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Ukraine

An interesting post I came across the other day by some random Redditor on the gas pipeline issue:

The idea of exporting US shale to Europe was a novel, and foolish idea. Europe uses 18.6 trillion cubic feet of gas a year, 5.7 trillion cubic feet of which is supplied by Russia. As of 2014 US gas plays do not fully supply the US’s gas needs, and US shale gas is for the most part peaking in production (in half or more of their gas plays). This means the US, if they wanted to export gas to Europe for a profit would have to import gas to fulfill their own needs (either immediately, or later on as they cannot lower their stockpiles for technical and safety reasons). Now besides the issue of not having enough gas to supply to Europe, as the US is still importing gas, there is the issue of how expensive US LNG is. Shale gas is more expensive than natural gas; and LNG is also more expensive than natural gas. To put it in perspective Shale Gas is more expensive to acquire than NG; then in turning NG to LNG it loses 25% of its energy; so on top of that you must pay more to turn it into LNG. Russian NG can be sold for as low as $.50 per thousand cubic feet, while US LNG can be sold as for low as $9per thousand cubic feet. So the LNG terminals being built in Italy, and finished in Poland and Lithuania would not be used to replace the supply of Russian NG to Europe with US LNG because it is simply too expensive. Russia would simply lower the price of their gas somewhere between $.50 and $9, as the US must sell for $9+ to make a profit, and remain holding on to the lion’s share of the European gas market. And this is after European countries spend ridiculous amounts in making these LNG terminals. All the LNG terminals do is supply Europe with a “competitor”, not necessarily a good one, to Russian gas, which could be used as a bargaining chip in lowering Russian NG prices. The other viable source of Gas in Europe is Norway, who has around 1/20th the gas Russia has. Norway would run out of gas in around 10 years if they attempted to arrogate Russia’s gas market; and this is after they build the infrastructure, or outfit the existing infrastructure to supply their gas to other markets besides the UK, Germany, Italy, etc. They are already a competitor of Russia in some markets, but removing Russia from those markets is another issue they do not have the resources to do. The third option besides Norway is European Shale Gas, which though it is in abundance, is 3.5times as expensive to acquire as US Shale Gas; not a very viable option for many European countries especially considering the ecological damage. Ukraine is apparently opting for this route even though it would damage existing agriculture projects, and cost the country more than simply buying Russian NG, in the short-term and long-term. Other countries are also mulling over this idea, like Romania, Hungary, and Bulgaria; but any attempt on their parts to take this route would meet with political issues for the leadership as the people of those nations are for the most part against fracking.

The idea of exporting US shale was actually only a tenable idea in Eastern Asia, where the three largest LNG importers reside (China, SK, and Japan). To give you an example of the Japan-Korea-China gas market, they consume around 12.5trillion cubic feet a year, while the whole Europe consumes around 18.7trillion cubic feet per year. This market was traditionally cornered by Qatar, but as of the late 2000’s Japan, SK and China had been wanting to diversify their sources. What the US originally hoped of their shale gas boom, besides their own gas independence, was that they could sell this gas on the SK, Japanese, Chinese market at a marked up price for a net-profit. This was a reasonable supposition because all three countries only used LNG. Qatar their main suppler was contriving unreasonably pricey deals with China, who recently had made a greater transition into Natural Gas use from coal (LNG usage in China growing around 25%); because of Qatari gas hegemony SK, Japan and China wanted to diversify; the competition of course caused Qatar to offer lower prices for their product in the short-term, with a higher price in the long-term(to recover their losses). That being said, Russia had been planning as early as 2007 usurp the East Asian gas market through the Sakhalin–Khabarovsk–Vladivostok pipeline, replacing LNG as the main gas supply to South East Asia with NG. China of course giving their approbation, Japan pushing for an agreement, and SK expressing their hopes and giving their approbation on a gas-pipeline. It is unquestionable that in the next 5-10 years Russia will have complete control of the Japanese, Korean, and Chinese gas markets, as LNG is more expensive that NG; and shale gas is out of the question as it is more expensive than LNG.

Edit: Further information: a source I used partly on why US Shale is not a viable export to Europe.

Edit 2: The second gas conflict is with the Russian South Stream pipeline the Qatar-Turkey pipeline, and the Iran-Iraq-Syria pipeline; all pipelines catered for the South European market. In this case, we understand the conflict in Syria from an economic stand-point. What is the Qatar/Saudi/Turkey/US fixation with Assad about? Assad denied Qatar the right to pass their pipeline through Syria because he had in mind Russian gas interests in Europe. Qatar wants the the Muslim Brotherhood, to ascend to power in Syria; a coup in Syria would guarantee not only the pipeline for Turkey and Qatar, but the old Turkish market in Syria. To get a scope of the indirect conflict, you could have a look also at the Iran-Iraq-Syria pipeline, backed by Russia to expand the EU's gas diversity and increase Russian/Iranian strength in Persia, it would[both pipelines] annul Qatar's hope to be a gas giant in Europe. And the impetus of Qatar to need Assad toppled through the indirect conflict between Qatar and Russia, as Russia is pivoting economically into Qatars LNG Market in South Korea, Japan, and China. This is something Qatar is unable to compete with because of the cheapness of Russian NG in contrast to their own LNG. That's why they desperately need the pipeline. This would essentially starve Qatar, a country that has for the most part ignored industrializing, of their main source of capital. The Russian South Stream pipeline would bypass Ukraine, who steals gas and refuses to pay their bill, thus causing the European gas deprivation issues, and would pump gas from Greece to Austria unhindered. This would solidify Russia's position as Europe's Gas supplier; consequently, the companies making this pipe-line, and the people involved are sanctioned; the countries involved are for the most part being prevented from building this pipeline, or have already begun.
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http://www.reddit.com/r/worldnews/comments/2l5kex/russian_supply_underpins_global_oil_glut/clrvyjd
 
coley said:
Your right regarding a stable customer, but Putin a "stable supplier"?
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Really good article here from Alexander Mercouris...

Much of the anger that exists in the west towards Putin can be explained by European and western resentment at his refusal and that of the Russian government to the break up of Russia's energy monopolies and to the “opening up” (as it is euphemistically called) of the Russian energy industry to the advantage of western companies. Many of the allegations of corruption that are routinely made against Putin personally are intended to insinuate that he opposes the “opening up” of the Russian energy industry and the break up and privatisation of Gazprom and Rosneft because he has a personal stake in them (in the case of Gazprom, that he is actually its owner). If one examines in detail the specific allegations of corruption made against Putin (as I have done) this quickly becomes obvious.

His agenda of forcing Russia to privatise and break up its energy monopolies has never gone away. This is why Gazprom, despite the vital and reliable service it provides to its European customers, comes in for so much criticism. When Europeans complain about Europe's energy dependence upon Russia, they express their resentment at having to buy gas from a single Russian state owned company (Gazprom) as opposed to their own western companies operating in Russia.

This resentment exists simultaneously with a belief, very entrenched in Europe, that Russia is somehow dependent upon Europe as a customer for its gas and as a supplier of finance and technology.

This combination of resentment and overconfidence is what lies behind the repeated European attempts to legislate in Europe on energy questions in a way that is intended to force Russia to “open up” its the energy industry there.
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http://vineyardsaker.blogspot.co.uk/2014/12/the-importance-of-cancellation-of-south.html?m=1
 
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camouflage said:
Really good article here from Alexander Mercouris...



http://vineyardsaker.blogspot.co.uk/2014/12/the-importance-of-cancellation-of-south.html?m=1
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No big deal, North stream is running under capacity, didn't really need SS, and if it helps the EU reduce its dependence on fossil fuels than Putin has done us a favour in the long run. As for the Turkey deal? Best of luck to them, got a feeling fingers will be burned, China, again I think GAzprom will,have to give China a stake in the operation in return for the necessary funding, but time will tell.
 
coley said:
No big deal, North stream is running under capacity, didn't really need SS, and if it helps the EU reduce its dependence on fossil fuels than Putin has done us a favour in the long run. As for the Turkey deal? Best of luck to them, got a feeling fingers will be burned, China, again I think GAzprom will,have to give China a stake in the operation in return for the necessary funding, but time will tell.
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That's what you got from the article... :confused:

wow.
 
coley said:
In essence, yes, what did you get from it?
Putins so clever he's got the west by the short and curlies?
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More like dopes manage to make life yet more expensive for the average Europer by mishandling a vital energy-trade relationship thanks to the priorities of interfering neocon fuckwits and eurocentric arrogance. From the Russian side of things it's a bit of a no brainer really, hardly a genius play to see how is it and take steps accordingly.

Nose, face, spite. The Bulgarians must feel particularly stung. There was no need for them to not get that transit revenue.

Mind you anything that encourages investment in sustainable energy is good in the long run (similar to how sanctions are encouraging much needed internal investments in Russian agriculture and industry really) but it's a big gap to fill. The penniless shivering old folk of Europe wont be happy for instance, glorious green future decades or no. Still, you've a feeling fingers will be burned in this selling lots of gas though strategicly invested pipelines scam the Russians have going and the Turks so that's good.
 
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camouflage said:
More like dopes manage to make life yet more expensive for the average Europer by mishandling a vital energy-trade relationship thanks to the priorities of interfering neocon fuckwits and eurocentric arrogance. From the Russian side of things it's a bit of a no brainer really, hardly a genius play to see how is it and take steps accordingly.

Nose, face, spite. The Bulgarians must feel particularly stung. There was no need for them to not get that transit revenue.

Mind you anything that encourages investment in sustainable energy is good in the long run (similar to how sanctions are encouraging Russian internal investment really) but it's a big gap to fill. The penniless shivering old folk of Europe wont be happy for instance, glorious green future decades or no. Still, you've a feeling fingers will be burned in this selling lots of gas though strategicly invested pipelines scam the Russians have going and the Turks so that's good.
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Aye, the Hungarians, Bulgarians are going to suffer through loss of transit revenues and infrastructure investment, but I doubt the loss of the SS will lead to more shivering Europeans than is normal, unless Putin really hoys his toys out of the pram and starts to restrict agreed gas flows to NE?
The Turkish deal is only in its initial stages so a lot could happen there, a lot of what Putin promised was done to put the screws on Europe but it could backfire if Turkey realises how important its market has become to Russia and Turkey demands the same discount as say Germany?
 
coley said:
Aye, the Hungarians, Bulgarians are going to suffer through loss of transit revenues and infrastructure investment, but I doubt the loss of the SS will lead to more shivering Europeans than is normal, unless Putin really hoys his toys out of the pram and starts to restrict agreed gas flows to NE?
The Turkish deal is only in its initial stages so a lot could happen there, a lot of what Putin promised was done to put the screws on Europe but it could backfire if Turkey realises how important its market has become to Russia and Turkey demands the same discount as say Germany?
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You doubt that a supply of gas that is 20% of Europe's gas demand being shifted toward Turkey instead wont effect the price of gas overall in Europe, have to say at this point I am beginning to doubt the quality of your doubt. But yes, too bad about those two periphery countries, Hungaria and Bulgary or whatever they're called (or even Italy and Austria) they're interests aren't really central anyway as what's important here is that Britain, France and Germany can shrug and swagger on regardless. A lot of business down the tubes but Europe can well afford it due to our inherent superiority. or something.

Do you have a point though about if Turkey plays hard ball and tries to maximalize it's gains in this deal in which the fact it has been announced means that it is at a state where both parties are confident that there is no going back? Maybe what you describe is all part of the normal Prisoners-Dilemma that is a trade-agreement, something I'm pretty sure both sides will have borne in mind (I doubt that arranging international trade agreements is something the negotiators only do when not doing their real jobs; ice-cream van drivers or chiropodists perhaps). It should be noted that the win-lose model is not the only approach to trade, win-win has also been theorized as viable in some cases, perhaps that's the concept that Russia and Turkey are going for. Besides from what I've read Turkey will get the same price the Europeans pay anyway, 6% discount wasn't it? As it stands Turkey gains a great deal, economically and diplomatically in its dealings with Europe, I don't buy your scenario where they start to screw around with the terms of what they've gained.

It should be noted that building gas-pipelines, keeping them presurized with the product etc... these represent serious, long-term geo-political commitments. Part of why the China deals were so notable, it represents a very long-term alignment between Russia and China, and this represents a very long term serious alignment between Russia and Turkey. Gas deals aren't something either ends of the pipe can just dick around with as you have been implying Vladimir Putin is about. Transit parties can though, if recent history is anything to go by, and this deal may have basically secured Ukraines position as having it's foot on Europes gas-gullet... maybe not though, Russia now deducts Ukraines gas siphoning so that it only results a reduction of the same amount the next day but... still.
 
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the ukranian catholics are worrying that they're going to be banned in crimea- apparently all crimean churches are to re registert with the russian state by next year and rusia doesn't recognise the catholic church .
 
The Ukrainian labour movement is growing again:

The government and the employers now face growing labour unrest. The most common cause of labour disputes throughout 2014 was the widespread practice of employers to withhold wages from their workers for months on end. While wage arrears continue to grow, protests over this and other issues are now taking to the streets and starting to focus on a broader problem: the coalition government’s austerity programme.

Workers’ protests picked up noticeably in mid-December when the Verkhovna Rada (parliament) made public the 2015 state budget bill. It contains far reaching cuts in health, education and social security and threatens workers’ legal rights (see details below).
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The rise in protests comes against the backdrop of a deepening economic crisis and haemorrhaging public finances. The incomes of the tiny middle class, the workers, pensioners and students were decimated in 2014 by inflation (23.9%, the highest since 2000), wage cuts, wage arrears, and a currency devaluation of 50%. The real level of unemployment is far higher than the official figures contend (9%), and would be even higher were it not for the ongoing war, which consumes its own share of working age people. Then there are over 850,000 internally displaced people in the country, many destitute and dependent on relatives and neighbours for their survival.
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The government has a broader economic and fiscal strategy front than the measures revealed in the 2015 state budget. It plans to privatise more state enterprises and services on the railways, the coal mines and port facilities (though these plans have been challenged by the Rada in recent days). The government also wants to finally adopt a new Labour Code so as to consolidate the rights of employers to hire and fire and to limit the rights and presence of trade unions in the workplace.

Its long term, strategic objective is to drastically reduce the state’s responsibility for the maintenance and reproduction of labour – that is, through the public institutions of welfare and social security, health and education, as well as the remaining public utilities.
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Interesting article here suggesting the US wishes to extend the war in Ukraine and continue the sanctions against Russia.

Ukraine: War In Kiev And Beyond?
Today the Ukrainian government finally admitted, three days after it happened, that it has lost its foothold at the Donetsk airport. Its position at the airport covered the artillery position the Ukrainian army has to the north-west of Donetsk. Those artillery units wereshelling the federalist held city and the federalists attacked the airport to push them further away.

According to statistics provided to VICE News by the morgue, 157 casualties have been recorded in Donetsk since the beginning of January, with 119 of these occurring in the last two weeks.
It took quite a while but the federalist finally managed to capture the whole airport. Several counterattacks by the Ukrainian army were repelled and the counterattacking forces were destroyed.

Parts of the airport had been held for months by the "volunteer" right sector radicals that are now the "National Guard" of Ukraine. Their number three on the election list was captured by the federalists and their leader Dmytro Yarosh was wounded when he visited their airport position.

There is also some indecisive fighting further south near Mariupol and fighting in the north east near Lukhansk with the federalist making some slight advance. Still the general map has not changed much over the last months.

The Ukrainian army continues to mobilize and, with the help of some NATO members, is building up more forces. I doubt that whatever they come up with will have the motivation, training, equipment or leaders needed to be successful on the battlefield. Grandma's won't do. The soldiers on the other side have proven to be better in all aspects. Despite repeated claims form the Ukrainian government that 1,000, 2,000 or 9,000 Russian regular soldiers and hundreds of Russian tanks are fighting with the federalists none have been documented.

The Ukrainian army can not win a war against the federalist backed by Russia. The Ukrainian government is broke and will not get bailed out. Why is it still trying to wage war? My impression is that the U.S. is stillpushing the Ukrainian government to continue its useless efforts to make any Europe-led ceasefire agreement with Russia null an void and to thereby keep the sanctions against Russia in place. Cold War 2.0 with proxy fighting in Ukraine is the U.S. plan to keep Russia from challenging its me-and-only-me-first global position.

The whole conflict seem to be based on more long-term plans:

American soldiers will deploy to Ukraine this spring to begin training four companies of the Ukrainian National Guard, the head of US Army Europe Lt. Gen Ben Hodges said during his first visit to Kiev on Wednesday.
The number of troops heading to the Yavoriv Training Area near the city of L'viv — which is about 40 miles from the Polish border — is still being determined, however.

Hmm. The Ukrainian National Guard mainly consists of the fascist units responsible for the Maidan fighting that led to the coup against the Ukrainian government. Lviv is the west Ukrainian capitol of the Ukrainian fascists. Why would the U.S. military train those units near Lviv when the regular Ukrainian army is also obviously in urgent need of training? Why train them in spring when the conflict, with some good will from both sides, could be over in a month or two?

Experience tells that whenever the U.S. announces official training will start then and there that unofficial training is already ongoing. I have zero doubt that some U.S. special forces, probably under the guise of "contractors", are already training semi-irregular Ukrainian units. As conventional warfare is unlike to help the Ukrainian government's cause those units may prepare for other means.

There are indeed signs that partisan warfare against the federalists is already happening. Today some mortars fired at civilian areas in Donetsk hit a bus and killed at least 13 people. Unlike regular artillery mortars are rather short ranged weapons. Those who fired them likely did so from inside the generally federalist held, but only lightly controlled areas. Also Alec Luhn, reporting for the Guardian from Donetsk, tweeted today:

Partisan war? Dnipro-1 battalion says pro-Ukraine partisans in Luhansk region blew up a train carrying coal to Russiahttp://nr2.com.ua/News/...
If what I suspect is happening, that Ukrainian government semi-regular units are waging a guerrilla campaign in federalist held regions, then the obvious response by the federalists will be the dispatch of similar units to Ukrainian government held areas. That means war in Kiev and beyond.
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Friend of mine (taking the pictures, not in them):

"Pro-Russia rebels on the frontline, Eastern Ukraine hours after they took control of a Ukrainian military position."

16507_10152671125488785_2469163042943637804_n.jpg 10922696_10152671125758785_7149985603419743951_n.jpg 10929208_10152671125688785_535327042822051599_n.jpg 10931087_10152671125288785_8147913459246165612_n.jpg
 
I did a bit of googling early this morning out of curiosity and saw that Louis Proyect has been provoking their ire (I guess you found out about that too, seen as I never mentioned anti-Semitism). How did you find the blog?
 
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