China finds itself in a challenging position, trying to maintain a delicate balance in its diplomatic maneuvering. Historically, China has followed an ideology rooted in communism while gradually adopting the principles of capitalism. However, this balancing act has become increasingly difficult as geopolitical tensions have risen.

The Russian invasion in Ukraine has compelled China to review its foreign policy strategy, especially regarding its economic interests in the region. China's pursuit of natural resources and energy supplies, critical for fueling its economic growth, has consistently influenced its foreign policy decisions. However, China now finds itself walking a diplomatic tightrope as it must balance the need for energy resources with concerns regarding Russia's actions and international condemnation.

These recent challenges have brought ambiguity about China's conventional wisdom of projection as a totalitarian state with an aspiration to be a prosperous capitalist country. While traversing through uncharted waters, China encounters a deeply entrenched predicament.

"Does it sustain prioritisation of economic expansion and global dominance, or does it shift its focus towards re-establishing the significance of socialist principles and self-sufficiency?"

China may be either tacitly supporting Russia's actions or carefully calculating its response to protect its interests. Amidst these uncertainties, an interesting development has arisen on the global political stage. Meanwhile, a senior statesman with extensive political knowledge has emerged and poses a significant challenge to China's leader, Xi Jinping. The veteran's expertise and experience may prove to be a valuable asset in navigating these complex geopolitical waters.

Meanwhile, an elderly gentleman with deep political knowledge has emerged to pose a formidable challenge to China's leader, Xi Ping. The veteran US president has become a cruel nightmare for President Xi Ping and many autocratic leaders around the world.

The American president is a charismatic figure with a proud Irish heritage and the ability to connect with people on a personal level. Despite his powerful position, he remains humble and approachable, breaking down the barriers between world leaders and their constituents. But do not be fooled by his gentle touch and affable disposition. There is a fire in this President, a passion that burns with all the fervor of the Irish spirit. When confronted with injustice or the need for swift action, he is not afraid to bang the table and demand immediate attention and resolution. The strength and determination of his actions leave no doubt that he will fight for what he believes in, regardless of the consequences.

Xi Jinping is well aware of his nature.

Nevertheless, these are the penultimate words in a wild, dangerous, ridiculous, unbelievable world struggling to find a way out of a geopolitical crisis that is still not in sight.

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Most read…

China’s blueprint for an alternative world order

Beijing is using its economic muscle to rally developing countries and reduce the west’s influence over the UN

Financial Times by James Kynge in London, now.

The BRICS Club of Emerging Nations Debates Letting Others In

China wants to expand the five-nation bloc, but the members’ conflicting interests may get in the way.

NYT By David Pierson, Lynsey Chutel, Jack Nicas, Alex Travelli, and Paul Sonne, today.

Exclusive: Northvolt raises $1.2 billion in latest funding round for factory build out - CFO

REuters By Supantha Mukherjee and Simon Jessop, August 22, 2023

Japan to Release Treated Water From Ruined Nuclear Plant Despite Concerns

In the face of regional and domestic objections, the country plans to proceed with a discharge at Fukushima that will eventually reach more than a million tons of water.

NYT by Motoko Rich and Hisako Ueno, reporting from Tokyo and Iwaki in Japan, published August 21, 2023.

The tragedy of the Venezuelan migration crisis

IN ONE IMAGE: The Steepest Hill

When I first met Mr. Arias, something extraordinary was happening.

NYT By Federico Rios, Today

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The AES Corporation is committed to accelerating the future of energy transitions by delivering greener and more innovative solutions. AES firmly believes that energy infrastructure plays a crucial role in ensuring the sustainability of our sector. Recently, the AES President and CEO, Andrés Gluski, had the privilege of moderating a captivating discussion titled "Harnessing Diplomacy for the Energy Transition and Universal Access" at the @EEI_Intl panel. This engaging conversation highlights the importance of collaboration and innovative approaches in driving the energy transition forward.

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Illustration: "The insatiable dragon" by Germán & Co. Copyright.

China’s blueprint for an alternative world order

Beijing is using its economic muscle to rally developing countries and reduce the west’s influence over the UN

Financial Times by James Kynge in London, now.

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When Xi Jinping, China’s leader, delivered an “important speech” at the UN in September 2021, it appeared to be little more than a list of feelgood clichés. He said that the world needed “harmony between man and nature” and added that economic development should bring “benefits for all”.

So short on specifics was his address that the international media mostly ignored it. Through subsequent elaborations, however, that speech has taken on a crucial significance. This is because Xi used it to propose a new scheme called the Global Development Initiative, which is now gaining recognition as a foundation stone in China’s blueprint for an alternative world order to challenge that of the US-led west.

Ostensibly, the GDI is a Chinese-led multilateral programme to promote development, alleviate poverty and improve health in the developing world. But along with two follow-up initiatives also announced by Xi — the Global Security Initiative and the Global Civilisation Initiative — it represents China’s boldest move yet to enlist the support of the “global south” to amplify Beijing’s voice on the world stage and build up China’s profile in the UN, Chinese officials and commentators say.

“[Xi’s initiatives] show China’s clearest intention yet to update the rules of global governance that were written by the collective west in the aftermath of world war two,” says Yu Jie, senior research fellow at Chatham House, a think-tank in London.

“The initiatives illuminate Beijing’s moves to carve out its own space in international affairs because it is firmly convinced that China’s relations with the collective west will remain turbulent for a decade to come,” she adds.

The key to China’s blueprint is to steadily institutionalise its leadership over the developing world by creating, expanding and funding a raft of China-led groupings of countries, according to Chinese officials and commentators. They add that the aims of this strategy are largely two-fold: to ensure that a broad swath of the world remains open to Chinese trade and investment and to use the voting power of developing countries at the UN and in other forums to project Chinese power and values.

The crucial context to this strategy is that by seeking increased leadership over the global south, China is throwing in its lot with the largest and fastest-growing part of the world. The 152 countries classified as developing at the UN vastly outstrip their developed counterparts on yardsticks such as population size and population growth, GDP growth rates over the past two decades and overall contribution to global GDP growth as measured by purchasing power parity.

For the first time ever, China exported more in the early part of this year to the developing world — as represented by the countries that make up the Belt and Road Initiative — than it exported to the US, EU and Japan combined (see chart), according to data collected by Dongwu Securities, a Chinese brokerage.

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China exports more to developning world than US and Japan

% of Total Chinese Exports in 2023 up to April.
Source: Wind, Dongwu Securities
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“China will always be a member of the family of developing countries,” Xi told a forum in 2021. “We will continue to do our utmost in raising the representation and voice of developing nations in the global governance system.”

The list of international institutions in which Beijing hopes to magnify its influence and, by extension, that of the developing world is getting longer. It includes the UN, the World Trade Organization, the G20 and others, Chinese officials say. In addition, Beijing also intends to expand the membership and raise the profile of several groupings in which it already plays a leading role, including the Shanghai Cooperation Organisation, the Brics group and others.

“We should not take the Chinese Communist party’s endeavours to establish a new world order lightly,” says Xu Chenggang, senior research scholar at Stanford University’s Center on China’s Economy and Institutions. “Developing countries with authoritarian regimes, particularly those in conflict with the US and other democracies, are finding that China’s new order is beneficial to their domestic authoritarian rule and their foreign policy,” he adds.

Multilateralism with Chinese characteristics

The UN — with its 15 specialised agencies that exercise global governance in several areas such as finance, telecoms, health and hunger alleviation — lies at the “very centre” of China’s worldview and its plans to boost its influence, says one senior Chinese official, who declined to be identified.

It is also a focus of Beijing’s attempt to gain influence through Xi’s three initiatives. The most important move so far has come in the form of a new UN forum that China founded in 2020. Called the “Group of Friends of the Global Development Initiative”, it has about 70 member countries, has held its first ministerial meeting and has won the endorsement of UN secretary- general António Guterres, according to official Chinese documents.

The full list of member countries in the group is confidential, a UN spokesperson and Chinese officials say. However, a list compiled by the Financial Times of 20 countries believed to be members, shows that the group includes many of China’s biggest debtors under the BRI. Through the initiative, Chinese financial institutions have lent nearly $1tn mainly for infrastructure projects in the developing world since 2013.

A study by AidData, a US-based research lab, shows that the 20 countries on the list have displayed impressive loyalty to China in the form of votes at the UN. Between 2013 and 2020, each of them have voted with China on at least 75 per cent of occasions in the UN General Assembly (see chart), the main policymaking body which issues recommendations on global crises, manages internal UN appointments and oversees the UN’s budget.

In the case of Cambodia, Pakistan, Tajikistan, Uzbekistan and Zimbabwe — all of which owe hefty debts to China — their voting alignment with China in the assembly registered at 80 per cent or above, according to the research.

The correlation between increased lending and greater voting fealty was consistent across the sample. “When countries vote with China in the UN General Assembly, they are richly rewarded,” says Bradley Parks, executive director of AidData. “Beijing is dusting off an old playbook and using its largesse to purchase foreign policy favours.

“On average, a 10 per cent increase in voting alignment with China in the UN General Assembly yields a 276 per cent increase in aid and credit from Beijing,” he adds, quoting AidData’s research on voting patterns over the period from 2013 to 2020.

These correlations do not prove that countries vote with China purely because of the debts they owe. Several other factors may also be in play such as political allegiances, trade and investment ties and agendas common to developing countries.

Nevertheless, such loyalty represents a resource that China can draw on in future UN votes, says Courtney Fung, a UN expert at the Lowy Institute, a think-tank based in Australia.

“China can harness these relationships in UN votes or debates to support and underline just how well-accepted China’s positions are within the UN system,” Fung says.

One focus of China’s UN strategy is lobbying. If Beijing can secure the allegiance of the majority of 152 developing countries — out of 193 UN member states — it stands to prevail and correspondingly amplify its voice in world affairs, Chinese officials say.

Recent general assembly resolutions have covered a gamut of issues, including financing for peacebuilding, pandemic prevention and a “new partnership” for Africa’s development.

But, as China’s recent experience shows, it is not only in the broadest forums such as general assembly where the votes of developing countries loyal to China have turned out to be crucial.

In October last year, the UN Human Rights Council voted down a western-led motion to hold a debate on China’s human rights abuses after a cohort of developing countries backed Beijing. The council has 47 members, of whom 19 voted against the motion, 17 for and 11 abstained.

It was only the second time in the council’s 16-year history that a motion had been rejected. But what made the defeat even more extraordinary was that it came just weeks after a finding by the UN Office of the High Commission for Human Rights that “serious human rights violations” had been committed by Beijing against Muslim minorities in Xinjiang, a region in north-west China.

Following that victory, China then enlisted 66 countries — most of them recipients of Chinese lending under the BRI — to support a statement at the UN praising its human rights record. Its signatories outnumbered the 50 mostly western countries that endorsed a rival statement which condemned China.

Beyond such one-off battles, China is starting to use the “Group of Friends of the Global Development Initiative” to promote its own definitions of key concepts in an effort to undercut those used by the US-led west. One of these is “true multilateralism”, which it defines as equal status for all countries. The whole idea of [China’s definition of] multilateralism is to oppose what Beijing sees as American hegemony

This vision is distinct from what China sees as the abuses of the US-led world order, which it characterises as “bloc politics under the disguise of multilateralism” or attempts to impose the “rules made by a few countries” under the pretext of multilateralism, according to an official Chinese document.

“The whole idea of [China’s definition of] multilateralism is to oppose what Beijing sees as American hegemony,” says Collin Koh, senior fellow at the Institute of Defence and Strategic Studies at the Nanyang Technological University in Singapore.

Another key Chinese strategy is to present itself as a global peacemaker, partly to counter the repetitional damage it suffered when its strategic partner, Russia, invaded Ukraine last year. Crucial to this ambition is the Global Security Initiative (GSI), which was launched this year by Xi and is designed as a China-led multilateral forum.

Its aim is to wrest influence away from the US on global security issues while elevating its own role, officials say. Part of the strategy to achieve this is to call for a “bigger UN role in security affairs” while expanding Beijing’s own role within the UN peacekeeping hierarchy.

This focus on the UN echoes that of the GDI and highlights a crucial feature of Xi’s three initiatives: rather than seeking to create a whole new world order, Beijing’s aim is to repurpose the UN’s authority to more squarely serve China.

China is the second largest contributor — after the US — to the UN’s peacekeeping budget and it supplies more UN peacekeeping troops than the other four permanent members of the UN Security Council combined, according to Courtney Fung’s research. Over a dozen Chinese officers have had top military posts in the UN’s Department of Peace Operations, a foundation stone in the UN architecture, Fung adds.

Although the DPO has been led by French officials since 1997, Beijing hopes that in time one of its officials will be chosen either to lead the DPO or one of its three main offices, Chinese officials say. Chinese peacekeepers deployed by the UN Mission in South Sudan patrol the UN Protection of Civilians site in Juba in 2016.

For Beijing, the prestige it accords UN peacekeeping is part of a bigger push to align itself with the cause of peace. In March, it brokered a landmark deal between Saudi Arabia and Iran, ending a seven-year rift. In May, Xi proposed a four-point plan aimed at working towards peace between Israel and the Palestinian Authority.

Officials from Beijing also attended a forum held this month in Saudi Arabia on resolving the conflict in Ukraine. European officials told the FT that China’s participation had been “constructive” and said that Beijing had signalled its willingness to attend further talks.

Institutional expansion

In spite of its official adherence to “true multilateralism” — the concept of equal status for all states — China has a complex position on reforming the UN. It relishes its position as one of the five permanent members — along with the US, UK, France and Russia — of the UN Security Council “P5”, which allows it to veto resolutions. ç

It is understood to be open to the idea of expanding the permanent membership from the current five. But it privately opposes the inclusion of Japan and India, both of which are strategic rivals to China, according to diplomats, who declined to be identified. This opposition in effect stymies a proposal to accept the “G4” — Germany, Brazil, India and Japan — as permanent members.

To Collin Koh, this stance lays bare the hollowness of China’s claim to want to bring true multilateralism to the UN decision-making process. “I don’t think China is trying . . . to devolve major decision-making authority from the P5,” Koh says. “But of course this would not stop Beijing from continuing to put itself up as the unwavering, faithful leading advocate of the global south.”

Beyond the UN, China has a raft of plans to boost the participation of developing countries in international forums and, in so doing, to bolster its own standing.

In the G20, which Beijing treats as a key forum to engage with the west, China became the first country last year to push for membership for the African Union, which comprises 55 member states from the continent. If membership is granted at a summit scheduled for September in New Delhi, the G20’s membership will expand to 21 and developing world representation will grow close to parity with that of the developed world.

China is also hoping to expand the Brics group beyond its current members — Brazil, Russia, India, China and South Africa — so that it becomes a counterweight to the G7, a group of developed powers. More than 20 countries have submitted applications to join the grouping at a summit this week in South Africa, diplomats said.

Another multilateral organisation in the throes of expansion is the Shanghai Cooperation Organisation, a security grouping founded by China that has nine countries as full members and is due to absorb Belarus as its tenth. Four of the members — China, Russia, India and Pakistan — are nuclear powers and Moscow sees the group “as the core of a China- and Russian-led anti-western bloc,” according to a paper from the European Council on Foreign Relations think-tank.

Nevertheless, the SCO’s membership also betrays a common flaw with Chinese multilateralism. The opaque parameters it uses to launch its initiatives and institutions allows countries to look past the rivalries they have with others in the group. But it does nothing to heal the rifts.

Thus the SCO embraces both Pakistan and India, which acknowledge their mutually hostile ties. India’s relationship with China itself is also tense on several fronts.

“The vague language of most of the initiatives made it easy for countries to pay lip service to them. China could then point to this rhetorical support as evidence that a large number of countries backed its world view,” says Yun Sun, director of the China Program at the Stimson Center, a think-tank in Washington.

“However, these countries would only be willing to accommodate China’s demands up to a certain point. When push came to shove, they would follow their own interests,” she adds.

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Source: NYT, BRICS leaders in Brasília in 2019.Credit...Ueslei Marcelino/Reuters

The BRICS Club of Emerging Nations Debates Letting Others In

China wants to expand the five-nation bloc, but the members’ conflicting interests may get in the way.

NYT By David Pierson, Lynsey Chutel, Jack Nicas, Alex Travelli, and Paul Sonne, today.

The journalists, who cover the BRICS nations, reported from Hong Kong; Johannesburg; Rio de Janeiro, Brazil; New Delhi, India; and Berlin.

The group of nations known as BRICS — Brazil, Russia, India, China and South Africa — represents 40 percent of the world’s population and a quarter of the world’s economy. Now it is considering expanding, in a push to be seen as a credible counterweight to Western-led forums like the G7 group of advanced nations.

But the challenge for the club is that it is as divergent as it is large, and hindered by sometimes conflicting interests and internal rivalries. It comprises the world’s largest authoritarian state (China) and its largest democracy (India), economies big and small, and relations with the United States that run the gamut, from friend to foe.

China, under Xi Jinping, wants to expand BRICS, seeing in it a platform to challenge American power. Russia is keen to demonstrate that Moscow has loyal allies despite its isolation from the West over the war in Ukraine. India, locked in a territorial dispute with China, is wary of Beijing’s dominance in the club.

Brazil and South Africa, the other swing states of the developing world, want good relations with China and Russia, but not to be overly aligned with either, for fear of alienating the United States.

As leaders of the five nations meet starting Tuesday at an annual summit, this time in Johannesburg, how they navigate those differences might determine whether the group becomes a geopolitical coalition or remains largely focused on financial issues such as reducing the dominance of the dollar in the global economy.

The task of finding common ground is only getting harder as the great power competition between Beijing and Washington intensifies, placing pressure on other nations to choose sides. And as Russia’s war in Ukraine grinds on, the conflict is roiling food and energy prices for many of the poorer countries that BRICS members claim to represent.

“China under Xi is looking to use BRICS for its own purposes, particularly in extending its influence in the Global South,” said Steve Tsang, the director of the SOAS China Institute in London. “India is highly unlikely to go along with it as the Chinese proposal will turn BRICS into something else — one which will serve primarily Chinese interests.”

Dozens of countries have expressed interest in joining the club. They include countries that fall squarely in the Chinese camp, like Iran and Belarus, and nonaligned states such as Egypt and Kazakhstan, reflecting a desire to hedge between China and United States in the face of geopolitical polarization.

The question of expansion will be leading the agenda of the three-day summit, to be attended in person by President Xi of China, Prime Minister Narendra Modi of India, President Luiz Inácio Lula da Silva of Brazil and President Cyril Ramaphosa of South Africa.

President Vladimir V. Putin of Russia is expected to take part remotely. Mr. Putin, who is wanted by an international court that has accused him of war crimes, had earlier planned on attending in person. He decided against it, sparing South Africa the dilemma of whether to arrest him.

China, which as the biggest economy in the group holds significant clout, will want to use the club to show that Beijing has its own circle of influence, after President Biden held a summit strengthening alliances last week with Japan and South Korea, nations in China’s backyard.

Beijing favors a rapid expansion of BRICS, which would also allow China to argue it has widespread support from the developing world.

“The Global South is not happy about the G7 trying to represent them, so they’re voting with their feet to join BRICS,” said Henry Huiyao Wang, president of the Center for China and Globalization in Beijing.

India has signaled that it prefers a more cautious approach that would limit Beijing’s ability to use the BRICS club to confront the West. It will want to avoid diluting its own role in favor of countries that might pick China over India in any tussle for influence.

Prime Minister Narendra Modi of India, right, welcoming President Abdel Fattah el-Sisi of Egypt, center, is watched by India’s president, Droupadi Murmu, left, in New Delhi, in January.Credit...Manish Swarup/Associated Press

India’s divergence with China reflects wider tensions and distrust between the two countries that were inflamed by a deadly border clash in 2020 and by India’s participation in a security grouping with the United States, Japan and Australia called the Quad.

India has emphasized that it is open to enlarging BRICS in principle, but wants to develop standards for deciding on new members, and to ensure that any changes are based on consensus.

Brazil has a similar position on the acceptance of new members.

“If they comply with the rules that we are establishing, we will accept their entry,” President Lula of Brazil told reporters this month.

Some of the requirements likely to be discussed include a minimum population or gross domestic product, as well as a willingness to work with the bloc’s New Development Bank, said one Brazilian government official helping plan for the talks who is not authorized to speak publicly and spoke on the condition of anonymity.

Brazil wants the group to remain a club of large, emerging economies rather than a geopolitical alliance that could be perceived as an anti-Western bloc, said a second Brazilian official helping to plan for the talks.

Mr. Lula said he supported at least three countries joining BRICS: Saudi Arabia, the United Arab Emirates and Argentina. He also suggested that Indonesia, which is widely seen as a natural fit given its size and location, would be a welcome addition.

An expansion, though, could make consensus in BRICS even more elusive. “When you have more countries join, and it’s such a disparate group to begin with, it’s harder to get anything accomplished,” said Theresa Fallon, director of the Center for Russia Europe Asia Studies in Brussels.

From Russia’s perspective, the summit will provide an opportunity to court the developing world again, after Mr. Putin hosted African leaders in St. Petersburg this summer.

President Vladimir V. Putin of Russia, and President Cyril Ramaphosa of South Africa, onscreen, seen during the second Russia-Africa summit in St. Petersburg, last month.Credit...Vladimir Smirnov/Tass, via Agence France-Presse — Getty Images

But the foreign minister of Russia, Sergei V. Lavrov, who will travel to South Africa in Mr. Putin’s place, will likely face questions about why Russia pulled out of a United Nations-brokered deal with Ukraine that allowed the export of grain through the Black Sea. Food prices jumped after the collapse of the agreement.

BRICS members have struggled to show consensus on Russia’s war in Ukraine: China has leaned toward the Kremlin, while India has relied on a strategy of nonalignment. Brazil has offered rhetoric but little action.

South Africa, the group’s smallest member in terms of population and economy, has faced international and domestic criticism for its close ties to Moscow.

South Africa made a show of its neutrality when its president, Mr. Ramaphosa, led a peace mission of African leaders to meet with Mr. Putin and President Volodymyr Zelensky of Ukraine last month. Still, those talks are yet to yield tangible results.

South Africa bowed to Western pressure when it asked Mr. Putin to attend the summit virtually because of his arrest warrant. But the country is still trying to assert itself, defying what it sees as arm-twisting from the West to isolate Russia. Zaheer Laher, an official in South Africa’s foreign affairs ministry, went so far as to liken Russia’s isolation to “cancel culture.”

South Africa, the last country to join the bloc, in 2010 on China’s invitation, will also have to walk a fine diplomatic line with its allies in the West. In the coming months, South Africa will turn its attention to its second largest trading partner after China — the United States — hosting a meeting about a continental trade agreement.

“It almost feels that in South Africa, the heart is in the east, the money is in the west,” said Gustavo de Carvalho, a researcher at the South African Institute of International Affairs.

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Exclusive: Northvolt raises $1.2 billion in latest funding round for factory build out - CFO

REuters By Supantha Mukherjee and Simon Jessop, August 22, 2023

STOCKHOLM/LONDON, Aug 22 (Reuters) - Swedish lithium-ion battery producer Northvolt has raised $1.2 billion from investors including BlackRock (BLK.N) and several Canadian pension plans as it prepares to build new factories in Europe and North America, its finance chief told Reuters.

The fresh funding, through a convertible note, comes as investor demand for companies set to benefit from the move to a low-carbon economy picks up pace, aided by policy initiatives in both regions to accelerate the transition.

"It's a very capital intensive industry... finding the right mix is always hard in this new greenfield kind of transitional projects," Chief Financial Officer Alexander Hartman said in an interview.

Leading the round alongside BlackRock, the world's biggest asset manager, were Canada Pension Plan, Ontario Municipal Employees Retirement System and, as previously reported, pension investor Investment Management Corporation of Ontario.

"The battery manufacturing sector has attractive growth potential driven by the accelerating adoption of battery storage and electric vehicles," said David Giordano, global head of climate infrastructure at BlackRock.

"As a leading investor in the energy transition, we look forward to supporting their continued growth."

Other investors to take part included Goldman Sachs (GS.N), Volkswagen (VOWG_p.DE), Baillie Gifford, Swedbank Robur (SWEDa.ST), Singapore's GIC and Hong Kong-based Chow Tai Fook Enterprises.

A number of funds to invest in the note were classed as 'dark green' under the European Union's sustainable finance framework, a stamp of environmental approval that bodes well for future interest in the company, which ultimately hopes to list, Hartman said.

The fresh funds will help the firm expand its factory footprint, Hartman said. The firm currently has several factories across Europe with the latest a 600 million euros ($654 million) investment to build a plant in Germany, announced in May.

While the company has a facility in the United States, sources said the company is close to finalising plans to build a multibillion-dollar battery factory in Canada that will be announced later this year.

Northvolt declined to comment on the factory plans.

With the latest round, Northvolt has raised more than $9 billion in debt and equity since 2017 in its bid to become Europe's biggest battery manufacturer, including $1.1 billion in convertible notes last year from multiple investors.

It has secured orders of over $55 billion from customers such as BMW, Fluence, Scania, Volvo Cars and Volkswagen.

Separately, Northvolt has assembled its first energy storage system products in Poland and expects to start customer deliveries from later this year.

"We have a business plan... we always want to make sure we have access to the markets," Hartman said.

He declined to comment on whether the company was preparing to go public.

Reuters has previously reported, citing sources, that Northvolt was preparing for an initial public offering that could value the company at more than $20 billion.

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Masatsugu Shibata, a fisherman near the Fukushima Daiichi nuclear power plant, is concerned the plan to release the water will threaten his livelihood.Credit...Noriko Hayashi for The New York Times

Japan to Release Treated Water From Ruined Nuclear Plant Despite Concerns

In the face of regional and domestic objections, the country plans to proceed with a discharge at Fukushima that will eventually reach more than a million tons of water.

NYT by Motoko Rich and Hisako Ueno, reporting from Tokyo and Iwaki in Japan, published August 21, 2023.

Japan will begin releasing treated radioactive wastewater from the ruined Fukushima Daiichi nuclear plant into the ocean this week, its government said on Tuesday, setting aside regional and domestic objections as it moves to eventually discharge over a million tons of the water into the sea.

Prime Minister Fumio Kishida made the announcement after a meeting of his cabinet, saying the release would begin on Thursday if weather and ocean conditions allowed.

The International Atomic Energy Agency said in July that the government’s plan met the agency’s safety standards, and it has said that releasing the treated water is not likely to pose a serious health threat to humans.

But some scientists have raised questions about whether the Japanese government and the company that operated the plant, Tokyo Electric Power, have been sufficiently forthcoming about what radioactive material may remain in the holding tanks.

The Chinese government, which has strongly opposed the plan, warned on Tuesday that it would take “all necessary measures” to safeguard the marine environment, food safety and public health. A large segment of the South Korean public also objects to the discharge, as do fishing groups and others in Japan.

Mr. Kishida visited the wrecked nuclear plant on Sunday and met with leaders of the Japanese fishery industry in Tokyo on Monday, vowing to ensure that fishermen can continue to make a living after the release.

Masanobu Sakamoto, head of the National Federation of Fisheries Cooperative Associations, said that while many of his group’s members had come to accept the government’s assurances on the safety of the discharge, it remained opposed because of the potential effects on fishermen’s livelihoods.

Since an earthquake and tsunami triggered a triple meltdown in Fukushima in 2011, the question of what to do with the accumulating tons of water used to cool nuclear fuel rods has been one of the biggest challenges facing both the government and Tokyo Electric.

For Japan, it is as much a political problem as it is an engineering or environmental one. Despite the determination by the international agency that it was safe to release the water, opponents at home and in neighboring countries have questioned both the government and the agency’s motives. When Japan’s cabinet approved the treated-water plan in 2021, it described the controlled ocean release as the best available disposal option.

People’s Daily, a state media organization owned by the Communist Party in China, has referred to the treated water as Japan’s “nuclear sewage.” And in South Korea, where seafood imports from waters near Fukushima are still banned, an opposition lawmaker warned that “no one can tell or predict for sure what the discharging of radioactive materials into the sea over an extended period of time will bring about.”

In Japan, both Fukushima and national fisheries associations have said they fear that once Tokyo Electric starts releasing the water, both domestic and international customers may be reluctant to eat fish from the region.

Although it has been a dozen years since the worst nuclear crisis since Chernobyl forced tens of thousands of people to flee the area around the ruined Fukushima plant, the cleanup is still in an early phase. The government says the water release is likely to take place over a period of 30 years.

Fish for sale in Naraha, Fukushima prefecture, in 2019. Japanese fisheries associations fear that both domestic and international customers may be reluctant to eat fish from the region once the water is released.Credit...Ko Sasaki for The New York Times

The water is stored in more than 1,000 sky-blue tanks lined up on the site of the plant. Tokyo Electric — or Tepco, as it is known — pumps the water through the destroyed reactors to cool melted fuel that is still too hot and radioactive to remove.

As the water passes through the reactors, it accumulates radioactive nuclides. Tepco is putting the water through a powerful filtration system, in some cases repeatedly, that is designed to remove all the radioactive material except for tritium, a hydrogen isotope. Experts say tritium does not harm human health in small doses, and it is prohibitively expensive to remove in any case.

Other nuclear plants around the world, including in China, South Korea and the United States, use similar processes to treat cooling water, and also release water containing tritium into the oceans after such filtration.

Still, some scientists have questions. According to Tepco’s website, just 30 percent of the approximately 473,000 tons of water in the tanks have been fully treated to the point that only tritium remains.

“The idea is, ‘just trust us,’” said Ken Buesseler, a marine radiochemist at the Woods Hole Oceanographic Institution.

Dr. Buesseler said that while tritium is “one of the least dangerous” radioactive materials, others, like cesium or cobalt, could be more hazardous if they are released into the ocean.

He said the government had not investigated alternative options such as building more tanks or using the treated water to make cement. “I think they just want the cheapest, fastest solution, which is a pipe in the ocean,” Dr. Buesseler said.

Kazuya Idemitsu, a professor of nuclear engineering at Tohoku University, said he was confident that the international agency would monitor the water release to ensure that only water containing tritium and no other radioactive material will be piped into the sea.

Dr. Idemitsu said that much of the public’s anxiety stemmed from the highly technical nature of the treatment process and the government’s difficulties in communicating the science.

Among fishermen who rely on the ocean waters off Fukushima for their daily catches, what matters is what would-be customers think.

“It’s a life-or-death issue for fishermen,” said Masatsugu Shibata, 67, who took his 40-foot fishing trawler out from a port at Iwaki in Fukushima before dawn on a recent morning and caught about a dozen large flounder. “I will be in trouble if they discharge” the water.

Mr. Shibata, who hopes to pass his fishing operation on to his son and grandson some day, said the fishing business had recovered only about 20 percent of its pre-disaster levels. When the water is released, he said, “there will definitely be reactions, for sure,” adding, “Many people would stop eating fish.”

“Now the government says it’s safe,” he said. “But safety and peace of mind are different.”

The government has already paid a total of 10 trillion yen ($68.4 billion) in compensation to fishermen, farmers and evacuated residents from Fukushima and other affected prefectures since 2011 to help make up for losses that resulted from the disaster.

Some countries have signaled their support for the government’s plan. Last week, before President Biden hosted Mr. Kishida and President Yoon Suk Yeol of South Korea at Camp David, Secretary of State Antony J. Blinken said that the United States was satisfied with Japan’s plan. In July, the European Union lifted all restrictions on fish and agricultural imports from Fukushima. The region had blocked shipments of products since the disaster.

While South Korea still bans seafood imports from waters off Fukushima, Mr. Yoon has endorsed the Japanese government plan amid recent warming relations between the two countries.

Opposition lawmakers have attacked Mr. Yoon for supporting the plan, with one accusing him of defending Japan “like a parrot.”

“We cannot let a government policy crucial for the people’s life and safety be decided by the president’s personal friendly feeling and intimacy toward Japan,” said Lee Byunghoon, an opposition lawmaker.

The Chinese government has been especially critical of Japan’s plan to release treated water at Fukushima, and has rejected the international agency’s report as insufficient proof that the release poses no undue risks.

Tensions between China and Japan are running high following the signing late last week of a trilateral security agreement between Japan, South Korea and the United States.

Chinese internet users responded angrily to the news on Tuesday, calling for boycotts of Japanese goods and posting racist comments.

“Japan has started a new form of nuclear war. We should reject Japanese products and restaurants,” read one comment under an article about the planned release from Mengma News, a media property operated by the government of Henan Province.

Hong Kong’s leader, John Lee, said that he was strongly opposed to Japan’s plan and had asked city departments to “immediately activate import control measures.”

China itself operates nuclear reactors along its seacoast, using seawater instead of scarce freshwater to cool the steam from reactors.

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• She had eyes only for her father as he faltered.

• Their boots told a tale of peril: For years, few dared cross the Gap, which links Colombia to Panama.

  Description text goes here

• The mud is so deep it can swallow a person whole. Behind them was the trail of debris migrants leave behind as they go through their provisions -- or just try to lighten their load.

  Description text goes here

• The sleeping mat was bought in Colombia, as the family was about to enter the Gap. Many migrants bring them. Many end up abandoning them.

  Description text goes here

IN ONE IMAGE: The Steepest Hill

NYT By Federico Rios, Today

When I first met Mr. Arias, something extraordinary was happening.

Venezuelans in never-before-seen numbers had given up on their country, an economic basket case, and were heading north. By the end of that year, more than 150,000 of them had arrived at the border between Mexico and the United States.

Mr. Arias, 27, was traveling not just with his daughter, who was on his shoulders much of the time, but with his wife, Desyree, and 7-year-old son, Luis Breyner. His mother-in-law and brother-in-law were also with them.

It was still early in the morning when I took this photo. A long day of travel lay ahead of the family, and more long days after that. A strong hiker might make the end of the Gap in four or five days. For travelers with young children, it could easily be double that.

But Mr. Arias had a more immediate problem: a hill. When he came to it, he just stopped, put down his pack, and sat. It was not clear if he could go on, but after about 15 minutes, he did.

Later, he told me that back in Venezuela, he studied industrial mechanics and worked at his father’s auto repair shop. He and his wife also had a food stall. But struggling to feed their family, they decided to try their luck elsewhere.

In 2019, they went to Colombia, where they opened another food stall and Mr. Arias also drove a motorcycle taxi and did some construction. But again it was not enough. It was time to move again.

As we made our way through the Gap in September, I saw the family from time to time, but eventually our ways parted. Later, as they crossed Central America, we kept in touch through social media. In mid-March, I heard from them again: They had just made into the U.S., applying for asylum as they crossed through border control in Texas in March.

Nearly a year later, Mr. Arias remembers the day he came to a halt on the Darién Gap.

“It was all very sudden,” he recalled. He said: “I felt like my stomach was empty. I started to vomit, and I felt very bad. Because those hills are very bad.”

The family is living in Palo Alto, Calif., now. Mr. Arias is waiting for a work permit, and his wife is occasionally doing manicures. Their son will enter fourth grade in the fall, and their daughter will start kindergarten.

Mr. Arias remembers something else about the moment the photo was taken: how ashamed he felt of his weakness, with his children looking on. But that feeling seems lost to the past now.

“I took a risk but I made it,” he says. “I risked it for them. For me it’s an achievement because of that, because I managed to bring my whole family.”

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News Round-Up, August 21, 2023

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Climate Change and Health Impacts by the Way of Today's California Floods

Climate change has become a significant concern of our time, with numerous implications across different realms of human existence. As the world faces the worsening outcomes of climate change, one aspect that demands urgent notice is its effects on human health. The current flooding in California serves as a clear indication of how climate change disrupts our surroundings and challenges our welfare. (1)

California, well-known for its sunny weather and barren terrain, is unfortunately accustomed to enduring periods of drought and wildfires. However, recent events have demonstrated a concerning trend: a substantial increase in severe climatic conditions, such as floods, that differ from the typical weather patterns of the region. These floods are evolving and posing significant risks to public health. (2)

Moreover, the floods themselves can cause immediate health hazards. They could create a conducive environment for waterborne diseases to spread. Microorganisms, such as bacteria, viruses, and parasites, can transmit diseases such as cholera, typhoid fever, and gastrointestinal infections. Additionally, when the floodwater recedes, it forms stagnant pools of water acting as breeding sites for mosquitoes, which can spread vector-borne diseases like dengue fever. (3)

Floods have severe social and economic implications that have a disproportionate effect on the most susceptible communities. Lower-income communities, typically situated in flood-prone areas, are disproportionately impacted by these calamities. (4)

Meanwhile, certain regions of the world are undergoing scorching heatwaves that have transformed some cities into public saunas. At the same time, the frightening expansion of unmanageable wildfires is a bleak reminder of the link between our surroundings. In the midst of these devastating circumstances, it is essential to give priority to our well-being. Preserving ourselves through self-preservation is crucial, as our health is intertwined with that of the planet. It is our responsibility. (5)

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Most read…

Biden faces calls to declare climate emergency as he heads to Maui

Climate groups and many of the president’s allies in Congress urge him to invoke emergency powers to mitigate environmental threats.

Politico Eu By MYAH WARD, August 8, 2023

TROPICAL STORM HILARY LIVE UPDATESCalifornia hit with flooding, mudslides, earthquake

The Washington Post, Now

EXCLUSIVE: The à la carte world: our new geopolitical order

With the US and China at loggerheads, a range of ‘middle powers’ see an opening to pursue their interests

FT by Alec Russell in London 6 HOURS 

Wealthy oil nation lays groundwork for ‘eye-popping’ climate fund

The United Arab Emirates has drawn a backlash from climate advocates for its role hosting the global climate talks, but the massive fund it’s considering would help countries green their economies.

POLITICO EU By ZACK COLMAN and KARL MATHIESEN, August 18, 2023 

World’s first wind-powered freighter sets off on maiden voyage

Pyxis Ocean bulk carrier fitted with revolutionary 120ft fibreglass ‘sails’ has reached more than five and a half knots on wind power alone

The Telegraph By Sarah Knapton, SCIENCE EDITOR21 August 2023 

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Biden faces calls to declare climate emergency as he heads to Maui

Climate groups and many of the president’s allies in Congress urge him to invoke emergency powers to mitigate environmental threats.

Politico Eu By MYAH WARD, August 8, 2023

As President Joe Biden prepares to visit Maui, the Hawaiian island devastated by the deadliest wildfire in U.S. modern history, lawmakers and climate groups are begging the White House to do more to prevent future climate-related disasters.

Their argument: If the latest environmental catastrophe won’t spur the president into action, what will?

The fires, likely sparked by the island’s electric utility and heightened by climate change impacts, swept through the Pacific paradise last week, killing at least 110 people and leaving the famed town of Lahaina smoldering in ruins. As survivors search for missing family members and friends, and a housing crisis unfolds amid the vast destruction, climate activists and members of Congress are urging Biden to declare a national emergency over climate change.

It isn’t the first time the White House has faced calls to take this step, but the ongoing crisis in Hawaii and a string of climate events this summer — including this weekend’s first-ever tropical storm warning for southern California — have intensified the appeals, building pressure on the president ahead of his scheduled trip to the island disaster site Monday.

The fires, likely sparked by Maui’s electric utility and heightened by climate change impacts, swept through the Pacific paradise last week, killing at least 110 people | Patrick T. Fallon/AFP/Getty Images

“Even when I talk about this issue, I tend to say things like, ‘I want to make sure my children have clean air and water — that they have running water. That they have a livable planet when they’re my age.’ But that’s not right. Tomorrow, you could wake up and your whole community could be ashes,” said Kaniela Ing, a seventh-generation indigenous Hawaiian from Maui and the national director of the Green New Deal Network, a climate justice organization.

“That’s the urgency we’re operating under,” he added, “so if there was ever a moment to declare a climate emergency, it is right now.”

Alongside climate groups, many of Biden’s allies in Congress have urged him to invoke emergency powers, which would enable the president to take sweeping action to restrain greenhouse gas production, implement large-scale clean transportation solutions and finance distributed energy projects, among other actions.

“The devastation in Maui is a clear sign that the president must declare a climate emergency — now. While FEMA is providing resources to the local heroes on the ground fighting for the lives and livelihoods of Hawaiians, the underlying climate-driven conditions of drought, extreme heat, environmental injustice, and non-resilient infrastructure will remain,” Sen. Ed Markey (D-Mass.) said in a statement to POLITICO.

Rep. Earl Blumenauer (D-Ore.), who has long called on Biden to take this step, said that if the devastation in Hawaii isn’t a national emergency, “what is?”

“I refuse to accept that people choosing between burning alive or jumping into the ocean for hours on end is our new normal. This is a crisis and we need to treat it that way. That starts with President Biden declaring a national climate emergency to unlock vast federal resources and emergency powers to help our communities prepare for and recover from these deadly climate disasters,” he added.

Declaring a climate emergency could come with political risks for an incumbent president heading into an election year, potentially spurring a spike in already high gas prices. Plus, any executive action Biden takes would likely face legal challenges, including going up against a conservative Supreme Court that has already ruled that the Environmental Protection Agency does not have the broad authority to rein in carbon pollution.

Biden says he and first lady will visit Hawaii ‘as soon as we can’

Still, advocates and lawmakers are pushing the president to be bold amid the latest crisis, arguing that the move would also reap political benefits among disillusioned young voters, as well as communities of color who have been disproportionately harmed by the effects of climate change.

While polls show that many Americans say they have heard little about the Inflation Reduction Act — the largest climate-focused investment in U.S. history — headlines on climate events have been continuous, and Biden’s approval for a massive oil drilling project in Alaska known as Willow earlier this year drew fierce opposition. Declaring a climate emergency would send a clear signal to these voters, Ing said.

“If he did that next week in Hawaii, I’d be standing right next to him. I’d be telling all my friends. I’d be campaigning for him all the way up until November. Because the stakes are too high to not. This is our last chance. There are six years left to really hit the transition — to decarbonize at the rate we need to. So this election, this is it,” he said.

The White House has so far avoided committing to an official declaration, while the president earlier this month said he has already “practically” declared a climate emergency.

Last week, White House press secretary Karine Jean-Pierre said that the president has called the climate crisis an emergency since “day one,” noting that Biden has used the Defense Production Act to jumpstart heat-pump manufacturing and the building of the electric grid. He’s also used the DPA to deploy money to stand up solar manufacturing and source needed materials for electric vehicles.

“While we’re trying to deal with this existential threat, this climate change crisis, the president is doing everything that he can to make sure that we are dealing with this … in a way that actually leads to results,” Jean-Pierre said Monday when asked if the president was considering declaring a national emergency. “And that’s what the president is going to continue to do.”

She also pointed to the Inflation Reduction Act’s investment in combating climate change, which the White House celebrated last week on the legislation’s one-year anniversary.

The work of the Sunrise Movement and other climate organizations has been credited with playing a key role in the passage of the country’s first climate law, which Evan Weber, a co-founder of Sunrise, says is his life’s greatest accomplishment.

Weber lives in Oahu and has been working to assist with recovery efforts in his state, as his friends in Lahaina continue to search for family members. Watching the anniversary celebration in Washington this week while his state burned and survivors provided DNA swabs to identify the ashes of their loved ones was painful, said Weber, who co-founded the nonprofit Our Hawai’i.

“The president and his Cabinet members often talk about the Inflation Reduction Act, the bipartisan infrastructure law as once-in-a-generation investments. And I think if that’s true, we are going to see a lot more Lahainas in the future,” Weber said, adding that Biden has done a lot of work on climate. “But we also really need him to know that just being the greatest president on climate action in United States history is the lowest bar in the world to clear, and it is not the same as acting at the scale of what science and the reality of our people on the ground demands.”

The federal response in Hawaii has been strong, Ing said, and the community is grateful for Biden’s upcoming visit. The president moved quickly to declare a major disaster declaration: There are over 1,000 federal responders on Maui and Oahu, and the government has provided over $7 million in financial assistance to nearly 2,200 households, Federal Emergency Management Agency administrator Deanne Criswell told reporters Saturday.

There are also 450 search and rescue teams on the ground, with 60 percent of the affected area searched as of Saturday afternoon. The shelter population also continues to fall, Criswell said, as FEMA, the Red Cross and the state pay for residents to transition into hotels.

Details of the president’s trip are still in flux, Criswell said, so it’s not yet clear if Biden will survey damage on the ground or fly over the path of destruction.

The president has vowed that Hawaii will get “everything it needs” and wants to meet with survivors who have been directly affected Monday, Criswell said. The hope among activists is that after the president sees the devastation in person, and hears directly from the people of Maui and Lahaina, that his promise will also include an official climate emergency declaration.

“It’s all coming to a head, and we’re just in a moment now where this makes the most sense,” said Michele Weindling, electoral director at Sunrise. “From every angle that you look at it, it is so clear that Biden making a climate emergency official is the no-brainer choice.”

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Source: Media

TROPICAL STORM HILARY LIVE UPDATESCalifornia hit with flooding, mudslides, earthquake

The Washington Post, Now

Tropical Storm Hilary is deluging Southern California, with much of the damage expected to become clear at daybreak Monday. Hilary is likely to bring “catastrophic and life-threatening flooding” to portions of the Southwestern United States and the Baja California region in Mexico through Monday, the National Hurricane Center warned. Tens of millions of people were under a tropical storm warning, the first of its kind issued for Southern California. Heavy rainfall and flooding are expected in parts of Arizona and Nevada.

Here’s what to know

• The storm is moving northeast from landfall in Southern California, and is forecast to reach Nevada early Monday, the NHC said in an advisory late Sunday local time. “A brief tornado or two will be possible” in southeastern California, northwest Arizona, southern Nevada and southwestern Utah, the NHC said.

• Much of Southern California was under a tropical storm warning, from the border with Mexico up to Point Mugu, up the coast from Malibu. Catalina Island, a popular tourist destination, was also under the warning.

• A man was killed Sunday in Mexico’s Baja California Sur, authorities said, after water swept away his car.

• A magnitude-5.1 earthquake shook parts of Southern California on Sunday afternoon, triggering an emergency mobile alert to residents in Los Angeles County and surrounding areas. The National Weather Service said a tsunami was not expecte

When will the rain subside?

Torrential rain and severe flooding are ongoing, hitting the mountains north and east of Los Angeles hardest, where rainfall totals have reached 4 to 8 inches. Downpours will continue for another few hours in these areas but should start to ease a little Monday after midnight local time.

The rain will take longer to relent in the Sierra Nevada, where it won’t dry out until closer to dawn Monday. This also holds true for central and southern Nevada.

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Source: FT

The à la carte world: our new geopolitical order

With the US and China at loggerheads, a range of ‘middle powers’ see an opening to pursue their interests

FT by Alec Russell in London 6 HOURS 

For a telling insight into the seismic changes reshaping the global order, it is worth a glance at the official schedule of Kenya’s diplomats. There was a time when they were called upon to host delegations from global powers relatively rarely. No longer. Now there is barely a slot free in their calendar.

In the early summer Nairobi hosted in quick succession US officials to discuss a free trade deal, Russia’s foreign minister, Sergei Lavrov, to address parliament, and EU officials to sign a trade agreement.

Kenya’s military commanders have an impressively full dance card too: in May, for example, an Indian frigate anchored off Mombasa for a joint naval exercise, even as British Royal Marines trained Kenya’s first commando unit.

All the while China, which two decades ago identified Kenya as a vital partner in Africa, in its then fledgling courtship of the continent, is investing in infrastructure leading from the Indian Ocean coast to the interior. China’s foreign minister, Wang Yi, popped by in July. Oh yes, and Iran’s president Ebrahim Raisi had a red-carpet reception in Kenya in July at the start of an African tour.

Welcome to the à la carte world. As the post-cold war age of America as a sole superpower fades, the old era when countries had to choose from a prix fixe menu of alliances is shifting into a more fluid order. The stand-off between Washington and Beijing, and the west’s effective abandonment of its three-decade dream that the gospel of free markets would lead to a more liberal version of the Chinese Communist party, are presenting an opportunity for much of the world: not just to be wooed but also to play one off against the other — and many are doing this with alacrity and increasing skill.

The rise of the middle powers This is the first in a series on how the stand-off between America and China has ushered in a new era of opportunity for countries across the world Part II tomorrow: Beijing’s blueprint for an alternative world order

“For Kenya and others it’s not a question of picking sides. It’s a question of picking everyone,” says Michael Power, a Cape-Town based investment analyst, most recently for Ninety One, who has devoted his career to following emerging markets.

“We should no longer talk of the non-aligned movement,” he adds, referring to the group of African, Asian and Latin American countries, formed in the cold war, and avowedly neutral in the contest between the west and the Soviet Union.

“But of the multi-aligned movement.”

It is 15 years since the first round of this phenomenon when the G20 found its voice and role in shoring up the global economy during the financial crisis — as captured by the commentator Fareed Zakaria in his 2008 essay, The Rise of The Rest. Now, however, with the US and China at loggerheads, the G20 is more divided and less effective and a new more opportunistic era is under way.

One senior western policymaker, privy to thinking in the west and China, sees it as a “once-in-a-generation shift”. Western diplomats talk of the era of “fence-sitters” and “swing states”. For Ivan Krastev, the political scientist, it is the age of the middle powers. The word “middle”, he stresses, refers to their position — in between the US and China — rather than their weighting.

His vision encompasses a range of distinctly un-middling countries including traditional US allies such as Saudi Arabia, Turkey, Israel and even Germany, as well as titans of the global south, such as Indonesia and India, patently a rising great power.

“This geostrategic entrepreneurialism reflects the evolution of the global order into an archipelago over the past decade,” says Nader Mousavizadeh, an adviser to Kofi Annan, when he was UN secretary-general, and who is the chief executive of Macro Advisory Partners, a strategic advisory firm.

“The shift has to be seen as structural, secular and not cyclical.” “The fact that the relationship between Washington and Beijing has become adversarial rather than competitive has opened up space for other actors to develop more effective bilateral relationships with each of the big powers but also to develop deeper strategic relationships with each other.”

Beyond the Brics

This new less regimented landscape most obviously benefits the global south, the loose term broadly synonymous with the developing economies of Latin America, Africa and Asia. Their heightened ambitions will be on display in South Africa in mid-August at the summit of the Brics nations, Brazil, Russia, India, China and South Africa.

The Brics was formalised in the aftermath of the financial crisis drawing on a classic jazzy bankers’ acronym — it was coined by Goldman Sachs economists — when their interests were more aligned than now. The founding four later invited South Africa, a relative economic minnow, to join; its inclusion brought Africa into the group. Now after some years treading water, the Brics is gathering momentum. Symbolically at least the summit has the potential for being seen as the 21st-century equivalent of the Bandung conference of 1955, which launched the non-aligned movement.

Top of the agenda is the application of 22 countries to join, and which if any to accept. The eclectic roll call of suitors includes global south ideological stalwarts such as Venezuela and Vietnam, but also Middle East actors such as Saudi Arabia, the UAE and Iran, and powerhouses from other regions, including Indonesia, Nigeria and Mexico.

Add all of them, and the block would represent 45 per cent of the global economy. Even a more limited expansion would create a behemoth accounting for almost half the world’s population and 35 per cent of its economy, says Anil Sooklal, South Africa’s ambassador to the Brics who is co-ordinating the summit. He anticipates “a more ambitious agenda and more forceful position, including a strong push for reform of the global political, economic and financial architecture”.

The anticipated arguments behind the scenes over who should join underline that it may be easier to articulate the Brics’ ambitions than realise them. They and potential new members have very different and in some cases rivalrous interests. China, for example, has no desire to see India or Brazil join them on the top table at the UN Security Council — nor is it in favour of a multipolar world, whatever it may say in public.

But however the Brics develops, the summit does underline the broader phenomenon. To understand the new room for manoeuvre, Krastev argues that talk of the rise of a new cold war between America and China is misleading.

“Don’t focus on US-China competition, as they are not going to be able to discipline fragmentation as Russia and America did in the cold war,” he says.

“The middle powers may not be big enough or strong enough to shape the international order, but their ambition is to increase their relevance.

“Their overactivity is going to make them unpredictable,” he adds. “Their activism is contagious. When I think of them, I am reminded of a line from a nonsense novel I read as a child: ‘Lord Ronald flung himself from the room, flung himself upon his horse, and rode madly off in all directions.’”

In its stance over Russia’s invasion of Ukraine, Turkey is a case study of a country choosing sometimes to align itself with the west and sometimes to stand against it. Its unpredictability was to the fore this summer at the Nato summit when it did a U-turn in allowing Sweden to join the alliance.

Western officials see Saudi Arabia and the UAE very much in this category of states behaving more assertively on the global stage and more independently of their traditional ally, America. Policymakers in Brussels have noted their intensified engagement in the politics of the Horn of Africa, for example, and also of course Saudi Arabia’s hosting of a Ukrainian peace talks, and concluded that the EU needs to rethink its foreign policy priorities and focus. “We need to be engaging more with such countries,” says a senior EU official. “A large part of our foreign policy structures are 20 years out of date.”

The spirit of activism will certainly be to the fore in Johannesburg. Much of the pre-summit argument focused on whether Vladimir Putin would attend. This posed a dilemma for South Africa over its international obligations to arrest him given that the Russian leader has been indicted by the International Criminal Court. Putin’s decision to stay at home was a boon for Cyril Ramaphosa, the president of South Africa, whose refusal to criticise Moscow has exasperated some in the Biden administration. It also suited many other countries attending which faced awkward encounters with Putin. While loath to join with the west in denouncing Moscow, many African states are upset by Russia’s ending of the deal on safe transport for Ukrainian grain supplies.

Instead it will be the other autocracy among the Brics founders, China, which will overshadow the summit, via the looming argument over expansion.

China’s desire to be the de facto head of the developing world is undisputed. Sir Danny Alexander, a former British government minister who is in Beijing as vice-president for policy and strategy at the Asian Infrastructure Investment Bank, says China clearly sees itself as the natural leader of the global south.

“At a meeting of the China International Development Co-operation Agency there was a lot of discussion about the different kinds of collaboration going on. They talked about south south, north south and triangular co-operation. What is clear is there is a multiplicity of discussions on development and investment issues and these conversations no longer all flow through a western lens.”

For Beijing, a beefed-up Brics would be a counterweight to the G20, although some of the leading players at the Brics summit — India in particular — have no interest in allowing the Brics to segue into a China “club”. Indian diplomats have made clear that India is not in favour, for example, of developing a Brics currency.

As the two Asian giants warily eye each other up, New Delhi has this year made unprecedented strategic overtures to the west, with Prime Minister Narendra Modi making state visits to Washington and Paris. Indian officials talk though of being “aligned with our own interests” and in its stance towards Russia, including buying its oil, New Delhi has resolutely avoided taking the west’s line.

Brazil too is wary of the implications of expanding the Brics, diplomats involved in the preparations for the summit have said, for all the anti-western rhetoric of its leftwing President Luiz Inácio Lula da Silva on a recent visit to Beijing.

Such diplomatic dexterity and juggling are on display daily by middle powers around the world, not least by Singapore, which feels the squeeze between China and America acutely.

De-dollar diplomacy

And yet for all the discordance behind the scenes in Johannesburg, most of the participants share a frustration that the global economic order is tilted in the west’s favour, and believe that now finally is the time to change it.

Mia Mottley, the prime minister of Barbados, spoke for many developing countries at a summit hosted by President Emmanuel Macron in June when she called for a transformation of the World Bank and IMF. “When these institutions were founded [in 1944] our countries did not exist,” she said.

Zoltan Pozsar, head of the macroeconomic advisory firm, Ex Uno Plures, believes that system is at a tipping point. “The global east and south are renegotiating the world order,” he says, highlighting the drive in the global south for de-dollarisation and a rethink of the IMF and World Bank. “The west dreamt of the Brics as a lapdog, that they would accumulate dollars and recycle them into Treasuries, but instead of that they are renegotiating how things are done.”

The US Treasury secretary Janet Yellen has confidently pushed back against this, reflecting the view of many market participants that the ambition to dethrone the dollar as the global reserve currency, is a very long-term bet. “There is a very good reason why the dollar is used widely in trade, and that’s because we have deep, liquid, open capital markets, rule of law and long and deep financial instruments,” she said at the Paris summit.

But politically at least the context is more propitious to push for change than ever. In the heyday of the cold war, the non-aligned movement had to rely on moral and emotional rather than economic or political clout. Now the Brics and aspirant members run an ever-larger share of the global economy and control many of the critical minerals the west so badly needs.

Moreover, some of the most influential “middle powers” who are wary of China share Beijing’s concerns over America’s weaponisation of financial sanctions. The signal moment for them in the past 18 months, argues the former Kofi Annan aide Mousavizadeh, was not Russia’s full-scale invasion of Ukraine in February 2022 nor Nato’s rediscovery of its purpose, but the freezing of Russian central bank reserves, which dramatically underlined once again the power of the US dollar.

“For middle powers, it was the equivalent of someone going in and seizing embassy property. It was a reminder that you can have this sense of opportunity in the archipelago but that the alternatives to a US dollar world do not exist.

“Many thought we have to do whatever it takes to avoid being in the position of having reserves of this magnitude frozen in the future. That was Modi’s main response and many other middle power governments including in the Middle East were obsessed about this too.”

In Washington and west European capitals, officials are all focused on the rise of the middle powers and the need to reassess their world view. German officials even posit that Germany too can be seen as a middle power. “Our clear idea is that the world is not a G2 world,” said one. “It should be a multipolar world. The task of Germany could be more in the middle.”

Biden administration officials talk of the need not to react when old allies adopt positions close to China or Russia, but rather to make their case privately and stress the long-term advantages of America’s values over China’s. All the while Washington is busy working away at new constellations of regional alliances, including the trilateral Aukus defence pact and the Quad grouping of Indo-Pacific powers.

At times the rhetoric emanating from Johannesburg will sound like a reheating of the old anti-imperialist language of Bandung. But western officials accept it would be wrong to dismiss it all out of hand as their 20th-century predecessors might have been tempted to do. The age of the western set menu is over. And the new menu, while heavily influenced by two lead chefs, is still being written.

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The UAE and Sultan al-Jaber, who is leading the COP 28 climate talks, have drawn criticism from environmental advocates for hosting the international gathering despite being one of the world’s largest contributors of greenhouse gases. | Pool Photo by John MacDougall

Wealthy oil nation lays groundwork for ‘eye-popping’ climate fund

The United Arab Emirates has drawn a backlash from climate advocates for its role hosting the global climate talks, but the massive fund it’s considering would help countries green their economies.

POLITICO EU By ZACK COLMAN and KARL MATHIESEN, August 18, 2023 

The United Arab Emirates is considering creating a multibillion-dollar fund to spur clean energy investments across the world that it plans to unveil at this year’s U.N. climate talks in Dubai, according to people familiar with the plan.

The fund could amount to tens of billions of dollars, with a sizable slice of the money coming from the UAE’s sovereign wealth reserves, according to seven people with knowledge of the discussions. A G-7 government official said envoys from the oil-rich Mideast nation had privately mentioned the idea of a fund of at least $25 billion.

“It’s an eye-popping figure,” one of the people familiar with the concept said.

Creation of the fund would be one of the largest ever state-sponsored financial efforts to help countries fight climate change. And it comes as the UAE and Sultan al-Jaber, the CEO of the Abu Dhabi National Oil Co. who is leading the climate talks, have drawn criticism from environmental advocates and some U.S. and European lawmakers for hosting the international gathering despite being one of the world’s largest contributors of greenhouse gases.

The summit, known as COP28, starts on Nov. 30.

The fund would help fill a financial chasm to shift nations’ energy economies off fossil fuels, with the aim of achieving net-zero greenhouse gas emissions by mid-century. Experts have said the effort will require trillions of dollars in spending to avoid catastrophic, irreversible effects of climate change.

In Washington, Republicans in Congress have vowed to block any U.S. effort to fulfill President Joe Biden’s promise to contribute $11 billion annually to international climate finance efforts.

Ron Johnson: Climate change is bad in Africa, but U.S. in ‘good shape’

But the UAE’s initiative would fail to plug other gaps in the system, most notably the need to aggressively deliver funding to clean up the economies of less wealthy nations that are crucial to stabilizing the world’s rapidly warming climate.

The people POLITICO spoke to regarding the fund were granted anonymity to discuss the confidential matter.

The UAE team organizing the climate summit declined to comment.

While its exact design is not settled, one person who had seen the UAE’s plan described the initiative as an investment fund to develop climate transition projects around the globe, ranging from greener cement-making to clean energy to electric vehicle charging infrastructure.

The person said the goal of the fund was to help attract massive amounts of private capital to climate-friendly initiatives. Previous programs were seen as too scattered and too small to realign the broader financial sector to invest in reaching governments’ net-zero goals.

But the focus of the fund on making investments at market rates risks creating tensions with wealthy governments in the U.S. and Europe, which expect the UAE to join their club of donors, and the world poorest countries, which may find themselves unable to compete for financing for their own projects.

The oil-rich UAE is under pressure to use its wealth to help prepare the world’s poorest countries to adapt to climate change that has been primarily caused by rich, developed economies. U.S. special climate envoy John Kerry has openly pushed for the Gulf nation to join the list of countries that are climate donors.

U.S. special climate envoy John Kerry has openly pushed for the UAE to join the list of countries that are climate donors. | Andy Wong/AP Photo

But climate finance experts and officials from low-income countries fear that this fund would inject cash into profitable projects largely in North America, Australia or Europe, rather than riskier economies in Africa or South Asia that have a massive clean energy funding deficit. customary for the summit host.

The “prevailing view” of the UAE government and sovereign wealth funds is that anything less than commercial terms was “charity” and shouldn’t be a priority, said a second person familiar with the discussions of the fund.

The government in Abu Dhabi, one of the seven emirates in the UAE, is considering basing the fund entirely on commercial terms, according to three people with knowledge of the discussions.

That doesn’t sit well with advocates for less developed nations.

“It’s not just about funding — it’s about justice and recognizing the vast disparities intensified by climate change,” said Madeleine Diouf Sarr, the Senegalese official who chairs a group representing 46 of the world’s poorest countries. “Concessional finance is instrumental in unlocking opportunities for our countries to leapfrog to cleaner, more sustainable energy sources.”

The person who had seen the plan said the UAE is considering measures within that fund to encourage investment in poorer countries where investor returns are less certain.

The UAE has tapped a longtime World Bank official, Samir Suleymanov, to lead the climate finance program. He comes from a background of development finance, which has left some people optimistic that the UAE can unlock more money for developing nations.

This year's U.N. climate talks will take place in Dubai, starting on Nov. 30. | Kamran Jebreili/AP Photo

Many of those developing countries have made their commitments to reduce their own emissions contingent on access to cheap finance, but they have long struggled to attract interest from the private sector for clean energy investment. That situation has worsened since the pandemic, combined with global energy and food crises, which drove much of the developing world into deeper debt distress.

Offering grant-based free money is not the only way to steer finance to such countries, the G-7 official said. Other options for encouraging investment in traditionally riskier environments include loan guarantees, lenders taking a secondary repayment position in investments with multiple creditors, or fixing interest rates for longer loan lifetimes.

The goal is getting that finance from countries long averse to providing it, the G-7 official said. Swiftly deploying enough clean energy outside the richest countries to combat climate change will be difficult without adding new finance contributors — but could be a role the Middle East’s cash-flush nations could play, the official said.

In a speech to African ministers in Ethiopia on Thursday, the summit president al-Jaber lamented “the chronic lack of available, accessible and affordable climate finance.” But his own government’s commitment to helping plug that hole is unclear.

Traditional sources for so-called concessional finance are tapped out. Nations this year must replenish the $19.2 billion Green Climate Fund and International Development Association funds — which both benefit low-income and climate vulnerable nations — while making cash available for a new “loss and damage” fund to pay for irreversible climate harm in vulnerable countries.

Russia’s war in Ukraine has also created major demand from developing nations for finance on favorable terms at a time when some rich governments, such as the U.K., are reducing rather than expanding their overseas aid budgets.

But the UAE has been clear which countries it believes should be volunteering cheap climate finance.

“To get from hundreds of billions to trillions, we know we need that concessional component,” COP28 Director General Majid Al Suwaidi told POLITICO in an interview last month. “We need the likes of the U.S., U.K., Canada, all of the Europeans, et cetera, to provide more concessional finance.”

Sovereign wealth funds and private pension plans could pile in after that, he said. “We can’t talk about who is contributing until we fix the system that allows and encourages them to come in.”

The governing structure of the potential UAE fund is unclear. The Emirates have avoided channeling finance through the U.N. process, seeking distance from rich governments expected to make regular financial contributions to fighting climate change.

But it’s unclear which nations would want to sign up for a UAE-developed investment vehicle. It’s also uncertain such an entity would add to total available finance for clean energy development, since countries could instead simply shift capital flows to the new fund, the G-7 official said.

Three people familiar with the UAE government’s moves said officials have shopped the idea to institutions in countries such as Canada, Denmark, Norway and Singapore. Those nations possess large sovereign wealth and pension funds capable of steering billions of dollars toward clean energy.

The Export and Investment Fund of Denmark’s senior communications director, Kim Bove, said he could not confirm an approach by the UAE. Funds in Canada, Norway and Singapore did not respond to requests for comment.

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Image: Germán & Co

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Pyxis Ocean left Singapore en route to Paranagua in Brazil in first major test to see if technology will work on a real voyage

World’s first wind-powered freighter sets off on maiden voyage

Pyxis Ocean bulk carrier fitted with revolutionary 120ft fibreglass ‘sails’ has reached more than five and a half knots on wind power alone

The Telegraph By Sarah Knapton, SCIENCE EDITOR21 August 2023 

It may not have the romance of the billowing multi-masted clippers, but the world’s first wind-powered freighter has embarked on her maiden voyage.

Mitsubishi’s Pyxis Ocean bulk carrier has been fitted with giant “wings” ushering in a new era of cargo-ladened sailing boats, borne to their destination on favourable tradewinds.

Although the sails are designed to work alongside the engine, engineers were delighted to find that during initial sea trials, the bulk carrier began to sail on wind power alone – reaching more than five and a half knots, before the crew intervened to bring her back under engine control.

Last week Pyxis Ocean – chartered by Cargill – left Singapore en route to the port of Paranagua in Brazil in the first major test to see if the technology will work on a real voyage.

If successful hundreds more ships will be retrofitted with the wings.

The revolutionary fibreglass aerofoils – which loom 123ft above deck – have been designed by engineers at BAR Technologies, a spin-off of Ben Ainslie Racing, the British team formed by the Olympic gold medalist.

Digital projections show they should deliver enough propulsion to cut the ship’s fuel use by at least three tonnes per day – about 30 per cent – helping to decarbonize the shipping industry without having to scrap existing vessels.

WindWings being retrofitted on Pyxis Ocean at the COSCO shipyard in Shanghai, China.

“I’m super excited about this,” said Jan Dieleman, president of Cargill’s Ocean transportation business. “We’re finally at the point where this ship is going to be on the water.

“We need to find out if everything is going to function. Is it safe? Is it going to work? Are the wings able to move as they should, can they fold? Does this actually work in port and then are we actually getting the fuel savings?

“It’s a huge project. This has never been done before. But you have to be willing to take some risks otherwise everything continues to be a theoretical exercise, so it’s time to showcase what is possible.”

The technology could change current shipping routes, making it more profitable to follow the old trading routes with favourable winds, rather than travelling in the straight lines most cargo ships do today.

Mr Dielman added: “We’ve always been working on the assumption that going from A to B is the quickest way, but we might need to deviate because there is more wind in certain areas, or you might get better returns at different times of year.

“We need to think differently to what we’ve done traditionally.”

Getting to the first voyage has not been easy. Cargill initially trialled kites but found they simply did not work and subsequently joined forces with Portsmouth-based BAR Technologies for the WindWings project.

That too has not been plain sailing.

Hampered visibility from the bridge

Placing the huge cambered aerofoils on the deck hampered visibility from the bridge, forcing the team to install cameras to see ahead. They also needed to build in a tilting mechanism that enabled the sails to be stowed during dockside operations, when passing under structures, or in stormy sea conditions.

In yachting, the size of the sail can be made smaller to cope with heavy weather, so engineers had to come up with a similar way of depowering the wings in case of a sudden storm.

As well as being able to pivot, each wing has three moveable elements that can be adjusted to spill the wind or exploit its power, in the same way that an aircraft wing changes its shape during take-off and landing.

Wind sensors on board pick up wind angle and speed, automatically reorienting the sail in the event of unexpected gusts. Above 40 knots – gale force conditions – the wings can be folded onto the deck.

There are also sensors which detect the lean – or heel – of the ship, how far it is drifting off the set course and the rudder angle.

“We don’t have Ben on board, so it has to be automatic,” said John Cooper, the CEO of BAR Technologies.

“If we see excess rudder angle, or leeway or heel, then the wings start, taking them out of a camber shape and pushing them into the wind angle.”

‘Sail away without the engine on’

So far, early sea trials have surpassed all expectations.

Mr Cooper added: “My senior engineer, who is normally very serious, phoned me up on the sea trials giggling like a 10-year-old and actually explaining they had just free-sailed.

“We’re all about wind-assisted propulsion, but it was super cool to lift the anchor and sail away without the engine on.

“And that’s only with two sails, we’ve got one right behind it with four sails on. They are still calculating it but we were well over five and half knots before we decided to stop acceleration, that was not terminal velocity, and we had an 18 knot wind not the strongest, so we know we can free-sail pretty damn well.”

The whole project was tested on a “digital twin” inside a computer before the wings were built by Yara Marine Technologies.

If the Pyxis Ocean’s journey is a success the team plan to test the wings on a Newcastlemax bulk carrier – one of the world’s largest cargo ships which is used to transport coal, iron ore, and grain across the world’s oceans.

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Illustrations by Germán & Co.

Will the rest of the world feel China’s deflation pain?

Falling prices will lower cost of imports but are unlikely to have a dramatic impact elsewhere

Financial Times by Chris Giles in London YESTERDAY

Beijing’s economic woes worsened last week after it emerged China had fallen into deflation. The news highlights how the country is struggling to live up to expectations of a strong recovery after emerging from extended Covid lockdowns.

But will falling prices have an impact beyond China’s borders, in places where the bigger risk is still that an extended period of high inflation will endure?

For now, economists say there is little reason for concern, as:

Chinese deflation is likely to prove temporary

Deflation is primarily a concern when it is pervasive and caused by companies desperate to sell to consumers who are unwilling or unable to buy because they have fallen on hard times.

This describes neither China’s economy nor its price movements.

The economic recovery following the reopening has disappointed — the property sector remains a serious concern — but output is still growing and an expansion of close to 5 per cent this year is still on the cards.

“China’s consumption recovery remains soft and uneven, but this a far cry from Japan-style deflation,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics, referring to the country’s decades-long experience with falling prices.

While Chinese consumer prices fell 0.3 per cent in the year to July, a small fall in costs also occurred in 2021. Now as then, the deflation appears temporary — more the result of base effects than any deep problems.

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A rise in core inflation signals Chinese deflation is unlikely to linger

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In July alone, prices rose by 0.2 per cent and they have increased 0.5 per cent in the first seven months of 2023. The measured deflation arose because prices — particularly of pork, which has fallen in price by 26 per cent over the past 12 months — did not rise at the pace seen during 2022, when China endured several major lockdowns.

Neil Shearing, chief economist of Capital Economics, said the rise in core inflation — which excludes food and energy, and is seen as a better measure of underlying price pressures — from 0.4 per cent in June to 0.8 per cent in July demonstrated the lack of entrenched deflation in China. “To the extent that chronic demand weakness shows up in the inflation data, it will do so in the core numbers,” he said.

Inflation is seldom as contagious as it seems

The world — bar China — has appeared to suffer an inflation boom during the past couple of years. While the pace of price rises has been high in most countries, the reasons why differ markedly.

Price rises triggered by snarl-ups in global supply chains may have been universal. But they were amplified in the US by extremely strong consumer demand growth. The surge in demand followed a huge fiscal expansion in 2020 and 2021, when the Trump and Biden administrations sent large cheques to households to combat the Covid-19 crisis.

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The US's economic recovery has been far stronger than elsewhere

Change in GDP between Q4 2019 and Q1 2023

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Strong demand was much less an issue in Europe and in emerging economies. These suffered much more from Russia’s invasion of Ukraine. In Europe, the pinch came from soaring natural gas prices. In poorer countries, higher food prices and energy costs sparked a wider rise in the price level.

Paul Donovan, chief economist of UBS, said in the case of Chinese deflation, price pressures were as likely to prove “intensely local”.

While the price of Chinese imports was likely to fall as a result of the country’s economic woes, Donovan noted that “an awful lot happens” to exports before they reach their final destination. “Generally most of the price of something made in China and sold in the US will be paid to US workers — in transport or advertising costs, and so on,” he said.

Chinese deflation can help in Europe

The big inflation problem, especially in Europe and emerging economies, has been the higher cost of imports, lowering living standards and sparking a process in which domestic companies try to defend their profit margins by raising prices and workers struggle to catch up.

Chinese factory goods prices were 4.4 per cent lower in July than a year earlier. To a minor extent, this has an effect abroad.

European countries will benefit from a weaker Chinese economy that places less competition on supplies of natural gas as it adjusts to weaning itself off from Russian supplies.

It would be wrong, of course, to suggest that everyone else benefits (at least a little) from a weak Chinese economy.

Recommended Unhedged podcast19 min listen China slows down China has contributed 40 per cent to global growth rates over the past 10 years, according to Dhaval Joshi, chief strategist at BCA Research. Any economic troubles in Beijing will weigh on world output.

But at the moment, the fallout from Chinese deflation looks manageable both for the country itself and the rest of the world.

---

News Round-Up, August 18, 2023

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Most read…

U.S. Mortgage Rates Jump to Highest Level Since 2002

The average 30-year fixed-rate mortgage has climbed above 7 percent, making it harder for buyers to afford homes, which are already in short supply.

NYT by Gregory Schmidt, Aug. 17, 2023

Hawaiian Electric/wildfires: old business models are no longer viable

Climate disasters were previously events utilities could withstand

Financial Times, Today

Putin fails again as Europe’s gas storage hits 90 percent

The EU has met its gas storage targets more than three months ahead of schedule. But that might not mean lower prices.

POLITICO EU BY GABRIEL GAVIN, AUGUST 17, 2023

Extreme fires caused by ancient humans wiped out Californian megafauna

A series of catastrophic fires killed off many large mammals in southern California by 13,000 years ago, and they were largely due to the arrival of humans

NEW Scientist by Michael Le Page, 17 August 2023

Unrealistic' global offshore wind expansion target would require $27 billion by 2026, says Wood Mackenzie

Reuters Today

Will the rest of the world feel China’s deflation pain?

Falling prices will lower cost of importe but are unlikely to have a dramatic impact elsewhere

Financial Times by Chris Giles in London YESTERDAY

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The AES Corporation is committed to accelerating the future of energy transitions by delivering greener and more innovative solutions. AES firmly believes that energy infrastructure plays a crucial role in ensuring the sustainability of our sector. Recently, the AES President and CEO, Andrés Gluski, had the privilege of moderating a captivating discussion titled "Harnessing Diplomacy for the Energy Transition and Universal Access" at the @EEI_Intl panel. This engaging conversation highlights the importance of collaboration and innovative approaches in driving the energy transition forward.

---

Source: NYT 

U.S. Mortgage Rates Jump to Highest Level Since 2002

The average 30-year fixed-rate mortgage has climbed above 7 percent, making it harder for buyers to afford homes, which are already in short supply.

NYT by Gregory Schmidt, Aug. 17, 2023

Mortgage rates surged to a 21-year high this week, a jump that will make it even harder for buyers to afford homes in a market hampered by high prices and low inventory.

The average 30-year fixed-rate mortgage — the most popular home loan in the United States — was 7.09 percent, up from 6.96 percent last week, Freddie Mac said on Thursday. A year earlier, the 30-year rate was 5.13 percent.

Analysts say they expect mortgage rates to remain lofty in the near term, and to start cooling only gradually by the end of the year. The current rate is the highest since April 2002. Since then, home buyers enjoyed years of falling rates, which even dipped below 3 percent at the beginning of the pandemic.

But as mortgage rates began abruptly rising last year, when the Federal Reserve started lifting interest rates to rein in rapid inflation, the housing market has stagnated, as owners with low mortgage rates have been unwilling to put their homes up for sale.

In June, sales of existing homes fell nearly 19 percent from the year before, according to the National Association of Realtors. The scarcity of listings has kept housing prices elevated: The median price of an existing home was $410,200 in June, the second-highest since the organization began tracking the data in 1999, down only marginally from a high of $413,800 a year ago.

And experts do not think the housing market will cool off anytime soon. On Tuesday, Goldman Sachs revised upward its forecast for home prices, predicting a 1.8 percent rise in prices this year and 3.5 percent jump in 2024. “Affordability remains burdensome,” analysts at the bank said in a report, citing a tighter housing supply and a steady demand for homes.

The scarcity of existing homes for sale has pushed buyers to consider new construction.Credit...Gene J. Puskar/Associated Press

That’s bad news for would-be home buyers like Kathleen Schmidt, who rents a house in Toms River, N.J., with her husband and two teenage children. She said that they were trying to save for a 20 percent down payment on a townhome nearby, and that the jump in mortgage rates was discouraging.

“I just felt in the pit of my stomach: We are never going to be able to buy a home,” said Ms. Schmidt, who owns KMSPR, a public relations firm for authors and publishers.

“My dream forever was to own a home someday because it’s something my parents never did,” she added. “We want something left for our kids.”

Affordability is a persistent challenge for home buyers, said Jeff Ostrowski, an analyst at the personal finance company Bankrate, who predicted that rates would remain elevated for some time.

“I think buyers are going to have to buckle their chin straps and figure out how to make it work,” he said.

The scarcity of existing homes for sale has pushed buyers to consider new construction. The sale of new homes climbed nearly 24 percent in June from the same period a year earlier, the Census Bureau reported. Housing starts, a measure of the construction of new homes, increased about 6 percent in July from the previous year.

“The builders are making profits, and their stock margins have increased from a year ago,” said Lawrence Yun, the chief economist at the National Association of Realtors. He added that national builders like KB Home, Lennar and Toll Brothers would continue to add inventory to make Wall Street happy, but that they were focused more on higher-priced homes.

For home buyers, finding affordable options remains difficult. The Federal Reserve has lifted its policy interest rate, which underpins borrowing costs across the economy, to the highest level in 22 years as it tries to slow inflation by cooling the economy. Although price pressures have abated, with the annual rate of inflation moderating from nearly 9 percent last year to just above 3 percent last month, a recent uptick in gasoline prices could prop up inflation figures.

Officials at the central bank have suggested that further rate adjustments could be possible this year. They expect to cut rates in 2024, but they think it could be several years before rates return to the lower levels that were common before the pandemic.

Mortgage rates generally track the yield on 10-year Treasury bonds, which are influenced by a variety of factors, including expectations around inflation, the Fed’s actions and how investors react to it all. On Thursday, the 10-year yield rose above 4.3 percent for the first time since 2007.

For home buyers and market watchers, the question remains, how long will mortgage rates remain high?

Mr. Yun predicted that rates would slowly start to ease by next spring or even by the year’s end, coming down to 6.5 percent, which is still more than double the rate in 2021. But he said the Fed’s fight against inflation and the recent downgrade in the nation’s credit rating continued to put pressure on mortgage rates.

“The housing market is in a tough spot,” he said.

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Image by Germán & Co

Hawaiian Electric/wildfires: old business models are no longer viable

Climate disasters were previously events utilities could withstand

Financial Times, Today

Climate disasters were previously events utilities could withstand Investors fear electricity transmission equipment may be implicated in the deadly wildfires in Hawaii © Patrick T. Fallon/AFP/Getty Images

The securities of US energy utilities are supposed to be safe investments. Consumer prices for power are set by regulators with the aim of producing solid returns. In parts of the US, climate change has upended that bargain. 

Shares of Hawaiian Electric Industries have fallen nearly 70 per cent this month. Investors fear electricity transmission equipment may be implicated in wildfires claiming more than a hundred lives and causing property damage running into billions of dollars.

For the moment, the focus should be on how to best help survivors. Soon enough, questions about the viability of old business models will need answering.

Serious litigation could result in a settlement that leaves alleged victims as shareholders in Hawaiian Electric. Just such an equitisation happened a few years back when northern Californian utility PG&E settled a $13.5bn liability for wildfires. Half was in the form of shares handed to a victims’ trust. 

PacifiCorp, a utility owned by investor Berkshire Hathaway, recently lost a lawsuit over a 2020 wildfire. It could be on the hook for several billions of dollars in claims. Colorado utility Xcel Energy is in the same boat.

Climate disasters were previously events utilities could withstand. They now risk becoming annual events that dictate expensive remediation and retrofitting. These may be beyond the capacity of any private business. 

Northern California is prosperous. Multiple investors, including private equity, were interested in funding the restructuring of PG&E. The state of California itself supported the creation of a specialised insurance fund to socialise risk.

Claims against Hawaiian Electric may be trickier to resolve. The population is smaller. Rebuilding costs will be exorbitant. The Hawaiian average price for electricity is already steep, at 44 cents per kilowatt hour.

Hawaii’s wildfires may therefore prove a tipping point in how the US apportions the costs of an increasingly unstable climate.

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Just Exceptional...

“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced…

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Gas Infrastructure Europe said Thursday that member countries' gas stores are now at more than 90 percent capacity | Attila Kisbenedek/AFP 

Putin fails again as Europe’s gas storage hits 90 percent

The EU has met its gas storage targets more than three months ahead of schedule. But that might not mean lower prices.

POLITICO EU BY GABRIEL GAVIN, AUGUST 17, 2023 

The EU's reserves of natural gas hit a historic high Thursday, filling up well in advance of the winter heating season as the bloc continues its dash away from Russian energy dependence.

That leaves the Kremlin scrambling to plug a gaping hole in its finances left by its decision to cut off European customers in the wake of its full-scale invasion of Ukraine last year.

But less Russian gas also opens the EU to the bigger price fluctuations of the global market for liquefied natural gas (LNG).

Gas Infrastructure Europe said Thursday that member countries' gas stores are now at 90.12 percent capacity — breezing past the 90 percent filling target that Brussels is legally required to meet by November.

"Today’s confirmation that we have met our gas storage requirements so far ahead of schedule underlines that the EU is well-prepared for winter and this will help to further stabilize markets in the coming months," the bloc's Energy Commissioner Kadri Simson told POLITICO.

"The EU energy market is in a much more stable position than it was this time last year," she added, while acknowledging "we have seen in recent weeks that the gas market remains sensitive" and that the Commission will continue to monitor it as the Continent heads toward chillier weather.

The news underlines the EU's success in shedding its dependence on Russian pipeline gas, which before the war supplied about 40 percent of the bloc's demand.

Moscow steadily cut off its EU customers, slashing and then ultimately cutting off deliveries through its Yamal-Europe and Nord Stream pipelines, while also reducing the volumes reaching the EU via Ukraine.

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EUROPE STOCKS UP ON GAS

*Europe's gas stores are filling faster than in previous years. 

*EU gas storage levels, in terawatt-hours and in share of total storage capacity.

*Storage data for some dates listed is estimated

SOURCE: Gas Infrastructure Europe by Lucia Mackenzie and Giovanna Coi.

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The EU responded by shifting to other suppliers and slashing demand.

Russian gas fell to 23.6 percent of EU imports in the first 32 weeks of 2022, and so far this year it's down to just 8.4 percent. That puts the EU's commitment to end purchases of Russian gas by 2027 within reach.

"This is definitely a success story," said Giovanni Sgaravatti, a research analyst at Brussels think tank Bruegel, "for the Commission, for the energy market, but even more so for the governments of member states that responded fairly well to replace 1,000 terawatt hours of missing Russian gas in the space of a year."

Russian gas has largely been replaced by imports from the U.S., Norway, Azerbaijan and others, bringing prices dramatically down from their 2022 peak. The Dutch TTF gas pricing index hit €320 per megawatt hour last August; it hovered around €38 this week.

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IMPORTS OF GAS FROM RUSSIA HAVE HIT HISTORIC LOWS

*The EU27's dependence on Russian gas imports has decreased over the past three years.

*EU natural gas imports from Russia and other trading partners, in share of total imports and millions of cubic meters for the first 32 weeks of each year.

SOURCE: Bruege by Lucia Mackenzie and Giovanna Coi 

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However, the cost of gas still remains higher than before the war, when it fluctuated around €20 per megawatt hour, meaning bigger bills for households and lower productivity for European industry.

"Wholesale gas prices may be significantly lower than a year ago when the market was gripped by Nord Stream coming offline, but they remain still noticeably more expensive than historic gas prices over the last decade," said Tom Marzec-Manser, head of gas analytics at market analysis firm ICIS, warning that traders are still anxious about supply.

"The fact European storages are nearly full earlier than normal — typically they reach this level around October — doesn't necessarily mean the price will come down further, unfortunately. Stored gas can only get you so far through a winter and if that winter is cold there's a certain amount of risk, and that's what keeps gas price elevated for the time being," he added.

Analysts expect this to be the last winter where shortages are a serious concern, given that increased LNG production capacity from suppliers like Qatar and the U.S. is due to come online midway through 2024.

However, a number of Central European countries, in particular Austria, are still reliant on Russian imports sent through pipelines running across Ukraine. Kyiv has indicated it does not intend to renegotiate the transit deal, which is set to expire at the end of next year. That creates a hard deadline for those still depending on Moscow's fossil fuels.

The loss of its most dependable European customers has been a big blow for the Kremlin; revenues from energy exports were down 41 percent to $43.4 billion in the first seven months of this year, the Russian finance ministry said. Meanwhile, the ruble hit a 16-month low, and this week crashed through a symbolic benchmark of more than 100 to the dollar.

That makes it harder for Russia to continue to prop up its isolated economy, pay its soldiers' wages and purchase weapons from abroad. According to Natasha Kuhrt, a senior lecturer at King's College London's Department of War Studies, "in the end, the government will prioritize military spending," while economic woes are mainly "going to mean hardship" for many ordinary Russians.

Meanwhile, Moscow-based research firm Romir on Wednesday published a poll of 3,500 Russians that found almost one in five is having to reduce their spending on food and essential goods to save money, up three percent from the month before.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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A sabre-toothed cat skull in the Page Museum at the La Brea tar pits, California/ Robert Landau

Extreme fires caused by ancient humans wiped out Californian megafauna

A series of catastrophic fires killed off many large mammals in southern California by 13,000 years ago, and they were largely due to the arrival of humans

NEW Scientist by Michael Le Page, 17 August 2023

A series of catastrophic fires was the immediate cause of the extinction of many large mammals in southern California 13,000 years ago, according to a study of fossils from the La Brea tar pits. The findings suggest these extreme fires were probably a result of humans abruptly changing the ecosystem by killing off herbivores – meaning there was more vegetation to burn – and deliberately starting fires.

“It’s a synergy of the drying climate and the humans, and the fact that they are killing herbivores and increasing fuel loads, and all of those things go together to make a feedback loop that takes the ecosystem to a chaotic state,” says Robin O’Keefe at Marshall University in West Virginia. “The fire event is really catastrophic.”

The tar pits at La Brea in Los Angeles have trapped numerous animals over the past 50,000 years and preserved their bones, providing an extraordinary window into the past. Many of the bones have never been precisely dated because radiocarbon dating was more expensive in the past and required destroying large chunks of bone, and also because results were skewed by the tar inside the bones.

Now, costs have fallen, only tiny quantities of bone are needed and the tar contamination problem can be solved by extracting preserved collagen and dating only this material. As a result, O’Keefe and his colleagues were able to precisely date 172 bones from eight species.

Seven of these species are extinct, including the sabre-toothed cat (Smilodon fatalis), the dire wolf (Aenocyon dirus), the western camel (Camelops hesternus) and the ancient bison (Bison antiquus), which was even larger than surviving bison. The team also dated coyote (Canis latrans) bones as a control.

The dating shows that the seven species were all gone from the La Brea area by 13,000 years ago, though some survived elsewhere in North America for another millennium or so. Their disappearance from La Brea coincides with massive spikes in the number of charcoal particles in lake sediments, which are deposited during wildfires.

Keep up with advances in archaeology and evolution with our monthly newsletter.

“Some of those spikes for those fires are just enormous, orders of magnitude more than has ever happened before,” says O’Keefe.

Pollen in lake sediments shows that the vegetation had begun changing from woodland to a more open landscape around 16,000 years ago, as the area became drier due to the retreat of the ice sheets. But there was a sudden shift to fire-resistant vegetation around 13,000 years ago.

“The results of this study are consistent with humans increasing fire both directly though ignitions and indirectly through hunting of herbivores,” says Allison Karp at Yale University, who wasn’t involved in the study.

If the tiny number of people alive at the time could do this, the much greater number of people alive now can have a much bigger impact, says O’Keefe. “It’s super relevant to today,” he says.

More extreme wildfires are happening in many parts of the world as it warms, and O’Keefe says his findings show there is a risk this could lead to ecosystems flipping into another state, resulting in many species going extinct. “Hopefully, by learning these things about what happened at La Brea, maybe we can change our trajectory,” he says.

Earlier research had suggested that the development of the Clovis stone tool technology, whose distinctive feature is finely crafted large spear points for tackling big animals, enabled people in North America to wipe out the continent’s megafauna. However, these findings show that some large mammals were going extinct in places before Clovis tools appeared. O’Keefe and his colleagues think Clovis tools were instead a response to the loss of some megafauna.

“The things that seem to get hunted out first are the things that are easier to catch, like camels and horses and bison,” says O’Keefe. “It’s only when you start running out of those that we think that the Clovis technology evolves, because you have to do this really dangerous thing and try to take on a mastodon because all the easier to kill animals are gone.”

“Clovis wasn’t a driver of extinction. It evolves because the extinction was already under way,” he says.

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image by Germán & Co

'Unrealistic' global offshore wind expansion target would require $27 billion by 2026, says Wood Mackenzie

Reuters, August 18, 2023

Aug 17 (Reuters) - Government targets to increase wind power installations would see annual capacity additions reach 80 gigawatts (GW) per year by 2030, requiring $100 billion in secured investment in the supply chain by 2026, Wood Mackenzie said in a report.

The research and consultancy firm forecast annual capacity is more likely to increase by 30 gigawatts (GW) a year by 2030, which would require $27 billion of secured investment by 2026.

"The supply chain is struggling to scale up and will be an impediment to achieving decarbonisation targets if change does not happen," said Chris Seiple, vice chair, power and renewables at Wood Mackenzie.

"Nearly 80 GW of annual installations to meet all government targets is not realistic, even achieving our forecasted 30 GW in additions will prove unrealistic if there isn't immediate investment in the supply chain," Seiple said.

Wood Mackenzie noted that the low profit margins on offshore wind production and uncertainty about project timings resulting in very different supply-chain needs are making it hard to drum up investment in the sector.

According to the Statistical Review of World Energy report in June, global wind and solar power grew to a record share of 12% of power generation last year, surpassing nuclear.

Target setting and plans for power market infrastructure to support offshore wind need to extend beyond 2030 to scale up the offshore wind supply chain, analysts at Wood Mackenzie said.

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Illustrations by Germán & Co.

Will the rest of the world feel China’s deflation pain?

Falling prices will lower cost of imports but are unlikely to have a dramatic impact elsewhere

Financial Times by Chris Giles in London YESTERDAY

Beijing’s economic woes worsened last week after it emerged China had fallen into deflation. The news highlights how the country is struggling to live up to expectations of a strong recovery after emerging from extended Covid lockdowns.

But will falling prices have an impact beyond China’s borders, in places where the bigger risk is still that an extended period of high inflation will endure?

For now, economists say there is little reason for concern, as:

Chinese deflation is likely to prove temporary

Deflation is primarily a concern when it is pervasive and caused by companies desperate to sell to consumers who are unwilling or unable to buy because they have fallen on hard times.

This describes neither China’s economy nor its price movements.

The economic recovery following the reopening has disappointed — the property sector remains a serious concern — but output is still growing and an expansion of close to 5 per cent this year is still on the cards.

“China’s consumption recovery remains soft and uneven, but this a far cry from Japan-style deflation,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics, referring to the country’s decades-long experience with falling prices.

While Chinese consumer prices fell 0.3 per cent in the year to July, a small fall in costs also occurred in 2021. Now as then, the deflation appears temporary — more the result of base effects than any deep problems.

---

A rise in core inflation signals Chinese deflation is unlikely to linger

---

In July alone, prices rose by 0.2 per cent and they have increased 0.5 per cent in the first seven months of 2023. The measured deflation arose because prices — particularly of pork, which has fallen in price by 26 per cent over the past 12 months — did not rise at the pace seen during 2022, when China endured several major lockdowns.

Neil Shearing, chief economist of Capital Economics, said the rise in core inflation — which excludes food and energy, and is seen as a better measure of underlying price pressures — from 0.4 per cent in June to 0.8 per cent in July demonstrated the lack of entrenched deflation in China. “To the extent that chronic demand weakness shows up in the inflation data, it will do so in the core numbers,” he said.

Inflation is seldom as contagious as it seems

The world — bar China — has appeared to suffer an inflation boom during the past couple of years. While the pace of price rises has been high in most countries, the reasons why differ markedly.

Price rises triggered by snarl-ups in global supply chains may have been universal. But they were amplified in the US by extremely strong consumer demand growth. The surge in demand followed a huge fiscal expansion in 2020 and 2021, when the Trump and Biden administrations sent large cheques to households to combat the Covid-19 crisis.

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The US's economic recovery has been far stronger than elsewhere

Change in GDP between Q4 2019 and Q1 2023

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Strong demand was much less an issue in Europe and in emerging economies. These suffered much more from Russia’s invasion of Ukraine. In Europe, the pinch came from soaring natural gas prices. In poorer countries, higher food prices and energy costs sparked a wider rise in the price level.

Paul Donovan, chief economist of UBS, said in the case of Chinese deflation, price pressures were as likely to prove “intensely local”.

While the price of Chinese imports was likely to fall as a result of the country’s economic woes, Donovan noted that “an awful lot happens” to exports before they reach their final destination. “Generally most of the price of something made in China and sold in the US will be paid to US workers — in transport or advertising costs, and so on,” he said.

Chinese deflation can help in Europe

The big inflation problem, especially in Europe and emerging economies, has been the higher cost of imports, lowering living standards and sparking a process in which domestic companies try to defend their profit margins by raising prices and workers struggle to catch up.

Chinese factory goods prices were 4.4 per cent lower in July than a year earlier. To a minor extent, this has an effect abroad.

European countries will benefit from a weaker Chinese economy that places less competition on supplies of natural gas as it adjusts to weaning itself off from Russian supplies.

It would be wrong, of course, to suggest that everyone else benefits (at least a little) from a weak Chinese economy.

Recommended Unhedged podcast19 min listen China slows down China has contributed 40 per cent to global growth rates over the past 10 years, according to Dhaval Joshi, chief strategist at BCA Research. Any economic troubles in Beijing will weigh on world output.

But at the moment, the fallout from Chinese deflation looks manageable both for the country itself and the rest of the world.

---

News Round-Up, August 17, 2023

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Most read…

EXCLUSIVE: Hawaiian Electric Knew of Wildfire Threat, but Waited Years to Act

Four years ago, the utility said it needed to do more to prevent its power lines from emitting sparks. It made little progress, focusing on a shift to clean energy.

WSJ by Katherine Blunt, Dan Frosch and Jim Carlton, Aug. 16, 2023 

Russia’s War-Torn Economy Hits Its Speed Limit

Economists see this week’s currency gyrations not as the beginning of a financial crisis but rather as a symptom of the Kremlin’s sclerotic economic prospects

WSJ by Chelsey Dulaney and Georgi Kantchev, Aug. 17, 2023

Why Hawaiian Electric Is Facing a Lawsuit After Deadly Wildfires in Maui

TIME by SIMMONE SHAH,  AUGUST 16, 2023  | ORIGINALLY PUBLISHED: AUGUST 15, 2023 

As Brazil's president, Lula is enjoying a favorable period with an approval rating of 60 percent.

Support for the leftist leader is increasing among evangelicals and in the southern part of the country, owing to the economic influence.

"El País" Naiara Galarraga Gortázar, São Paulo, August 17, 2023 - Translation and editing to English by Germán & Co.

THE ANATOMY OF TWITTER

A POLITICAL TSUNAMI BY MILEI

IF THE FAR-RIGHT CANDIDATE WINS THE PRESIDENCY, HE WILL ELIMINATE SEVERAL MINISTRIES. TO CLARIFY HIS PROJECT, HE UPLOADED A VIDEO ON TIKTOK WITH AN IMPECCABLE STAGING THAT MATCHED HIS PROFILE.

"El País" Federico Rivas Molina, 17th August 2023, translation and editing to English by Germán & Co.

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The AES Corporation is committed to accelerating the future of energy transitions by delivering greener and more innovative solutions. AES firmly believes that energy infrastructure plays a crucial role in ensuring the sustainability of our sector. Recently, the AES President and CEO, Andrés Gluski, had the privilege of moderating a captivating discussion titled "Harnessing Diplomacy for the Energy Transition and Universal Access" at the @EEI_Intl panel. This engaging conversation highlights the importance of collaboration and innovative approaches in driving the energy transition forward.

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Burned cars in front of homes destroyed by the wildfire in Lahaina PHOTO: JUSTIN SULLIVAN/ Edited by Germán & Co.

Hawaiian Electric Knew of Wildfire Threat, but Waited Years to Act

Four years ago, the utility said it needed to do more to prevent its power lines from emitting sparks. It made little progress, focusing on a shift to clean energy.

WSJ by Katherine Blunt, Dan Frosch and Jim Carlton, Aug. 16, 2023 

During the 2019 wildfire season, one of the worst Maui had ever seen, Hawaiian Electric concluded that it needed to do far more to prevent its power lines from emitting sparks.

The utility examined California’s plans to reduce fires ignited by power lines, started flying drones over its territory and vowed to take steps to protect its equipment and its customers from the threat of fire. 

Nearly four years later, the company has completed little such work. Between 2019 and 2022, it invested less than $245,000 on wildfire-specific projects on the island, regulatory filings show. It didn’t seek state approval to raise rates to pay for broad wildfire-safety improvements until 2022, and has yet to receive it.

Now, the company is facing scrutiny, litigation and a financial crisis over indications that its power lines might have played a role in igniting the deadliest U.S. wildfire in more than a century. The blaze has caused more than 100 deaths, destroyed the historic town of Lahaina and resulted in an estimated billions of dollars in damage. 

Electrical workers repair power lines leading into Lahaina on Tuesday. PHOTO: MIKE BLAKE/REUTERS

The fire’s cause hasn’t been determined, but mounting evidence suggests the utility’s equipment was involved. One video taken by a resident shows a downed power line igniting dry grass along a road near Lahaina. A firm that monitors grid sensors reported dozens of electrical disruptions in the hours before the fire began, including one that coincided in time with video footage of a flash of light from power lines. 

Hawaiian Electric said it would investigate any role its infrastructure may have played and cooperate with a separate probe into the fire launched last week by the Hawaii attorney general. 

“We all believe it’s important to understand what happened. And I think we all believe it’s important to make sure it doesn’t happen again,” said Shelee Kimura, Hawaiian Electric’s chief executive.

In response to questions about its wildfire-mitigation spending, a spokesman for Hawaiian Electric said the company reduces wildfire risk through its routine utility work, including trimming or removing trees and upgrading, replacing and inspecting equipment. It said it has spent about $84 million on maintenance and tree work in Maui County since 2018.

The utility has long been a force in Hawaii politics and business. In the wake of the fire, its finances are reeling. Its stock has plunged 49% this week, and its credit rating was downgraded to junk by S&P.

Hawaiian Electric is the latest utility in the Western U.S. to struggle following large wildfires, many of which have been sparked by utility equipment in recent years. PG&E, the Northern California utility giant, sought bankruptcy protection in 2019 after its power lines ignited a series of major fires, including the 2018 Camp Fire that killed 84 people and destroyed the town of Paradise, Calif. That had been the deadliest wildfire in modern U.S. history until the Maui fire. 

In recent days, Hawaiian Electric officials have conferred with their counterparts at PG&E, seeking legal guidance on how to weather a crisis, people familiar with the matter said. The company is speaking with restructuring-advisory firms, exploring options to address its financial and legal challenge, said people familiar with the matter.

Since PG&E’s bankruptcy, Hawaiian Electric has made reference in regulatory filings to the risks of power-line fires, but it waited years to take significant action, documents and interviews show. During that period, the company was undertaking a state-mandated shift to renewable energy. 

Acres burned in Maui County

Source: Hawaii Wildfire Management Organization

The growing risk of wildfire on Maui had been known for years. The number of acres burned on the island soared to 39,000 in 2019, from 150 in 1999, according to data compiled by the Hawaii Wildfire Management Organization, a nonprofit that works with government agencies and the public. 

Several reports released by the group and others in recent years have said the danger is increasing, in part, because of invasive plants that have overtaken former sugar and pineapple plantations. Roughly one-quarter of state land in Hawaii is now covered by invasive grasses and shrubs, according to a study by the University of Hawaii and think tank East-West Center. 

Wildfires in Maui since 2000

Note: Grasslands as of 2017
Sources: NASA (wildfires); U.S. Geological Survey (grasslands)
Jake Steinberg/THE WALL STREET JOURNAL

In 2018, winds from Hurricane Lane passing to the south helped fuel fires that burned more than 2,000 acres on Maui. The next year was far worse, with the most acres blackened in decades, data from the wildfire management group show.

That July, a 9,000-acre blaze blew out of control in Central Maui, burning 25 acres a minute, according to the Maui News. The blaze prompted hundreds of evacuations and came within 150 feet of Hawaiian Electric’s power plant on Maui, according to the paper. The plant accounts for as much as 80% of the island’s power supplies.

A view of the devastation in Lahaina. PHOTO: ELYSE BUTLER FOR THE WALL STREET JOURNAL

It said it would install heavier, insulated conductors on Maui and Oahu to minimize the risk of sparks when winds picked up, as well as technology to detect disruptions when the conductors came into contact with vegetation or each other. It said it would apply fire retardant on poles in risky areas and consider installing cameras and other devices to monitor weather conditions during fire season.

In filings over the next two years with the Hawaii Public Utilities Commission, which is tasked with approving utility projects and spending, the company made only passing reference to wildfire mitigation. 

Renewables push

Former regulators and energy company officials said the utility was focused at that time on procuring renewable energy. Hawaii has been on a push to convert to renewables since 2008, when a run-up in oil prices sent electrical rates at Hawaiian Electric—which relied on petroleum imports for 80% of its energy supply—through the roof. In 2015, lawmakers passed legislation mandating that the state derive 100% of its electricity from renewable sources by 2045, the first such requirement in the U.S. 

The company dove into reaching the goals, stating in 2017 that it would reach the benchmark five years ahead of schedule. 

In 2019, under pressure to replace the output of two conventional power plants set to retire, the company sought to contract for 900 megawatts of renewable energy, the most it had pursued at any one time.

“You have to look at the scope and scale of the transformation within [Hawaiian Electric] that was occurring throughout the system,” said Mina Morita, who chaired the state utilities commission from 2011 to 2015. “While there was concern for wildfire risk, politically the focus was on electricity generation.” 

The drive to reach the renewable goals also preoccupied private energy companies working with Hawaiian Electric and state energy officials, said Doug McLeod, a consultant who served for several years as the Maui county energy commissioner. 

“Looking back with hindsight, the business opportunities were on the generation side, and the utility was going out for bid with all these big renewable-energy projects,” he said. “But in retrospect, it seems clear, we weren’t as focused on these fire risks as we should have been.”

Burned cars in front of homes destroyed by the wildfire in Lahaina PHOTO: JUSTIN SULLIVAN/GETTY IMAGES

A 2020 management audit of the company found that its enterprise risk analysis was largely focused on financial risk, with limited consideration of operational and business risk. And the division within the company that oversaw power line operations had significant management problems, the audit found.

Henry Curtis, who leads an environmental and community group that regularly weighs in on utility projects, said Hawaiian Electric officials told him privately that they didn’t believe Hawaii was prone to the type of devastating wildfires roaring through California. The utility officials thought the state’s parched grasslands were less of an urgent threat than California’s vast and dry timberlands, he said. 

Shirley Daniel, a former Hawaiian Electric board member, said the utility hadn’t seen Hawaiian fires as a major threat. She likened the Maui disaster to the devastation Hurricane Sandy brought in 2012 to a New York City area that hadn’t before experienced so much damage from a tropical storm. 

“I think the world is going to have to be realistic about these things,” she said about the changing nature of natural disasters.

Prompted by the increase in wildfires, a Maui county government commission in July 2021 examined the local prevention and response system and warned county and state officials of the growing fire threat. 

“The investigation found that the number of incidents from a combination of wild/brush/forest fires appears to be increasing, and that this increase poses an increased threat to citizens, properties, and sacred sites,” the commission’s report concluded.

The report said not enough was being done to address the concerns. It recommended a number of solutions, including better management of vegetation around power lines and creating fuel buffers around the lines. 

County and state officials didn’t return calls seeking comment. 

Sweeping Wildfire

Fires started on Tuesday devastated Lahaina.

Sources: Whisker Labs; Maxar Technologies, Planet Labs (satellite images); OpenStreetMap (building footprints)

The month the county report was released, Hawaiian Electric broached wildfire risk with the utilities commission. In a proceeding focused on modernizing the power grid, it proposed some wildfire-mitigation work on Maui, including upgrading power lines and installing weather cameras and smart technology—some of the initiatives mentioned in its 2019 announcement. 

The regulatory proceeding stalled, and only recently resumed.

Jennifer Potter, who served as a state utilities commissioner from 2018 until November 2022, said the utility should have been more aggressive in presenting its plans on wildfire risk. “With the increase in wildfires that did occur, in particular on Maui, it wouldn’t have been unreasonable for [Hawaiian Electric] to have a more robust wildfire plan,” she said. 

Potter also said the commission itself could have been more assertive in demanding that the utility give priority to wildfire mitigation. “Because it wasn’t an emergency, it didn’t receive the attention that it needed,” she said. She called it a “missed opportunity.” 

In June 2022, Hawaiian Electric sought regulatory permission to raise rates to fund a more comprehensive plan to prepare the grid for new climate change-related stresses, including elevated risk of wildfire. It said it planned to spend about $190 million across Hawaii on removing potentially hazardous trees, replacing and upgrading power lines, and other protective measures, many of which have been undertaken by other utilities throughout the West. 

As in many regulatory proceedings, the proposal has taken months to advance. The state utilities commission and other stakeholders asked dozens of questions of the company. In responses filed before the Maui fire occurred, Hawaiian Electric said it believed there was an urgent need to complete the upgrades, but that it wouldn’t start on the work until it has state approval to recoup costs from customers—a common occurrence when utilities seek to make large investments.

In a filing in June, the commission said: “In light of the asserted urgency of these transmission and distribution resiliency upgrades, why did Hawaiian Electric not begin to initiate some of these projects sooner?” 

The company hasn’t yet responded.

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This week, the ruble fell to its lowest level since the early days of Russia’s invasion of Ukraine. YURI KADOBNOV/AGENCE FRANCE-PRESSE

Russia’s War-Torn Economy Hits Its Speed Limit

Economists see this week’s currency gyrations not as the beginning of a financial crisis but rather as a symptom of the Kremlin’s sclerotic economic prospects

WSJ by Chelsey Dulaney and Georgi Kantchev, Aug. 17, 2023

The Russian central bank’s jumbo interest-rate increase to halt a tumbling ruble this week points to a new reality for the Kremlin: Russia’s economy has reached its speed limit.

The government has flooded the Russian economy with money to keep its troops in Ukraine supplied and insulate its businesses and citizens from the war. Thanks to the state’s largess, demand in the economy is rising, helping it recover from last year’s sanctions-induced recession. Supply—increasingly constrained by Russia’s isolation and widespread labor shortages—isn’t.

That growing imbalance of Russia’s wartime economy was thrust into focus this week as the ruble fell to its lowest level since the early days of the war. A senior Kremlin official blamed the currency drop on loose monetary policy. A day later, Russia’s central bank hiked interest rates by 3.5 percentage points at an emergency meeting, citing the need to stabilize the currency and bring down inflation, which it said has been growing at an annualized rate of 7.6% over the last three months.

The ruble has staged a rebound, with $1 now buying roughly 95 rubles compared with as much as 102 on Monday. Economists see this week’s volatility not as the beginning of an imminent financial crisis but rather as a symptom of Russia’s sclerotic economic prospects.

How many rubles by $1

Russian invades Ukraine

Note: The Y-axis is reversed to show the ruble's depreciation against the dollar.

One step Russia’s central bank is now considering to boost the currency would reimpose requirements—used earlier in the war—on exporters to convert foreign earnings back into rubles, according to media reports.

“Russia is one of the few countries that could sustain for the longest. I don’t think they’re necessarily going to run out of money or whatnot,” said Erik Meyersson, chief emerging-market strategist at Swedish bank SEB.  

But the level at which the Russian economy can grow without stoking inflation is now much lower than before Western sanctions. The decline of this so-called potential growth rate sets up a dilemma for President Vladimir Putin as he needs to both boost military production and placate the domestic population ahead of the coming presidential elections in March.

Government spending as part of gross domestic product has jumped by 13.5% in the first quarter compared with the same period last year, the highest growth rate in data going back to 1996.

The International Monetary Fund has estimated that Russia’s potential growth rate was around 3.5% before 2014, the year it seized Crimea from Ukraine.

Analysts at Raiffeisenbank Russia estimate the long-term potential growth of the economy now stands at 0.9%. In the years running up to the 2008 financial crisis, Russia’s economy averaged growth of more than 7% a year.

“The devaluation of the ruble shows that the economic fireworks of booming public spending are not sustainable,” said Janis Kluge, an expert on the Russian economy at the German Institute for International and Security Affairs. “The speed limit is not what the government can finance, but what the economy can produce.”

Russia’s ability to increase production at its own factories is already stretched to the limit. In sectors supplying the military, plants are working multiple shifts to cope with orders. Statistical categories associated with military output, such as metal goods, optical products and special clothing, boomed in the first half of the year. 

Nonmilitary industrial sectors, meanwhile, have languished, weighed down by the lack of access to Western parts, inefficiency and a history of weak investment in upkeep of machines and equipment. Auto output is down more than 10% year-over-year. As a result, Russia’s economy has become increasingly centered on its vast natural resources, with profits from energy and metals filling the government’s coffers.

Russia has tried to become more self-sufficient since it invaded Ukraine last February and was cut off from Western supply networks. Those efforts are slow-moving and so far having mixed success. Some 65% of industrial enterprises in Russia are dependent on imported equipment, according to a poll published in June by Moscow’s Higher School of Economics. 

“Building up capacity in new sectors takes time,” said Iikka Korhonen, the head of the Bank of Finland Institute for Emerging Economies. “You need machinery, you need qualified technicians. All that takes resources and it takes time.”

Russia has turned abroad to fill the gap. Imports of goods were up 18% this year through July, according to data from the finance ministry. Imports from China have surged and Russia’s defense minister recently visited North Korea to view weapons systems. 

Russia’s growing dependence on imports has major implications for its economic stability. The economy still runs a current-account surplus, broadly meaning it receives more from exports than it spends on imports. But that surplus has fallen 85% this year, which means less money is flowing into the economy and a lower demand for rubles. A weakening ruble also makes imports more expensive in ruble terms, driving up inflation.

Russia has been less successful at finding new suppliers for mid-tech and high-tech products such as aircraft parts that have been hit by Western sanctions. Those imports were down $7 billion in the final quarter of 2022 compared with a year earlier, according to an analysis published by the Centre for Economic Policy Research.

Russia’s growing technological isolation is expected to reduce its long-term growth prospects, which were bleak even before the war. The country’s labor force has been shrinking for more than a decade as its population ages. Productivity has been weak owing to a lack of investment and a business climate rife with corruption and bureaucracy.

How might the state of the Russian economy affect the war in Ukraine? Join the conversation below.

Those trends have only worsened over the past year. Russia is facing its worst labor shortage since the 1990s as hundreds of thousands are mobilized for the front or have fled the country. 

“There’s almost no supply left in Russia’s economy, and the inevitable result of that is going to be inflation,” said Liam Peach, senior emerging-market economist at Capital Economics.

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“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced…

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A downed power line in Lahaina on Aug. 14.

David Butow for TIME

Why Hawaiian Electric Is Facing a Lawsuit After Deadly Wildfires in Maui

TIME by SIMMONE SHAH,  AUGUST 16, 2023  | ORIGINALLY PUBLISHED: AUGUST 15, 2023 

In the wake of wildfires that ripped through Maui last week, many are seeking answers about what caused the deadliest wildfire in the U.S. in over a century. That search has put Hawaiian Electric, which serves 95% of the island state’s 1.4 million residents, in the spotlight. The utility provider is facing a lawsuit over alleged inaction in the face of the destructive Lahaina wildfire that has killed at least 99 people on the island of Maui.

Though an official cause of the wildfire has not been reached, Lahaina residents filed a class action lawsuit against the utility company, alleging that, in the days before the fires broke out, the company “chose not to deenergize their power lines during the High Wind Watch and Red Flag Warning conditions for Maui before the Lahaina Fire started.” The filing also claims that the company failed to shut off power lines even after the fires began.

No shut-off plan

Hawaiian Electric did not deploy a public power shutoff plan—an aggressive safety strategy used in other states, such as California, Oregon and Nevada—to proactively shut down power to communities with high wind conditions and increased risks of fire. 

Intense wind gusts knocked down approximately 30 utility poles across the region on August 8, many onto trees and roads, and complicated evacuations, according to Maui County Mayor Richard Bissen, who confirmed that some electrical lines were energized when they hit the ground.

According to the Washington Post, Hawaiian Electric was aware that a power shut-off was an useful strategy, but didn’t include the step in it in its fire mitigation plans. Hawaiian Electric spokesman Jim Kelly, told CNN that the utility company does not have a formal shut-off program in place, since the power is needed to provide water for firefighters.

“Pre-emptive, short-notice power shut-offs have to be coordinated with first-responders and in Lahaina, electricity powers the pumps that provide the water needed for firefighting,” Kelly told the New York Times.

Research firm CoreLogic has estimated that the residential property damages stand at $1.3 billion, but Hawaii Gov. Josh Green estimates the losses “approach $6 billion.” On Friday, Hawaii Attorney General Anne Lopez announced a “comprehensive review” of the decisions and policies surrounding the fires, which the state’s emergency measures were largely unprepared for. 

An emergency management plan published by the state of Hawaii in February 2022 rated wildfires as low and medium risk across the board for its effect on people, property, the environment, and emergency management program operations.

The state’s outdoor emergency siren system—which it says is the largest in the world—is meant to alert residents to tsunamis and other natural disasters, but it did not activate during the fires. 

Scrutiny and lawsuit

Power lines have been responsible for the spread of many destructive wildfires in the U.S.  From 1992 to 2020 federal, state and local fire services dealt with 32,652 powerline-ignited wildfires across the country, according to Inside Climate News. In California alone, the electric company PG&E has been blamed for more than 30 wildfires since 2017 that wiped out more than 23,000 homes and businesses and killed more than 100 people. The company recently reached a $150 million settlement for its involvement in the 2020 Zogg fires. 

Documents filed in the Hawaiian Electric lawsuit allege that the company had studied wildfire mitigation plans filed by California utility companies, which included a shut-off plan during high wind and so-called “red flag”—when warm temperatures, low humidity, and strong winds combine to produce an increased fire risk—conditions to prevent wildfires. But the documents allege that Hawaiian Electric never created a plan of its own. 

In an emailed statement to TIME, Hawaiian Electric said it does not comment on pending litigation. "Our immediate focus is on supporting emergency response efforts on Maui and restoring power for our customers and communities as quickly as possible," the statement added. "At this early stage, the cause of the fire has not been determined and we will work with the state and county as they conduct their review."

Amid the scrutiny, Hawaiian Electric has seen its share price tumble, plunging over 40% to a 13-year low, on Monday morning following the lawsuit. The company’s shares were down more than 30% on Tuesday.

Government filings show that the company reported its plans to make infrastructure more resilient, including putting lines underground in vulnerable areas, hardening poles and launching a program to remove hazardous trees. 

“The risk of a utility system causing a wildfire ignition is significant,” the company wrote in one filing, noting that a large objective was to “minimize the probability of the Companies’ facilities becoming the origin or contributing source of ignition for a wildfire”.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image by Germán & Co.

As Brazil's president, Lula is enjoying a favorable period with an approval rating of 60 percent.

Support for the leftist leader is increasing among evangelicals and in the southern part of the country, owing to the economic influence.

"El País" Naiara Galarraga Gortázar, São Paulo, August 17, 2023 - Translation and editing in English by Germán & Co.

Eight months after taking the reins of Brazil's presidency, 77-year-old Luiz Inácio Lula da Silva is currently experiencing a favorable period despite facing a coup attempt within the first week. According to the Genial/Quaest poll released on Wednesday, 60 percent of Brazilians approve of Lula's performance as president, marking the highest approval rate of his third term, while 35 percent disapprove. His growing popularity is due to the current economic situation, which his compatriots view optimistically, mitigating the previous reluctance towards left-leaning politicians in the south and among evangelical voters. Both groups overwhelmingly supported his opponent, Jair Bolsonaro, in the elections.

These recent results indicate that, compared to the previous poll two months ago, Lula has gained four points in support for his work as president, and his rejection rate has fallen by five points. These levels of support are a relief for the president, primarily since he has just hosted a major summit in the Amazon and presented his grand investment plan.
Lula has a packed international schedule, which includes his upcoming trip to Africa next week. During a phone conversation on Wednesday that lasted 30 minutes, he spoke with his counterpart, US President Joe Biden, who acknowledged "the obligations of developed countries [in relation to climate change] and the necessity of assisting developing countries [in coping with the consequences]," as per a statement issued by the Brazilian presidency.

The ambitious objective is to inject $350 billion into the economy through public and private works in all states. During the revealed plan, Lula announced that it is no longer the time for ministers to propose new ideas; instead, the objective now is to deliver what has been pledged. A few experts express doubt regarding the consistency of the growth acceleration programme because it needs to elucidate the source of funds or priorities fully.

The federal government's job receives less endorsement and criticism than the president's, with 42 per cent approving, 29 per cent considering it neutral, and 24 per cent negative.

Backing for the leader of the Workers' Party (PT) in the wealthier and less diverse southern region of the country has surged by an impressive 11 points, reaching the national average. Although the south of states are considered strongholds of Bolsonarism, the Safra (harvest) initiative, targeting support for farmers, has had an impact. The far-right leader Bolsonaro maintains a low profile amid daily press reports exposing new insights into the manoeuvres of his closest aides to sell valuable gifts he received while in office.

The economic scenario experienced by Lula since he assumed office has been favorable. Millions of families have welcomed the program he launched to encourage debt negotiation with banks stuck in debt. The unemployment rate is approximately 9%, although the informal sector employs 40 million of the workforce (in a country of 203 million people). In the first quarter, GDP grew by 4% compared to the same period last year.

And among evangelicals, a group that votes fairly homogeneously, for the first time, Lula has more supporters (50%) than opponents (46%), although the difference is small and well below the national average. The leaders of the main evangelical denominations have a political alliance with Bolsonaro that Lula is trying to erode as he seeks to broaden his parliamentary support in search of a majority in Congress, which is currently dominated by Bolsonaro's supporters. While Brazilian legislators are always willing to negotiate, it is a question of agreeing on the price.

In any case, the president's current popularity ratings are a far cry from Lula's record, a fact he likes to point out. When Brazil's first workers' president left power in 2010, he enjoyed more than 80% support. None of his predecessors or successors came close. There was no way of knowing then how strong the anti-Petism would become, fueled by Bolsonaro and his supporters, and that the former president would spend time in prison before staging an equally unexpected political resurrection.

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Javier Milei was pictured in Buenos Aires on 14th June after an interview on the television programme 'A dos voces'
Tomas Cuesta

THE ANATOMY OF TWITTER

A POLITICAL TSUNAMI BY MILEI

IF THE FAR-RIGHT CANDIDATE WINS THE PRESIDENCY, HE WILL ELIMINATE SEVERAL MINISTRIES. TO CLARIFY HIS PROJECT, HE UPLOADED A VIDEO ON TIKTOK WITH AN IMPECCABLE STAGING THAT MATCHED HIS PROFILE.

"El País" Federico Rivas Molina, 17th August 2023, translation and editing to English by Germán & Co.

Javier Milei, a figure with curly black hair who pledges to eliminate 'the political elite' in Argentina, has already become a significant phenomenon in his country. On Sunday, August 13th, he emerged as the most-voted candidate in the primary elections and now stands a strong chance to win the initial round of the general elections in October. Self-proclaimed as an 'anarcho-capitalist', he is an ultra-liberal libertarian who advocates for the elimination of the state in a mixture of ideas that include promises of unrestricted firearm ownership, legal trading of organs, and adoption of the US dollar to combat inflation.
Milei is a television product - his continuous staring into the camera while making derogatory remarks amplified his popularity and secured him a spot on talk shows and social media platforms on a daily basis. It was too late by the time the monster fled. While Milei is a provocative figure, he is above all a self-promoter. He is known for wearing black leather and never smiling in front of a camera. He even goes by the moniker 'the lion'. One of his most memorable speeches showcases him smashing a box that represents the Central Bank with a cane. Milei vows to 'set it on fire' in order to put a stop to the issuance of money.

On October 22nd, the economist will compete against the conservative candidate Patricia Bullrich, who came second in the elections for the Juntos por el Cambio alliance, and Sergio Massa, the Peronist candidate and current Economy Minister. At the beginning of the week, Milei unexpectedly gained political fame, and he recently announced some of his proposed policies if he were to assume power. He remembers that controversy fuels his campaign. For instance, Milei stated that he would repeal the abortion law, which has been in force since December 2020, through a referendum. The progressive electorate is opposed to this, making it a particularly sensitive topic. However, the left did not come out to denounce him. Candidate Bullrich, who was the security minister under Mauricio Macri's (2015-2019) government, called it madness to spend time on popular consultations when it is urgent to reduce inflation and address poverty.

Argentina is currently facing its umpteenth economic crisis. Inflation has risen above 110% per month year on year, the value of the peso is declining daily against the dollar, and the Central Bank's reserves are critically low, while the International Monetary Fund awaits. Minister and political candidate Massa will be traveling to Washington this week to finalize a new agreement with the multilateral forum. Milei boasted on television on Tuesday. He stated that he had already received a call from Kristalina Georgieva's offices. He was asked if they are afraid of him at the IMF. He replied, stating that he was not afraid of them as the fiscal adjustment he has in mind is much tougher than the one demanded in Washington to open the financing tap.

Most of this adjustment will be paid for by the state, as per Milei's proposed plan of jibarization. He has said that if he reaches the Casa Rosada, he will eliminate the ministries of education, health, and social development. He argues that "social justice" is a robbery paid for by those who work, and he will fire hundreds of thousands of state employees who are on precarious contracts. He uploaded a video on TikTok with a mise-en-scène suitable for his profile to make his project clear. Milei's state will only handle matters pertaining to defense, internal security, and foreign relations. Its main international partners will be the United States and Israel; he has vowed to relocate the Argentine embassy from Tel Aviv to Jerusalem. The Milei wave has rocked Argentine politicians. It remains to be seen if he will succeed in sustaining the wave and confirming his triumph in the final election.

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News Round-Up, August 16, 2023

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The Best in the Biz – August 10, 2023

Posted to Energy Centralin the Utility Management Group

EPA Plan Would Impose Drastic Cuts on Power Plant Emissions by 2040

German Toro Ghio

Link to original article: https://energycentral.com/c/ee/epa-plan-would-impose-drastic-cuts-power-plant-emissions-2040

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President Bill Clinton, Israel Prime Minister Ehud Barak, and Palestinian Authority Chairman Yasser Arafat walking through Camp David.

Deepened lost in diplomacy...

Mr. Henry Kissinger, during his interview for the Portfolio Magazine at the French restaurant Jubilee in downtown Manhattan, New York, on July 27, 2018, warned of the urgent need to broaden global communication channels, particularly with China. He emphasized the potential for global order disruptions if this critical diplomatic work is still pending.
In this interview, in Mr. Kissinger's eyes, French President Emmanuel Macron stands out as a commendable world leader with a unique and expansive vision. Macron's ability to think beyond conventional boundaries has positioned him as a significant influencer on the global stage. Despite this, his attempts to engage with Russian President Vladimir Putin have thus far proven unsuccessful. Macron's efforts to establish a productive dialogue with Putin still need to catch up.
Turning to China, Mr. Kissinger acknowledges its professed desire for world peace. However, China's ambivalent position has hindered the establishment of clear pathways towards achieving this overarching goal. While the country may outwardly express aspirations for global harmony, its actions and stances have yet to align with those intentions consistently.
Another wild card is Turkey President Recep Tayyip Erdoğan, who holds an open telephone line with President Putin and Zelensky, has struggled to achieve tangible results in his diplomatic endeavors. Despite the promise of direct communication, President Erdoğan has faced challenges bridging gaps and achieving meaningful progress.
While seeking a resurgence in his political career, Brazil's President Luiz Inácio Lula da Silva viewed the ongoing conflicts as an opportunity. Unfortunately, Lula's efforts, similar to his other diplomatic attempts, have failed to yield the desired outcomes. This setback underscores the complexity of navigating international disputes and finding practical solutions. Lastly, Norway, known for its commitment to peace and goodwill, has played a pivotal role in facilitating numerous peace processes and honouring individuals with the Nobel Peace Prize. However, the country's focus on safeguarding its borders against Russian aggression has diverted attention and resources from actively contributing to broader global peacemaking efforts.

In summary, Mr Kissinger's perspective highlights world leaders' challenges in pursuing international cooperation and peace. While Macron's visionary approach is celebrated, his inability to engage successfully with Putin demonstrates the complexities of diplomatic relations.

The paradox of world leaders knowing and accepting Russia's impending invasion of Ukraine two years in advance is a striking revelation that challenges our understanding of international relations and diplomacy. It begs the question of why, despite this knowledge, no significant action was taken to prevent or deter such a devastating military incursion.

The image of President Bill Clinton, Israel Prime Minister Ehud Barak, and Palestinian Authority Chairman Yasser Arafat walking through Camp David is a powerful symbol of diplomacy and its potential to resolve conflicts. This image refers to a different time: the successful negotiation of the Camp David Accords between Israel and the Palestinians in 2000, facilitated by Clinton's dedication to finding a peaceful resolution.

Similarly, the outstanding diplomatic work of Clinton's Russian counterpart, Boris Yeltsin, deserves recognition. As the leader of Russia, Yeltsin played a crucial role in shaping the country's foreign policy and relations with other nations. His collaboration with Clinton on various issues showcased a commitment to finding common ground and resolving conflicts through dialogue.

The friendship between President Yeltsin and President Clinton was a diplomatic alliance and a genuine bond built on trust and mutual respect. Their relationship was characterized by lighthearted banter and a shared sense of humor. This camaraderie led Yeltsin to playfully describe Clinton as a disaster man. Such words provoked uncontrollable laughter from President Clinton. This clever comment highlighted the strong bond between the two leaders.During President Clinton's final visit to Russia on the 5th of June 2000, he met with newly appointed President Vladimir Putin. Following the meeting, Clinton had the opportunity to reunite with his dear friend, former President Yeltsin. At this reunion, Yeltsin admitted that he had mistakenly designated Putin as his successor. Their friendship is a reminder that laughter and genuine connections can bridge gaps between nations, even in international politics. It reminds us who needs to do the job.

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Most read…

California’s planning a renewable energy project at a scale never before attempted in the world

The Newsom administration’s path to net-zero carbon emissions runs through one of the state’s poorer, most remote areas.

POLITICO USA by WES VENTEICHER, August 15, 2023

Energy & Utilities Roundup: Market Talk by WSJ

The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET.

In Georgia and federal indictments, two vastly different approaches

Fani Willis’s sprawling case allows prosecutors to target Trump’s broad scheme. But legal experts and critics say both the scope and specificity could be a problem.

TWP by Amy Gardner, Holly Bailey, Amber Phillips and Shayna Jacobs, updated August 15, 2023 

Why This Company’s Financial Crisis Threatens China’s Economy

Country Garden was China’s biggest real estate developer. Now it is staring down default, facing billions of dollars in losses and $200 billion in unpaid bills.

NYT by Alexandra Stevenson, Reporting from Hong Kong,  August 15, 2023

Latest news from Latinamerica

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Vital Natural Gas Is Being Stashed in Caverns Beneath War-Torn Ukraine

Commodity merchants are pumping natural gas into Ukrainian reservoirs, hoping the war doesn’t disrupt potential profits

WSJ by Joe Wallace, updated Aug. 16, 2023 

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Pulp Mill at sunset in Humboldt Bay, California. | Gary Crabbe / Enlightened Images / Alamy Stock Photo / Edited by Germán & Co.

California’s planning a renewable energy project at a scale never before attempted in the world

The Newsom administration’s path to net-zero carbon emissions runs through one of the state’s poorer, most remote areas.

POLITICO USA by WES VENTEICHER, August 15, 2023

EUREKA, Calif. — A 300-foot tall smokestack from a defunct paper mill looms over the port in Humboldt Bay, a relic of the timber industry that once defined the northwestern corner of California along with the struggling salmon fishing industry and sputtering marijuana trade.

But a gust of optimism has arrived in Humboldt County over plans to develop offshore wind at a depth and scale never before attempted in the world – sparking hope and anxiety in a region that has lived through repeated boom-and-bust cycles and ended up with one of the lower per-capita incomes in the state.

“This is a generational project,” said Jeff Hunerlach, secretary-treasurer of a council of construction unions for Humboldt and neighboring Del Norte County. “I could work 20 years on this project and my kid could work 20 years on this project.”

The floating offshore wind turbines proposed would barely be visible according to a rendering from the Bureau of Ocean Energy Management. | Bureau of Ocean Energy Management

The offshore wind proposal, driven by the Biden and Newsom administration efforts to dramatically increase renewable energy, would erect dozens of turbines three times the size of that smokestack with blades as long as a football field in an area of the Pacific Ocean nearly 10 times the size of Manhattan.

The turbines, which would be about 20 miles from shore in water up to 2,500 feet deep, are a key part of the state’s plan to generate enough offshore wind energy to power more than 20 million homes.

Getting the turbines to remote Humboldt County and then assembling them would be a significant undertaking – one that would create the need for heavy investment in an area that has seen little for many years.

“It’s a lot of good-paying jobs if we do it right,” said U.S. Rep. Jared Huffman (D-San Rafael), whose district includes the bay. “This can be part of lifting up the regional economy in a way that is better than anything to come along in decades.”

Rob Holmlund, executive director of the Humboldt Bay Harbor, Recreation and Conservation District, likens the endeavor to the moon landing.

A 2023 rendering prepared for the Humboldt Bay Harbor District. | Moffatt & Nichol

“We’re talking about completely transitioning our entire energy system,” Holmlund said. “It’s an ambitious goal for the betterment of humanity.”

But the project faces a host of major challenges. They include not just the obvious economic and bureaucratic hurdles but also a widespread distrust of outsiders in a region where indiscriminate logging engendered deep resentment and where an illegal marijuana industry created a counterculture haven in the fog-shrouded mountains.

The region is still recovering from mistakes of the past. International wind developers are pitching their projects just as many residents celebrate the removal of Klamath River dams the Yurok Tribe and the fishing industry fought for decades. The structures destroyed rich salmon habitat to export hydropower even as many native people lived without electricity.

“It has to be done right,” said Yurok Vice Chairman Frankie Myers. “Because we have to avoid being in the same position we are now 50 years from now. I’ve spent most of my life fighting the dams. I do not want to leave my children a fight to remove offshore wind.”

The destination for agenda-setting coverage of politics, policy and power that shapes the conversation in the world's fifth-largest economy.

The developers — German-based RWE Energy and Danish-backed Vineyard Offshore — secured federal leases in December for a combined $332 million that include decommissioning requirements and set aside a portion of the money for community benefits.

The companies are opening offices in the area, holding meetings and sponsoring local events.

“As a company we believe there are great opportunities ahead, because this can create jobs and other opportunities,” said Lars Pedersen, Vineyard Offshore’s CEO. “But we have to do that being respectful of those who live there and have been living there a long time.”

The Newsom administration’s path to zeroing out the state’s carbon emissions by 2045 runs right through the bay. It’s the only developed port from San Francisco to Coos Bay, Oregon, able to accommodate assembly of the massive turbines. The area could ultimately supply the turbines for both California — which would need around 1,700 to reach its goal — and the rest of the West Coast. Additional leases are expected in Washington, Oregon and offshore from the Northern California counties of Mendocino and Del Norte.

President Joe Biden wants the nation to reach net-zero emissions by 2050. Offshore wind is central to both administrations’ plans due to its ability to displace the burning of fossil fuels, particularly in the evening when solar power drops off.

Reaching those goals will require the state and nation to advance offshore wind and accompanying transmission projects at speeds that governments haven’t achieved in generations.

“All of it has to work together in what is a really complex and almost overwhelming set of challenges,” said Huffman.

The Harbor District is partnering with Crowley Wind Services, a division of the international logistics company, to develop a 180-acre terminal on property occupied by a former pulp mill.

The land — which now hosts two seaweed farms, an oyster hatchery and temporary storage for freshly caught hagfish — would be transformed into an industrial terminal with up to 650,000 square feet of building space, lights mounted 150 feet in the air and giant cranes that crawl through the water on tank treads.

The district is in early permitting stages under the California Environmental Quality Act, which can be a lengthy process even as Gov. Gavin Newsom and the Legislature recently took steps to limit the duration of legal challenges filed under the law.

Gov. Gavin Newsom is planning on offshore wind powering roughly 25 million homes by 2045. | Bruce Gilbert/AP Images for Bloomberg Philanthropies

At the same time, the project developers are initiating a federal permitting process that’s expected to take six years. They’re assessing impacts to the economy, tribes and lands.

The projects would affect fishermen the most, impacting the Dover sole, thornyhead, and sablefish fisheries offshore and harvests of Dungeness crab, baitfish and shellfish within the bay. The extent of the threat, along with the effects on birds and whales, is still being assessed.

The companies are addressing technical challenges of operating the floating turbines and transmitting energy to shore from floating platforms connected by cable to the ocean floor 2,500 feet below. While fixed-bottom turbines are common in Europe and are arriving on the East Coast, the floating variety have never been used in such deep water.

Transmission projects of the scale needed to carry 25 gigawatts of wind energy 270 miles from Humboldt to San Francisco have in the past taken more than a decade, and an overland line would need to run through environmentally sensitive areas as well as populated communities that may not welcome them. An undersea cable is being considered, but deep underwater canyons and other features make that option logistically daunting.

On land, leaders such as Yurok Tribal Court Judge Abby Abinanti worry how the expected influx of construction and manufacturing labor, some likely to occupy temporary “mancamps,” will affect vulnerable people such as native women who already go missing and are killed at higher rates than other groups.

“Our concern is that these camps end up elevating those kinds of statistics unless preventative efforts are made,” said Abinanti.

She also wants to make sure women have the same access as men to the new jobs through training.

And then there’s the cost. The price tag to develop 25 gigawatts of offshore wind energy by 2045 is about $100 billion — not including some major outlays such as transmission upgrades, according to a National Renewable Energy Laboratory estimate.

Costs have ballooned even beyond expectations in New York and New Jersey, prompting developers to seek more money from those states and their electricity customers. Wind developers have canceled some of their plans in Massachusetts and Rhode Island.

If they come, the turbines will barely be visible from shore in daylight once they’re towed out to the deep sea. At night, red lights affixed to their tops will line the horizon — a new symbol for an industry that will once again redefine life on the northern coast.

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Photo by Germán & Co.

Energy & Utilities Roundup: Market Talk by WSJ

The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET.

1646 ET – The American Petroleum Institute reports US commercial inventories of crude oil fell by 6.2 million barrels last week, while gasoline supplies rose by 700,000 barrels, a source citing the data says. The results were released ahead of official EIA inventory data due tomorrow morning. Average forecasts in a WSJ survey indicate the EIA report will show crude stockpiles fell by 1.7M barrels from the previous week and that gasoline decreased by 1.2M barrels. In late trading, WTI oil prices that were lower before the data were released reduced those declines slightly afterward, down 1.7% at $81.11 a barrel. (dan.molinski@wsj.com)

1457 ET – Natural gas prices in the US drop 4.9% to finish at $2.659/mmBtu as the market gets swept up by a broader sell-off in other energy commodities such as crude oil and gasoline. The past week has seen price movements in the US natural gas market being significantly influenced by markets outside its realm, with European gas markets moving US natural gas futures last week, and WTI oil prices seeming to be impacting natural gas markets in today’s session. This is partly because rising US LNG exports have made the domestic gas market more global. Also, an increase in associated gas production in the US from oil-producing shale regions is linking the two markets, oil and gas, closer together. (dan.molinski@wsj.com)

1448 ET – US crude futures fall for a second straight day, ending the session 1.8% lower at $80.99 a barrel as investors continue to fret over weak US and global demand. Crude-oil production cuts throughout the summer by the Saudi and Russian-led OPEC-plus group are keeping supplies relatively tight, but the mere fact that producers have to keep reducing output to avoid oversupplies is sending a bearish signal to investors regarding the world’s economic health. Data today showing Chinese retail sales and industrial production grew less than expected in July reflected that economic weakness, and with the US manufacturing sector still in recession, WTI oil seems to be struggling to stay above $80. (dan.molinski@wsj.com)

1436 ET – While US exports of liquefied natural gas to places like Europe and Asia have skyrocketed over the past decade, the US is still also exporting massive amounts of natural gas the old-fashioned way—by pipeline. And last month pipelined gas flows to Mexico hit a new all-time high. The EIA, citing Wood Mackenzie data, says in a report that US natural gas pipeline exports to Mexico averaged 6.8 billion cubic feet per day in June, topping a previous record set in June 2021. Mexico is far and away the top recipient of US natural gas, receiving more than one-third of all US natural gas or LNG volumes in 2022, and nearly four times as much as top US LNG recipient France. (dan.molinski@wsj.com)

1119 ET – Class-action lawsuits against Hawaiian Electric Industries are raising the risk around the company’s credit. S&P Global Ratings downgrades the company to BB- following the filing of class-action lawsuits against Hawaiian Electric on behalf of residents who have had their homes destroyed by wildfires. S&P says the total cost to rebuild will be an estimated $5.5 billion, far greater than the company’s book equity of $2.2 billion. S&P also says the wildfires have destroyed a portion of the company’s customer base, which will damage profitability. Shares fall 8.6% to $19.61. (ben.glickman@wsj.com; @benglickman)

0900 ET – Refining cracks, a term for measuring refiners’ profits, are doing better in the second half of 2023 than the first half, and that’s adding some upward momentum to oil prices by firming up demand, says Energy Intelligence. “Refining cracks-diesel in particular-are improving,” it says in a note. “The first half of the year featured a steady decline in diesel and distillate prices/cracks as macro concerns took hold. In Asia, diesel cracks drifted to near zero. Since June, along with the improved macro sentiment as well as a pickup in demand, a gradual rebound has taken shape although margin levels are still well below where they were 6-12 months ago.” (dan.molinski@wsj.com)

0846 ET – Cosan has a lot of cash to make acquisitions after the Brazilian energy and sugar conglomerate’s recent debt issuance, said XP Investimentos analysts André Vidal and Helena Klum in a research note. Cosan said Monday evening that its net revenue declined 19% in 2Q from a year earlier, while it swung to a net profit in the period from a net loss a year earlier. Cosan’s debt level rose slightly, but the current level is still controlled and its cost of debt is low, giving it the firepower it needs to add to its portfolio, the analysts said. (jeffrey.lewis@wsj.com)

0843 ET – The resignation of Centrais Eletricas Brasileiras’s CEO, Wilson Ferreira Junior, will probably be negative at first for the share price of the Brazilian power company known as Eletrobras, but his replacement is also experienced and capable so his departure should only have a short-term impact, said Citi Research analyst Antonio Junqueira in a research note. Eletrobras said Ivan Monteiro, a former CEO of Petrobras, will replace Ferreira at the top of the electric utility. Monteiro has a top-notch resume and is a solid executive, Junqueira says.(jeffrey.lewis@wsj.com)

2245 ET – Ratch Group may benefit from higher-than-expected electricity output at its new wind farms in Australia, Thanachart Securities analyst Nuttapop Prasitsuksant says in a research report. The brokerage lifts its earnings estimates for the independent power producer by 2% for 2024 and 10% for 2025, to reflect the higher-than-anticipated capacity factor of the company’s newly acquired 212-megawatt wind project in Australia. The stock’s valuation has also become more justified at 9 times price-to-earnings with a 5% dividend yield in 2024 following the share price’s sharp year-to-date decline, the analyst says. The brokerage raises the stock’s rating to hold from sell and increases target price to THB36.00 from THB33.00. Shares last quoted at THB35.50. (ronnie.harui@wsj.com)

2229 ET – CSE Global’s 2H earnings outlook appears brighter, driven by its record-high order book of S$522 million in 1H, UOB Kay Hian analysts say in a research report. The technologies company’s 2023 earnings could more than quadruple from a low base of S$5 million in 2022, and it should be able to deliver its contracts faster and enjoy a recovery in margins as supply-chain disruptions ease, the analysts say. CSE Global highlighted that its diversification strategy to invest in and acquire communications businesses has contributed to a better financial performance, the analysts add. They raise the stock’s target price to S$0.61 from S$0.60 with an unchanged buy rating. Shares are unchanged at S$0.465. (ronnie.harui@wsj.com)

2137 ET – YTL Power International is likely to report stronger fiscal 4Q earnings after it raised power tariffs for its Singapore and U.K. subsidiaries, says Kenanga IB analyst Teh Kian Yeong in a note. YTL’s 4Q earnings may rise 10%-20% on quarter to MYR585 million-MYR590 million driven by a 43% hike in Singapore’s electricity retail prices and about a 9% tariff hike for U.K.’s sewerage utility company Wessex Water from April. Teh raises YTL’s FY 2023 and FY 2024’s profit estimates by 26% and 34%, respectively, to factor in higher earnings contributions from its Singapore and U.K. subsidiaries. Kenanga raises the stock’s target price to MYR1.85 from MYR1.48 and maintains an outperform rating. Shares are 0.6% lower at MYR1.56.(yingxian.wong@wsj.com)

1712 ET – Toronto stocks finish with losses, as the benchmark S&P/TSX Composite Index falls 117 points, or 0.6%, to 20290. The blue-chip S&P/TSX 60 Index also slips 0.6% to 1215. Gains in the healthcare sector were offset by broad declines elsewhere, particularly in telecommunications and base metals. Among the largest movers of the day was Boralex, with shares climbing more than 6% after the renewable energy producer reported stronger-than-expected 2Q earnings. (will.feuer@wsj.com; @WillFOIA)

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In Georgia and federal indictments, two vastly different approaches

Fani Willis’s sprawling case allows prosecutors to target Trump’s broad scheme. But legal experts and critics say both the scope and specificity could be a problem.

TWP by Amy Gardner, Holly Bailey, Amber Phillips and Shayna Jacobs, updated August 15, 2023 

Fulton County District Attorney Fani Willis speaks during a news conference regarding the grand jury indictment of former president Donald Trump and 18 co-conspirators at the Fulton County government building on Monday in Atlanta. (Joshua Lott/The Washington Post)

ATLANTA — Charges against former president Donald Trump and a raft of others in Fulton County, Ga., over their alleged efforts to overturn his 2020 defeat finally landed Monday, the result of a sprawling investigation that stretched over 2½ years and led to a complex racketeering case featuring 41 criminal counts against 19 defendants in a massive 98-page indictment.

Contrast that with a federal indictment filed against Trump on Aug. 1 in Washington that also accuses him of illegally attempting to subvert and overthrow the election. In that case, Justice Department prosecutors sought charges against Trump alone. They appeared to be aiming for speed and simplicity, producing a 45-page indictment featuring four charges after an investigation of the former president that began well after the Fulton probe.

Unlike the Georgia indictment, which alleges multiple instances of making false statements, witness tampering and impersonating a public officer — among dozens of other counts — the federal indictment avoids potentially complicated accusations that some advocates pushed for, such as seditious conspiracy or insurrection.

Legal experts said the difference in strategy comes with some advantages: District Attorney Fani Willis’s sprawling case will allow Fulton County prosecutors to tell the jury a story of a broad conspiracy to reverse election results in multiple states and build a forceful narrative of Trump’s actions in concert with numerous aides, lawyers and local officials. But experts warned that the logistics of putting Trump on trial along with 18 other people — each of whom may file a flurry of pretrial motions — in a racketeering indictment so complex and multilayered could carry unique difficulties.

Trump and his allies have attacked both Willis, a Democrat, and special counsel Jack Smith of the Justice Department for investigating alleged election interference, accusing them of conducting political witch hunts and attempting to interfere with the former president’s 2024 bid for the White House.

But even some of Trump’s critics have questioned the apparent breadth of Willis’s investigation and the challenge she faces in persuading a jury to criminalize statements about election fraud — including portraying a few seemingly innocuous tweets as furthering the conspiracy — that many view as protected speech under the First Amendment. She will also have to convince a jury that Trump and others knew what they were saying was false, and that they are not protected by the fact that in many instances they were following the advice of their lawyers.

Trump is indicted in Georgia on charges of racketeering. What it means, what happens next.

Willis’s ambitious decision to use Georgia’s expansive RICO statute — a law historically employed to prosecute mobsters — to charge Trump with leading a vast criminal enterprise to steal the 2020 election could allow her to target many more of those involved in the alleged conspiracy beyond Trump, potentially transforming the way political wrongdoing is punished.

Alternatively, her gambit to try all 19 defendants together could be seen by jurors as a massive instance of prosecutorial overreach. And despite Willis’s statement late Monday that she’d like to see a trial date within six months, the sprawling nature of the case could push the start beyond the 2024 election and take years — and many appeals — to resolve.

“This is eye-popping,” said John Malcolm, a former federal prosecutor based in Atlanta who is now a constitutional scholar at the conservative Heritage Foundation, speaking of the contrast between the federal and state indictments. “What about the right — when you believe allegations to be true, or you have some evidence to support the allegations — to seek redress? And all of a sudden they’re perpetrating a conspiracy? I think that’s astonishingly dangerous.”

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Country Garden’s offices in Foshan, China. Experts fear the company’s troubles could spill over into the financial markets.Credit...Agence France-Presse

Why This Company’s Financial Crisis Threatens China’s Economy

Country Garden was China’s biggest real estate developer. Now it is staring down default, facing billions of dollars in losses and $200 billion in unpaid bills.

NYT by Alexandra Stevenson, Reporting from Hong Kong,  August 15, 2023

Country Garden, a Chinese real estate giant, has lost billions of dollars and racked up $200 billion in unpaid bills. It’s on the hook to deliver, by one estimate, nearly one million apartments across hundreds of cities in China.

The privately owned developer, founded by a farmer three decades ago, is inching closer to default.

In China’s housing market, there are plenty of deadbeat developers no longer paying their bills. The possible collapse of Country Garden is one to pay attention to.

The company has tried to project confidence. “One shall pick himself up from where he has fallen,” Mo Bin, Country Garden’s president, said last week, pledging to “spare no effort.”

But the problem is much bigger than one company, and the timing could hardly be worse. A default by Country Garden would be the latest in a string of collapses in a housing market that has been hurting for years. Emerging from paralyzing lockdowns during the pandemic, China’s leaders badly need the country’s economic engine to pick up. Instead, growth is sputtering as housing prices fall, people spend less and consumer and business confidence wanes.

Now, experts fear that Country Garden’s troubles will spill over into the broader financial markets, thwarting any possible recovery of the real estate industry and spreading the damage through the economy.

How did Country Garden run into trouble?

A year ago, Country Garden was a model corporate citizen in an expanding universe of delinquent real estate companies that borrowed recklessly and then stopped paying their bills.

Country Garden, founded by Yang Guoqiang in 1992, was a beneficiary of the world’s biggest real estate boom. Its success turned Mr. Yang into a billionaire and became a testament to the country’s remarkable growth. Chinese people, having few other reliable options to build wealth, invested their incomes and savings in real estate. Like other big private developers, Country Garden kept borrowing and often borrowed more to pay back its loans, operating on the assumption that as long as it continued to expand, it could keep repaying its debt.

But the bills grew so big that the authorities began to fear the debt would threaten the broader financial system. China’s top leader, Xi Jinping, ordered that homes should be for living, not for speculation. In 2020, the government cracked down, limiting the ability of real estate companies to raise money and prompting a series of defaults.

Even as other developers stopped paying their bills, Country Garden continued to make good on its obligations. It began to rely more heavily on the revenue from selling apartments before they were finished and using that money to help finance its operations.

A slump in home buying this year has placed the company in a crisis, facing what it described as the “biggest difficulties since its establishment.”

How big is the problem?

Markets, investors and home buyers are fearing the worst. In early August, Country Garden skipped two interest payments on loans. If it does not pay up by early September or get the creditors to give it more time after that 30-day grace period, it will default. Investors are not likely to lend it more money if that happens. The company’s share price has fallen below $1 in Hong Kong.

Country Garden’s losses are mounting. It has said it expects to report a loss of as much as $7.6 billion in the first six months of the year.

Even if people were still buying Country Garden’s apartments, they would not be able to buy enough of them to make up the financial shortfall, experts said. Besides, who wants to buy an apartment from a company that might not be around to finish building it?

All of this has led to worries that Country Garden will end up like China Evergrande, a real estate behemoth that collapsed in 2021 and set off panic in global markets.

“The Country Garden default could be as influential as Evergrande simply because it is so huge,” said Rosealea Yao, a real estate analyst at Gavekal, a China focused research firm.

And it could be even worse. A handful of big developers have already defaulted. The market is more on edge than it was when Evergrande failed. Policymakers, while recently vowing to support the housing market, have not done enough to bolster confidence.

“Things may get worse before the government reacts,” Ms. Yao said.

Can the government save Country Garden?

Maybe. Chinese policymakers have pulled all the stops before. And after years of tightening the screws, China’s top leadership has signaled a pivot in its approach, pledging to adjust its policy and take steps like lowering interest rates to make it easier to buy apartments.

But the measures so far have not been big enough to reverse the housing slump. Policymakers are unlikely to go back to the days when companies could amass huge piles of debt for speculative projects.

The housing market is also no longer growing like it did during the real estate boom that urbanized much of China in the 1990s and early 2000s.

China’s leaders have made it clear that the country cannot depend so heavily on real estate for economic growth. Gone are the days of real estate bubbles fueled by banks and investors throwing money at developers. More likely, some experts said, is that policymakers will do their best to make sure buyers get the apartments they paid for.

Many big questions remain unanswered. What, for example, happens to the Chinese economy if developers like Country Garden never pay back suppliers like painters and construction workers?

By one estimate from Gavekal Research, unpaid bills from private Chinese developers total $390 billion.

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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When the crisis becomes permanent//www.ips-journal.eu

Latest news from Latinamerica

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Tuesday, 15 August 2023

BRAZIL: Surprise resignation of Eletrobras CEO

On 14 August Brazil’s electricity company Eletrobras, which was privatised in June 2022, announced the resignation of its CEO, Wilson Ferreira Junior. 

Tuesday, 15 August 2023

HAITI: Police disperse another protest over insecurity

On 14 August Haiti’s national police (PNd’H) used tear gas to disperse protesters from Carrefour-Feuille, a Port-au-Prince suburb, who were demonstrating against insecurity.

Tuesday, 15 August 2023

MEXICO: Discovery of human remains raises concerns in Veracruz

On 14 August the attorney general’s office (FGE) in Mexico’s Veracruz state confirmed that the remains of multiple people had been found in two buildings in the city of Poza Rica, in the north of Veracruz.

Tuesday, 15 August 2023

CHILE: Key ministerial resignation fails to satisfy opposition

On 14 August Chile’s finance and labour ministers, Mario Marcel and Jeannette Jara respectively, embarked on a tour of 12 cities in the south of the country to promote the government’s tax and pension reforms.

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Workers at the Bilche-Volytsko Uherske facility, one of Ukraine’s gas-storage sites. ALONA NIKOLAIEVYCH/ZUMA PRESS

Vital Natural Gas Is Being Stashed in Caverns Beneath War-Torn Ukraine

Commodity merchants are pumping natural gas into Ukrainian reservoirs, hoping the war doesn’t disrupt potential profits

WSJ by Joe Wallace, updated Aug. 16, 2023 

A daredevil trade is in vogue among commodity merchants: Stashing natural gas in caverns beneath the surface of war-torn Ukraine.

The wager could reap hundreds of millions of dollars collectively for traders such as Trafigura Group, Vitol and Gunvor Group, people familiar with the matter said. Others looking to cash in include oil-and-gas giants such as Shell and utilities such as Switzerland’s Axpo.

Traders are getting paid to stockpile power-generation and heating fuel for Europe ahead of the second winter since Russia pitched the continent into an energy crisis. So much gas has flooded in from the rest of the world to replace Russian fuel that prices have fallen more than 80% over the past year. That will make the trade a lucrative one, if all goes well.

The danger isn’t that the gas itself goes up in smoke. It is housed nearly a mile underground in depleted gas reservoirs and aquifers, mostly away from the front line in the west of Ukraine. But traders’ winnings could evaporate if shells strike pipelines or compressor stations and trap the gas in the country.

Another risk is that “the government says ‘I have to confiscate the gas’” if Ukraine’s energy situation worsens, said Martin Pich, trading director at MND, a Czech energy company. “You are looking at the potential profit, versus the losses that you could face in these scenarios.”

Gas flows picked up speed in recent weeks into the Ukrainian caverns, by far the biggest storage sites in Europe. The gas comes from all over the world: some shipped as liquefied natural gas from the U.S. and Nigeria and into Europe’s pipeline network. Other batches arrive directly from massive fields in Norway and the U.K. There is even a remaining trickle of gas from Russia, some of it U-turning in Slovakia and heading back across the border into Ukraine.

Flows accelerated after a series of meetings between European traders and officials from state-owned Ukrainian energy companies. The Gas Transmission System Operator of Ukraine gave a presentation in Vienna in mid-June showing that its pipeline network had spare capacity because of the drop in Russian gas since the invasion, said people briefed on the meeting.

As a result, the state company could redirect gas if any blockages occur, enabling traders to get it out of the country, said Chief Executive Dmytro Lyppa. “We are ready for any scenario,” he said.

Volumes flowing into storage are lower than before the war, reflecting the difficulty traders encountered in insuring fuel in a war zone or persuading banks to lend against it. The European Union has failed, so far, in an attempt to create a state-backed guarantee program. Ukrainian officials say foreign traders might store 3.5 billion cubic meters by winter, out of an available 10 billion.

That could prove to be a handy buffer, adding almost 4% to the EU’s storage capacity. Europe remains vulnerable, having swapped dependence on Russia’s Gazprom for reliance on the liquefied-natural gas market. Underlining that vulnerability, gas prices rocketed twice this month on the mere threat of a strike at gas plants in Australia.

Stowing fuel in Ukraine is a variation on a classic commodities trade. The play gained fame on Wall Street when Salomon Brothers made a bonanza by stashing crude on tankers on the eve of the First Gulf War in the early 1990s. It requires a big balance sheet, logistical intelligence and, in this instance, an appetite for risk.

It works like this: The EU’s gas stores are so close to brimming over that traders can buy fuel on the cheap now and sell at higher prices in the forward market, for delivery this winter or later.

Recently, they could earn more than 10 euros per megawatt-hour, said Marco Saalfrank, head of merchant trading at Axpo. That is after taking into account storage and transit fees, as well as interest rates and credit charges.

Shell signed a deal to explore shale gas in Ukraine in 2013. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS

Across 3.5 billion cubic meters, that adds up to more than 340 million euros, or $370 million, in potential profit. The actual figure will differ. Some traders are locking in sales for next summer instead of winter, or not selling forward at all, which amounts to a bet that prices will rise.

The companies involved mostly had extensive dealings in Ukraine before the war. Shell signed a deal to explore shale gas in the country in 2013.

London-based Vitol, the world’s biggest independent oil trader, struck a deal to develop oil-and-gas fields in Ukraine in 2012, while Swiss trader Trafigura had an office in Kyiv. The two traders—fierce competitors—are hunting for new ways to make money after earning billions of dollars in recent years from the upheaval caused by war and the pandemic.

Ukrtransgaz, the storage operator, has checked caverns for bugs, ordered extra patrols of perimeter fences and stocked up on spare parts, said Roman Maliutin, acting director general. The company treats all of the stores as if they were one giant cavern, guaranteeing traders access to fuel even if the site they originally injected it into is damaged.

“The probability that all our underground storages will be taken out of the production, will be destroyed, is very low,” Maliutin said.

The more gas in the depleted gas sites, the higher the pressure, easing the withdrawal of fuel to send back to Europe or burn in Ukraine this winter. Ukrtransgaz, a Naftogaz subsidiary, also gets much-needed cash from storage fees, though it has set them at low levels to encourage the influx. Ukraine also exempts the gas from customs duties for three years.

Inflows of gas from Poland, Hungary, Slovakia and Moldova mark a reversal of Ukraine’s historic role as a thoroughfare for Russian gas to Europe. The caverns are a legacy of that trade route. Gazprom drew them down to top up exports to Europe in winter, allowing cities in eastern Ukraine to burn newly arrived Russian fuel from a clutch of arterial pipelines in the coldest months of the year.

“Traders are coming to Ukraine without additional insurance, actually bearing this risk as commercial risk, which is a great signal,” said Oleksiy Chernyshov, chief executive of state-owned Naftogaz. He added that Kyiv wouldn’t consider confiscating the fuel.

The caverns, he said, are “the safest place in Ukraine right now.”

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News Round-Up, August 15, 2023

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The Best in the Biz – August 10, 2023

Posted to Energy Centralin the Utility Management Group

EPA Plan Would Impose Drastic Cuts on Power Plant Emissions by 2040

German Toro Ghio

Link to original article: https://energycentral.com/c/ee/epa-plan-would-impose-drastic-cuts-power-plant-emissions-2040

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Editorial…

On the seemingly peaceful and serene day of July 28, 2011, the tranquil city of Oslo, renowned for its picturesque fjords, revered artist Edward Munch, and vibrant Vigeland Park, was struck by an unimaginable horror that no one could have anticipated. On this fateful day, the capital of Norway became the epicenter of deadly acts of terror: Oslo and Utøya Island fell victim to brutal attacks that shook the nation to its core.
The first blast targeted government offices, leaving behind devastation and despair. However, the horrors were far from over. During this chaos, Norway was about to witness an even more horrifying act. On the peaceful Utøya Island, a youth camp was abruptly transformed into a blood-soaked battleground. A lone gunman, chillingly disguised as a police officer, mercilessly opened fire on the unsuspecting camp attendees. Sixty-nine young individuals, filled with hopes and dreams, were ruthlessly torn away from their loved ones, forever etching their names into the darkest annals of Norwegian history.
Over the past few years, criminal activity has become a worldwide threat. The current statistics are alarming, with homicides taking the lives of almost half a million people globally. Surprisingly, this number is higher than the deaths caused by armed conflicts and terrorist attacks during the same period. Latin American criminal groups have played a crucial role in increasing crime rates in the region. These groups frequently operate with a twisted notion of loyalty, engaging in violent conflicts over territories to dominate and control lucrative illegal activities. Their influence goes beyond local communities, spreading into diverse aspects of society and perpetuating cycles of violence.
In Europe, the widespread availability of firearms worsens the hazards of criminal activities. As guns are easily accessible, criminals become more confident, increasing armed robberies, gang violence, and even terrorist attacks. Recognizing the urgency of addressing this crisis, the United Nations implemented the "Sustainable Development Goal 16" to decrease violence and associated deaths by 2030. Nonetheless, the current crime rate persists. Therefore, achieving the goal on time is likely.
A diverse approach is necessary to tackle crime and ensure community safety. Such an approach should involve investing in social programs that address the root causes of crime, encourage education and skills development, enable economic opportunities, and bolster international cooperation to dismantle transnational criminal networks.
On Sunday, this blog took to Twitter to share an article that has since taken the internet by storm. Entitled "Hemingway and the 'Gang' say: 'Farewell To The Arms...'," the story explores the incredible social project known as Project Alcatraz, driven by Santa Teresa Hacienda in Venezuela.
Responding to the escalating challenge of gang-related activities, the visionary minds of Santa Teresa Hacienda decided to establish Project Alcatraz. Little did they know that this decision would begin an extraordinary endeavor that would reshape lives and offer hope to countless individuals.
From its beginnings, Project Alcatraz has undergone notable transformations, blossoming into a comprehensive initiative dedicated to recruiting and rehabilitating individuals involved in criminal gangs. Multifaceted strategies have been used in this program to foster successful reintegration.
Today, we are thrilled to announce that the article has garnered close to 80,000 views and has received overwhelmingly positive feedback from readers. This level of engagement is a testament to the power of the story, resonating the well-done impact of Project Alcatraz.

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Most read…

Experts Scrutinize Hawaiian Electric as They Search for the Maui Wildfire Cause

The main utility serving Hawaii did not pre-emptively shut off power before high winds reached Maui, and power lines fell in the windstorm.

NYT by Peter Eavis, Ivan Penn and Thomas Fuller, Aug. 14, 2023

How (Many) Economists Missed the Big Disinflation

NYT by Paul Krugman, Opinion Columnist, August 14, 2023 

Far-Right Libertarian Wins Argentina’s Presidential Primary

Javier Milei, who wants to abolish the central bank and adopt the U.S. dollar as Argentina’s currency, is now the front-runner in the fall general election.

NYT by Jack Nicas, Natalie Alcoba and Lucía Cholakian Herrera, Reporting from Rio de Janeiro and Buenos Aires, Augus 14, 2023

Russia Raises Interest Rates to 12% After Ruble Plummets

The Moscow Time by Jake Cordell, 5 hours ago

Hemingway and the “gang” say: “Farewell To The Arms…

By GERMÁN & CO, August 13, 2023

Trump Indicted in Georgia for Election Interference Scheme Along With 18 Others

TIME BY BRIAN BENNETT AND ERIC CORTELLESSA, AUGUST 14, 2023 

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The AES Corporation is committed to accelerating the future of energy transitions by delivering greener and more innovative solutions. AES firmly believes that energy infrastructure plays a crucial role in ensuring the sustainability of our sector. Recently, the AES President and CEO, Andrés Gluski, had the privilege of moderating a captivating discussion titled "Harnessing Diplomacy for the Energy Transition and Universal Access" at the @EEI_Intl panel. This engaging conversation highlights the importance of collaboration and innovative approaches in driving the energy transition forward.

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In Lahaina and other towns in West Maui last week, downed power poles and lines littered the highway, blocking roads in some cases. Credit...Philip Cheung for The New York Times

Experts Scrutinize Hawaiian Electric as They Search for the Maui Wildfire Cause

The main utility serving Hawaii did not pre-emptively shut off power before high winds reached Maui, and power lines fell in the windstorm.

NYT by Peter Eavis, Ivan Penn and Thomas Fuller, Aug. 14, 2023

In the hunt to determine what caused the fire that consumed Lahaina, the focus has increasingly turned to Hawaii’s biggest power utility — and whether the company did enough to prevent a wildfire in the high winds that swept over Maui last week.

Lawyers for Lahaina residents suing the utility, Hawaiian Electric, contend that its power equipment was not strong enough to withstand strong winds, and that the company should have shut down power before the winds came. Wildfire experts who have studied the catastrophic fires in California over the past two decades also see shortcomings in Hawaiian Electric’s actions.

Nearly a week after the wildfire tore through the island town of Lahaina, state and local officials have not determined a cause for the blaze that killed at least 99 people. But the explosive conditions were similar to those elsewhere in the country where wildfires were sparked by electrical equipment: dry brush, high winds and aging infrastructure.

Many wildfires in the United States occur when poles owned by utilities or other structures carrying power lines are blown down, or when branches or other objects land on power lines and cause them to produce high-energy flashes of electricity that can start fires. That is why utilities in California and other states have at times shut down power in recent years before strong winds arrive.

The National Weather Service expected winds of up to 45 miles per hour last Tuesday, with gusts of 60 miles per hour — conditions that were amplified by Hurricane Dora, which traveled across the Pacific Ocean about 700 miles to the south.

“We allege that many of the regulatory laws that require maintenance of equipment were broken,” said James Frantz, chief executive of the Frantz Law Group, one of several law firms taking action against Hawaiian Electric. “There’s got to be some accountability.” He said his firm was representing five Lahaina residents who were filing lawsuits in a Hawaiian state court on Monday.

Nearly a week after the wildfire tore through Lahaina, state and local officials have not determined a cause for the blaze that killed at least 96 people. Credit...Max Whittaker for The New York Times

Shares in Hawaiian Electric lost over a third of their value on Monday, a sign that investors feared that the company would have to pay out large sums to settle lawsuits filed by homeowners and businesses, and spend enormous amounts to try to fireproof its operations.

“The issue becomes whether they did everything they could that was reasonable to prevent this incident,” said Shahriar Pourreza, an analyst who covers Hawaiian Electric’s stock for Guggenheim Securities. “Was there gross negligence, was there imprudence?”

Hawaiian Electric, established in 1891, operates on Maui through its subsidiary, Maui Electric, and is tiny compared with the Californian utilities that have paid huge wildfire settlements. Its revenue last year totaled $3.7 billion, compared with $21.7 billion at Pacific Gas and Electric of California. Like most other utilities, Hawaiian Electric operates under the scrutiny of public commissioners who have to approve its spending plans.

At a news conference on Monday, Shelee Kimura, the chief executive of Hawaiian Electric, said the company did not have a shut-off program and contended that cutting the power could have created problems for people using medical equipment that runs on electricity.

She also said turning off the power would have required coordination with emergency workers. “In Lahaina, the electricity powers the pumps that provide the water — and so that was also a critical need during that time,” Ms. Kimura said. “There are choices that need to be made — and all of those factors play into it.”

In Lahaina and other towns in West Maui last week, downed power poles and lines littered the highway, blocking roads in some cases. It was unclear how much of the equipment had been tossed over by the strong gusts of wind and how much of it was damaged by the fire.

Power lines have caused catastrophic wildfires in California in recent years, prompting lawsuits that have led to multibillion-dollar payouts by the state’s utilities. Pacific Gas and Electric filed for bankruptcy in 2019 and agreed to pay $13.5 billion to settle claims relating to destructive wildfires, including the Camp Fire, which destroyed the Northern California town of Paradise and killed 85 people.

The Federal Emergency Management Agency and the Pacific Disaster Center, a firm based in Hawaii that provides disaster-related analysis, said on Saturday that more than 2,000 structures had been damaged or destroyed by the recent fires on Maui. And they estimated that it would cost $5.52 billion to rebuild. Mr. Pourreza, the analyst, said in a research note that there was a scenario in which Hawaiian Electric’s liability from the fire could exceed $4 billion. It had $314 million in cash at the end of June.

Pre-emptive power shutdowns are unpopular, because of how disruptive they can be to individuals and businesses. But wildfire experts say that they are a necessary measure, and, with planning, they can be deployed in such a way that they don’t prevent emergency services from operating during the blackout.

“It keeps people safe,” said Michael Wara, a scholar focused on climate and energy policy at Stanford University.

Lightning strikes have been another common source of ignition for wildfires in the Western United States. While not definitive, satellite-based lightning detectors operated by NASA did not indicate lightning activity on Hawaii last Monday or Tuesday.

Local and state officials have said little about what might have caused the fire that eventually engulfed Lahaina on the afternoon of Aug. 8. Earlier that day, Maui County said it had completely contained a small brush fire that was first reported that morning, but later announced at 4:45 p.m. that “an apparent flareup” had forced the closure of one main road and sudden evacuations.

Data from Whisker Labs, a private company that monitors the electrical grid in cities across the country looking for problems that might spark a home fire, appears to show significant faults — or major incidents — on power lines near where the Tuesday morning blaze is believed to have started.

On the night of Aug. 7 and into the early morning hours, its data showed, power lines began losing voltage, which can happen when vegetation interferes with wires, lines touch power poles or electrical equipment malfunctions.

The company said it had almost 1,000 sensors in Hawaii and about 70 on Maui. A major fault was felt by all sensors on the island, but was strongest near Lahaina, Whisker Labs found.

And it was a full eight seconds, “which is an eternity in electrical grid time,” said Bob Marshall, co-founder and chief executive of Whisker Labs, based in Germantown, Md. “Something on the grid was very unhappy for eight seconds and trying to recover from a shock.”

Hawaiian Electric, through Jim Kelly, a spokesman, declined to comment on Whisker Labs’ data and findings.

Ken Pimlott, the former chief of the California Department of Forestry and Fire Protection, said in an interview on Sunday that the notion that power lines might have started the fire was plausible.

He said the Maui fire recalled the 2017 Tubbs fire in California, which tore through wine country north of San Francisco. That fire was caused by private electrical equipment and quickly spread through communities lined up and down steep slopes. As was the case in West Maui, the Northern California community was on the edge of wild lands, making it more vulnerable.

Wildfire experts who have studied the catastrophic fires in California over the past two decades see shortcomings in Hawaiian Electric’s actions. Credit...Philip Cheung for The New York Times

Hawaii’s attorney general, Anne Lopez, said on Friday that she would be “conducting a comprehensive review of critical decision-making and standing policies leading up to, during, and after the wildfires on Maui and Hawaii islands.”

Mr. Wara, of Stanford, said Hawaiian Electric appeared to have ample time to shut down power. He noted that before the high winds hit, the company took the precaution of turning off reclosers, equipment designed to restart the flow of power after an outage.

Hawaiian Electric in a regulatory filing last year detailed measures aimed at reducing the risk of its equipment causing fires. Among other things, the filing said the company was “hardening” poles to withstand high winds and cutting back vegetation, noting that Lahaina was a priority area.

But such measures can take time to complete and be very expensive. Burying power lines costs $3 million to $5 million per mile, said Mr. Wara, who was a member of a California commission that advised lawmakers after the Camp Fire on how to hold utilities accountable for wildfire costs and risks. Typically, such costs are added to customers’ bills under regulatory rules — and Hawaii’s electricity rates are already by far the highest in the United States, according to the U.S. Energy Information Administration.

“Why did they not do the cheap thing — turn the power off?” Mr. Wara said.

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Credit...Illustration by Akshita Chandra/The New York Times; Photograph by Larry Washburn

How (Many) Economists Missed the Big Disinflation

NYT by Paul Krugman, Opinion Columnist, August 14, 2023 

In economics, as in life, it’s really important to learn from your mistakes. The learning process begins when you say the magic words “I was wrong,” which sets you free to ask why you were wrong and do better next time.

Those of us who failed to predict the big run-up of inflation in 2021-22 are, I think it’s fair to say, well along on that process. But it’s not clear to me that economists who had predicted that getting inflation under control — it’s down a lot, although not all the way — would require years of very high unemployment are engaging in a similar reckoning.

They should. In particular, they should ask themselves whether inflation pessimism was in part caused by a form of bias that has had negative effects on a lot of economic policymaking — not partisan bias, but the urge to sound serious by calling for hard choices and sacrifice.

Before I get to that, however, let me talk about what went wrong with so many recent economic predictions.

I’ve been looking at what you might call mainstream predictions about inflation and unemployment made late last year — economic projections by the Federal Reserve and by professional forecasters surveyed by the Philadelphia Fed. Perhaps surprisingly, both more or less correctly predicted the inflation decline we’re actually seeing.

The survey of forecasters predicted consumer inflation (excluding volatile food and energy prices) of 3.5 percent for the whole of 2023; given actual price increases so far this year, this would require inflation for the rest of the year to run at 2.7 percent, which seems quite reasonable given recent data. The Fed predicted that the core personal consumption expenditures deflator, a similar measure, would rise 3.5 percent over the course of the year; this will also come close if inflation for the rest of the year is 3 percent or less, which again seems reasonable.

Both forecasts, however, assumed that disinflation would require a substantial rise in unemployment. The professional forecasters predicted 4.4 percent unemployment by the fourth quarter, the Fed 4.6 percent. Since the actual unemployment rate in July was only 3.5 percent, to meet those predictions would require that the economy fall off a cliff starting just about now — and there are no signs that this is happening.

Yet most of the criticism I heard of the Fed and others berated them for excessive optimism. Getting inflation down, a chorus of economists insisted, would require much bigger increases in unemployment. Most famously, Larry Summers declared that we would need something like two years of 7.5 percent unemployment to get inflation down to 2 percent, but others offered broadly similar if less extreme diagnoses.

OK, we haven’t reached 2 percent yet (and it’s not clear that we even should), but surely we’ve seen enough to conclude that such claims were wildly off base. So, have the pessimists come to terms with that reality?

Well, I’m still seeing a lot of excuses — two, in particular.

I’m still seeing a lot of excuses — two, in particular. One is the claim that much of the progress against inflation is in some sense illusory, that underlying inflation is still well above 4 percent. Now, there are enough measures of underlying inflation out there that if you pick and choose you can still manage to be pessimistic, but the preponderance of the evidence — plus the results of hands-free algorithms that use a consistent procedure to extract the signal from the noise — suggests underlying inflation around 3 percent and dropping.

The other is the claim that disinflation pessimists were simply applying standard economic models, so that the fault lay in the models, not themselves.

But that’s simply not true. Standard models say that disinflation is very costly if persistent high inflation has become entrenched in expectations. And it was or should have been clear, even a year ago, that this wasn’t a good description of the current U.S. economy. That’s not 20/20 hindsight: I argued a year ago, at the peak of inflation pessimism, that analogies with the painful aftermath of the 1970s were all wrong. And I was, frankly, shocked to see smart economists blithely ignoring the obvious differences in circumstances.

Did I expect disinflation to come as painlessly as it has? No. Even inflation optimists clearly need to do some rethinking. But inflation pessimists really need to do what inflation optimists did a year ago, and ask how they got it so wrong, effectively calling for policies that would have put millions out of work.

As I said, it wasn’t partisanship; America’s right has become so divorced from empirical reality that it has played no role in this debate. What I do suspect, however, is that some very good economists got caught up in a version of the Very Serious People problem of the 2010s, in which the desire to seem hardheaded led many elite voices to obsess over budget deficits when they should have been focused on inadequate job creation.

The good news is that while the Fed did, in effect, try to engineer a recession to control inflation, it didn’t succeed: Despite rising interest rates, the economy just kept chugging along. Why that happened is another question. But pessimists really need to grapple with the fact that disinflation happened anyway.

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Just Exceptional...

“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced…

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Source: Media

Far-Right Libertarian Wins Argentina’s Presidential Primary

Javier Milei, who wants to abolish the central bank and adopt the U.S. dollar as Argentina’s currency, is now the front-runner in the fall general election.

NYT by Jack Nicas, Natalie Alcoba and Lucía Cholakian Herrera, Reporting from Rio de Janeiro and Buenos Aires, Augus 14, 2023

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Who is “don” Javier Milei?

Javier Milei is undeniably a unique character in Argentine politics. Known for his distinctive sideburns, he closely resembles iconic figures in Argentina, such as Sandro, Leonardo Favio, Carlos Menem, and even Diego Armando Maradona. In other words, he is "a sympathetic and curious thing." It is important to note that these resemblances are physical and should not be misinterpreted as ideological or political.
Described by the media as a far-right politician, economist, and former TV personality, Javier Milei recently made waves by winning the most votes in Argentina's primary election. His self-proclaimed label as an anarcho-capitalist and his admiration for former US President Donald Trump have only added to his controversial image. Milei's victory, where he secured an impressive 30% of the votes and defeated more established politicians, has been referred to as a "political earthquake" by the Argentine media. This unexpected success highlights both the growing appeal of far-right ideologies in the country and the dissatisfaction of Argentine voters with traditional political parties.

However, it is important to examine Milei's ideology and political stance critically. While his triumph may have shocked the establishment, his alignment with the far-right raises questions about his policy proposals and potential consequences for social and economic issues in Argentina.
As Milei's influence continues to grow, it will be interesting to see how he navigates the complexities of Argentine politics and whether his ideas will resonate with a broader audience. The political landscape in Argentina appears to be shifting, and it remains to be seen how Milei's rise will impact the country's future.
Milei is known for his anti-establishment views and has launched scathing attacks on his rivals from established political parties. He has stated that if elected, he would abolish Argentina's central bank, replace the peso with the US dollar, and privatize state-run companies that are making a loss. Milei is also recognized for his provocative style and often berates "the left" using expletive-laden outbursts. He is frequently seen wearing his trademark leather jacket and sporting long sideburns.

By Germán & Co

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A far-right libertarian candidate won Argentina’s open presidential primary election on Sunday, a surprising showing for a politician who wants to adopt the U.S. dollar as Argentina’s official currency and embraces comparisons to Donald Trump.

Javier Milei, 52, a congressman, economist and former television pundit, secured 30 percent of the vote with 96 percent of the ballots counted, making him the front-runner for the presidency in the fall general election.

Polls had suggested that Mr. Milei’s support was at about 20 percent, and political analysts had predicted that his radical policy proposals — including abolishing the country’s central bank — would prevent him from attracting many more voters.

But the vote on Sunday made clear that Mr. Milei now has a clear shot at leading Argentina, a South American nation of 46 million with some of the world’s largest reserves of oil, gas and lithium.

“I think these results are surprising even to him,” said Pablo Touzon, an Argentine political consultant. “Up until now, he was a protest candidate.”

Argentina’s general election in October, which could go to a November runoff, will now become a new test of the strength of the far right around the world. Although hard-right forces have gained new influence in several powerful nations in recent years, including the United States, Germany, France, Italy, Sweden and Finland, they have also suffered some defeats, including in Spain and Brazil.

Mr. Milei has pitched himself as the radical change that the collapsing Argentine economy needs, and he could be a shock to the system if elected. Besides his ideas about the currency and the central bank, he has proposed drastically lowering taxes and cutting public spending, including by charging people to use the public health care system; closing or privatizing all state-owned enterprises; and eliminating the health, education and environment ministries.

Sergio Massa, Argentina’s center-left finance minister, finished second in the primary, with 21 percent of the vote. Patricia Bullrich, a conservative former security minister, finished in third place, with 17 percent.

The general election takes place on Oct. 22, but it appears likely that the race will be decided in a runoff vote on Nov. 19.

The Sunday results showed that Argentina’s three separate coalitions have similar levels of support, making it unlikely that any candidate will reach or exceed the 45-percent threshold necessary to win outright in the first round. (A candidate can also win outright by winning 40 percent of the vote with a margin of victory of at least 10 percentage points.)

The center-right coalition’s candidates received a combined 28 percent of the vote on Sunday, while the center-left coalition received 27 percent — both slightly less than Mr. Milei’s total.

The incumbent center-left party has held power in Argentina for 16 of the past 20 years and has been controlled largely by former President Cristina Fernández de Kirchner.

“We’re not only going to end Kirchnerism, but we’re also going to end the useless, parasitic, criminal political caste that is sinking this country,” Mr. Milei told supporters in a speech on Sunday night. He then thanked his sister, who runs his campaign, and his five Mastiff dogs, each named after a conservative economist.

Argentina, which has weathered economic crises for decades, is in the midst of one of its worst. The Argentine peso has plummeted in value, annual inflation has surpassed 115 percent, nearly 40 percent of the population is impoverished and the country is struggling to repay its $44 billion debt to the International Monetary Fund.

Mr. Milei has said that his economic policies would represent an austerity package that goes beyond even what the I.M.F. is requesting of Argentina.

He could also have a profound effect on other parts of Argentine society. He and his running mate, a lawyer who has defended the country’s past military dictatorship, have suggested they would loosen gun laws, reverse recent policies allowing abortion and even permit the sale of human organs, an example of commerce that Mr. Milei says the government has no business restricting.

Yet implementing such changes would lead to a major challenge. Sunday’s results suggested that Mr. Milei, if elected, would have limited direct support in Congress. His party, called Liberty Advances, said it would control just 8 of the 72 seats in the Senate and 35 of the 257 seats in the House, according to the results for its other candidates.

Supporters of Mr. Milei in Buenos Aires on Sunday. His outsider status and radical economic proposals appealed to more voters than analysts had expected.Credit...Mario De Fina/Associated Press

Mr. Touzon said Mr. Milei would have less institutional support than far-right candidates who were swept into office elsewhere in recent years, including Mr. Trump and former President Jair Bolsonaro of Brazil. “Bolsonaro leaned on the army. Trump had the Republican Party. Milei has nothing,” he said.

He added that Mr. Milei’s economic plan, while radical, is lacking in details and has been revised frequently. “His dollarization plan was changed 50 times,” Mr. Touzon said. “Today, he does not have a team to govern Argentina.”

Yet Mr. Milei has proved to be a skilled politician in the internet age, with a trademark scowl and head of unruly hair that have given him a larger-than-life persona and made him an easy subject of internet memes, much like Mr. Trump and Mr. Bolsonaro.

In a public video posted online ahead of the vote, Mr. Bolsonaro endorsed Mr. Milei and said they were political kindred spirits. “We have a lot of things in common,” he said, citing what he called their support for private property, freedom of expression, the free market and the right to self-defense.

And not unlike supporters of Mr. Trump and Mr. Bolsonaro, Argentines who voted for Mr. Milei said on Sunday that they liked him because he was a political outsider who would shake up a broken system and tell it like it is.

“The Argentine people have finally woken up,” said Rebeca Di Iorio, 44, an administrative worker celebrating at Mr. Milei’s election-night street party in Buenos Aires. “Argentina needs that. It needs a change.”

Santiago Manoukian, research chief of Ecolatina, an Argentine economic consulting firm, said that of the different scenarios for primary results that analysts had mapped out, Mr. Milei’s victory was the least expected.

Now Mr. Manoukian said he would have to rethink his predictions of the election, as Mr. Milei has a clear chance to reach the second round, which then could be a tossup.

“He was not seen as a competitive candidate for a runoff,” Mr. Manoukian said. “Now something very different is happening.”

An earlier version of this article misstated the number of seats in Argentina’s lower house of Congress. It has 257 seats, not 500.

An earlier version of this article misidentified how a candidate could win the election outright and avoid a runoff. A candidate needs either 45 percent of the vote, or 40 percent and a margin of victory of at least 10 percentage points, not 50 percent of the vote.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Russian Central Bank Governor Elvira Nabiullina.Alexander Koryakov / Kommersant

Russia Raises Interest Rates to 12% After Ruble Plummets

The Moscow Time by Jake Cordell, 5 hours ago

Russia’s Central Bank hiked interest rates from 8.5% to 12% on Tuesday in an emergency meeting after the ruble slid past 100 against the U.S. dollar the day before.

“The decision is aimed at limiting price stability risks,” the Bank said in a statement.

The ruble gained strongly ahead of the decision, rising by more than 2% to around 95 against the U.S. dollar, before paring gains to fall back below 98 after the rate hike was announced, Moscow Exchange data showed.

It was the first extraordinary meeting of the Bank’s board of directors since Feb. 28, 2022, when the regulator raised interest rates to 20% in the wake of Moscow’s invasion of Ukraine just days earlier.

Kremlin Unfazed as Ruble Crashes Through 100 vs. Dollar

A devaluation in the Russian currency has gathered pace in recent weeks, triggering concerns it could set off an inflationary spiral and panic in Russia’s domestic financial markets.

In its statement, the Bank said surging demand at home — which includes a rapid increase in state spending on the war in Ukraine — was causing the economy to overheat.

“Steady growth in domestic demand surpassing the capacity to expand output amplifies the underlying inflationary pressure and has an impact on the ruble’s exchange rate dynamics,” it said.

Ahead of the move, analysts at Alfa Bank said a key rate of around 12% could help stabilize the currency.

“Perhaps with the help of a rate increase, the Central Bank expects to slow down domestic demand and reduce imports. But this will only have an indirect effect on the ruble exchange rate,” they wrote in a research note.

A fall in Russia’s export sales, a recovery in imports and surging government spending to help fund the invasion of Ukraine have all contributed to a weakening ruble and rising inflation, analysts say. The Central Bank itself has been warning of inflationary pressures for almost a year, following Russia's mobilization of some 300,000 reservists in September. 

Inflation is currently running at 4.4%, the bank said in its statement — above its official 4% target — and is set to accelerate toward 6.5% by the end of this year, according to official forecasts. Other measures of price rises, including core inflation and seasonally-adjusted inflation were running above 7%, the central bank said on Tuesday.

“The pass-through of the ruble’s depreciation to prices is gaining momentum and inflation expectations are on the rise,” it said in a statement, adding there were “substantial” risks that inflation would not be brought back down to 4% until after 2024.

Tuesday’s hike came after Maxim Oreshkin, an aide to Russian President Vladimir Putin, publicly called for higher borrowing costs to address the ruble’s woes, in a rare criticism of the regulator’s policy from the Kremlin. 

Central Bank governor Elvira Nabiullina, previously an economic advisor to Putin, is seen in Moscow as an astute operator who has been instrumental in helping Russia’s economy weather a barrage of Western sanctions and the economic fallout of the war.

Analysts say the falling ruble is both a blessing and a curse for the Kremlin. 

A weaker currency increases Russia’s revenue from energy sales, which are priced in dollars, helping offset lost income from lower exports. The price in rubles for a barrel of Russia’s Urals oil has more than doubled since the start of the year. 

However, it could also trigger financial panic and inflation at home, by pushing up prices for goods that use imported parts and even for some domestically-produced agricultural products, where the price is dictated by international markets. 

Last week a state TV presenter, Vladimir Solovyov, slammed the Central Bank on a broadcast of his online show, calling on Nabiullina to halt the slide in the ruble ahead of the upcoming presidential election, scheduled for March 2024. Putin is certain to win the race, which independent observers and rights groups say will be neither free nor fair, but the Kremlin would prefer not to have Russians head to the polls against the backdrop of an economic crisis. 

Russia’s economy has become increasingly militarized in the 18 months since Russia invaded Ukraine, with a massive ramp-up in arms production and payments to soldiers offsetting a sharp drop in retail sales, foreign investment and energy exports.

Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image by Germán & Co

Hemingway and the “gang” say: “Farewell To The Arms…

By GERMÁN & CO, August 13, 2023

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Project "Alcatraz": A Comprehensive Initiative for Gang Rehabilitation and Reintegration by Santa Teresa...

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“If you treat an individual as he is, he will remain how he is. But if you treat him as if he were what he ought to be and could be, he will become what he ought to be and could be.”

―JOHANN WOLFGANG VON GOETHE

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It is the cruelest reality imaginable...

Criminal activity has become a worldwide threat recently. The current statistics are alarming, with homicides taking the lives of almost half a million people globally. Surprisingly, this number is higher than the sum of deaths caused by armed conflicts and terrorist attacks during the same period.

To deal with the problem effectively, it's crucial to comprehend the intricate relationships between Latin American gangs, the widespread availability of firearms in Europe, and the extent of organized crime. Latin American criminal groups have played a crucial role in the increase of crime rates in the region. These groups frequently operate with a twisted notion of loyalty, engaging in violent conflicts over territories to dominate and control lucrative illegal activities. Their influence goes beyond local communities, spreading into diverse aspects of society and perpetuating cycles of violence.

In Europe, the widespread availability of firearms worsens the hazards of criminal activities. As guns are easily accessible, criminals become more confident, leading to an increase in armed robberies, gang violence, and even terror attacks. Recognizing the urgency of addressing this crisis, the United Nations implemented “Sustainable Development Goal 16”, which aims to decrease violence and associated deaths by 2030. Nonetheless, the current crime rate persists. Therefore, achieving the goal on time is likely.

To effectively tackle crime and ensure community safety, a diverse approach is necessary. Such an approach ought to involve investing in social programs that address the root causes of crime, encourage education and skills development, enable economic opportunities, and bolster international cooperation to dismantle transnational criminal networks.

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A déjà vu of goodness…

On a chilly autumn evening, the “Spirit of Good Hope” entered a bustling café on Rue de l'Abreuvoir in Paris. It seemed familiar. The Spirit felt like he had been there before; he enjoyed the cozy ambiance and was captivated by the café's charm. The air was filled with the aroma of freshly brewed coffee, mingling with the gentle buzz of conversation permeating the room. It wasn't fleeting, though. It was a positive repetition that set the tone for the evening. The Spirit felt a profound sense of hope, as if tonight was different from other nights. Approaching the counter, he had a smile spread across his face. He said to the barista, "Un café au lait avec du rhum Santa Teresa, s'il vous plaît," with a hint of excitement in his voice. He ordered this drink every time. It was ideal for this time of year when the weather was cold. In the dimly lit café, a poignant scene unfolded, reflecting the intense emotions of this extraordinary gathering. Ernest Hemingway filled the room with his gray beard, exuding rugged charm. Surrounding him, the young "gang" members held court, their faces bearing tattoos and scars from their struggles and battles fought on the unforgiving city streets.

The conversation drifted through the smoky haze, blending past and present and forging an unexpected connection between two contrasting worlds.  Hemingway acknowledged the profound impact guns have had on gang members.  In the weathered writer, these resilient individuals discovered a kindred spirit who understood their conflicting natures.  The gang's weapons were a source of power and control in a world constantly challenging their lives.  These weapons gave them a semblance of strength and protection through their tumultuous existence.  But beneath the surface, guilt seethed—an undeniable truth they could not escape. The countless lives lost in the crossfire haunted their consciences, leaving scars that would never fully fade.  Hemingway, too, understood the weight of guns on the human soul.  Through his experiences as a soldier first and a writer afterwards, he witnessed the devastating effects of war.  The weapons that once filled his hands had penetrated the depths of his being, leaving scars that time would never heal.  He carried the ghosts of those he had lost, constantly reminding him of the devastating toll of violence.  

As they talked, an unspoken understanding began to develop. Despite the differences that separated them, Hemingway and the gang members found common ground in the profound impact that guns had on their lives. Through their shared experiences, they formed an unlikely bond, providing a moment of relief from the adversity molded by the destructive forces of the past. They yearned to break free from the chains that held them captive. And so, on that fateful night, they conceived a noble path - the Alcatraz Project - with the audacious purpose of bidding farewell to the arms.

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Inspired by the noble soul of Saint Teresa Of Avila…

The teachings and spirituality of Saint Teresa of Avila, a nun renowned for her devotion to praying for the most vulnerable, have had a profound influence on the Wollmer family, who own Hacienda Santa Teresa in the Aragua Valley, a key region in Venezuela's sugar industry. The family, deeply moved by her teachings and spiritual beliefs, embraced the principles that would later be recognized as corporate social responsibility, long before it became a popular trend.

Hacienda Santa Teresa is the home of "Santa Teresa," Venezuela's oldest rum brand, with a rich history dating back to 1796. Originally focused on cultivating coffee, cocoa, and sugarcane, the hacienda ventured into rum production in 1830 and has persevered through numerous challenges, including wars, revolutions, dictators, and even the ongoing pandemic. Although the company produces various rum, only one, the "Santa Teresa 1796 Solera Rum," is designated for exportation. This particular expression was introduced in 1996 to commemorate the bicentennial of the hacienda and is managed internationally by Bacardi Ltd.

Through their commitment to Saint Teresa's teachings and spiritual values, the Wollmer family has nurtured a brand that embodies tradition, resilience, and respect for its community and the environment. Hacienda Santa Teresa's enduring legacy as a producer of exceptional rum highlights the family's dedication to their craft and their unwavering belief in the principles that were inspired by Saint Teresa herself.

The brand has a long history of community involvement. The organization's most renowned endeavour is the ongoing Project “Alcatraz”. In 2003, a criminal gang unlawfully entered the Hacienda premises and launched a surprise attack on a security guard. When apprehended, the perpetrators were presented with an unconventional option:

“Either surrender to the authorities or engage in labour at the Hacienda to restate their transgression…

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Project "Alcatraz"…

In response to the ever-growing challenge of gang-related activities, the offer to establish Project "Alcatraz" was accepted, marking the beginning of a remarkable endeavor. Since its inception, Project "Alcatraz" has evolved into a comprehensive initiative dedicated to the recruitment and rehabilitation of individuals involved in criminal gangs.

Drawing upon a multi-faceted approach, this program employs a range of strategies to foster the reintegration of these individuals into society. One core aspect of Project "Alcatraz" is vocational training, equipping participants with essential skills and expertise necessary for employment and self-sustainability. Moreover, value formation plays a key role in instilling a sense of moral compass and social responsibility.

Recognizing the importance of addressing underlying psychological issues, Project "Alcatraz" also provides psychological counseling to its participants. By addressing the root causes of their involvement with criminal gangs, this counseling plays a pivotal role in guiding them towards positive and productive paths.

Formal education is another vital component of the program. Through academic pursuits, participants have the opportunity to expand their knowledge and develop a solid foundation for future success. By fostering intellectual growth, Project "Alcatraz" helps break the cycle of criminal activity and opens doors to new possibilities.

An unexpected aspect of the rehabilitation process embraced by Project "Alcatraz" is the involvement of its participants in the sport of rugby. Beyond its physical benefits, rugby serves as a powerful tool for instilling discipline, teamwork, and self-esteem. This sport offers a unique opportunity for personal development and camaraderie, contributing to the overall success of the program.

Since its establishment, Project "Alcatraz" has witnessed the participation of numerous young people aiming to leave behind a life of crime. Through its far-reaching initiatives, the program has successfully reintegrated many individuals into society, providing them with a chance for a fresh start. The unwavering commitment and dedication of the Project "Alcatraz" team have paved the way for transformation and hope in the lives of those previously trapped in a cycle of gang-related activities.

Looking forward, as Project "Alcatraz" continues to grow and evolve, it serves as a beacon of progress and renewal in the realm of gang rehabilitation. With its holistic approach and undeniable impact, this initiative stands as a testament to the power of compassion, perseverance, and the belief in the potential for redemption in every individual.

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IMAGE BY GERMAN & Co

Trump Indicted in Georgia for Election Interference Scheme Along With 18 Others

TIME BY BRIAN BENNETT AND ERIC CORTELLESSA, AUGUST 14, 2023 

Agrand jury in Georgia voted to indict Donald Trump on Monday, along with more than a dozen of his allies, for trying to overturn his 2020 election loss in the state, marking the fourth criminal case leveled against the former President this year and the second related to his efforts to stay in power.

Fani Willis, the Fulton County District Attorney, charged Trump with 13 counts, including violating state racketeering laws and soliciting a public official to violate his oath of office, conspiring to commit forgery in the first degree, conspiring to file false documents, and making false statements.

"Trump and the other Defendants charged in this indictment refused to accept that Trump lost, and they knowingly and willfully joined a conspiracy to unlawfully change the outcome of the election in favor of Trump," the indictment reads.

The sweeping charges in Georgia are almost certain to add to Trump’s already packed court schedule and increase his legal bills as he aims to win the GOP presidential nomination and reclaim the White House.

Special Counsel Jack Smith indicted Trump earlier this month on four federal charges, including knowingly spreading lies about election malfeasance, defrauding the U.S. government by orchestrating a scheme to present fake electors to the Electoral College, and engaging in a conspiracy to obstruct an official proceeding, which culminated with his supporters violently storming the U.S. Capitol on Jan. 6, 2021. Smith is separately prosecuting Trump for mishandling classified documents at Mar-a-Lago, in a case set to go to trial in May. At the same time, Manhattan District Attorney Alvin Bragg is set to take Trump to trial in March on 34 counts of falsifying business records.

Several of Trump’s rivals for the GOP presidential nomination have said they would pardon him if elected. Trump has also routinely claimed that a president can pardon himself. But the latest charges out of Georgia present a unique danger to Trump’s future freedom. Notably, no president could grant Trump clemency in the Georgia and New York cases, as presidential pardon power only applies to federal charges. In Georgia, only an independent state board enjoys pardon authority.

The Fulton Country indictment is focused on five main areas of legal impropriety, including the deliberate dissemination of election fraud falsehoods by Trump allies to manipulate the Georgia legislature; Trump’s efforts to intimidate state officials, including Georgia's Secretary of State Brad Raffensperger, to overturn Biden’s victory; the breach of voting data in Georgia’s rural Coffee County; the targeted abuse and harassment of state election workers; and the orchestrated attempt to send alternate electors slates to Congress to undermine the will of the voters.

Willis didn’t stop with Trump. A number of his closest associates were also charged under Georgia’s anti-racketeering law for conspiring to nullify the election, including Rudy Giuliani, the former New York mayor who was Trump’s personal attorney at the time; former White House Chief of Staff Mark Meadows; attorneys John Eastman and Kenneth Cheseboro, both of whom devised a scheme to send alternate Trump electors to the Electoral College; and other lawyers in Trump’s orbit who pushed wild or legally dubious theories for how to reverse the election outcome, such as Sidney Powell and Jenna Ellis. A handful of Georgia-based Trump attorneys and advisers were also included in the indictment.

All in all, the historic indictment brought a grand total of 41 charges against 19 people. They collectively face a gamut of different charges but are all being prosecuted under the Georgia Racketeer Influenced and Corrupt Organizations Act, what are known in legal parlance as RICO Statues, which have typically been used to prosecute members of the mob.

In a statement Monday night, Trump’s campaign dismissed the new indictments as a partisan attempt to kneecap his 2024 campaign. “Ripping a page from Crooked Joe Biden’s playbook, Willis has strategically stalled her investigation to try and maximally interfere with the 2024 presidential race and damage the dominant Trump campaign,” it said. “All of these corrupt Democrat attempts will fail."

The campaign’s comments were less vituperative than Trump’s own attacks on Willis, who he has called a “racist” and “Phoney Fani” and has baselessly accused of having an affair with a gang member she once prosecuted, a claim that Willis has denied and has since been debunked.

Trump has strenuously fought to stop Willis’s case in its tracks. In July, he filed and lost a petition to the Georgia State Supreme Court to bar Willis from prosecuting him. The request, if granted, would have also forced the investigative special grand jury that met last year to toss out the final report. 

The Georgia case will test just how far someone with outsized political power can influence the election process. Trump is being prosecuted under more than a dozen charges  to use his weight as president to illegally change the vote tallies and send fake electors to Washington to alter the election result.

The Willis investigation into Trump dates back to early 2021, shortly after The Washington Post reported on a Jan. 2, 2021 phone call in which Trump asked Georgia's Secretary of State Brad Raffensperger, a fellow Republican, to "find" 11,780 votes—one more than the number he lost by in the decisive swing state. Raffensperger refused. At that point, Georgia officials had already counted the votes three times, won multiple lawsuits over the outcome, and debunked extravagant fraud claims from Trump's team. At each turn, Biden’s victory was confirmed irrefutably. Trump has said he did nothing wrong, calling the phone was “perfect” 

But while many legal analysts have characterized the leaked conversation as something of a smoking gun, Willis has presented a much broader case, as her investigators have examined an extensive and multi-faceted effort by Trump to exert political muscle and disseminate brazen lies to remain in office despite the will of the voters. 

Trump’s allies, including Rudy Giuliani, harassed election workers and propagated patently false claims of a rigged election. On Dec. 14, 2020, the same day Biden’s electors were confirmed, a group of 16 fake electors met separately at the state capitol building to sign a false certificate stating that Trump had won the election. 

A separate grand jury investigated the matter last year, and concluded that some witnesses may have lied under oath, recommending indictments in the case, according to its own report, portions of which a Georgia judge released earlier this year. The grand jury in that probe also unanimously found that “no widespread fraud took place in the Georgia 2020 presidential election that could result in overturning the election.”

Willis’s prosecution against Trump may not only increase his criminal vulnerability liability. It could also provide a road map for other jurisdictions to pursue election interference charges. Special Counsel Smith’s indictment alleges that Trump tried to influence the outcome in Georgia as well as six other states. “It certainly raises the question of whether or not there are going to be investigations in those states and potentially, if there are, if those investigations will lead to further indictments,” says Richard Serafini, a former federal prosecutor.

The more cases Trump faces, the harder it will be for him to maneuver his way out of the justice system’s grip. Some of his most famous tactics—from lying to intimidating potential foes—are more likely to yield far more severe consequences in a court of law than in the political arena. And with the Georgia charges, unlike the federal cases, he can’t hope to win the 2024 election and grant himself a pardon or appoint an attorney general who will squash the matter altogether. It’s why it may be the indictment that scares him the most.

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News Round-up, August 14, 2023

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The Best in the Biz – August 10, 2023

Posted to Energy Centralin the Utility Management Group

EPA Plan Would Impose Drastic Cuts on Power Plant Emissions by 2040

German Toro Ghio

Link to original article: https://energycentral.com/c/ee/epa-plan-would-impose-drastic-cuts-power-plant-emissions-2040

The Biden administration is preparing to unveil a proposal to require power plants to drastically reduce their greenhouse-gas emissions by 2040, another attempt to regulate one of the country’s biggest contributors to climate change after the Supreme Court struck down the first effort, according to three people familiar with the plans.

I want to express my deepest gratitude to Matt Chester for his immense support, but my appreciation does not end with Matt. I also extend my thanks to everyone of you who has supported me. Your support has made all the difference, and I am forever grateful.

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Most read…

The Clean Energy Future Is Arriving Faster Than You Think

The United States is pivoting away from fossil fuels and toward wind, solar and other renewable energy, even in areas dominated by the oil and gas industries.

NYT,  David Gelles reported from Tulsa, Okla.; Brad Plumer and Jim Tankersley from Washington; and Jack Ewing from New York to see how an accelerated energy transition is playing out. Photographs by Mason Trinca, August 13, 2023

Electric Vehicle Myths

Electric Vehicles: Will they save or destroy us?

Source: https://www.epa.gov/greenvehicles/electric-vehicle-myths#Myth1

The Economic Losers in the New World Order

Giant subsidies and rising protectionism are upending decades of free trade. Smaller countries, from the U.K. to Singapore, are getting left behind.

WSJ by Ed Ballard, Jason Douglas,  and Jon Emont, August 14, 2023 The Economic Losers in the New World Order

Opinion: In Iowa, Mike Pence delivers a powerful message against Trump

TWP by Karen Tumulty, Deputy opinion editor and columnist, August 13, 2023 

The hunt for Russia’s secret ships

Turkey’s strategic straits are a trade superhighway — and a lifeline for the Kremlin’s war machine.

POLITICO EU BY GABRIEL GAVIN, AUGUST 14, 2023

Oil Firms Face Hard Choices After a Year of Big Spending

The industry’s wartime windfall is dwindling

TWSJ by David Uberti, August 14, 2023

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The AES Corporation is committed to accelerating the future of energy transitions by delivering greener and more innovative solutions. AES firmly believes that energy infrastructure plays a crucial role in ensuring the sustainability of our sector. Recently, the AES President and CEO, Andrés Gluski, had the privilege of moderating a captivating discussion titled "Harnessing Diplomacy for the Energy Transition and Universal Access" at the @EEI_Intl panel. This engaging conversation highlights the importance of collaboration and innovative approaches in driving the energy transition forward.

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A big shift in the way America produces energy is already underway.

The Clean Energy Future Is Arriving Faster Than You Think

The United States is pivoting away from fossil fuels and toward wind, solar and other renewable energy, even in areas dominated by the oil and gas industries.

NYT,  David Gelles reported from Tulsa, Okla.; Brad Plumer and Jim Tankersley from Washington; and Jack Ewing from New York to see how an accelerated energy transition is playing out. Photographs by Mason Trinca, August 13, 2023

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This is the first article in a three-part series examining the speed, challenges and politics of the American economy moving toward clean energy.

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Delivery vans in Pittsburgh. Buses in Milwaukee. Cranes loading freight at the Port of Los Angeles. Every municipal building in Houston. All are powered by electricity derived from the sun, wind or other sources of clean energy.

Across the country, a profound shift is taking place that is nearly invisible to most Americans. The nation that burned coal, oil and gas for more than a century to become the richest economy on the planet, as well as historically the most polluting, is rapidly shifting away from fossil fuels.

A similar energy transition is already well underway in Europe and elsewhere. But the United States is catching up, and globally, change is happening at a pace that is surprising even the experts who track it closely.

Wind and solar power are breaking records, and renewables are now expected to overtake coal by 2025 as the world’s largest source of electricity. Automakers have made electric vehicles central to their business strategies and are openly talking about an expiration date on the internal combustion engine. Heating, cooling, cooking and some manufacturing are going electric.

As the planet registers the highest temperatures on record, rising in some places to levels incompatible with human life, governments around the world are pouring trillions of dollars into clean energy to cut the carbon pollution that is broiling the planet.

The cost of generating electricity from the sun and wind is falling fast and in many areas is now cheaper than gas, oil or coal. Private investment is flooding into companies that are jockeying for advantage in emerging green industries.

“We look at energy data on a daily basis, and it’s astonishing what’s happening,” said Fatih Birol, the executive director of the International Energy Agency. “Clean energy is moving faster than many people think, and it’s become turbocharged lately.”

More than $1.7 trillion worldwide is expected to be invested in technologies such as wind, solar power, electric vehicles and batteries globally this year, according to the I.E.A., compared with just over $1 trillion in fossil fuels. That is by far the most ever spent on clean energy in a year.

Those investments are driving explosive growth. China, which already leads the world in the sheer amount of electricity produced by wind and solar power, is expected to double its capacity by 2025, five years ahead of schedule. In Britain, roughly one-third of electricity is generated by wind, solar and hydropower. And in the United States, 23 percent of electricity is expected to come from renewable sources this year, up 10 percentage points from a decade ago.

“The nature of these exponential curves sometimes causes us to underestimate how quickly changes occur once they reach these inflection points and begin accelerating,” said former Vice President Al Gore, who called attention to what he termed a “planetary crisis” 17 years ago in his film “An Inconvenient Truth.” “The trend is definitely in favor of more and more renewable energy and less fossil energy.”

Even as the pace of change in the United States is surprising everyone from energy experts to automobile executives, fossil fuels still dominate energy production at home and abroad.

Corporations are building new coal mines, oil rigs and gas pipelines. The government continues to award leases for drilling projects on public lands and in federal waters and still subsidizes the industries. After posting record profits last year, leading oil companies are backing away from recent promises         to invest more heavily in renewable energy.

The scale of change required to remake the systems that power the United States — all the infrastructure that needs to be removed, re-engineered and replaced — is mind-boggling. There are major challenges involved in adding large amounts of renewable energy to antiquated electric grids and mining enough minerals for clean technologies. Some politicians, including most Republicans, want the country to continue burning fossil fuels, even in the face of overwhelming scientific consensus that their use is endangering life on the planet. Dozens of conservative groups organized by the Heritage Foundation have created a policy playbook, should a Republican win the 2024 presidential election, that would reverse course on lowering emissions. It would shred regulations designed to curb greenhouse gases, dismantle nearly every federal clean energy program and boost the production of fossil fuels.

And while energy systems are changing fast, so is the climate. It is far from certain whether the United States and other polluting countries will do what scientists say is required to avert catastrophe: stop adding greenhouse gases to the atmosphere by 2050. All of the investment so far has slowed the pace at which emissions are growing worldwide, but the amount of carbon dioxide pumped into the atmosphere is at record levels.

And yet, from Beijing to London, Tokyo to Washington, Oslo to Dubai, the energy transition is undeniably racing ahead. Change is here, even in oil country.

‘Energy Is Energy’

As the workday begins in Tulsa, Okla., the assembly line at the electric school bus factory rattles to life. Crews fan out across the city to install solar panels on century-old Tudor homes. Teslas and Ford F-150 Lightnings pull up to charging stations powered in part by the country’s second-largest wind farm. And at the University of Tulsa’s School of Petroleum Engineering, faculty are working on ways to use hydrogen as a clean energy source.

Tulsa, a former boomtown once known as the “Oil Capital of the World” where the minor league baseball team is the Drillers, is immersed in a new energy revolution.

At the port, an Italian company, Enel, is building a $1 billion solar panel factory. The bus factory is operated by Navistar, one of the biggest commercial vehicle makers in the world. And the city’s main electric utility, Public Service Company of Oklahoma, now harvests more than 28 percent of its power from wind.

Clean energy entrepreneurs are flocking to Oklahoma, too. Francis Energy, a fast-growing maker of electric vehicle charging stations, is based in Tulsa. Canoo, an electric vehicle start-up, is building a 100,000-square-foot battery factory at a nearby industrial park and a manufacturing plant for its trucks in Oklahoma City, though there are questions about whether the company will have enough funding to realize its plans. And teams from Solar Power of Oklahoma are busy fastening photovoltaic panels to the roofs of homes and businesses around Tulsa.

The city is embracing its shifting identity.

“We have a tremendous sense of pride in our history,” said Dewey F. Bartlett Jr., the Republican former mayor of Tulsa who was an oil and gas executive but now helps recruit clean energy companies to the region. “But we also understand that energy is energy, whether it is generated by wind, steam or whatever it might be.”

Around the country, clean energy is taking root in unlikely locales.

Houston, home to more than 500 oil and gas companies, also has more than 130 solar- and wind-related companies. Some of the country’s largest wind and solar farms are in the Texas flatlands outside the city, and a huge wind farm has been proposed off the coast of Galveston.

In Arkansas, a planned solar farm — the state’s biggest — is expected to help power a nearby U.S. Steel factory that is undergoing a $3 billion upgrade. When complete, the plant will use electric furnaces to mold scrap steel into new products. That will result in about 80 percent less greenhouse gases, the company says, and set the pace for an industry that has been a major polluter.

About two-thirds of the new investment in clean energy is in Republican-controlled states, where policymakers have historically resisted renewables. But with each passing month, the politics seem to matter less than the economics.

“We’re the reddest state in the country, and we’re an oil and gas state,” said J.W. Peters, president of Solar Power of Oklahoma. “So it took a lot of time to convince people that this wasn’t snake oil.”

Mr. Peters was broke six years ago, with less than $400 in his checking account after his contracting business slowed down. Then he responded to a help-wanted ad looking for workers to install solar panels, which were becoming more popular in Tulsa. He now employs 61 workers and has $18 million in annual sales. “The environmental benefits are nice,” he said, “but most people are doing this for the financial opportunity.”

‘Something Very Dramatic’

Fifteen years ago, solar panels, wind turbines and battery-powered vehicles were widely viewed as niche technologies, too expensive and unreliable for mainstream use.

But clean energy became cheap far faster than anyone expected. Since 2009, the cost of solar power has plunged by 83 percent, while the cost of producing wind power has fallen by more than half. The price of lithium-ion battery cells fell 97 percent over the past three decades.

Today, solar and wind power are the least expensive new sources of electricity in many markets, generating 12 percent of global electricity and rising. This year, for the first time, global investors are expected to pour more money into solar power — some $380 billion — than into drilling for oil.

The rapid drop in costs for solar energy, wind power and batteries can be traced to early government investment and steady improvements over time by hundreds of researchers, engineers and entrepreneurs around the world.

Source: Lazard. Notes: Charts reflect the mean levelized cost of energy, which captures the price of building and running new power plants but excludes other electrical system costs. Lazard did not release data for 2022. In 2023, costs rose because of supply-chain problems, inflation and other issues.

“The world has produced nearly three billion solar panels at this point, and every one of those has been an opportunity for people to try to improve the process,” said Gregory Nemet, a solar power expert at the University of Wisconsin-Madison. “And all of those incremental improvements add up to something very dramatic.”

An equally potent force, along with the technological advances, has been an influx of money — in particular, a gusher since 2020 of government subsidies.

In the United States, President Biden signed a trio of laws during his first two years in office that allocated unprecedented funds for clean energy: A $1 trillion bipartisan infrastructure law provided money to enhance the power grid, buy electric buses for schools and build a national network of electric vehicle chargers. The bipartisan CHIPS and Science Act set aside billions of dollars for semiconductors vital to car manufacturing. And the Inflation Reduction Act, which marks its first anniversary on Aug. 16, is by far the most ambitious attempt to fight climate change in American history.

The United States is ramping up its capacity to produce electric vehicles, batteries, solar panels and wind turbines.

That landmark law provided tax breaks related to electric vehicles, heat pumps and energy efficiency upgrades, solar panel and wind turbine manufacturing and clean hydrogen production. The government is also investing in efforts to capture carbon emissions and store them before they can reach the atmosphere, as well as technology that can remove them directly from the air.

Originally estimated to cost roughly $391 billion between 2022 and 2031, the tax breaks are proving so popular with manufacturers and consumers that estimates now put the cost as high as $1.2 trillion over the next decade.

Combined, the three laws have prompted companies to announce at least $230 billion in manufacturing investments so far. In Georgia, a Korean solar manufacturer, Qcells, is building a $2.5 billion plant. In Nevada, Tesla is building a new $3.6 billion electric truck factory. And in Oklahoma, the Enel and Canoo facilities are primed to benefit from the Inflation Reduction Act, as is a new $4.4 billion battery factory being considered by Panasonic, the Japanese conglomerate.

“There’s a lot of appetite to invest in the United States thanks to that law,” said Giovanni Bertolino, an executive at Enel, adding that the plant his company is building in Tulsa would not exist without the Inflation Reduction Act.

Regulations are also hastening the energy transition. Mr. Biden has proposed tough new federal pollution limits on tailpipes and smokestacks, but several states are acting on their own. California, with market muscle that influences the entire auto industry, plans to halt sales of new gas-powered cars by 2035 and new diesel-powered trucks by 2036 — and a handful of states are following suit. In May, New York became the first state to ban gas hookups in most new buildings, requiring all-electric heating and cooking starting in 2026. Several cities, including New York and San Francisco, have similar prohibitions, although some Republican-controlled states have blocked their municipalities from banning gas.

Heavy investment by the United States has spurred a spirited reaction from other wealthy nations. Countries that initially complained that the United States was unfairly subsidizing clean energy manufacturers have since engaged in a sort of friendly subsidy race.

Canada, South Korea and others have pushed for their companies to have better access to the American incentives, while offering similar subsidies to their domestic manufacturers. After Russia invaded Ukraine last year, the European Union moved to lessen its dependence on Russian oil and gas. In May, for the first time ever, wind and solar power in the E.U. generated more electricity than fossil fuels.

And in China, which is currently both the world’s top polluter and the global leader for renewable power, the government continues to invest in every stage of clean energy production, from solar cells to batteries, wind turbines and more. Like the United States, China provides subsidies to buyers of electric vehicles. Last year it spent $546 billion on clean energy, far more than any other country in the world.

With costs falling fast, manufacturing has picked up and installations of solar and wind projects have increased. The U.S. solar industry installed a record 6.1 gigawatts of capacity in the first quarter of 2023, a 47 percent increase over the same period last year.

And those low costs have led many of the United States’ biggest corporations, such as Alphabet, Amazon and General Motors, to purchase large amounts of wind and solar power, because it burnishes their reputations and because it makes good economic sense.

“We’re seeing the nonlinear change happen before us,” said Jon Creyts, chief executive of RMI, a nonprofit organization that promotes the energy transition. “And that’s important, because we’re facing a climate crisis right now.”

‘A National Phenomenon’

Steve Uerling’s Tulsa home is a model of energy efficiency. He replaced all his incandescent light bulbs with LEDs. He installed a heat pump and rooftop solar panels this year. And he drives a plug-in hybrid Ford Fusion and a Tesla Model 3.

Mr. Uerling, a mechanical engineer, said he wanted to see renewable power take off in Oklahoma and was trying to do his part. But he was also driven by his wallet.

Source: International Energy Agency

Note: Sales share of battery electric vehicles excludes plug-in hybrids. By The New York Times

“My fuel cost is equivalent to getting 200 miles a gallon on gasoline,” he said. “We charge at night, when we get a much cheaper rate on our electricity.”

Millions of people around the country are making similar calculations. Electric vehicles are by far the fastest-growing segment of the auto industry, with record sales of 300,000 in the second quarter of 2023, a 48 percent increase from a year earlier. Teslas are now among the best-selling cars in the country, and Ford has expanded its production of the F-150 Lightning, the electric version of its popular pickup truck, after a surge of initial demand created a waiting list.

Concerns among consumers about the availability of charging stations as well as the cost of some models have helped to cool sales somewhat, leading some automakers to slash prices. Still, federal tax credits of up to $7,500 have made the least expensive electric vehicles competitive with gas-powered cars. And about two dozen states offer additional tax credits, rebates or reduced fees, further pushing down their cost.

Government action is also helping heavier vehicles go electric. Sales of electric school buses are soaring, largely because of $5 billion in federal grants that can cover 100 percent of the cost for low-income communities. The Postal Service plans to spend nearly $10 billion to purchase 66,000 electric mail trucks — roughly 30 percent of its fleet — over the next five years.

Electric vehicles sales are growing quickly, but consumers are still concerned about high upfront costs and charging availability.

In the private sector, Amazon has ordered 100,000 electric delivery trucks from Rivian. Tesla has an electric semitruck, as do several other manufacturers, including Peterbilt.

Companies that provide charging stations are springing up to meet the demand. Francis Energy has more than 400 chargers across Oklahoma and is expanding nationwide. EVgo, which has one of the largest fast-charging networks in the United States, plans to more than double the 3,000 charging stalls it operates.

“It is not a red-state, blue-state thing,” said Cathy Zoi, EVgo’s chief executive. “It is a national phenomenon.”

In an unusual move, seven carmakers — BMW Group, General Motors, Honda, Hyundai, Kia, Mercedes-Benz Group and Stellantis — are spending $1 billion in a joint venture to build 30,000 charging ports on major highways and other locations in the United States and Canada.

The shift is happening so quickly that some of America’s most iconic automakers are preparing for a world beyond gasoline-powered cars and trucks.

General Motors, which has the largest market share of any carmaker in the United States, has committed to selling only zero-emissions vehicles by 2035. It’s a “once-in-a-generation inflection point” for the 114-year-old automaker, according to Mary Barra, G.M.’s chief executive.

In an interview, Ms. Barra said her company began to consider an all-electric future in 2020. “We started to see this happening with the consumer research we did,” said Ms. Barra, who has subsequently bet billions on G.M.’s efforts to reorient its engineering, overhaul its manufacturing facilities and processes and build new battery plants.

As the cost of batteries comes down, and the number of charging stations nationwide goes up, Ms. Barra expects exponential growth. “I think it’s going to be definitely an upward trajectory,” she said. “It’ll be a little bumpy, but bumpy growing.”

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Source: Media

Electric Vehicle Myths

Source: https://www.epa.gov/greenvehicles/electric-vehicle-myths#Myth1

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Electric Vehicles: Will they save or destroy us?

https://www.youtube.com/watch?v=UNBLhGsjHQI

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Myth #1: Electric vehicles are worse for the climate than gasoline cars because of the power plant emissions.

• FACT: Electric vehicles typically have a smaller carbon footprint than gasoline cars, even when accounting for the electricity used for charging.

  Electric vehicles (EVs) have no tailpipe emissions. Generating the electricity used to charge EVs, however, may create carbon pollution. The amount varies widely based on how local power is generated, e.g., using coal or natural gas, which emit carbon pollution, versus renewable resources like wind or solar, which do not. Even accounting for these electricity emissions, research shows that an EV is typically responsible for lower levels of greenhouse gases (GHGs) than an average new gasoline car. To the extent that more renewable energy sources like wind and solar are used to generate electricity, the total GHGs associated with EVs could be even lower. (In 2020, renewables became the second-most prevalent U.S. electricity source.1 ) Learn more about electricity production in your area by visiting EPA’s Power Profiler interactive web page. By simply inputting your zip code, you can find the energy mix in your region.

  EPA and Department of Energy's (DOE’s) Beyond Tailpipe Emissions Calculator can help you estimate the greenhouse gas emissions associated with charging and driving an EV or a plug-in hybrid electric vehicle (PHEV) where you live. You can select an EV or PHEV model and type in your zip code to see the CO2 emissions and how they stack up against those associated with a gasoline car.

Myth #2: Electric vehicles are worse for the climate than gasoline cars because of battery manufacturing.

• FACT: The greenhouse gas emissions associated with an electric vehicle over its lifetime are typically lower than those from an average gasoline-powered vehicle, even when accounting for manufacturing.

  
  Some studies have shown that making a typical EV can create more carbon pollution than making a gasoline car. This is because of the additional energy required to manufacture an EV’s battery. Still, over the lifetime of the vehicle, total GHG emissions associated with manufacturing, charging, and driving an EV are typically lower than the total GHGs associated with a gasoline car. That’s because EVs have zero tailpipe emissions and are typically responsible for significantly fewer GHGs during operation (see Myth 1 above).

  For example, researchers at Argonne National Laboratory estimated emissions for both a gasoline car and an EV with a 300-mile electric range. In their estimates, while GHG emissions from EV manufacturing and end-of-life are higher (shown in orange below), total GHGs for the EV are still lower than those for the gasoline car.

Source: EPA

Estimates shown2 from GREET 2 2021 are intended to be illustrative only. Estimates represent model year 2020. Emissions will vary based on assumptions about the specific vehicles being compared, EV battery size and chemistry, vehicle lifetimes, and the electricity grid used to recharge the EV, among other factors.

Above, the blue bar represents emissions associated with the battery. The orange bars encompass the rest of the vehicle manufacturing (e.g., extracting materials, manufacturing and assembling other parts, and vehicle assembly) and end-of-life (recycling or disposal). The gray bars represent upstream emissions associated with producing gasoline or electricity (U.S. mix), and the yellow bar shows tailpipe emissions during vehicle operations.

Recycling EV batteries can reduce the emissions associated with making an EV by reducing the need for new materials. While some challenges exist today, research is ongoing to improve the process and rate of EV battery recycling.

Myth #3: The increase in electric vehicles entering the market will collapse the U.S. power grid.

• FACT: Electric vehicles have charging strategies that can prevent overloading the grid, and, in some cases, support grid reliability.

  It is true that the increasing number of electric vehicles (EVs) on the road will lead to increased electricity demand. Yet, how that impacts the grid will depend on several factors, such as the power level and time of day when vehicles are charged, and the potential for vehicle-to-grid (V2G) charging 3 among others.

  • EVs can be charged at off-peak times, such as overnight, when rates are often cheaper. Even with a mix of charging times (so not all nighttime charging), research indicates that sufficient capacity will exist to cover EVs entering the market in the coming years.4 And further down the road, when renewables make up a larger part of our energy mix in many regions, switching to more daytime charging (when some renewables like solar generate energy) with some energy storage capability should allow the grid to handle increases in EV charging.5 California leads the country with more than 1 million electric vehicles and EV charging currently makes up less than 1% of the state’s grid total load, even during peak hours.6

  • Vehicle-to-grid (V2G) charging allows EVs to act as a power source that may help with grid reliability by pushing energy back to the grid from an EV battery. This is done by allowing EVs to charge when electricity demand is low and drawing on them when that demand is high.

  Long term, higher electricity demand from EV growth may drive the need for upgrades to transmission and distribution infrastructure. Planning for this possibility is underway. The Department of Energy’s (DOE) Build a Better Grid Initiative, launched as part of the Bipartisan Infrastructure Law, will provide over $13 billion towards improving the reliability and efficiency of the grid over the next decade. Visit DOE’s Bipartisan Infrastructure Programs and search “grid infrastructure” to see where the initial investments will be made.

Myth #4: There is nowhere to charge.

• FACT: Electric vehicles can be plugged into the same type of outlet as your toaster! When you need to charge while on the road, you’ll find over 51,000 stations in the U.S. available to the public.

  
  Many people can meet their driving needs by plugging in only at home. Most EVs can be charged with a standard 120 Volt (Level 1) outlet. To charge the vehicle more quickly, you can install a dedicated 240 Volt (Level 2) outlet or charging system. And for those who live in apartments or condominiums, EV charging stations are becoming a more common building amenity.

  Access to EV charging will increase significantly in the coming years as a result of government initiatives put in place as part of the Bipartisan Infrastructure Law, including an investment of up to $7.5 billion to build out a national network of electric vehicle chargers along highways, and in communities and neighborhoods. In February 2023, the White House announced major progress toward a made-in-America national network of EV chargers.

  Interested in seeing how many chargers may be needed in your area? Use DOE’s EV Pro Lite Tool to get an estimate on charging needs in your state or metropolitan area as EV adoption grows.

  For up-to-date information on EV charging locations, visit DOE’s Alternative Fuel Data Center.
   

Myth #5: Electric vehicles don’t have enough range to handle daily travel demands.

• FACT: Electric vehicle range is more than enough for typical daily use in the U.S.

  
  EVs have sufficient range to cover a typical household’s daily travel, which is approximately 50 miles on average per day.7 The majority of households (roughly 85%) travel under 100 miles on a typical day. Most EV models go above 200 miles on a fully-charged battery, with nearly all new models traveling more than 100 miles on a single charge. And automakers have announced plans to release even more long-range models in the coming years.

  Range estimates for specific EVs are available from the Find A Car tool on www.fueleconomy.gov—click on the car you are interested in, and check out the “EPA Fuel Economy” line in the table.

  How you drive your vehicle and the driving conditions, including hot and cold weather, also affect the range of an EV; for instance, researchers found on average range could decrease about 40% due to cold temperatures and the use of heat.8

Myth #6: Electric vehicles only come as sedans.

• FACT: Electric vehicles now come in a variety of shapes and sizes.

  
  EVs and PHEVs are now available in many vehicle classes, extending beyond small sedan/compact models. There are currently more than 50 PHEV and EV models on the market. More models are being released in the coming years, so vehicle class options are likely to expand.

Myth #7: Electric vehicles are not as safe as comparable gasoline vehicles.

• FACT: Electric vehicles must meet the same safety standards as conventional vehicles.

  
  All light duty cars and trucks sold in the United States must meet the Federal Motor Vehicle Safety Standards. To meet these standards, vehicles must undergo an extensive, long-established testing process, regardless of whether the vehicle operates on gasoline or electricity. Separately, EV battery packs must meet their own testing standards. Moreover, EVs are designed with additional safety features that shut down the electrical system when they detect a collision or short circuit.

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Just Exceptional...

“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced…

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Source: Media

The Economic Losers in the New World Order

Giant subsidies and rising protectionism are upending decades of free trade. Smaller countries, from the U.K. to Singapore, are getting left behind.

WSJ by Ed Ballard, Jason Douglas, and Jon Emont, August 14, 2023 The Economic Losers in the New World Order

The world’s biggest economies are offering  huge subsidies in a cutthroat race to win the industries of the future. The losers: all the countries that can’t pay up. 

New tax credits for manufacturing batteries, solar-power equipment and other green technology are drawing a flood of capital to the U.S. The European Union is trying to respond with its own green-energy support package. Japan has announced plans for $150 billion of borrowing to finance a wave of investment in green technology. All of them are working to become less dependent on China, which has a big lead in areas including batteries and the minerals to make them.

Foreign direct investment flowsSource: United NationsNote: EU figures exclude Luxembourg

Now, some smaller players are getting left behind. Many are nimble economies that were on the rise during decades of free trade, but are at a disadvantage in a new era of aggressive industrial policy. Industrialized nations such as the U.K. and Singapore lack the scale to compete against the biggest economic blocs in offering subsidies. Emerging markets such as Indonesia, which had hoped to use its natural resources to climb the economic ladder, are also threatened by the shift.

Intel has been offered $11 billion in subsidies from the German government to build two semiconductor plants, in what Prime Minister Olaf Scholz called the largest foreign direct investment in German history. The pledged government financing is substantially more than the annual budget of Singapore’s Ministry of Trade and Industry. 

“Let me tell you plainly: We cannot afford to outbid the big boys,” deputy Prime Minister Lawrence Wong told supporters at a recent political rally. 

For many tech companies nurtured in the U.K., growth lies elsewhere. British battery-technology startup Nexeon, which developed its technology near Oxford, helped by government funding, raised over $200 million last year. Its first commercial factory will be in South Korea, likely followed by a plant in North America. 

“But not the U.K., sadly,” said Scott Brown, Nexeon’s chief executive. Nexeon doesn’t see that changing without more government support for the battery industry. 

AMTE Power, one of the U.K.’s few homegrown battery manufacturers, has said it may rethink plans to locate a proposed $200-million-plus factory in Scotland given the difference in subsidies on offer in the U.S. and Europe. Arrival, an electric-vehicle startup, said last year it wants to focus its manufacturing in the U.S. instead of the U.K, citing the tax breaks. 

The U.S., which is offering $369 billion in incentives and funding for clean energy as part of the Inflation Reduction Act, is seeing a windfall of foreign investment. German carmaker BMW just broke ground for a new battery plant in South Carolina. South Korean firms Hyundai and LG announced a $4.3 billion battery plant in Georgia. Panasonic of Japan is building a plant in Kansas. 

Unwinding globalization

The subsidy race marks a step away from the economic integration that for decades broke down barriers to trade and investment between countries. 

Globalization transformed once-poor countries such as South Korea and Taiwan into high-tech, developed economies, lifting hundreds of millions of people out of poverty. Western consumers got an abundance of affordable consumer goods and a higher standard of living. Technological advances and new management ideas also moved more freely between countries, along with goods and financial resources.

The model also had steep costs. Once-thriving communities in the U.S. and Western Europe were hollowed out as manufacturing jobs moved to Asia or the former Soviet states. Environmental concerns mushroomed as the global economy consumed more natural resources. Some economies faced destabilizing bouts of capital flight as foreign money flooded in and out. 

Unwinding that global integration—whether for reasons of national security, geopolitical rivalry or supply-chain anxieties—comes with its own problems, economists say. Especially at risk are smaller, developing economies that need access to global markets if they’re to trade their way to greater prosperity. 

“The world as a whole is becoming more inward and turning away from open trade and investment,” said David Loevinger, a former U.S. Treasury official who is managing director for emerging markets at asset manager TCW Group. “Europe, the U.S. and China are in a subsidy competition and the losers in that competition are poorer economies with less fiscal resources.” 

The Western embrace of industrial policy could be especially painful for countries that had hoped to exploit the adoption of green technologies to turbocharge their own economic development. 

Indonesia has ambitions to parlay its abundant nickel resources into a world-leading battery industry. But U.S. rules, put in place as part of the IRA, deny subsidies for EV batteries that contain large amounts of minerals from nations that are not American free-trade partners. Indonesia is among them.

“We have all the natural resources. We have the human resources. And we are a country that’s a democracy,” said Arsjad Rasjid, the head of the Indonesian Chamber of Commerce and Industry, in an interview. “Please don’t shut us down.”

The winners

As a leader in the subsidy race, the U.S. is experiencing an investment boom. The U.S. took in about 22% of global foreign direct investment last year, making it the world’s top recipient, according to United Nations data. That is slightly lower than the 26% it received in 2021 when global investment bounced back after a lull during the pandemic, but significantly higher than the 13% it got in 2019. Spending on construction related to manufacturing rose 76% in May compared with a year earlier, to a seasonally-adjusted annual rate of $194 billion, Census Bureau data show.

In the U.K., Nexeon’s funding underscores the power of the U.S. purse to skew the playing field. As well as the private capital it raised last year, Nexeon received two million pounds, worth about $2.55 million, from a U.K. government EV-industry fund. 

Weeks later, two U.S. rivals, Sila Nanotechnologies and Group14 Technologies, both got $100 million from the Energy Department under a battery-industry funding program introduced in the 2021 infrastructure law. Like Nexeon, those companies are making silicon-based materials to be used in battery anodes to improve performance.

“The economics of projects in the U.S. are just out of sight,” said Guy Debelle, a former deputy governor of Australia’s central bank and now director of Fortescue Future Industries, the green energy unit of West Australia miner Fortescue Metals. The company is scouting investment opportunities and currently sees the U.S. as the most likely location due to subsidies that could knock up to 60% off a project’s price tag, said Debelle.

The European Union is preparing its own support package, relaxing limits on subsidies member countries can give industry. By 2030, the EU wants 40% of the key technologies needed for the green transition to be manufactured in the bloc, including solar equipment—a sector currently dominated by China—wind turbines and batteries.

The U.S. battery production pipeline, which measures capacity from projects in the works, has jumped 67% since the IRA was announced and now matches the size of Europe’s, which grew by 26% over that period, according to estimates by Benchmark Minerals Intelligence, a U.K. based firm that gathers industry data.  

The Brexit problem

The shift in global trade comes at a particularly awkward time for the U.K., which has been struggling to chart a new course in the global economy after leaving the European Union in 2020, which meant it no longer had easy access to its giant single market.

Brexit proponents said the U.K. could strike bilateral trade deals with other countries  and double down on globalization. Since then, momentum for free trade has stalled and now appears to be in retreat. 

“Back during the Brexit vote, nobody had any idea that we’d see a resurgence of industrial policy in the U.S.,” said Gernot Wagner, a climate economist at Columbia Business School. 

Now, the U.K. government is facing calls from all corners of the country’s economy to respond to the interventionist turn in global economics with its own reinvigorated industrial strategy. 

The U.K.’s auto sector got a boost recently when the owner of Jaguar Land Rover chose to build a new EV-battery plant there, but the overall scale of green subsidies lags far behind the U.S.

Finance Minister Jeremy Hunt has promised to unveil the U.K.’s response this fall, but has downplayed expectations and said Britain will not “go toe-to-toe with our friends and allies in some distortive global subsidy race.” He said the U.K. will look to target funding to areas where Britain has a clear competitive advantage.  

New alliances

One solution for countries that can’t compete is to draw rich trade partners closer and benefit from their industrial policies, as Canada and Mexico have done through their free-trade deal with the U.S., said Chad Bown, a trade expert and former World Bank official at the Peterson Institute for International Economics, a think tank in Washington, D.C. Indonesia’s government is participating in the American-led Indo-Pacific Economic Framework for Prosperity, an economic pact that it hopes will improve market access for its minerals.

Last year, Investment Minister Bahlil Lahadalia said Indonesia would seek to form an OPEC-like cartel for nickel, a battery mineral whose production Indonesia dominates, as a response to protectionism by countries that make EVs. An OPEC-modeled organization would coordinate nickel production levels with other major exporters to ensure elevated prices. 

Analysts doubt the plan, in part because other nickel producers don’t want to alienate powerful trading partners such as the U.S. and China. Similar ideas for an OPEC-like organization of lithium producers have been floated by left-wing leaders in Latin America, but haven’t been enacted.

Indonesia and Zimbabwe have put in place export restrictions on minerals such as nickel, bauxite and lithium, along with requirements that foreign companies build processing facilities in the country as a condition for exporting. 

“I’m not a fan of these policies but they’re clearly very popular,” said Simon Evenett, a professor of international trade and economic development at the University of St. Gallen in Switzerland. “Clearly it will drive up prices and it will increase uncertainty and risk.”

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Former vice president Mike Pence speaks at the Iowa State Fair in Des Moines on Aug 10. (Demetrius Freeman/The Washington Post)

Opinion: In Iowa, Mike Pence delivers a powerful message against Trump

TWP by Karen Tumulty, Deputy opinion editor and columnist, August 13, 2023 

DES MOINES — When former vice president Mike Pence took his turn on the Des Moines Register’s soapbox at the Iowa State Fair last Thursday — a quadrennial ritual for presidential contenders — there were, as expected, some hostile shots from the audience.

One man asked Pence why he committed “treason” on Jan. 6, 2021. Another, referring to a brutal interview he had recently done with the right’s favorite provocateur, mocked: “How’s life going since Tucker Carlson ruined your career?”

But afterward, as Pence lingered to shake hands, there came quieter encounters. Nathaniel Gavronsky, 41, pushed forward to thank Pence for standing on principle that day in the Capitol and refusing Donald Trump’s demands that the vice president, in what was a ceremonial role, toss out the electoral votes that made Joe Biden president.

Even as rioters were swarming the Capitol chanting, “Hang Mike Pence,” he performed what the Constitution required, Gavronsky told me. “I’ve researched the heck out of it, and I don’t believe there was anything else he could have done.”

So will he vote for Pence at January’s Republican caucuses in Wayne County, where he lives? Not a chance, Gavronsky said. Which I had already figured out, given that he was wearing a T-shirt that said: TEAM TRUMP.

There has rarely, if ever, been a candidacy more bound in conundrum than this one. As Trump continues to hold what looks like an insurmountable lead in the polls, his once-devoted lieutenant has reluctantly become an essential witness for the prosecution in the Justice Department’s case against the former president for criminal conspiracy to overturn the 2020 election. Meanwhile, Pence’s struggling campaign has barely gained enough traction to qualify for the stage of the first GOP primary debate.

It doesn’t help that social media comes to life every time a heckler calls Pence a traitor or worse. But just as frequent are those rarely recorded moments of affirmation for what history will surely regard as his highest service to the nation during the four years he held its second-highest office.

“Really, from the time we moved home to Indiana, began to travel the country with some regularity, my overwhelming experience has been very humbling expressions of gratitude — standing in an aisle on an airplane, stopped at a grocery store,” Pence said when we sat down for an interview a couple of days later in Ankeny. “And now that we’ve got a campaign going on, more and more people are coming up and saying that now.”

His wife, Karen, added: “People at the fair came up with tears in their eyes, just holding back emotion, saying, ‘Thank you for saving our country.’”

He is more eager than he once was to remind voters of what he did that day, and his criticism of Trump is increasingly direct and pointed.

The day after the Justice Department released its second indictment, Pence told reporters that his former boss had surrounded himself with “a group of crackpot lawyers that kept telling him what his itching ears wanted to hear.” His campaign has started selling red-lettered T-shirts that say “TOO HONEST” — a reference to an episode mentioned in the 45-page document, in which Trump berated his vice president for refusing to buckle, saying: “You’re too honest.”

But, ultimately, Pence maintains, the events of Jan. 6 will not be what voters have uppermost when they go to the polls. “Elections are about the future,” he said.

And therein lies another conundrum, one that Pence will have an even harder time overcoming. It is possible that there will be enough voters in the Republican base looking for a way to move on from Trump. But it is hard to imagine that a vice president who never expressed a significant disagreement with Trump in public until Jan. 6 will be the choice amid a slate of fresher faces in 2024.

Still, Pence assured me, there will be plenty to distinguish him from others on the debate stage in Milwaukee on Aug. 23, as well as from the front-runner, who is likely to be absent.

He is solidly in favor of supporting Ukraine and is dismayed “when I see the former president, when I see others in the field that are walking away from American leadership on the world stage, beginning to embrace the kind of a rising tide of isolationism on the populist right.”

Whereas most of the others — including Trump — have put Social Security and Medicare off-limits, Pence regularly argues that the nation’s long-term debt problem cannot be solved unless spending for those programs can be brought under control. And even amid growing evidence that the abortion issue is becoming a drag on his party’s prospects, he is pushing for nationwide restrictions, rather than leaving the question to the states.

All of this, he said, represents a return to the classic conservatism of his idol, Ronald Reagan. That there is an appetite for that in the GOP is a dubious proposition in the era of Trumpism, a transformation that took place in the party as Pence stood unwaveringly at the president’s side. His four years of fealty to Trump are also the reason he is hardly the ideal tribune for what he said is a longing in the country “for us to restore a threshold of civility in public life. Washington has lost a sense of treating one another the way you want to be treated.”

Given how doubtful his prospects, it is fair to ask why Pence is running. “I believe I am the most qualified candidate on the stage to bring this country back to the mainstream conservative agenda that always made America strong and prosperous and free,” Pence said.

And I, for one, am glad he will be there when the candidates get together in Milwaukee. Because no one could serve as a better reminder of how close the country came to losing that freedom, which starts with respecting its democratic institutions. Now comes his best chance to make that case, even if many in the Republican base don’t want to hear it.

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Seaboard: pioneers in power generation in the country…

…“More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Yörük Işık has been watching the waters in his native Istanbul for over a decade | Ozan Kose/AFP

The hunt for Russia’s secret ships

Turkey’s strategic straits are a trade superhighway — and a lifeline for the Kremlin’s war machine.

POLITICO EU BY GABRIEL GAVIN, AUGUST 14, 2023

ISTANBUL — Yörük Işık puts down his espresso cup suddenly and picks up his camera. “This one is carrying diesel,” he says, training the long lens on a rusted red tanker bobbing into view in the distance. “Maybe in violation of the price cap.”

For more than a decade, he’s watched the waters in his native Istanbul, tracking the comings and goings of the tens of thousands of grain carriers, container vessels and warships that chart a course along the Bosphorus Strait every year. The natural canal flowing through the heart of Europe’s largest city links the Black Sea to the Mediterranean, connecting Russia and Ukraine to the rest of the world.

“I’m obsessive,” he explains, “I don’t like to go too far inland because I have this fear I’ll miss something. You never know what’s going to happen and often you don’t realize it’s suspicious until afterwards. Even when I have free time or I’m writing a report, I sit on my balcony so I can keep an eye out.”

With his long hair and grey beard, Işık doesn’t stand out among the fishermen, tug captains and dock workers making a living in Turkey’s ports. But as a non-resident scholar at the Middle East Institute, a Washington-based think-tank, the 52-year-old has built up unparalleled evidence of Russia’s efforts to quietly acquire sanctioned goods and military hardware — while keeping energy and agricultural exports flowing to help pay for them. A regular analyst in Turkish media and on television, his Bosphorus Observer site has become a go-to resource for those tracking the Kremlin’s supply routes.

Ultimately, it’s a battle that could decide the outcome of the war in Ukraine.

“It’s all about finding out what they’re hiding,” he said, looking out from the café on the Bosphorus as the call to prayer wafts across the water from the half-dozen or so white minarets that dot the hillside.

“Sometimes they’ll lie and say a ship is going from one perfectly innocent place to another. They’ll turn their tracking off and go dark in the Black Sea or spoof their location. Along the waterway is endless traffic, it’s like watching an Istanbul taxi rank, but when you look closer and see the ship physically isn’t there, that tells you a lot. The camera doesn’t lie.”

Troubled waters

Just 500 kilometers away across the Black Sea, Russia’s war is raging in Ukraine. Since the full-scale invasion in February 2022, Western nations have imposed sweeping sanctions on Moscow in an effort to cut it off from luxury products and dual-use goods that could be repurposed for use on the battlefield. Meanwhile, the G7 club of nations has imposed a $60 per barrel cap on Russian crude oil, threatening steep penalties for traders who flout the rules.

But analysts and policymakers fear not enough is being done to make the restrictions stick and helping Russia get hold of what it wants has become big business for middlemen — both companies and countries — prepared to take the risk.

“It’s very difficult to track what’s coming from Europe to Russia and vice versa,” said George Voloshin, an expert in sanctions circumvention with financial crime watchdog ACAMS. “We have a very incomplete picture because Russia is trying to adapt to increasingly stringent sanctions and once you have a control in place, they find a way around it. Turkey is the gateway for that kind of trade — particularly for European consumer goods.”

According to statistics collated by analytics platform Trade Data Monitor, seen by POLITICO, Turkey is the fifth-biggest source of Russia’s imports, shipping more than $3.6 billion worth of goods and commodities last year alone. Machinery and electronic components are among its top exports for 2023, up 200 percent and 183 percent respectively in the first six months of this year. And that doesn’t even include the supplies that simply transit the Bosphorus without ever formally entering Turkey.

“Ankara has carved a role for itself where on one hand it’s an intermediary in the conflict, but on the other a convenient geographical hub for the re-export of things that Moscow needs,” said Maria Shagina, a senior fellow working on sanctions policy at the International Institute for Strategic Studies.

Yörük Işık has spent years building evidence on Russia’s efforts to circumvent sanctions and move military hardware into and out of the Black Sea | Gabriel Gavin/POLITICO

“That ranges from oil and diesel shipments to military hardware. For Russia, this comes at a cost — but, at the moment, it’s profitable and it’s hell-bent on winning a war of attrition this way over time.”

Chasing a shadow

Meanwhile, a so-called shadow fleet of hundreds of aging tankers has emerged on the global market over the past year to haul embargoed Russian energy exports and buy oil above the price cap, giving the Kremlin much-needed revenues to pay its troops and purchase weaponry. Without proper maintenance or insurance, they frequently turn off their transponders to hide the origin of their fuel or carry out ship-to-ship transfers to confuse those watching from afar.

In June, the EU moved to bar these vessels from its ports — but many continue to sail through the Bosphorus.

“The shadow fleet was all under the flag of the Marshall Islands, and they were all deregistered thanks to successful U.S. diplomacy,” said Işık. “Then, in one night, the whole shadow fleet moved to Gabon registration. Maybe next it will move to Cameroon or Palau. When you see these flags, it’s not that they’re immediately guilty, but there’s a higher chance you’ll find something compared to others.”

With warnings that circumvention could prolong the war, costing more Ukrainian lives, Brussels is ramping up pressure to tighten existing loopholes. According to Voloshin, those like Işık who monitor ports and waterways can be “very useful” in piecing together the full scale of the problem and helping target sanctions against those involved. “You need people like that at every single dock and airport, but unfortunately that’s impossible.”

Worse still for the maritime industry, unprecedented Western sanctions mean unsuspecting companies could fall foul of the existing rules inadvertently. “The EU’s latest sanctions package has introduced the first ban on spoofing anywhere in the world,” said Ami Daniel, co-founder of Windward, an Israeli tech firm that tracks vessels suspected of sanctions circumvention using satellite imagery.

“Anyone doing business with vessels suspected of that kind of activity as well as vessel who turn off transmissions or conduct unreported ship-to-ship transfer could face criminal charges, fines or see their goods impounded. If a container under the transit ban — chemicals, automotive, technology — makes an unscheduled stop in Russia, it becomes untradeable, and without due diligence major companies could be caught up in that.”

Playing both sides

Of even greater concern are the ships said to be covertly supplying Russia’s armed forces.

“With naval ships, you can see their flags, it’s not something secret. But some are now disguising themselves as merchant vessels — they might do commercial jobs, or hire civilian crews to hide it, but they’re carrying Russian Armed Forces equipment and not flying a naval flag,” said Işık.

“Turkey isn’t inspecting these ships. During the Syrian war, when there was lots of tension with Russia, Turkey created lots of headaches for naval auxillary vessels, and there’s plenty of evidence put out by people like me that these ships are operating in this way. But Ankara isn’t being creative or coming up with new approaches at the moment.”

Despite being a member of NATO, Turkey has refused to impose sanctions on Moscow, instead hosting a series of ill-fated peace talks and stepping up economic relations with both sides. That policy seems to reflect public opinion inside the country where, according to a poll last year from Aksoy Research, nearly two thirds of Turkish people worry that the war is having a negative impact on their country — but 80 percent believe they still need to stay neutral.

As part of efforts to insulate itself from the consequences of the conflict, Ankara also underwrote the U.N.-brokered grain deal, credited with helping get food supplies from Ukraine’s blockaded ports to the developing world. Its collapse following the Kremlin’s withdrawal last month has sparked fears of famine and led to a spate of Russian attacks on Ukrainian export infrastructure. Turkey’s National Security Council has since warned tension in the Black Sea “is not in anyone’s benefit,” but stopped at calling for the two sides to return to the negotiating table.

“The Turkish government would rather see predictability than not, but it’s clear their government has been compensated from the conflict,” Ryan Gingeras, a professor at the U.S. Naval Postgraduate School, told POLITICO. “They’ve abetted stolen shipments of grain out of Ukraine — they’ve made sure they’ve stayed on good relations with Moscow, as well as Kyiv, but the collapse of the grain deal shows the limits to which Ankara can exert influence over the Black Sea.”

War on the waves

Ukraine is now evidently intent on dealing with the threat Russia poses itself.

Last week, Kyiv declared the waters around Russia’s Black Sea ports a “war risk area” from August 23 until further notice. Speaking to POLITICO, Oleg Ustenko, an economic adviser to Ukrainian President Volodymyr Zelenskyy, said that his country views “everything the Russians are moving back and forth on the Black Sea [as] our valid military targets.”

Hours earlier, the Ukrainian armed forces reportedly hit a Russian fuel tanker, the Sig, with a sea drone, causing it serious damage. The ship, sanctioned by the U.S. Treasury in 2019, had been sailing close to Ukraine’s occupied Crimean peninsula, carrying 43,123 barrels of fuel oils.

“The target they chose was the most wonderful one,” Işık beamed.

“The Sig is a ship that, along with its sister ship Yaz, has been assisting the Russian armed forces for more than half a decade now. Hitting the Sig, which is a secret Russian naval auxillary vessel carrying kerosene from refineries in occupied Crimea, hits Russian logistics in Syria, it hurts the profits of the Kremlin-linked elites making money from that trade and cuts the money being used to pay their private militaries.”

“If my work helped Ukraine identify it then I’m proud, because I’ve been after it for a long, long, long time,” he said.“There’s 15-20 other targets like that, and I think Ukraine knows about them all. Given the world has chosen not to take action, they have acted.”

But for Işık, Istanbul isn’t just a place to watch the war unfold — it holds the key to ending it.

“This city has been here for thousands of years because of the waterway,” he said, swilling coffee grounds around the bottom of his cup. “If you control the water, you control the trade — and then you get to decide how the world works.”

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TREVOR PAULHUS FOR THE WALL STREET JOURNAL

Oil Firms Face Hard Choices After a Year of Big Spending

The industry’s wartime windfall is dwindling

TWSJ by David Uberti, August 14, 2023

Wall Street wants Big Oil’s cash. Washington wants it to drill more. Keeping them both happy is about to get a lot tougher.

Armed with a mountain of cash after Russia’s invasion of Ukraine sent oil prices skyrocketing, U.S. oil-and-gas firms cranked up production near record levels while also raining money on shareholders with dividends and buybacks.

The continuing investor windfall and a recent run-up in oil prices helped make the energy sector the S&P 500’s best performer over the past month. 

But oil prices are still considerably below last summer’s highs, dragging down producer revenues. That is going to mean hard choices for businesses such as international major oil companies and independent drillers, as well as for energy investors and policy makers who have benefited from the past year’s largess.

“It is moving toward companies spending what they can while they can,” said Mark Young, a senior analyst at data-analytics firm Evaluate Energy. 

How the industry uses its cash in coming years has huge implications for U.S. drivers and energy investors. Oil executives last year buoyed their stock prices by funneling most of their wartime windfalls to investors—not new drilling. As a surge in fuel costs supercharged inflation to 40-year highs, President Biden accused oil firms of profiteering and urged them to invest in boosting capacity.

Higher oil prices gradually encouraged the industry to do just that. Exxon Mobil and Chevron increased capital spending last quarter from a year ago while paying a combined $15.2 billion in dividends and buybacks.

But companies’ ability to keep investing while extending shareholder returns will get harder as their cash piles dwindle from spending and acquisitions. Exxon Mobil and Chevron have a combined $39.4 billion in cash, down from $48.4 billion at the end of the first quarter, according to FactSet.

Investment in the American oil patch last quarter outpaced shareholder returns for the first time since the Kremlin’s invasion, according to Evaluate Energy. The more than 40 oil-and-gas producers tracked by the firm boosted capital spending to $28.4 billion, while funneling a combined $25.4 billion to investors.

In 2019, that group spent an average of $24.3 billion per quarter on projects and $11.3 billion on shareholder returns. Capital spending fell sharply after the pandemic derailed U.S. demand for fuels, only recently surpassing pre-Covid levels.

Better-than-expected production in recent months led federal officials to bump their U.S. output projections for this year to a record 12.8 million barrels of crude a day. A gusher of oil this year blunted the impact of Russian and Saudi production cuts and pushed down gasoline and diesel costs in the first half of 2023.

Smaller exploration and production companies have continued to spend a greater portion of their cash on new projects. 

“We never said that we didn’t want to grow. We just don’t want growth to be the target,” Vicki Hollub, chief executive of Occidental Petroleum, told analysts during an earnings call. 

Cash is concentrated among six firms in the​S&P 500 energy sector. Source: FactIva

Many Wall Street analysts expect the recent rebound in oil prices to continue, potentially giving an incentive for more drilling. The tightening market has contributed to what Goldman Sachs recently described as a turning point in capital spending—fueled by a promise of higher returns and a growing focus on energy security.

Other investors remain wary about boosting production. The U.S. and European Union are encouraging more clean energy with a wave of subsidies intended to curb fossil-fuel use in the coming decades. Some experts warn that the best land for oil-and-gas extraction in the U.S. has already been drilled. 

That has left many companies trumpeting cost cuts and new technologies that can more quickly drill longer wells through shale rock. The message to investors: Oil-and-gas producers can increasingly do more with less. 

“This is not just one-off execution,” Toby Rice, CEO of independent natural-gas producer EQT, told analysts last month.

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Hemingway and the “gang” say: “Farewell To The Arms…

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Project "Alcatraz": A Comprehensive Initiative for Gang Rehabilitation and Reintegration by Santa Teresa...

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“If you treat an individual as he is, he will remain how he is. But if you treat him as if he were what he ought to be and could be, he will become what he ought to be and could be.”

―Johann Wolfgang von Goethe

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Just Exceptional...

“Words fail to capture the resplendent magnificence of this exquisite beverage. Its qualities transcend the boundaries of human expression, rendering it a true paragon of its kind. Indeed, it stands unequivocally among the most exceptional —-elixir—- concoctions ever produced, enrapturing discerning palates with unparalleled flavors and nuances. Its profound impact lingers long after consumption, leaving an indelible impression that implores one to partake in its delights time and time again. Indeed, it is a gem of unrivaled brilliance, a testament to the artistry and craftsmanship that define the realm of fine spirits…

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It is the cruelest reality imaginable...

Criminal activity has become a worldwide threat recently. The current statistics are alarming, with homicides taking the lives of almost half a million people globally. Surprisingly, this number is higher than the sum of deaths caused by armed conflicts and terrorist attacks during the same period.

To deal with the problem effectively, it's crucial to comprehend the intricate relationships between Latin American gangs, the widespread availability of firearms in Europe, and the extent of organized crime. Latin American criminal groups have played a crucial role in the increase of crime rates in the region. These groups frequently operate with a twisted notion of loyalty, engaging in violent conflicts over territories to dominate and control lucrative illegal activities. Their influence goes beyond local communities, spreading into diverse aspects of society and perpetuating cycles of violence.

In Europe, the widespread availability of firearms worsens the hazards of criminal activities. As guns are easily accessible, criminals become more confident, leading to an increase in armed robberies, gang violence, and even terror attacks. Recognizing the urgency of addressing this crisis, the United Nations implemented “Sustainable Development Goal 16”, which aims to decrease violence and associated deaths by 2030. Nonetheless, the current crime rate persists. Therefore, achieving the goal on time is likely.

To effectively tackle crime and ensure community safety, a diverse approach is necessary. Such an approach ought to involve investing in social programs that address the root causes of crime, encourage education and skills development, enable economic opportunities, and bolster international cooperation to dismantle transnational criminal networks.

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A déjà vu of goodness…

On a chilly autumn evening, the “Spirit of Good Hope” entered a bustling café on Rue de l'Abreuvoir in Paris. It seemed familiar. The Spirit felt like he had been there before; he enjoyed the cozy ambiance and was captivated by the café's charm. The air was filled with the aroma of freshly brewed coffee, mingling with the gentle buzz of conversation permeating the room. It wasn't fleeting, though. It was a positive repetition that set the tone for the evening. The Spirit felt a profound sense of hope, as if tonight was different from other nights. Approaching the counter, he had a smile spread across his face. He said to the barista, "Un café au lait avec du rhum Santa Teresa, s'il vous plaît," with a hint of excitement in his voice. He ordered this drink every time. It was ideal for this time of year when the weather was cold. In the dimly lit café, a poignant scene unfolded, reflecting the intense emotions of this extraordinary gathering. Ernest Hemingway filled the room with his gray beard, exuding rugged charm. Surrounding him, the young "gang" members held court, their faces bearing tattoos and scars from their struggles and battles fought on the unforgiving city streets.

The conversation drifted through the smoky haze, blending past and present and forging an unexpected connection between two contrasting worlds.  Hemingway acknowledged the profound impact guns have had on gang members.  In the weathered writer, these resilient individuals discovered a kindred spirit who understood their conflicting natures.  The gang's weapons were a source of power and control in a world constantly challenging their lives.  These weapons gave them a semblance of strength and protection through their tumultuous existence.  But beneath the surface, guilt seethed—an undeniable truth they could not escape. The countless lives lost in the crossfire haunted their consciences, leaving scars that would never fully fade.  Hemingway, too, understood the weight of guns on the human soul.  Through his experiences as a soldier first and a writer afterwards, he witnessed the devastating effects of war.  The weapons that once filled his hands had penetrated the depths of his being, leaving scars that time would never heal.  He carried the ghosts of those he had lost, constantly reminding him of the devastating toll of violence.  

As they talked, an unspoken understanding began to develop. Despite the differences that separated them, Hemingway and the gang members found common ground in the profound impact that guns had on their lives. Through their shared experiences, they formed an unlikely bond, providing a moment of relief from the adversity molded by the destructive forces of the past. They yearned to break free from the chains that held them captive. And so, on that fateful night, they conceived a noble path - the Alcatraz Project - with the audacious purpose of bidding farewell to the arms.

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Botlle Waxing / Image courtesy of Santa Teresa Editing by Germán & Co

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Inspired by the noble soul of Saint Teresa Of Avila…

The teachings and spirituality of Saint Teresa of Avila, a nun renowned for her devotion to praying for the most vulnerable, have had a profound influence on the Wollmer family, who own Hacienda Santa Teresa in the Aragua Valley, a key region in Venezuela's sugar industry. The family, deeply moved by her teachings and spiritual beliefs, embraced the principles that would later be recognized as corporate social responsibility, long before it became a popular trend.

Hacienda Santa Teresa is the home of "Santa Teresa," Venezuela's oldest rum brand, with a rich history dating back to 1796. Originally focused on cultivating coffee, cocoa, and sugarcane, the hacienda ventured into rum production in 1830 and has persevered through numerous challenges, including wars, revolutions, dictators, and even the ongoing pandemic. Although the company produces various rum, only one, the "Santa Teresa 1796 Solera Rum," is designated for exportation. This particular expression was introduced in 1996 to commemorate the bicentennial of the hacienda and is managed internationally by Bacardi Ltd.

Through their commitment to Saint Teresa's teachings and spiritual values, the Wollmer family has nurtured a brand that embodies tradition, resilience, and respect for its community and the environment. Hacienda Santa Teresa's enduring legacy as a producer of exceptional rum highlights the family's dedication to their craft and their unwavering belief in the principles that were inspired by Saint Teresa herself.

The brand has a long history of community involvement. The organization's most renowned endeavour is the ongoing Project “Alcatraz”. In 2003, a criminal gang unlawfully entered the Hacienda premises and launched a surprise attack on a security guard. When apprehended, the perpetrators were presented with an unconventional option:

“Either surrender to the authorities or engage in labour at the Hacienda to restate their transgression…

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Project "Alcatraz"…

In response to the ever-growing challenge of gang-related activities, the offer to establish Project "Alcatraz" was accepted, marking the beginning of a remarkable endeavor. Since its inception, Project "Alcatraz" has evolved into a comprehensive initiative dedicated to the recruitment and rehabilitation of individuals involved in criminal gangs.

Drawing upon a multi-faceted approach, this program employs a range of strategies to foster the reintegration of these individuals into society. One core aspect of Project "Alcatraz" is vocational training, equipping participants with essential skills and expertise necessary for employment and self-sustainability. Moreover, value formation plays a key role in instilling a sense of moral compass and social responsibility.

Recognizing the importance of addressing underlying psychological issues, Project "Alcatraz" also provides psychological counseling to its participants. By addressing the root causes of their involvement with criminal gangs, this counseling plays a pivotal role in guiding them towards positive and productive paths.

Formal education is another vital component of the program. Through academic pursuits, participants have the opportunity to expand their knowledge and develop a solid foundation for future success. By fostering intellectual growth, Project "Alcatraz" helps break the cycle of criminal activity and opens doors to new possibilities.

An unexpected aspect of the rehabilitation process embraced by Project "Alcatraz" is the involvement of its participants in the sport of rugby. Beyond its physical benefits, rugby serves as a powerful tool for instilling discipline, teamwork, and self-esteem. This sport offers a unique opportunity for personal development and camaraderie, contributing to the overall success of the program.

Since its establishment, Project "Alcatraz" has witnessed the participation of numerous young people aiming to leave behind a life of crime. Through its far-reaching initiatives, the program has successfully reintegrated many individuals into society, providing them with a chance for a fresh start. The unwavering commitment and dedication of the Project "Alcatraz" team have paved the way for transformation and hope in the lives of those previously trapped in a cycle of gang-related activities.

Looking forward, as Project "Alcatraz" continues to grow and evolve, it serves as a beacon of progress and renewal in the realm of gang rehabilitation. With its holistic approach and undeniable impact, this initiative stands as a testament to the power of compassion, perseverance, and the belief in the potential for redemption in every individual.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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