News round-up, May, 2, 2023
Quote of the day…
For Whom the Bell Tolls?
Horror Scenario
Germany Prepares for Possible Re-Election of Donald Trump
Berlin is preparing for the possibility that Donald Trump could beat Joe Biden in the next election. That outcome would likely be a disaster for Ukraine, NATO and the looming climate crisis. Diplomats have begun establishing contacts with the former president's camp to avoid being blindsided as they were in 2016.
SpiegelMost read…
Biden seeks debt ceiling talks, as U.S. faces possible June 1 default
The updated deadline comes less than a week after Republicans adopted a bill coupling an increase in the debt ceiling with spending cuts, defying a veto threat from President Biden
WP By Tony Romm, Tyler Pager and Liz Goodwin, May 1, 2023
Explosions Near Ukraine’s Giant Nuclear Plant Prompt Diplomatic Push
U.N. agency struggles to end Russia-Kyiv dispute over how to avert disaster at Zaporizhzhia
WSJ By Laurence Norman in Berlin and Drew Hinshaw in Vienna, April 29, 2023This power plant offers a peek into the future
In Texas, an energy company is building a power plant that can run on hydrogen, a fuel that is gaining steam because of new tax credits and upcoming federal regulations
WP By Timothy Puko, May 1, 2023AI: the key battleground for Cold War 2.0?
It’s becoming impossible to distinguish between the AI hype and warning of a conflict with China. What’s certain is that the hype will be monetised.
Le Monde Diplomatique by Evgeny MorozovChilean military sent to border to stem flow of migrants
In February left-wing President Gabriel Boric decided to send units to patrol the north of the country, where Venezuelan refugees cross into the country. Many immigrants have found themselves in a legal gray area.
Le Monde By Flora Genoux, (Iquique (Chile) special correspondent), Published today at 12:53 am (Paris)Horror Scenario
Germany Prepares for Possible Re-Election of Donald Trump
Berlin is preparing for the possibility that Donald Trump could beat Joe Biden in the next election.
Renewable energy's share of German power use tops 50% in Q1
By 2030, Germany intends to generate green energy from solar, wind, biomass, and hydropower to account for 80% of its energy mix.
ReutersIsrael planning 800 MW energy storage project -Energy Ministry
The plan calls for four storage facilities with a combined 800-megawatt capacity, which will be done "in stages in accordance with the system needs and with various storage technologies."
ReutersBP's profit rises to $5 billion as share buyback slows
BP reported a substantial profit due to excellent gas marketing and trading results.
Reuters By Ron Bousso and Shadia Nasralla
Andrés Gluski, CEO of energy and utility AES CorpHow can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…
The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.
Today's events
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Today's events 〰️
Image: PHOTO: Treasury Secretary Janet L. Yellen-. / Editing by Germán & Co Biden seeks debt ceiling talks, as U.S. faces possible June 1 default
The updated deadline comes less than a week after Republicans adopted a bill coupling an increase in the debt ceiling with spending cuts, defying a veto threat from President Biden
WP By Tony Romm, Tyler Pager and Liz Goodwin, May 1, 2023
President Biden invited House Speaker Kevin McCarthy (R-Calif.) and other congressional leaders to the White House next week to discuss the debt ceiling, as Washington scrambled Monday to respond to news that the government could default on its obligations as soon as June 1.
Biden’s request for talks followed a jarring new projection from the Treasury Department that the government could run out of cash to pay its bills in as few as four weeks without additional borrowing authority — an unprecedented event that could rattle world financial markets and tip the fragile U.S. economy into another recession.
The debt ceiling imposes a legal limit on the amount of money the U.S. government can borrow, currently set at $31 trillion. Since the national debt hit the cap in January, the Biden administration has adopted special budgetary maneuvers to conserve cash and buy time for lawmakers either to raise the limit or to suspend its enforcement.
Republican lawmakers — who took control of the House in January — have tried to seize on the looming deadline to extract spending cuts and other policy concessions from the White House. Last week, the House approved a Republican measure that would briefly raise the debt ceiling while cutting billions of dollars in federal spending and repealing some of Biden’s recent legislative accomplishments.
The president has threatened to veto the measure and called on Congress to raise the debt ceiling without conditions. Until Monday, Biden had also refused to haggle with Republicans over an issue that poses such immense risks to the economy.
But with Monday’s news that default could come as soon as next month, the president set in motion a plan to hold talks on May 9, personally calling McCarthy as well as Senate Majority Leader Charles E. Schumer (D-N.Y.), Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader Hakeem Jeffries (D-N.Y.), according to a White House official, who spoke on the condition of anonymity to describe private conversations.
The Treasury Department, meanwhile, sounded an urgent alarm about the need for haste: In a letter to lawmakers, Treasury Secretary Janet L. Yellen said the agency may be “unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1.”
Yellen cautioned that the projection is imprecise, given the variability of federal tax receipts, which have come in lower than anticipated in recent months. But she said she was certain about the economic consequences of inaction, warning that it could cause “severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
“I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible,” Yellen said.
With time running out, the flurry of activity revealed a growing sense of anxiety in Washington. Few debates carry such high political and economic stakes: The nation has never defaulted on its financial obligations, and the failure to make payments to bondholders — as well as to federal employees and to beneficiaries of government programs such as Social Security — could send shock waves through the entire global financial system.
Adding to the uncertainty, the federal government and private economists have offered mixed, and sometimes conflicting, estimates as to the actual debt ceiling deadline, known in the nation’s capital as the “x date.” In its own projection, the nonpartisan Congressional Budget Office on Monday reported that there is now a “significantly greater risk” that the United States could run out of funds in early June. The CBO had earlier projected that lawmakers had as late as September to act.
Previously, Republicans have raised the debt ceiling without issuing demands. Three times, they addressed the borrowing cap under President Donald Trump without demanding fiscal reforms. Each time, Democrats serving in the minority also supplied their votes in a bid to avert a crisis.
Under Biden, Republican lawmakers have adopted a more aggressive posture, aiming to use the threat of a fiscal crisis as a political tool while blaming Democrats for the burgeoning debt. In reality, policies supported by both parties have contributed to a growing tide of red ink that could exceed $50 trillion over the next 10 years.
In a bill adopted last week, House Republicans spelled out their demands: They seek billions of dollars in spending cuts, the repeal of federal funds to fight climate change and pursue tax cheats, a set of new work requirements on welfare recipients, and an end to Biden’s plan to cancel student debts. Heralding the outcome at a brief news conference, McCarthy portrayed the so-called Limit, Save, Grow Act as a tool meant to force Biden to negotiate.
“The sad part here is, now the Democrats need to do their job,” McCarthy said after the vote. “The president can no longer ignore [it] by not negotiating.”
For the past three months, though, the two men have not met. The president has said he is open to discussing other fiscal issues with the House speaker, but only if the GOP lays out its plan for balancing federal spending and tax revenue, a difficult task the party has yet to tackle.
Even Monday, as Biden invited lawmakers to new discussions, he again slammed House Republicans for their legislation, saying “their extreme MAGA plan would cut critical funding for education, public safety, including cut 60,000 public schoolteachers, take health care and food assistance away from millions of working families.” The president also blamed Trump and his predecessors for incurring “200 years of debt,” adding: “We’re not paying for what we’re spending right now.”
McCarthy, who is on an official trip to Israel, responded to Biden’s invitation by criticizing the president for having “refused to do his job” and “threatening to bumble our nation into its first default.”
“After three months of the Biden administration’s inaction, the House acted, and there is a bill sitting in the Senate as we speak that would put the risk of default to rest. The Senate and the President need to get to work — and soon,” McCarthy said in a statement.
Understanding the debt ceiling
What is the debt ceiling?
It’s a restriction Congress has put on on how much money the federal government can borrow to pay its bills, which has been in place since 1917. Because the government usually spends more than it takes in, Congress needs to raise the debt ceiling fairly frequently to pay for its operations. (Sort of like a credit card bill.)
What is a default?
If Congress doesn’t raise the debt ceiling, the government can’t borrow and might not be able to pay its bills on time (like bond interest). That’s called a default, and it’s never happened before on this scale (though the U.S. got close in 2011). It would likely tip the U.S. into a recession and shake the global economy.
Why does the U.S. keep raising the debt limit?
Congress needs to raise the debt ceiling so the U.S. can keep issuing bonds, which investors around the world buy because they’re seen as a safe and reliable investment. In turn, the government can fund projects from the military to social programs.
Why is raising the debt limit a fight?
Until recently, it was routine for Congress to raise the debt ceiling. Since 1960, Congress has intervened 78 times to change it in some way. But it has become a political battle because it is one of the few must-pass bills, so lately Republicans have seen it as an opportunity to make demands.
In the Senate, meanwhile, Schumer has signaled that he has no plans to approve the House bill. On Monday, he promised that lawmakers instead would hold hearings that “expose the true impact of this reckless legislation on everyday Americans.” Schumer also took the first procedural steps toward ensuring the Senate could act swiftly on legislation to increase the debt ceiling, including potentially a two-year increase.
Some Senate Democrats responded with pessimism to the idea of talks at the White House, arguing that Biden should continue to refuse to negotiate.
“There’s no deal to cut here,” Sen. Brian Schatz (D-Hawaii) said Monday, before news broke about the president’s invitation. “The premise here is that there should be no policy concessions in exchange for preventing default.”
Some Senate Republicans appeared equally unenthusiastic about Biden’s outreach, reiterating their unwillingness to get involved in what they believe should be a negotiation solely between Biden and McCarthy.
“What we’ve said all along is the only thing that can get 60 votes in the Senate is something that’s negotiated between the president and the House Republican leadership,” said Sen. John Thune (R-S.D.), McConnell’s deputy. “And so I’m not sure at this point what Schumer or McConnell add to the debt conversation.”
The looming deadline and the lack of a path forward raised the grim specter of 2011, when Washington came within days of breaching the debt limit. Then the standoff between Republican lawmakers and a Democratic president spooked the stock market and triggered a downgrade in the nation’s credit rating, which ultimately cost taxpayers an estimated $1 billion in higher interest rates on government bonds.
This year, investors already have started to hedge against the potential for another disruption, shifting away from bonds that mature around the date of the debt ceiling deadline. In another ominous sign, Fitch Ratings, which evaluates debt, warned last week that persistent dysfunction could result in another downgrade of the nation’s credit rating.
Image: IAEA Director-General Rafael Grossi, in cap, visited Ukraine’s Zaporizhzhia nuclear plant in late March. PHOTO: SERGEI ILNITSKY/SHUTTERSTOCK/ Editing by Germán & CoExplosions Near Ukraine’s Giant Nuclear Plant Prompt Diplomatic Push
U.N. agency struggles to end Russia-Kyiv dispute over how to avert disaster at Zaporizhzhia
WSJ By Laurence Norman in Berlin and Drew Hinshaw in Vienna, April 29, 2023The United Nations atomic energy agency is racing to prevent Russia’s war in Ukraine from endangering the Zaporizhzhia nuclear plant, Europe’s largest, as fighting nearby intensifies.
Artillery fire and explosions now ring out nearly every day at the six-reactor plant that sprawls near an active front line and is occupied by Russian security agents.
Each side accuses the other of shelling across a two-mile-wide bend in the Dnipro River that separates the plant from a Ukrainian-held shore. Both deny doing so.
A team of United Nations nuclear safety inspectors last week had to take shelter inside the facility. Twice this month, Russian land mines ringing the plant to prevent an amphibious assault have exploded. Russian troops in the neighboring city of Enerhodar raid apartments and search streets, seeking evidence of an insurgency network they suspect of spotting targets for Ukrainian troops lurking nearby.
On the roofs of several reactors, Russian forces have built sandbag fighting positions, the first indications that Moscow is planning to use the nuclear reactors as defensive positions, the British defense ministry said on Thursday.
“Something is definitely going on,” said a plant worker, sheltering in his apartment. “We hear very powerful booms around the perimeter of the city. Dogs howl, children get scared, car alarms go off
Since September, the U.N. atomic agency has sought agreement from the two warring nations to not position heavy military equipment at the plant or fire artillery from or toward it. Those negotiations have been one of the principal diplomatic efforts to de-escalate the war, and a test case for broader negotiations around the conflict.
A breakthrough remains elusive. On Wednesday, in a fresh bid for progress, International Atomic Energy Agency Director General Rafael Grossi spoke with Ukrainian President Volodymyr Zelensky before flying to Turkey for talks with Alexey Likhachev, the head of Russia’s state-owned Rosatom nuclear company and a primary interlocutor on securing Zaporizhzhia.
Complicating the fight over Zaporizhzhia is tension between the IAEA and the U.N. over how to handle the crisis. The IAEA is an independent agency but it reports to the U.N.
For weeks, U.N. Secretary-General António Guterres’s team has been telling diplomats and others that they believe the IAEA initiative has failed, according to people familiar with the dispute. Senior U.N. officials have said since February that they planned to take over the diplomatic efforts, according to one of the people, and in recent days the U.N. chief has huddled with the two sides to discuss new ideas, two diplomats said.
A spokesman for Mr. Guterres declined to comment. An IAEA spokesman said that the secretary-general has expressed his full support for the IAEA’s work.
A U.S. State Department official said Washington backs Mr. Grossi’s efforts. “We absolutely share his concerns,” the official said. “Russia is playing a very dangerous game with its military seizure of Ukraine’s nuclear power plant.”
Ukraine has been wary of the IAEA’s proposals, seeing them as permitting the presence of Russian armed forces currently occupying the plant. After a phone call between Messrs. Grossi and Zelensky on Wednesday, the Ukrainian president said Zaporizhzhia can only be safely secured by returning it to Ukrainian hands.
However a Ukrainian official said that the IAEA chief later presented some new ideas to encourage Kyiv to sign on.
Mr. Grossi has insisted he would continue his diplomacy and last week foreign ministers from the Group of Seven advanced democracies backed him.
Seaboard: pioneers in power generation in the country
…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.
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.
Workers help manufacture a Mitsubishi Power M501JAC gas turbine at Savannah Machinery Works. Such technology will be used in some of the newest power plants in development, including a planned Entergy facility in Texas. (Mitsubishi Power Americas)
This power plant offers a peek into the future
In Texas, an energy company is building a power plant that can run on hydrogen, a fuel that is gaining steam because of new tax credits and upcoming federal regulations
WP By Timothy Puko, May 1, 2023PORT ARTHUR, Tex. — A half-hour’s drive from where the modern oil and gas industry was born, a new power plant provides a glimpse into one possible future for fossil fuels.
In this Texas region called the Golden Triangle — named for the riches produced a century ago from the first modern oil field — the electricity producer Entergy is building what it calls the most advanced power station in its fleet. The $1.5 billion project comes with added capability: In addition to burning gas, its turbines can also run on hydrogen, a fuel that burns with no greenhouse gas emissions.
Technology such as this would probably become an imperative for many energy companies under historic power plant rules the Biden administration is expected to unveil this month. Those regulations, if they survive near-certain legal challenges, will play a critical role in the United States meeting its promises to cut carbon emissions.
“This is a way to keep growing gas, but make it cleaner over time,” said Steve Fleishman, a utility analyst with Wolfe Research. To reduce emissions but keep the power grid reliable, he added, “the system cannot rely just on adding renewables.”
Yet the Entergy plant also underscores the technological and political challenges that U.S. electricity generation faces as it transforms. Hydrogen power and other technologies — such as those that allow companies to capture carbon emissions and store them rather than releasing them into the atmosphere — are still far from proven solutions for large-scale deployment.
And even as Texas and other Republican-leaning states produce huge amounts of carbon-free electricity, lawmakers in those places and in Washington are often hostile to clean energy. Just last week, as part of legislation to lift the federal debt limit, House Republicans passed a bill to repeal the Inflation Reduction Act, a law that devotes hundreds of billions of dollars to subsidizing such transformations.
At a recent groundbreaking for Entergy’s plant — the Orange County Advanced Power Station — executives made no mention of the politics playing out in Washington. The company’s chief executive, Drew Marsh, didn’t mention gas once during his nearly five minutes of remarks. He mentioned hydrogen nine times.
“People are talking about hydrogen hubs,” Marsh said. “Affordable, reliable and clean energy is what our customers are looking for. And with this investment, they’ll get to check all three boxes.”
EPC Consortium of Mitsubishi Power, TIC and Sargent & Lundy to Build Entergy Texas’ New, Cleaner and More Reliable Power Station Representative illustration of the 2 on 1 combined cycle project, including two M501JAC enhanced air-cooled gas turbines, steam turbine, heat recovery steam generator, and advanced control system. (Business Wire via AP)
As operators of fossil fuel-burning plants are pressured to eliminate or at least reduce their planet-warming emissions, Washington has come through with subsidies for carbon capture and hydrogen to help. And the latest push from the Environmental Protection Agency involves new emissions limits that are so stringent, gas- and coal-burning power plants would need carbon-capture or hydrogen technology to comply, The Washington Post and others have reported.
With roughly a dozen projects such as Entergy’s nationwide, some power companies are trying to get ahead of that push from federal regulators, Fleishman said.
Both hydrogen and carbon capture are still developing — and often controversial — technologies. The infrastructure needs for both are massive, and it may not be a viable business solution for most companies, especially outside of the Gulf Coast and a few other select geographic areas, Fleishman said.
During the Obama era, the Department of Energy spent $1.1 billion to help launch 11 carbon capture demonstration projects. Only two of them are operational today. A study by the Institute for Energy Economics and Financial Analysis found that 10 of the world’s 13 biggest capture projects are either underperforming by large margins — trapping as little as half of the carbon dioxide promised — or have shut down.
When burned, hydrogen fuel produces no greenhouse gas emissions. But the fuel can have significant climate impacts depending on how it is produced, stored and transported.
Just producing it can create greenhouse gases. Currently, the most common way of producing hydrogen is to combine large amounts of natural gas with high-temperature steam. The process is highly energy intensive and creates carbon-dioxide emissions — unless it is paired with a carbon-capture system to control them.
Using a different process instead, producing hydrogen with solar, wind, geothermal or even nuclear energy, can avoid those emissions. But many environmental groups say that is a much riskier and less efficient use of that zero-carbon energy than just sending power from those sources onto the grid.
“If clean hydrogen is going to play a niche role in the power sector, then that hydrogen must have very low greenhouse gas emissions at every stage of its production, no matter how it’s produced,” said Emily Kent, the U.S. director of zero-carbon fuels at the Clean Air Task Force, an environmental organization.
If hydrogen is not properly stored and transported, it could also leak into the atmosphere, adding to the greenhouse effect. The Environmental Defense Fund and other groups say there is little data indicating whether the industry has a properly leak-proofed system.
“We currently do not have a very clean system for moving natural gas, and hydrogen is going to be even harder,” said Steven Hamburg, the fund’s senior vice president and chief scientist. “It’s still going to help us in the long term, without a doubt. So hydrogen has a role to play, but we have to get it right.”
But there are also signs that hydrogen and carbon capture technologies are becoming more viable. Their advocates often point to the Petra Nova project southwest of Houston, which used a system that captured more than 90 percent of the carbon dioxide from its flue gas — although that success was tempered by extensive outages, according to the Energy Department’s 2020 conclusions about the project.
The energy industry has changed dramatically since the Obama administration first targeted power-sector emissions through its Clean Power Plan nearly a decade ago.
In 2014, coal was the country’s top source of electric power, and the industry was the country’s top source of emissions, responsible for nearly a third of the nationwide total. Since, electric power has dropped to No. 2, with emissions down 20 percent, according to EPA data, as power companies closed waves of old coal-fired plants and replaced them almost exclusively with wind, solar and new, more efficient gas-burning units.
Despite that change, the grid is still reliant on fossil fuels, and its plants often support union members and working-class voters. Gas and coal still fuel roughly 60 percent of U.S. power. Both the White House and Congress have responded by pledging billions in new spending to develop new systems — such as carbon capture — that can preserve jobs and keep the lights on.
Carbon capture typically works through a chemical process to separate carbon dioxide from industrial gases. In many existing operations, it is then compressed into a liquid and routed to storage, or repurposed for industrial uses, keeping it from entering the atmosphere and warming the planet.
Four power plants nationwide actively use carbon capture, according to a count from the Clean Air Task Force. Coal-fired plants in the U.S. have the capability to capture 3 million to 4 million tons of carbon dioxide per year, and newly announced projects are on pace to raise that number more than sevenfold by 2025, according to Bloomberg data published last month in a U.S. Energy Department report.
A hydrogen storage facility at the National Renewable Energy Laboratory in Golden, Colo. Fortescue Future Industries and Forrest are investing heavily in green hydrogen production, with the goal to move the world to green energy as quickly as possible. (Chet Strange for The Washington Post)
The first major hydrogen-fueled power plant in the United States was completed in 2021, according to S&P Global. It is one of about a dozen similar projects in development, as tracked by the nonprofit Clean Energy Group, though most are smaller and sometimes just pilot projects.
Hydrogen production done in conjunction with carbon capture is expected to soar in the coming years, according to the Energy Department report, with an expected yearly capacity of 33 million tons of carbon sequestration by 2030, up from nothing today.
Much of that momentum has come from major subsidies approved in Washington. The bipartisan infrastructure spending package of 2021 included nearly $18 billion combined for carbon capture and hydrogen.
Last year’s climate-spending package passed by Democrats, dubbed the Inflation Reduction Act, then expanded on tax credits offered for every ton of carbon captured. Electric generators and industrial companies — including hydrogen producers — can now claim as much as $85 a ton, up from $50. Hydrogen producers also have the option of instead claiming a tax credit specifically for them.
While there’s uncertainty around the new EPA rules, the climate spending law can help make these technologies competitive with gas, said Bill Newsom, chief executive of Mitsubishi Power Americas.
“The key thing is cost. If we can get hydrogen and carbon capture cost competitive, then yes, it’ll play significantly in the marketplace,” said Newsom.
Mitsubishi Power is making the two turbines for Entergy’s Orange County project, part of a model the company is selling that can burn 30 percent hydrogen along with gas without any changes — and go to 100 percent hydrogen with what Newsom said are “small modifications.” The Japanese company is also the contractor for a Utah plant that is replacing 1,800 megawatts of coal power.
Newsom said the hope is to start both projects still at 70 percent natural gas, but to go to only hydrogen eventually, pending decisions from the plant owners and regulators. The Utah site also has a production and storage facility, creating the type of hub that the company hopes will perfect the process and drive down costs.
An Entergy spokeswoman said the plant may benefit from those tax credits in the future but did not detail how. The company declined a request for interviews with executives. State regulators must still approve use of hydrogen at the plant, and consumer demand and other market conditions will determine how much of it is used, a company spokeswoman said.
The Inflation Reduction Act tax credits will be available later, once the hydrogen gets produced and used — or the carbon gets captured — but tax lawyers say companies can start borrowing off those expected credits now to finance deals and new developments. That’s part of what is feeding this surge of development, building off consumer demand for zero-emissions energy that has also been growing in recent years, attorneys and executives said.
For the Biden administration, that momentum feeds into its regulatory plans. To impose more stringent limits on emissions, the EPA must be able to justify the costs it is imposing on industry. The federal subsidies, combined with these investments and growing development, should lead to technological improvements that make compliance less expensive, advocates say.
The advancements will allow the EPA to bolster the rules it sets through the Clean Air Act, and that’ll help the country fulfill Biden’s commitment to cut nationwide emissions in half by 2030 compared with 2005 levels, White House national climate adviser Ali Zaidi said earlier this year.
“They’re not going to ignore the fact that there’s a transformation going on in American industry,” Zaidi said in a February speech at the Georgetown University Law Center. “We have a whole new set of tools — including through the Bipartisan Infrastructure Law and the Inflation Reduction Act — that makes our job easier. So number one is using both of those tools and using them in tandem.”
Image: Playing Tetris: visitors to the observatory at the Abeno Harukas skyscraper in Osaka can play the game projected on a huge wall, 30 November 2017
The Asahi Shimbun/ Editing Germán & CoAI: the key battleground for Cold War 2.0?
It’s becoming impossible to distinguish between the AI hype and warning of a conflict with China. What’s certain is that the hype will be monetised.
Le Monde Diplomatique by Evgeny Morozov‘The Cold War Is Over’ proclaimed a flashy 1988 marketing brochure for a strange new computer game, an unlikely hit from behind the Iron Curtain. Then came the teaser: ‘Almost…’ Perhaps they got it right, but for the wrong reasons. The brochure, now at the National Museum of American History in Washington, was the brainchild of Spectrum HoloByte, a Silicon Valley software company then owned by Robert Maxwell (father of Ghislaine) (1). Featuring a drawing of the Kremlin with some geometric figures in front, the brochure warned of the ‘Soviet challenge’, announcing that ‘just when East/West tensions are beginning to ease, the Soviets have scored a direct hit on the US.’
That hit was Tetris, the cult computer game, whose Cyrillic name Тетрис – in bold yellow letters – was proudly displayed on the brochure’s bright-red cover page (the Soviet hammer and sickle replacing the final ‘s’). Spectrum HoloByte, the game’s US distributor, leveraged all the right cold-war themes – from Russian folk music to the images of the Soviet cosmonauts – to make Tetris a hit in Reagan-era America. Even then, some in Silicon Valley knew how to cash in on the cold war.
Fast forward to 2023. Gilman Louie, then the company’s CEO, is now a key figure in what some in Washington excitedly call Cold War 2.0 – the ongoing battle between China and the US for the commanding heights of the global economy. As the battle expands to technological and even military fronts, it’s no longer about Tetris. It’s now about artificial intelligence.
‘Unlock the American heartland’
Gilman Louie’s career path is a quintessential American journey. He made his name in the early 1980s designing flight simulator games. They were so successful that the US Air Force got in touch. Eventually, one of Louie’s startups appeared on Maxwell’s radar and he snapped it up.
By the late 1990s, Louie ran In-Q-Tel, CIA’s own venture capital fund, a nonprofit entity whose most famous bet led to the technology behind Google Earth. As the Trump administration began making noises about losing the technological race to China, Louie resurfaced as a member of the National Security Commission on Artificial Intelligence, a high-profile advisory group led by Eric Schmidt, former CEO of Google.
The tech industry and military contractors don’t always see eye to eye. Many American tech companies don’t want to lose the Chinese civilian market due to its sheer size. The military contractors have no such constraints
Just a few years later, that connection with Schmidt has blossomed into a closer partnership – so close that Louie is now CEO of the Schmidt-backed America’s Frontier Fund (AFF), an In-Q-Tel-like nonprofit venture, with a mission to help Washington ‘win the 21st century global technology competition’. The fund styles itself as a panacea, promising to ‘revitalise manufacturing, create jobs, bolster local economies, and unlock the American heartland’. And it has a most impressive board, which includes the ex-CEO of IBM and Trump’s former National Security Advisor.
‘Frontier technologies’
China’s growing influence in the so-called ‘deep tech’ or ‘frontier technologies’ like artificial intelligence and quantum computing is what led to AFF’s creation. ‘Frontier tech can’t be built in a garage,’ proclaims AFF’s website, departing from Silicon Valley’s faith in the genius entrepreneur. Between the novels of Ayn Rand and government subsidies, they choose the latter.
Ironically, Gilman Louie, the man who leveraged Cold War 1.0 to hype up Tetris, is now leveraging Cold War 2.0 to hype up AI. Or perhaps vice versa. In today’s Washington, these two operations have become almost indistinguishable, and the only certainty is that all that hype will be monetised.
To work in the age of AI, the old Tetris slogan needs some polishing. ‘The Cold War Is Over. Almost…’ sounds dated. However, ‘The New Cold War Is Here. Almost…’ is a message that many in America – from tech companies to defence contractors to hawkish thinktanks – find appealing.
For all the rhetoric, some ideological shifts are unmistakable. All the recent anxiety about losing the AI race to China seems to have stirred America’s policy elites from their slumber in the magical land of free markets. They sound like a group no longer bound by the dogmas of the Washington Consensus. Some even sound like they have cast in their lot with the Beijing Consensus.
A recent essay in Foreign Affairs (2), the publication of choice of the US foreign policy establishment, reveals not only a new-found enthusiasm for a strong, AI-boosting state, but a re-examination of policy errors of the past. Co-written by Eric Schmidt, the essay chides Washington’s earlier fascination with globalisation for distracting America from ‘strategic considerations’ and also attacks the venture capital industry’s short-termism.
It celebrates instead ‘grants, government-backed loans and purchase commitments’ as the right vehicle for accomplishing Washington’s long-term tech objectives. Obviously, such grants would probably be disbursed through entities like AFF, which, unlike conventional VCs, would know how to spend it with long-term interest in mind.
At times, the essay is just a few steps away from demanding a robust industrial policy. But it never quite gets there, saying that it remains a ‘fraught label’. As things stand, the revised Washington Consensus expects more public handouts to the private sector – and uses the fear of the US losing the next cold war as the main rationale.
Such arguments are usually framed to appeal to both sides of the aisle, making it imperative to complement geopolitical considerations with economic ones. And so it is this time, with the push for AI framed as a way to make America great abroad and at home, in the latter case by turbocharging new AI-enabled industries.
Thus, while some have mistaken the new American consensus for the emergence of ‘post-neoliberalism’, it has all the trappings of the cold war-era ‘military Keynesianism’ whereby greater military spending was supposed to help beat the Soviet Union and ensure American economic prosperity.
The Pentagon stands back
Yet, erasing the last three decades of neoliberal statecraft is proving difficult. Apparently, one can’t simply go back to the cold-war days, with nearly unrestrained funding flowing to a handful of military contractors. Today, one has to play lean and entrepreneurial, and generals don’t dream of relaunching themselves as Silicon Valley startups. The Pentagon has even been reluctant to operate its own In-Q-Tel-like venture fund, walking away from the money the US Congress has allocated it (Fortune.com, 17 March 2023). This might explain why AFF had to be created as a private venture.
Still, the links between the Pentagon and Silicon Valley have undeniably grown stronger. The US Defense Department has even recently created the new post of Chief Digital and AI officer – a position filled by Craig Martell, former head of machine learning at the ride-sharing platform Lyft. And, for all the ethical concerns from their employees, America’s tech companies continue making inroads into the military’s procurement budgets.
Thus, while Alphabet may have shelved its plans to work on the Pentagon’s controversial Project Maven – a computer vision project that prompted protests among its engineers – it went ahead and formed Google Public Service, an innocent-sounding unit which does offer cloud services to the military.
It’s hardly alone. Silicon Valley’s cloud and machine learning capabilities remain crucial to the Pentagon’s vision of building a system to integrate data coming from terrestrial and air sensors – these are no longer limited to radar – from across all branches of the armed forces. The idea is to crunch them with artificial intelligence, so as to mount an effective joint response. To that end, in late 2022 the Pentagon awarded four tech giants – Microsoft, Google, Oracle and Amazon – a $9bn contract to develop the infrastructure for this bold effort (defensescoop.com, 7 December 2022).
But, unlike in the old cold-war days, it’s not at all clear how much of this money would trickle down, Keynesian-style, to ordinary Americans. When it comes to AI, the labour costs accrue either to the star engineers – and we are talking hundreds, not millions of them – or to the numerous low-paid contractors who toil to help train the AI models. Most of them are not even in America, with OpenAI relying on contractors in Kenya to prevent ChatGPT, the popular AI chatbot, from showing obscene images and text.
As for cloud computing, it’s also not clear how its expansion would help. Building data centres is expensive and their positive effects on the economy have yet to be seen. They do tend to drive up the cost of real estate. And the environmental costs of both AI and cloud computing are not trivial. So the multiplier effect of pouring all this money into military AI might be a mirage.
So perhaps this Cold War 2.0 would not feature a return to ‘military Keynesianism’. Short of AI leading to the much-awaited Singularity, merely dumping more money in the tech industry won’t suddenly bring Keynes to life. Perhaps we are more likely to witness the weird new regime of ‘military neoliberalism’ in which ever-greater government spending on AI- and cloud-related matters would widen inequality and enrich the tech giants’ shareholders.
Return of Google’s ex-chief
No wonder some of them are so keen to restart the cold war. In fact, it’s Google’s former boss Eric Schmidt who’s done more than anyone to shape this new consensus (3). Worth roughly $20bn, Schmidt has been a fixture in Washington’s policy circles ever since campaigning for Barack Obama in the 2008 election. Between 2016 and 2020 he chaired the Pentagon’s Defense Innovation Advisory Board – for whom he visited some hundred US military bases around the world. He then made a quick transition to chair of the AI commission and has now resurfaced on a government commission on emerging biotechnology.
Schmidt’s many ventures to push his cold war narrative make it hard to keep track. There’s Innovation Endeavors, Schmidt’s venture capital fund, which lavishly funds startups that specialise in military AI. The highest-profile of them, Rebellion AI, has been recently described as an ‘early-stage WeWork and Theranos’ – a reference to the overblown promises made by its founders (Vox.com, 14 December 2022).
While Schmidt chaired the two government entities – the Pentagon’s board and the AI commission – he and his business partners invested more than $2bn in AI-related startups. Given that the commission recommended pouring more government money into such startups, one can only wonder what Schmidt’s advocacy is all about.
Elizabeth Warren, the firebrand Democratic senator, has even pressed the Pentagon for more details on Schmidt’s involvement with the US administration, suggesting that the Defense Department may have ‘failed to protect public interest’ in granting Schmidt so much influence. Now that he’s joined the new biotech commission, raising some eyebrows, his investments in this sector – through yet another venture capital fund – have attracted more criticism (CNBC.com, 13 December 2022).
The case of Schmidt Futures
Then there’s Schmidt Futures, his philanthropic foundation, which on closer examination turns out to be a for-profit company (4). It was recently in the news for funding the salaries of staffers working in the US government (5) – including in positions related to AI policy and tech regulation. Eric Schmidt (and indirectly Schmidt Futures) even played a role in helping Lyft’s Craig Martell to become the Pentagon’s AI chief.
How could a company possibly be paying the salaries of administration officials? Well, there’s a loophole: certain nonprofits are allowed to do that, and, as nonprofits, they can even receive money from companies. In this case, the nonprofit that receives money from Schmidt Futures (but not only them) is the Federation of American Scientists, a venerated cold-war thinktank that traces its origins to the Manhattan Project. Conveniently, its current chairman is that same Gilman Louie of Tetris fame (6).
Schmidt’s most effective cold war publicity gamble has been to recruit to his cause Henry Kissinger, not known for shunning billionaires. Perhaps, as a result of Schmidt’s influence, the 99-year-old Kissinger opining on AI sounds much like a 19-year-old describing their first LSD trip. ‘I think the technology companies have led the way into a new period of human consciousness,’ Kissinger said in a recent interview, adding that it is akin to what ‘the Enlightenment generations did when they moved from religion to reason’. By this logic, Eric Schmidt must be the new Voltaire.
Schmidt, Kissinger and a third collaborator have even penned a book-length manifesto (7) about this new era, in which they warn that AI warfare may lead to ‘inherently destabilising’ situations that are like those ‘created by nuclear weapons’. They ask, ‘Will terrorists engineer AI attacks? Will they be able to (falsely) attribute them to states or other actors?’ But they offer no answers. At times, it seems just a rehashing of the old talking points around the inevitable ‘cyber 9/11’, the earlier rallying cry of defence contractors eager to pillage public budgets.
After all this fearmongering, they arrive at a logical conclusion. What the world needs is a ‘concept of arms control for AI’. That’s all they say. The book remains vague on detail, opting for open-ended philosophical questions over analysis.
Schmidt is so keen to leverage whatever is left of Kissinger’s reputation that in 2021 he even launched a dedicated AI thinktank – Special Competitive Studies Project (SCSP) – modelled on a similar initiative that Kissinger himself ran at the height of the cold war in the late 1950s. At the time, Kissinger was far from advocating arms control of any kind. Rather, he was one of the most vocal proponents of the view that a limited nuclear conflict with the Soviets was all but inevitable, and probably a good thing for America.
Kissinger’s first cold-war initiative was itself a power-grabbing vanity project of another billionaire, Nelson Rockefeller. Its most high-profile report, released in 1958, called for continued increases in defence spending of roughly 1% a year and the overall ratcheting-up of America’s military preparedness. Its stance on arms control was unequivocal: ‘The illusion of security brought about by a spurious agreement to disarm would be a poor substitute for vigilance based on strength’ (8).
SCSP’s new ‘offset strategy’
For all the ‘AI arms control’ speculations of the Schmidt-Kissinger book, the policies advocated by SCSP point in the opposite direction. Of those, one stands out in particular: SCSP’s efforts to shape the next ‘offset strategy’ – a push SCSP markets under the catchy name of Offset-X. During the cold war, ‘offset strategy’ referred to the Pentagon’s efforts to leverage the latest technology, from battlefield nuclear weapons to airborne sensors, in order make up for its numerical inferiority with regard to Soviet tanks, planes and troops. From the mid-1940s, there have been three such ‘offset strategies’, all of them relying on different technologies and assumptions.
SCSP’s Offset-X advocacy assumes that, should a war between China and the US break out, the People’s Liberation Army (PLA) will go after US networks – and the US must be prepared. Thus, according to a recent SCSP report (9), ‘the outcome of a potential war with the PLA will increasingly come down to superiority and resilience of sensors, networks, software, interfaces between humans and machines, logistics and – especially – the systems that connect or empower them all together.’ This doesn’t exactly sound like arms control, does it?
To the uninitiated, it may sound awe-inspiring, but anyone familiar with Pentagon thinking over the past decade would probably yawn. Much of this was already part of Offset Three, which ran between 2014 and 2018, spearheaded by, among others, then Deputy Secretary of Defense Robert Work, who’s now resurfaced on SCSP’s board of advisors.
The primary audience for SCSP reports is not military types, but the general public. It’s they who need to be persuaded to increase the Pentagon’s AI budgets. And to do that, one must make a convincing argument that China is not only winning the AI war, but that its victory would crush the US militarily. The second assumption remains the stuff of science fiction. But is China winning that AI war?
US culture wars
To judge by its inability to offer an alternative to America’s ChatGPT, Beijing is still a long way off winning the AI race. Baidu’s launch of its ChatGPT competitor, ERNIE Bot, went so badly its stock price tanked.
To some extent, Silicon Valley’s leadership in the so-called Large Language Models – the type of deep learning AI behind ChatGPT – is a consequence of America’s cultural hegemony. The reason OpenAI, the company behind ChatGPT, is so far ahead of the competition is, in part, because its model is trained on vast holdings of English texts, abundant online. You won’t find as much Mandarin content.
Those who have been worrying about cultural imperialism have a great cause for concern now: ChatGPT may well emerge as the default provider of answers to the world’s questions. However, with ChatGPT, one is likely to be treated only to the blandest and most politically correct answers. We might all become prisoners of America’s culture wars.
Viewed outside of the narrow confines of ChatGPT-like language models, one may suspect China’s technology push is still going strong. A recent report by a prominent Australian thinktank suggests that it leads in 37 out of 44 critical technologies (10), a list that spans defence, space, robotics, energy, the environment, biotechnology, AI, advanced materials and key quantum technology areas.
The problem with most of such studies is that they focus – almost excessively – on research indicators tied to the relative performance of academic institutions, the number of publications and the degrees of individual researchers. Though this can be a useful proxy for dominance in a particular field, all these research papers count for nothing without the capacity to implement their findings.
And it’s here that US attempts to break China’s rise are bearing fruit – from efforts to cripple Huawei’s dominance in 5G to policies aimed at preventing Beijing from achieving self-sufficiency in the manufacture of advanced chips.
The tech industry and military contractors don’t always see eye to eye. Many American tech companies don’t want to lose the Chinese civilian market due to its sheer size. They definitely don’t want a full-blown Cold War 2.0, which would adversely affect their own sales there.
The military contractors, who don’t have many civilian contracts to begin with and who cannot work with the Chinese military without losing their Pentagon ties, have no such constraints. They want Cold War 2.0 – and they want it now. And some probably wouldn’t mind a hot war either.
Uneasy compromise
The Biden administration’s policy towards China’s tech ascendancy – slow but profitable strangulation – reflects the uneasy compromise between the two sides. Washington tightens the noose around Beijing’s neck by cajoling allies like the Netherlands, South Korea and Japan to stop selling their own critical technologies to China. As usual, it is also using cold war-era legal instruments – like the so-called Foreign Direct Product Rule – which can limit what foreign companies can ship to China, as long as their products are made using American technology.
This is not to say that Chinese companies have been completely cut off from the US hardware they need to continue their work on AI self-sufficiency. Instead of buying chips, they are now directed to rent them, sometimes at exorbitant prices, which has allowed some US tech giants to profit from Washington’s crackdown on Beijing.
The idea is to make AI development costly – but not prohibitively costly – thus profiting from Beijing’s desire for autonomy. And since Biden’s policies also slow down the pace at which Beijing achieves its goals, they give the US time to sort out its own AI-related problems (which by and large are to do with having too many eggs in Taiwan’s chip basket).
Keeping ‘China reliant on foreign chips’
At least no one in Washington is hiding the fact that maintaining and monetising China’s dependence – the one-time complaint of dependency theorists like Andre Gunder Frank or Ruy Mauro Marini – is the explicit objective.
Thus, another recent article in Foreign Affairs (11) – predictably, by someone in the Eric Schmidt universe – holds that ‘instead of implementing broad bands, US policymakers should work closely with allies to maintain China’s dependence on foreign chips’ and that ‘ensuring that Washington maintains the upper hand as the AI revolution progresses’ requires keeping ‘China reliant on foreign chips’.
Beijing is not taking any of this lying down. Recently, it insisted that Japan should think twice about joining Washington’s campaign to limit China’s access to advanced chips, all while starting a cybersecurity probe into Micron, an important US chipmaker.
What isn’t yet clear is whether Beijing would be able to steer an international coalition of some kind to support its agenda. Washington has not been acting alone to counter China, tapping into or even spearheading international initiatives such as Global Partnership for Artificial Intelligence and AI Partnership for Defense. Recently AFF – the Schmidt fund run by Gilman Louie – announced a joint fund with India, Japan and Australia under the auspices of the Quadrilateral Security Dialogue, a joint military initiative of the four countries aimed at restraining China.
Most of these efforts are taking place under the banner of promoting democracy and world peace, even if getting there requires boosting defence budgets and letting technology companies and their shareholders get even richer.
Europe is mostly absent from these efforts, for the obvious reason that on military matters it follows the US lead. And when changes occur, they are usually smallscale. It was recently announced that the Netherlands will host the investment management arm of the new €1bn innovation fund announced by NATO. That’s peanuts.
While the war in Ukraine has boosted European defence budgets, it will probably be American companies like Peter Thiel’s Palantir that will get most of the new AI-related funds. At this point, it’s Europe’s privacy laws – and not active public policy – that prevents US giants from advancing even further and faster. And it’s not just the recent case of Italy banning ChatGPT. A recent court ruling in Germany has found that the police use of Palantir-supplied data analysis software to prevent crime before it happens is unconstitutional. How long these privacy defences might last is anyone’s guess.
Judging by recent high-profile speeches by European Commission officials, they find Washington’s rhetoric of Cold War 2.0 quite convincing. This is likely to have an adverse impact on EU-China relations, while pushing the EU further into the arms of US tech giants. A much smarter strategy for the EU would have been to play the two sides against each other, something that Brussels has tried to do in the past, at least on some issues.
Absence of a cold-war enemy
In her 2014 book on how America’s national security state (rather than Silicon Valley) has been the true engine of the country’s technological leadership (12), the political scientist Linda Weiss noted that the absence of a cold-war enemy has undermined the Pentagon’s ability to create ground-breaking innovations. She even asked ‘why China has not yet metamorphosed into a rival that spurs innovation like the Soviet Union and Japan’.
It turns out this was just a matter of time. Then, Weiss argued that if the US was serious about preserving its technological leadership, it would need to get over its obsession with what she called ‘financialism’, put Wall Street’s interests aside and focus on rebuilding its manufacturing industry.
Financialism, of course, never ended. What we got instead is something much weirder. While some re-shoring does, in fact, take place, it’s anyone’s guess whether America will really reinvent itself as the world’s primary chip manufacturer.
Surprisingly, it’s not the downfall of Wall Street but the rise of Silicon Valley, with its desire to capitalise on the AI hype, that may have awakened the US from its slumber, while turning China into the strategic enemy that the Soviet Union once was.
Image: Chilean soldiers monitor the international route taken by migrants that have been stranded for 14 days in the city of Arica, at the border with Peru. This photo was taken on April 27, 2023. PATRICIO BANDA / EPA/ Editing by Germán & CoChilean military sent to border to stem flow of migrants
In February left-wing President Gabriel Boric decided to send units to patrol the north of the country, where Venezuelan refugees cross into the country. Many immigrants have found themselves in a legal gray area.
Le Monde By Flora Genoux, (Iquique (Chile) special correspondent), Published today at 12:53 am (Paris)What day is it? "I've lost track of time," said Daniel, a 30-year-old Venezuelan migrant, sitting in a square in Iquique, a Chilean city in the Tarapaca region, some 1,700 kilometers north of Santiago. It was mid-April. "Last night, we slept outside. Me, just a few minutes. I was afraid we would be robbed," he said, pointing to his partner, Joselin, 26, and their daughter, Alanna, soon to be 3.
They had left Venezuela two months earlier because "they could no longer eat every day," they said. After traveling by bus and hitchhiking, they had reached their destination, Chile, a week earlier, after entering the country from Peru. Like thousands of other migrants, the majority of them poor Venezuelans, they crossed illegally, not having the means to pay for a passport and a visa in their country of origin. They hoped to land a job immediately. "We've asked everywhere, but we can't find anything. Being on the street makes us ashamed," said Daniel. A passer-by offered them two boxes of chicken and rice. But the Chileans they met warned them: migrants were not welcome here.
In an effort to stem the influx from Bolivia and Peru, on February 27 Chile's leftist President Gabriel Boric deployed the military to guard the border with both countries for a period of 90 days. The soldiers have the right to conduct identity checks and apprehend people crossing the border. "The country was not sufficiently prepared to receive this huge number of migrants," said Boric on March 15. "Unfortunately, some of them also come with criminal intent (...). We will look for them and, within the rule of law, we will make their lives impossible," he added.
A climate of suspicion
This measure reversed Boric's previous policy. Before he took office in March 2022, he pledged to have a migration policy based on human rights and a registry of foreigners without residence permits – a far cry from this military scenario. Instead, on April 18, the Parliament approved two bills tightening migration controls and conditions for deportation.
According to the Chilean Interior Ministry, the deployment of the military – a popular measure in the country – has reduced the number of illegal immigrants crossing the border by 55% compared to the same period last year, with an average of 440 arrivals per week. But the militarization highlights the state's shortcomings, the government's struggle to implement a coherent migration policy and the fragility of a social fabric riven by xenophobia.
Under a bright sun, facing the ocean with the foothills of the Andes behind him, 52-year-old garage owner Cristian (a pseudonym) was sipping a beer on the beach in Iquique, the migrant transit city closest to the northern border. He was proud of himself. In January 2022, during an anti-foreigner demonstration, he forcibly dislodged some migrants who were camping. In September 2021, another rally gave way to xenophobic scenes as residents burned the belongings of migrants camping in a city square, now fenced off. "They were delinquents," said the 50-year-old. "Not all of them," he added, "but these migrants bring us more harm than good. Because of them, the city has become dangerous. We are afraid."
Criminal organizations and lone offenders mix with the hundreds of thousands of people fleeing Venezuela's humanitarian crisis, which has created a climate rife with suspicion in Chile. According to the Tarapaca prosecutor's office, the region has the highest (and rising) homicide rate per capita. In 2022, 37% of those indicted were foreigners, compared to 19% in 2018. In Chile, the 1.5 million foreigners made up 7.5% of the population at the end of 2021. Their number doubled between 2018 and 2021.
Militarizing the border "is a purely political decision, a way for Gabriel Boric to show that he is in control," said Felipe Pardo, project development coordinator at the local Christian Churches' Social Aid Foundation (FASIC). But the dissuasive presence of the army is not enough to seal off the 1,000-kilometer border. In fact, the number of recorded arrivals is still higher than at the end of 2022. According to FASIC, the military are engaging in informal deportations, ordering migrants to turn back. But Chile also has to face Bolivia's refusal to accept non-Bolivians who have been deported – a policy that was also implemented in Peru since the end of April.
"Who are [the migrants]? Where are they? How many are they? The state can't reliably answer," said Daniel Quinteros Rojas, the state representative in the Tarapaca region. He himself advocates extraordinary regularization.
Requested to self-report
Chilean authorities require migrants to self-report. The state calls it a monitoring mechanism, but it is also often the first step before an expulsion order is issued (there were 1,034 between March and November 2022). However, self-reporting is recommended by some migrant aid organizations. It would allow people lacking a residence permit to formalize their presence on Chilean territory and, if necessary, to appeal the expulsion order in order to obtain regularization. "But this is not the way to get regularization," said Pardo, adding, "Everything pushes migrants to remain in clandestinity and precariousness."
"What do you advise me to do, to regularize myself?" asked 22-year-old Evelyn (a pseudonym) to the leaders of World Vision, an organization helping migrants in Iquique. She arrived in December 2022 with her two small children and her underage sister, after a risky five-hour walk from Bolivia to Chile. She did not self-report to the authorities. "I'm thinking of doing it to be regularized. But I am afraid that I will be expelled," said the young woman. She found a job as a dishwasher in a restaurant, working 11 hours a day with no days off and for a very low pay.
In a March report, Amnesty International condemned what it called an administrative gray area, placing migrants who are neither deported nor regularized in limbo. "Migrants' human rights are not respected in Chile," said World Vision regional manager Victoria Cardemil. Is this true? "Yes," replied Quinteros Rojas, reluctantly. "We have added more spots [from 400 to 500] in the emergency reception centers in Colchane [a Chilean village on the Bolivian border] and in Iquique. The conditions in the centers are better than before. Since Gabriel Boric's arrival, there have been no more anti-migrant demonstrations," he added.
After another night on the streets, Daniel, Joselin and their daughter showed up at World Vision headquarters. They wanted to rest and take a shower. But upon their arrival, the reception center staff apologized, saying there was no room left. The family left for the streets of Iquique. They continue to sleep far from the squares and other areas with high foot traffic. They know they have to keep a low profile.
Image: Former President Donald Trump has said he plans to run again next year. Foto: Joe Raedle / AFP / Editing by Germán & CoHorror Scenario
Germany Prepares for Possible Re-Election of Donald Trump
Berlin is preparing for the possibility that Donald Trump could beat Joe Biden in the next election. That outcome would likely be a disaster for Ukraine, NATO and the looming climate crisis. Diplomats have begun establishing contacts with the former president's camp to avoid being blindsided as they were in 2016.
Spiegel By Markus Becker, Markus Feldenkirchen, Marina Kormbaki, Veit Medick, Ralf Neukirch, Christian Reiermann, Jonas Schaible and Gerald Traufetter, 28.04.2023It seemed like the 45th United States president, whose ancestors came from Germany, had an obsession with the country , but not a positive one. It often seemed as though he regarded Germany as America's greatest enemy, even as he got along splendidly with North Korean leader Kim Jong Un and others of his ilk. At least those ties were better than his relationship with then-German Chancellor Angela Merkel.
ANZEIGE
"The Germans are bad, very bad," Trump declared in May 2017 at a meeting with European Union leaders in Brussels, where one of the issues under discussion was Germany's trade surplus. "See the millions of cars they are selling in the U.S. Terrible. We will stop this," he said.
Over and over, he let the world know how he viewed the Germans: a nation of parasites who have taken "advantage of us for many years." He also saw the country as being unreliable, if not controlled outright by external forces. "Germany is totally controlled by Russia," he railed in July 2018. And later: "So, we're supposed to protect you against Russia and you pay billions of dollars to Russia."
Despite his penchant for preposterous rhetoric, Trump wasn't always wrong, sometimes even recognizing German hypocrisy or inconsistencies before the Germans did themselves. Still, Berlin was elated when Trump lost to his Democratic challenger Joe Biden in autumn 2020. The tenor in both Berlin and Brussels is that the trans-Atlantic relationship probably wouldn't have survived a second Trump term.
But now, that is exactly what could happen.
Trump announced his intention to run for a second term in the White House several months ago. In polls, Trump is far ahead of potential rivals from his own party, including Florida Governor Ron de Santis, who is widely considered to have the best chance to beat Trump in the primaries.
Since this week, it has been pretty certain that Joe Biden will be Trump's opponent again. The incumbent president would be 82 years old when he took office for his second term, and 86 when it ended. Trump, who is himself already 76, may not seem more serious by comparison, but he is definitely more dynamic. And the last race between the two of them was already a nail-biter.
A second presidency is actually a realistic outcome for Trump. At the very least, forward-looking politicians are considering the possible scenarios, especially in Berlin and Brussels, where Trump's favorite opponents are based: NATO, the European Union and Germany
Necessary Precautions
Michael Link is the German government's coordinator for trans-Atlantic cooperation. If Trump were to be re-elected, it would make his job a lot tougher. "Trump would be a greater challenge for Germany, Europe and the world in a second term than he was in his first term," says the politician, who is a member of the business-friendly Free Democratic Party (FDP). "He would probably govern in an even more unrestrained, unpredictable and defiant manner."
Preparations for the 2024 U.S. elections have already become a significant component of his job, and he is planning on traveling to the U.S. more often in the near future. "In the end, what counts are steady contacts in the executive and legislative branches of government," he says. "Individual senators can have a decisive influence on whether and how a bill is passed. If the going gets tough, they can be important allies."
Agnieszka Brugger, deputy head of the Green Party group in Germany parliament, also argues that preparations must be made for the possibility of Trump 2.0. She says the Europeans need to be more self-reliant and less vulnerable, regardless who is the current president of the U.S. "Even though we in the EU have become better in the technological, economic and security fields with regard to the crises of this world, we are still too slow," Brugger says. She says Germany and the EU should broaden their horizons and expand partnerships and alliances, "especially with countries of the Global South."
Disastrous for Climate Protection
Some in the German government believe that if Trump returns to office, it will be a horror scenario for climate protection. The Greens, in particular, recall with dismay his first term, when he withdrew the U.S. from the Paris climate agreement. Trump also rolled back over 100 environmental protection policies, made it easier for companies to drill for oil and gas in the ocean and allowed a controversial pipeline project to go through. Most crucially, though, he weakened the Environmental Protection Agency (EPA) by putting people at its helm who trivialized climate change.
Under Trump, the U.S. "would probably immediately withdraw from international climate finance," says Lukas Köhler, who is deputy head of the FDP's parliamentary group and responsible for his party's climate protection policy. He says it would have been difficult to move forward with commitments to establish a fund for offsetting climate damage without commitments at the last global climate summit. The system's future would be in question without funding from Washington.
At the G-7 summit in Germany last summer, German Chancellor Olaf Scholz and Joe Biden continued to hone the idea of a climate club, a community of countries that want to move their economies toward climate neutrality. Such a fundamental transformation requires significant investments and puts companies at a disadvantage relative to those corporations who can continue producing in a manner deleterious to the climate in other countries. The idea of the club is to support each other and prevent competitive disadvantages for their own industry. Its members now include countries like Chile, Argentina and Indonesia. "Right now, the U.S. is showing what it is made of in terms of climate policy," says Green Party head Ricarda Lang. "If that were to change again, a key driver for climate action worldwide would be lost."
The Threat of a Trade War
The most dangerous conflict for Germany in trans-Atlantic relations played out in the realm of trade policy. During his second year in office in 2018, Trump launched a trade war, declaring steel and aluminum imports from the EU a threat to national security and slapping a 25 percent punitive tariff on them. The EU retaliated with tariffs of their own on traditional American products like jeans, bourbon, whiskey, motorcycles and peanut butter.
The tone between Washington and the European Commission, the EU's executive, has unsurprisingly improved dramatically since President Joe Biden took office. But in terms of substance, little has changed. Like Trump, Biden is also pursuing an "America First" policy.
At first, it looked as though the situation might become less tense. Both sides basically suspended the punitive tariffs at the end of 2021. Officials also reached agreement in the dispute over subsidies for aircraft manufacturers Airbus and Boeing, which had been simmering for years. There was also a great deal of euphoria when Biden made a big push to transform the U.S. economy at the end of last year. The Inflation Reduction Act (IRA) is a huge subsidy program of over $370 billion for climate-friendly products ranging from electric cars to wind turbines. Upon closer examination, however, Germans and Europeans discovered that the IRA contains a strong protectionist component: The rules only allow domestic producers to benefit from the subsidies.
With billions in subsidies and low energy prices, the U.S. is in a position to lure companies away from the EU, especially in the field of important green technologies. Car companies could also migrate to the U.S. given the significantly lower cost of electricity. "In terms of security policy, the EU and U.S. are close, but on trade issue, Washington shows no willingness to make any concessions," says Bernd Lange of the center-left Social Democratic Party (SPD), who is the chair of the European Parliament's Foreign Trade Committee. And if Trump were to return to the White House, Lange believes, he would "likely tighten the protectionist stance seen in his first term."
FDP foreign policy point man Alexander Graf Lambsdorff, on the other hand, is more optimistic. "I am confident that the sensible Republicans in Congress could prevent the worst from happening," he says. "Even under Biden, not everything is easy – just look at his protectionist stance on economic issues, for example."
"Biden is saving our asses in Europe."
Michael Roth, chairman of the Foreign Affairs Committee in the German parliament
International financial markets are also likely to react extremely sensitively if Trump is re-elected. They are very good at sniffing out incompetence, which Trump demonstrated plenty of during his one term in office.
For example, he repeatedly tried to force the U.S. Federal Reserve, which is supposed to be independent of politics, to lower interest rates. He also drove up the U.S. national debt with big promises. It is true that the national debt also rose during Joe Biden's term in office. But there was no turbulence on currency markets. Investors trust Biden and his team to act professionally.
There are a number of foreign policy experts who are urging people not to lose their composure over the upcoming election. "NATO isn't dependent on just one person," says Sergey Lagodinsky, a member of the European Parliament with the Green Party. "A second term for Trump should be an incentive for us to strengthen European political self-sufficiency."
That's also the view taken by leading foreign policy experts in Berlin. "Biden is saving our asses in Europe," Michael Roth, chairman of the Foreign Affairs Committee in the German parliament and a member of the SPD, says of Europe's dependence on the U.S. He argues that Germany needs to do more for its own and European security, "regardless of whether the next president is named Biden, Trump or something else." Roth ticks off a list that are unlikely to draw any applause at any of his center-left party's conventions: "the steady increase in defense budgets to at least 2 percent of gross domestic product, the strengthening of the European defense industry and the expansion of Europe's strategic capacities." Marie-Agnes Strack of the FDP also calls for greater German self-reliance. "It makes no sense whatsoever to 'prepare' for different presidents," says Strack, who chairs the Defense Committee in German parliament. "We can't influence that, anyway."
Ukraine Would Probably Be Lost without the U.S.
So far, Europe hasn't been great at demonstrating its self-sufficiency. There are no disputes within the alliance about the overall goal of Europe's strategic autonomy, which French President Emmanuel Macron has emphasized repeatedly. But there are differences of opinion about what, exactly, that means. The Eastern European countries, above all Poland and the Baltic states, are opposed to a stronger military role for the EU. They want Europe to do more within NATO to bind the Americans more closely to the Continent. Macron, on the other hand, wants the EU to become an independent player on the global stage, also militarily. Berlin is somewhere in-between. These conflicts will erupt in full if Trump becomes president again.
A return of Trump to the White House would also be disastrous for Ukraine. In recent weeks, Trump has again revealed in several interviews his impassivity toward Russia's breach of international law and his lack of empathy toward the suffering of Ukrainians. He has claimed that if re-elected, he would end the war in Ukraine "within 24 hours." And if it were up to him, Russia would have been allowed to "take over" parts of Ukraine. They would be "very simple negotiations," Trump says, because he gets along very well with Vladimir Putin.
Trump has always admired Putin, probably even more than Kim Jong Un. Russia's influence on the 2016 U.S. election in favor of Trump is likely one reason for this loyalty. Even on the eve of the Russian attack, Trump described Putin's action as "pretty smart." He has never spoken that enthusiastically about Ukrainian President Volodymyr Zelenskyy. One possible reason is that Trump reportedly urged the Ukrainian president to open an investigation into the Ukrainian energy company Burisma, where Biden's son Hunter was once employed. But Zelenskyy refused – and Trump is widely known to be vindictive.
Ukraine probably would have lost already if it weren't for support from the U.S. Western military assistance for Kyiv didn't gain momentum until Washington took over coordination. And Brussels is currently demonstrating what happens as soon as Washington lowers the pressure: Europe becomes entangled in minute details. At the end of March, EU leaders announced that they would deliver 1 million rounds of artillery ammunition to Ukraine within 12 months and that they would jointly procure ammunition in the future. Since then, however, they have been arguing about the small print. "The inability of the EU to implement its own decision on the joint procurement of ammunition for Ukraine is frustrating," Ukrainian Foreign Minister Dmytro Kuleba wrote on Twitter last week. "For Ukraine, the cost of inaction is measured in human lives."
If Trump were to beat Biden next year, Ukraine would almost surely grow even more frustrated. Trump tends toward isolationism. If it were up to him, the U.S. would increasingly stay out of other countries' conflicts and invest even more in the domestic economy. His foreign policy reflexes are guided by economic interest rather than values.
A resolution recently passed in the U.S. House of Representatives by a group of Trump supporters ahead of the first anniversary of the invasion offered a preview of Trump's possible Ukraine policy. Its title: "Ukraine Fatigue." In it, 11 Republicans call for an end to military and financial aid for Ukraine. The motion shows clearly that a completely different U.S. Ukraine policy is conceivable.
Diplomats Approach the Trump Camp
In Berlin, a second term for Trump would likely result in the most changes for Annalena Baerbock. The German foreign minister, a member of the Green Party, maintains an amiable relationship with her U.S. counterpart Antony Blinken. Both have played some role in keeping the West in close alignment on sanctions against Russia. If Trump were to win the election, Baerbock would lose more than just a trusted partner. It would also weaken the kind of values-oriented foreign policy approach she has sought, not to mention her vision of a feminist foreign policy . Both are likely to be totally foreign concepts to Trump.
At the Foreign Ministry in Berlin, officials want to at least be prepared for that scenario. As such, the priority in German policy toward America is to establish contacts with U.S. Republicans. It won't be an easy project: Ties to the Republican camp have either been dormant for a long time, or they simply do not exist.
Staff at Germany's embassy and consulates in the U.S. have been tasked by headquarters to identify all potentially relevant individuals. From this point on, anyone traveling to the U.S. with the Foreign Ministry or other government ministries is expected to meet with U.S. conservatives, even in destinations far away from Washington. In particular, Andreas Michaelis, who will take up his post as the new German ambassador in Washington this autumn, is reportedly establishing targeted contacts in the Trump camp in order to be prepared for the worst-case scenario. It is a lesson learned from Trump's first election as president. In 2016, the German government was counting on victory by Hillary Clinton and had not bothered to establish contacts within Trump's team until it was far too late. The idea is to prevent that from happening again.
Moreover, Baerbock's diplomats have identified issues with which the Germans might be able to find some common ground with Republicans. One example on this list is the promotion of electric cars. Since the emergence of Tesla CEO Elon Musk, this issue is no longer relegated exclusively to the realm of the leftist fringe.
Another issue is China. Under the auspices of the Foreign Ministry, Germany is currently developing a China strategy that, on balance, advocates adopting a greater distance from the People's Republic. There are few other issues over which the U.S. Republicans and Democrats are as united as on their tough stance toward China. Berlin's China strategy is being designed in a way to show the Americans that Germany can also be an ally in the Indo-Pacific realm. It is unclear, however, whether German Chancellor Olaf Scholz will ultimately support the Foreign Ministry's robust China stance.
Neither Scholz nor those close to him want to see the status quo in trans-Atlantic relations change too quickly. They argue that it has been years since diplomatic contacts with Washington have been as close as they are right now and they point out that a hotline to all key players in the Biden administration currently exists.
Besides, Trump and Scholz seem like two men from different planets. Trump's brand of politics is frenetic, while Scholz consistently seems as though he has just been taken out of cold storage. While Trump follows his instincts or wants to make a quick headline, Scholz trusts only his wits or Wolfgang Schmidt, his devoted chief of staff in the Chancellery. How are those two world's supposed to fit together?
A President Trump could actually create some advantages for Scholz personally. Some on the chancellor's team recall Angela Merkel in this context: Internationally, she was only able to rise to the position of defender of the free world because there was someone in Washington who was seen as its destroyer. Scholz, according to the interpretation of those close to him, could also play himself off as Trump's foe if need be.
Image: Germán & CoCooperate with objective and ethical thinking…
Image: Wind turbines, including some from RWE's new Kaskasi offshore wind farm, are pictured during the opening of the RWE-Offshore-Windpark Kaskasi, north of Helgoland, Germany, March 23, 2023. Christian Charisius/Pool via REUTERS TPX IMAGES OF THE DAY/Editing by Germán & CoRenewable energy's share of German power use tops 50% in Q1
By 2030, Germany intends to generate green energy from solar, wind, biomass, and hydropower to account for 80% of its energy mix.
ReutersFRANKFURT, April 28 (Reuters) - Renewable energy accounted for 50.3% of Germany's power consumption in the first three months of the year, data from utility group BDEW and the Centre for Solar Energy and Hydrogen Research (ZSW) showed on Friday.
Germany wants green power from solar, wind, biomass and hydroelectric generation to account for 80% of its energy mix by 2030, as it abandons nuclear power and aims to cut most of its coal generation, using gas plants mostly for grid back-up.
The preliminary figures partly reflected lower power consumption in the first three months of 2023 when electricity usage fell 6.4% year-on-year to 138.1 terawatt hours (TWh), BDEW noted in a statement.
Renewables accounted for 49.2% of the mix in the first three months of 2022.
The data was calculated under European Union requirements that base the share on usage rather than production, a method also adopted by the Berlin government for its climate target definitions, BDEW said.
"Because the renewable share is measured by its share in overall usage, lower (electricity) consumption means a higher relative share and vice versa," it added.
Looking at domestic electricity production, the two research bodies recorded a fall of 8.3% to 147.5 TWh in the three-month period, including production volumes directed for export.
Within the output total, renewables, at 69.5 TWh, accounted for a share of 47.1%, up from 45.1% in the first three months of 2022, even as green power production volumes dropped 4.3%.
Conventional energy sources - nuclear, coal, natural gas and oil - provided 78 TWh within the generation total, down from 88.3 TWh a year earlier.
Image: FLUENCE Sunstack™ was specifically designed to optimize solar capture and delivery. The Sunstack system architecture unites batteries and PV on the same side of the DC bus in order to take advantage of higher PV-to-inverter ratios, maximize solar yield, and simplify the interconnection process.Israel planning 800 MW energy storage project -Energy Ministry
The plan calls for four storage facilities with a combined 800-megawatt capacity, which will be done "in stages in accordance with the system needs and with various storage technologies."
ReutersJERUSALEM, May 2 (Reuters) - Israel's Energy Ministry said on Tuesday that it was moving forward with a plan to build the country's first large-scale energy storage project.
The plan is for four storage facilities with a combined capacity of approximately 800 megawatts, which will be built "in stages according to the needs of the system and with different storage technologies."
The project was given a green light by Israel's national planning council and will be brought for approval by the government.
Image: The BP logo is seen at a BP gas station in Manhattan, New York City, U.S., November 24, 2021. REUTERS/Andrew Kelly/ Editing by Germán & CoBP's profit rises to $5 billion as share buyback slows
BP reported a substantial profit due to excellent gas marketing and trading results.
Reuters By Ron Bousso and Shadia NasrallaLONDON, May 2 (Reuters) - BP (BP.L) made a profit of $5 billion in the first quarter of 2023, up from the previous three months on the back of strong oil and gas trading, but the company's shares fell as it slowed a share buyback programme.
BP's results, which beat forecasts, follow a strong showing from rivals including Exxon Mobil (XOM.N) and Chevron last week as oil majors continue to benefit from energy prices that remain strong despite some softening since the start of the year.
BP's shares, however, had fallen around 4.5% by 0735 GMT - compared with a drop of around 1.2% for an index of European oil companies (.SXEP) - after it said it would repurchase $1.75 billion worth of shares over the next three months, down from $2.75 billion in the previous three.
First-quarter underlying replacement cost profit, the company's definition of net income, reached $4.96 billion, up from $4.8 billion in the fourth quarter of 2022 and above expectations of $4.3 billion in a company-provided survey of analysts.
The profit reflects "an exceptional gas marketing and trading result, a lower level of refinery turnaround activity and a very strong oil trading result", BP said, noting the partial offset from lower oil and gas prices and refining margins.
BP had reported a $6.25 billion profit in the first quarter of 2022.
The lower share buyback "will more than offset the good operational performance as BP is the first international oil company...to cut buybacks this quarter," Jefferies analysts said in a note.
BP repurchased $11.7 billion of shares in 2022 and the $1.75 billion indicated on Tuesday still means the company will exceeded its goal of using 60% of surplus cash for the purpose.
Its dividend remained unchanged at 6.61 cents per share after a 10% increase in February. BP had previously halved its payout in the wake of the pandemic.
Reuters GraphicsWEAKER DIESEL
The London-based company said it expects oil and European gas prices to remain strong in the second quarter even as refining profit margins are expected to weaken due to lower diesel prices.
BP shares have outperformed in the sector so far this year, up 10% compared to a 6% rise for Exxon and a 3% gain for Shell.
Benchmark Brent crude oil prices averaged $81 per barrel in the first three months of the year, down 16% from a year earlier and 7% from the fourth-quarter.
BP's profit hit a record $28 billion in 2022 on soaring energy prices and market volatility which benefited its large trading business.
Reuters Graphics