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Net Zero Policies Will Turn Europe Into a “Trivial and Incapable” Backwater

BY CHRIS MORRISON | THE DAILY SCEPTIC |  JULY 24, 2022

The social and economic destructive power of the political Net Zero agenda across the European Union, and by extension the U.K., is laid bare in a damning new report from the Global Warming Policy Foundation. In a long and detailed presentation, energy writer John Constable warns that the European Green Deal seems all but certain to break Europe’s economic and socio-political power – “rendering it a trivial and incapable backwater, reliant on – and subservient to – superior powers”.

It is easy to read into the report that “superior powers” include countries that supply Europe with vital oil and gas and make the industrial goods required to enjoy current lifestyles. If they wish, European consumers and politicians can continue to indulge in monumental green virtue signalling, print money until kingdom come and even consider resurrecting old economic and social disasters like pointless Covid restrictions. The TalkTV host Julia Hartley-Brewer often notes that Net Zero is “borderline insanity”. The use of the word “borderline” seems superfluous.

The collapse in competitive manufacturing capacity is nowhere more evident than in the renewable sector itself, says Constable.

It is clear that renewable energy equipment manufacturing has no future in the EU, and indeed manufacturing of any kind exposed to international competition will struggle to survive, except in niche areas.

The all but total collapse of the Spanish solar industry within eight years is highlighted. Constable describes it as “extraordinary” and in large part explained by the curtailment of subsidies. Overall, he says, “subsidised deployment in Europe has failed to give European industries a secure position in the world markets for renewable energy equipment. The field is now dominated by China”.

Again, it might be noted that if you can’t even pay companies to produce hardware under local economic conditions, Boris Johnson’s promise – backed it seems by almost all politicians – to bring plentiful green jobs in the U.K. across the ‘Red Wall’ is just windy rhetoric.

News of an impending Net Zero calamity is rarely far from the headlines. Tata Steel has been trying to obtain subsidies approaching £1.5bn from the U.K. Government to pay decarbonising costs and keep Port Talbot steelworks operational. “The new Prime Minister is unlikely to be willing to hand over subsidies on this scale, not least because every other industry hit by demands for decarbonisation would insist on handouts too,” said Dr. Benny Peiser, Director of Net Zero Watch. “It is becoming more evident by the day that the Climate Change Committee misled Parliament over the true cost of Net Zero,” he added.

The lack of Net Zero discussion in the current Tory leadership battle is interesting. Savvy politicians are starting to become aware of the disaster that is hurtling towards society as it seeks to quickly remove the cheapest and most efficient fuel it has from the energy mix and replace it with intermittent sources – described by Constable as “thermodynamically incompetent”. On the other hand, large swathes of the population have become convinced that the climate is breaking down, as evidenced by the hysteria that surrounded the recent brief heatwave. The science is ‘settled’, although a more realistic interpretation is that green activists and financiers have pursued a ruthless 30-year campaign to outlaw the scientific method from atmospheric climate science.

Constable argues that a change of course is inevitable to undo the “deeply embedded” harm of nearly 30 years. Moving towards “fundamentally cheaper energy” will require substantial reductions in European living standards. “Explaining this to the European people will form the greatest political challenge of the next 50 years,” he says.

In his wider report, Constable attempts to demonstrate that the enthusiastic adoption of the green agenda in the 1990s and early 2000s “has effectively produced gradual industrial and economic disarmament”. The ‘”resultant enfeeblement” compared to Europe’s competitors will make arresting the decline difficult: “Recovering the situation entirely may be impossible.” The author lists numerous body blows to overall competitiveness. Electricity prices to industry in the EU between 2008-2018 have been about 30% above those in the G20, an organisation that includes China, India and Russia. Gas price were 20-30% higher. Electricity prices were 80% and 30% higher respectively for industry and households,  and this would have hit competitiveness hard and placed heavy energy costs on some of those least able to afford them. Petrol prices were approximately 30-50% higher, and diesel 10-40%, figures again that were guaranteed to destroy competitiveness outside the EU’s protective internal single market.

Meanwhile, energy consumption in the EU has been falling and is now said to be at levels last seen in the early 1990s. Such a deep and sustained decline is said to be unprecedented in the modern era. In the U.K., electricity consumption is reported to have fallen back to levels not seen since 1970. Energy efficiency, of course, plays a part, but Constable notes the effect of “price rationing and demand destruction”. The report labels Europe’s “green experiment” as a “costly failure”, noting that “carbon dioxide abatement costs in the EU are on average several times greater than even high-end estimates of the social cost of carbon”. This is said to indicate that the economic harm of the EU’s mitigation policies “is greater than the climate change it aims to prevent”.

Politicians – and green activist commentators – often blame inflation, high energy prices and food shortages on recent events such as Russia’s war in Ukraine. But Constable argues that the Ukrainian war, while bringing the failures of climate policies into sharper focus, does not mean that the harm is of recent origin. “On the contrary,” he argues, “the environmental policies have been damaging to the EU’s interests, and advantageous to those of its rivals, from the very beginning.”

July 24, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , | Leave a comment

New Prime Minister will have to pause Net Zero or face the demise of UK’s steel industry

Net Zero Watch | July 22, 2022

London – With the exorbitant costs of Net Zero plans threatening Port Talbot steelworks with closure, the next Prime Minister will be faced with a stark choice: pause Net Zero plans for energy-intensive industries or preside over the end of the UK steel manufacturing.

The warning comes from the director of Net Zero Watch, Dr Benny Peiser.

Tata Group, the owner of the UK’s largest steel manufacturer, has threatened to shut down operations if the government does not agree to provide £1.5bn of subsidies to help it reduce CO2 emissions.

The crisis for UK steel demonstrates that the cost of Net Zero is an existential threat to British industries and manufacturing.

As an energy-intensive manufacturer of internationally traded commodities, the steel sector is particularly sensitive to the astronomical cost of decarbonisation. It is the first to acknowledge that the industry simply can’t survive Net Zero without multi-billion handouts – but it won’t be the last.

Tata Steel and the energy-intensive sector more broadly can be regarded as a canary in the coalmine, giving early warning of a more general economic and industrial disaster, as the rising costs of Net Zero trickle down to the rest of the economy.

Dr Peiser said:

“The new Prime Minister is unlikely to be willing to hand over subsidies on the scale demanded by Tata, not least because every other industry hit by demands for decarbonisation would insist on handouts too.

“It is becoming more evident by the day that the Climate Change Committee misled Parliament over the true cost of Net Zero. Most energy-intensive businesses in the UK won’t be able to survive the looming Net Zero cost crisis unless the new Prime Minister takes swift action.”

July 23, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity | | Leave a comment

Orban: Sanctions Made No Change in Moscow’s Course, Europe Lost Four Governments

Samizdat – 23.07.2022

Russia-related sanctions have not shattered Moscow’s resolve, while Europe has already lost four governments amid economic and political crises, Hungarian Prime Minister Viktor Orban said on Saturday.

“The West’s strategy is like a car with flat tires on all four wheels… The sanctions did not destabilize Moscow. Europe is in trouble, economically and politically, and four governments have become victims: UK, Bulgarian, Italian and Estonian… People will face a sharp increase in prices. And the better part of the world deliberately did not support us as well — China, India, Brazil, South Africa, the Arab world, Africa — everybody is aloof from this conflict, they are interested in their own affairs,” Orban said, delivering a speech in the Romanian city of Baile Tusnad.

Orban further noted that the Ukrainian conflict is likely to “put an end to the Western hegemony, which could unite the world against someone,” and that a “multipolar global order will knock on the door.”

Hungarian Prime Minister Viktor Orban said on Saturday that Europe needs a new strategy aimed at peace in the Ukrainian conflict.

“Hungary should not be under the illusion that we can influence the strategy of the West. Nevertheless, it is a matter of honor and morality for us to state our position that a new strategy is needed, the goal of which would be peace and the formulation of a good proposal for peace. The task of the European Union is not to take sides, but to stand between Russia and Ukraine,” Orban said in the Romanian city of Baile Tusnad.

Orban noted that for the first time since World War II, Europe again has no say in important security issues as decisions are made by the United States and Russia.

Peace in Ukraine may be established only after the negotiations between Russia and the United States, and Europe has lost its chance at mediation since it failed to ensure the fulfillment of the Minsk agreements, Hungarian Prime Minister Viktor Orban said on Saturday.

“When we are talking about the war, it begs the question: what should we do? Peace talks between Russia and Ukraine will not take place. People who are waiting for them, they are waiting in vain. Russia wants security guarantees, that is why only the talks between Russia and the US can end this war. Until Russian-American negotiations take place, there will be no peace,” Orban said, delivering a speech in the Romanian city of Baile Tusnad.

Orban noted that Europeans cannot mediate the process anymore as Moscow is not willing to listen to the EU after the failure of the Minsk agreements.

“We lost it after 2014 when we could not ensure the fulfillment of the Minsk agreements containing the guarantees from France and Germany. And the Russians do not want to conduct talks with us anymore,” he added.

On February 24, Russia began a military operation in Ukraine responding to calls for help from the breakaway republics of Donetsk and Lugansk. The United States and its allies responded by imposing comprehensive sanctions against Russia while also ramping up their military support for Ukraine.

July 23, 2022 Posted by | Economics | , , , | Leave a comment

Europe Repeating Napoleon’s Continental Blockade Mistake With Russia Sanctions: Le Figaro

Samizdat – 22.07.2022

Western nations have faced skyrocketing energy prices, creeping inflation, and plummeting growth amid their attempt to “punish” Russia into submission for Moscow’s military op in Ukraine. According to the Russian president, the sanctions’ outcome hasn’t at all been “what the initiators of the economic blitzkrieg against Russia were counting on.”

The current sanctions war against Russia by the European Union and the United States bears striking parallels to Napoleon Bonaparte’s ill-fated early 1800s attempt to institute a blockade against Great Britain, which ultimately culminated in the French Empire’s economic ruin, French economist Olivier de Maison Rouge believes.

In a recent op-ed in Le Figaro, de Maison Rouge pointed out that the EU’s sanctions on Russia in response to the “military aggression on its eastern flank” have so far only led to the appreciation of the Russian ruble, and a stark and unpleasant realization of just how much Europe depends on Russian natural resources for its well-being.

The present situation is not unique, and has a historical parallel in the 19th century, the economist, who teaches at the Paris-based ILERI School of International Relations, and the School of Economic Warfare, explained.

“Take for example the European blockade declared against England by Napoleon I. Although English industry initially faltered, it was ultimately able to forge new commercial partnerships with its vast empire, enabling it to reach the height of its glory, on land and at sea, in the 19th century,” de Maison Rouge wrote.

In a Napoleonic decree penned in November 1806, the British Isles were declared to be in a state of blockade, with all trade prohibited, and all letters or packages with English addresses, or to Englishmen, or written in the English language, banned from being sent at France’s post offices and seized.

A year later, de Maison Rouge recalled, in the decree of Milan of December 17, 1807, Napoleon “ordered any boat anchored in a British port, whatever its nationality, to be considered flying the British flag and therefore confiscated by the customs administration. The direct consequence of this policy for France was the disruption of supplies.”

The professor noted that with each of Napoleon’s European conquests, the restrictions on trade with Britain were extended, with the emperor envisioning a ban on “all British goods from Lisbon to Saint Petersburg.”

With the Treaty of Tilsit of July 1807, Russia and Prussia joined the blockade, and between 1807 and 1810, Sweden and Portugal were also made to join the embargo (Russia would exit from this arrangement in 1810 when the tsar began allowing neutral ships to land at Russian ports, culminating in the French invasion of 1812).

Britain’s response to the restrictions, de Maison Rouge wrote, included its own embargo on the young American republic’s trade with continental Europe, thus disrupting France’s access to the riches of the New World. At the same time, the blockade led to a virtual drying up of major ports in France, Holland, Germany, and Italy.

“England, for its part…was able to forge new commercial relations, particularly with Canada, and then with the United States and Latin America,” the economist noted. In the meantime, in the French-occupied nations, local merchants, sometimes aided by corrupt French officials, were able to organize smuggling routes, “partially wiping out the effects of the blockade” and ultimately forcing French customs to start granting import and export licenses in 1809 to certain shipping companies and for certain goods.

“The Emperor’s wish was to collapse the English economy by cutting off its commercial outlets, and incoming flows of raw materials for the supply of manufactured goods (cereals, weapons, ammunition, cotton, wool, etc.). Indeed, it is estimated that England’s exports fell by 20 percent between 1808 and 1810.”

However, in time, “the effects of the blockade proved counterproductive, because goods like machine tools ran out, while [lost] sales of European goods outside Europe were never compensated. While England knew how to forge an economy turned toward other markets (in particular in Latin America)…and established its maritime power against the continent, creating new outlets which would make its fortune in the 19th century, France, centered on the continent alone, was not able to find alternatives beyond its domestic markets,” de Maison Rouge explained.

In the end, “despite temporary economic crises (in 1808 and 1810) England ultimately emerged strengthened from this ordeal, subsequently enlarging its empire and its clientele and becoming the dominant nation of the 19th century,” the economist concluded.

In recent weeks, Western officials, academics, and media have expressed fears that the West’s push to “punish” Russia for its military operation in Ukraine has backfired on the European Union, shaping up to be the region’s most severe inflationary and energy crisis since the 1970s Arab oil embargo and stagflationary crisis. The US, which had far weaker trade ties to Russia before the escalation of the crisis, has also been affected, with the White House blaming spiking inflation and gasoline prices on Russia and calling the problems “Putin’s price hike.”

Last week, Romanian Deputy Prime Minister Hunor Kelemen warned that as the Ukraine crisis shows no signs of letting up, European countries “will all pay the price” for the restrictions slapped on Russia during the coming winter. “This will be a harsh winter, and possibly the harshest winter in the past 40, 50 or 60 years, and, unfortunately, for the whole of Europe”, he said.

Earlier this month, Putin suggested that the West had already lost its “sanctions war” against Russia, and sparked the start of the “radical breakdown of the American-style world order.” Admitting that sanctions have created some difficulties for the Russian economy, the Russian president stressed that their outcome nevertheless hasn’t at all been “what the initiators of the economic blitzkrieg against Russia were counting on.”

July 22, 2022 Posted by | Economics, Timeless or most popular | , , , | Leave a comment

Iran eyes 5.7 mln bpd of oil output by 2029

Press TV – July 21, 2022

Iran plans to attract around $160 billion worth of domestic and foreign investment to its petroleum sector until 2029 to significantly increase its production of oil and gas, according to a new report.

The Thursday report by the official IRNA news agency said that the National Iranian Oil Company (NIOC) has outlined a seven-year investment plan under which Iran’s production of crude oil will reach 5.7 million barrels per day by 2029.

Iran’s current oil output capacity is just over 3.8 million bpd although actual production has dropped to nearly 2.6 million bpd mainly because of American sanctions that hamper direct exports of Iranian crude.

It added that Iran also seeks to meet a natural gas production target of 1.5 billion cubic meters (bcm) per day by 2029, up from a current output of just over 1 bcm per day.

The IRNA analysis said a current administrative government in Tehran, which may remain in office until 2029 under a second four-year term, has already secured nearly $50 billion worth of investment for development projects in the Iranian petroleum sector.

It said the commitments include a memorandum of understanding reached earlier this week between the NIOC and Russia’s state petroleum company Gazprom for up to $40 billion worth of investment in oil and gas projects.

Others include contracts signed in early July with a consortium of Iranian banks and energy companies to carry out development projects in oilfields shared with Iraq in southwestern Iran.

The report also said that the NIOC had signed a $500-million contract in March with a foreign company, whose name it said would remain confidential because of US sanctions, to develop the oil layer of the South Pars gas field in the Persian Gulf.

July 21, 2022 Posted by | Economics | , | Leave a comment

Hungary Wants to Buy Additional Natural Gas From Russia: Lavrov

By Ilya Tsukanov – Samizdat – 21.07.2022

Hungary has asserted an independent policy unique in the European Union in relation to the Ukrainian crisis, refusing to slap sanctions on Russian energy, and refusing to allow its territory to be used by NATO to transfer weapons to Kiev.

Russia and Hungary are intent on advancing their bilateral cooperation, notwithstanding EU sanctions, and are looking to implement major projects, including in the energy sector, Russian Foreign Minister Sergei Lavrov has indicated.

“Despite the difficult international situation, despite the desire of some of our partners to increase sanctions pressure against Russia, our interaction continues, and last year we managed to overcome the recession caused by the pandemic and to achieve growth of over 25 percent in our trade turnover,” Lavrov said, speaking to his Hungarian counterpart Peter Szijjarto in Moscow on Thursday.

“We note the mutual commitment of the Russian and Hungarian governments to promote our interaction, our partnership, including in the implementation of major projects in energy, transport and other areas,” Lavrov said.

The Russian foreign minister indicated that Budapest has expressed interest in buying additional gas supplies from Russia, and that Moscow would consider this request immediately.

Hungary imports approximately 65 percent of its oil and some 80 percent of its gas from Russia, and recently refused to cut down amid Brussels’ attempts to force a “phase out” of Russian crude supplies.

“I consider your visit very timely, including for the continuation of our trust-based exchange of views on regional and international issues,” Lavrov said.

“I know that you are closely following the situation in Ukraine as it develops, including from the point of view of the Hungarian national minority, and today we will be prepared to give you our vision of how our special military operation is developing and about the prospects for resolving this serious crisis,” he said.

Hungary has refused to toe the line set by its NATO and EU allies amid the Ukraine crisis, calling for an immediate ceasefire as the only possible chance to avoid a steep economic crisis in Europe. Budapest has also been critical of Brussels’ tough sanctions against Moscow, saying they threaten to undermine Hungary’s own economic and energy security.

Last week, Hungarian Prime Minister Viktor Orban suggested that Europe had “shot itself in the lungs” with sanctions, and was now paying the price.

“At first I thought we just shot ourselves in the foot, but the European economy shot itself in the lungs and is gasping for air,” he said. “There are countries committed to the sanctions policy, but Brussels must admit that it was a mistake, that it has not fulfilled its purpose and has even had the opposite effect,” Orban added, suggesting that restrictions were hurting the EU much more than Russia.

Hungary’s relations with Ukraine worsened dramatically after the 2014 coup in Kiev, and the new Ukrainian government’s legislative efforts to deprive the community of 150,000 ethnic Hungarian-Ukrainians living in the country’s Zakarpattia region of the right to receive a public education in their native tongue.

Following the escalation of the Ukraine crisis in February, tensions have degenerated into a bitter war of words, including mutual recriminations about the state of Ukrainian and Hungarian officials’ mental health.

In May, an advisor to Ukraine’s energy minister suggested that “something” should happened to the Soviet-era Druzhba (‘Friendship’) oil pipeline carrying Russian crude through Ukraine to Hungary to speak to Orban “in the language he understands.” The same month, Orban’s name was added to a notorious Security Service of Ukraine-curated website containing the personal information of so-called “enemies of Ukraine.” Several individuals listed on the website have subsequently been killed.

July 21, 2022 Posted by | Economics, Russophobia | , , | Leave a comment

Kremlin Says Western Restrictions to Blame for Technical Problems With Russian Gas Deliveries

By Ilya Tsukanov – Samizdat – 21.07.2022

Russian gas deliveries via the Nord Stream 1 pipeline were resumed on Thursday morning following scheduled maintenance work. Last month, Gazprom was forced to cut supplies sent through the network to about 40 percent of capacity due a refusal by Canada to send a Siemens turbine used by Nord Stream 1 to Russia due to sanctions.

All technical problems related to the delivery of Russian gas to Europe are the result of various restrictions Western countries themselves have placed on Russian energy exports, Kremlin spokesman Dmitry Peskov has indicated.

“I suggest that you carefully reread the statement made by the [Russian] president in Tehran. He explained in great detail how many compressor stations there are, what kinds of problems have been recorded by Siemens – and in connection with this, what type of situation is occurring where it is impossible to build pressure up to 100 percent. These are technical reasons connected to the impossibility of proper technical maintenance,” Peskov said, speaking to reporters on Thursday.

“Any technical difficulties associated with this stem from the restrictions that European states and the European Union themselves have introduced… It is these restrictions which do not allow for the repair of equipment, including turbines operating at compressor stations. And it is these restrictions which lead to the fact that some units cannot currently receive the necessary maintenance,” he stressed.

Peskov indicated that Gazprom remains committed to fulfilling its obligations in full, and rejected recent statements made by Western officials and media about alleged Russian attempts to “pressure or blackmail” Europe in the energy sector. “These are absolutely false statements and we categorically deny them,” he said.

Asked to comment on Wednesday’s remarks by State Department spokesman Ned Price that the resumption of Nord Stream 1’s operation would be “an important element” in ensuring Europe’s security, Peskov said Moscow was “no longer surprised” by anything Washington says. “As for the energy security factor, yes, we agree – we constantly say that Russia, as a supplier of energy resources, is very important and integral factor for European energy security. This is true,” he said.

Nord Stream 1, which has become Gazprom’s central gas supply route to Europe amid machinations by Poland and Ukraine, resumed operations on Thursday morning following scheduled summer maintenance work, and is now expected to resume operations at about 40 percent of its capacity of 55 billion cubic meters of gas per year. Gazprom was forced to reduce shipments via the network in mid-June over delays in the repair of a Siemens-built high-pressure gas pumping turbine in Canada. Ottawa deliberately delayed the return of the turbine, which had undergone maintenance work, back to Europe, citing anti-Russian sanctions. Last week, amid pressure from Germany, Ottawa relented, with the turbine now thought to be on route back to Europe for installation at Gazprom’s Portovaya Compression Station on the Russian Baltic Sea coast. Ukrainian authorities blasted Canada over the move, vowing that Kiev would “never accept” Ottawa’s decision.

President Putin commented on the European energy crisis in remarks to reporters at the conclusion of his working visit to Iran on Tuesday, indicating that the EU and its allies in Kiev are wholly responsible for current situation regarding gas deliveries from Russia.

“Until recently, we supplied… around 30 billion cubic meters [of gas] a year to Turkey, and 170 billion to Europe, 55 billion of that via Nord Stream 1, and, if memory serves, 33 billion via Yamal-Europe, through two strings running through Ukraine. And about 12 billion to Europe through Turkey via Turkstream,” Putin said.

“Ukraine suddenly announced that it was going to close one of the two routes on its territory, allegedly because the gas pumping station is not under its control but on the territory of the Lugansk People’s Republic. It found itself under the control of the LPR several months earlier, but they closed it just recently without any grounds,” he said.

After that, Putin said, Poland imposed sanctions on the Soviet-era Yamal-Europe network, first shutting it down and then turning it back on in reverse mode to send about 32 million cubic meters of gas per day from Germany eastward.

“Where is the gas from Germany coming from? It is our Russian gas. Why from Germany? Because it turned out to be cheaper for the Poles. They used to get it from us at a very high price, closer to the market price, whereas Germany gets it from us 3-4 times cheaper than the market price under long-term contracts,” he explained.

“So, first one of the routes in Ukraine was shut down, then Yamal-Europe was shut down; now Nord Stream 1, which is one of the main routes – we pump 55 billion cubic meters a year through it,” Putin said.

The Russian president noted that there are five Siemens-built gas compressor turbines used by Nord Stream 1, plus one more on standby. One turbine was sent out for repairs to a Siemens plant in Canada, but was slapped with sanctions by Ottawa. On top of that, another turbine at Portovaya is out of order due to technical problems, leaving two operational units currently pumping 60 million cubic meters of gas per day.

“So, if one more is delivered, fine, we will have two in operation. But if it is not, only one will be left, and it will pump only 30 million cubic meters per day. You can imagine how much time it will take to pump the rest. How is this Gazprom’s responsibility? What does Gazprom even have to do with this? [The West] cut off one route, then another, and sanctioned this gas pumping equipment. Gazprom is ready to pump as much gas as necessary. But they have shut everything down,” Putin stressed.

The Russian president added that the new Nord Stream 2 pipeline network, which could double the Nord Stream network’s capacity to 110 billion cubic meters of gas per year over the long term, remains ready for launch, but has been frozen by Germany.

European economies are bracing for a cold winter and rushing to fill up underground gas storage facilities amid the largely self-inflicted energy crisis brought on by sanctions and Brussels’ push to “phase out” or restrict purchases of Russian oil, gas and coal to “punish” Moscow over its military operation in Ukraine. This week, the International Monetary Fund predicted that some countries’ economic output could fall up to 6 percent in the event of a total shutoff of Russian gas. Business leaders in Germany, the EU’s main industrial powerhouse, have warned that the country could face its gravest economic crisis since the Second World War amid the tensions over Russian gas deliveries.

July 21, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity, Russophobia | , , | Leave a comment

Ukraine’s Naftogaz Reportedly Requests $5Bln in Government Subsidies to Buy Gas Ahead of Winter

Samizdat – 20.07.2022

Ukraine’s state-run oil and gas company Naftogaz has requested 150 billion Ukrainian hryvnias ($5 billion) in subsidies from the government to purchase enough gas ahead of the heating season, the RBC Ukraine news agency reported on Wednesday, citing the firm’s letter to the government.

Naftogaz had to request budgetary help since raising such massive funds otherwise is neither possible domestically nor internationally, the company wrote in the letter to the cabinet, according to the report.

“In such conditions, the state budget is the only possible source of financing the purchase of imported natural gas… The most favorable option is to increase the authorized capital of Naftogaz of Ukraine,” the letter read, according to the report.

The company suggested increasing its authorized share capital by 150 billion Ukrainian hryvnias, the report said.

On July 12, Naftogaz asked the holders of its Eurobonds to defer interest payments for two years but was not granted such concession, thereby exposing the company to the risk of default.

Ukraine’s former housing and communal services minister, Oleksiy Kucherenko, has accused Naftogaz of forging its profit results in 2021, saying that the breach now has to be patched with 264 billion hryvnias from the budget. The ex-official also noted that Ukraine’s budget is running low, so Kiev may have to request assistance from the United States.

July 20, 2022 Posted by | Corruption, Deception, Economics | | Leave a comment

Let the people pay: EU leaders make their citizens suffer the fallout from their failed Russia policy

Samizdat | July 20, 2022

In a Bastille Day interview, French President Emmanuel Macron told citizens to “prepare ourselves for a scenario where we have to do without Russian gas entirely.” At the same time, Macron accused Moscow of using the fuel as a “weapon of war,” echoing the spin emanating from a European Union leadership that obscures the real reason the bloc is facing an energy shortage that’s driving up the cost of living.

This crisis is entirely self-inflicted.

European Commission President Ursula von der Leyen accused Russia of energy “blackmail” at the end of April, citing the state-owned Gazprom’s announcement of a halt in gas deliveries to Poland and Bulgaria for failing to pay for in rubles. What von der Leyen – and now Macron – conveniently omitted was that it was the EU’s own anti-Russian sanctions, adopted in a knee-jerk and ideologically-driven fashion at the outset of the Ukraine conflict, that represent the root cause of these disruptions.

The West quickly adopted a strategy of targeting and sanctioning various aspects of the Russian financial system, including banks and foreign reserves, cutting it off from the SWIFT global transaction system – and then had the gall to complain that Moscow was asking for payment for its gas exports in its own currency to mitigate the hassle of navigating a system from which it was effectively blocked. “Export your gas but good luck trying to get paid,” is hardly a reasonable expectation.

It wasn’t Russian President Vladimir Putin who called on the EU to cut off Russian gas. Rather, it was his Ukrainian counterpart Vladimir Zelensky, who has constantly pushed for ever more Western sanctions on Russian fossil fuels. And the West has only been to happy to recklessly indulge him to the detriment of their own citizens.

Earlier this month, Zelensky even admonished Canada for agreeing to return repaired turbines for reintegration into the Nord Stream 1 gas pipeline that provides gas to Germany, and demanded that Ottawa reverse its decision. Canada had earlier faced the dilemma of violating the West’s own anti-Russian sanctions by virtue of even returning the critical parts – even though the pipeline is so vital to EU industry that the bloc’s leaders have even been freaking out about its scheduled maintenance shutdown.

Why would you be so worried about Russia failing to turn the tap back on when you’ve been saying repeatedly that you’ll gladly do without it “for Ukraine.”

But even in defending the return of the turbines, Canadian Prime Minister Justin Trudeau cited the same ridiculous Western establishment propaganda of Russia’s “weaponization” of gas, when in reality it’s the West’s own sanctions that have wreaked energy havoc and caused all this drama.

“We have seen Russia consistently trying to weaponize energy as a way of creating division amongst the allies,” Trudeau said. So if Canada doesn’t violate its own sanctions and return the turbines to Germany, then Putin wins. The Olympic level rhetorical gymnastics required by Western leaders to justify violating their own failed sanctions are second only to their recent defense of firing up coal plants again, and redefining fossil fuel energy as “green,” amid the current shortages.

EU leaders are calling for an end to Russian energy imports, citing their decision to sanction their own gas supply as a reason to expedite a transition to unproven renewables. But rather than take responsibility for the fact that they set fire to their sails and are now stranded in the middle of the ocean while awaiting the manifestation of their renewable energy transition fantasy, they’re blaming Russia for their own shortsightedness and trying to spin it as a withholding of energy orchestrated by Moscow.

Russia is only too happy to sell its fuel to whomever wants to buy it. And if the EU sanctions were lifted, the Western energy crisis would end. But that would mean admitting to a failed policy. So, instead, we’re being told that it’s all Putin’s fault, but also that the best way to stick it to Vladimir Putin is to take short, cold showers and to reduce “night lighting,” as Macron has recently suggested.

Western leaders aren’t just taking their citizens for credulous fools with their ridiculous propaganda as cover for their own failures, but they’re treating the livelihood of the average person as collateral economic damage in their hopeless bid to isolate Russia. They’ve convinced themselves, from their ideologically-isolated elite bubble, that they represent the entire world. But they’re mostly just fooling themselves.

Even the EU’s chief diplomat, Josep Borrell, admitted to a rude awakening recently at the G20 summit. “The G7 and like-minded countries are united in condemning and sanctioning Russia and in trying to hold the regime accountable,” Borrell said in a statement on the EU’s website. “But other countries, and we can speak here of the majority of the ‘Global South’, often take a different perspective.”

But then Borrell gave away the game. “The global battle of narratives is in full swing and, for now, we are not winning,” he said. “As the EU, we have to engage further to refute Russian lies and war propaganda.” But who’s really peddling the propaganda? On one hand, the EU has been trying to portray the impact of their own irresponsible and devastating sanctions on their own economies and citizens as Putin’s doing even as they try to convince Westerners that their suffering is some kind of a war effort that’s doing harm to Russia.

However, in reality, Russia can pivot to the rest of the entire world and simply leave West Europeans to wallow in their own costly delusions. They may be about to find out whether moral superiority and virtue-signaling will heat the house or feed the kids this winter.

July 20, 2022 Posted by | Economics, Progressive Hypocrite, Russophobia | , | Leave a comment

Russia teaches Europe ABCs of gas trade

BY M. K. BHADRAKUMAR | INDIAN PUNCHLINE | JULY 20, 2022

The unthinkable is happening for the second time in five months: Russian gas giant Gazprom writes to German gas companies announcing force majeure effective from June 14, exonerating it from any compensation for shortfalls since then. 

The first time shock and awe appeared in German-Russian relations this year was on February 22 when Chancellor Olaf Shloz surprised even hardened political observers by freezing approval process for the newly-constructed Nord Stream 2 gas pipeline. The $11 billion pipeline beneath the Baltic Sea would have doubled the volume of gas sent directly from Russia to Germany, but Scholz instead blocked its commissioning. Those were halcyon days when Berlin talked of “defeating” Russia. 

Scholz’s move was in reaction to Moscow’s decision on February 21 to recognise two breakaway regions of Ukraine as independent republics. Russia hawks in Germany applauded his decision. Acclaim came pouring in. Jana Puglierin, head of the European Council on Foreign Relations in Berlin, praised Scholz, saying he was “raising the bar for all other EU countries… this is real leadership at a crucial moment.” 

However, in Moscow, which has a thorough understanding of the German energy market, Scholz’s move was seen as an act of deliberate self-harm. Moscow reacted with a flash of sardonic humour. Dmitry Medvedev, former president and deputy head of Russia’s Security Council, tweeted, “Welcome to the brave new world where Europeans will soon be paying €2,000 per 1,000 cubic meters of gas!” 

He was alluding to the grim reality that gas accounted for a quarter of Germany’s energy mix, and more than half of it came from Russia. Indeed, it was plain to see that Germany’s reliance on gas could only rise having decided to shelve nuclear power in the aftermath of the 2011 Fukushima disaster in Japan and committed to phasing out coal-fired power by 2030.

But Scholz insisted that Germany would expand solar and wind power capacity “so we can produce steel, cement and chemicals without using fossil fuels.” His confidence actually stemmed from the fact that Germany had a long-term contract with Russia to supply gas at a friendly price via Nord Stream 1. 

The first indication that something was going horribly wrong was when the influential Russian daily Izvestia wrote on July 11 quoting industry experts in Moscow that the scheduled routine stoppage of NS1 for annual servicing and repairs from July 11-21 might continue due to Canada holding back, under sanctions against Russia, the turbine that had gone for repair. 

The daily went on to forecast that Gazprom might announce force majeure because of western sanctions, as Siemens twice already failed to return equipment to Gazprom after repairs in Canada, which resulted in a reduction in the gas flow from the planned 167 million cubic meters.m to 67 million cubic meters.m per day.

Izvestia noted that the situation would lead to a spike in spot market price for LNG upward of $2,000 per 1,000 cubic meters — perhaps, “even more — up to $ 3,500” — from the July 8 price level of $1800. 

Acting on an urgent request from Berlin and recommendation for Washington for waiver of sanctions, Canada since agreed, but, according to Izvestia, even after Siemens returns the turbines to Gazprom, “there will be a long period of testing the turbines to find out how correctly they were repaired. No one wants to install turbines that are at risk of failure after being repaired in an unfriendly country. So the real time for launching turbines and returning SP-1 (NS1) to its design capacity is two to three months.” 

That is, gas may flow through NS1 earliest only by September/October. Even then, Gazprom may not be able to utilise more than 60 percent of its capacity, since overhauls are overdue for two more turbines. 

Therefore, the experts told Izvestia that problems with gas shortages in the European Union would persist for the next few winters and authorities may have to “limit the supply of hot water, dim street lights, close swimming pools and turn off energy-consuming equipment” and, furthermore, instead of green energy, switch to coal.  

Kommersant newspaper reported today that while classic force majeure events could be natural disasters, fires, etc., in the case of Gazprom, “we are talking about a technical malfunction of equipment,” which may lead to litigation — and, “what will be decisive will be whether Gazprom’s actions to cut gas supplies were proportionate to the real scale of the technical problems.” 

Evidently, Gazprom is well-prepared. Germans suspect that Gazprom’s alibi of non-delivery of gas turbines from Canada, et al, is bogus. And Kommersant foresees a “lengthy trial.” Now, the catch is, in the long run, we are all dead. 

For Germany, however, this is a grave situation, as many industries may have to shut down, and there could be serious social unrest. Germans are convinced that Moscow is resorting to the “nuclear option.” The big question is whether Germany’s solidarity with Ukraine will survive a cold winter. 

Scholz’s confidence was predicated on the belief that Russia desperately needed the income from gas exports. But then, Moscow is today generating more income from less exports. Arguably, Russia’s best strategy today would be to reduce gas deliveries without ending them altogether, as even if Russia sells only a third of the gas it sold previously, its revenues do not get affected, since the shortage of LNG globally has exponentially spiked the market price. It’s a fair bet that’s what Gazprom would do. 

Putin once disclosed that under the long-term contracts, Russia sold gas to Germany at ridiculously low price — $280 per thousand cubic meters — and Germany was even reselling Russian gas to other customers for a tidy profit!    

Where it hurts Germany most is that this is not only about freezing homes, but the implosion of its entire economic model that is over-reliant on industrial exports, thanks to imports of cheap fossil fuels from Russia. German industry is responsible for 36 percent of its gas use. 

Germany behaved in an unprincipled way on all aspects of the Ukraine crisis. It pretended to support Zelensky but shied away from giving military support, triggering a nasty diplomatic spat between Kiev and Berlin. On the other hand, when Moscow introduced the new payment scheme for gas exports, making it mandatory to pay in rubles, Germany was the first country to fall in line, knowing well that the new regime undercut EU sanctions. 

Thus, Moscow insists that German gas buyers keep euro and dollar accounts at Gazprombank (which is not subject to EU sanctions) and convert the currencies into rubles, since the Russian central bank is subject to western sanctions and can no longer transact in foreign exchange markets! 

Russians have made monkeys out of Europeans. Clearly, it is impossible to sanction a country that is sitting on valuable commodities. Russia is the world’s second largest exporter of oil, the largest exporter of gas, and the largest exporter of wheat and fertilisers — plus the range of rare earth metals like palladium.

Both Boeing and Airbus have complained of risks in their supply chain. Airbus imports large quantities of titanium where about 65 percent of the supply of the metal comes from Russia. It has publicly requested the EU not to impose restrictions on the material, which is used to manufacture critical components of aircraft. 

Thus, it comes as no surprise that the EU is slowing down the pace of sanctions against Russia. The bureaucrats in Brussels have  exhausted the potential for increasing sanctions and the political elites admit that the sanctions were a mistake.

The consequences for European economies are already extremely serious. The rising energy prices are fuelling inflation in all EU countries. According to forecasts, in France inflation will reach 7% this year; in Germany – 8.5-9%; and in Italy – 10%. And this is just the beginning. Most countries will also face a serious drop in GDP next year — from 2 to 4 percent.

July 20, 2022 Posted by | Economics | , | Leave a comment

US and UK want ‘real war’ between Russia and EU – Lavrov

Samizdat | July 20, 2022

The US and UK want to escalate the Russia-Ukraine conflict into a larger confrontation between Moscow and members of the European Union, Russian Foreign Minister Sergey Lavrov said on Wednesday in an interview with RT and Sputnik.

“Our American counterparts, British counterparts… with active support from Germans, the Polish and the Baltic states, they really want to turn this war into a real war and start a confrontation between Russia and European states,” Lavrov told RT’s editor-in-chief, Margarita Simonyan.

The Western governments are “keeping Ukraine from any constructive steps” towards a peace settlement, Lavrov argued. “[Ukraine is] not just [being] pumped with weapons. They are forced to use these weapons in an increasingly riskier way.”

Russia launched its military operation in the neighboring country in late February. Many countries, including NATO members, imposed sweeping sanctions on Moscow and have been supplying Kiev with heavy weapons. The latest deliveries include US-made M142 HIMARS multiple rocket launchers and M777 howitzers.

Lavrov claimed that the US and Britain were acting to their own advantage in the conflict between Russia and the EU because the economies of the bloc’s members are bearing the brunt of the sanctions. He added that the US has been acting “irresponsibly” by stoking tensions with Russia.

They are playing a very dangerous game. I don’t think they understand it themselves. But then, in Europe, a lot of people are starting to understand that.

US President Joe Biden said last week that Russia must suffer “a strategic failure” in Ukraine and vowed more support for Kiev.

Russia sent troops into Ukraine on February 24, citing Kiev’s failure to implement the Minsk agreements, designed to give the regions of Donetsk and Lugansk special status within the Ukrainian state. The protocols, brokered by Germany and France, were first signed in 2014. Former Ukrainian President Pyotr Poroshenko has since admitted that Kiev’s main goal was to use the ceasefire to buy time and “create powerful armed forces.”

In February 2022, the Kremlin recognized the Donbass republics as independent states and demanded that Ukraine officially declare itself a neutral country that will never join any Western military bloc. Kiev insists the Russian offensive was completely unprovoked.

July 20, 2022 Posted by | Economics, Militarism | , , , , | Leave a comment

EU to soften Russia sanctions – Reuters

Samizdat | July 19, 2022

The European Union is planning to amend its sanctions on Moscow to facilitate trade in food and fertilizers, Reuters reported on Tuesday.

The changes will allow EU nations to unfreeze the funds of top Russian banks, which may be required to ease bottlenecks in the global trade of food and fertilizers, Reuters explained, citing a draft document it has seen.

The document said the funds could be released “after having determined that such funds or economic resources are necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilizers,” the agency said.

The revised sanctions will also help facilitate exports of food from Russian ports, which traders had stopped servicing despite food exports being explicitly exempted from the sanctions, Reuters added, quoting an official.

The amendments are expected to be adopted on Wednesday, and will reportedly concern Russian lenders such as VTB, Sovcombank, Otkritie FC Bank, Promsvyazbank, and others.

Russia is the world’s largest exporter of fertilizers and wheat. According to Reuters, the changes follow criticism from African leaders about the negative impact the sanctions have had on the trade of critical commodities. The ongoing conflict in Ukraine and broad restrictions on Russia have led to food-supply shortages, rising grain and fertilizer prices, and have triggered fears of a global food crisis.

July 19, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity, Russophobia | | Leave a comment

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