Quote of the day…

International relations are complicated at present, and the situation hardly improved after the collapse of the bipolar system; quite on the contrary, tensions spiralled. In this regard, Russian-Chinese cooperation in the international arena, as we have repeatedly stressed, is very important for stabilising the international situation.

THE KREMLIN, MOSCOW, FEBRUARY 22, 2023

Most read…

Meeting with Member of the Political Bureau of the Communist Party of China Central Committee Wang Yi

We are delighted to see you in Russia, in Moscow.

THE KREMLIN, MOSCOW, FEBRUARY 22, 2023

From George to Barack: A Look at Secret Bush Memos to the Obama Team

Newly declassified memos offer a window into how the world appeared as the Bush administration was winding down.

The transition between Barack Obama and George W. Bush came at a fragile moment for the country…

NYT By Peter Baker

The Impact of Russian Missile Strikes on Ukraine’s Power Grid

The Kremlin wagered that by depriving Ukrainians of electricity—and heat and water—during wintertime, they would sap the country’s resolve.

The New Yorker By Joshua Yaffa

Analysis: Healthy gas storage warms Europe, but not enough

European gas prices rallied in the run-up to Moscow's invasion of Ukraine begun almost exactly a year ago and they leapt to record highs when Russia subsequently cut supplies of relatively cheap pipeline gas.

Reuters by Nora Buli and Bozorgmehr Sharafedin

Mexico passes electoral overhaul that critics warn weakens democracy

President Andres Manuel Lopez Obrador argues the reorganization will save $150 million a year and reduce the influence of economic interests in politics.

Reuters

cnbc.com, Anmar Frangoul

PUBLISHED MON, JAN 23 

AES chief says we’ll need natural gas for next 20 years

From the United States to the European Union, major economies around the world are laying out plans to move away from fossil fuels in favor of low and zero-carbon technologies.

It’s a colossal task that will require massive sums of money, huge political will and technological innovation. As the planned transition takes shape, there’s been a lot of talk about the relationship between hydrogen and natural gas.

During a panel discussion moderated by CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland, the CEO of energy firm AES offered up his take on how the two could potentially dovetail with one another going forward.   

“I feel very confident in saying that, for the next 20 years, we need natural gas,” Andrés Gluski, who was speaking Wednesday, said. “Now, what we can start to do today is … start to blend it with green hydrogen,” he added.

“So we’re running tests that you can blend it up to, say 20%, in existing turbines, and new turbines are coming out that can burn … much higher percentages,” Gluski said.

“But it’s just difficult to see that you’re going to have enough green hydrogen to substitute it like, in the next 10 years.”

Change on the way, but scale is key

The planet’s green hydrogen sector may still be in a relatively early stage of development, but a number of major deals related to the technology have been struck in recent years.

In December 2022, for example, AES and Air Products said they planned to invest roughly $4 billion to develop a “mega-scale green hydrogen production facility” located in Texas.

According to the announcement, the project will incorporate around 1.4 gigawatts of wind and solar and be able to produce more than 200 metric tons of hydrogen every day.

Despite the significant amount of money and renewables involved in the project, AES chief Gluski was at pains to highlight how much work lay ahead when it came to scaling up the sector as a whole.

The facility being planned with Air Products, he explained, could only “supply point one percent of the U.S. long haul trucking fleet.” Work to be done, then.

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.

Sourrce by MERCADO Dominican Republic

28 JUNE 2022

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.

Armando Rodríguez, vice president and executive director of Seaboard, joins us for this Mercado Interview to talk about the company's contributions to the Dominican Republic's electricity sector. "Our plants have been strategically located by the authorities of the electricity sector to make it possible to reduce blackouts in Santo Domingo and save foreign currency for all Dominicans," he explains.

Cooperate with objective and ethical thinking…

Meeting with Member of the Political Bureau of the Communist Party of China Central Committee Wang Yi

The Kremlin, Moscow, February 22, 2023

On the Russian side, taking part in the talks were Russia’s Foreign Minister Sergei Lavrov and Security Council Secretary Nikolai Patrushev; the Chinese side was represented by Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to the Russian Federation Zhang Hanhui and Vice-Minister of Foreign Affairs Deng Li.

* * *

Beginning of conversation with Member of the Political Bureau of the Communist Party of China Central Committee Wang Yi

President of Russia Vladimir Putin: Mr Wang Yi, friends, colleagues,

We are delighted to see you in Russia, in Moscow.

First of all, I would like to take this opportunity of having you here and to begin our meeting by conveying my best wishes to our friend, President of the People's Republic of China, Comrade Xi Jinping.

We know that China has implemented very important domestic political steps, which will certainly contribute to the strengthening of the country and will create the right conditions for its ongoing development in accordance with the plans of the Chinese Communist Party.

In this regard, I would like to note that Russian-Chinese relations are progressing as we planned in previous years: they are progressing and growing steadily, and we are reaching new milestones.

I am primarily referring to economic projects, of course. It is our ambition to reach the level of US$200 billion in 2024. Last year, we reached US$185 billion. There is every reason to believe that we will achieve our goals in terms of trade, perhaps even earlier than we planned, because bilateral trade is growing.

Trade is important for both sides, but we also cooperate in international affairs. As the long-term Foreign Minister of China, you are well aware of this, as you have been a part of this and continue to be directly involved as a member of the Political Bureau of the CPC Central Committee. We are grateful to you and to all your colleagues, to the entire staff of the Ministry of Foreign Affairs – we are expressing the warmest words of gratitude for this joint work.

International relations are complicated at present, and the situation hardly improved after the collapse of the bipolar system; quite on the contrary, tensions spiralled. In this regard, Russian-Chinese cooperation in the international arena, as we have repeatedly stressed, is very important for stabilising the international situation.

We also cooperate in every other area – in humanitarian projects and international organisations, including, of course, the United Nations, the UN Security Council, of which we are permanent members, BRICS, and the Shanghai Cooperation Organisation. We have a lot of joint work to do together.

And of course, we are expecting the President of the People's Republic of China in Russia – we have agreed on his visit earlier. We know he has a domestic political agenda to attend to, but we assume that once the issues on that agenda are dealt with (the National People's Congress, which is planned by the relevant congress of Chinese deputies, where major personnel issues are to be resolved), we will proceed with our plans for personal meetings, which will give an additional impetus to our relations.

Thank you.

Member of the Political Bureau of the Communist Party of China (CPC) Central Committee and Director of the Office of the Foreign Affairs Commission of the CPC Central Committee Wang Yi (retranslated):

Mr President,

Thank you very much for finding the time in your schedule to meet with our delegation.

First, let me convey to you sincere greetings and best wishes from President Xi Jinping.

At the end of 2022, President Xi Jinping met with you via videoconference to comprehensively sum up the achievements in our relations, which outlined a wide-scale plan for the continued development of our relations.

I attended that meeting as well. You said that the Russian side invited Mr Wang Yi to visit Russia as soon as possible, so I visited Russia as scheduled in order to comprehensively implement the agreements of our leaders so as to achieve great results in our cooperation across various fields.

Amid an extremely complex and volatile international situation, China-Russia relations have withstood the pressure exerted by the international community and are developing quite sustainably. Although the crisis constantly makes itself felt, crises offer opportunities, and opportunities may turn into crises, which we know from history. So, we need to redouble our efforts to respond to the crisis and the opportunities, and to deepen our cooperation.

We are also here to emphasise that our relations are never directed against third countries and, of course, are not subject to pressure from third parties, since we have a very strong economic, political and cultural foundation. We have gained quite an extensive experience precisely because we are supportive of multipolarity and democratisation of international relations, which is fully in line with the spirit of the times and history and meets the interests of most countries as well.

In conjunction with the Russian side, we are looking forward to maintaining political determination, deepening political mutual trust and strategic cooperation, comprehensively expanding practical cooperation in order to play a major, constructive role in ensuring the interests of our countries, and promoting progress around the world.

That concludes my opening remarks. I am now ready to listen to your very important opinion, and I am also prepared to have a detailed discussion with you.

Thank you.

From George to Barack: A Look at Secret Bush Memos to the Obama Team

Newly declassified memos offer a window into how the world appeared as the Bush administration was winding down.

The transition between Barack Obama and George W. Bush came at a fragile moment for the country…

NYT By Peter Baker

Feb. 14, 2023

WASHINGTON — The world was a volatile place when President George W. Bush was leaving office. So on the way out the door, he and his national security team left a little advice for their successors:

India is a friend. Pakistan is not. Don’t trust North Korea or Iran, but talking is still better than not. Watch out for Russia; it covets the territory of its neighbor Ukraine. Beware becoming ensnared by intractable land wars in the Middle East and Central Asia. And oh yes, nation-building is definitely harder than it looks.

Fourteen years ago, Mr. Bush’s team recorded its counsel for the incoming administration of President Barack Obama in 40 classified memos by the National Security Council, part of what has widely been hailed by both sides as a model transition between presidents of different parties. For the first time, those memos have now been declassified, offering a window into how the world appeared to a departing administration after eight years marked by war, terrorism and upheaval.

Thirty of the memos are reproduced in “Hand-Off: The Foreign Policy George W. Bush Passed to Barack Obama,” a new book edited by Stephen J. Hadley, Mr. Bush’s last national security adviser, along with three members of his staff, and set to be published by the Brookings Institution on Wednesday. The memos add up to a tour d’horizon of the international challenges that awaited Mr. Obama and his team in January 2009 with U.S. troops still in combat in two wars and various other threats to American security looming.

“They were designed to provide the incoming administration with what they needed to know about the most critical foreign policy and national security issues they would face,” Mr. Bush wrote in a foreword to the book. “The memoranda told them candidly what we thought we had accomplished — where we had succeeded and where we had fallen short — and what work remained to be done.”

The transition between Mr. Bush and Mr. Obama came at a fragile moment for the country, which was in the throes of a global financial crisis even as it was grappling with other foreign challenges. But even though Mr. Obama had assailed Mr. Bush’s policies during his campaign, particularly the war in Iraq, their teams worked together with unusual collegiality during the turnover.

Each of the memos focuses on a different country or a different area of foreign policy, reviewing for the new team what the Bush administration had done and how it saw the road ahead.

In the book, Mr. Hadley and his team, led by Peter D. Feaver, William C. Inboden and Meghan L. O’Sullivan, add postscripts written in the current day to reflect on where the transition memos got it right or wrong and what has happened in the three presidencies since then.

Iraq was central to the Bush administration’s foreign policy and still a festering problem as he was leaving office, but his surge of additional troops and a change in strategy in 2006 had helped bring down civilian deaths by nearly 90 percent. Those moves also paved the way for agreements that Mr. Bush sealed with Iraq to withdraw all American troops by the end of 2011, a time frame that Mr. Obama essentially adopted.

The Iraq memo, written by Brett McGurk, who went on to work for Mr. Obama, President Donald J. Trump and President Biden, offered no recapitulation of how the war was initiated on false intelligence about weapons of mass destruction, but it did acknowledge how badly the war had gone until the surge.

“The surge strategy reset negative trends and set the conditions for longer-term stability,” the memo said. “The coming 18 months, however, may be the most strategically significant in Iraq since the fall of Saddam Hussein,” it added, putting that in boldface. Referring to Al Qaeda of Iraq, it said, “AQI is down but not out and a series of elections will define Iraq’s future.”

The memo warned the Obama team that the situation could still unravel again: “There is no magic formula in Iraq. While our policy is now on a more stable and sustainable course, we should expect shocks to the system that will require a flexible and pragmatic approach at least through government formation in the first quarter of 2010.”

The memo included a warning that would figure in a later debate. While Mr. Bush’s agreement called for a 2011 withdrawal, the memo reported that Iraqi leaders “have told us that they will seek a follow-on arrangement for training and logistical (and probably some special operations) forces beyond 2011.” Mr. Obama tried to negotiate such a follow-on agreement, but talks collapsed and his allies later played down the notion that anyone had ever expected such an extension.

In her postscript to the Iraq memo, Ms. O’Sullivan skated lightly over the false predicate for the war (“intelligence that was tragically later proven wrong”) and the mistaken assumptions (“an unanticipated collapse of order and Iraqi institutions”). But she was more expansive about the “shortcomings of the 2003-2006 strategy,” which she defined as the “mistaken belief” that political reconciliation would lead to improved security, inadequate troop levels, “too aggressive a timeline to transition” to Iraqi control and “a failure to take on Iranian influence more directly.”

“America’s experience in Iraq demonstrates that it is neither all-powerful nor powerless,” she wrote. “It has the ability to help countries make dramatic changes. But it should not underestimate the significant time, resources and energy that doing so requires — and the overwhelming importance of a committed, capable local partner.” Moreover, she added, “significant efforts to rebuild countries should only be undertaken when truly vital U.S. interests are at stake.”

The Bush team drew similar conclusions about Afghanistan. “Rarely, if ever, were the resources accorded to Afghanistan commensurate with the goals espoused,” Ms. O’Sullivan and two colleagues wrote in a postscript for that memo. “Policymakers overestimated the ability of the United States to produce an outcome” and “underestimated the impact of variables beyond U.S. control.”

Some of the memos underscored how much has changed in the last 14 years — and how much has not. Paving the way for administrations that followed, the Bush team saw India as a country ripe for alliance — and in fact its improved ties with India were seen as one of its foreign policy successes — even as it saw Pakistan as duplicitous and untrustworthy.

The Bush administration spent enormous energy trying to negotiate agreements to eliminate North Korea’s nuclear weapons program and, to a lesser extent, Iran’s, to no avail, much like its successors. But Mr. Bush’s aides concluded that diplomatic engagement restrained North Korea from provocative acts and came to believe that their mistake may have been expecting too much from the talks.

“An argument could be made that the United States had too intense a focus on the North Korean nuclear problem,” the postscript to the North Korea memo said. “Rather than seeking to contain or ‘quarantine’ the program, the Bush administration set a very high bar of eliminating the program.”

The memos indicate how much American policymakers in both parties at the time still held out hope for constructive relations with Russia and China. The memo on China urged extensive personal engagement between leaders, crediting Mr. Bush’s interactions with his Chinese counterparts with creating “a reserve of good will” between the two powers.

The memo on Russia concludes that Mr. Bush’s “strategy of personal diplomacy met with early success” but acknowledged that ties had soured, especially after Russia’s invasion of the former Soviet republic of Georgia in 2008. The memo presciently warned about Russia’s future ambitions.

“Russia attempts to challenge the territorial integrity of Ukraine, particularly in Crimea, which is 59 percent ethnically Russian and is home to the Russian Navy’s Black Sea Fleet, must be prevented,” the memo warned five years before Russian forces would seize Crimea and 13 years before they would invade the rest of the country. The memo added that “Russia will exploit Europe’s dependence on Russian energy” and use political means “to drive wedges between the United States and Europe.”

As enlightening as the memos are, however, they also underscore that major challenges on the international stage are rarely solved for good, but instead are bequeathed from one administration to another, even in evolved form. So too are the successes and failures.

The Impact of Russian Missile Strikes on Ukraine’s Power Grid

The Kremlin wagered that by depriving Ukrainians of electricity—and heat and water—during wintertime, they would sap the country’s resolve.

The New Yorker By Joshua Yaffa

Photography by Sasha Maslov

February 20, 2023

One day last fall, a Kh-101 cruise missile, launched from a Russian strategic-bomber plane, slammed into an electrical substation on the outskirts of Kharkiv, a Ukrainian city of more than a million people twenty-five miles from the Russian border. The strike blew apart the station’s control room, sending bricks and steel flying. The roof collapsed; equipment was incinerated in a wall of fire. Two workers for Ukrenergo, the state electricity company, were on duty in the control room and were killed instantly. Kharkiv was plunged into darkness. “They know where they are aiming,” a repairman named Vadim said. (Like a number of power-grid employees I spoke with, he asked not to use his full name.) “They hit the most critical places.”

Since the beginning of Russia’s invasion, its attacks had periodically damaged energy infrastructure near the front lines. “That we were used to,” Dmytro Sakharuk, the executive director of DTEK, Ukraine’s largest private energy company, said. “But then they changed strategy.” Starting last fall, the Russian military began targeting coal-fuelled power plants, substations, and transformers across the whole of Ukraine. Russian officials wagered that by depriving Ukrainians of electricity—and, as a result, heat and water—during wintertime, they would sap the country’s resolve. “They wanted to initiate a long-term blackout and to freeze our big cities,” Volodymyr Kudrytskyi, the C.E.O. of Ukrenergo, told me. “The idea was to force us to negotiate not through emerging victorious on the battlefield but by terrorizing the population.”

After successive waves of Russian strikes, Ukraine has faced a stark electricity deficit and rolling blackouts. At any given moment, millions of Ukrainian households are without power, as part of a centrally managed schedule that splits each day into three color-coded periods: green (guaranteed electricity), orange (no electricity), and white (cuts are possible). The guttural purr of diesel generators has become the background noise to life in just about every major Ukrainian city, as shops and restaurants have struggled to keep their lights on.

“We want to at least make these cuts predictable,” Kudrytskyi said. “It’s not just about making sure people survive the winter but also making sure they can work, and that businesses can operate, so that there is a domestic economy that, in turn, can fund the army.”

Not long ago, Ukraine and Russia, along with Belarus, shared the same electricity grid, an arrangement that independent Ukraine inherited from the Soviet period. Last year, on the eve of the war, Ukraine finalized a long-awaited plan to disconnect from the Russian grid and reorient its electrical network toward Europe. But the physical legacy of its shared past with Russia remains: much of the crucial equipment in the energy sector, from power-generating turbines to transformers and control-panel switches, are of Soviet vintage. The layouts of Ukraine’s plants and substations hardly vary from those in Russia; many were constructed from blueprints still readily available in Moscow.

“Our station was built from a Mosenergo project that dates to the nineteen-sixties,” Roman, the head of a substation in the Lviv region, said, referring to the Russian state power company that serves Moscow. “I imagine them sitting holding these plans in their hands, pointing out exactly what should be hit.”

The Russian campaign has a certain logic. Initial strikes focussed largely on transformers and substations—the pumps and arteries of an electrical grid, which convert electricity from one voltage to another and move it across the system, eventually delivering it to a person’s home. That equipment tends to be exposed, placed in the open, whereas the vast turbine halls of power plants, sheathed by a casing of concrete and steel, present a harder target.

A substation in central Ukraine hosts a number of seven-hundred-and-fifty-kilowatt transformers, each one the size of a moving van and capable of transporting large quantities of electricity over long distances. Not only are these transformers crucial for Ukraine’s energy grid—they are the only model of transformer capable of accepting high-voltage electricity produced by a nuclear power plant, for example—but they are also relatively rare. Similar models are found in the United States and China, but nowhere else in Europe; ordering and producing a new one can take up to a year. Ukraine has one factory that makes seven-hundred-and-fifty-kilowatt transformers, but it is situated in Zaporizhzhia, a city in the south that has come under regular bombardment.

The first strikes at the substation damaged a number of transformers. Repair crews managed to receive spare parts from across Ukraine, and spent weeks trying to bring whatever they could back online. The hope was that the station could function with limited capacity. But then, on New Year’s Eve, the station was hit again, this time by a number of Iranian-made kamikaze drones. The repaired transformers were destroyed completely.

“That’s when, you might say, we ran out of hardware and patience all at once,” Taras, the head of the facility, told me. “At the current moment, the station doesn’t carry out its function whatsoever.” Workers found a wing of one of the drones in the snow. “Happy New Year” was written on the underside, in Russian. “They must have been proud, and thought this was funny,” Taras said.

Later waves of Russian strikes targeted power generation itself. At one power plant in western Ukraine, a missile hit the turbine hall, destroying one power unit and damaging others. One of the units is still smoldering, weeks after it was hit, letting out a hiss of dark smoke. According to Maksym, the facility’s chief engineer, the plant is functioning at only a third of its previous capacity. Even that output makes it a target.

“You go to work every day with a certain fear,” Makysm said. Although most personnel head to the bomb shelter during air-raid alerts, Maksym remains at his post in the central control room. He pointed to a rack of helmets and flak jackets. “We tell our guys we are also at war,” he said. “This is our front—to keep the electricity flowing.”

Russia’s strategy of plunging the country into darkness and cold has, if not outright failed, certainly not succeeded, either. Public opinion has not shifted as a result of the blackouts—polls in recent months have shown that more than eighty per cent of respondents in Ukraine want to continue the fight, the same number as before the attacks on the energy grid began. Over time, Ukraine’s air defenses have improved, and its technicians have got faster at repairing the electrical grid. Russia’s stock of long-range missiles, meanwhile, has dwindled, leading to less frequent attacks.

The onset of spring will bring lower electricity consumption, and Kudrytskyi, the head of Ukrenergo, expects that the Ukrainian grid will soon stabilize. “Russia did not achieve its ultimate goal,” he said. “Yes, they managed to create problems for nearly every Ukrainian family.” But that is only half the story: “Instead of making us scared and unhappy, it made us angry, more resolved to win. They did not lower the morale of the nation; they mobilized the nation.”

Analysis: Healthy gas storage warms Europe, but not enough

European gas prices rallied in the run-up to Moscow's invasion of Ukraine begun almost exactly a year ago and they leapt to record highs when Russia subsequently cut supplies of relatively cheap pipeline gas.

Reuters by Nora Buli and Bozorgmehr Sharafedin

OSLO, Feb 23 (Reuters) - As Europe emerges from a mild winter with gas storage close to record levels, it must brace for another costly race to replenish its reserves on the international market.

European gas prices rallied in the run-up to Moscow's invasion of Ukraine begun almost exactly a year ago and they leapt to record highs when Russia subsequently cut supplies of relatively cheap pipeline gas.

Although European prices have eased to around 50 euros ($53) per megawatt hour (MWh) from last August's peak of more than 340 euros, they remain above historic averages.

That means European governments face another huge bill to refill storages before peak winter demand.

To ward off market volatility and protect against shortage, they will have to repeat the exercise annually until the continent has developed a more permanent alternative to the Russian pipeline gas on which it depended for decades.

Analysts and executives say the amounts already in storage will help, as will an increase in French nuclear generation following unusually extensive maintenance.

"The situation on the gas market is currently no longer so tense," Markus Krebber, CEO of RWE (RWEG.DE), Germany's biggest utility, told Reuters.

He did not expect any repeat of last year's record price spike, but also said "one must not lull oneself into a false sense of security".

Similarly, analysts cautioned against leaving it too late to buy for future delivery.

"We do not expect filling storage to be as costly next summer as it was this past year," Jacob Mandel, senior analyst at Aurora Energy Research, said.

"That said, firms that rely on spot supply to fill storage, rather than hedge against future price jumps, will risk paying similar costs to last summer."

He estimated buying gas over the summer months would cost "2-2.5 times more on a per unit basis than it had been pre-crisis" and that European governments last year spent tens of billions of euros on supplies.

That was even when they had received significant levels of Russian gas on long-term contracts prior to the shut down of the Nord Stream pipeline to Germany in August.

Nord Stream's closure drove up European gas prices, as well as liquefied natural gas (LNG) prices, which also hit record levels of around 70 million British thermal units (mmBtu), compared with around $16 now .

CONTRACTS IN TATTERS

Russia's long-term contract prices, based on complex calculations, are not public but are much cheaper than the spot market rate, industry sources say.

In all, last year's European imports of Russian pipeline gas were 62 billion cubic metres (bcm), 60% below the average of the previous five years, European Commission data showed.

This year, Russian deliveries to the EU are expected to fall to 25 bcm, assuming flows via the TurkStream pipeline and through Ukraine are in line with December 2022 volumes, the International Energy Agency (IEA) forecasts.

LNG FOR NOW, RENEWABLES FOR THE FUTURE

Even when filled to the brim, Europe's storage caverns, capable of holding some 100 bcm, can only meet around a quarter of European demand.

Think-tank Bruegel, which provides analysis to EU policymakers, has called for a 13% demand curb this summer, compared with the EU agreement last year for a voluntary reduction of 15%.

That could be tricky as the fall in gas prices this year has reduced the incentive to avoid the fuel.

One of the reasons for less gas use last year was increased use of coal, which was cheaper, although bad for carbon emissions.

James Waddell, head of European Gas and global LNG at Energy Aspects, said gas was becoming competitive against coal in the power sector and other industry, which switched to alternative fuels to gas, may also switch back.

"If you're pricing somewhere below 60 euros/MWh and you move down to 40 euros/MWh, you get quite a lot of that gas coming back into the industrial sector," he said.

More French nuclear production will help Europe's overall situation as output rises to about 310 Terwatt-hours (TWh) from 280 TWh last year, Waddell said.

But he said it was still lower than the five-year average and the gain would be eroded by losses elsewhere, notably in Germany.

Industry analysts say eventually the solution to the gas shortfall needs to be more renewable energy as the EU seeks to achieve its goal of zero net greenhouse emissions by 2050 and that the energy crisis will accelerate progress.

Until then, even full storages are no guarantee, Helge Haugane, head of gas and power trading at Equinor (EQNR.OL), Europe's biggest gas supplier, said.

As long as global supplies remain tight, he said, the market would be very vulnerable to any disruptions or "weather events".

UNUSUAL LEVEL OF UNCERTAINTY

After a Herculean EU effort, gas storages were 96% full at last year's November peak.

They have dropped to 64%, according to Gas Infrastructure Europe (GIE) data. Analysts forecast a further fall to around 55% by the end of the official heating season, on March 31.

Levels have held up following a mild winter that, combined with reduced demand, led the IEA to lower its forecast for the EU gas shortfall.

Earlier this month, it put the supply-demand gap at 40 bcm this year, down from its previous estimate of 57 bcm.

It said energy efficiency and speedy deployment of renewable energy and heat pumps could help plug 37 bcm of that gap in 2023, while warning of an "unusually wide range of uncertainties and exogenous risk factors".

These include the possible complete halt of Russian gas through the pipelines still supplying Europe and a post-lockdown demand recovery in China that could increase competition on the international LNG market, making it harder for Europe to buy there.

The IEA said European LNG imports could provide an extra 11 bcm to 140 bcm this year, in addition to an additional 55 bcm in 2022.

As one of Russia's most loyal gas customers until last year's invasion of Ukraine, Germany previously had no import capacity for LNG. Now at a record pace, it is bringing online six floating storage and regasification units (FSRUs) by the end of this year.

The industry says this needs to be matched with more terminals to liquefy and ship LNG, but strong global demand means that will be difficult to achieve over the next 24 months, Luke Cottell, senior analyst at Timera Energy consultancy, said.

Other European countries are also increasing their LNG capacity, while environmental campaigners and green politicians question the amounts being invested in the infrastructure that should become irrelevant in a low-carbon economy.

Germany has also been at the forefront of demand for heat pumps, which do not rely on fossil fuel to heat buildings, although their installation last year was still outpaced by gas-based systems.

($1 = 0.9395 euros)

Reporting by Nora Buli in Oslo and Bozorgmehr Sharafedin in London; additional reporting by Kate Abnett in Brussels and Vera Eckert in Frankfurt; editing by Barbara Lewis

Mexico passes electoral overhaul that critics warn weakens democracy

President Andres Manuel Lopez Obrador argues the reorganization will save $150 million a year and reduce the influence of economic interests in politics.

Reuters

A view shows senators during a session at Mexico's senate as they discusses an initiative by President Andres Manuel Lopez Obrador to give the Army control over the civilian-led National Guard, at Mexico's Senate building, in Mexico City, Mexico September 8, 2022. REUTERS/Henry Romero

MEXICO CITY, Feb 22 (Reuters) - Mexican lawmakers on Wednesday approved a controversial overhaul of the body overseeing the country's elections, a move critics warn will weaken democracy ahead of a presidential vote next year.

President Andres Manuel Lopez Obrador argues the reorganization will save $150 million a year and reduce the influence of economic interests in politics.

But opposition lawmakers and civil society groups have said they will challenge the changes at the Supreme Court, arguing they are unconstitutional. Protests are planned in multiple cities on Sunday.

The Senate approved the reform, which still needs to be signed into law by Lopez Obrador, 72 to 50.

The changes will cut the budget of the National Electoral Institute (INE), cull staff and close offices.

The INE has played an important role in the shift to multi-party democracy since Mexico left federal one-party rule in 2000. Critics fear some of that progress is being lost, in a pattern of eroding electoral confidence also seen in the United States and Brazil.

Lopez Obrador has repeatedly attacked the electoral agency, saying voter fraud robbed him of victory in the 2006 presidential election.

The head of the INE, Lorenzo Cordova, has called the changes a "democratic setback" that put at risk "certain, trustworthy and transparent" elections. Proposed "brutal cuts" in personnel would hinder the installation of polling stations and vote counting, Cordova said.

The changes, dubbed "Plan B," follow a more ambitious constitutional overhaul last year that fell short of the needed two-thirds majority. That bill had sought to convert the INE into a smaller body of elected officials.

Mexico will hold two state elections in June and general elections next year, including votes for president and elected officials in 30 states.

• Reporting by Adriana Barrera and Diego Ore; Writing by Carolina Pulice; Editing by Stephen Eisenhammer, Sandra Maler and William Mallard