Is there a new attempt to replicate the 1991 Soviet —coup d'état—?…Putin in crisis: Wagner chief Prigozhin declares war on Russian military leadership, says ‘we will destroy everything’

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Image editing by Germán & Co

Russia’s FSB security service opens criminal case against mercenary boss, as he vows to steamroll over anyone who gets in his way.

Is there a new attempt to replicate the 1991 Soviet —coup d'état—?

The attempt in 1991 was undoubtedly a significant event in modern history. It was an attempt by a group of hardline Communist Party members to overthrow Soviet leader Mikhail Gorbachev and seize control of the Soviet Union. The coup ultimately failed, thanks in part to the mass protests and resistance of the people of Moscow. The event marked the beginning of the end for the Soviet Union, which would officially dissolve just a few months later. Despite its failure, the 1991 Soviet coup attempt remains a fascinating and significant moment in world history.

Germán & Co

Politico EU BY GABRIEL GAVIN, TIM ROSS AND ZOYA SHEFTALOVICH, JUNE 23, 2023 

Vladimir Putin is facing a major military crisis after Russian mercenary leader Yevgeny Prigozhin declared war on Moscow’s own defense ministry, claiming Kremlin officials had killed thousands of his soldiers.

In a statement issued Friday night, the FSB security agency said it had “legally and reasonably begun criminal proceedings” against the Wagner Group warlord “for the organization of armed insurrection.”

Prigozhin, meanwhile, claimed he had pulled his troops back from Ukraine and into Russia’s Rostov, and vowed: “If anyone gets in our way, we will destroy everything!”

POLITICO could not verify the claim that Wagner troops had entered Rostov and Prigozhin did not present evidence of the massive troop movements he claimed were underway. But in the early hours of Saturday morning, videos began circulating on social media that reportedly showed unidentified armed men dressed in camouflage entering Rostov-on-Don, the administrative center of the Rostov region, and seizing government buildings.

According to Russian state media, Kremlin spokesperson Dmitry Peskov said that Putin is aware of the rapidly unfolding situation and “all necessary measures are being taken.”

“Prigozhin’s statements and actions are actually the calls for the beginning of an armed civil conflict on the territory of Russia and are a ‘stab in the back’ for Russian servicemen,” officials added.

The move comes after Prigozhin accused Defense Minister Sergei Shoigu of having hidden “colossal” failings on the battlefield from Putin, claiming that 2,000 Wagner men were killed as a result of strikes ordered by the Russian Ministry of Defense.

In a later statement on Telegram, Prigozhin called Shoigu and Valery Gerasimov, chief of the general staff of the Russian Armed Forces and the overall commander of the war on Ukraine, “criminals” who had “who destroyed around 100,000 Russian soldiers.”

In an audio recording posted just after 5 a.m. Rostov time, Prigozhin repeated his threat that his troops would destroy anything that stood in their way. “Once again I’m warning everyone: we will … destroy everything around us. You can’t destroy us. We have goals. We are all ready to die. All 25,000 of us.”

In response to Prigozhin’s allegations, Moscow issued a strong denial and a procession of generals have lined up to urge Wagner fighters to stand down.

In one video appeal, Lieutenant General Vladimir Alekseev, first deputy chief of the general staff of the armed forces, said Prigozhin does not have the authority to give orders. “This is a state coup,” he insisted, “come to your senses!”

Meanwhile, the Deputy Commander of Russian forces in Ukraine Sergei Surovikin — known as “General Armageddon” — urged Wagner to hold its positions and not to turn on its own allies. “Stop the columns, return them to the points of permanent deployment,” he pleaded.

Russia’s defense ministry issued a statement in the early hours of Saturday morning, warning that Ukrainian forces are “taking advantage of Prigozhin’s provocation” on the front lines around the key battleground town of Bakhmut, which Wagner troops previously held. Moscow’s top brass also said the 35th and 36th brigades of Ukraine’s Marine Corps “are on the starting lines for offensive operations.”

In a tweet in the early hours of Saturday, Ukraine’s defense ministry said: “We are watching.”

Rolling the dice

Earlier Friday, the Wagner Group founder questioned Moscow’s rationale for launching its invasion of Ukraine, saying that “the Armed Forces of Ukraine were not going to attack Russia with NATO,” and that “the war was needed for a bunch of scumbags to triumph and show how strong of an army they are.”

In a bombastic video statement he called the Russian military leadership “evil” and vowed to march for “justice,” threatening anyone who stood in his way.

In a second message released on his Telegram channel in the early hours of Saturday morning, Prigozhin said that “at the current time, we are entering Rostov,” in Russia, adding that conscripts had been sent to turn Wagner Group fighters back. However, he went on to claim, those guarding the frontier had greeted his troops with open arms.

“If anyone gets in our way, we will destroy everything!” Prigozhin vowed.

In a post on his Telegram account, Vasily Golubev, the governor of the Rostov region, said: “The current situation requires the maximum concentration of all forces to maintain order. Law enforcement agencies are doing everything necessary to ensure the safety of residents of the area. I ask everyone to stay calm and do not leave the house without the need.”

Russian state media said checkpoints have been erected in Rostov-on-Don, close to the souther border with Ukraine. At the same time, unnamed officials told news agency TASS that security has been tightened in Moscow with national guard units deployed to keep the peace. Unverified videos purport to show armored vehicles parked on the streets of the capital.

Russian state media also said Moscow’s Red Square will be closed to the public on Saturday, claiming the reason for the closure was because an event was to be held there.

Speaking to POLITICO, Colonel Philip Ingram, a former British military intelligence officer and ex-NATO planner, said that it was “too early to tell” if a coup was underway. “Clearly Moscow is worried and has activated a defense plan — Prigozhin is trying to push something focused on Shoigu, but it could be many things.”

According to Ian Garner, a Russia expert and author of a new book on the fallout of the war in Ukraine, the Wagner chief has overplayed his hand. “Prigozhin has rolled the dice, and now the state is going to do away with him for good,” he said.

“I suspect Prigozhin’s chances of launching a successful coup are slim. The state can offer everything he does — money, freedom, prestige — without him. Why would the Wagner fighters side with Prigozhin in a battle to the death?” Garner said.

Death knell for Wagner

The chaos amounts to a death knell for the Wagner Group, which has been active not just in Ukraine but also in Africa, according to one analyst.

“Whatever this is, it is definitely the dismantling of Wagner,” said Tatiana Stanovaya, a political analyst and founder of the R-Politik consultancy firm, on her Telegram channel.

“This is the end of Prigozhin and the end of Wagner. An important moment: many within the elite will hold it against Putin that things have come this far and that the president did not react sooner. That’s why this entire story is also a blow to Putin.”

In his increasingly unhinged voice memos on Telegram, Prigozhin also claimed a Russian military helicopter had opened fire on a convoy of his troops — and that Wagner had shot it down.

U.S. National Security Council spokesperson on Russia Adam Hodge said: “We are monitoring the situation and will be consulting with allies and partners on these developments.”

Meanwhile, the Kremlin published a pre-recorded video of President Putin in honor of Youth Day.

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

…”While there's significant disruption in Europe, renewable energy may accelerate in the US.

https://www.cnbc.com/video/2022/03/02/while-theres-significant-disruption-in-europe-renewable-energy-may-accelerate-in-the-us-aes-ceo.html

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…”We proudly announce that several AES companies have been certified as Great Places to Work, including AES El Salvador, AES Dominicana, AES México, AES Panamá, and AES Puerto Rico. AES Servicios América ranked 3rd in the Great Place to Work for Women Argentina 2023. We're committed to providing an inclusive and empowering work environment for all, and our employees are our most valuable asset. Let's collaborate for a brighter, cleaner, and more sustainable future.

Ricardo Manuel Falú

Senior Vice President, Chief Strategy and Commercial Officer and President, New Energy Technologies SBU

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Cooperate with objective and ethical thinking…

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Seaboard: pioneers in power generation in the country…

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

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News round-up, June 23, 2023

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”The Fish Dies By The Mouth…

During the previous week, the President of the United States, Joe Biden, delivered a sequence of impromptu statements that have significantly escalated the tension between the United States and China, as well as Russia, to a level that is approaching a critical point.

 “It was about 3 o'clock in the morning when I was abruptly awoken by a loud crashing sound emanating bedroom. The noise resembled that of a collapsing and the subsequent falling of all items stored in the garret onto the floor. I on my bed, I hastily vacated discerned that the sole object that had descended was the stack of containers that my spouse had previously arranged in the corner to organize closet. There was no evidence of any objects having fallen from an attic, as no such space existed within structure. Remained undamaged, and I emerged unscathed.

David Goleman

The current geopolitical situation is a far cry from David Goleman's reflection. The tension between the United States, China, and Russia has reached a point where it is almost boiling over.

The role of language in shaping a state and accomplishing political goals is of utmost importance. Political linguistics can be a potent instrument for persuasion in the realm of politics, particularly in the context of speeches and campaigns. In a world that is politically fragmented, it is imperative that language is inclusive and demonstrates respect for diverse perspectives. It is imperative to refrain from using language that is divisive and inflammatory as it has the potential to exacerbate polarization and conflict. It is imperative to pursue shared interests and endeavor to comprehend divergent perspectives by means of transparent and productive discourse.

On September 22, 2021, an article authored by Ted Anthony for the Associated Press reported that China's President Xi Jinping, following in the footsteps of U.S. President Joe Biden, utilized a composed pre-recorded video message during the 76th session of the United Nations General Assembly.

“China's President Xi Jinping remark, in which he underscored his country's unwavering dedication to multilateralism. President Jinping also urged nations to engage in dialogue and cooperation to resolve disputes. The statement pertains to the escalating tensions between China and the United States.  President Xi emphasized the importance of ensuring that the success of one country does not impede the progress of another, and that the global community has ample space for collaborative development and advancement of all nations.

On March 27, 2022, the British Broadcasting Corporation (BBC) published an article written by Anthony Zurcher, titled "Reflections on Why Biden's Off-Script Remarks About Putin Are So Dangerous.  The article delves into the potential consequences of President Biden's unscripted comments regarding Russian President Vladimir Putin over the past week, the President of the United States, Joe Biden, delivered a series of impromptu statements that have significantly escalated the tension between the United States and Russia, bringing it to a point of almost reaching its boiling point.

As contrast tone in a recent statement from the White House, Mr Henry Kissinger, the former Secretary of State, “cautioned that in situations where two powers of comparable strength are in opposition, it frequently leads to military confrontation. The necessity for well-defined principles in managing conflicts bears resemblance to the period preceding the onset of World War I. The outstanding question pertains to the viability of harmonious cohabitation between China and the United States and whether it can be attained without the potential risk of military conflict. Kissinger proposes the implementation of measures aimed at promoting competition in strategic domains, alongside the creation of a continuous high-level dialogue between Beijing and Washington.

In this blog post that President Jose Biden, —considering his age— aspires to be commemorated from a historical perspective. Nothing strange in the longing if it is based on convectional parameters. Older people tend to be more reckless... Why, the answer is very easy, and they have nothing to lose... “The proposal put forth by Mr Kissinger to improve communication between Beijing and Washington has not received widespread support. The current crisis has been intensified by recent events, including the deployment of armaments by NATO against Russia and China's assertion that Russia's intervention in Ukraine was a result of a flawed security framework in Europe. This has contributed to an escalation of tensions and a deterioration of diplomatic relations between the involved parties. The use of the —law of club— as a mechanism for preserving order in contemporary society is a subject of apprehension and is commonly viewed as antiquated.

“China has responded to recent comments made by US President Joe Biden, in which he referred to Chinese President Xi Jinping as a "dictator," by accusing the US of engaging in political provocation.

The possibility of a third nuclear age in Ukraine is concerning. According to Olivier Zajec's article in Le Monde Diplomatic, the situation is still being determined. It's important to remember that the first atomic age was based on deterrence, while the second was focused on eliminating nuclear weapons. However, we may face a much more dangerous and uncertain situation with the current state of affairs. Leaders must consider the consequences and take responsibility to prevent catastrophic outcomes.

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La menace d’une guerre nucléaire en Europe…

By using its nuclear weapons, Russia could save humanity from a global catastrophe,’ the influential political scientist Sergey Karaganov wrote in a 13 June article published by his think tank, the Council for Foreign and Defence Policy. In this terrifying piece, Karaganov, who is close to Putin, explained that to avoid a stalemate in the war and ‘break the West’s will to support the Kiev junta’, Moscow should resort to targeted nuclear strikes on European cities. ‘The most striking characteristic of the war in Ukraine is its nuclear backdrop,’ observed Olivier Zajec in April 2022. ‘Events are unfolding as if the world was hurriedly relearning the vocabulary and fundamentals of nuclear strategy, forgotten since the cold war.’

By Olivier Zajec, June Editions, 2023, Le Monde Diplomatique

Special focus on natural resources

Energy: conflicts, illusions, solutions

“Reflections from Le Monde Diplomatique …

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The Guardian by Fiona Harvey in Paris, 23 Jun 2023 

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

…”While there's significant disruption in Europe, renewable energy may accelerate in the US.

https://www.cnbc.com/video/2022/03/02/while-theres-significant-disruption-in-europe-renewable-energy-may-accelerate-in-the-us-aes-ceo.html

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…”We proudly announce that several AES companies have been certified as Great Places to Work, including AES El Salvador, AES Dominicana, AES México, AES Panamá, and AES Puerto Rico. AES Servicios América ranked 3rd in the Great Place to Work for Women Argentina 2023. We're committed to providing an inclusive and empowering work environment for all, and our employees are our most valuable asset. Let's collaborate for a brighter, cleaner, and more sustainable future.

Ricardo Manuel Falú

Senior Vice President, Chief Strategy and Commercial Officer and President, New Energy Technologies SBU

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La menace d’une guerre nucléaire en Europe…

By using its nuclear weapons, Russia could save humanity from a global catastrophe,’ the influential political scientist Sergey Karaganov wrote in a 13 June article published by his think tank, the Council for Foreign and Defence Policy. In this terrifying piece, Karaganov, who is close to Putin, explained that to avoid a stalemate in the war and ‘break the West’s will to support the Kiev junta’, Moscow should resort to targeted nuclear strikes on European cities. ‘The most striking characteristic of the war in Ukraine is its nuclear backdrop,’ observed Olivier Zajec in April 2022. ‘Events are unfolding as if the world was hurriedly relearning the vocabulary and fundamentals of nuclear strategy, forgotten since the cold war.’

By Olivier Zajec, June Editions, 2023, Le Monde Diplomatique

‘If we refuse to use them, why do we have them?’

The first nuclear age was marked by deterrence, the second by hopes that nuclear weapons might be eliminated. The war in Ukraine may herald a third nuclear age, much more dangerous and uncertain than what came before.

On 11 March, President Joe Biden sharply rejected politicians’ and experts’ calls for the United States to get more directly involved in the Ukraine war, ruling out direct conflict with Russia: ‘The idea that we’re going to send in offensive equipment and have planes and tanks and trains going in with American pilots and American crews — just understand ... that’s called World War III’ (1). He nonetheless accepted war was possible if the Russian offensive spread to the territory of a NATO member state.

Thus a distinction was established between NATO’s territory (inviolable) and the territory of Ukraine, which falls into a unique geostrategic category: according to the US, maintaining this distinction will require an accurate understanding of the balance of power between the belligerents on the ground, strict control of the degree of operational involvement of Ukraine’s declared supporters (especially concerning the nature of arms transfers to Ukraine) and, above all, continual reassessment of the limits of Russia’s determination — all with a view to leaving room for a negotiated way out acceptable to both Russia and Ukraine. Some trace the US’s caution back to a statement by Russia’s president Vladimir Putin on 24 February: ‘No matter who tries to stand in our way or ... create threats for our country and our people, they must know that Russia will respond immediately, and the consequences will be such as you have never seen in your entire history.’ These words, and his order that Russia’s nuclear forces be placed on high alert (‘a special regime of combat duty’), amounted to attempted coercion, and could suggest that Biden’s reaction constituted backing down. In January, neoconservative New York Times columnist Bret Stephens had called for the revival of the concept of the ‘free world’, and warned, ‘The bully’s success ultimately depends on his victim’s psychological surrender’ (2).

One might argue that it is not for the bully to say how much aggression is ‘acceptable’ from countries that, with help from allies, seek to defend their own borders and their right to exist. Stephens’s warning could equally apply to past international crises, such as Iraq’s invasion of Kuwait in 1990. But the territory being invaded today is Ukraine, which is far bigger. And the aggressor — Russia — has strategic arguments entirely different from those of Saddam Hussein.

‘Scenarios for use of nuclear arms’

To help understand the issues at stake in US-Russian relations today, and Joe Biden’s irritation with the extreme positions of some of his fellow Americans and some allies, it’s worth recalling Russian foreign minister Sergey Lavrov’s 2018 statement that Russia’s nuclear doctrine ‘has unambiguously limited the threshold of use of nuclear weapons to two ... hypothetical, entirely defensive scenarios. They are as follows: [first,] in response to an act of aggression against Russia and/or against our allies if nuclear or other types of mass destruction weapons are used and [second,] with use of conventional arms but only in case our state’s very existence would be in danger’ (3).

Nuclear doctrines are made to be interpreted, and Russia experts have long debated exactly how (4). In Foreign Affairs, Olga Oliker, director of International Crisis Group’s Europe and Central Asia programme, writes that ‘although it has not been used before, Putin’s phrase “a special regime of combat duty” does not appear to signal a serious change in Russia’s nuclear posture’ (5).

But, at least in terms of how the present crisis is perceived, we cannot ignore the implications of the second scenario in Lavrov’s 2018 statement — an existential threat to Russia. Do Russia’s leaders really see Ukraine’s strategic status, and therefore its potential NATO accession, as critical? If they do, that would explain why, contrary to all normal logic and political good sense, they have given NATO a reason to make a stand and irretrievably damaged Russia’s international standing by deciding it is rational to attack Ukraine unilaterally — and then opting for a blunt ‘nuclearisation’ of their crisis diplomacy, so as to keep other potential belligerents out of the conflict.

Is this just a cynical manoeuvre, banking on Western weakness and hesitation, to give Russia the greatest possible freedom to act? Former British prime minister Tony Blair asks on his thinktank’s website: ‘Is it sensible to tell [Putin] in advance that whatever he does militarily, we will rule out any form of military response? Maybe that is our position and maybe that is the right position, but continually signalling it, and removing doubt in his mind, is a strange tactic’ (6).

Who would take responsibility?

Yet although diplomatic manoeuvring is clearly going on, who — with responsibility for what comes next — would be able to say today precisely to what extent this Russian cynicism, which seeks to achieve its objectives through aggressive drawing of red lines, also stems from strategic conviction fuelled by frustrations that have come to a head? We should not underestimate the dangers of this mixture if the West were to test Russia’s siege mentality head on in Ukraine.

Others asked these questions, well before Biden. In the first days of the October 1962 Cuban missile crisis, when the US joint chiefs of staff were taking a hard line, President John F Kennedy expressed the key issues not in military terms, but in terms of perception. He told a meeting of ExComm (the Executive Committee of the National Security Council), ‘Let me just say a little, first, about what the problem is, from my point of view ... we ought to think of why the Russians did this.’

The declassified archives on this key moment in history reveal that Kennedy talked of a blockade, of the importance of giving Khrushchev a way out, and of avoiding escalation to nuclear weapons, all while preserving the US’s international credibility. General Curtis E LeMay, US Air Force chief of staff, replied, ‘This blockade and political action, I see leading into war ... This is almost as bad as the appeasement at Munich.’ The joint chiefs were unanimous in recommending immediate military action. Kennedy thanked them, dryly, and, in the days that followed, did the exact opposite.

‘And [the joint chiefs] were wrong,’ historian Martin J Sherwin concludes in a recent book on decision-making processes in nuclear crises. ‘Had the president not insisted on a blockade, had he accepted the chiefs’ recommendations (also favoured by the majority of his ExComm advisers), he unwittingly would have precipitated a nuclear war’ (7).

The central issue is indeed the significance of the nuclear signalling in which Russia has wrapped its premeditated conventional attack. Ukraine’s president Volodymyr Zelensky doubts Putin will really use nuclear weapons: ‘I think that the threat of nuclear war is a bluff. It’s one thing to be a murderer. It’s another to commit suicide. Every use of nuclear weapons means the end for all sides, not just for the person using them’ (8).

At the risk of appearing spineless, Biden seems to have reserved judgment. For the moment he is restraining his most aggressive allies, such as Poland, and focusing on the coercive force of the economic sanctions, rather than any initiative that might give Putin an excuse for escalation — starting with the use of tactical nuclear weapons, of which Russia is thought to have around 2,000.

‘Putin is bluffing on nuclear’

Is Biden wrong? On 14 March General Rick J Hillier, former chief of Canada’s defence staff, told CBS that NATO should impose a no-fly zone over Ukraine because Putin was bluffing. John Feehery, former communications director to House Majority Whip Tom DeLay, thought so too: ‘Biden’s weakness on Ukraine invited [the] Russian invasion ... When Putin hinted that he was willing to use nuclear weapons to achieve his goals, Biden said that we weren’t going to use ours, which seems to me to defeat the purpose of having those weapons in the first place. If we refuse to use them, why do we have them?’ (9). Stanford historian Niall Ferguson agrees: ‘Putin is bluffing on nuclear, we shouldn’t have backed down.’ And is dismayed that ‘media coverage has become so sentimental and ignorant of military realities’ (10).

But what are these military ‘realities’? What is the nature of the problem? It’s the possibility that Russia will resort to first use of nuclear weapons in an armed conflict that is already under way. Nina Tannenwald, whose book The Nuclear Taboo (Cambridge, 2007) has become a key text in international relations, believes the risk is too great, and supports the US’s wait-and-see strategy: ‘Despite scattered calls in the US for the creation of a “no-fly zone” over some or all of Ukraine, the Biden administration has widely resisted. In practice, this could mean shooting down Russian planes. It could lead to World War III’ (11).

The most striking characteristic of the war in Ukraine is its nuclear backdrop. Events are unfolding as if the world was hurriedly relearning the vocabulary and fundamentals of nuclear strategy, forgotten since the cold war. This is certainly true of Western media and governments, as they become conscious of the potentially destructive sequences of events that link the operational-tactical and politico-strategic dimensions of the present tragedy. The bellicose declarations of some experts in the early days of the war have given way to calmer analysis. In many ways, it’s high time; Kharkiv is not Kabul. Especially given the recent worrying developments in the nuclear debate.

Until relatively recently, the nuclear orthodoxy established after the cold war, as the two superpowers reduced their strategic arsenals, had placed some nuclear weapons in a kind of peripheral area of the doctrine: those known as ‘tactical’ because of their lesser power and range. From 1945 to the 1960s, they had been a key part of US war plans, especially for the European theatre. At the time, the aim was to counter the Soviet Union’s conventional superiority with overwhelming nuclear superiority, to deny the battlefield to the enemy. US secretary of state John Foster Dulles, author of the ‘massive retaliation’ doctrine, stated in 1955, ‘The United States in particular has sea and air forces now equipped with new and powerful weapons of precision which can utterly destroy military targets without endangering unrelated civilian centers’ (12). President Dwight D Eisenhower declared, ‘I see no reason why they shouldn’t be used just exactly as you would use a bullet or anything else.’

However, from the 1960s, the prospect of ‘mutual assured destruction’ reduced the likelihood that tactical nuclear weapons would be used, because of the risk of escalation. The concept of a ‘limited nuclear strike’ gradually came to be seen as dangerous sophistry. Regardless of experts who were certain that a nuclear war could be ‘won’ by ‘graduating’ one’s nuclear response, and controlling the ‘ladders of escalation’ (the best known being Herman Kahn of the Hudson Institute), even a nuclear weapon (arbitrarily) labelled as ‘tactical’ still had the potential to lead to total destruction. The works of Thomas Schelling, especially The Strategy of Conflict (1960) and Strategy and Arms Control (1961) contributed to this new awareness.

Options for US decision makers

The rejection of graduation became a distinguishing characteristic of France’s nuclear doctrine. While reserving the option of a ‘unique and non-renewable’ warning shot, President Emmanuel Macron said in February 2020 that France had always ‘refused to consider nuclear weapons as a weapon of battle.’ He also insisted that France would ‘never engage in a nuclear battle or any form of graduated response’ (13).

Prior to the 2010s, it seemed possible that other nuclear-weapon states could adopt such a doctrinal stance, coupled with the ‘minimum necessary’ nuclear arsenal (France had fewer than 300 warheads). And it was possible to believe that, with a few exceptions (such as Pakistan), tactical nuclear weapons had ‘faded into the background of military and political planning and rhetoric’ (14).

Despite scattered calls in the US for the creation of a ‘no-fly zone' over some or all of Ukraine, the Biden administration has widely resisted. In practice, this could mean shooting down Russian planes. It could lead to World War IIINina Tannenwald

But over the last decade, the trend has reversed. In the world of strategic studies, there has been a return to ‘theories of [nuclear] victory’. Their proponents draw on the work of past scholars such as Henry Kissinger, who wondered in his 1957 book Nuclear Weapons and Foreign Policy if extending the American deterrent to all of Europe at a time when the threat of total destruction hung over the US itself would actually work: ‘A reliance on all-out war as the chief deterrent saps our system of alliances in two ways: either our allies feel that any military effort on their part is unnecessary or they may be led to the conviction that peace is preferable to war even on terms almost akin to surrender ... As the implication of all-out war with modern weapons become better understood ... it is not reasonable to assume that the United Kingdom, and even more the United States, would be prepared to commit suicide in order to defend a particular area ... whatever its importance, to an enemy’ (15).

One of the recommended solutions was to bring tactical nuclear weapons back into the dialectic of deterrence extended to allied territories, so as to give US decision makers a range of options between Armageddon and defeat without a war. Global deterrence was ‘restored’ by creating additional rungs on the ladder of escalation, which were supposed to enable a sub-apocalyptic deterrence dialogue — before one major adversary or the other felt its key interests were threatened and resorted to extreme measures. Many theorists in the 1970s took this logic further, in particular Colin Gray in a 1979 article, now back in fashion, titled ‘Nuclear Strategy: the case for a theory of victory’ (16).

Theoreticians of nuclear victory today reject the ‘paralysis’ that comes with an excessively rigid vision of deterrence. Their strategic beliefs were semi-officialised in the Trump administration’s 2018 Nuclear Posture Review (17). What influence have these theories had on Russia? Has the Kremlin chosen to combine nuclear and conventional deterrents in an operational continuum? Whatever the case, authors who defend the idea of using tactical (‘low-yield’ or ‘ultra-low yield’) nuclear weapons emphasise the importance of countering adversaries who adopt hybrid strategies. Rogue states without a nuclear deterrent will increasingly be tempted to present a fait accompli, banking on nuclear-weapon states’ risk aversion, at least when the latter face a crisis that does not affect their own national territory.

Uncertainties of deterrence dialogue

This shows how Kissinger’s 1957 discussion of the intrinsic weaknesses of wider nuclear deterrence remains pertinent today. The benefits would be even greater for a state with a nuclear deterrent — a nuclear-weapon state behaving like a rogue state. This is exactly what Russia is doing in Ukraine. The West’s hesitation to adopt an over-vigorous response that could lead to nuclear escalation is amplified by its realisation of how history would view whichever party — aggressor or victim — became the first to break the nuclear taboo since Hiroshima and Nagasaki. International Crisis Group’s Olga Oliker admits that ‘such caution and concessions may not bring emotional satisfaction; there is certainly a visceral appeal to proposals that would have NATO forces directly help Ukraine. But these would dramatically heighten the risk that the war becomes a wider, potentially nuclear conflict. Western leaders should therefore reject them out of hand. Literally nothing else could be more dangerous.’

The ‘Third Nuclear Age’, heralded by various crises over the last decade, has dawned in Ukraine. In 2018 Admiral Pierre Vandier, now chief of staff of the French navy, offered a precise definition of this shift to the new strategic era, which has begun with Russia’s invasion: ‘A number of indicators suggest that we are entering a new era, a Third Nuclear Age, following the first, defined by mutual deterrence between the two superpowers, and the second, which raised hopes of a total and definitive elimination of nuclear weapons after the cold war’ (18).

This third age will bring new questions on the reliability — and relevance — of ‘logical rules ... painfully learned, as during the Cuban [missile] crisis’ (19). There will be questions about the rationality of new actors using their nuclear deterrents. The worth of the nuclear taboo, which some today treat as absolute, will be reappraised.

‘Unleashed power of the atom’

Questions like ‘If we refuse to use them, why do we have them?’ suggest Albert Einstein’s warning from 1946 may still be pertinent: ‘The unleashed power of the atom has changed everything save our modes of thinking.’ Yet Einstein was already wrong. Huge numbers of papers were hurriedly written to explain the balances and imbalances of the deterrence dialogue. The current usefulness of these historical, theoretical documents is highly variable, as their logic often reaches absurd conclusions. Yet they include some intelligent analyses that shed light on the Ukrainian nuclear crisis.

Columbia professor Robert Jervis (20), a pioneer of political psychology in international relations, sought to demonstrate that it was possible to overcome the security anxieties that cause each actor to see his own actions as defensive, and those of his competitor as ‘naturally’ offensive. Jervis maintained that breaking the insecurity cycle caused by this distortion meant developing exchanges of signals that would make it possible to differentiate between offensive and defensive weapons in the arsenals of one’s adversaries. And his adaptation of prospect theory to nuclear crises opens up possibilities of interpreting Russia’s behaviour differently, suggesting for example that the adoption of aggressive tactics is more often motivated by aversion to loss than by hopes of gain.

In a nuclear crisis, all strategies are sub-optimal. One, however, is worse than all the rest: claiming that the adversary’s leader is insane, while simultaneously treating the standoff as a game of chicken. This will lead either to mutual destruction or to defeat without a war. Over the past few weeks, some seem to have accepted that this worst of all possible choices is worthy of being called a strategy.

Olivier Zajec is a lecturer in political science at Jean Moulin Lyon III University’s law faculty.

Translated by Charles Goulden

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image by Le Monde Diplomatique / cc p_v a l d i v i e s o

Special focus on natural resources

Energy: conflicts, illusions, solutions

“Reflections from Le Monde Diplomatique …

Oil, gas, coal, uranium: these words make up the language of power, and the countries that forgot it were reminded by the war in Ukraine. Today we can add solar, wind and hydrogen to this vocabulary. How much are the business sector’s green schemes worth? Will a real energy transition also require a social transformation? There is no shortage of ideas around to reconcile concerns about the end of the world with concerns about the end of the month.

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Seaboard: pioneers in power generation in the country…

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

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Flags are seen at Siemens Energy's site on the day of German Chancellor OIaf Scholz's visit, during which he saw a gas turbine meant to be transported to the compressor station of the Nord Stream 1 gas pipeline in Russia, in Muelheim an der Ruhr, Germany, August 3, 2022. REUTERS/Wolfgang Rattay/FILE PHOTO

Siemens Energy's wind turbine troubles to last years, shares tumble

On Friday, Siemens Energy's share price took a sharp dip, marking the most significant drop since the company's spin-off from Siemens and separate listing in 2020. The sudden decline has caught the attention of many investors and analysts, who are closely monitoring the situation to see how it will impact the energy industry as a whole.

REUTERS By Sabine Wollrab, Maria Sheahan and Christoph Steitz, June 23, 2023

FRANKFURT/BERLIN, June 23 (Reuters) - Siemens Energy (ENR1n.DE) had one third wiped off its market value on Friday after warning that the impact of quality problems at its Siemens Gamesa wind turbine business could cost more than 1 billion euros ($1.09 billion) and take years to fix.

The group scrapped its 2023 profit outlook late on Thursday after a review of its wind turbine division exposed deeper-than-expected problems.

"This is a disappointing and severe setback," Siemens Gamesa CEO Jochen Eickholt told journalists on a call.

"I have said several times that there is actually nothing visible at Siemens Gamesa that I have not seen elsewhere. But I have to tell you that I would not say that again today."

Siemens Energy's share price plunge on Friday was the biggest since the group was spun off from Siemens (SIEGn.DE) and separately listed in 2020.

Shares in the group, which supplies equipment and services to the power sector, were down 31.5% at 0842 GMT.

Traders and analysts said the extent of the company's latest problems was still uncertain.

"Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us," Siemens Energy CEO Christian Bruch told journalists in a call.

Finance chief Maria Ferraro earlier told analysts that the majority of the hit would be over the next five years.

"Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude," analysts at JPMorgan said.

Issues at Siemens Gamesa have been a drag on its parent for a long time, prompting Siemens Energy to take full control of the business earlier this month after only partially owning it for several years.

Deka Investment, a top-20 shareholder, said Siemens Energy would have to work hard to regain market confidence.

"The renewed profit warning is a bitter setback that undoes the very good work of the management team in one fell swoop," Deka Investment's Ingo Speich told Reuters.

Deepening troubles at Siemens Energy could also weigh on efforts by Siemens AG (SIEGn.DE), which still owns nearly a third of Siemens Energy and remains its largest shareholder, to divest its stake at an attractive price and exit the company.

Siemens AG declined to comment on Friday.

PROBLEMS 'SWEPT UNDER CARPET'

The discovery of faulty components at Siemens Gamesa in January had already caused a charge of nearly half a billion euros.

Eickholt said that while rotor blades and bearings were partly to blame for the turbine problems, it could not be ruled out that design issues also played a role.

Bruch also blamed the corporate culture at Siemens Gamesa, the result of a merger of the wind turbine division of Siemens and Spain's Gamesa, saying: "Too much has been swept under the carpet".

He said that the setback from the quality problems was "more severe than I thought possible". At the same time, he said he did not believe that the full takeover of Siemens Gamesa had been a mistake.

Bruch said that the company would be able to provide a more accurate estimate of the costs from the latest problems by the time it publishes its third-quarter results on Aug. 7, after a full analysis of the situation.

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The US climate envoy John Kerry (left) and the French president, Emmanuel Macron, take part in a discussion during the summit in Paris on Thursday. Photograph: Ludovic Marin/EPA

Governments at Paris summit to finalise climate finance roadmap

Almost 40 leaders to present plans for overhaul of public financial institutions including World Bank

The Guardian by Fiona Harvey in Paris, 23 Jun 2023 

Questions over a tax on global shipping and other big sources of greenhouse gas emissions, and how countries should go about setting up a loss and damage fund continue to be the subject of fierce discussion, as governments meet in Paris to prepare an overhaul of global development and climate finance.

Nearly 40 heads of state and government and a similar number of ministers and high-level representatives will finalise a roadmap for the reform of the world’s public finance institutions, including the World Bank, and of overseas aid and climate finance.

Governments at the two-day finance summit in Paris will now be ordered to present concrete proposals on a loss and damage fund, to be directed at the rescue and reconstruction of countries stricken by climate disaster, before the UN Cop28 climate summit this November. This must include proposals for how to fill that fund, including potential new taxes on fossil fuels.

A draft of the roadmap seen by the Guardian, dated 20 June and discussed on Thursday at the first day of the Paris summit for a new global financing pact, sets out six pages of proposals for delivery at carefully choreographed points up to September 2024. It includes items for delivery at future meetings of the G20 summit, the World Bank and International Monetary Fund annual meetings in October, Cop28 and other international meetings, up to the Summit for the Future to be held next September.

Some of these aims have already been partly achieved at the current Paris summit, hosted by the French president, Emmanuel Macron. For instance, the World Bank has agreed to start suspending debt payments for countries hit by climate disaster. However, so far these “climate resilient debt clauses” will only apply to new loan agreements, rather than being applied to existing loans.

Taxes are likely to prove a difficult point. The EU wants more countries to use emissions trading to raise funds for climate action, but some developing countries are less keen on the prospect, which they regard as complex and more suitable for use in advanced economies.

John Kerry, the special envoy for climate to the US president, Joe Biden, said the White House did not have a position on potential taxes on shipping, aviation or fossil fuels. “I support some kind of revenue raising on a broad basis, but this is not administration policy,” he told journalists, in answer to a question from the Guardian. “I personally have supported pricing carbon, but I’m not advocating a tax or a fee or anything at this point. Certainly the administration is not, but we have to find a way to find more concessionary funding.”

He also indicated that China should be a potential donor to a loss and damage fund. “You’ve got to look at this [fund] and say what’s fair, what makes sense. And people are going to ask themselves all around the world: ‘Do you think that the second largest economy in the world ought to put something into it?’ I can’t imagine people who say no, that doesn’t make sense. So that’s the kind of thing we have to work at. It’s the kind of thing we’ve got to have a discussion about.”

Absent from the draft proposals seen by the Guardian is the commitment to triple the finance available from the World Bank, which has been supported by Mia Mottley, prime minister of Barbados.

However, if the changes to the World Bank and its fellow institutions are carried out, then a significant expansion of publicly funded development banks’ ability to lend could follow.

The planet's most important stories. Get all the week's environment news - the good, the bad and the essential

The proposals range from the highly detailed, including ways of sharing data on developing countries with private investors to help them draw up improved risk profiles on countries less likely to default on debt, to the broad brush, such as the launch of an independent body to facilitate links between countries and funds so that climate financing works a little more smoothly.

Experts are also asked to come up with a definition of “vulnerable countries”, to target those most at risk from the effects of the climate crisis and least able to build resilience against disaster.

Alex Scott of the E3G thinktank said: “If this [draft roadmap] is what comes out, we and campaigners would be very happy with this. It is a concrete roadmap that would be a clear and credible sign that this agenda for solving problems with the financial system is on its way. It sets actions governments have to take, and there are lots of ideas in here that are needed.”

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News round-up, June 21, 2023

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Quote of the day…

Europe cannot reach net zero without nuclear, Rolls-Royce chief says

…”Claims come against backdrop of division within EU over how to approach clean energy

The Telegraph by Howard Mustoe, 20 June 2023

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Most Read…

Biden equates China's Xi with 'dictators' at donors reception

Speaking at a campaign fundraiser in California, Biden said said Xi had been angered over an incident in February when a Chinese spy balloon was shot down by American military jets.

Le Monde with AFP,  Published today at 5:10 am (Paris)

U.S. Tracked Huawei, ZTE Workers at Suspected Chinese Spy Sites in Cuba

Intelligence bolstered suspicions telecom giants might be playing role in expansion of China’s capabilities on island

WSJ by Kate O’Keeffe, updated June 21, 2023 

How Europe's polluting industries turned free CO₂ quotas into a market worth billions

'The right to pollute' (1/2). Cement and steel manufacturers have used a European Union aid system to boost their profits.

Le Monde by Guillaume Delacroix, Emmanuelle Picaud and Luc Martinon, published today at 5:00 am (Paris) 

Europe cannot reach net zero without nuclear, Rolls-Royce chief says

Claims come against backdrop of division within EU over how to approach clean energy

The Telegraph by Howard Mustoe, 20 June 2023

Clean Geothermal, Green Earth: Sinopec to Host World Geothermal Congress 2023

In 22 cities, Sinopec Star has built 10 "smoke-free cities" and has installed more than 1 million square meters of geothermal heating. Over 85 million square meters of clean energy heating capacity have been built in Tianjin, Shaanxi, Hebei, Henan, Shandong provinces, and more, reducing carbon emissions by 4.2 million tons and benefiting millions of households. 

BEIJING, June 21, 2023 /PRNewswire/ 

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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President Biden equates China's Xi with 'dictators' / Image by Germán & Co

Biden equates China's Xi with 'dictators' at donors reception

Speaking at a campaign fundraiser in California, Biden said said Xi had been angered over an incident in February when a Chinese spy balloon was shot down by American military jets.

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Crossing the line can be dangerous…

In September 2002, I published on Energycentral.com an essay titled: *"Beware of Starving the Enemy of Oxygen." The paper delved into the dangerous tactic of depriving the adversary of oxygen. The praxis entails maintaining an open door to any potential solution that has been identified. The article "Biden Shows Growing Appetite to Cross Putin's Red Lines," published in the Wall Street Journal, offers valuable insights into President Biden's inclination to confront the limitations imposed by the Russian leader, Putin. Despite the suspicions of a potential global conflict, this action is a subject of significant apprehension. The former Secretary of State, Henry Kissinger, has warned that when two powers of similar strength oppose, it often results in armed conflict. The need for clearly defined principles for conflict management is reminiscent of the period preceding the onset of World War I. The unresolved inquiry concerns the feasibility of peaceful coexistence between China and the United States and whether it can be achieved without the potential risk of military conflict. Kissinger proposes the implementation of measures to foster competition in strategic domains, as well as the establishment of an ongoing high-level dialogue between Beijing and Washington. Unfortunately, there has been a significant increase in the frequency of reports concerning drone attacks targeting Russian infrastructure and military installations. The extent of these attacks has exceeded the confines of the front line. It can be categorized as shaping operations, which may serve as a preliminary step towards a counteroffensive by Kyiv. The recent fire incident at the Afipsky refinery has brought attention to the potential outcomes and advantages of pushing against the limits set by President Putin, as there is a possibility that a drone caused the incident.

*HTTPS://ENERGYCENTRAL.COM/C/OG/BEWARE-STARVING-ENEMY-OXYGEN

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US President Joe Biden (R) and China's President Xi Jinping (L) meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on November 14, 2022. SAUL LOEB / AFP

US President Joe Biden equated his Chinese counterpart Xi Jinping with "dictators" on Tuesday, June 20, as he addressed a Democratic Party donors reception in the presence of journalists.

Speaking at a campaign fundraiser in northern California, Biden said Xi had been angered over an incident in February when a Chinese balloon, which Washington says was used for spying, flew over the United States before being shot down by American military jets.

"The reason why Xi Jinping got very upset in terms of when I shot that balloon down with two box cars full of spy equipment is he didn't know it was there," Biden said. "I'm serious. That was the great embarrassment for dictators, when they didn't know what happened. "That wasn't supposed to be going where it was (...) and he didn't know about it," Biden said of Xi. "When it got shot down he was very embarrassed and he denied it was even there."

Biden, who at 80 is running for re-election, on Tuesday waived off concerns about the Asian giant, telling donors that "China has real economic difficulties." The remarks are likely to raise strong objections from Beijing, where US Secretary of State Antony Blinken visited just days earlier in an attempt to lower the temperature between the two global powers.

Still on the subject of China and Xi, Biden said "we're in a situation now where he wants to have a relationship again." Blinken "did a good job" on his Beijing trip, but "it's going to take time," Biden added.

The US president did bring up another prickly point regarding communist-ruled China: a recent summit in which leaders of Australia, India, Japan and the US, known as the Quad group, sought to boost peace and stability in the Indo-Pacific maritime region. The four countries are "working hand in glove in the South China Sea and the Indian Ocean," Biden said. "What he [Xi] was really upset about was that I insisted that we unite the (...) so-called Quad," Biden said.

Tuesday was not the first time Biden has made significant, even provocative, statements at fund-raising receptions, usually small-scale events at which cameras and recordings are forbidden but where journalists may listen to and transcribe the president's opening remarks. At one such event last October, for example, Biden spoke of the threat of nuclear "Armageddon" from Russia.

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Seaboard: pioneers in power generation in the country…

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

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Despite U.S. restrictions on Huawei, exporters have sold large amounts of technology to the Chinese company. PHOTO: ERIC GAILLARD/REUTERS/ Editing by Germán & Co 

U.S. Tracked Huawei, ZTE Workers at Suspected Chinese Spy Sites in Cuba

Intelligence bolstered suspicions telecom giants might be playing role in expansion of China’s capabilities on island

WSJ by Kate O’Keeffe, updated June 21, 2023 

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…”China's military involvement in the region is a cause for concern. They supply armaments, train personnel, send warships and military delegations, and covertly involve themselves in strategic infrastructure development, such as ports (Honduras). Recent information on a base in Cuba highlights the extent of their involvement.

Ursula von der Leyen's perilous journey to Latin America as President of the European Union by Germán & Co , 20 June, 2023

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WASHINGTON—During the Trump administration, U.S. officials reviewed intelligence that tracked workers from the Chinese telecom giants Huawei Technologies and ZTE entering and exiting facilities suspected of housing Chinese eavesdropping operations in Cuba, according to people familiar with the matter. 

The intelligence contributed to suspicions within the Trump administration that the telecommunications companies might be playing a role in expanding China’s ability to spy on the U.S. from the island, according to people familiar with the matter. It couldn’t be learned whether the Biden administration has pursued that line of inquiry.

While neither Huawei nor ZTE is known to make the sophisticated tools governments would use for eavesdropping, both specialize in the technology needed to facilitate such an operation, such as servers and network equipment that could be used to transmit data to China, the people familiar with the matter said.

In a statement, Huawei said it denied “such groundless accusations,” adding that it was “committed to full compliance with the applicable laws and regulations where we operate. ”ZTE didn’t respond to a request for comment.

China has maintained a spy base in Cuba since at least 2019, when Donald Trump was president, and the two countries already jointly run four eavesdropping stations on the island, according to U.S. officials. In addition, Beijing and Havana are negotiating to establish a new joint military training facility on Cuba’s northern coast, The Wall Street Journal has reported. 

Beijing’s efforts to expand its intelligence gathering from Cuba are ongoing, the White House has said. Following a 2019 upgrade to its intelligence-collection facilities on the island, Beijing “will keep trying to enhance its presence in Cuba, and we will keep working to disrupt it,” a White House official said Monday.

U.S. officials have long said China’s government might use the nation’s telecom companies to spy. The U.S. has been engaged in a yearslong campaign to persuade allies to shut Huawei in particular out of their next-generation telecommunications networks. Huawei has said it wouldn’t spy for China.

The Chinese Embassy didn’t respond to requests for comment. The Chinese Foreign Ministry has denied that China is spying in Cuba. The Cuban Embassy in Washington didn’t respond to a request for comment, but has called the Journal’s earlier report on a Chinese spy station on the island “totally mendacious and unfounded.” 

The U.S. Office of the Director of National Intelligence didn’t respond to requests for comment.

On Tuesday, Secretary of State Antony Blinken said he had told his counterparts in Beijing that the U.S. had “deep concerns” about Chinese spying and military activities in Cuba. 

“This is something we’re going to be monitoring very, very closely, and we’ve been very clear about that,” he told reporters. “And we will protect our homeland; we will protect our interests.”

The White House didn’t respond to a request for comment on Huawei’s and ZTE’s potential roles in China’s spying operation in Cuba. National Security Council spokesman John Kirby said Tuesday it was “no secret or surprise that the PRC has been trying to improve their influence, their reach, and their intelligence collection capabilities in the Western Hemisphere and that includes the relationship that they had had for quite some time with Cuba.”

“It’s not like we aren’t aware of it, it’s not like we haven’t been monitoring it,” he said. “And quite frankly, it’s not like we haven’t taken steps and we’ll continue to take steps to thwart it and to be able to protect our own secrets and our own national security, and that’s the case in this space as well.”

Rep. Mike Gallagher (R., Wis.), chairman of the bipartisan Select Committee on the Chinese Communist Party, on Tuesday sent a letter to Director of National Intelligence Avril Haines and Commerce Department Secretary Gina Raimondo seeking clarity on U.S. policies to control the export of U.S. technology to Chinese telecom companies.

In the letter, which was reviewed by the Journal, he said Huawei has assisted the Cuban government in modernizing its telecommunications and internet infrastructure since the 2000s and that the company, along with ZTE and Great Dragon Information Technology Group, maintains a regular business presence on the island. 

Great Dragon couldn’t be reached for comment.

Gallagher wrote that because of China’s official policy of using Chinese commercial entities to build up its military, any enhancement of China’s intelligence capabilities in Cuba “is likely” to be aided by Chinese telecommunications companies. 

He speculated that these companies’ existing business operations in Cuba could provide cover for Chinese intelligence officials to travel to and from the island without creating the same suspicion as official travel.

Gallagher posed a series of questions to the officials regarding the intelligence community’s awareness of the connections between Chinese signals-intelligence operations and commercial activities in Cuba and whether the information has been used to inform ongoing export-licensing decisions.

In 2019, the U.S. Commerce Department added Huawei to a so-called entity list requiring companies to get licenses to ship many goods to Huawei. In 2020, officials significantly expanded the licensing requirements. But the Commerce Department has issued many such licenses, enabling exporters to continue selling large amounts of tech to Huawei.

The chair of the House Foreign Affairs Committee, Rep. Michael McCaul (R., Texas), has been spearheading an effort to pressure the Commerce Department to change its policy. In 2021, he released data showing the department had granted 113 export licenses enabling companies to sell about $61 billion of goods to Huawei from Nov. 9, 2020, through April 20, 2021.

The Commerce Department had restricted exports to ZTE on and off since 2016 until Trump said in 2018 that he would allow the company to resume buying U.S. goods in exchange for a fine of $1.3 billion and a leadership shake-up. 

Alan Estevez, the Commerce Department’s undersecretary for industry and security, has told lawmakers that his team is reviewing its policies and doing everything possible to prevent sensitive U.S. technology from getting into the hands of adversaries.

A Commerce Department spokesman said Huawei still faces “significant export restrictions” and noted that the agency in April imposed the largest stand-alone civil penalty in its history against a U.S. company for selling hard-disk drives to Huawei without a license.

The spokesman added that ZTE remains subject to a settlement agreement with the Commerce Department that subjects it to additional oversight.

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Image by Germán & Co

How Europe's polluting industries turned free CO₂ quotas into a market worth billions

'The right to pollute' (1/2). Cement and steel manufacturers have used a European Union aid system to boost their profits.

Le Monde by Guillaume Delacroix, Emmanuelle Picaud and Luc Martinon, published today at 5:00 am (Paris) 

It's a 30-year story worth billions of euros. Thirty long years that will not go down in the European Union's (EU) history as the most successful in its fight against global warming. Three decades during which Europe's most polluting industries – steel, cement, oil, and aluminum, among others – received free CO2 emission quotas; a kind of "right to pollute" that is supposed to be reduced over time to encourage them to reduce their greenhouse gas emissions.

However, the scheme quickly became a financial tool enabling its beneficiaries to increase their profits through the resale of these quotas. Between 2013 and 2021 alone, the World Wide Fund for Nature estimates that the biggest emitting industries pocketed €98.5 billion, and only a quarter of this sum (€25 billion) was devoted to climate action.

The free quota system, which was launched on January 1, 2005, and is still in force, is set to disappear in 2034. On April 18, the European Parliament adopted a new climate plan to gradually replace it with a "carbon border adjustment mechanism" at the Union's borders, this time with the aim of making imports from the sectors with the highest CO2 emissions green. By opting for a simpler scheme, the EU did not officially make its mea culpa. But implicitly, that was the admission.

'Legal' detour

After eight months of investigation with financial support from the Investigative Journalism for Europe (IJ4EU) fund, Le Monde can reveal that this system, which was intended to be benevolent toward industrialists, has been diverted from its original purpose. Le Monde took a closer look at the steel and cement industries in France and Spain, which are two of the biggest beneficiaries.

An in-depth analysis of the financial transactions recorded by these players on the EU Emissions Trading Scheme (SEQE-EU-ETS) confirms what some people have long assumed: Companies have resold part of their free allowances for hundreds of millions of euros, sometimes billions. But unlike the huge VAT fraud that rocked the scheme in its early days, costing EU countries €6 billion and leading to court convictions many years later, this form of embezzlement is legal.

This story began at the Rio Summit in 1992. It was then that the idea of a carbon tax on industries in developed countries, in a bid to make the economy more environmentally friendly, was born. The initiative failed to win the unanimous support of member states, with France in particular blocking the decision. In 1997, the Kyoto Protocol put the issue back on the table. Al Gore, vice president of the United States, found the idea interesting but feared that this approach would not be approved by the US Congress. So, a system more compatible with the capitalist model had to be devised, with a view to a possible rapprochement of transatlantic markets in the future.

Europe then set up a carbon market, within which manufacturers could buy and sell quotas to regulate their CO2 emissions. "The EU created a market that had never existed before from scratch. It was a first in the history of mankind," said Thomas Pellerin-Carlin, director of the Europe program at the Institut de l'Economie pour le Climat. Today, this market is the world's leading financial center of its kind, although others are emerging, for example in China.

"From the outset, a number of key questions were raised. What model should be used to allocate the quotas that companies will trade with each other? Should they be given away for free or sold? Who will be covered by the measure? Will companies be able to save quotas from one year to the next?" said Julien Hanoteau, professor of economics and sustainable development at Kedge Business School in Aix-Marseille. A model was rapidly taking shape, even if it had not been met with unanimous approval. The European Union decided that every year it would allocate free CO2 quotas to manufacturers, based on the greenhouse gases they estimated they would emit over the following 12 months. One quota is equivalent to one tonne of CO2.

Sale of CO2 quotas with no strings attached

After one year, industrial facilities must surrender the number of allowances equivalent to their actual CO2 emissions. If they have emitted more CO2 than expected, they can buy additional allowances from companies that have not used all of theirs, according to the "polluter pays" principle devised by the market's creators. Conversely, if they have emitted less CO2 than expected, they can resell the surplus allowances they hold. Quotas have no sell-by date. And when they are in surplus, they become stocks in the form of simple financial assets that companies can sell at will, with no strings attached, or supplement by buying others on the market if the price of carbon has fallen.

In its 2022 annual report, ArcelorMittal stated that it held €154 million in "intangible financial assets" in respect of CO2 quotas on December 31, 2021, and €691 million on December 31, 2022, as noted by the London-based international journalist organization Finance Uncovered, which was contacted for the purposes of this investigation. This is the result, said the company, of "mature" purchases that have enabled it to strengthen the assets side of its balance sheet for considerable amounts.

The pilot phase of the European free quota scheme began 20 years ago in 2003. Distribution began timidly in 2005, reaching cruising speed in 2008. In retrospect, the initial logic was surprising. The more CO2 an industrial facility plans to emit, the more rights to pollute it receives. From 2008 until 2012, quotas were allocated on the basis of production years prior to the economic crisis. As a result, manufacturers received far more allowances than they actually needed. Some manufacturers themselves were quick to express reservations about the SEQE system's methods, such as the Spanish cement manufacturer Cementos Tudela Veguin and the French cement manufacturer Vicat.

"We told ourselves that we were on a slippery slope, that we were potentially going to have to give back the stocks granted in excess. We were aware that it couldn't last, that someone was going to ring the bell at some point," said Eric Bourdon, deputy managing director of the French cement manufacturer, which chose not to touch the surplus quotas that had been distributed to it, a strategy that ran counter to its competitors. "We sold a little at the beginning, but we stopped very quickly. We now have 4.5 million tonnes of CO2 quotas. We'll have to decide how best to use them," he said.

The allocation rules were changed in 2012 and again in 2018. But the excess has continued, as shown by the latest report on the state of the EU ETS, published in 2022 by the European Roundtable on Climate Change and Sustainable Transition. Cumulative surpluses of free allowances only stabilized in 2013, and even then at a very high level, for the equivalent of 1.3 billion tonnes of CO2 per year. And it was only in 2017 that CO2 emissions across all sectors began to fall significantly.

'A market created from scratch'

MEP Yannick Jadot (Europe Ecologie-Les Verts, France's Green party), who has been calling for the abolition of free quotas for years, is bitterly disappointed. "The public authorities have created a market from scratch, accepting from the outset all the intolerable excesses of the financialization of the economy," said the former Green candidate in the 2022 presidential election. "The State could very well have recuperated the money generated by the sale of quotas to environmentally compensate polluting activities, lower VAT or to reduce income tax. However, this is not the choice that was made, but instead to let companies operate freely," said Hanoteau.

Allowances are auctioned every morning at 11 am. In the early days, transactions represented a few million tonnes of CO2 per day. Since then, the market has become more sophisticated. It now covers almost 18,000 installations, and manufacturers, through banks, investment funds, brokers and a dozen trading companies, now trade 20 to 30 million tonnes of CO2 every day, anticipating future variations in the price of carbon.

"The market has become very attractive to investors. The price of carbon was initially €7 per tonne, in August 2008 it rose to €24, and now it's hovering around €100. Some predict that it will reach €150 in 2030, and in the meantime, more than 80% of transactions are speculative rather than related to environmental issues," said Ismael Romeo, director of SendeCO2, a trading company based in Barcelona.

Ivan Pavlovic, an energy transition specialist at Natixis (a subsidiary of the Banque Populaire Caisse d'Epargne group), confirmed this: "Even if they remain a minority for the moment, speculative investment funds specializing in carbon markets, which bet on these quotas, now exist." In 2021, almost 11 billion tonnes of CO2 were traded on the market, with a value of €683 billion, said British financial analysis company Refinitiv.

'It's a black box'

The system soon proved to be flawed. Transactions were difficult to trace, even for experts in the field. "The system is rather esoteric. At all levels, including the European Commission, nobody has a global, unanimous vision. It's a black box. Only the financial directors or industrial directors of the companies concerned know exactly what is being done with these quotas," said the head of a CO2 quota trading company.

Sometimes, transactions are not only justified by financial reasoning. "They can also be inspired by climatic or political events. Energy companies, which were excluded from the system of free quotas in 2013 because they used them to increase the price of electricity, are obliged to buy them at their own expense. They may resell them at the end of the winter if the temperature was higher than expected and their CO2 emissions were consequently lower. The same applies if there is inflation in energy prices, as in the summer of 2022, when gas prices soared," said Gregory Idil, a trader at Vertis Environmental Finance, a Brussels-based company.

In any case, companies are reluctant to disclose this information, which they consider sensitive for their industrial competitiveness. "Transactions are a reflection of economic activity. If a company says it has sold quotas, it is potentially acknowledging that its production has fallen," said Barcelona-based trader Romeo. Not everyone is equal when it comes to the right to pollute. British Steel learned this the hard way. After getting rid of its free quotas to make up for its financial losses, it had to buy back pollution rights to be able to continue its activities and be authorized to emit CO2. Except that, in the meantime, the price of carbon had soared. In the end, the company became over-indebted and, a victim of its speculation, it eventually went bankrupt in 2019.

Opacity

Quota sales are subject to "business secrecy." This was an argument put forward by several of the companies interviewed by Le Monde when commenting on the information in our database. In Spain, cement manufacturers referred us to their employers' federation, Oficemen, for consolidated sector data. But the federation refused to comment. "Oficemen doesn't have any data. These questions relate to specific company issues. Only they can answer you," said a spokesperson. None of them did.

Another difficulty is that the financial transactions carried out by each of the 18,000 industrial sites that benefited from free allowances are published retrospectively by the EU, with a three-year time lag. At present, while allocations of free allowances are known up to 2022, the latest available figures for resales are for 2019. And they don't tell the whole story.

As some plants have changed hands, it is impossible to reconstruct the history of transactions site by site. The European Union Transaction Logs (EUTL) – which Le Monde worked on with the help of the database on the EUETS.info website, make it possible to trace, by date and time, the exchanges of allowances carried out between operators. However, they do not reveal any changes in ownership of industrial facilities that may have occurred over the period studied (2005-2019), which contributes to the opacity of this market.

Swiss cement manufacturer Holcim refused to comment on the figures, on the grounds that its scope of consolidation has changed since its 2015 merger with Lafarge, which led to the sale of cement plants by the new entity. The same goes for Germany's Heidelberg Materials (ex-HeidelbergCement), which has radically altered its network of cement plants in Europe, following its 2016 takeover of Italy's Italcementi and its French branch Ciments Calcia.

Spain's Cementos Portland Valderrivas became the leader on the Iberian Peninsula when it took control of Uniland in 2006, but only regained full ownership of the company in 2013 after selling its subsidiary Cementos Lemona to Ireland's CRH. Its competitor, Cementos Molins, pointed out that in 2013 it acquired a plant from Mexico's Cemex in Barcelona, which it claims "distorts" the balance of its quota exchanges. Their Brazilian colleague Votorantim Cimentos is in the same situation, having only entered the Iberian market in 2012 by taking over the sites of Portugal's Cimpor.

'Surplus' companies

One thing is certain: A group like ArcelorMittal has always received more free quotas than it emitted in CO2. And that's still the case today. The steel giant resold large quantities in 2008, and again in 2011 and 2012. However, the level of its emissions remained such that it also had to reach into its pocket in some years, in order to acquire some on the carbon market. In total, according to EUTL records, between 2005 and 2019, the steel giant sold €3.7 billion worth of allowances and bought €1.8 billion, generating a margin of €1.9 billion. When contacted by Le Monde, ArcelorMittal France was unable to confirm these figures.

Again according to EUTL records, Holcim had a surplus of pollution rights until 2017. It sold many allowances from 2008 to 2012 before merging with Lafarge, which also sold a lot of allowances. In total, the two companies now merged would have sold €1.3 billion and bought €339 million to date, for a positive balance of €986 million. The amounts are buried in the Group's accounts and are impossible to trace in annual reports. "Transaction data is business data, which we do not communicate," said Lafarge France.

Their competitor, Heidelberg Materials, had a surplus until 2016. This major player in European cement, present in France through its Ciments Calcia brand and in Spain with the Sociedad Financiera y Minera cement plants, is also said to have disposed of a significant quantity of allowances after the 2008 financial crisis, for a total of €732 million, but ceased this practice in 2016 and also purchased €364 million, making a profit of €368 million. According to a spokesperson, the German firm "unfortunately does not have this information."

In Spain, Cementos Portland Valderrivas, a subsidiary of public works giant FCC, is one of the biggest CO2 emitters. From 2008 to 2012, it received an inordinate volume of rights to pollute each year, completely out of proportion to its actual emissions. The surplus did not end until 2021. It is said to have sold some of these rights, pocketing €288 million, and buying €11 million, for a profit of €277 million. The company refused to comment on these figures. "Our policy is not to participate in journalistic investigations," Le Monde was told.

'Cut the losses'

Nevertheless, some of these transactions can be found in the annual accounts filed with the Commercial Registry by its subsidiary Cementos Alfa. Until 2021, a line explicitly entitled "sale of greenhouse gas emission rights" appeared in the company's balance sheets, confirming that quotas are indeed considered an asset and that they are managed by the company's finance department, and not by the environment or sustainable development departments.

"Some companies sold a lot [of quotas] in 2012, 2014 or even 2018, years that correspond either to the introduction of stricter free allowance allocation criteria, or to periods when carbon prices were high," said Florian Rothenberg, carbon market analyst at ICIS consulting.

On the ground, testimonials confirm that the financial storm of 2008 precipitated quota sales. "At the time, our managers' only concern was to cut the losses. It was in this climate of crisis that some cement plants began to sell their pollution rights, which they no longer needed, due to the drastic fall in activity. Since then, European and Spanish regulations have evolved considerably to better encourage the gradual reduction of the industry's carbon emissions and discourage speculation on the CO2 market," said Daniel Lopez Caro, representative of the UGT union's industrial federation within the cement sector.

Absolute secrecy

As several French and Spanish trade unionists have said, employee representatives attending meetings with management are bound to absolute secrecy on the subject. They are made to sign confidentiality agreements, which no one dares to break for fear of being taken to court, as has already happened at ArcelorMittal. A source contacted by Le Monde, who had access to the accounts of one of the companies concerned, confirmed that this practice does indeed take place: "As recently as 2022, our managers resold quotas for tens of millions of euros. These sums are used to restore the company's net income when the year has been average."

"I know what my company pocketed by auctioning off quotas that it obtained free of charge, but I swore an oath to the works council not to divulge the figures. All I can say is that the money was used to balance the books to the tune of €6 to €10 million a year when times were tough," said a Spanish trade unionist, under the seal of secrecy. Another anonymous trade union source confirmed this practice at the steelworks: "At the time of the crisis at Florange, ArcelorMittal was receiving free quotas even though the site was shut down. It was a deception because this money was not used to reduce CO2 emissions or to invest in clean energy. It was an unhoped-for windfall of money that they obviously pounced on," she said.

"We were given figures orally and, most of the time, we said nothing, because management explained to us that by selling the quotas, they had saved our jobs. So we turned a blind eye. We preferred not to know," said a former Holcim Spain employee. "Everyone knows where the money ended up, but unfortunately it's impossible to demonstrate a direct link between the sale of quotas and the dividends distributed to these companies' shareholders," said Judith Kirton-Darling, general secretary of IndustriALL Europe, the European industrial workers' union.

According to Sam Van den plas, Campaign Director at Carbon Market Watch, an NGO that has been following the free quota affair for several years, the mystery is now over: "We finally know what companies have done with their rights to pollute. Up until now, we only had hypotheses," he said, referring to a study by CE Delft, which estimated in 2016 that free quota sales amounted to several billion euros.

Jadot believes the system of free quotas is "beyond moral judgment": "The whole thing is scandalous, as is the possibility of buying rights to pollute in African countries. It's a way of shirking responsibility and falsely practicing decarbonization," he said. "Companies have hijacked the concept of free quotas to make a profit, which raises an ethical question. At a time when we're trying to save the planet, some people are lining their own pockets. It's shameless," said Ana Isabel Martinez Garcia, a steel sector specialist with the Syndex accounting and consulting firm. It's shameless but legal.

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Tufan Erginbilgic believes SMRs will play a pivotal role in helping to decarbonise electricity grids across the continent CREDIT: F. Carter Smith/Bloomberg/ Editing by Germán & Co 

Europe cannot reach net zero without nuclear, Rolls-Royce chief says

Claims come against backdrop of division within EU over how to approach clean energy

The Telegraph by Howard Mustoe, 20 June 2023

Europe cannot reach its target of net zero carbon emissions by 2050 unless it embraces nuclear power, the chief executive of Rolls-Royce has said.

Tufan Erginbilgic claimed that new small reactors of the sort being developed by his company would play a pivotal role in helping to decarbonise electricity grids across the continent.

Speaking at the Paris Air Show, he said: “I’m not sure, without nuclear, Europe can go to a net zero world. SMR [small modular reactors], frankly, relative to the traditional nuclear power plant, has lots of advantages, because it is much smaller. And therefore the risk profile is much smaller.”

Mr Erginbilgic’s comments come against a backdrop of division within the European Union over how to approach nuclear power.

Some members, such as Germany and Denmark, have a more circumspect approach to nuclear and want more wind and solar sources. Others, including France, are keen to push ahead with the development of new nuclear power.

Rolls-Royce is developing so-called SMRs that are far smaller and cheaper than existing large-scale generators. It hopes the plants can offer zero-carbon power to decarbonise homes, industry and also make green hydrogen for the airline industry.

The company is pushing the UK to place cornerstone orders for the products. However, the Government is running a competitive process and looking at various rival designs. An update is expected as early as October.

Mr Erginbilgic said: “Our technology is very robust. I’m confident that our technology will actually prevail in that process.”

However, he renewed his plea for the government to make “firm commitments” on orders for the reactors. Rolls-Royce has argued that orders from the state will help attract private sector buyers and investment to get the technology off the ground.

In February, Mr Erginbilgic warned that Britain risks squandering its role as a leader in mini-nuclear reactor technology if ministers failed to support its SMRs.

Rolls-Royce is competing with dozens of other companies. It has ambitions to eventually build about 30 SMRs, each with a capacity of about 470 megawatts, which will supply millions of homes and businesses with clean electricity.

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USA, Nevada: McGinness Hills Geothermal Power Plant Capacity Increased to 138 MW/ Image by Germán & Co

Clean Geothermal, Green Earth: Sinopec to Host World Geothermal Congress 2023

In 22 cities, Sinopec Star has built 10 "smoke-free cities" and has installed more than 1 million square meters of geothermal heating. Over 85 million square meters of clean energy heating capacity have been built in Tianjin, Shaanxi, Hebei, Henan, Shandong provinces, and more, reducing carbon emissions by 4.2 million tons and benefiting millions of households. 

BEIJING, June 21, 2023 /PRNewswire/ 

-- China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") will host the 7th World Geothermal Congress (WGC 2023) from September 15 to 17 in Beijing, China, which will be China's first time hosting the international convention known as the "Olympics of Geothermal." The theme for the WGC 2023 is "Clean Geothermal, Green Earth." 

Organized by the International Geothermal Association (IGA), a leading global platform on geothermal energy committed to promoting and supporting global geothermal development, the triennial conference is the premier global event convening the leaders of industry, academia, the finance sector, governments, NGOs, and communities to collaborate and provide thoughtful solutions for a sustainable society. 

Sinopec Star Co., Ltd., a subsidiary of Sinopec that has been actively exploring the development and utilization of geothermal energy since 2006, is making significant contributions to Sinopec's roadmap of clean energy development and building up a new industry layout. 

The company is committed to promoting scaled development of its "Geothermal+" business model to further expand carbon asset volume and improve service quality while integrating into major regional and national economic and ecological development strategies to push forward clean energy heating. 

As of now, Sinopec Star has built 10 "smoke-free cities" in China and boasts more than 1 million square meters of geothermal heating capacity in 22 cities. It has built nearly 85 million square meters of clean energy heating capacity, serving more than 60 cities and counties in Tianjin, Shaanxi, Hebei, Henan, Shandong provinces, and more, thereby reducing carbon emissions by 4.2 million tons per year while benefiting millions of households. 

Globally, Sinopec Star is actively pursuing cooperation opportunities with international institutions, organizations, and partners. It has established alliances which Icelandic companies, landed a series of pilot geothermal projects in China, led the establishment of a Sino-Icelandic Geothermal R&D Center with Iceland's Arctic Green Energy, and hosted international geothermal conferences and workshops to continually strengthen global cooperation while expanding the brand's influence. 

In addition, Sinopec Star has drafted 52 industry standards that have been approved and cover a wide scope, including geothermal resource exploration and evaluation, geothermal heating, and more. It actively participates in constructing the geothermal international standard system, winning the market's trust with leading standards. 

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News round-up, June 20, 2023

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Today…

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Ursula von der Leyen's perilous journey to Latin America as President of the European Union

”Europe is coming back, but not at full speed…

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1. Despite Latin America has been in the U.S. backyard, China has wise and strategically colonized the region in the past two decades.

2. Pandemic worsened poverty in Latin America. The EU's health reliance shifted towards Russia and China due to delayed release of Western vaccines, leading to criticism.

3. On the hunt for Latin American lithium. LA's abundant lithium resources and the potential for green hydrogen development make it appealing to superpowers. The European Union is countering the growing influence of Asian giants in Latin America through the Global Gateway program.

4. The region's president warned European Union President Ursula Von Der Leyen that nothing could be given away for free.

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“Latin America has always been in the United States' backyard…

Latin America, and the Caribbean have strong connections with the United States through geography, commerce, and family ties, but the region is facing unprecedented challenges that could impact our security and prosperity. The pandemic worsened existing issues, increasing inequality and insecurity, and leading to more migration to the U.S.

As a result of dissatisfaction with previous government performance, the region has shifted to the left, with populist authoritarian governments consolidating power in Venezuela, Nicaragua, and Cuba. Argentina, Mexico, Bolivia, Peru, Honduras, and Chile have all faced crises and anti-democratic manifestations.

Governments may, however, reduce their cooperation with the US on critical issues, allowing rivals such as China, Russia, and Iran to expand their regional presence. The Biden administration has regional diplomacy expertise and policy documents. The bill emphasizes the importance of a public debate to address issues such as resource allocation, interagency efforts, and the root causes of regional issues.

“China, on the other hand...

Beijing's strategy for boosting China's influence in Latin America and the Caribbean. Chinese state-owned enterprises, with government backing, have invested in Latin America since 2005, driving China's expansion in the region, particularly in the last decade. The pandemic has temporarily slowed progress. This includes $314 billion in PRC trade and $136 billion in loans from PRC policy banks. China invests in industries like oil, mining (including strategic minerals like lithium), agro-logistics, forestry, and fishing to ensure access to commodities and food for its people. Chinese companies prioritize secure connectivity to strategic markets and technologies in various sectors, including electricity, biotech, transportation, logistics, telecom, smart cities, A.I., and e-commerce. Bilateral engagement, including free trade agreements and strategic partnerships, has facilitated progress in critical areas.

They have collaborated with the Inter-American Development Bank and United Nations Economic Commission and participated in forums such as BRICS and Caribbean Development Bank to achieve their goals. They collaborated with CELAC to coordinate regional engagement plans, excluding the U.S. and Canada. The PRC employs "people-to-people" diplomacy in Latin America through Confucius Institutes, scholarships, and sponsored trips for academics, analysts, journalists, and politicians via the Chinese Communist Party's International Liaison Department. China supports Latin American media.

PCR's military involvement in the region is a cause for concern. They supply armaments, train personnel, send warships and military delegations, and covertly involve themselves in strategic infrastructure development, such as ports (Honduras). Recent information on a base in Cuba highlights the extent of their involvement.

The US authorities' inadequate response to a recent development has sparked intense debate in political studies circles, causing confusion and concern. China has reportedly reached out to Havana to establish another espionage facility in Cuba, according to —The Wall Street Journal and POLITICO—. The White House and the Pentagon both issued statements on the same day refuting the accuracy of the reporting. They did not explain their objections. A Biden administration official accuses China of espionage against the US. The speaker claimed the current administration inherited the issue. The administration has taken action to address the matter, said the official. To hold China accountable, measures like cybersecurity and diplomacy are being improved. The US will seek other ways to hold China accountable for its actions. The administration is determined to protect the US from China's malicious activities.

The pandemic has made the region more vulnerable to China's influence as it supplies vaccines and medical aid and purchases goods. And China's institutions fund significant projects like Peru's Chancay port, Mexico's Maya train, and Argentina's $8 billion Hualong-1 reactor.

Who is Ursula von der Leyen?

The current leader of the European Union, has been entrusted with the responsibility of addressing the multifaceted challenges arising from the COVID-19 pandemic and an invasion that has further aggravated the pre-existing global economic crisis and the aftermath of the pandemic.

Ursula von der Leyen is a German politician born in Brussels, Belgium, in 1958. Whit studied in economics at three institutions and earned a degree from Hanover Medical School (MHH) in 1991.

Ursula von der Leyen started politics in 1996 and became a minister in Angela Merkel's first administration. She oversees family affairs, senior citizens, women, and youth. Von der Leyen was the first female German Minister of Defense from 2013 to 2019. In July 2019. In 2015, Europe saw a significant influx of refugees, leading to the implementation of anti-immigration policies backed by Angela Merkel and Francois Zarcozy, who both have Jewish ancestry. These measures faced strong condemnation for their harsh treatment of minority groups, including the Roma community.

…”The crisis significantly impacted the region's political, social, and economic domains. Angela Merkel's downfall is often attributed to her policy during the 2015 migrant crisis. Germany's net migration figure doubled to 1.1 million that year. Despite the Dublin Agreement, Merkel made Germany the largest destination for refugees in Europe as the continent struggled to cope. The refugee crisis remains a defining moment in Merkel's leadership, signalling her loss of power.

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Whem in October 2018, Chancellor Angela Merkel announced she would not seek another term as CDU leader. Ursula von der Leyen was nominated for European Commission President. Her confirmation was narrowly secured with 383 out of 747 votes cast. The former German Defense Minister resigned and was succeeded by Kramp-Karrenbauer. The cabinet formation was delayed by one month due to disagreements regarding its composition.

Von der Leyen, since taking office, COVID-19 has caused global fatalities and disruptions. EU member states have reintroduced border controls. 75% of EU citizens will receive at least one COVID-19 vaccine dose by the end of 2021. Russia has increased its military presence in several regions, including Western Russia, Crimea, Belarus, and Transdniestria in Moldova. EU leaders sought to prevent a the Russian invasion of Ukraine reduced its dependence on Russian gas exports. In February 2022, Russia's invasion of Ukraine marked the most significant European conflict since World War II. Von der Leyen has pledged €500 million in direct military aid to Ukraine, marking the EU's first weapons financing for a country under attack.

On the Global Gateway Program for Latin America and von der Leyen trip...

The EU's Global Gateway program promotes sustainable development and cooperation with partners. The focus is on improving intelligent, clean, and secure connections in digital, energy, and transportation sectors, as well as global health, education, and research systems. The EU and its member states will invest €300 billion in sustainable projects from 2021 to 2027 for lasting benefits to communities and partner countries. The Global Gateway aligns with UN’s Agenda 2030, Sustainable Development Goals, and Paris Agreement.

The EU is countering China's influence in Latin America through diplomacy. Ursula von der Leyen's recent visit to South America marks the first in a decade. The promise is to invest €10 billion and sign supply agreements for regional strategic materials, but Brazil and Argentina oppose unravelling Mercosur due to their concerns. Europe aims to regain lost ground in China, the top trading partner in South America and second in Latin America and the Caribbean.

Von der Leyen pledges €10 billion in investments and strategic material agreements but faces opposition from Brazil and Argentina in dismantling Mercosur. European Commission President Ursula von der Leyen informed Brazilian President Luiz Inácio Lula da Silva of the EU's plan to strengthen its partnership with Brazil during her recent visit. Argentina, Chile, and Mexico followed Brazil. The EU is trying to cancel the Mercosur agreement, which includes Brazil, Argentina, Uruguay, and Paraguay and is the fifth largest non-EU economic area.

Latin America is a natural choice for rare earth, but the region is cautious about European interest and the Mercosur agreement. Lula and Fernández see the pact as mutually beneficial, but some believe it favor’s the community club.

”Europe is coming back, but not at full speed…

According to Beata Wojna, a professor of Instituto de Relaciones Internacionales del Tecnologico de Monterrey in Mexico, Europe is coming back, but not at full speed. The EU has acknowledged Latin America's political and economic distancing. The pandemic widened the gap as the EU faced backlash for not releasing Western vaccines while Russia and China did.

Von der Leyen is committed to addressing the Kremlin's actions in Ukraine. It surpasses European companies' combined investments in China, India, Japan, and Russia. Chinese influence is rapidly expanding. Bilateral trade in goods between Latin America and Asia has grown 26 times, from €11B to €287B in 2020. It is expected to surpass $700 billion by 000. Beijing has signed free trade agreements with Peru, Costa Rica, and Chile and completed technical negotiations with Ecuador. Negotiations with Uruguay continue. Javi López, MEP and co-president of EuroLat, recommends that the EU prioritize China's unique value to the region instead of obsessing over its role.

The Union wants an alliance, not dependence. The Members of European Parliament (MEP) attributes our economy's compatibility with Latin America to its non-destructive nature. Chinese enterprises receive government subsidies and must follow state labour and environmental policies. Latin American governments prioritize industrial development over raw material sales. We must show the value of our investments beyond extraction," he says. The EU partners with seven Latin American countries to promote cooperation on raw materials and secure more lithium supply agreements in the region. China invests billions in lithium production in Mexico, the new El Dorado, and the "lithium triangle" (Argentina, Bolivia, and Chile). Von der Leyen signed an agreement to develop a lithium production chain in Chile and Argentina. Wojna suggests showing genuine interest as a successful strategy.

The professor warns of mistrust and a perception that Europe wants to extract resources from Latin America, leading to a lack of promotion and dissemination.

The President of the Council of the EU, Charles Michel, visited the region after several EU commissioners in recent months. The EU's High Representative for Foreign Policy, Josep Borrell, has been active. Brussels is looking forward to the EU-CELAC summit in July under Spain's presidency.

Strengthening relations with Latin America is a top priority for Spain, as shown by the recent summit after an eight-year gap. The meeting aims to achieve more than just concrete agreements and economic announcements, such as the investments of 10,000 million euros from the Commission and 9,400 million from Spain. Brussels aims to promote Mercosur, but ratification is blocked by France, Ireland, Austria, and the Netherlands over economic concerns. Von der Leyen emphasized this objective during her visit to Brazil and Argentina. Lula and Fernández, who did not sign, question the EU's proposed letter to be added to the agreement.

The letter addresses new European environmental regulations on deforestation that some in Latin America see as protectionism. Buenos Aires and Brasilia want to renegotiate a harmful part of the agreement. Visiting Mexico, Chile and Brazil, sees von der Leyen's trip as a sign of the EU's commitment to the region and the need for ongoing political efforts to strengthen relations.

The MEP suggests adjusting the letter to Mercosur to prioritize environmental policies, but Professor Wojna fears inflexibility from some EU members or the Commission may cause a missed opportunity. The Amazon's destruction could hinder Mercosur countries from creating certification systems to prevent deforestation in their exports, warns Wojna. According to his prediction, the agreement with Mexico may not be modernized and signed until after the Mexican and European Parliament elections in June 2024 or even as late as 2025.

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Most Read…

Beijing Plans a New Training Facility in Cuba, Raising Prospect of Chinese Troops on America’s Doorstep

Biden administration scrambles to forestall China’s ambitions in the Caribbean

WSJ By Warren P. Strobel,  Gordon Lubold,  Vivian Salama and Michael R. Gordon, June 20, 2023

The near-infinite energy source that could win Britain’s net zero race

Deep geothermal energy aims to fill the gaps in the country’s green power supply

The Telegraph By Matt Oliver, 20 June 2023 

Qatar strikes second big LNG supply deal with China

The China National Petroleum Corporation (CNPC) and QatarEnergy signed a 27-year agreement in which China will buy 4 million metric tons of liquefied natural gas (LNG) from the Gulf Arab state.

REUTERS By Andrew Mills and Maha El Dahan, June 20, 2023

Qatar strikes second big LNG supply deal with China

The China National Petroleum Corporation (CNPC) and QatarEnergy signed a 27-year agreement in which China will buy 4 million metric tons of liquefied natural gas (LNG) from the Gulf Arab state.

REUTERS By Andrew Mills and Maha El Dahan, June 20, 2023

As Modi visits White House, India’s reliance on Russian arms constrains him

The BrahMos missile illustrates how India's long-standing reliance on Russia for military equipment and technology limits New Delhi's ability to align with the West in confronting Russia over its war in Ukraine, as President Biden welcomes Indian Prime Minister Narendra Modi to the White House this week. India has not condemned the invasion, much to Washington's chagrin.

WP By Karishma Mehrotra, June 20, 2023

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: Kremlin

Beijing Plans a New Training Facility in Cuba, Raising Prospect of Chinese Troops on America’s Doorstep

Biden administration scrambles to forestall China’s ambitions in the Caribbean

WSJ By Warren P. Strobel,  Gordon Lubold,  Vivian Salama and Michael R. Gordon, June 20, 2023

China and Cuba already jointly run four eavesdropping stations on the island, according to U.S. officials. PHOTO: YANDER ZAMORA/SHUTTERSTOCK

WASHINGTON—China and Cuba are negotiating to establish a new joint military training facility on the island, sparking alarm in Washington that it could lead to the stationing of Chinese troops and other security and intelligence operations just 100 miles off Florida’s coast, according to current and former U.S. officials.

Discussions for the facility on Cuba’s northern coast are at an advanced stage but not concluded, U.S. intelligence reports suggest. The Biden administration has contacted Cuban officials to try to forestall the deal, seeking to tap in to what it thinks might be Cuban concerns about ceding sovereignty. Beijing’s effort to establish a military training facility in Cuba hasn’t been previously reported. The White House declined to comment.

The heightened anxiety in Washington over China’s ambitions in the Caribbean and Latin America comes as the administration is seeking to tamp down broader tensions with Beijing that have been stoked by a host of other issues, including U.S. support for Taiwan. Secretary of State Antony Blinken was on a high-profile visit to China these past few days, meeting with Chinese leader Xi Jinping.

The trip appeared to halt a downward spiral in relations. But Blinken failed to secure China’s agreement to a U.S. proposal that the two countries resume military-to-military communications to avoid misunderstandings. He also raised U.S. concerns about Chinese intelligence activities in Cuba, according to a State Department statement.

U.S. officials said reference to the proposed new training facility in Cuba is contained in highly classified new U.S. intelligence, which they described as convincing but fragmentary. It is being interpreted with different levels of alarm among policy makers and intelligence analysts.

The Wall Street Journal reported on June 8 that China and Cuba had reached an agreement in principle for a new eavesdropping site in Cuba; the White House characterized that reporting as inaccurate but didn’t elaborate. Two days later, the White House declassified intelligence to confirm publicly that Chinese intelligence collection facilities have existed in Cuba since at least 2019.

Current and former U.S. officials said a new military facility could provide China with a platform to potentially house troops permanently on the island and broaden its intelligence gathering, including electronic eavesdropping, against the U.S.

Most worrying for the U.S.: The planned facility is part of China’s “Project 141,” an initiative by the People’s Liberation Army to expand its global military base and logistical support network, one current and one former U.S. official said.

China and Cuba already jointly run four eavesdropping stations on the island, according to U.S. officials. That network underwent a significant upgrade around 2019, when a single station expanded to a network of four sites that are operated jointly, and Chinese involvement deepened, according to the officials.

There also are signs of changes in the arrangement for those facilities that officials say could signal greater Chinese involvement, though the details are scant. A U.S. intelligence report earlier this year referred to the “centralization” of the management of the four joint sites, but what precisely that entails isn’t clear.

Other Project 141 sites include a deal for a Chinese naval outpost in Cambodia and a military facility whose purpose isn’t publicly known at a port in the United Arab Emirates, a former U.S. official said. None of the previously known Project 141 sites are in the Western Hemisphere.

Some of those facilities include intelligence gathering capabilities as well, including a Chinese base in Djibouti on the Horn of Africa, Beijing’s only military base outside the Pacific region, where China has been working to build a facility for gathering signals intelligence.

An official with the Chinese Embassy in Washington referred to comments from a senior foreign ministry spokesman in Beijing on June 9, saying he wasn’t aware of any deal between China and Cuba and saying the U.S. is an “expert in chasing shadows” in other countries and meddling in their affairs.

“We hope that relevant parties can focus more on things that are conducive to enhancing mutual trust and regional peace and stability development,” Chinese Foreign Ministry spokeswoman Mao Ning said when asked about the Cuba negotiations at a regular briefing in Beijing on Tuesday.

Cuba’s embassy in Washington had called the Journal’s earlier report “totally mendacious and unfounded.” The embassy didn’t respond to a request for comment on Monday.

In an interview with CBS News on Monday, Blinken said that the Chinese activities in Cuba were a serious concern for the administration and that he had raised it in his weekend meetings in Beijing.

“We’ve been taking steps over the past couple of years, diplomatically, wherever we’ve seen China trying to create that kind of presence,” he said. “It is something of real concern. I was very clear about our concerns with China.”

U.S.-China tensions have soared in recent months over issues including a Chinese spy balloon that flew over the U.S. before the U.S. military shot it down, and close encounters between the nations’ militaries in the skies and at sea.

Some intelligence officials say that Beijing sees its actions in Cuba as a geographical response to the U.S. relationship with Taiwan: The U.S. invests heavily in arming and training the self-governing island that sits off mainland China and that Beijing sees as its own. The Journal reported that the U.S. has deployed more than 100 troops to Taiwan to train its defense forces.

Taiwan is roughly 100 miles from mainland China, about the same distance Cuba is from Florida.

China has no combat forces in Latin America, according to U.S. officials. Meanwhile, the U.S. has dozens of military bases throughout the Pacific, where it stations more than 350,000 troops. Chinese officials have pointed this out when they push back on American efforts to counter their military expansion outside of the Indo-Pacific.

Some U.S. officials cautioned that the parameters of China’s plans in Cuba aren’t fully known, and said the two countries would move cautiously to expand security ties.

“The intelligence community has assessed for several years that the PRC intends to expand its reach globally, and in this case, it is premature to draw firm conclusions about recent reporting,” a U.S. intelligence official said. “At this stage, it does not appear to be anything that provides much of an enhancement to the current suite of capabilities.”

Any increase in security coordination between China and Cuba “is going to go slowly,” the U.S. intelligence official said.

Cuba, several officials said, has reason to move cautiously, to avoid provoking the U.S. at a time when its economy is in disastrous shape and it is seeking the easing of economic sanctions and travel restrictions imposed by Washington.

The U.S. had been tracking a planned visit to Beijing by a senior Cuban defense official that U.S. officials said they interpreted as representing the next step in the negotiations over the training facility. It wasn’t immediately clear from the latest intelligence if the visit had taken place, but officials said it reflected how close the plans were to becoming formalized.

The Biden administration contacted Cuban officials in Washington to express its concern about the planned facility, officials said.

“We’ve made our concerns known” to the Cuban government, National Security Council spokesman John Kirby said earlier this month.

A White House official said Monday that the Chinese government “will keep trying to enhance its presence in Cuba, and we will keep working to disrupt it.”

Sen. Mark Warner (D., Va.) and Sen. Marco Rubio (R., Fla.), the chair and vice chair of the Senate Intelligence Committee, said in a joint statement earlier this month that they were “deeply disturbed by reports that Havana and Beijing are working together to target the United States and our people.”

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Seaboard: pioneers in power generation in the country…

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

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A geothermal plant started providing energy for the Eden Project this week. Image CREDIT: Matt Greenwell/PGB/Editing by Germán & Co 

The near-infinite energy source that could win Britain’s net zero race

Deep geothermal energy aims to fill the gaps in the country’s green power supply

The Telegraph By Matt Oliver, 20 June 2023 

The crumbling pumping stations dotting the landscape of the Gwennap district are a visible reminder of the area’s pivotal role in the long-gone Cornish mining boom.

During the Industrial Revolution, the huge output of the district’s copper and tin mines, not far from Redruth, helped garner it a reputation as “richest square mile on earth”.

Today, businesses are digging deep in search of a different sort of treasure: energy.

At United Downs, a stone’s throw from many of the old mines, a pioneering project run by Geothermal Engineering is drawing heat from granite rocks that lie more than three miles below the surface.

It does this by pumping out water warmed to 200 degrees celsius to power a heat exchanger, before being pumped back down again to a shallower well.

From next year, the scheme will provide heat and power to 3,800 homes near Truro, as well as the Royal Cornwall Hospital, local schools and a leisure centre, after receiving £22m in funding from the Government.

Ryan Law, chief executive of Geothermal Engineering, believes it can serve as a template for similar schemes across Britain, at a time when policymakers are exploring what role the technology can play in the race to “net zero”.

It comes as another geothermal plant has also begun generating energy this week for the Eden Project near St Blazey, roughly 20 miles from United Downs.

“Geothermal has really become a hot topic in the last two years,” says Law. “We chose Cornwall because it’s the hottest spot in the UK – and United Downs is sort of the trailblazer.”

Although it can be used to generate power, like wind and solar farms, Law believes geothermal’s real promise lies in heating buildings, providing a viable replacement for gas-fired boilers. About one fifth of the UK’s carbon emissions come from keeping buildings warm, with carbon-free solutions such as electric heat pumps currently too expensive for many households.

The rock underneath Cornwall is hot because it contains small amounts of the radioactive elements uranium, potassium and thorium, Law explains, which over a large area creates “quite a lot of heat”.

This means it can be available all year-round, barring short periods needed for power plant maintenance.

“It is just a massive resource,” adds Law. “It’s like taking buckets out of the ocean. I wouldn’t say it’s infinite, but it is huge.

“And unlike wind and solar, it just keeps going once you switch it on.”

However, he argues geothermal will not compete directly with those renewables, “because it’s a different form of energy”.

“Wind and solar are pretty good at producing large scale electricity, but where geothermal fits into the mix is with this sort of elephant in the room of how we will meet our zero carbon heating targets.

“I see these projects as being installed in areas that need power and heat, for example big swathes of urban areas, because it’s that combination which could see geothermal have a big impact on the UK.”

The company already has two more projects, in Penhallow and Manhay, that have been granted planning permission. They will be even bigger, with Geothermal Engineering aiming to win support for the schemes through the Government’s contracts for difference auction this summer.

The company is seeking about £119 per megawatt hour of electricity generated, although Law says he believes the price for future plants could eventually be two thirds lower based on other projects in operation in the US today.

He also reckons that the cost of drilling the two wells at United Downs – about £24m – can be halved.

Whether this is ultimately possible will depend on demand for geothermal in Britain and the supply chains that grow to serve it.

At the moment, less than 1pc of the country’s energy is generated through geothermal schemes.

But the technology has been pioneered and proven successful elsewhere, including in Iceland, the US, Italy, France and Germany.

In Iceland, 30pc of electricity is now generated from geothermal sources. The resulting power is so cheap it is used to heat greenhouses growing bananas domestically and the freezing country has become a magnet for energy-intensive aluminium producers.

Munich has also pursued geothermal in a big way. Regional energy company Stadtwerke Munich (SWM) now operates six geothermal plants in and around the German city, providing heat and electricity for hundreds of thousands of residents and facilities.

Law claims the example of Munich is proof that the technology can be deployed in densely populated areas with relatively little disruption, despite the need for rigs to drill the wells initially.

In Britain, the most promising areas for development after Cornwall include parts of the North West such as Manchester and swathes of Yorkshire including Hull.

The UK Government is preparing to publish a white paper in the coming weeks that could set out the potential for geothermal energy and where the best opportunities are.

Geothermal energy has proved highly successful in countries such as Iceland, where 30pc of electricity is now generated from geothermal sources CREDIT: LANDSVIRKJUN/AFP via Getty Images

However, the UK currently lacks a specific regulatory regime for geothermal, according to a House of Commons Library report, and both planning and grid connection delays pose challenges.

The Eden Project scheme, for example, could potentially export some power to the grid but has been told it cannot be connected until 2036 at the earliest.

“We would love to turn it into electricity. But it’s a nightmare,” Gus Grand, the boss of Eden Geothermal, told the Financial Times.

Geothermal Engineering’s Law says a key test for the industry will be whether his company’s projects - and others - win funding from a government-run energy auction this summer. There is a specific pot of money earmarked for “developing technologies”.

This will underpin “substantial further investment” from private sources, he says.

Another emerging use of geothermal technology, being developed by his company and others including Cornish Lithium, is the extraction of underground minerals using liquid solutions. This allows resources like lithium – a key material used to make batteries – to be extracted with minimal environmental disruption and zero carbon emissions.

At the same time, as in Iceland, the technology could open up new frontiers for British agriculture. Powering greenhouses would allow British farmers to grow produce from hotter climes here without incurring ruinous energy costs.

“We’re at an inflection point now,” says Law. “I really think we’re at the tip of the iceberg and it’s just a question of maturity.

“If you remember with offshore wind, people said it would never work because it was too expensive.

“Now look at it.”

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CNPC (China National Petroleum Corporation) logo and stock graph are seen through magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo / Editing by Germán & Co

Qatar strikes second big LNG supply deal with China

The China National Petroleum Corporation (CNPC) and QatarEnergy signed a 27-year agreement in which China will buy 4 million metric tons of liquefied natural gas (LNG) from the Gulf Arab state.

REUTERS By Andrew Mills and Maha El Dahan, June 20, 2023

DOHA, June 20 (Reuters) - Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead in the race to secure gas supplies from Doha's massive production expansion project.

China National Petroleum Corporation (CNPC) and QatarEnergy signed a 27-year agreement, under which China will purchase 4 million metric tons of liquefied natural gas (LNG) a year from the Gulf Arab state.

CNPC will also take an equity stake in the eastern expansion of Qatar's North Field LNG project, QatarEnergy chief Saad al-Kaabi said at the signing.

The stake is the equivalent of 5% of one LNG train with capacity of 8 million metric tons a year.

"Today we are signing two agreements that will further enhance our strong relations with one of the most important gas markets in the world and key market for Qatari energy products," Kaabi said.

In an identical deal, QatarEnergy sealed a 27-year supply agreement with China's Sinopec in November for 4 million metric tons a year. The state-owned Chinese gas giant also took an equity stake equivalent to 5% of one LNG train of 8 million metric tons a year capacity.

Asia, with an appetite for long-term sales and purchase agreements, has outpaced Europe in locking in supply from Qatar's two-phase expansion plan that will raise its liquefaction capacity to 126 million metric tons a year by 2027 from 77 million.

Tuesday's deal will be QatarEnergy's third deal to supply LNG from the expansion to an Asian buyer.

Other Asian buyers are also in talks for equity stakes in the expansion, Kaabi said.

DEALS WITH 'VALUE-ADDED PARTNERS'

Qatar is the world's top LNG exporter and competition for LNG has ramped up since the beginning of the war in Ukraine, with Europe in particular needing vast amounts to help replace Russian pipeline gas that used to make up almost 40% of the continent's imports.

Reuters had earlier reported that CNPC was close to finalising a deal to buy LNG from QatarEnergy over nearly 30 years from the North Field expansion project.

QatarEnergy had previously said that it could give up to 5% stakes in the gas trains linked to its North Field expansion to what Kaabi, the Gulf state's energy minister and CEO of QatarEnergy, described as "value-added partners".

In April, China's Sinopec became the first Asian energy company to become a "value-added" partner in the project.

QatarEnergy has also signed equity partnerships on the project with international oil companies but has said it plans to retain a 75% stake in the North Field expansion, which will cost at least $30 billion including construction of liquefaction export facilities.

As Beijing's ties with the United States and Australia, Qatar's two biggest LNG export rivals, are strained, Chinese national energy firms increasingly see Qatar as a safer target for resource investment.

The Qatar Investment Authority (QIA), the country's $445 billion sovereign wealth fund, will manage most of the revenues from the North Field expansion," Kaabi said.

"I think the majority of the revenue of what's going to come from this North Field expansion will go into a future generation wealth fund in QIA ... making sure that the Qatari people and people living in Qatar are well taken care of."

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Image by Germán & Co via Shuttersock

As Modi visits White House, India’s reliance on Russian arms constrains him

The BrahMos missile illustrates how India's long-standing reliance on Russia for military equipment and technology limits New Delhi's ability to align with the West in confronting Russia over its war in Ukraine, as President Biden welcomes Indian Prime Minister Narendra Modi to the White House this week. India has not condemned the invasion, much to Washington's chagrin.

WP By Karishma Mehrotra, June 20, 2023

Indian soldiers preparing for a Republic Day parade in 2014 sit near BrahMos supersonic missiles, jointly developed by India and Russia. (Saurabh Das/AP)

NEW DELHI — One of India’s most highly regarded weapons is a supersonic cruise missile that can be launched from sea, sky and land. Its name, BrahMos, is a portmanteau of the Brahmaputra River in India and the Moskva River in Russia, which began jointly developing the missile after the fall of the Soviet Union. Indian defense officials call it their “Brahmastra” — a Hindu mythological weapon that can destroy the entire universe.

India sees the missile as an essential part of a military capability that could survive a nuclear attack and has deployed it along its tense border with China. The missile has been supplied to the Philippines, and potential sales to Vietnam and Indonesia are underway.

As President Biden welcomes Indian Prime Minister Narendra Modi to the White House this week, the BrahMos missile illustrates how India’s long-standing reliance on Russia for military equipment and technology constrains New Delhi’s ability to line up with the West in confronting Russia over its war in Ukraine. To Washington’s disappointment, India has not condemned the invasion.

The arms relationship is “a key driver” of India’s reluctance to vocally oppose the Russian invasion of Ukraine, said Richard Rossow, the chair of U.S.-India Policy Studies at the Center for Strategic and International Studies.

Robust military trade between the countries dates back to the 1960s, and Russian equipment now makes up about 85 percent of the Indian arsenal, according to a team led by Sameer Lalwani, a senior expert at the U.S. Institute of Peace. Russia has supplied fighter aircraft, nuclear submarines, cruise missiles, battle tanks, Kalashnikov rifles and much more. Some of this, such as fighter aircraft, could stay in India’s arsenal till 2065. India will remain dependent on Moscow for spare parts and maintenance for decades to come.

Other forms of Russian influence — including support for India at the United Nations and other international forums, and, since the outbreak of the Ukraine war, discounted crude oil — have all kept India close to Moscow. But experts like Lalwani say that military dependency is the “strongest” and “most durable” bond between the two countries.

“The number of really important countries to the U.S. who have a lot of Russian stuff is small, and India is at the top of that list,” said Chris Clary, a former country director for South Asian affairs in the office of the U.S. secretary of defense and now a professor at the University at Albany. “The big picture is that you don’t end a six-decade relationship quickly. It’s not going to be easy for even a determined national leadership to overcome, and it’s not at all clear to me that the current dispensation in New Delhi is determined.”

During Modi’s visit to Washington this week, U.S. officials will be looking to cut into Russian dominance of India’s military market, with discussions underway about deals to sell 31 armed drones and to jointly produce fighter jet engines involving General Electric, and a new initiative to deepen cooperation in military innovation.

The United States has been seeking to expand its role over the past decade, as military imports from Russia to India have slowly waned. India, the largest importer of weapons in the world, obtained 45 percent of its equipment from Russia in the five years through 2022, down from nearly two-thirds from the five years prior, according to the Stockholm International Peace Research Institute.

American supplies still represent only 1 percent of the Indian army’s equipment and just about 4 percent of that of the Indian navy and air force, Lalwani said. From 2018 through 2022, according to SIPRI, the estimated value of Russian weapons sold to India was four times that of American weapons.

U.S. officials may not be happy about the Russian cast of India’s military. But they recognize that it’s important these weapons remain effective given the continuing tensions between India and China, which represents the top American concern in Asia, Rossow said.

Defense analysts in India agree that Russian technology is losing any technical edge it had over other suppliers, making deals with the United States more desirable. At the same time, the Ukraine war caused delays in the supply of spare parts from Russia as well as payment issues. Rajesh Rajagopalan, a professor of international politics at Jawaharlal Nehru University in Delhi, said he suspects that Indian leaders are now “regretting” their overreliance on Russia.

Russia’s dominance of the Indian market has deep roots. “Russia historically was willing to extend sophisticated technology to India that frankly the U.S. has not,” said Lisa Curtis, director of Indo-Pacific security at the Center for a New American Security, who previously directed South Asia policy at the U.S. National Security Council.

When the Soviet Union made its first major sale of MiG-21 jets to India in the 1960s, Moscow offered sweeteners that Washington didn’t match, including allowing India to pay in rupees and produce the fighter jets domestically. For decades after, the Russians had a near-monopoly on the Indian military market, charging lower costs than competitors and offering some technology transfers. Russians began to openly extend nuclear-technology sharing in the 1980s, leasing to India a nuclear submarine and supporting India’s nuclear energy production.

Many Indian military officials and planners, especially those who came of age during the Cold War, were scarred by the American decision to side with Pakistan during its 1971 war with India. “There were a lost three decades in the India-U.S. relationship because the Americans felt we were pro-Soviet,” said D.B. Venkatesh Verma, a former Indian ambassador to Russia. “We turned to the Soviets because nothing was on offer for us.”

After the collapse of the Soviet Union, when India was eager to build new trading relationships, the United States remained reluctant to supply military equipment because of concerns over India’s ambitions to develop its nuclear weapons capacity, Verma said.

The nuclear deal finalized in 2008, which saw India and the United States coordinate on nuclear power, marked a major turning point for relations between India and the United States.

“The sentiment toward the U.S. has become a lot warmer over the last 15 years, but it still hasn’t reached the level of strategic empathy that India shared with the Soviet Union and Russia,” said Rajagopalan.

After the Russian annexation of Ukraine’s Crimean Peninsula in 2014 and Russian interference in the 2016 U.S. elections, the United States became increasingly opposed to countries buying Russian equipment, adopting sanctions in 2017 that restricted the sharing of American technology with countries that bought certain Russian equipment. Despite the sanctions risk, India finalized a deal to buy Russian long-range missiles, known as S-400s, which will likely last another two decades.

The India-Russia relationship “casts a very long shadow into the future,” Verma said. “Hopefully, there is understanding from the U.S. that this is a transition that India should be allowed to make at its own pace, because India is too large and the relationship with Russia is too deep for India to make U-turns.”

Some experts in India already see it turning away from Russia. Happymon Jacob, a professor of disarmament studies at Jawaharlal Nehru University, says Indians think of the Russia relationship in “past terms” and the U.S. one in “future terms.”

Senior U.S. defense officials say India began to reduce its reliance on Russia before the Ukraine war, noting that Lockheed Martin is making F-16 wings and C-130J tails in Indian factories. “Is there still a reality that they have to manage in terms of their relationship with Russia? Yes. But the trends are in the right direction,” said one official, speaking on the condition of anonymity under ground rules set by the Pentagon.

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News round-up, June 16, 2023

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Today…

" It appears that the future readers' souls had forewarned us about the dangers of Triton…

The international media reported this morning on a significant cybersecurity breach in the United States.

Yesterday, there was a significant discussion and warning regarding the Triton malware, which has been classified as the —world's most lethal—. The focus was on its capability to disable safety mechanisms in industrial facilities remotely. This subject has attracted significant attention from cybersecurity experts, particularly within the energy sector. Today's disclosure of a substantial cybersecurity breach in the United States, as reported by the international media, is a matter of great concern. The Energy Department, along with several other federal agencies, has been targeted by a global cyber-attack carried out by a Russian cyber-extortion group. This security breach specifically targeted a widely utilized file-transfer program that is highly favored by both corporate entities and governmental organizations. The potential ramifications could have been more severe; nevertheless, officials from the Department of Homeland Security have asserted that this campaign was promptly identified. According to Jen Easterly, the Director of the Cybersecurity and Infrastructure Security Agency, the nature of this attack is predominantly opportunistic, rather than being driven by the intention to gain broader access or steal high-value information. The revelation that a significant number of individuals, including professionals in various industries, higher education institutions, and state motor vehicle agencies, may have encountered unfavorable outcomes is deeply unsettling.

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Most Read…

US Energy Department among federal agencies breached by Russian ransomware gang

Several American federal agencies were compromised on Thursday in a Russian cyber-extortion gang's global hack of a file-transfer program popular with corporations and governments.

Le Monde with AP,  Published today at 6:03 am (Paris)

ECB hikes rates to 22-year high and vows to keep going

While the US Federal Reserve is hitting pause on a series on interest rate hikes, the ECB has once again raised rates and says that more are on the way.

Le Monde with AFP, Published yesterday at 6:50 pm (Paris)

The Global Economy Looks Like It’s Out of Sync

As central banks go in different directions, most capital markets remain linked to the dollar

WSJ by James Mackintosh, June 16, 2023 

Column: Key differences in government spending on the energy transition

Governments globally are investing billions to speed up the energy transition, reduce costs, and drive innovation in fuels and power technologies. However, there are significant differences in government funding priorities, with the United States heavily investing in low-carbon electricity and transportation systems. Private sector companies are investing in clean energy.

Reuters by Gavin Maguire, June 15, 2023, editing by Germán & Co

Opinion | A Trump Pardon Could Drain Poison from the System

If Trump loses in 2024, sparing him jail time could ease our divided politics.

POLITICO USA, Opinion by RICH LOWRY, June 15, 2023 

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: by Germán & Co

US Energy Department among federal agencies breached by Russian ransomware gang

Several American federal agencies were compromised on Thursday in a Russian cyber-extortion gang's global hack of a file-transfer program popular with corporations and governments.

Le Monde with AP,  Published today at 6:03 am (Paris)

The Department of Energy and several other federal agencies were compromised in a Russian cyber-extortion gang's global hack of a file-transfer program popular with corporations and governments, but the impact was not expected to be great, Homeland Security officials said Thursday, June 15.

But for others among what could be hundreds of victims from industry to higher education – including patrons of at least two state motor vehicle agencies – the hack was beginning to show some serious impacts.

Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency, told reporters that unlike the meticulous, stealthy SolarWinds hacking campaign attributed to state-backed Russian intelligence agents that was months in the making, this campaign was short, relatively superficial and caught quickly. "Based on discussions we have had with industry partners ... these intrusions are not being leveraged to gain broader access, to gain persistence into targeted systems, or to steal specific high value information— in sum, as we understand it, this attack is largely an opportunistic one," Easterly said.

"Although we are very concerned about this campaign and working on it with urgency, this is not a campaign like SolarWinds that presents a systemic risk to our national security or our nation’s networks," she added.

British Airways and the BBC also targeted

A senior CISA official said neither the US military nor intelligence community was affected. Energy Department spokesperson Chad Smith said two agency entities were compromised but did not provide more detail.

Known victims to date include Louisiana’s Office of Motor Vehicles, Oregon's Department of Transportation, the Nova Scotia provincial government, British Airways, the British Broadcasting Company and the UK drugstore chain Boots. The exploited program, MOVEit, is widely used by businesses to securely share files. Security experts say that can include sensitive financial and insurance data.

The Cl0p ransomware syndicate behind the hack announced last week on its dark web site that its victims, who it suggested numbered in the hundreds, had until Wednesday to get in touch to negotiate a ransom or risk having sensitive stolen data dumped online.

The gang, among the world’s most prolific cybercrime syndicates, also claimed it would delete any data stolen from governments, cities and police departments.

The senior CISA official told reporters a "small number" of federal agencies were hit – declining to name them – and said "this is not a widespread campaign affecting a large number of federal agencies." The official, speaking on condition of anonymity to discuss the breach, said no federal agencies had received extortion demands and no data from an affected federal agency had been leaked online by Cl0p. US officials "have no evidence to suggest coordination between Cl0p and the Russian government," the official said.

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Seaboard: pioneers in power generation in the country…

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

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Image editing by Germán & Co

ECB hikes rates to 22-year high and vows to keep going

While the US Federal Reserve is hitting pause on a series on interest rate hikes, the ECB has once again raised rates and says that more are on the way.

Le Monde with AFP, Published yesterday at 6:50 pm (Paris)

The European Central Bank hiked interest rates to a 22-year high Thursday and said another increase in July was "very likely", as it pushed ahead with its fight against inflation despite a darkening eurozone economy.

The ECB's governing council increased rates by a further 25 basis points, taking the closely-watched deposit rate to 3.50% – its highest level since 2001.

"Inflation has been coming down but is projected to remain too high for too long," ECB President Christine Lagarde said. The move comes a day after the US Federal Reserve held off from raising rates after 10 straight increases.

"We're not thinking about pausing," Lagarde said, adding that the ECB still has "ground to cover" on rates after the Frankfurt institution lifted its inflation outlook for 2023-2025 in fresh forecasts on Thursday. "Barring a material change to our baseline, it is very likely the case that we will continue to increase rates in July," she told reporters.

The ECB has lifted borrowing costs at the fastest rate ever to combat red-hot inflation after Russia's war in Ukraine sent food and energy prices soaring, raising its key rates by 4.00 percentage points since July.

Eurozone inflation slowed to 6.1% in May year-on-year, down from a peak of 10.6% in October, mainly thanks to rapidly falling energy costs. The ECB said its inflation-busting efforts were "gradually having an impact", with loan demand slowing sharply as higher borrowing costs take their toll on eurozone households and firms.

But inflation remains three times above the ECB's target while core inflation – which strips out volatile food and energy prices – eased only slightly to 5.3% in May, after 5.6% in April. Lagarde reiterated on Thursday that the ECB will "follow a data-dependent approach" as it charts the way forward.

"The ECB simply cannot afford to be wrong on inflation," said ING bank economist Carsten Brzeski. "The bank wants and has to be sure that it has slayed the inflation dragon before considering a policy change."

'Not satisfactory'

Like all central banks, the ECB has to walk a fine line in raising interest rates sufficiently to dampen demand and contain inflation, without provoking a sharp economic slowdown in the process. But the eurozone economy has proved less resilient than initially thought.

Revised data last week showed that the economy in the 20-nation currency union shrank by 0.1% for two straight quarters at the end of 2022 and the start of 2023, meeting the technical definition of a recession. While still mild, the surprise winter slump has cast doubt on more optimistic economic forecasts for 2023.

In updated forecasts, the ECB now sees the eurozone economy growing by 0.9% in 2023 – down from 1.0% previously. Lagarde said the economy would "strengthen in the course of the year" as inflation slows, supply chains ease and the service sector remains resilient. But she stressed that the outlook remained "highly uncertain", citing Russia's war in Ukraine and potentially weak global growth among the risk factors.

'Tit-for-tat' price surges

Thursday's updated projections also showed inflation reaching 5.4% in 2023, 3.0% in 2024 and 2.2% in 2025 – a 0.1-percentage-point increase for each year from its last forecasts in March. With the ECB's 2% target still out of reach by 2025, Lagarde called the outlook "not satisfactory".

Wage pressures were becoming an "increasingly important source" of inflation, she said, as workers – boosted by record-low eurozone unemployment – push for pay rises to help compensate for the higher cost of living. She also expressed concern about high corporate profits, urging companies and employees to avoid a "tit-for-tat" where both sides sought full compensation for inflation – potentially creating an unwanted spiral of price rises.

The ECB was watching the discussions and developments between the different parties in the labour market closely, Lagarde said. The central bank "will take all necessary measures to return inflation to two percent. That they can count on," she said. "And we are confident that we will get there."

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Image credit by Germán & Co

The Global Economy Looks Like It’s Out of Sync

As central banks go in different directions, most capital markets remain linked to the dollar

WSJ by James Mackintosh, June 16, 2023 

While the Federal Reserve delivered a hawkish statement, Chair Jerome Powell held what markets viewed as a dovish press conference Wednesday. Photo: Sarah Silbiger

In just 24 hours this past week the central banks of the world’s three biggest economic blocs came to starkly different conclusions, with the eurozone raising rates, the U.S. on hold and the Chinese cutting. It’s getting harder for investors to understand the global economy—and potentially getting harder for the Federal Reserve to put a lid on inflation.

The conflicting moves are caused by economies increasingly moving to local rhythms. Europe is in a technical recession, but the central bank expects inflation to last. China has no inflation problem but is suffering from the aftermath of its extended lockdowns and property bubble. The U.S. economy is doing surprisingly well, and inflation has plunged, but underlying price increases remain stubbornly high.

The global divergence has already swung currencies. China’s yuan has weakened this year, which should make its exports more competitive, crimp imports and help its economy. Except when China goes for all-out stimulus or intervention as in 2009 or after its 2015 stock bubble burst, its markets have their own beat. Capital controls and fear of expropriation mean they aren’t tightly integrated into global portfolios.

More important for U.S. investors are the moves in Europe, where the European Central Bank and the Bank of England—which will decide on its rate next week—are now seen by investors as more hawkish than the Fed. That’s driving up their bond yields, and pushing down the dollar against the euro and sterling.

In itself, such moves are exactly what’s meant to happen. The whole point of having a floating currency is to free central banks to set rates according to the issues their own economies face. The problem comes from the sensitivity of investors to dollar weakness, and the knock-on boost to confidence it brings.

Americans aren’t used to thinking about their investments in other currencies. The dollar’s role as the world’s reserve currency makes it the standard for measuring value, as well as for global transactions. But the dollar still has a profound effect, just one that U.S. investors often miss.

It is potentially getting harder for the Federal Reserve to put a lid on inflation. PHOTO: NATHAN HOWARD/BLOOMBERG NEWS

When the dollar goes up, Americans are richer in that they can buy more foreign stuff with the same money. But recently they’re likely to feel poorer, because the dollar and stocks have been moving in opposite directions. Historically the two were closely linked only in crises, when the dollar was bought as a haven and stocks were dumped because of their risk. After 2008, the dollar-up, stocks-down relationship strengthened, and since the stock selloff began in 2022 the link has been even stronger, with weekly moves in the dollar explaining about half the move in the S&P 500.

What effects do you think will stem from an asynchronous global economy?Join the conversation below.

One way to think about this is that as the Fed raised rates, the dollar, up until the autumn, strengthened sharply, which hurt U.S. stocks. But then the ECB and Bank of England became serious about rate rises, the dollar began to weaken, and the bull market in U.S. stocks kicked off.

See American stocks as Europeans do, and in euros they never fell the 20% usually defined as a bear market, nor did they rebound so much as to be in a new bull market. The drama was in the currency, not stocks.

This might seem like a perverse outcome, and makes things harder for the Fed. In principle, higher rates in Europe should damp demand, including for U.S. exports to the region, while also pushing up U.S. yields, as some investors switch to higher-yielding European bonds. Both these things should be bad for the U.S. economy, and bad for U.S. stocks.

But as long as investors stick with the idea that the dollar and stocks move in opposite directions, the weaker dollar alone means American shareholders feel richer, even if they have the same purchasing power in foreign-currency terms. And investors who feel flush tend to borrow and spend more, supporting the economy—exactly the opposite of the slowdown the Fed wants. It also boosts the competitiveness of U.S. production, again supporting the economy. Without the Fed doing anything, rate rises elsewhere might give the U.S. a boost.

The weak dollar has a perverse effect elsewhere, too. Because capital markets are integrated, lots of countries and companies borrow in dollars, and many big global investors think in dollars, a weak dollar makes everyone feel positive. European stocks in local-currency terms and emerging markets excluding China have risen almost exactly as much as the S&P 500 as the dollar weakened. 

Even as economies and central banks diverge, most capital markets remain tightly integrated and linked to a common global force: the dollar

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 Image: REUTERS/Stephane Mahe/ Editing by Germán & Co

Column: Key differences in government spending on the energy transition

Governments globally are investing billions to speed up the energy transition, reduce costs, and drive innovation in fuels and power technologies. However, there are significant differences in government funding priorities, with the United States heavily investing in low-carbon electricity and transportation systems. Private sector companies are investing in clean energy.

Reuters by Gavin Maguire, June 15, 2023, editing by Germán & Co

LITTLETON, Colorado, June 14 (Reuters) - Governments across the world are doling out billions of dollars worth of investments and subsidies to help accelerate the energy transition, reduce energy costs for consumers, and spur innovation in fuels and power-sector technologies.

But while all authorities are spending big in the energy space in general, there are important differences in where key governments are focusing their funds, most starkly between the United States and the governments of Europe.

Both regions have shared aspirations in terms of emissions reduction goals, but have so far taken vastly different funding approaches that have potentially significant implications for the pace of energy sector decarbonisation efforts and the emergence of future industry champions.

Private sector players in the United States and Europe, as well as in Asia and the rest of the world, are also embarking on their own investment campaigns in the clean energy space, and stand to have an equally significant impact on the sector.

Government spending on clean energy, energy affordability & energy efficiency

But in all regions corporations rely on the government to provide critical funding in areas such as early-stage research and development, and in helping to set key goals for industries that can make or break individual companies.

As such, the scale and trajectory of government support in the clean energy space is of critical importance in all major economies.

US: SPURRING CHANGE

Fuelled in large part by the Inflation Reduction Act (IRA) of 2022, the United States has the world's largest government-funded war chest, estimated at $560 billion by the International Energy Agency (IEA), to be deployed on energy transition and energy efficiency measures.

More than $210 billion (37.6% of total) is earmarked for the development of low-carbon electricity and related efforts to aid the power sector's switch away from fossil fuels.

Companies engaged in the production of renewable energy equipment, in the deployment of clean energy supplies, and in the switching out of fossil fuel power for renewable systems are also eligible for tax breaks and other incentives.

An additional $140 billion (25%) is tied to reducing the carbon footprint of the country's transportation systems, including $66 billion for high-speed rail systems and around $40 billion in grants for public transport system upgrades.

Subsidies are also available for manufacturers of electric vehicles and batteries, and U.S. consumers can qualify for tax credits for electric vehicle purchases.

Nearly $80 billion (14%) is available for the development of clean fuels and for innovation in fuel technology, with the intention of creating a virtuous circle of production and consumption of green energy products within the United States.

EUROPE: SHIELDING CONSUMERS

While the United States is deploying over 60% of its government funding on low-carbon electricity and transport system overhauls, energy affordability has been by far the single largest focus of government spending in Europe.

Germany, Europe's largest economy, has the largest government spending total in the region ($339 billion), and has earmarked over $240 billion (72.6% of total) for an array of energy affordability measures.

Price caps on electricity and heating costs, capital injections into ailing utilities, and relief packages for cash-strapped households and businesses shell shocked by the surge in power costs account for nearly three quarters of the government spending on clean energy seen so far, IEA data shows.

France, Britain, Poland, Czechia, Croatia, Finland, Portugal and Greece, among others, have also spent over half of all clean energy related government spending on affordability measures.

Low carbon and efficient transport accounts for the next largest share of government spending in Europe (around 21%), followed by energy efficient buildings (14%), according to the IEA's data.

ASIA: SEEKING BALANCE

Major Asian nations including China, Japan and India are also spending heavily on energy affordability measures, which have so far accounted for roughly 50% of the region's government spending in the clean energy and energy efficiency areas.

However, Asian governments are also deploying major funding on low carbon electricity (roughly 16% of total spending), low carbon transport (around 12%) and on electricity network upgrades and expansions (7%), in an effort to develop positive momentum among carbon reduction and green energy supply efforts.

Several nations across Africa, Latin America and the Middle East have split spending allocations in a similar way.

However, as with most European nations, the heavy price tag associated with energy affordability measures means there is less funding available to be deployed on other areas associated with accelerating the energy transition.

That means that the United States' higher levels of government spending on low carbon electricity generation and transportation compared to other major economies may enable the country to build up development leads in those areas, and in time give the U.S. a competitive advantage over other nations as those investments bear fruit.

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The bind represented by former President Donald Trump’s indictment is that, based on the evidence we have now, he appears to be caught dead to rights. | Alex Brandon/AP Photo / Editing by Germán & Co

Opinion | A Trump Pardon Could Drain Poison from the System

If Trump loses in 2024, sparing him jail time could ease our divided politics.

POLITICO USA, Opinion by RICH LOWRY, June 15, 2023 

Rich Lowry is editor in chief of National Review and a contributing writer with Politico Magazine.

It’s an idea whose time is inevitably coming for Republican presidential candidates — pardoning former President Donald J. Trump.

With the former president facing 37 counts in a federal indictment alleging violations of the Espionage Act and obstruction of justice, his fellow Republicans began discussing clemency even before Trump had entered a plea in the case in Miami.

Vivek Ramaswamy has led the way, making a pledge to pardon Trump his calling card. He is swaddling his case in selfless principle, saying that it’d be easier for him if Trump were out of the race, yet his commitment to justice forces him to act against his own interest … and say something that many Republican voters obviously want to hear.

Nikki Haley is inclined toward a pardon, too.

The middle of a primary campaign is not the best place to carefully think through the various equities involved in the criminal case against Trump and potential clemency, but the idea of pardoning Trump is a sensible one that, depending on the exact circumstances, truly could serve the public interest.

The bind represented by Trump’s indictment is that, based on the evidence we have now, he appears to be caught dead to rights; at the same time, nothing good is going to come from the political and legal warfare inevitable with the prosecution by the U.S. government of the leader of the opposition party.

The presidential pardon power is sweeping. The Supreme Court called it “unlimited” in the 1886 case Ex parte Garland. It extends to “every offence known to the law, and may be exercised at any time after its commission, either before legal proceedings are taken or during their pendency, or after conviction and judgment.”

Among other things, it allows for the consideration of factors that the law alone might not take into account.

The most famous example from high politics is, of course, Gerald Ford pardoning Richard Nixon for offenses related to Watergate, although that episode dates from a different era when politics was a more serious business for more serious people. Ford didn’t go around bragging that he’d pardon Nixon to garner attention and curry favor with Nixon supporters, while Nixon, for all his desperate flaws, was a man of considerable substance and achievement.

Ford, of course, justified his act of clemency on grounds of moving on from, as he put it in his national address, “a tragedy in which we all have played a part. It could go on and on and on, or someone must write the end to it. I have concluded that only I can do that, and if I can, I must.”

We are still far away from getting to anything like this place. First, Trump would have to lose the Republican nomination, and he’s currently the strong favorite. Then, some other Republican would have to win the presidency, or President Joe Biden would have to see the wisdom of potentially keeping the vanquished Trump out of jail, either after beating him again or defeating another Republican.

All this is very speculative, and who knows where the documents case will stand in a year or two? It looks formidable now, but Trump has yet to mount a legal defense.

That said, the case for a pardon is straightforward.

The conventional wisdom is that our politics is over-heated. The worry over this is often exaggerated (things have been as or more feverish before), but having a former president stand trial in a federal criminal case, and potentially spend the rest of his life in jail, is only going to make things more intense and the country more divided. A pardon itself would be a flash point, as the Ford pardon of Nixon was, but it would at least take the unprecedented possibility of a former president behind bars off the table.

There is some significant plurality of the country that simply isn’t going to accept the legitimacy of the charges. Maybe this shouldn’t matter — the law is the law. If the shoe were on the other foot, though, and if it were the Ron DeSantis Department of Justice prosecuting a Democrat with a significant chance of running against him, there’d be an outcry from the same people now dismissing any doubts about the Trump prosecution.

Those doubts are based on more than the typical partisan suspicions of the other side. The Trump prosecution comes against the backdrop of the years-long Russia investigation by the FBI and special counsel Robert Mueller that cast a pall over Trump’s campaign and early presidency and that was based on gossamer thin, politically motivated information.

It comes after Hillary Clinton got a prosecutorial pass over her “home brew” email set-up as secretary of State that was designed to evade government record-keeping rules and that transmitted and stored classified information and sensitive discussions, putting their security at risk.

It comes as the Hunter Biden investigation has dragged on since 2018, with an IRS whistleblower now alleging a cover-up.

It comes at the same time as the Department of Justice has failed to appoint a special counsel to probe whether the Biden family has used its influence to enrich itself.

What we should want to avoid is a pattern of legal retribution and counter-retribution. That would distort our legal process beyond anything that’s happened to this point, further subordinating it to politics and undermining public trust in it. Perhaps this prosecutorial tribal warfare has already been unleashed, but a Trump pardon has a chance of sapping some of the poison out of the system.

It’s also worth emphasizing that in any of these pardon scenarios, Trump has lost his latest bid for the presidency, either in the primary or the general election. This means he’d presumably be a much-reduced figure, whether he’d been rejected by Republican primary voters or lost a national election a second time (although I thought the same thing after the 2020 election). We aren’t talking about a pardon clearing the way for another White House bid, but rather as a consolation prize for someone who is vastly diminished and looking at potentially losing his freedom, too.

There are reasonable objections to all this. Pardoning Trump would mean entrenching a norm that high-flying political figures don’t have to play by the same rules around the handling of classified documents that everyone else does. Also, usually someone asks for a pardon, and expresses remorse for their wrongdoing. It’s impossible to imagine Trump doing that. Finally, we don’t know what 2024 will look like, and it may be that by the end of it, Trump looks more unsympathetic to a Republican president and more loathsome to Joe Biden.

At the end of the day, a Trump pardon would be about book-ending the Trump era, trying to get beyond a noxious chapter that both he and his often unscrupulous, overzealous pursuers contributed to. If Trump is a Nixon, it’d be best for the country if he found his Gerald Ford.

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News round-up, June 15, 2023

This week's event:

…”Historic Moment in Australia’s Energy Transition as Hazelwood Battery Energy Storage System is Commissioned

The Hazelwood BESS is an impressive feat of engineering and collaboration. Jointly funded and developed by ENGIE and Eku Energy, this facility is Australia's largest privately funded utility-scale battery, boasting a massive 150 MW/150 MWh capacity. Moreover, this project represents a significant step forward in the country's energy transition, thanks in part to the —-State Of The Art—-technology supplied by Fluence.

GLOBE NEWSWIRE / Editing by Germán & Co, June 14, 2023

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The other side of the coin…

…”The Triton malware... Do you know what it is?

The issue has attracted significant attention from cybersecurity experts, especially in the energy sector. The malware under scrutiny has been labelled as the "world's most lethal" due to its ability to remotely deactivate safety mechanisms in industrial facilities, which could result in catastrophic consequences.

Reuters, now

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Most Read…

‘As geopolitically important as oil’: Lithium mining could transform India – but is trouble looming?

As countries wean themselves off fossil fuels and decarbonise their economies, a global race to extract the precious metal is on the horizon

THE TELEGRAPH By Samaan Lateef IN NEW DELHI15 June 2023 

…”Historic Moment in Australia’s Energy Transition as Hazelwood Battery Energy Storage System is Commissioned

The Hazelwood BESS is an impressive feat of engineering and collaboration. Jointly funded and developed by ENGIE and Eku Energy, this facility is Australia's largest privately funded utility-scale battery, boasting a massive 150 MW/150 MWh capacity. Moreover, this project represents a significant step forward in the country's energy transition, thanks in part to the —-State Of The Art—-technology supplied by Fluence.

GLOBE NEWSWIRE / Editing by Germán & Co, June 14, 2023

Energy bills to rise £200 a year ‘to pay for wasted wind power’

Poor electricity grid infrastructure means energy created by turbines in Scotland can’t reach homes in England on very windy days

The Telegraph by Emma Gatten, ENVIRONMENT EDITOR15 June 2023

The rise of North Korea’s most dangerous woman

Tipped to be the future leader, Kim Jong-un’s sister Yo-jong reportedly ordered the executions of officials for ‘getting on her nerves’

The Telegraph By Sung-Yoon Lee, 8 June 2023 

Cyberattacks on renewables:

Europe power sector's dread in chaos of war…

Reuters by Nora Buli, Nina Chestney and Christoph Steitz, June 15, 2023, now

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: Lithium is found all over the world in both brine and hard rock deposits CREDIT: Surya Nair/iStockphoto / Editing by Germán & Co

‘As geopolitically important as oil’: Lithium mining could transform India – but is trouble looming?

As countries wean themselves off fossil fuels and decarbonise their economies, a global race to extract the precious metal is on the horizon

THE TELEGRAPH By Samaan Lateef IN NEW DELHI15 June 2023 

In early February, the Indian government made a discovery deep beneath the foothills of the Himalayas which holds the potential to transform the nation.

It was not a discovery of gold, diamonds or oil – but a highly reactive precious metal that is, quite literally, electrifying the world: lithium.

As countries look to wean themselves off fossil fuels and decarbonise their economies, a global race has emerged to mine the metal, which is a vital component for batteries – the sort used in electric vehicles and mobile – and extremely effective at storing energy.

This race is currently being won by the likes of Australia and Chile, but India’s new-found supply of lithium, which amounts to 5.9 million metric tons, the sixth largest reserve in the world, is likely to make the nation a serious contender.

The government will be eager to exploit its bounty as soon as possible – not only because it offers the opportunity to create jobs and attract investment, helping turbocharge the economy, but because lithium can pave the way to a greener India.

“It is geopolitically important as oil now,” says Chris Berry, a Washington-based analyst on energy metals supply chains.

India is currently the world’s third biggest emitter of carbon dioxide behind China and the US, and could well overtake these nations as its population and economy continues to grow. 

To avoid inheriting the unwanted title of the world’s leading polluter, the Indian government has declared its intentions to seek self-reliance in energy. “From solar energy to Mission Hydrogen to adoption to EVs [electric vehicles], we need to take these initiatives to the next level for energy independence,” Prime Minister Narendra Modi said last year.

Already, many of the country’s public institutions are running – or partially running – on solar energy. And in India’s most developed cities, more and more people are embracing electric vehicles, while public transport is transitioning away from fossil fuels.

The discovery of high-grade lithium in the north Indian village of Salal, up in the mountains of Jammu and Kashmir, has therefore come as a shot in the arm for the nation’s green dreams.

If harnessed properly, this reserve could reduce India’s greenhouse gas emissions by facilitating the electrification of the transport sector, which currently accounts for eight per cent of the nation’s greenhouse gas emissions.

The number of electric vehicles being sold in the country is already on the rise. In the 2020-21 fiscal year, just under 50,000 EVs were sold. This number rose significantly to 237,811 the following year, and 442,901 until December 2022.

More and more Indians are embracing electric vehicles CREDIT: ANUSHREE FADNAVIS/REUTERS

To promote the adoption of electric and hybrid vehicles in the country, India has implemented a scheme known as ‘Faster Adoption and Manufacturing of Electric Vehicles’ (FAME), which, if all goes to plan, will help turn the nation into the number one global exporter of EVs.

Under the programme, electric vehicles will make up 30 per cent of all private cars, 70 per cent of commercial vehicles, 40 per cent of buses and 80 per cent of two- and three-wheeler sales by 2030.

By providing a competitive advantage in the manufacturing of batteries and EVs, India’s lithium could turn the bold aspirations of FAME into reality.

The domestic availability of lithium could also facilitate the scaling up of energy storage systems to enable more efficient and reliable integration of renewable power into India’s energy grid.

“If managed efficiently and sustainably, the domestic availability of lithium can play a significant role in India’s pursuit of energy self-reliance and the transition towards a greener and more sustainable future,” says Pankaj Srivastava, Professor of geology at the University of Jammu.

He added that the lithium reserve could reduce India’s dependence on imports – last year, India spent £1.6 billion on buying lithium from abroad – and “boost its economy”.

Land slips, earthquakes and water scarcity

The government plans to auction off the lithium reserve in December. Both Indian private companies and foreign entities with a local subsidiary will be able to stake a claim, an official from India’s Ministry of Mines said.

But there are likely to be many challenges ahead. Experts believe India may need technology transfers and tie-ups with the global firms engaged in lithium metal extraction to facilitate the mining of the deposit.

“Lithium is found all over the world in both brine and hard rock deposits. The challenge is building the mine and producing large amounts of what we call battery grade or high purity lithium because of the geological and geochemical complexity of the lithium deposit,” says Mr Berry.

“Whoever decides to build a mine here would need significant capital as well as deep technical and engineering talent. This is not to say the mine can’t or shouldn’t be built but to say that it could take years.”

There is also the issue of local opposition. Salal village is part of the Reasi district – a hilly region prone to earthquakes and land sliding.

Many locals told the Telegraph they do not want the reserve to be mined, fearing it will trigger earthquakes and habitat disruption and lead to drinking water scarcity in the area, given the huge amounts of water needed to extract lithium.

“We are facing an acute shortage of drinking water and if lithium mining starts here, there won’t be enough water left for us,” says Nitin Mukesh, 37, a Salal resident.

Many of the wells have already dried up from other mining projects in the area, Mukesh adds.

Authorities will have to displace around 350 families of Salal village to build the mine. This has fuelled protests, with locals demanding jobs and compensation three times the cost of their properties.

In August 2022, Nature Conservancy claimed that the proven technologies of lithium extraction through surface mining or brine evaporation require hundreds of acres of land for extraction and can lead to the complete removal of native vegetation from an affected area.

With this in mind, the people of Salal are fearful of what will happen to the natural resources and beauty of their home land.

Vaibhav Rukwal, a 25-year-old local lawyer, is surprised that the surveyors who reviewed the area ignored the presence of a significant river beneath the foothills where the lithium reserves have been found.

“We fear the lithium mountain will sink due to the mining. And if the mountain sinks by just two inches, it could alter the course of the Chenab river, resulting in devastating flooding of the Raesi town,” says Rukwal.

Many families are protesting against the displacement as they say it would be difficult for them to leave behind ancestral properties without any significant benefit in return, he said.

“What purpose does this lithium serve when our people are forcibly uprooted?” asks Rukwal.

Even as officials claim the lithium mining would be economically viable because of its quality and quantity amid growing demand for the mineral, critics say it is a long road ahead.

“Getting Lithium out of the ground in an economic way is difficult. There is a big difference between resources in the ground, economic reserves, and then building a mine that can make lithium chemicals for the EVs. That timeline is decades long,” says Simon Moores, a London-based businessman specializing in the lithium ion battery and electric vehicle industry.

India needs to first drill the lithium deposits to understand the geology and how to commercialise it, he adds. “A wealth of lithium in the ground is great for politics but useless for the industry.”

Prof Srivastava argues that the discovery of lithium “is in its preliminary stage”. He adds: “It will be interesting to see how this evolves and contributes to India’s renewable energy goals.”

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Seaboard: pioneers in power generation in the country…

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

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Fluence with their Gridstack product, this world-renowned energy solutions provider is helping to ensure that energy in Victoria remains secure and reliable for years to come. / Image credit: Fluence/ Yahoo / Editing by Germán & Co

…”Historic Moment in Australia’s Energy Transition as Hazelwood Battery Energy Storage System is Commissioned

The Hazelwood BESS is an impressive feat of engineering and collaboration. Jointly funded and developed by ENGIE and Eku Energy, this facility is Australia's largest privately funded utility-scale battery, boasting a massive 150 MW/150 MWh capacity. Moreover, this project represents a significant step forward in the country's energy transition, thanks in part to the —-State Of The Art—-technology supplied by Fluence.

GLOBE NEWSWIRE / Editing by Germán & Co, June 14, 2023

MELBOURNE, Australia, June 13, 2023 ( -- ENGIE and project partners Eku Energy and Fluence have delivered another milestone at the site of the former Hazelwood Power Station in the Latrobe Valley in Victoria, with the commissioning of the Hazelwood Battery Energy Storage System (BESS) today. Marking a new era in Australia’s energy transition, Hazelwood is the first retired coal-fired power station to host a battery storage system in Australia and represents a key moment in repurposing former thermal assets for renewable energy technologies.

The Hazelwood BESS was officially opened on 14 June 2023 by The Hon. Lily D’Ambrosio MP, Victorian Minister for Energy & Resources, together with Rik De Buyserie, CEO, ENGIE Australia & New Zealand, Daniel Burrows, Chief Investment Officer and Head of Asia Pacific, Eku Energy, and Achal Sondhi, Vice President for Market Growth, APAC & General Manager for Australia, Fluence.

Jointly funded and developed by ENGIE and Eku Energy, the 150 MW/150 MWh Hazelwood BESS is Australia’s largest privately funded utility-scale battery. Fluence supplies, operates, and maintains the facility for the partnership and it is the first project in Australia to use Fluence’s Gridstack product to provide secure and reliable energy in Victoria and support the energy transition.

The Hon. Lily D’Ambrosio MP, Minister for Energy & Resources, Government of Victoria said:

… “Victoria is leading the nation in delivering battery and energy storage projects, with our ambitious energy storage targets ensuring that Victoria continues to attract industry investment and collaboration opportunities like this. The Latrobe Valley has been the home of Victoria’s energy generation for decades and new investment in technologies like energy storage will help solidify its role in our renewable energy future.”

Rik De Buyserie, CEO, ENGIE ANZ said:

…“ENGIE’s delivery of the Hazelwood battery is part of our commitment to building long-term, reliable assets that play a key role in the future of Australia’s energy transition. With its access to transmission and available space at site, Hazelwood is the perfect location for an asset that can grow in depth and duration, increasing the hosting capacity for renewables.”

Daniel Burrows, Chief Investment Officer and Head of Asia Pacific, Eku Energy said:

… “The Hazelwood battery is an example of how strong partnerships can support the deployment of battery storage systems at strategic grid locations as Australia’s existing generation fleet transitions towards higher penetrations of renewable energy resources. Storage solutions remain key to the pace at which we can transition to renewable energy and today’s event marks another proud milestone in Eku Energy’s global energy storage portfolio, as we celebrate the commissioning of 150 MW of safe, secure and reliable battery capacity to accelerate the energy transition.”

Achal Sondhi, Vice President for Market Growth, APAC & General Manager for Australia at Fluence said:

…. “As the first project in Australia to deploy Fluence Gridstack, an energy storage product which is designed for the most demanding market applications, the Hazelwood battery is a major milestone for us. By partnering with ENGIE and Eku Energy, we are bringing Fluence’s proven advanced technology combined with over 15 years of global energy storage experience to deliver industry-leading reliability, scalability, and safety to Australia. Fluence Mosaic™ bidding software allows the Hazelwood battery to react quickly and efficiently to grid needs and maximise the revenue while allowing integration of more clean energy. Our rapidly growing Fluence team in Australia is committed to the country’s energy transition.”

The Hazelwood battery has the capacity to store the equivalent of an hour of energy generated from the rooftop solar systems of 30,000 homes. It will play a critical role in increasing renewable energy capacity in Victoria while delivering essential system services to the grid. The Hazelwood Power Station was built in the 1960s and closed in 2017 after 50 years of service, in line with ENGIE’s global strategy to be Net Zero carbon by 2045.

The findings of this significant project indicate that adopting the —State Of The Art— technologies, such as the battery energy storage system (BESS) provided by Fluence, is imperative for achieving a swift and effective shift towards renewable energy sources.

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Image credit by Germán & Co

Energy bills to rise £200 a year ‘to pay for wasted wind power’

Poor electricity grid infrastructure means energy created by turbines in Scotland can’t reach homes in England on very windy days

The Telegraph by Emma Gatten, ENVIRONMENT EDITOR15 June 2023

Energy bills will rise £200 a year within a decade to pay for wasted wind power as new turbines in Scotland are paid to switch off, according to new forecasts.

Poor electricity grid infrastructure means energy created by turbines in Scotland cannot reach homes in England on very windy days.

Last year Britain wasted enough wind power for a million homes, but new turbines built over the next decade would see that figure grow fivefold by 2030, according to think tank Carbon Tracker.

The cost to pay wind farms to switch off at these times and buy gas to fill in the shortfall would rise to £3.5 billion a year, according to Carbon Tracker’s analysis. That would add an average of £200 to annual household energy bills.

Bottlenecks in the planning process

The problem has been blamed on bottlenecks in the planning process which can take up to seven years for major new electricity cable projects.

Meanwhile, the construction of wind farms has grown steadily to help meet the Government’s net zero goals.

As a result, wind generation in Scotland is expected to grow four times faster by 2030 than the cables required to send the power across the border.

Scotland can currently produce 10GW of electricity from its wind farms on peak days, but the grid has the capacity to transport just 6GW.

With Scotland accounting for just 10 per cent of the country’s electricity demand, an excess of power would be created on days with high wind and low demand if turbine owners were not paid to switch off.

National Grid paid Scottish wind farms to stop generating on more than 200 occasions last year while paying gas power stations in England to increase output to compensate.

“The electricity grid is not fit for purpose because investments are not increasing in step with the rapid growth of wind power,” said report author Lorenzo Sani.

‘Grid can’t support Government’s plans’

“Without significant improvement in the permitting timeframes for critical energy transmission infrastructure – the grid can’t support the Government’s plans to decarbonise generation by 2035 or deliver on its vision of ‘affordable, homegrown, clean energy’.”

The Government is looking at ways to speed up connections, including forcing slow-moving projects to the back of the queue.

Carbon Tracker said building new subsea cables would be the cheapest and most effective way to solve the problem.

The cost of two new undersea cables between England and Scotland would be around £3.7 billion, but could save £1.7 billion in annual wind curtailment costs, the report found.

“We’ve known for years that more renewables need to be built to meet our goals, but the network has not kept pace, creating bottlenecks and constraints in the system, and this is costing consumers hundreds of millions of pounds,” said Barnaby Wharton from industry body RenewableUK. “The solution to this problem is clear: building more grid is essential to getting low cost, low carbon power to consumers and reducing our reliance on gas imports.”

A Department for Energy Security and Net Zero spokesperson said: “Since 2010, we’ve increased the amount of renewable energy connected to the grid by 500 per cent – the second highest amount in Europe.

“This has meant installing 3790MW of additional capacity across all renewables in 2022 alone - enough to power 3.8 million homes.

“We continue to support more renewable projects to come online, including onshore wind if there is local community backing, as clean, more affordable energy brings down costs for consumers and boosts our long-term energy security.”

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Image: 'It is the First Sister of North Korea who wields real power,' writes Sung-Yoon Lee CREDIT: Nigel Buchananby / Editing by Germán & Co

The rise of North Korea’s most dangerous woman

Tipped to be the future leader, Kim Jong-un’s sister Yo-jong reportedly ordered the executions of officials for ‘getting on her nerves’

The Telegraph By Sung-Yoon Lee, 8 June 2023 

Under a foggy February sky, a plane made its descent towards Incheon International Airport in South Korea. Inside sat 23 passengers – five officials, three reporters and the rest bodyguards. But one mattered above all.

At 1.46pm, Korea Standard Time, on 9 February 2018, the Soviet-era Ilyushin-62 touched down. It was the first time a direct descendant of North Korea’s dynastic founder Kim Il-sung had set foot on South Korean soil since Kim Il-sung himself in July 1950, one month after invading the South.

Cameras clamoured to catch a glimpse of the guests. First to emerge from the airport was Kim Yong-nam, the then-90-year-old nominal head of the North Korean mission, who got into the first of two black sedans. Then, shadowed by a tall, male North Korean bodyguard and a female South Korean bodyguard, came a slightly built woman, around 30 years old. As she made her way to the second car, her gaze was still and her posture erect, as though she was entirely at ease with being at the centre of such a historic moment.

This was Kim Yo-jong, the sister of leader Kim Jong-un. As the youngest of the late leader Kim Jong-il’s seven children, she was doted on from childhood, known as ‘sweet princess Yo-jong’ to her parents. But unlike her other brother Kim Jong-chol, a royal sibling without real power, Kim Yo-jong was also ambitious.

From at least 2014 she had been ‘censor in chief’, running the nation’s Propaganda and Agitation Department (PAD), whose mission is to indoctrinate North Koreans with state ideology. Her role in government has dramatically increased since 2018, and she has played an integral part in statecraft, expanding her dynasty’s power by drawing on lessons learned from her father – along the way earning the nicknames of ‘bloodthirsty demon’ and ‘devil woman’ from certain North Korean officials.

And yet until that South Korea trip, few outside her country had even heard of her.

For two days, as the mysterious princess from Pyongyang attended lunches, receptions and the opening ceremony of the Winter Olympics in Pyeongchang, she had South Koreans enthralled, despite doing very little besides walking, sitting, shaking hands, ignoring US vice president Mike Pence in the Olympic stands, infrequently smiling and frequently looking down her nose at South Koreans – including President Moon Jae-in.

Kim Yo-jong alongside North Korea's nominal head of state Kim Yong Nam and behind Mike Pence as she watches the opening ceremony of the 2018 Winter Olympics in Pyeongchang, South Korea CREDIT: AP

She didn’t give a single public statement or interview. The only moment that betrayed what she really thought of anything came during the opening ceremony. When the US athletes made their entrance, she stayed in her seat while others applauded, her nose in the air, scowling slightly. (By then US-North Korea relations were at a particularly low ebb, with much name-calling between Kim Jong-un and then-President Trump, that ‘mentally deranged US dotard’.)

Kim Yo-jong eschewed small talk at photo ops too, and sat silently, her face expressionless, while others made polite chit-chat about the weather. Yet throughout that 56-hour trip, she was the talk of the nation and beyond.

Press commentary was over the top, unpicking every detail from her plain black outfits and the flower-shaped clip that kept her hair back in a ‘no-nonsense style’, through to the fact that she was seen wearing thick make-up, even though she usually wore little of it at all. What could this mean? One expert concluded that her eyeshadow must be positive news – a sign that she took her mission seriously.

‘She is not only pretty but also polite!’ gushed another commentator after a wrangle over seating in the airport VIP room. In their excitement, they failed to see what was really at play: the South Korean hosts had indicated to Kim Yong-nam to take the centre seat but he motioned to the princess to take it instead. With a smile, she pointed for him to sit. ‘How gracious she is!’ remarked South Korean pundits, not noticing that Kim Yo-jong’s outstretched fingers were less a gesture of respect than the boss telling her underling to sit down.

Kim Yo-jong arrives to attend the opening ceremony of the 2018 Winter Olympics in Pyeongchang, South Korea CREDIT: AFP

Had she wanted to show true deference, Kim Yo-jong would have motioned with both hands cupped. But imperviousness and self-confidence bred from an early age do not lend themselves to modesty; and here she was calmly exuding arrogance.

The most important event of her trip was a visit with President Moon at the Blue House, then the presidential office and mansion, followed by a luncheon. It would be here that she delivered a personal letter from her brother, paving the way for a series of historic meetings between the North and South Korean leaders.

That this letter was delivered by Kim Yo-jong, not Kim Yong-nam – a government veteran of six decades, who had for the past 20 years been President of the Presidium of the Supreme People’s Assembly, the rubber-stamp parliament – spoke volumes. It was a snapshot of a peculiarity in North Korean political culture, in which official ranks often belie the true hierarchy, and the lives of cabinet members and four-star generals can hang on the whims of a real power-holder of a much lower rank. Indeed Kim Yo-jong could, if she wished, order the execution of any one of the 250-strong Central Committee of the Workers’ Party of Korea, except Kim Jong-un.

It is the First Sister of North Korea who wields real power.

When Kim Il-sung died in 1994 and Kim Jong-il became the Supreme Leader, the outside world – even foreign intelligence agencies – knew little about the new man, nor his seven children, born to four different women. Of his three youngest children – Jong-chol, Jong-un and Yo-jong, all born to his most favoured consort, dancer Ko Yong-hui – they knew nothing at all.

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Image source: Media / Editing by Germán & Co

Cyberattacks on renewables: Europe power sector's dread in chaos of war

Reuters by Nora Buli, Nina Chestney and Christoph Steitz, June 15, 2023, now

OSLO/LONDON/FRANKFURT, June 15 (Reuters) - Saboteurs target a nation leading the world in clean energy. They hack into vulnerable wind and solar power systems. They knock out digitalized energy grids. They wreak havoc.

It's the stuff of nightmares for European power chiefs.

Henriette Borgund knows attackers can find weaknesses in the defences of a big renewables power company - she's found them herself. She joined Norway's Hydro (NHY.OL) as an "ethical hacker" last April, bringing years of experience in military cyberdefence to bear at a time of war in Europe and chaos in energy markets.

"I am not sure I want to comment on how often we find holes in our system. But what I can say is that we have found holes in our system," she told Reuters at Hydro's Oslo HQ, declining to detail the nature of the vulnerabilities for security reasons.

Hydro is among several large power producers shoring up their cyberdefences due in significant part to Russia's invasion of Ukraine, which they say has ramped up the threat of hacker attacks on their operations, according to Reuters interviews with a dozen executives from seven of Europe's biggest players.

"We established last year, after the start of the Ukraine war, that the risk of cyber sabotage has increased," said Michael Ebner, information security chief at German utility EnBW (EBKG.DE), which is expanding its 200-strong cyber security team to protect operations ranging from wind and solar to grids.

The executives all said the sophistication of Russian cyberattacks against Ukraine had provided a wake-up call to how vulnerable digitalized and interconnected power systems could be to attackers. They're nervously monitoring a hybrid war where physical energy infrastructure has already been targeted, from the Nord Stream gas pipelines to the Kakhovka dam.

"The cyber campaigns that Russia has been running against Ukraine have been very targeted at Ukraine. But we have been able to observe and learn from it," said Torstein Gimnes Are, cybersecurity chief at Hydro, an aluminium producer as well as Norway's fourth-largest power generator.

Gimnes Are said he feared a nation state could work with hacker groups to infect a network with malicious software - though like the other executives declined to divulge details on specific attacks or threats, citing corporate confidentiality.

Ukraine's SBU security service told Reuters that Russia launched more than 10 cyberattacks a day, on average, with the Ukrainian energy sector a priority target. It said Russia had tried to destroy digital networks and cause power cuts, and that missile attacks on facilities were often accompanied by cyberattacks.

Russian officials have said that the West repeatedly blames Moscow for cyberattacks without providing evidence and that the United States as well as its allies carry out offensive cyber operations against it. The Russian foreign ministry didn't immediately respond to a request for comment on the views of the power companies or the Ukrainian SBU's assertions.

The European power companies, as well as half a dozen independent tech security experts, stressed that the digitalized and interconnected technology of the thousands of renewable assets and energy grids springing up across Europe presented major - and growing - vulnerabilities to infiltration.

"The new energy world is decentralized. This means that we have many small units - such as wind and solar plants but also smart meters - which are connected in a digital way," said Swantje Westpfahl, director at Germany's Institute for Security and Safety.

"This networking increases the risks because there are significantly more possible entry points for attacks, with much greater potential impact."

TRITON VIRUS SHUTS PLANT

The possible effects of a cyberattack range from capture of sensitive data and power outages to the destruction of a physical asset, said James Forrest, executive vice president at Capgemini, which advises companies on security risks.

He cited, in particular, the risk of malware such as the Triton virus, which hackers used to remotely take over the safety systems of a Saudi petrochemical plant in 2017 and shut it down.

While malware packages like Triton might be exotic algorithmic weapons, the most common mode of entry used by hackers looking to deliver them is more familiar, according to the executives and experts interviewed: via phishing emails designed to elicit data from employees like network passwords.

Such attacks are "more or less constant", according to Cem Gocgoren, information security chief at Svenska Kraftnaet. The Swedish grid operator has roughly quadrupled its cybersecurity team to about 60 over about the last four years and is raising awareness among staff. "We have to make them understand that we are under attack all the time. It's the new normal."

Hydro's ethical hacker Borgund echoed this sense of a relentless barrage via phishing, which she described as the "first initial vector" of cyberattackers.

CYBERATTACK ON SATELLITE

Traditional power plants like gas and nuclear typically operate on airgapped IT infrastructure that's sealed off from the outside, making them less susceptible to cyberattacks than physical sabotage, said Stephan Gerling, senior researcher at Kasperky's ICS CERT, which studies and detects cyber threats on industrial facilities.

By contrast, the ever-growing number of smaller renewable installations around Europe run on diverse third-party systems that are digitally hooked up to the power grid, and are below the power-generation monitoring threshold set by safety authorities, he added.

This kind of interconnectedness was demonstrated last February when a Russian cyberattack on a Ukrainian satellite communications network knocked out the remote monitoring of more than 5,800 wind turbines of Germany's Enercon and shut them down, said Mathias Boeswetter, head of IT security at German energy industry group BDEW.

While the incident did not affect the electricity grid, it showed the escalating cyber vulnerabilities posed by the energy transition, he added.

KEY TO HACKING A WIND FARM

Hacking into a wind farm can be relatively easy.

Researchers at the University of Tulsa conducted an experiment by hacking into unnamed wind farms in the United States in 2017 to test their vulnerabilities, with the permission of the wind farm operators, according to a report on cyber threats to energy by risk consultancy DNV.

The researchers picked a lock to gain access to a chamber in the base of a wind turbine, the report said. They accessed the turbine's server and got a list of IP addresses representing every networked turbine in the field. They then stopped the turbine from turning.

Driven by government efforts to wean nations off fossil fuels and double down on renewables, wind and solar power accounted for more than a fifth of European energy demand in 2021, according to EU data, a share expected to double by 2030.

E.ON (EONGn.DE) - Europe's largest operator of energy grids with a network sprawling 1 million miles - has also observed a rising risk of cyberattacks, its CEO Leonhard Birnbaum said at the group's shareholder meeting in May.

The company has expanded its dedicated cyber staff to around 200 over the years, it said in emailed comments, adding the group had long recognized the issue's relevance.

"Putting cybersecurity at the top of the priority list only after the start of the war in Ukraine and the energy crisis would have been a serious omission," it said.

The European power sector as whole may be unprepared for the scale of the security challenge - that's the view of many workers in the sector who say a lack of in-house cybersecurity skills was the biggest obstacle to effectively guarding against attack, according to a separate DNV survey of around 600 energy professionals carried out in February and March.

"Companies in the energy space, their core business is producing energy, not cybersecurity," said Jalal Bouhdada, CEO of cybersecurity firm Applied Risk, a division of DNV.

"This means that they must work diligently to secure every aspect of their infrastructure because malicious actors only need to find one gap to exploit."

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News round-up, June 14, 2023

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Most Read…

Chile intends to become the world's leading lithium producer

With 36% of the world's lithium reserves located in Chile, President Gabriel Boric is leading an extraction strategy, including plans for a government-owned company.

Le Monde by Flora Genoux(Buenos Aires (Argentina),  Published today at 3:00 pm (Paris)

Is Donald Trump Scared? 

At the former President’s indictment in Miami on Tuesday, it was impossible to say whether his fate was more likely to be a return to the White House—or prison. 

The New Yorker by Eric Lach, June 13, 2023

Peak in global oil demand ‘in sight before end of decade’

International Energy Agency says demand will grow by 2.4m barrels a day in 2023 to record 102.3m

The Guardian by Alex Lawson and agencies, Wed 14 Jun 2023

Stock Market to Fed: You Haven’t Done Enough

Bullish stocks, low bond yields and recovering housing market suggest interest rates aren’t that restrictive

WSJ by Greg Ip, June 14, 2023

Shell’s New Strategy Avoids the Toughest Questions

The European energy major promises stable oil and gas production this decade, but higher hurdles for investments in lower-carbon alternatives

WSJ By Carol Ryan, June 14, 2023 

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit:The brine basins and processing areas of a lithium mine owned by the Chilean company SQM (Sociedad Quimica Minera), in the Atacama Desert, Calama, Chile, September 12, 2022. MARTIN BERNETTI / AFP / Editing by Germán & Co

Chile intends to become the world's leading lithium producer

With 36% of the world's lithium reserves located in Chile, President Gabriel Boric is leading an extraction strategy, including plans for a government-owned company.

Le Monde by Flora Genoux(Buenos Aires (Argentina),  Published today at 3:00 pm (Paris)

The brine basins and processing areas of a lithium mine owned by the Chilean company SQM (Sociedad Quimica Minera), in the Atacama Desert, Calama, Chile, September 12, 2022. MARTIN BERNETTI / AFP

The announcement had been a long time coming. In a televised speech on Thursday, April 20, Chilean President Gabriel Boric outlined his "national lithium strategy," fulfilling a promise made during his campaign. The plan is part of an initiative to redistribute profits from the mining sector, one of the pillars of the Chilean economy. "No more mining for the few," vowed Boric, who assumed office in March 2022.

The lithium strategy "means more wealth so that Chile can finance new schools, hospitals, police stations, in short, a more dignified life for everyone," Boric continued. The project's cornerstone involves the creation of a "national lithium company" – the precise outline of which has yet to be determined – that will "participate in the entire production cycle of the mineral," according to the president. The idea is not to nationalize existing private companies but to set up a public-private partnership with mining stakeholders.

However, in order for the new structure to come to fruition, it remains subject to approval by Congress (where the government does not have a majority), via a bill due to be presented at the end of 2023. In the meantime, the government-owned copper company Codelco has already taken charge of launching the national participation in lithium extraction, by forging partnerships with private companies.

Taxation and energy sovereignty

Codelco, along with Enami (the national mining company), will be awarded exploration and exploitation contracts. Currently, two private companies – the US company Albemarle and the Chilean company SQM – are operating in the lithium salt flats of Atacama (1,500 km north of Santiago), where the metal is already being extracted in Chile. Their concessions expire in 2043 and 2030 respectively.

With the new policy, Boric intends to follow in the footsteps of Salvador Allende, the former socialist Chilean president (1970-1973) who nationalized the copper mines in 1971, calling the natural resource "Chile's wage." According to the authorities, Chile holds 36% of the world's lithium reserves, right in the heart of the "golden triangle" created by Argentina and Bolivia (together accounting for two-thirds of reserves, according to the French National Centre for Scientific Research).

As such, the country dreams of becoming the world's leading producer. Currently, Chile accounts for 34% of global production, outpaced by Australia. By 2022, lithium production will account for 3% of Chile's gross domestic product (GDP).

More coveted than ever, lithium is at a critical juncture. It's an essential metal for the batteries used in portable devices and in the manufacture of electric vehicles, which are increasingly encouraged by climate change adaptation policies. Demand for lithium is set to multiply by five to seven times between now and 2035, according to projections released on Tuesday, May 30, by the Chilean Copper Commission.

Consequently, the price of lithium has exploded. Between December 2020 and 2022, the price of lithium carbonate rose by 680% according to the Chilean government, making its tax and exploitation a major issue for tax revenues and sovereignty over natural resources.

The creation of a national lithium company "is a policy that seems quite legitimate," said Quentin Deforge, a political scientist, and researcher specializing in strategic minerals at the Free University of Brussels. "The energy transition is reshuffling the cards and allowing southern countries to gain a more favorable balance of power," he added. "If the Chilean strategy works, it could become a model."

New extraction methods

Although shares in SQM and Albemarle plummeted in the wake of the president's announcement, they recovered their value soon after. Above all, the companies have expressed a willingness to engage in dialogue. On Monday, June 5, French mining group Eramet announced the opening of an office in Santiago, "to support [its] future technical and commercial operations in Chile." According to Deforge, it's proof that "companies need lithium at any price and are absolutely willing to accept the new conditions" in Chile.

However, the specifics of the national lithium company have yet to be defined. "There's currently room for negotiation in Congress," said Emilio Castillo, an economist at the University of Chile. "Will the public company distribute contracts? Will it define the progressivity of taxes? The government presents it as a management company, but we can assume that the opposition will try to limit its action." In the meantime, a participatory phase focused on communities living in areas near mining operations is due to begin at the end of June.

In addition, the announced strategy includes "the use of new lithium extraction technologies that minimize the impact on brine basin ecosystems," along with research into these specific landscapes to learn more about how they function. Data gathering on the fragile brine basins "will take time and go beyond the current presidential term [until 2026]," warned Telye Yurisch, a researcher with the environmental protection foundation Terram.

The most critical issue is the high water demand involved in lithium extraction, due to the requirements of the evaporation process and the extensive use of fresh water in dilution, especially since these operations occur in a desert area in a water-stressed country. Yurisch added that "today, there is no commercial production anywhere in the world that uses the direct extraction method," which consumes less water.

Less than a month after the announcement of the lithium strategy, on Wednesday, May 17, Congress passed a tax amendment adding an increase for large copper mining operations, of which Chile is the world's leading producer. The government aims to finance its social policies by reviving the bill first proposed in 2018. The new tax system will start operating in 2024.

The government plans to reap $1.3 billion (€1.16 billion, or 0.45% of GDP) in tax revenue, a third of which will be redistributed to the regions. The law's approval is a major victory for the government, which nevertheless plans to pursue its tax reform project – originally intended to finance half its policies – which was rejected in March.

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Seaboard: pioneers in power generation in the country…

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

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Image: by Germán & Co

Is Donald Trump Scared? 

At the former President’s indictment in Miami on Tuesday, it was impossible to say whether his fate was more likely to be a return to the White House—or prison. 

The New Yorker by Eric Lach, June 13, 2023

For long stretches during former President Donald Trump’s arraignment in Miami on Tuesday afternoon, the only sounds in the courtroom were the creaks of the wooden benches in the spectators’ gallery and the hum of the air-conditioning system. Trump, wearing a dark suit, sat between his two lawyers, Todd Blanche and Chris Kise. From time to time, he leaned to his right to whisper to Blanche. Blanche would cover his mouth as he replied, pressing his face into Trump’s shoulder, practically snuggling.

Every American should be afforded the opportunity to observe Trump sitting silently for an hour. As it was, a half-dozen members of the public and a few dozen representatives of the press had their names drawn out of a hat by the clerk of the U.S. District Court for the Southern District of Florida. In April, at Trump’s arraignment in Manhattan on thirty-four counts of falsifying business records, the former President said fewer than a dozen words. On Tuesday, facing federal charges—including willful retention of national-security defense information and conspiracy to obstruct justice—Trump said absolutely nothing. His lawyers did the talking for him. “Your honor, we most certainly enter a plea of not guilty,” Blanche said, a few minutes into the proceeding.

There had been speculation before the hearing that Trump wouldn’t be formally arraigned on Tuesday. Two of the lawyers who had been handling the case left his legal team last week, after the indictment against him was unsealed. Since the case will be tried in Florida, Trump needed a lawyer admitted to the bar in the state. But who would take such a case, with such a client, and at the last minute? Representing Trump right now means accepting a nonzero chance of ending up in legal trouble oneself. Federal prosecutors, led by the special counsel Jack Smith, built their indictment against Trump in part using notes kept by one of Trump’s own lawyers, M. Evan Corcoran, who will now likely be called as a witness in the case. But there was Kise, a veteran Florida lawyer with deep ties to the state Republican Party, sitting to Trump’s left. There always seems to be someone in a red hat or blue suit ready to step in for Trump, no matter the fate of the last guy.

Arraignments are usually considered perfunctory affairs, particularly in cases against wealthy defendants who can afford bond and stay out of pretrial detention. But nothing about the criminal prosecution of a former President is perfunctory. As was the case in April in Manhattan, Trump’s arraignment on Tuesday involved extensive discussion of Trump’s extraordinary circumstances. Prosecutors allege that Trump kept classified national-security documents in sloppily stored banker’s boxes at Mar-a-Lago, his private club in Palm Beach, and at his golf club in Bedminster, New Jersey, and that he engaged in a series of deceptions and scheming maneuvers when asked to return them. While discussing whether the judge presiding over the arraignment, Jonathan Goodman, would prohibit Trump from contacting witnesses in the case, Blanche argued that such a rule would be impossible for Trump to abide by, since the case involved so many elements of Trump’s life: his staff, his security detail, his clubs.

Trump’s co-defendant in the case is Waltine Nauta, a former White House military valet who has continued to work for Trump since the former President left office. The government says that Nauta was the other member of Trump’s conspiracy to keep the classified documents. Nauta was sitting at the defense table to Blanche’s right, his shiny bald head a contrast with Trump’s shiny blond head. Goodman said it was his understanding that Nauta was with Trump “on a daily or nearly daily basis.” Nauta’s presence meant that Trump had some familiar company in the courtroom. As was the case in Manhattan, no member of Trump’s family attended the hearing in Miami. There has been much talk about what kind of venue Florida will be for a Trump trial, and whether a jury here will be friendlier to the former President than one in New York. Calls had gone out for Trump supporters to protest the proceeding on Tuesday. But, for much of the morning, Trump fans were rivalled in number by the feral chickens that live on the grass outside the Wilkie D. Ferguson, Jr., Courthouse.

Eventually, the judge, the prosecutors, and Trump’s lawyers hashed out a plan wherein Trump agreed not to discuss the facts of the case directly with anyone whom prosecutors put on a list of potential witnesses. Otherwise, the prosecutors seemed to go out of their way to demonstrate that they did not want the case to restrict Trump in any way. He was not asked to surrender his passport. He was not asked to check in with pretrial services. He did not have to put up bail. Trump is running for President, after all. After about forty-five minutes, the hearing was over. Trump stood as the judge exited, and then he turned to look at the gallery for a moment before walking out through a side door. His head was set low on his shoulders. He was grimacing.

From the courthouse, Trump made what the Miami Herald called “strategic detour” to Versailles, a Cuban restaurant in Little Havana where his supporters had gathered. “Are you ready? Food for everyone!” he said, before a pastor and a rabbi who were on hand took a moment to pray for him. Then Trump headed for the airport, to fly to Bedminster, one of the scenes of the alleged crime, and the site of a fund-raiser he planned to attend in the evening. On Wednesday, Trump will be seventy-seven years old. He might end up President again, or he may face a terminal prison sentence. It remains impossible to say which is more likely. 

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Image credit: The International Energy Agency expects economic headwinds to reduce oil growth to 860,000 bpd next year. Photograph: Nick Oxford/Reuters/ Editing by Germán & Co

Peak in global oil demand ‘in sight before end of decade’

International Energy Agency says demand will grow by 2.4m barrels a day in 2023 to record 102.3m

The Guardian by Alex Lawson and agencies, Wed 14 Jun 2023

The worldwide peak in demand for oil is “in sight” and could come before the end of this decade, the global energy watchdog has said.

The International Energy Agency said the bounceback in oil demand that followed the easing of Covid restrictions was likely to end this year and growth would slow from next year.

A potential worsening in the global economy and the long-term transition to cleaner energy sources are expected to hurt demand.

The IEA’s executive director, Fatih Birol, said: “The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency and other technologies advance.”

Global oil demand would grow by 2.4m barrels per day (bpd) in 2023 to a record 102.3m, the IEA said in its monthly report on Wednesday.

However, the Paris-based agency expects economic headwinds to reduce growth to 860,000 bpd next year, and increasing use of electric vehicles to help to reduce that to 400,000 bpd in 2028 for overall demand of 105.7m.

“The slowdown has been hastened by Russia’s invasion of Ukraine amid heightened energy security concerns and by governments’ post-Covid recovery spending plans, with more than $2tn mobilised for clean energy investments by 2030,” the IEA said.

Demand for oil from combustible fossil fuels, excluding biofuels, petrochemical feedstocks and other non-energy uses, was likely to peak at 81.6m bpd in 2028, it added.

“Oil producers need to pay careful attention to the gathering pace of change and calibrate their investment decisions to ensure an orderly transition,” Birol said.

Shell told investors it had ditched plans to cut oil production each year for the rest of the decade as it focused on fossil fuels under its new chief executive, Wael Sawan.

Energy prices soared last year after Russia, a large exporter of fossil fuels, invaded Ukraine and cut deliveries of natural gas to Europe.

Western powers imposed bans and price caps on Russian oil exports in efforts to drain a significant source of cash for Moscow’s war effort.

Oil and gas prices have fallen in recent months. However, British households’ energy bills remain about double what they were before the beginning of the energy crisis in 2021.

The energy price cap in Great Britain will fall to £2,074 for an average household from July, from the £2,500-a-year level set by the government’s energy price guarantee, which subsidises bills.

Last month a report by the IEA showed that clean energy investment was on track to reach $1.7tn (£1.4tn) this year as investors turned to renewables, electric vehicles, nuclear power, grids, storage and other low-carbon technologies.

The agency said Russia’s invasion of Ukraine, and the volatility the war injected into commodity markets, had encouraged greater investment in clean energy.

Joe Biden’s $369bn Inflation Reduction Act package of climate subsidies has also enticed investor capital into low-carbon projects in the US, and put pressure on the UK and elsewhere in Europe to respond with greater support for green energy on this side of the Atlantic.

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Image by Germán & Co

Stock Market to Fed: You Haven’t Done Enough

Bullish stocks, low bond yields and recovering housing market suggest interest rates aren’t that restrictive

WSJ by Greg Ip, June 14, 2023

Federal Reserve officials plan to take a break from raising interest rates Wednesday because they think monetary policy is already plenty tight.

To which the markets say: no, it ain’t.

The Fed’s mission has been to get interest rates high enough to slash inflation from its current 4% to 5% range to 2%, even if that means pushing the economy into recession and unemployment higher. If the Fed had succeeded, you probably wouldn’t be seeing these things: stocks entering a new bull market, a rebounding housing market or long-term Treasury yields well below the inflation rate.

In other words, the premise behind the Fed’s pause is suspect. Yes, interest rates are up a full 5 percentage points since early 2022, the steepest pace of increases since the 1980s. Despite that, monetary policy simply isn’t very tight, and that explains why the economy remains stronger and inflation is more stubborn than Fed officials expected—and why their job is still not done.

Likewise, the Reserve Bank of Australia and Bank of Canada had both raised rates rapidly, then paused to await an economic slowdown and lower inflation. Neither happened, and both resumed raising rates in recent weeks. 

Monetary policy appears tight because the Fed has raised the nominal federal-funds rate so much—from near zero to a range between 5% and 5.25%. But it’s the real (inflation-adjusted), not nominal, interest rate that matters for the economy, and that has risen much less because inflation is higher than in previous cycles.

The level of real rates depends on the inflation rate used. Based on the 5.3% increase in consumer prices excluding food and energy in the past 12 months, the real rate is around zero. Using inflation-protected Treasury bond yields, Benson Durham, an analyst at Piper Sandler, estimates that the real rate is now about 1.4%. Unlike nominal rates, the real rate has risen less than in 1994 and 2004, though more than in 1999 and 2016, he calculates. “Not much to write home about,” he says.

The Fed considers a real rate of 0.5% neutral, meaning it neither stimulates nor slows economic activity. Anything above that is seen as restrictive enough to nudge unemployment higher and inflation lower. That said, a real rate of 1.4% isn’t that restrictive. The real rate was higher before every previous recession at least since 1960.

Typically, when the Fed raises short-term rates, stock prices fall, and long-term bond yields and the dollar rise. It’s this tightening of financial conditions more broadly, not the rise in short-term rates alone, that slows the economy. That’s what happened for the first six months of Fed tightening in more or less textbook fashion.

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Image: Shell wants to expand its natural-gas business and keep oil flows steady for the rest of the decade. PHOTO: YUI MOK/ZUMA PRESS/Editing by Germán & Co

Shell’s New Strategy Avoids the Toughest Questions

The European energy major promises stable oil and gas production this decade, but higher hurdles for investments in lower-carbon alternatives

WSJ By Carol Ryan, June 14, 2023 

Attacked on all sides, Europe’s energy bosses have a new pitch: They won’t cut fossil fuels until global demand falls. For investors, the strategy promises plenty of cash, but also questions.

On Wednesday, Shell SHEL 1.68%increase; green up pointing triangle released fresh targets at its investor day in New York, where Chief Executive Wael Sawan set out detailed goals for the company he took the helm of earlier this year. Among the new plans are additional cash for shareholders, steady fossil fuel production and a higher profit hurdle for clean-energy investments to get the green light.

Shell will distribute up to 40% of its cash flows to investors, an increase from up to 30% previously. This will happen “through the cycle,” according to the company’s statement, perhaps an assurance that there won’t be a repeat of Shell’s 2020 dividend cut. Cost efficiencies and lower capital spending will help fund the higher payouts. Despite the new handouts, Shell’s shares were up a muted 1% in early trading.

As long as demand for fossil fuels continues to grow, Shell will meet it. The company wants to expand its natural-gas business and keep oil flows steady for the rest of the decade. It previously planned to reduce oil production by 1% to 2% a year, though Shell says it has already met this target by selling assets. Rival BP made a similar shift earlier in February. Shell will also be more selective about investing in alternative sources of energy such as wind and solar, where returns have been disappointing.

Europe’s top oil companies clearly don’t want to jump the gun with the shift to cleaner energy. Shell’s Sawan thinks that cutting oil and gas production while global demand for fossil fuels is still growing is “unhealthy.” Similarly, TotalEnergies boss Patrick Pouyanné said during a recent interview with Columbia Energy Exchange that the company’s oil production “will begin to decline when we see the decline of demand.”

The case for not starving the world of oil and gas before an alternative energy system is in place is valid. Consumers and businesses don’t need a repeat of last year’s energy shortages and record-high prices. But the lion’s share of oil companies’ investment budgets is still being pumped into fossil fuels rather than alternatives. One risk for investors is that when the tipping point comes, oil companies won’t be as well prepared for the energy transition—or harsher regulations—as they should be. 

The International Energy Agency thinks peak oil is on the way this decade. For now, there is no obvious candidate to replace oil and gas, or at least none that is as profitable. For example, BP is targeting returns on investment of up to 8% for renewable energy such as wind and solar, which is less than half what fossil fuel projects typically deliver. Biofuels are more promising, as are green hydrogen and carbon capture and storage, but these are still small markets. 

European energy companies are trying to balance competing demands. Their valuations trade at a big discount to American oil giants Exxon Mobil and Chevron as investors reward companies that stick with fossil fuels. But shareholders don’t want too much investment in new oil exploration and prefer cash to be handed back instead. Shell, BP and TotalEnergies are also under pressure from ESG-minded European investors to address climate change.

Big Oil’s “over to you” message to society lets companies slow their bets on the energy transition for now. But it doesn’t add up to a convincing long-term plan.

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News round-up, June 13, 2023

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Editor's reflections...

“Due to global geopolitical tensions, Latin America is more forgotten than ever…

The task of finding news articles about Latin America in the global media can be daunting. The presidency of Manuel Andrés López Obrador of Mexico has been the subject of occasional reports, particularly regarding his disputes with neighboring countries to the north. Similarly, Colombian President Gustavo Petro's stance on Venezuela's autocratic government has been inconsistent, attracting attention from various quarters. The resurgence of Brazilian President, former labor leader and lobbyist Luiz Inácio Lula da Silva has also been a topic of discussion in recent times. Furthermore, the young Chilean President Gabriel Boric has encountered challenges as he navigates the deeply rooted power structures of his nation. President Boric has received praise for his positioning in international politics and outspoken condemnation of autocratic regimes in the region. The potential establishment of a Chinese military base in Cuba has raised concerns. However, it is worth noting that China has already established satellite police stations in numerous locations around the world. Furthermore, Peru, a nation renowned for its exquisite cuisine but plagued by political instability, is competing with Bolivia for the unenviable title of having the shortest presidential terms in the region. The phenomenon of transforming public spaces into temporary settlements for homeless populations due to the inability to afford rent is not unique to Argentina. Many countries in the region have experienced similar incidents, such as the transformation of Ezeiza International Airport in Buenos Aires into a hotel operated by the Salvation Army. 

In conclusion, it can be stated that the Latin American and Caribbean region is characterized by the presence of major oil-producing nations, as well as countries that heavily depend on fuel imports. Colombia, Venezuela, Guyana, and Mexico are predominantly known for their crude oil exports, while Peru and Chile are recognized as significant importers of crude oil. The implementation of sanctions against Russia, a prominent global oil producer, has resulted in a prolonged increase in oil prices. As mentioned earlier, the result has the potential to provide benefits to oil-producing nations while also impacting the economic stability of countries that are net importers. The ongoing conflict has the potential to impact the pricing of food and agricultural commodities. The phenomenon being considered can be explained by Russia's dominant position as the primary global producer of wheat. This is further compounded by the ongoing conflict involving Ukraine, which is the world's third-largest wheat producer. As previously stated, the potential consequences of this situation are of great significance for countries such as Venezuela, which have a surplus in food product trade but a deficit in oil trade. Moreover, it is crucial to recognize that the prices of wheat, maize, barley, and rice have been considerably affected by export restrictions resulting from the conflict and sanctions. The inflation targets of several nations have been exceeded. Given that food prices constitute a substantial portion of the average consumption basket in the region, any abrupt price hike could lead to a rise in poverty rates, causing hunger and social unrest.

Considering an uncertain future, Latin America requires wise leadership to navigate the transition ahead and about all minimize the impact on the most vulnerable populations. As Pope Francis usually said: —"Pray for me..." —.  This is exactly what the troubled region of the southern part of the American continent needs at this moment.

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Most Read…

CPI Report Shows Inflation Has Been Cut in Half From Last Year’s Peak

U.S. May consumer prices rose 4.0% from year earlier

WSJ By Gwynn Guilford, June 13, 2023 

Germany overtakes China as second most attractive country for renewables investment

The United States ranked first in EY's annual ranking of the top 40 renewable energy markets worldwide, with Germany moving up one spot to second for the first time in a decade.

Reuters By Nina Chestney, June 13, 2023

Macron warns Ukraine counteroffensive could last ‘weeks, even months’

The leaders of France, Germany and Poland met in Paris to discuss giving Ukraine security guarantees.

POLITICO EU BY CLEA CAULCUTT, JUNE 12, 2023 

'In the US, the culture war is hardly good for business'

Because of debates on gender and environmental issues, American companies are torn between progressives and those who denounce woke capitalism, writes New York correspondent Arnaud Leparmentier.

Le Monde, Arnaud Leparmentier, New York (United States) correspondent,  Published today at 12:02 pm (Paris)

Exclusive: Trump finds no new lawyers for court appearance in Mar-a-Lago case

Trump is expected to be represented by existing lawyers Todd Blanche and Chris Kise

The Guardian, Hugo Lowell in Doral, Miami, Tue 13 Jun 2023

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: NYT / Editing by Germán & Co

CPI Report Shows Inflation Has Been Cut in Half From Last Year’s Peak

U.S. May consumer prices rose 4.0% from year earlier

WSJ By Gwynn Guilford, June 13, 2023 

The job market remains robust and consumers have boosted their spending. PHOTO: RICHARD B. LEVINE/ZUMA PRESS

May inflation was around half of last year’s peak but remained far above what Federal Reserve officials would like to see.

The consumer-price index rose 4% in May from a year earlier, the Labor Department said Tuesday, well below the recent peak of 9.1% last June and down from April’s 4.9% increase.

Fed officials are meeting June 13-14 to decide their next steps to cool inflation, which they would like to see at 2%. They could hold interest rates steady at the meeting, while preparing to increase rates again in the summer or the fall if they don’t think enough progress has been made on inflation.

So-called core consumer prices, which excludes volatile food and energy categories, climbed 5.3% in May from a year earlier, down from 5.5% in April. Economists see core prices as a better predictor of future inflation. Core prices remain elevated in part because an earlier surge in housing-rental prices continues to show up in the inflation figures.

Overall consumer prices increased a seasonally adjusted 0.1% in May from the prior month, down from April’s 0.4% increase. Core consumer prices rose 0.4% in May from the prior month, the same pace as in April and March.

May inflation was driven by rising housing prices along with higher used vehicles and food prices, the Labor Department said. Energy prices declined 3.6% in May from April.

The Fed has aggressively raised rates from low levels starting last year to slow economic growth and tame inflation. Fed officials in May raised the benchmark interest rate to the current range between 5% and 5.25%, the highest level in 16 years. 

Last month’s inflation figures may be more likely to influence whether Fed officials raise rates at their subsequent July meeting. Concerns that inflation isn’t slowing fast enough could lead more of them to signal in projections set for release Wednesday that they are prepared to lift rates again later this year even if they hold rates steady this week.

“Making slow progress is the big problem,” said Omair Sharif, who leads forecasting firm Inflation Insights. “There’s still a lot of debate among Fed officials over ‘how much more do we need to do?’

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Seaboard: pioneers in power generation in the country…

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

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Image: Electrical power pylons with high-voltage power lines are seen next to wind turbines near Weselitz, Germany November 18, 2022. REUTERS/Lisi Niesner / Editing by Germán & Co

Germany overtakes China as second most attractive country for renewables investment

The United States ranked first in EY's annual ranking of the top 40 renewable energy markets worldwide, with Germany moving up one spot to second for the first time in a decade.

Reuters By Nina Chestney, June 13, 2023

LONDON, June 13 (Reuters) - Germany has overtaken China to become the second most attractive country in the world for renewables investment due to its efforts to speed up power market reform and move away from fossil fuels, research showed on Tuesday.

In an annual ranking of the top 40 renewable energy markets worldwide by consultancy EY, the United States was ranked first, with Germany climbing one place to second position for the first time in a decade.

Germany was Europe's biggest buyer of Russian gas until the war in Ukraine and has also been reliant on nuclear and coal. However, it closed its last three nuclear power stations in April.

"While this is a major milestone in its progress to accelerated energy transition targets, there is likely to be an increase in the use of coal in the short term, to reduce the effects of intermittency in the power supply," the report said.

Germany is aiming to have renewables make up 80% of its energy mix by 2030. Currently, renewables account for 46%, up from 41% at the start of 2022, the report said.

The United States held its top position in the index, supported by the passing of the Inflation Reduction Act last year, which earmarks $369 billion for investment in energy security and climate change.

However, there is a grid lock of renewables projects waiting to be connected to regional grids. Even though the offshore wind sector has grown, the U.S. administration’s goal of having 30 gigawatts (GW) of offshore wind by 2030 is likely to be missed by 10 GW, according to current construction dates announced by developers, the report said.

India moved ahead of Australia to sixth position in the index, due to the fast growth of its renewables industry, particularly solar.

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Image credit: by Germán & Co

Macron warns Ukraine counteroffensive could last ‘weeks, even months’

The leaders of France, Germany and Poland met in Paris to discuss giving Ukraine security guarantees.

POLITICO EU BY CLEA CAULCUTT, JUNE 12, 2023 

PARIS — French President Emmanuel Macron warned on Monday that the Ukrainian counteroffensive against Russian forces could last “weeks, even months.”

“The counteroffensive has started. It’s going to be deployed for several weeks and even months. We are supporting it within the limits that we set ourselves,” Macron said alongside German Chancellor Olaf Scholz and Polish President Andrzej Duda at the Elysée Palace.

Ukrainian forces have stepped up operations in the last couple of days and announced on Monday evening that they had liberated several villages in the south and the east of the country.  

“We want [the counteroffensive] to be as victorious as possible so that we can then start a period of negotiations in good conditions,” he added.

The French, Polish and German leaders were meeting in Paris to discuss Ukraine’s request for security guarantees and a clear pathway to NATO membership ahead of a summit of the military alliance in July. However, on Monday evening it appeared that the leaders were sending different signals in a press conference that was held ahead of a working dinner in Paris.

While Duda called for Ukraine to be given “a clear signal, a clear perspective” on its future membership of NATO, Scholz was less forthcoming, noting that debates were “intense.”

“We have been discussing security guarantees since the start of the war … We have taken decisions to support Ukraine for as long as needed. This debate is intense between us, between Germany, France, and its U.S. partners,” Scholz said. “We will finalize [our position] when we have the results of our talks. But … it must be very concrete.”

Earlier this month, Macron called for Ukraine to be given “strong and tangible” security guarantees but stopped short of calling for full-fledged NATO membership.

Macron, Scholz and Duda all pledged that their countries would continue supporting Ukraine during the counteroffensive. Scholz told reporters that Germany would support Ukraine for “as long as necessary” and said his country had also set up systems to repair weapons during the current assault.

Macron meanwhile said that France had “intensified deliveries” of weapons, ammunition and armored vehicles.

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Image by Germán & Co

'In the US, the culture war is hardly good for business'

Because of debates on gender and environmental issues, American companies are torn between progressives and those who denounce woke capitalism, writes New York correspondent Arnaud Leparmentier.

Le Monde, Arnaud Leparmentier, New York (United States) correspondent,  Published today at 12:02 pm (Paris)

Twenty billion dollars: That's how much a single can of Bud Lite cost Budweiser, the brewery king based in St. Louis, Missouri. The can was decorated with the face of a transgender woman influencer, who was quick to promote it on Instagram. Following the 45-second clip, disaster struck. A revolt formed at barbecues around the country. In the Midwest, small-town America stopped buying the famous light beer, which saw sales plummet by 20%. And there was panic on Wall Street, where the company's market capitalization lost $20 billion (€18.6 billion). This unprecedented shock, far from a mere anecdote, reflects the state of the debate in the United States. Climate change is threatening the planet, Russia is attacking Ukraine and conflict is brewing with China, but the topic obsessing America is the fate of transgender people, the climax of the culture war between conservatives and "woke".

What a change since eight years ago, when Donald Trump was campaigning to defend White workers in the deindustrialized regions of the Rust Belt! Today, the US is engaged in new isolationism to promote "America First." The fight is focused on the culture war, which is championed by Florida Governor Ron DeSantis, a contender for the 2024 Republican nomination.

Of course, this reaction is no guarantee of success. The Supreme Court's decision to overturn the federal right to abortion in the summer of 2022 was a Pyrrhic victory, leading to the mobilization of women and the Republicans' relative defeat in the midterm elections. DeSantis, who has repeatedly gone too far, has put himself in difficulty in his face-off Trump.

Nonetheless, it's the dominant issue, and companies are fed up with being called upon to take a stand on every social issue. The peak was reached, quite rightly, with the May 2020 murder of an African-American man, George Floyd, by a white Minneapolis police officer. A stunned America collectively examined its conscience.

Negative value

The ebb first concerned the environment. After having a negative value on the markets at the worst of the Covid-19 pandemic, oil rebounded, contributing to inflation. The Republican message from the oil-producing states of the South and Midwest was threefold: Divestment would increase American dependence, drive up the price of a gallon of gasoline (which at one point exceeded $5) and reduce the performance of pension funds on the stock market. These states have passed laws banning public ESG (environmental, social and governance) investments. And the idea of divesting from carbon-emitting fuels has faded in a complex world: Can we treat companies that promise to use the carbon windfall to reinvest in renewables in the same way as those that vaguely promise to capture carbon?

In this debate, companies are caught between progressives and those who denounce woke capitalism. Anti-ESG initiatives are flourishing at shareholders' meetings: 68 resolutions this year, compared with 45 in 2022 and around 20 in previous years, according to the website Axios. As revealed by the Financial Times, a dozen major US financial companies, including BlackRock, Blackstone and KKR, explained in their annual reports that "divergent views" or "competing demands" on ESG criteria could affect their financial performance.

This debate affects the image of corporate America. According to the 2023 reputation rankings of America's top 100 brands, published by Axios in May, Twitter has long been hated, and Elon Musk's takeover hasn't done much for it (97th in the rankings, just ahead of Meta/Facebook). However, its boss's incessant political takes have had a major impact on Tesla, which has fallen from 12th to 62nd. On the left, Disney did not emerge completely unscathed from its tug-of-war with DeSantis over the controversies with its characters, as it dropped 12 places in the rankings to 77th. Clearly, the culture war is hardly good for business.

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Image by Germán & Co

Exclusive: Trump finds no new lawyers for court appearance in Mar-a-Lago case

Trump is expected to be represented by existing lawyers Todd Blanche and Chris Kise

The Guardian, Hugo Lowell in Doral, Miami, Tue 13 Jun 2023

Donald Trump is expected to be represented at his first court appearance to face federal criminal charges for retaining national security materials and obstruction of justice by two of his existing lawyers, despite trying to recruit a local Florida lawyer willing to join his legal defense team.

The lawyers making an appearance with Trump on Tuesday will be the top former federal prosecutor Todd Blanche and the former Florida solicitor general Chris Kise, according to people familiar with the matter. Trump’s co-defendant, his valet Walt Nauta, will be represented by Stanley Woodward.

Trump and his legal team spent the afternoon before his arraignment interviewing potential lawyers but the interviews did not result in any joining the team in time for Trump’s initial court appearance scheduled for 3pm ET on Tuesday after several attorneys declined to take him as a client.

Trump has also seemingly been unable to find a specialist national security lawyer, eligible to possess a security clearance, to help him navigate the Espionage Act charges.

The last-minute scramble to find a veteran trial lawyer was a familiar process for Trump, who has had difficulty hiring and keeping lawyers to defend him in the numerous federal and state criminal cases that have dogged him through his presidency and after he left the White House.

After interviewing a slate of potential lawyers at his Trump Doral resort, the former president settled on having Kise appearing as the local counsel admitted to the southern district of Florida as a one-off, with Blanche being sponsored by him to appear pro hac vice, one of the people said.

Blanche and Kise had dinner with Trump and other advisers on Monday at the BLT Prime restaurant at the Doral.

Among the Florida lawyers who turned down Trump was Howard Srebnick, who had expressed an interest the former president at trial as early as last week in part due to the high fees involved, but ultimately was not allowed to after conferring with his law partners, the person said.

The other prominent lawyer who declined to work with Trump was David Markus, who recently defended the Florida Democratic gubernatorial candidate Andrew Gillum against charges that he lied to the FBI and funnelled campaign contributions into his personal accounts, the person said.

Trump and his team have interviewed the corruption attorney Benedict Kuehne, who was indicted in 2008 for money laundering before the charges were dropped, the person said. But he has his own baggage as he faces disbarment for contempt of court in a recent civil suit he lost.

The other interviews are understood to have been with William Barzee, as well as Bruce Zimet, the former chief assistant US attorney in Fort Lauderdale and West Palm Beach.

Donald Trump arrives in Miami a day before his scheduled arraignment on a 37-count federal indictment involving classified documents. Photograph: Kyle Mazza/Anadolu Agency via Getty Images

Part of the problem of recruiting new lawyers has been Trump’s reputation for being a notoriously difficult client who has a record of declining legal advice and seeking to have his lawyers act as attack dogs or political aides rather than attorneys bound by ethics rules, people close to the process said.

The other concern for the top lawyers in Florida being contacted by Trump’s advisers has been the perceived reputational damage that could come from defending the former president, the people said, not just because of his politics but also because of the strength of the indictment, which could potentially lead to years in prison.

By using Trump’s own taped admissions about retaining national defense information and the witness accounts of his employees, the indictment gave compelling evidence of Trump’s efforts to hoard the country’s most sensitive secrets and obstruct the government’s attempts to get them back.

Trump is said to still be searching for a lawyer in the mold of Roy Cohn, the ruthless New York fixer who defended and mentored him before he was later disbarred – and the fear of potentially being asked to take similar actions has been a persistent issue.

That fear has loomed large for numerous lawyers Trump’s advisers have contacted, the people said, in particular after Trump might have made Evan Corcoran, another former lawyer who withdrew from his defense in the Mar-a-Lago documents investigation, into a witness against him.

According to the indictment, after Trump was issued a subpoena last year seeking the return of any classified documents, Trump took steps to remove boxes of documents from a storage room that Corcoran intended to search through in order to find materials responsive to the subpoena.

The steps Trump took to have those boxes removed from the storage room, an episode now at the heart of the obstruction charge, caused Corcoran to certify a false certification to the justice department confirming that no further documents were at the property, the indictment said.

As Trump’s search for new lawyers in Florida continues, Blanche is expected to take the lead role in the Mar-a-Lago documents case in addition to leading the team defending Trump against state charges in New York for paying hush money to an adult film star in 2016.

Though Kise is expected to appear alongside Blanche in federal district court in Miami, he has primarily handled civil litigation for Trump since he came off the documents case last October and is not expected to be on the trial team proper, a person familiar with the matter said.

The scramble to find Florida lawyers came after Jim Trusty and John Rowley, the two remaining Trump lawyers after the earlier resignation of Tim Parlatore and the recusal of Corcoran, became the latest casualties of a legal team undermined by turmoil and infighting.

News round-up, June 12, 2023

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Most Read…

Why the U.S. Electric Grid Isn’t Ready for the Energy Transition…

…“Decarbonizing the power grid by 2035 could total $330 billion to $740 billion in additional power system costs, depending on restrictions on new transmission and other infrastructure development. However, there is substantial reduction in petroleum use in transportation and natural gas in buildings and industry by 2035. As a result, up to 130,000 premature deaths are avoided by 2035, which could save between $390 billion to $400 billion in avoided mortality costs.

www.nrel.gov

TIME By Nadja Popovich and Brad Plumer, June 12, 2023

In Russia, the outcome of Putin's leadership is being debated. Time and Newsweek offer two perspectives on the subject…

…“Sir Richard Dearlove, the former director of the United Kingdom's foreign intelligence service, on the potential trajectory of Vladimir Putin's leadership in Russia, are thought-provoking. According to Dearlove, the tenure of Putin as the leader of Russia will come to an end either due to his health or the intervention of another Russian faction.

Newsweek

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Russia’s Elites Are Starting to Sour on Putin’s Chances of Winning the War in Ukraine…

TIME: BY BLOOMBERG NEWS, JUNE 8, 2023

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There will be no civil war over Trump. Here’s why

Nations go to war over the ideologies, religions, racism, social classes or economic policies. Trump represents nothing other than his own grievance…

The Guardian by Robert Reich, Mon 12 Jun 2023

UN concerned by ‘discrepancy’ in Ukraine nuclear plant water levels after dam collapse

IAEA head Rafael Grossi, who will visit Zaporizhzhia nuclear plant, says there is a difference of about 2 metres from the reservoir that cools the plant

Reuters, Mon 12 Jun, 2023

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

---

Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: www.nrel.gov / Editing by Germán & Co

Why the U.S. Electric Grid Isn’t Ready for the Energy Transition…

…“Decarbonizing the power grid by 2035 could total $330 billion to $740 billion in additional power system costs, depending on restrictions on new transmission and other infrastructure development. However, there is substantial reduction in petroleum use in transportation and natural gas in buildings and industry by 2035. As a result, up to 130,000 premature deaths are avoided by 2035, which could save between $390 billion to $400 billion in avoided mortality costs.

www.nrel.gov

TIME By Nadja Popovich and Brad Plumer, June 12, 2023

The U.S. electric grid is often described as a vast, synchronized machine — a network of wires carrying electricity from power plants across the country into our homes.

But, in reality, there is no single U.S. grid. There are three — one in the West, one in the East and one in Texas — that only connect at a few points and share little power between them.

Those grids are further divided into a patchwork of operators with competing interests. That makes it hard to build the long-distance power lines needed to transport wind and solar nationwide.

America’s fragmented electric grid, which was largely built to accommodate coal and gas plants, is becoming a major obstacle to efforts to fight climate change.

Tapping into the nation’s vast supplies of wind and solar energy would be one of the cheapest ways to cut the emissions that are dangerously heating the planet, studies have found. That would mean building thousands of wind turbines across the gusty Great Plains and acres of solar arrays across the South, creating clean, low-cost electricity to power homes, vehicles and factories.

But many spots with the best sun and wind are far from cities and the existing grid. To make the plan work, the nation would need thousands of miles of new high-voltage transmission lines — large power lines that would span multiple grid regions.

To understand the scale of what’s needed, compare today’s renewable energy and transmission system to one estimate of what it would take to reach the Biden administration’s goal of 100 percent clean electricity generation by 2035. Transmission capacity would need to more than double in just over a decade:

Source: National Renewable Energy Laboratory | The 2035 map is based on the “All Options” path from NREL’s 100% Clean Electricity by 2035 Study. Both maps show utility-scale renewable projects, but do not include distributed installations, like rooftop solar.

There are enormous challenges to building that much transmission, including convoluted permitting processes and potential opposition from local communities. But the problems start with planning — or rather, a lack of planning.

There is no single entity in charge of organizing the grid, the way the federal government oversaw the development of the Interstate Highway System in the 1950s and ‘60s. The electric system was cobbled together over a century by thousands of independent utilities building smaller-scale grids to carry power from large coal, nuclear or gas plants to nearby customers.

By contrast, the kinds of longer-distance transmission lines that would transport wind and solar from remote rural areas often require the approval of multiple regional authorities, who often disagree over whether the lines are needed or who should pay for them.

“It’s very different from how we do other types of national infrastructure,” said Michael Goggin, vice president at Grid Strategies, a consulting group. “Highways, gas, pipelines — all that is paid for and permitted at the federal level primarily.”

In recent decades, the country has hardly built any major high-voltage power lines that connect different grid regions. While utilities and grid operators now spend roughly $25 billion per year on transmission, much of that consists of local upgrades instead of long-distance lines that could import cheaper, cleaner power from farther away.

“Utilities plan for local needs and build lines without thinking of the bigger picture,” said Christy Walsh, an attorney at the Natural Resources Defense Council.

Study after study has found that broader grid upgrades would be hugely beneficial. A recent draft analysis by the Department of Energy found “a pressing need for additional electric transmission” — especially between different regions.

The climate stakes are high. Last year, Congress approved hundreds of billions of dollars for solar panels, wind turbines, electric vehicles and other technologies to tackle global warming. But if the United States can’t build new transmission at a faster pace, roughly 80 percent of the emissions reductions expected from that bill might not happen, researchers at the Princeton-led REPEAT Project found.

Already, a lack of transmission capacity means that thousands of proposed wind and solar projects are facing multiyear delays and rising costs to connect to the grid. In many parts of the country, existing power lines are often so clogged that they can’t deliver electricity from wind and solar projects to where it is needed most and demand is often met by more expensive fossil fuel plants closer to homes and businesses. This problem, known as congestion, costs the country billions of dollars per year and has been getting worse.

The dearth of long-distance transmission isn’t just a climate problem, said Mathias Einberger, a manager for RMI’s Carbon-Free Electricity Program. It spells trouble for reliability, too.

Many power operators are increasingly struggling to keep the lights on as demand rises and extreme weather events become more frequent and severe. More capacity to transfer power between regions could help, so that if a storm knocked out power plants in one area, its neighbors could send electricity. Texas, for example, could have suffered fewer blackouts during a deadly winter storm in 2021 if its isolated grid had more connections with the Southeast, one analysis found.

There are a few efforts underway to ease the bottlenecks. The Biden administration has billions of dollars to help fund transmission projects, and Congress has given the federal government new authority to override objections from state regulators for certain power lines deemed to be in the national interest.

“There’s no silver bullet,” said Maria Robinson, the director of the Department of Energy’s newly created Grid Deployment Office. “Every transmission project is unique like a fingerprint, facing its own challenges, so we need a large arsenal of tools to try to move things along.”

The Federal Energy Regulatory Commission, an independent agency that regulates interstate transmission of electricity, gas and oil, is exploring ways to encourage grid operators to do more long-term planning and to strengthen ties between regions. Some lawmakers have proposed bills that would give the commission more power to approve the routes of major new lines that pass through multiple states, the way it does with gas pipelines.

But these efforts still face plenty of resistance. Utilities are sometimes wary of long-distance transmission lines that might undercut their local monopolies. Some Republicans in Congress say giving the federal government more authority over transmission would trample on states’ rights. During the debt ceiling debate, Democrats floated a proposal to mandate more connectivity between different grid regions, a provision that was opposed by some utilities and Republicans, and was eventually dropped.

If the country continues to struggle to build long-distance transmission, it might need to opt for more expensive measures to fight climate change instead, a recent study by the National Renewable Energy Laboratory found. That could mean building more advanced nuclear plants or gas plants that capture their emissions, which could in theory be built closer to population centers.

Getting better at managing how and when we use electricity could also relieve some of the pressure on the grid. For example, utilities could provide incentives for people to charge their electric cars and other devices when demand is low or ask them to turn off unnecessary appliances during extreme weather events.

But even that wouldn’t entirely cancel out the need for a lot more transmission.

“The grid is already a critical element of our energy system,” said Matteo Muratori, an analyst at the National Renewable Energy Laboratory. “But it’s going to become the central piece of the future energy system.”

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Seaboard: pioneers in power generation in the country…

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

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Image: Russian President Vladimir Putin during the Supreme Economic Eurasian Council at the Grand Kremlin Palace in Moscow, May 25, 2023 / Editing by Germán & Co

In Russia, the outcome of Putin's leadership is being debated. Time and Newsweek offer two perspectives on the subject…

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…“Sir Richard Dearlove, the former director of the United Kingdom's foreign intelligence service, on the potential trajectory of Vladimir Putin's leadership in Russia, are thought-provoking. According to Dearlove, the tenure of Putin as the leader of Russia will come to an end either due to his health or the intervention of another Russian faction. Despite the conjecture surrounding his considerable wealth, Dearlove posits that Putin will be unable to enjoy a luxurious retirement following his departure from the presidency. Dearlove acknowledged Putin's misstep regarding Ukraine and made a prediction of an unfavorable outcome for him. This statement suggests that Dearlove has knowledge and expertise in the subject matter and is making an informed analysis of the situation. Since the commencement of the Russia-Ukraine conflict, conjectures regarding Putin's physical condition and the possibility of a successor have been in circulation within the public discourse. According to Ukrainian intelligence, there are purported plans among Russian elites to replace President Putin with Alexander Bortnikov, who currently serves as the director of Russia's Federal Security Service.

Newsweek

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Russia’s Elites Are Starting to Sour on Putin’s Chances of Winning the War in Ukraine…

TIME: BY BLOOMBERG NEWS, JUNE 8, 2023

Amood of deepening gloom is gripping Russia’s elite about prospects for President Vladimir Putin’s war in Ukraine, with even the most optimistic seeing a “frozen” conflict as the best available outcome now for the Kremlin.

Many within the political and business elite are tired of the war and want it to stop, though they doubt Putin will halt the fighting, according to seven people familiar with the situation, who asked not to be identified because the matter is sensitive. While nobody’s willing to stand up to the president over the invasion, absolute belief in his leadership has been shaken by it, four of the people said.

The most favorable prospect would be negotiations later in the year that would turn it into a “frozen” conflict and allow Putin to proclaim a Pyrrhic victory to Russians by holding on to some seized Ukrainian territory, two of the people said.

“There is elite deadlock: they are afraid to become scapegoats for a meaningless war,” said Kirill Rogov, a former Russian government advisor who left the country after the invasion and now heads Re:Russia, a Vienna-based think tank. “It is really surprising how widespread among the Russian elite became the idea of a chance that Putin won’t win this war.”

The growing despondency is likely to intensify a blame game over responsibility for the faltering invasion that’s already stirred bitter public divisions between nationalist hardliners and Russia’s Defense Ministry. With the Kremlin facing a Ukrainian counteroffensive that’s backed by billions in weapons from the US and Europe, expectations are low among Russian officials for any significant advances on the battlefield after a winter in which Moscow’s forces made little progress and incurred huge casualties.

The catastrophic breach of a giant dam in Ukraine on Tuesday that the government in Kyiv blamed on Russia further complicated the conflict as floodwater swept across parts of the conflict zone. Russia denied responsibility.

Attacks inside Russia are adding to a sense of insecurity, including the largest drone strikes last week targeting Moscow since the war began. Fighting has spread into the Belgorod region bordering Ukraine, challenging Putin’s image as the guarantor of Russia’s security.

Even some who support the invasion and want to intensify the fight against Ukraine have become deflated about Russia’s prospects in a war that was supposed to conclude within days and is now in its 16th month. Nationalists led by Yevgeny Prigozhin, founder of the Wagner mercenary group, have raged against Defense Minister Sergei Shoigu and Russia’s army chief Valery Gerasimov for military failings, as they press for a full-scale mobilization and martial law to avert a potentially catastrophic defeat.

“There have been too many big mistakes,” said Sergei Markov, a political consultant with close Kremlin ties. “There were expectations a long time ago that Russia would take control of the majority of Ukraine but these expectations didn’t materialize.”

Putin and his top officials insist Russia will win, even as it’s no longer very clear what would constitute victory after its army failed to seize Kyiv early in the war. There’s no sign of any challenge to his leadership from within his circle.

Most in the elite are keeping their heads down and getting on with their work, convinced they can’t influence events, according to four of the people with knowledge of the situation. Putin shows no indication of wanting to end the war, five of the people said.

State media explain away repeated reverses by pumping out the message that Russia is fighting a proxy war in Ukraine against the US and its North Atlantic Treaty Organization allies, though it was Putin who initiated the unprovoked invasion in February 2022.

The Kremlin has imposed the harshest repression in decades to punish even mild dissent with jail terms. Russia’s middle class who’d formed the bedrock of support for opposition to Putin’s rule in major cities in the past decade have been cowed into silence or have fled the country as part of the biggest wave of emigration since the 1990s after the Soviet Union’s collapse.

So far, polls show most ordinary Russians continue to back Putin, who’s mixed Soviet-era nostalgia with Russia’s imperial past to assert that he’s defending the country’s interests and reclaiming historical lands by annexing areas of eastern and southern Ukraine.

Still, concern may be ticking up again after spiking last fall when Putin announced a draft of 300,000 reservists. A May 19-21 survey of 1,500 Russians by the FOM polling company found 53% considered their family and friends were in an anxious mood, a jump of 11 percentage points since April and the highest in nearly four months.

Prigozhin toured Russian cities last week warning of a “difficult” war that may last years as he argued for martial law and full mobilization. He said in an interview last month that Russia risked a revolution similar to the one in 1917 because of the divide between the Kremlin elite and ordinary Russians whose children “come back in zinc coffins” from Ukraine.

The ruling United Russia party began an investigation after a senior State Duma lawmaker, Konstantin Zatulin, told a forum that the invasion had achieved none of its declared aims, Vedomosti reported Monday. “Let’s get out of this somehow,” Zatulin said.

Konstantin Malofeev, a Russian Orthodox nationalist supporter of Putin, wants Russia to keep fighting because “the Ukrainian state should cease to exist.” He rejects any talk of a cease-fire, though he said many within the ruling elite including a “huge number” of business people would support China’s recent peace initiative that envisages a truce.

“They say they support the special military operation but in reality they’re against it,” said Malofeev, a multi-millionaire who’s also sponsoring a volunteer force fighting in Ukraine. “In six months, we’ll have clear superiority in ammunition and shell production and we’ll be ready to go onto the attack.”

To be sure, Russia still possesses enormous resources for the fight. Its troops are dug in on the front lines in eastern and southern Ukraine and Ukrainian air defenses have been kept busy as Russian missiles and drones have rained down on the country throughout the past month.

Ukraine has ruled out a resolution of the conflict that leaves Russia occupying any of its territory, as it begins to unleash the counteroffensive that’s been months in preparation.

“It’s time to take back what’s ours,” Ukrainian Commander-in-Chief Valeriy Zaluzhnyi said in a Telegram post May 27.

With no end to the fighting in sight, Russian officials and billionaire tycoons know they face potentially years of international isolation and deepening dependence on the Kremlin as Putin pushes businesses to back the war effort and bans those around him from leaving their posts.

They and their families have been hit with asset freezes and travel bans under US and European penalties that have also made Russia’s economy one of the world’s most sanctioned, upending decades of integration into global markets.

“Officials have adapted to the situation but no one sees any light at the end of the tunnel – they’re pessimistic about the future,” said Alexandra Prokopenko, a former Russian journalist and central bank advisor who’s now a non-resident scholar at the Berlin-based Carnegie Russia Eurasia Center. “The best they hope for is that Russia will lose without humiliation.”

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Image credit: by Germán & Co

There will be no civil war over Trump. Here’s why

Nations go to war over the ideologies, religions, racism, social classes or economic policies. Trump represents nothing other than his own grievance…

The Guardian by Robert Reich, Mon 12 Jun 2023

The former president of the United States, now running for re-election, assails “the ‘thugs’ from the Department of Injustice”, calls Special Counsel Jack Smith a “deranged lunatic” and casts his prosecutions and his bid for the White House as part of a “final battle” for America.

In a Saturday speech to the Georgia Republican party, Trump characterized the entire American justice system as deployed to prevent him from winning the 2024 election.

“These people don’t stop and they’re bad and we have to get rid of them. These criminals cannot be rewarded. They must be defeated.”

Once again, Trump is demanding that Americans choose sides. But in his deranged mind, this “final battle” is not just against his normal cast of ill-defined villains. It is between those who glorify him and those who detest him.

It will be a final battle over … himself.

“SEE YOU IN MIAMI ON TUESDAY!!!” he told his followers on Friday night in a Truth Social post, referring to his Tuesday arraignment.

It was chilling reminder of his 19 December 2020, tweet, “Be there, will be wild!” – which inspired extremist groups to disrupt the January 6 certification.

At the Georgia Republican party convention on Friday night, the Arizona Republican Kari Lake – who will go to Miami to “support” Trump – suggested violence.

“If you want to get to President Trump, you’re going to have to go through me and you’re going to have to go through 75 million Americans just like me,” Lake exclaimed to roaring cheers and a standing ovation. “Most of us are card-carrying members of the NRA,” the National Rifle Association gun lobby. “That’s not a threat, that’s a public service announcement.”

Most Republicans in Congress are once again siding with Trump rather than standing for the rule of law.

A few are openly fomenting violence. The Louisiana representative Clay Higgins suggested guerrilla warfare: “This is a perimeter probe from the oppressors. Hold. rPOTUS [a reference to the real president of the United States] has this. Buckle up. 1/50K know your bridges. Rock steady calm.”

Most other prominent Republicans – even those seeking the Republican presidential nomination – are criticizing Biden, Merrick Garland and the special counsel Jack Smith for “weaponizing” the justice department.

All this advances Trump’s goal of forcing Americans to choose sides over him.

Violence is possible, but there will be no civil war.

Nations don’t go to war over whether they like or hate specific leaders. They go to war over the ideologies, religions, racism, social classes or economic policies these leaders represent.

But Trump represents nothing other than his own grievance with a system that refused him a second term and is now beginning to hold him accountable for violating the law.

In addition, the guardrails that protected American democracy after the 2020 election – the courts, state election officials, the military, and the justice department – are stronger than before Trump tested them the first time.

Many of those who stormed the Capitol have been tried and convicted. Election-denying candidates were largely defeated in the 2022 midterms. The courts have adamantly backed federal prosecutors.

Third, Trump’s advocates are having difficulty defending the charges in the unsealed indictment – that Trump threatened America’s security by illegally holding (and in some cases sharing) documents concerning “United States nuclear programs; potential vulnerabilities of the United States and its allies to military attack; and plans for possible retaliation in response to a foreign attack”, and then shared a “plan of attack” against Iran.

Republicans consider national security the highest and most sacred goal of the republic. A large number have served in the armed forces.

Trump’s own attorney general, Bill Barr, said on Fox News Sunday that he was “shocked by the degree of sensitivity of these documents and how many there were, frankly … If even half of it is true, then he’s toast. I mean, it’s a very detailed indictment, and it’s very, very damning. And this idea of presenting Trump as a victim here, a victim of a witch-hunt, is ridiculous.”

None of this is cause for complacency. Trump is as loony and dangerous as ever. He has inspired violence before, and he could do it again.

But I believe that many who supported him in 2020 are catching on to his lunacy.

Trump wants Americans to engage in a “final battle” over his own narcissistic cravings. Instead, he will get a squalid and humiliating last act.

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Image by Germán & Co

UN concerned by ‘discrepancy’ in Ukraine nuclear plant water levels after dam collapse

IAEA head Rafael Grossi, who will visit Zaporizhzhia nuclear plant, says there is a difference of about 2 metres from the reservoir that cools the plant

Reuters, Mon 12 Jun, 2023

The UN atomic watchdog has said it needs wider access around the Zaporizhzhia nuclear plant to check “a significant discrepancy” in water level data at the breached Kakhovka dam used for cooling the plant’s reactors.

International Atomic Energy Agency head Rafael Grossi, who is to visit the plant this week, said that measurements the agency received from the inlet of the plant showed that the dam’s water levels were stable for about a day over the weekend.

“However, the height is reportedly continuing to fall elsewhere in the huge reservoir, causing a possible difference of about 2 metres,” Grossi said in a statement.

“The height of the water level is a key parameter for the continued operability of the water pumps”.

The water from the reservoir is used to cool the facility’s six reactors and spent fuel storage, the IAEA said.

The agency has said earlier that the Zaporizhzhia plant can fall back on other water sources when the reservoir’s water is no longer available, including a large cooling pond above the reservoir with several months’ worth of water.

The destruction of the Kakhovka hydropower dam in southern Ukraine last week has flooded towns downstream and forced thousands of people from their homes.

Both the Kakhovka hydropower dam and the Zaporizhzhia nuclear plant have been occupied by Russia since the early days of its invasion in February 2022.

“It is possible that this discrepancy in the measured levels is caused by an isolated body of water separated from the larger body of the reservoir,” Gross said in the statement. “But we will only be able to know when we gain access to the thermal power plant.”

Grossi said the thermal power plant “plays a key role for the safety and security of the nuclear power plant a few kilometres away,” hence the need for access and independent assessment.

The war in Ukraine has changed the world, and the Guardian has covered every minute of it. Our people on the ground have endured personal risk and hardship to produce more than 5,000 articles, films and podcasts since the invasion. Our liveblog has reported continuously and comprehensively since the outbreak of Europe’s biggest war since 1945. 

We know it’s crucial that we stay till the end. Will you join us? There is no substitute for being there – and we’ll stay on the ground, as we did during the 1917 Russian Revolution, the Ukrainian famine of the 1930s, the collapse of the Soviet Union in 1991 and the first Russo-Ukrainian conflict in 2014. We have an illustrious, 200-year history of reporting throughout Europe in times of upheaval, peace and everything in between. We won’t let up now. Will you make a difference and support us too?

Tens of millions have placed their trust in the Guardian’s fearless journalism since we started publishing 200 years ago, turning to us in moments of crisis, uncertainty, solidarity and hope. We’d like to invite you to join more than 1.5 million supporters from 180 countries who now power us financially – keeping us open to all, and fiercely independent.

Unlike many others, the Guardian has no shareholders and no billionaire owner. Just the determination and passion to deliver high-impact global reporting, always free from commercial or political influence. Reporting like this is vital to establish the facts: who is lying and who is telling the truth.

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News round-up, June 9, 2023

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Exclusive: Analysis by Spiegel of President Vladimir Putin's Stay as a KGB Agent in Dresden, Germany: Is it all true?

…”Over several years, a discourse has been widely circulated regarding the President of Russia. In the 1980s, Vladimir Putin held a position as a junior officer within the KGB, a prominent intelligence agency of the Soviet Union. The individual was tasked with conducting covert operations while deployed in East Germany. His responsibilities included executing covert activities. According to the reports, he sustained communication with leftist militants linked to the Red Army Faction (RAF) in West Germany. He furnished them with armaments and directives during his tenure at the agency's station in Dresden.

Germán & Co

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Most Read…

Donald Trump Was Just Indicted in the Classified Documents Case. Here's What to Know

Reports state that the federal government has indicted Donald Trump and must appear in federal court in Miami on Tuesday afternoon—the first indictment of a former president on federal charges. Trump also faces charges for 2016 campaign hush payments in Manhattan court. He faces seven undisclosed federal charges. Trump announced on social media that he must appear at the federal courthouse in Miami on Tuesday at 3 p.m.

TIME BY BRIAN BENNETT, JUNE 8, 2023 

The future of Russia — and its opposition

It’s important for Western countries to recognize that the broad-based Russian opposition is a crucial ally in the confrontation with the Putin regime.

POLITICO EU BY MIKHAIL KHODORKOVSKY, JUNE 5, 2023

AES buys solar + storage project in California

The Bellefield project from Avantus, one of the most significant solar-plus-storage projects in the United States. The project consists of two phases, each capable of generating 500 MW of solar power and storing up to 500 MW of energy in batteries.

Renewable Energy World, June 8, 2023

Exclusive: Russia's Novatek offered Argentina know-how to liquefy gas from Vaca Muerta

Moscow now possesses control of LNG technology that was previously held by Western companies, thanks to Novatek. Russian businesses are demonstrating their technological expertise in Latin America using Russian concrete gravity base structures for Arctic LNG 2. The first train is expected to be operational by the end of the year.

REUTERS By Vladimir, Soldatkin, June 9, 2023 / Editing by Germán & Co

Russian President’s Years in Germany…

Spiegel By Sven Röbel und Wolfgang Tietze, 07.06.2023

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: by Germán & Co

Donald Trump Was Just Indicted in the Classified Documents Case. Here's What to Know

Reports state that the federal government has indicted Donald Trump and must appear in federal court in Miami on Tuesday afternoon—the first indictment of a former president on federal charges. Trump also faces charges for 2016 campaign hush payments in Manhattan court. He faces seven undisclosed federal charges. Trump announced on social media that he must appear at the federal courthouse in Miami on Tuesday at 3 p.m.

TIME BY BRIAN BENNETT, JUNE 8, 2023 

Former President Donald Trump has been indicted on federal charges for his handling of classified documents and told to appear in federal court in Miami on Tuesday afternoon, he said on his Truth Social account Thursday night. ABC News broke into regular TV programming shortly after 7 p.m. to report that a grand jury in Florida had voted to indict Trump on multiple federal charges.

It is the first time a former president has faced federal charges. In a separate case, Trump is facing local charges in a Manhattan court for hush money payments to adult film star Stormy Daniels made during his 2016 campaign. Trump has been told he is facing seven charges in the federal case, according to a source in contact with him. The exact charges were unclear.

Trump, who is running for another term as president and remains the frontrunner for the Republican nomination, wrote on his social media site at 7:21 pm on Thursday that he has been summoned to appear at the federal courthouse in Miami on Tuesday at 3 p.m.

“The corrupt Biden Administration has informed my attorneys that I have been Indicted, seemingly over the Boxes Hoax,” Trump wrote on Truth Social. “I AM AN INNOCENT MAN!”

Attorney General Merrick Garland appointed Jack Smith as a special counsel in November to oversee the investigation into whether Trump broke the law by taking sensitive national-security documents when he moved out of the White House in January 2020, or obstructed the government’s efforts to retrieve them.

The FBI obtained a search warrant in August to enter Mar-a-Lago and found more than 100 classified documents. The discovery came after Trump’s advisors had said they had already conducted a “diligent search” of the property and turned over “any and all” papers marked classified. Federal officials had been negotiating with Trump for more than a year by then over the return of government documents he had taken with him to his Mar-a-Lago Club.

The federal indictment is the latest addition to Trump’s mounting legal troubles. Smith is also overseeing a separate investigation into Trump’s role in trying to overturn the 2020 election results and encourage a violent mob of supporters to enter the Capitol Building on Jan. 6, 2021, to interrupt the certification of the election results.

In Georgia, Fulton County District Attorney Fani Willis is moving forward with a case looking at Trump’s effort to reverse his 2020 loss in Georgia by encouraging state election officials to “find” votes. New York Attorney General Letitia James sued Trump in November, alleging he fraudulently overvalued his properties to insurers and bank lenders. And in Manhattan court, District Attorney Alvin Bragg, has charged Trump with 34 felony counts of falsification of business records that Bragg says were designed to hide payments intended to keep quiet his alleged affair with Daniels in the weeks before the 2016 election. Trump has called all of the investigations against him hoaxes designed to hurt him politically.

Trump has made claims that he is the victim of a politically-motivated conspiracy to keep him from returning to office an animating force of his political movement. Both while in office and in the years afterward, he used two impeachments and Special Counsel Robert Mueller’s investigation into Russia’s effort to help Trump win the 2016 election to energize his supporters. The top of his social media feed on Truth Social reads: “THEY’RE NOT COMING AFTER ME, THEY’RE COMING AFTER YOU—I’M JUST STANDING IN THEIR WAY!” When he was indicted in Manhattan in April, Trump raised more than $1 million in campaign funds off the news.

Within minutes of the news breaking Thursday evening, Trump’s campaign was fundraising off his latest indictment. “This is nothing but a disgusting act of Election Interference by the ruling party to ELIMINATE its opposition and amass total control over our country,” read one campaign email with the subject line “BREAKING: INDICTED” and paid for by Trump Save America Joint Fundraising Committee.

Trump’s allies were quick to defend the former President, and claim that the federal indictment was a play by President Joe Biden to torpedo Trump’s campaign. Earlier Thursday, Biden was asked at a press conference how he can restore Americans’ trust in the Department of Justice with Trump attacking it. “Because you’ll notice, I’ve never once, not one single time, suggested to the Justice Department what they should do or not do relative to bringing a charge or not bring a charge. I’m honest.” Biden tapped the podium twice for emphasis and walked out.

A trial date for the Manhattan case has been set for March 2024, right in the middle of the presidential campaign season. That means that Trump, who announced his intention to take back the White House in November, will be campaigning across the country while defending himself in court against two ongoing criminal cases.

Some legal experts have argued Trump is particularly vulnerable to prosecution in the documents case. “I think this one is the most damaging because not only is there so much evidence, but it goes directly to the heart of his ability to be the leader of our country,” Jessica Levinson, a professor at Loyola Law School, recently told TIME. “It’s truly a complete undermining of his job if he really took government documents that don’t belong to him, if he showed people government documents that could have put our country at risk, and if he obstructed justice by not complying with a subpoena.”

Even if Trump is convicted by the special counsel, the charges against him won’t disqualify him from the presidency, according to legal experts. Under the Constitution, all natural-born citizens who are at least 35 years old and have been a resident of the U.S. for 14 years can run for president. There is no legal impediment to Trump continuing his presidential campaign while facing criminal charges—even if he were jailed.

“Indictment is absolutely no legal bar to him running,” says Levinson. “And a conviction is not a legal bar to him serving.”

At least two candidates with criminal convictions have run for president in the past, albeit unsuccessfully. In 1920 a candidate named Eugene Debs ran for president while in a federal prison in Atlanta as the nominee of the Socialist Party. Debs was convicted of violating the Espionage Act over an anti-war speech, and won more than 3% of the vote nationally. Lyndon LaRouche ran for president in every election between 1976 and 2004. LaRouche, a fringe candidate who embraced conspiracy theories, was convicted of tax and mail fraud in 1988 and ran his 1992 campaign from prison.

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Seaboard: pioneers in power generation in the country…

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

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Image by Germán & Co

The future of Russia — and its opposition

It’s important for Western countries to recognize that the broad-based Russian opposition is a crucial ally in the confrontation with the Putin regime.

POLITICO EU BY MIKHAIL KHODORKOVSKY, JUNE 5, 2023

Mikhail Khodorkovsky, a former political prisoner and CEO of Yukos Oil company, is the author of “The Russia Conundrum: How the West Fell for Putin’s Power Gambit — and How to Fix It.”

At the initiative of Lithuanian MEP Andrius Kubilius and others, a two-day conference will take place in the European Parliament in Brussels this week, with the participation of over 200 representatives from Russia’s anti-war and opposition groups, journalists, prominent cultural figures, as well as European politicians.

There are just two topics for discussion on the agenda: the future of Russia and the future strategy of the Russian opposition.

Previous experience, both in Russia and elsewhere, has long shown that personality-based regimes — such as the one in Moscow today — can often implode without warning, unable to withstand the stresses caused by a failed war. And at that critical moment, the country’s future depends, in large part, on who picks up the reins of power — and how.

Interestingly, the present situation in Russia is developing in such a way that at this moment, the West can have a significant — albeit not definitive — voice in this transition, since large segments of the Russian elite have an interest in the repeal of Western sanctions, imposed in response to President Vladimir Putin’s full-scale war against Ukraine.

This gathering in Brussels is by no means the first coordinated action by the Russian opposition, however. The Free Russia Forum, organized by Garry Kasparov, has been meeting regularly in Vilnius since 2016; Lithuania’s Ministry of Foreign Affairs organizes an annual conference with the Russian opposition; and a very productive meeting, including several of the largest European parliamentary parties, recently took place between the Parliamentary Assembly of the Council of Europe and the Russian opposition as well.

Additionally, in preparation for the Brussels conference, around 70 anti-war and opposition groups met in Berlin in April to agree on a common declaration, which has now been signed by 30,000 Russians.

This common position is that the war is criminal, that the regime that unleashed it is illegitimate and must be removed from power, that Ukraine’s sovereignty within its 1991 borders must be restored and war criminals punished, that the victims of the aggression must be compensated and that all political prisoners and prisoners of war must be released.

We also believe that a future Russian leadership must abandon imperialism, both internally and externally.

Some of the discussions in coming to this position were not easy to have. For example, the issue of restoring Ukraine’s sovereignty over Crimea is contentious for many Russians. And matters of compensation and tribunals will require serious work not only with the pro-Putin part of Russia’s population, but even with some of those opposed to the war.

Lest we forget, signing such a declaration is also regarded as a crime by the Kremlin. And the prison terms prescribed are brutal, ranging from 10 to 20 years.

Meanwhile, there’s a part of the human rights community that’s uncomfortable with violent methods of struggle against the regime. Whereas others — and I count myself among them — believe that peaceful regime change in Russia is impossible.

Despite these differences, in our discussions, we also agreed that a unification of the opposition under a single leadership, or gathered into a single party, isn’t needed. This would be a catastrophic mistake, as it would lay the foundations for the restoration of authoritarianism after Putin’s fall.

Russian citizens’ interests are no longer represented by Russian President Vladimir Putin’s “criminal regime” | Mikhail Metzel/Sputnik/AFP via Getty Images

However, I am convinced that we need to coordinate our actions on key, broad questions that concern us all, and to this end, a whole series of working groups and large-scale joint projects have already been created to provide assistance to Ukraine and Russian refugees, and they are operational. At the same time, some anti-war groups have joined forces to train those ready and committed to return to Russia on the “first flight back” after the fall of the regime.

Thus, we are already gaining experience in working as a coalition, which will serve as a good foundation for building a new, democratic model for the country, with separation of powers and a system of checks and balances.

And today, we all agree that our joint focus should be on three areas: the coordination of anti-war initiatives and humanitarian aid for Ukraine; media support for anti-war activism and counterpropaganda; and help for Russian citizens whose interests are no longer represented by Putin’s criminal regime.

I, for one, have my own ideas of what the future Russia should look like and the preferred paths to transition — the abridged version of my manifesto on this, entitled “How to Slay a Dragon,” has been translated into several European languages. And for me, personally, the key goal of this upcoming meeting in Brussels is to agree, as a coalition, on how to represent the interests of those who have cut their ties with the regime, and how best to help them in practical terms.

Besides that, the conference will also give us an important opportunity to remind European politicians of our stance:

For us, reaching a negotiated agreement with Putin about medium- or long-term issues is out of the question. Merely replacing Putin with another individual with yet another name — without a transition to a parliamentary model of governance with free and fair elections — will change nothing. And a coalition model of transition offers a real possibility of democratization, while a transition through a single revolutionary party guarantees authoritarianism.

What’s more, we believe that the break-up of Russia would be dangerous, not only for Russians but also for the West; that communication with Russian society is no less important than sanctions; and that even though the Kremlin’s unlawful influence on political processes in Western countries has diminished greatly over the past 15 months, it remains significant — and could become stronger.

All in all, it’s important for Western countries to recognize that the broad-based Russian opposition is a crucial ally in the West’s confrontation with the Putin regime — which is fast becoming increasingly fascist.

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Image credit: AES / Editing by Germán & Co

AES buys solar + storage project in California

The Bellefield project from Avantus, one of the most significant solar-plus-storage projects in the United States. The project consists of two phases, each capable of generating 500 MW of solar power and storing up to 500 MW of energy in batteries.

Renewable Energy World, June 8, 2023

AES Corp. said it acquired from Avantus (formerly 8minute) the 2 GW Bellefield project, which is currently in late-stage development and is one of the largest permitted solar-plus-storage projects in the United States.  

The project is located in Kern County, California, and includes two phases, each with 500 MW of solar and up to 500 MW of four-hour duration battery energy storage.  

Phase one has a 15-year Power Purchase Agreement (PPA) to deliver hourly energy to an existing AES corporate customer. AES said it expects to contract up to an additional 1 GW of solar-plus-storage in phase two of the project by the end of 2023. 

The two phases were developed by the seller, Avantus, and are expected to come online in 2025 and 2026, respectively.

Additional terms were not disclosed.

Alberta Investment Management Corporation is an investor in AES’ clean energy business in the U.S. with 25% ownership of the business’ growth projects. Onpeak Capital LLC served as the financial advisor and Foley & Lardner LLP served as legal counsel for Avantus.

AES has been shifting from its portfolio of coal-fired plants to renewable energy projects. It plans to exit its coal portfolio by the end of 2025. It said it also expects to triple its renewable energy capacity by adding 25 to 30 GW of solar, wind and energy storage.

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A participant walks past a stand of Russian gas producer Novatek during the Russian Energy Week International Forum in Moscow, Russia October 13, 2021. REUTERS/Maxim Shemetov / Editing by Germán & Co

Exclusive: Russia's Novatek offered Argentina know-how to liquefy gas from Vaca Muerta

Moscow now possesses control of LNG technology that was previously held by Western companies, thanks to Novatek. Russian businesses are demonstrating their technological expertise in Latin America using Russian concrete gravity base structures for Arctic LNG 2. The first train is expected to be operational by the end of the year.

REUTERS By Vladimir, Soldatkin, June 9, 2023 / Editing by Germán & Co

MOSCOW, June 9 (Reuters) - Russia's largest producer of liquefied natural gas (LNG) Novatek (NVTK.MM) last year offered technology to build a plant to produce the gas from Argentina's Vaca Muerta field, a highly-placed source familiar with the proposal said, though the talks have since broken off.

The source said that Novatek proposed to help implement Argentina's plans to build an LNG plant to liquefy gas from Vaca Muerta, a massive shale formation in western Argentina seen as key to boosting the South American country's gas supplies and reducing the need for pricey imports.

According to the source, Novatek told Argentina's government it has developed a unique

infrastructure for construction of LNG plants based on concrete gravity base structures (GBS) in shallow offshore waters.

"There are no negotiations (with Novatek)," Argentina's energy secretariat said in response to the query about the offer by the Russian company.

Novatek did not reply to a request for comment.

In September, Argentina's state oil company YPF (YPFD.BA) and its Malaysian counterpart, Petronas, inked a deal to build a major LNG plant and a pipeline to transport the fuel.

Novatek's approach indicates Moscow's ability to develop, at least partially, its own large-scale LNG-producing technology, which had been exclusively provided in Russia by Western companies before they withdrew from the country last year due to the conflict in Ukraine.

It also highlights Russian businesses' drive to expand their global reach as far as Latin America after President Vladimir Putin urged business to pivot away from the West.

Russian concrete gravity base structures will be used in Novatek's Arctic LNG 2 plant in Russia. The first technological line, or train, of the plant is due to start production at the end of this year.

Novatek said in its offer to Argentina that the technology allows for construction of one LNG train with production capacity of 7 million tonnes per year within 2.5-3 years, according to the source.

The Vaca Muerta formation, in Argentina's Patagonian south, is the size of Belgium. It holds the world's second-largest shale gas reserves and the fourth-largest shale oil deposits.

It could become a key global supplier of gas as the world looks for alternatives to Russia, whose energy industry has been heavily sanctioned over its military campaign in Ukraine.

The LNG project promises future dollar earnings for the cash-strapped South American country even though the gains are still years out. Growing production from Vaca Muerta should also allow for less reliance on costly gas imports over time.

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Image: Spiegel / Stasi-Unterlagen-Archiv / Editing by Germán & Co

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Exclusive: Analysis of President Vladimir Putin's Stay as a KGB Agent in Dresden, Germany: Is it all true?

Over several years, a discourse has been widely circulated regarding the President of Russia. In the 1980s, Vladimir Putin held a position as a junior officer within the KGB, a prominent intelligence agency of the Soviet Union. The individual was tasked with conducting covert operations while deployed in East Germany. His responsibilities included executing covert activities. According to the reports, he sustained communication with leftist militants linked to the Red Army Faction (RAF) in West Germany. He furnished them with armaments and directives during his tenure at the agency's station in Dresden.

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Russian President’s Years in Germany…

Spiegel By Sven Röbel und Wolfgang Tietze, 07.06.2023

For a number of years, a story has been circulating about the Russian president. It goes like this: During the 1980s, Vladimir Putin was on a top-secret mission in East Germany as a young officer in the feared Soviet secret service agency KGB. From the agency's station in Dresden, he purportedly maintained contacts with left-wing terrorists belonging the Red Army Faction (RAF) in West Germany, supplying them with both weapons and instructions.

Putin is said to have repeatedly led conspiratorial meetings between the KGB, the East German Ministry for State Security (the notorious Stasi) and the RAF, at which attacks on prominent targets were also discussed – such as the assassination of Deutsche Bank CEO Alfred Herrhausen.

The narrative of Putin's alleged RAF connections found its way into two standard international works on the Kremlin leader's life – including British journalist Catherine Belton's bestseller "Putin's People." The same informant apparently served as the source in both works: an alleged former RAF member who was granted anonymity.

For quite some time, experts puzzled over who the source for the RAF story could be. Now, it seems, the mystery has been resolved: The person in question is believed to be Dietmar C. from the town of Dillingen in the western state of Saarland.

That fact could prove to be a serious problem for the credibility of the Putin narrative. It turns out that C., now 71, has been many things in his eventful life: a hippie, a bank robber, a key source of questionable revelations – but he was very clearly never a member of the RAF. Instead, he is considered a notorious fabulist and has several previous convictions, including for making false statements.

Purported RAF insider Dietmar C. in 2001 in a court in Budapest, Hungary

Image: Tibor Rozsahegy / picture-alliance / dpa / Editing by Germán & Co

The case highlights a broader problem with some of the reporting that has been conducted into Putin's KGB past. Ever since the former spy ascended to become Russia’s leader, researchers, journalists and biographers have been combing through his years of service in East Germany from 1985 to 1990. In the eagerness to find new details, fact and fiction have sometimes blurred, and somewhere along the line, the man from Leningrad gained the reputation for being a Soviet super agent.

The literature is full of speculation about Hollywood-like special missions in which Putin is alleged to have been involved: a secret operation to overthrow the East German government; the establishment of a network of agents made up of defected Stasi employees; or the blackmail of a toxic materials researcher, on whom pornographic material was to be planted.

Even today, there is no convincing evidence for these stories. In the Stasi files that have been made public so far, there are only a few pages in which Putin is even mentioned at all. They cover rather banal events such as birthday greetings, administrative matters or German-Soviet friendship evenings, captured in slightly faded photographs.

The fact that there is so little about him in the files itself provides grounds for speculation: Were Putin's assignments so explosive that all traces were consistently erased from official documents? Or was he actually just performing routine work that was simply too trivial to be archived by the Stasi?

A collection of slightly yellowed photos from the 1980s is stored in the Stasi archives. They document internal festivities, receptions and award ceremonies of the Stasi district administration in Dresden. Some of the photos show a pale man whose face is now world-famous.

Vladimir Putin worked in the Dresden station of the Soviet KGB secret servicefrom 1985 to 1990. Daily life at the local station wasn't all that glamorous.

But there were moments, occasional celebrations that were also attended by colleagues from East Germany's State Security (the Stasi).

One of the undated snapshots shows the future Russian leader in a crowd at the buffet.

From Putin's time in Dresden, it is said the he had a special appreciation for the local beer, Radeberger, which was difficult for normal citizens of East Germany to obtain.

Putin's fondness for the tipple apparently didn't go unnoticed by East Germany's Ministry of State Security.

According to a handwritten note in the margin of an internal memo, Dresden Stasi chief Horst Böhm not only had his colleague Putin presented with flowers and a card for his 35th birthday, but also with a beer mug.

According to Horst Jehmlich, the chief aide to the last Dresden Stasi chief, Putin played only a minor role in the neighboring KGB station. Putin was more of an "errand boy" at the regional KGB station, Jehmlich told DER SPIEGEL. Although Putin sometimes signed requests to the Ministry of State Security (MfS), important matters were always clarified personally by the Soviet head of the KGB station – with the help of an MfS interpreter and without Putin.

Putin's former office neighbor at the KGB office in Dresden echoed Jehmlich's view. He said that his colleague was "a complete conformist" whose work consisted mainly of sifting through an endless stream of applications to visit family in West Germany or searching for potential informants among foreign students at the University of Dresden.

None of that served to diminish speculation about explosive special missions, especially since Putin himself has never made any explicit statements about the work he performed in East Germany. The legend of having been a top spy shrouded in secrecy isn't likely one that he finds particularly bothersome.

The wildest story to date – that of Putin's purported involvement in RAF terror – first surfaced in the 2012 biography "The Man Without a Face" by Masha Gessen. In it, an alleged "former RAF member" describes how members of the extreme left-wing terrorist group "occasionally came to Dresden for training sessions" and brought their contact Putin gifts from the West – a Grundig short-wave receiver, for example, or a stolen Blaupunkt car stereo. "He always wanted to have things," the informant told Gessen. The interview took place in Bavaria in August 2011.

Apparently the same anonymous source is quoted in Catherine Belton's 2020 bestseller "Putin's People." "We met there (in Dresden) about a half a dozen times," the alleged former terrorist claims in that book. According to the source, the RAF people would travel to East Germany by train and were picked up at the train station by Stasi agents in a Soviet-made sedan and driven to a safe house in Dresden, where, Putin and another KGB colleague would join them to discuss terrorist operations. "They would never give us instructions directly," the informant said. "They would just say: 'We heard you were planning this, how do you want to do it?'" Putin and his KGB colleague, the source said, would then make "suggestions" to the RAF fighters for attacks and sometimes recommended "other targets."

Citing her source, Belton writes that Putin "would be among the leaders" in these secret meetings in Dresden. Even a Stasi general, who was allegedly also present, would obey his orders, according to the source. At the end, the source said, the terrorists handed over their wish lists for weapons, which would then allegedly be delivered to secret locations by KGB agents and picked up by RAF members.

According to Belton's source, the terror of the RAF was at the time a "key part of KGB attempts to disrupt and destabilize" West Germany. The assassination of Herrhausen, which was allegedly also initiated by Putin and the KGB, also allegedly served this purpose. The head of Deutsche Bank was murdered in the Frankfurt suburb of Bad Homburg on November 30, 1989, in a bomb attack that remains unsolved to this day.

The bombed-out sedan of murdered Deutsche Bank CEO Alfred Herrhausen in Bad Homburg, Germany, in 1989

Image: Kai-Uwe Wärner / picture-alliance / dpa / Editing by Germán & Co

"I know this target came from Dresden," Belton's alleged RAF informant claimed."They were using us to disrupt, destabilize and sow chaos in the West." Belton doesn’t provide any further witnesses or evidence of a KGB background to the attack on Herrhausen in her book. In a footnote, she merely refers to the "former RAF member" she spoke to in March 2018.

By then, the story of Putin, the RAF and the secret meetings in Dresden was already circulating on the Internet, on the "Putinism" blog, for example. But in contrast to the source cited by Gessen and Belton, the alleged RAF member was named on the blog: Dietmar C.

Gessen left unanswered questions from DER SPIEGEL as to whether the alleged RAF witness had in fact been Dietmar C. Belton stated that she would not comment in order to protect her source. She said revealing any information would be a violation of agreements made to ensure the safety of the person in question. She did, however, say that she had viewed documents that "gave credence to this person's account." But Belton did not state which documents those were.

The source of the alleged RAF-KGB connection was treated less discreetly in the biography "Vladimir V. Putin" by German journalist Thomas Fasbender, published in 2022. In it, he quotes Dietmar C. by his full name. The book states that the source now has "no reservations about revealing his identity." The book claims that the source is the same person who had spoken to Gessen and Belton.

According to Fasbender, in a meeting with Dietmar C. in August 2021, the source again described the RAF meetings with Putin in Dresden and embellished them with additional details. He also claimed that the clandestine meetings were attended not only by Putin, but also by Sergei Ivanov, who later became Russia's defense minister. In addition, he alleged that terrorists from the French group Action Directe and the head of the Dresden Stasi district administration, Major General Horst Böhm, had also been present at times. And that Putin, who answered to the name "Vova" at the time, would sometimes"send him to fetch coffee."

Fasbender writes, however, that Dietmar C. had never been a member of the RAF, instead merely offering the group occasional assistance - as a French interpreter, for example. Readers don't have to believe Dietmar C.'s account, the author writes, but his story is "no less plausible than others."

Asked by DER SPIEGEL about the credibility of his source, Fasbender says that Dietmar C. "did not give the impression of being a storyteller or an impostor." However, this does not mean that "every statement he makes should be taken at face value."

Whereas Fasbender describes Dietmar C. as a "man with a left-wing radical past and a colorful life in the haze of terrorism" and the secret services, the German security authorities have no knowledge of the man's connections to the RAF, the KGB or the Stasi. Reporting conducted by DER SPIEGEL found that neither the Federal Prosecutor's Office, which is responsible for terror investigations, nor the counterintelligence unit of the Federal Office for the Protection of the Constitution, nor the Stasi archives have obtained any such information.

The last head of the Stasi Department XXII/8, which was responsible for surveilling the RAF on the orders of Minister for State Security Erich Mielke, also told DER SPIEGEL that he had never heard of the man.

Dietmar C.'s name is more familiar to the West German judiciary. Starting in the 1970s, he criminal record consistently grew, including crimes such as embezzlement, theft, coercion and violations of the Weapons Act. He served multiple prison sentences, and as recently as 2017, a Bavarian district court sentenced him to a fine for assault. According to the verdict, his federal criminal record contained "12 entries" at the time.

In addition to his criminal career, Dietmar C. also liked to share spectacular stories – often putting himself in the leading role. For example, he once told the investigative journalist Jürgen Roth a completely different version of his biography. In contrast to the story he told Fasbender, according to which Dietmar C. was a member of an anarchist "fighting association" in southern Germany in the early 1970s, where he allegedly came into contact with the RAF, he apparently told Roth that, "in the early 1970s," he had fought as a "mercenary" in Africa, in what was then Rhodesia.

In fact, according to a once close companion, Dietmar C. didn't fight for the RAF or in Rhodesia at the time – but served in Germany’s armed forces, the Bundeswehr. He reportedly trained as a medic, stole equipment and deserted. The District Court in Marburg, Germany, in fact, convicted Dietmar C. of desertion in December 1972.

A few months later, in May 1973, the then-21-year-old was on trial again. As his former acquaintance told DER SPIEGEL, Dietmar C. belonged to a hippie group in Saarland that dreamed of emigrating to Canada and founding a rural commune. They planned to obtain the necessary money by robbing banks, but the group got caught. A juvenile court in Saarbrücken sentenced Dietmar C. to three years in juvenile detention.

Dietmar C. Also Claims To Have Met Osama Bin Laden

There's also another story where the facts don't quite match up with the timeline. According to Jürgen Roth's 2016 book "Schmutzige Demokratie" (Dirty Democracy), at the beginning of the 1980s, Dietmar C. spent "several years in Afghanistan" supporting the mujahedeen "in the fight against the Soviet troops." The book states that the man from Saarland had also met "several times" with Osama bin Laden, whom he had experienced as a very "calm personality."

The files tell a different story: Rather than having fought for "several years" in Afghanistan, Dietmar C. served another prison sentence in Germany in the early 1980s. According to the former acquaintance, Dietmar C. and an accomplice robbed a bank in Konz in the state of Rhineland-Palatinate in December 1980. In September 1981, the Trier Regional Court sentenced C. to six and a half years in prison for predatory extortion. He landed another entry in his criminal record in October 1987 for "negligent driving without a license."

According to the files, Dietmar C. spent much of the 1980s in custody or under the watchful eye of the police, judiciary and parole supervisors. Just how he managed to find time for the Afghan mujahedeen, KGB agents and RAF terrorists in between remains his secret. An order of summary punishment issued by judicial officials in the city of Mönchengladbach also raise doubts about his credibility. He was slapped with a suspended sentence there in May 1995 for giving false testimony.

Shortly thereafter, in 1996, Dietmar C. hit the headlines as the suspected supplier of a hand grenade found at the scene of the kidnapping of Hamburg millionaire Jan Philipp Reemtsma. He was later arrested in Hungary on other charges and sentenced to a total term of imprisonment of 11 years for illegal explosives trafficking and aiding and abetting counterfeiting, among other infractions.

A Known Neo-Nazi in the Service of the KGB?

C. was extradited to Germany and has been living for the past several years in Bavaria. Today, he is a member of the board of directors of an association he founded himself, for which he works as a "legal adviser." In the official registry files, he does business under the name "Dr. Dietmar C."

It remains unclear how Dietmar C. might have obtained his academic title – he left written questions from DER SPIEGEL about all the events unanswered. When contacted by telephone, he admitted that he spoke with Masha Gessen, but not, he claimed, about trips to East Germany by the RAF. When asked if he had spoken to Catherine Belton about Putin’s time in Dresden, he replied: "About Putin in Dresden? No." Then about what? "I don't want to say anything about that. Ms. Belton should explain." He also claimed never to have spoken to the journalist Fasbender about the RAF taking trips to East Germany. Dietmar C. claimed to have no recollection of his written authorization for the book passages in question and the permission to mention his name, which DER SPIEGEL has obtained. He also said he didn't want to comment on the question of whether he himself had been with Putin in Dresden. Dietmar C. did, however, attach great importance to one thing: That he "at no time was a member of the RAF."

The supposed Dresden connection between the RAF and the KGB isn’t the only narrative that captured the imagination of biographers, journalists and Putin scholars. The reports range from Putin’s purported secret spy network to a known neo-Nazi whom the KGB man is said to have handled as an informant. There is no evidence for any of these episodes in the Stasi files that have been made public so far.

The titillating stories first began circulating at the beginning of 2000, when Putin had just become Russian president and hordes of reporters went in search of clues about his past. Britain’s Sunday Times reported on a "ring of 15 agents" that Putin had allegedly built. The Sächsische Zeitung newspaper wrote that among the secret inductees was the notorious Dresden-based neo-Nazi Rainer Sonntag, who was shot dead in 1991. And in the German daily Die Welt, one could read about an East German medical doctor on whom Putin's agents allegedly wanted to plant "pornography with young girls" in order to get him to feed false data about "chemical warfare" into a computer network.

Public broadcaster ZDF and the newsweekly Focus, meanwhile, also reported on a spy network, and the Reuters news agency made the story virtually official in May 2000. The spokesman for the Stasi records office, the news agency reported at the time, confirmed that Putin had set up an agent ring of former Stasi employees in 1990 to continue working for the Soviets after the end of East Germany.

However, the statement from the agency turned out to be false. In fact, the records office wrote the next day in a little-noticed "clarification" that it had neither knowledge nor documents "on the activities of the former KGB officer Vladimir Putin in Dresden."

The journalists from various media had based their reporting primarily on the information provided by a dismissed Stasi employee named Klaus Z., who operated under pseudonyms such as "Peter Ackermann" or "Michael Mannstein."

The now 66-year-old did not have a glittering career at the Stasi. In the early 1980s, he initially worked as a low-level employee in Department XV of the Dresden district administration before being transferred to the less prestigious Department VIII in 1988. There, according to his personnel file, he dealt with "conspiratorial residential area investigations," among other things. The following year, he was transferred again and took care of "technical security" at Stasi properties.

Confessions to West German Intelligence

His superiors were ambivalent about the young lieutenant: On the one hand, he was characterized by a "high level of commitment and maximum utilization of working time," but on the other hand, he tended to get lost in the thicket of information. Because he always strives to "clarify facts down to the smallest detail," the comrade quickly loses sight of the big picture, his superiors noted.

Klaus Z. also provided a large number of details to the Federal Office for the Protection of the Constitution after the fall of communism. Following his release from the Stasi, he traveled in frustration to Cologne during Christmas 1990 and offered his services to West German counterintelligence. At this point, a good year after the fall of the Berlin Wall, the interest of the agent hunters for internal information from the Dresden Stasi field office was no longer all that pronounced. Their interest increased only when the conversation turned to the "friends" from the KGB.

Klaus Z. reported on an alcohol-filled party at the end of 1984, to which he had been taken by his wife, who was working for the East German criminal police at the time. At the party, he claims to have met a certain Georg S., who went by the nickname "Schorsch." Officially, he was with Department K1 of the Volkspolizei, the East German national police, but in reality, Klaus Z. reported, he worked mainly for the KGB.

Klaus Z. claimed to have met a Russian named "Volodya" during Stasi company sporting activities in 1985, and that they visited each other privately and went on excursions. Later, Klaus Z. claimed to have learned that "Volodya" was a contact of "Schorsch" at the KGB. Once it became clear that East Germany was soon to disintegrate, he said, they jointly considered whether Z. could henceforth work for the KGB in a conspiratorial capacity, but the plan was never implemented, he said.

Following his Cologne Christmas confession in 1990, Klaus Z. started a new life in West Germany - including a stint as a security man at public broadcaster ZDF. He fell off the radar at that point - until he surprisingly contacted his case worker at the Office for the Protection of the Constitution again in 1999. He said he had recognized "Volodya" on television, the Soviet intelligence man he had once met in Dresden. The person in question was none other than the recently appointed Russian Prime Minister Vladimir Putin.

KGB officer Putin's access badge for the Stasi offices

Image: Stasi-Unterlagen-Archiv

He claimed the he had played sports and went on excursions with him during that time in Dresden. He said that the last time he had met Putin was in January 1990, in his apartment, together with another KGB man. He said he spontaneously pulled out some paper from the cupboard himself and wrote a handwritten declaration of commitment to the KGB. But no one ever responded to it, he said.

In order to find out more details about Putin's KGB past, Klaus Z. was apparently supposed to try to reactivate his old contacts with "Schorsch," who in the meantime was working as a private detective in Dresden. The operation ended in a fiasco. Klaus Z. shared his knowledge about "Volodya" not only with the Cologne counterintelligence, but also with various media, which then spun the information he fed them into juicy stories.

ZDF, for example, had Klaus Z. reenact a scene in which he signs a self-written declaration of allegiance to Putin. The newsmagazine Focus presented him as a top source of the Office for the Protection of the Constitution, which it reported had uncovered no less than"15 German scouts in Moscow's service" – and seemed almost clairvoyant when reporting: "We haven’t heard the last from Putin."

Today, Klaus Z. lives as a pensioner in a communist-era building in a rural part of the eastern state of Saxony. When contacted by DER SPIEGEL, he proposed meeting in a "Greek national restaurant with a convivial meeting atmosphere." There, he was happy to discuss DER SPIEGEL's questions.

During the more than three-hour interview, he admits that much of the information about Putin that various media have attributed to him over the years was not based on his own experience at all. He says he researched some connections afterwards, with the help of newspaper reports, for example, and that he "combined" others on the basis of statements by "Schorsch" or other former colleagues.

An Alleged Blackmail Attempt

Moreover, much is based on pure conjecture, such as the story about the toxic substance researcher's alleged blackmail attempt: "Schorsch" had only made "rudimentary" allusions to this, Klaus Z. now says, adding that he subsequently combined the account with other information. Through research in a chronicle of the Medical Academy of Dresden, he ultimately came across a professor with whom "Schorsch's" information might fit. However, Klaus Z. did not know whether the man was actually involved with chemical warfare agents, if he was to be blackmailed by the KGB or whether Putin had anything to do with it. It’s no longer possible to contact "Schorsch." He died in 2010

Similar to the story about the toxic substance researcher is the matter of Putin's purported 15-agent spy cell. According to Klaus Z., he had also learned about this through hints from "Schorsch" at a party in a beer tent in Dresden shortly before the fall of the Wall. He had spoken of "troops" in other districts in East Germany. Z. understood "Schorsch" as meaning covert KGB colleagues. He says he knew that there were five agents working in "Schorsch's" Dresden KGB group and had simply extrapolated the number.

The allegation disseminated by some media that the Dresden-based neo-Nazi Rainer Sonntag spied for Putin's KGB network is also based on a bold interpretation of Klaus Z.'s statements. Sonntag moved in the criminal circles during East German times and served time and again in prison between 1972 and 1981, including for theft and for plans to escape to the West. In November 1985, he was deported to West Germany, where he worked in Frankfurt's red-light district and joined the far-right scene. After the fall of the Wall, Sonntag returned to Dresden and got into a fight in the local red-light district. In 1991, a pimp shot him to death.

At the time, "Schorsch" confided in him, Klaus Z. now says, that Sonntag had once worked for him as a police informer. Z. says he then conducted elaborate research on his own before drawing up a "time line." However, to deduce from this that Sonntag worked for the KGB or for Putin requires an active imagination. According to Stasi documentation, Sonntag was only considered a "candidate" for an informant position as an "unofficial criminal police employee" at the end of the 1970s, without success. Because of "deconspiracy," meaning the candidate had somehow deliberately or inadvertently revealed his connection to the secret police, the recruitment was broken off. There are no references in the file to connections with "Schorsch" or with the KGB.

Few Stasi documents exist about Putin himself. Among the few papers in which his name appears is a letter from 1989 in which he, representing the KGB liaison officer actually in charge, asks the Dresden Stasi chief for help. The letter references a KGB informant named Gerhard B., whose phone had been cut off. The former captain of the East German criminal police was considered a security risk because of drunkenness and debts and had been removed from service. Putin now asked the Stasi on behalf of his boss to unblock the man's telephone line, because he continued to provide support to the KGB.

A request letter from the KGB to the Stasi, signed by Vladimir Putin "on behalf" of the actual liaison officer (from September 1989)

Image: Stasi-Unterlagen-Archiv / Editing by Germán & Co

The role of supplicant for a washed-up informer doesn't quite fit the image of a top spy. But it probably describes Putin's everyday life in the Dresden KGB station more aptly than the stories about terrorists and secret weapons caches.

In fact, things were far less glamorous in the Saxony KGB station than some non-fiction books claim. In one of the office's duties, Putin was quite familiar from his time as a secret service agent in Leningrad: the suppression of the opposition. As late as October 1989, Putin's superior, Major General Vladimir Shirokov, turned a student at Dresden Technical University in to the Stasi. "By means of the printer in his possession," the young man had duplicated an appeal from the democracy movement "New Forum" and distributed it among the students.

A few weeks later, the Wall fell and the communist Socialist Unity Party (SED) regime was history. On the evening of December 5, 1989, civil rights activists marched in front of the KGB station in Dresden's Angelika Strasse, where they came face to face with Soviet soldiers who were tasked with securing the area.

The scene provided the backdrop for the final myth about Putin's time in East Germany: According to one version, he heroically confronted the demonstrators, with a determined look and armed soldiers at his side. According to another version, a small man was standing at the entrance of the nearby Stasi headquarters, watching the spectacle from a safe distance.

Whether Putin was even there at the time cannot be proven.

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Special Edition: "The Covert Conflict on Lithium: An Examination of the Other Hidden War" News round-up, June 8, 2023

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"The Covert Conflict on Lithium: An Examination of the Other Hidden War"

It is imperative to emphasize that a covert competition for supremacy in the lithium market is underway, with the Chinese government consolidating its authority over global extraction. (1) Of significant importance, China has commenced lithium concentration operations in Zimbabwe, Africa, by establishing a facility that includes a mine in proximity. Furthermore, Chinese corporations are engaged in similar initiatives in Namibia, Mali, and the Democratic Republic of Congo (2) Tianqi Lithium, a Chinese corporation, has made a substantial investment in the largest producer of lithium mineral concentrate globally, located in Australia. The investment being made carries significant implications for the global lithium market, highlighting the growing importance of lithium as a critical resource for the energy sector. The following statement elucidates the ownership framework of a joint venture within the lithium mining sector. Notably, Ganfeng Lithium, a Chinese enterprise, exercises control over a joint venture that possesses a 50% interest in the second-largest lithium ore mining site in Western Australia. (3)

The South American region, commonly called the "lithium triangle," comprising Argentina, Bolivia, and Chile, has garnered the interest of Chinese stakeholders owing to its substantial concentration of economically feasible lithium reserves, which constitute almost 50% of the global total (4). This region's significance in the global lithium market has made it a focal point for various international players, including China, seeking to secure a reliable supply of this critical resource. It is worth noting that the European Union is heavily dependent on this region to meet its lithium requirements (5)

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Image credit: A prototype of the lightweight, flexible microwave transmitter array that is now being tested in orbit aboard Caltech’s Space Solar Power Demonstrator.

Beaming Solar Energy From Space Gets a Step Closer

Scientists are testing how satellites could collect power from the sun and send clean electricity to Earth—and getting encouraging results

In this age of wireless everything, engineers are trying to perform the ultimate act of cord-cutting: generating abundant solar electricity in space and beaming it to the ground, no power cables required. 

Spiegel By Corey S. Powell | Photographs by Francesca Forquet for The Wall Street Journal, June 7, 2023 

More than half a century ago, an article titled “Power from the Sun” in the journal Science spelled out the rationale for this high-wireless act. Above Earth’s atmosphere, sunshine is never interrupted by cloudy skies, and there is no day or night. Satellites collecting solar power could theoretically operate around the clock, dispatching emission-free electricity wherever it’s needed, anywhere on Earth. But the concept was long dismissed as too complicated and expensive. 

Now it is finally being put to the test. 

On Jan. 3, a team at Caltech launched the Space Solar Power Demonstrator, an orbiting suite of experiments to test key components for space-based solar power. It switched on in May and has begun sending back encouraging early results. “People are realizing this isn’t just science fiction,” says Ali Hajimiri, an electrical engineer at Caltech and one of the project leaders on the demonstrator. “There may be a pathway to make this reality.” 

Ali Hajimiri, an electrical engineer at Caltech and one of the project leaders on the Space Solar Power Demonstrator, stands between two generations of microwave-beaming technology: the original rigid design, right, and the newer, lightweight, flexible version, left.

Other related efforts are also gaining momentum. The European Space Agency is drawing up a blueprint for a possible European space-solar network. The China Academy of Space Technology has announced plans for a power-beaming satellite prototype by 2028. And military labs in the U.S. are experimenting with tech that could someday transmit space-based power to remote bases or combat zones. 

One of the central challenges for all of these projects is finding a safe, efficient and reliable way to transmit gigawatts of power to the ground and then convert it into electricity that people can use. Microwave beams are the favored technique, in large part because they can travel freely through the air regardless of weather. While similar to those used in microwave ovens, these beams would be nowhere near as concentrated. A recent study by the European Commission found that the incoming microwave beams would be too feeble and diffuse to harm human health. Some involved in these projects say further thorough research will be needed for public acceptance, though. 

How to Beam Power From Space

Engineers have long hoped to harvest clean, affordable solar power in orbit and send it down to Earth. A group at Caltech is now testing ultra-light structures and flexible electronics that could finally make the idea practical. Here's how it would work:

Source: Caltech

Jemal R. Brinson/THE WALL STREET JOURNAL

“It’s basically the same technology as wireless charging for your cellphone,” says Chris Rodenbeck, head of the Advanced Projects Group at the U.S. Naval Research Laboratory in Washington, D.C. In 2021, Rodenbeck and his collaborators sent a 1.6-kilowatt beam of microwaves (also similar to those used for Wi-Fi signals, but at a higher frequency) from a transmitter to a receiver two-thirds of a mile away at the U.S. Army Research Field in Blossom Point, Md. The researchers said they used microwaves because they travel freely through the air, unaffected by weather. Nobody has yet pulled off an equivalent feat from orbit, however. 

The NRL has been experimenting with beaming technology in space using a device the size of a bread loaf called the photovoltaic radiofrequency antenna module, or PRAM. It flew aboard the U.S. Air Force’s X-37B space plane and effectively converted sunshine into microwaves—but didn’t actually direct the waves anywhere—before returning to Earth last year. Rodenbeck is working on a follow-on project, Arachne, run by the Air Force Research Laboratory in Dayton, Ohio. Arachne is designed to tackle the more challenging task of transmitting power from orbit to a station on the ground. It is scheduled for a 2025 launch. 

Chris DePuma of the U.S. Naval Research Laboratory monitors the performance of the photovoltaic radiofrequency antenna module, or PRAM. It recently flew aboard the X-37B space plane, running experiments on efficient ways to convert solar electricity into microwaves. PHOTO: JONATHAN STEFFEN/U.S. NAVY

The Caltech team is attempting to accelerate this process by testing multiple, potentially lower-cost technologies at once, with funding from billionaire real-estate developer and philanthropist Donald Bren, chairman and owner of Irvine Company. Many years ago, he was captivated by an article in Popular Science magazine about harvesting solar energy in space. “I’ve dreamed about how space-based solar power could solve some of humanity’s most urgent challenges,” he says. His donation of more than $100 million to Caltech over the past decade supported the creation of the Space Solar Power Demonstrator, the suite of technology tests that launched in January attached to a commercial satellite. 

One of the key components on the Caltech demonstrator is a prototype power-beamer called Maple, short for Microwave Array for Power-transfer Low-orbit Experiment. It has generated microwaves and steered them from one part of the satellite to another, lighting up two test LEDs, Hajimiri says. The distance traveled is small, about a foot, but it is the first documented demonstration of power-beaming in space. The device also directed microwaves toward Earth, which were picked up by Caltech’s detectors on the ground. 

Maple has a novel modular design that would combine a solar-energy collector and a transmitter into a single, self-contained unit. That approach could help address one of the most daunting obstacles to building solar-power satellites—their shocking size requirements. To match the output of a midsize power plant on Earth, a solar satellite would need at least 1 square mile of light-collecting area.

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Image credit: Crushed rare earth rocks: Europe remains extremely dependent on China.
Foto: Roger Kisby / DER SPIEGEL

The Global Competition for Raw MaterialsEurope at Risk of Losing the Lithium Race

Without lithium, copper and rare earths, our mobile phones, electric cars and wind turbines wouldn't function. Currently we are almost exclusively dependent on China for these critical raw materials. But there might be a way out.

Spiegel By Simon Book, Michael Brächer, Christoph Giesen, Simon Hage, Claus Hecking, Martin Hesse, Stefan Schultz and Gerald Traufetter,  June 8, 2023

Europe’s future smells like scorched metal. Sparks are flying, workers wearing protective goggles cut with unwavering focus through metal pipes. Here in the industrial park in Bitterfeld-Wolfen, just north of Leipzig, where AGFA once developed the first functioning color film in the world, a new German industrial miracle is taking shape: Europe’s first lithium refinery.

The man hoping to realize the project is named Dr. Heinz C. Schimmelbusch, a 78-year-old known lovingly as "Schibu” in the world of raw materials. Schimmelbusch is far from being an unknown: He is the former director of the legendary German industrial conglomerate Metallgesellschaft, once one of the country’s largest. Born in Vienna, he has bright blue eyes, carefully parted hair and a larger-than-life ego to match his reputation. The executive, whose career had actually seemed to come to an end 30 years ago, wants to build a final monument to himself with this latest project. And already, his refinery is being viewed as a key piece in Germany’s economic puzzle going forward.

Schibu’s company, called Advanced Metallurgical Group, or AMG for short, hopes to begin producing lithium hydroxide this year. It is the stuff that ecological dreams are made of, a metallic salt that is necessary for car batteries, wind turbines and solar facilities, the key to electromobility. The United Nations calls it "a pillar for a fossil fuel-free economy.” Approximately 10 kilograms of the stuff can be found in the battery of an electric SUV, such as BMW’s iX.

Image credit: Heinz C. Schimmelbusch: "We have to act now. Otherwise, we’ll run out of time."

Foto: Salome Roessler / DER SPIEGEL

Soon, Schimmelbusch is hoping to refine 20,000 tons of lithium hydroxide per year in Bitterfeld, enough for half a million electric cars. Within just a few years, the plan calls for the total to increase to 100,000 tons annually. The raw material necessary is to initially come from Schimmelbusch’s own mine in Brazil, but might one day even be sourced from mines in Germany itself. The executive is currently investing hundreds of millions of euros to make that happen. "We have to act now. Otherwise, we’ll run out of time,” he says.

Reliable supplies of the raw materials necessary for the economy of the future is currently one of the most important challenges facing the global economy. Whether at the industry’s premier trade fare Hannover Messe, in European Parliament, at company headquarters or in lobbying discussion in Berlin, everyone sees the accelerating exploitation of metals, ores and minerals as inescapable for the salvation of the planet – for clean energy and the transportation revolution. Millions of jobs, fighting climate change, Germany’s future geopolitical independence: All that hinges on the availability of lithium, cobalt, nickel and graphite – and on rare earths like neodymium and praseodymium.

Image credit. AMG factory under construction in Bitterfeld, part of Germany's effort to catch up.

Foto: Thomas Victor / DER SPIEGEL

"The race for the raw materials is also a race for our future prosperity,” says Peter Buchholz, head of the German Mineral Resources Agency (DERA), a state-run informational and consultancy platform.

Were the global competition for raw materials a horse race, the odds would currently favor China. No country is home to larger mineral deposits and no country has been more active, more successful and more ruthless in exploiting them. The European Union Intelligence and Situation Center (INTCEN) recently warned that Beijing could seek to take advantage of its market position on batteries and solar cells. The European Center of Excellence for Countering Hybrid Threats (Hybrid CoE) has noted that China is increasingly turning to "economic coercion” as an instrument of geopolitical power.

As if a reminder were needed, Beijing recently targeted the American semiconductor manufacturer Micron, issuing a warning against using the company’s chips. Officially, the Chinese cited security concerns, but experts believe it was a response to U.S. sanctions.

Buchholz describes the current situation as a "systemic competition,” and says it is long past time for German companies to finally invest significant amounts of money into guaranteeing future supplies of raw materials. Instead of simply buying what they need on global markets, Buchholz says they must invest in exploitation and refinement, including buying ownership stakes in mines. "The best projects are currently being divvied up,” Buchholz says, and competitors from China are already in position. If the Germans don’t hurry, the DERA analyst says, the best deposits will all be gone.

Image credit: A worker at a raw materials factory in the Antofagasta, Chile. The raw materials industry is far from clean.

Foto: Marcos Zegers / The New York Times / Redux / laif/Editing by Germán & Co

The fact that Schimmelbusch, approaching his 80th birthday, has had to jump into the breach says a lot about the failure of German industry. For many years, senior German executives showed little interest in the issue of critical natural resources, with vital corporations like Siemens, BMW, Daimler, Thyssen and BASF largely unconcerned. The world, says one chemical industry executive, "was free, the markets were open, and prices were low.” Why bother devoting valuable capital to company-owned raw materials storage facilities? Why take the risk of exploiting resources oneself? Why take direct responsibility for environmental degradation and for provoking the anger of locals? Indeed, why submit to all that stress when the model of just-in-time purchases, mostly from China, was working just fine? "It was a huge advantage for use,” the chemical industry executive says. "We didn’t have to deal with the environmental mess and were able to receive quality products at reasonable prices.”

Periodic price fluctuations did little to change that approach – particularly since things were going rather well for the Germans, aside from a few shortages that were likely provoked by Beijing.

But the supply-chain breakdowns produced by the pandemic, the Russian invasion of Ukraine and China’s more aggressive stance toward Taiwan have combined to cast doubt on age-old assumptions that raw materials will always be accessible from somewhere. China has become far too irreplaceable, far too powerful as a supplier.

The European Commission now admits that Europe is "heavily dependent” on raw materials from China, leading to a "vulnerability” in the EU economy. Depending on the material, a maximum of 7 percent of European demand is met by production facilities in Europe. In other words, in the best case, 93 percent of demand for the vitally important metals must be met through imports – and 100 percent in the worst case.

Source: European Commission 2023, high demand scenario (HDS)

And the West’s vulnerability is growing every day. According to the European Commission, the demand for lithium for batteries alone will increase to 90 times the current level by 2050, and the demand for cobalt will increase to 15 times the current level. The U.S. government already expects interest in such critical materials to increase by up to 600 percent by 2030.

Europe's demand for rare earth elements like neodymium is expected to be five to six times higher by the end of the decade than it was at the beginning, Brussels believes.

…“China may not be the world’s leader when it comes to extracting neodymium …

… but it does process the most globally … / … and is thus the main supplier to the EU.

Concerns have become so great that raw material supplies were a major focus of the recent G-7 summit in Japan. Though the heads of state and government were unable to agree on the establishment of a "Critical Raw Materials Club,” as the European Commission had recently proposed, a five-point plan was devised for the identification and exploitation of sources for critical metals and minerals.

"We want to change the situation,” German Chancellor Olaf Scholz said recently at the opening of the Hannover Messe. But how?

China – Domination Everywhere

Our destination is Bayan Obo, a once sacred place, the name of which means "rich mountain.” These days, though, the area has little to do with the spirituality of untouched nature. Rather, it is home to the largest rare earths mine in the world. The minerals have been exploited here, on the outermost fringe of China just before the Mongolian border, since 1958, and the site is home to at least a third of the world’s reserves. It is also one of very few mines in the world where all 17 of the coveted metals can be found in the rock belowground. Between 70 and 80 percent of the amount produced by China comes from here – equating to more than half of global production.

The drive to the mine leads along well-constructed roads through hills and past fields where sheep and cattle are grazing. But the landscape grows more austere the closer one gets to the mine. Mining companies have completely dug up the region, felling all the trees. Cranes and earthmovers are everywhere, as are the cars belong to state security. First three, then four and finally five dark-colored VW sedans with tinted windows begin following our taxi.

The road is blocked precisely 10 kilometers from the mine, with a police van parked across the traffic lanes. A uniformed officer blows vigorously into his whistle before then yelling so loud that it is audible through the closed windows: "Turn around!”

There is a second approach to the mine as well, requiring a detour of several hours through the scraggy landscape. Shortly before sundown, the second roadblock comes into view. Again, an official state security vehicle is present. And again, all cars are sent away.

"The Middle East has oil, China has rare earths."

Deng Xiaoping, Chinese leader, 1992

There are many reasons for why China is making its best-known export into a state secret. The raw materials business is rather filthy. Dynamite and heavy machinery is used to extract elements out of the earth or rock that have been there for millions of years. It must be blasted to bits, pulled to the surface and washed, a process that requires vast amounts of energy and water – and sometimes also releases radioactivity.

In Western countries, strict environmental regulations govern such operations, sometimes making them unprofitable. In China, by contrast, market leadership is the goal, and the environment is a secondary consideration, if it even enters the equation at all.

In Baotou, located 150 kilometers south of the mine, the material pulled out of the ground is processed, with the waste produced by the refinery dumped into the lake next door. Officials have built a two-meter high, concrete wall – several kilometers long – around the cesspool and nobody is allowed close to the water. Immersion would likely be deadly.

Baotou is essentially the global capital of raw materials, and the lake has turned into a tailings pond for 40, perhaps even 50, industrial operations that have set up shop in the region to process the metals. They have names like China North Rare Earth, Baotou Jinmeng Rare Earth and Baotou Dapeng Metal. Hundreds of factory chimneys just into the sky, beneath which extremely toxic chemicals are used to separate the 17 coveted rare earths from each other. From the lake, the toxic soup seeps into the groundwater, and likely also into the nearby Yellow River, one of the most important waterways in China, the basin of which is home to more than 100 million people.

The cancer rate in towns located along the lakeshore is high. Almost every family here, say residents, has lost at least one member to cancer. The tap water that comes out of the faucet in a restaurant next to the lake shimmers, with metal residuals visible to the naked eye. Locals say that they used to boil the water and then drink it, and some elderly residents still do so, though younger people who live in the region have come to understand that doing so does not lessen the amount of metal residue the water contains. Factories have also pumped fluoride-laden water into the lake, which can make bones brittle and leads to abnormal teeth growth.

Of the 51 raw materials that the EU now categorizes as strategically important or critical for Europe's supply ...

Source: European Commission

... 24 are primarily extracted in China, which is also the main processor for 33 out of the 51 raw materials. For heavy rare earth elements, which are essential for numerous modern technologies, there is currently not a single processing facility outside of China.

It was Deng Xiaoping, who led China from 1978 to 1989, who launched China on a path to becoming the world leader in raw materials. "The Middle East has oil, China has rare earths,” he said in 1992. The difference, however, is that while the OPEC cartel occasionally adjusts production to keep prices high, China’s rare-earths lever is incomparably larger, allowing the country to exert political influence around the world.

When Beijing 13 years ago suddenly reduced rare earth exports by 72 percent, it triggered an earthquake on the raw materials markets. For years, China had practiced aggressive price dumping to run its competitors into the ground, forcing mines in the U.S., Australia and Africa to close because they were unable to keep up with the low prices the Chinese were charging. But in the second half of 2010, the country’s leadership ordered that instead of the normal export total of 28,000 tons, only half be sent abroad. Officially due to environmental concerns.

The German government, then under the leadership of Christian Democrat Angela Merkel in coalition with the business-friendly Free Democrats, produced its first raw materials strategy in response – which was never really implemented, in part because China quickly returned to its more liberal export policy. But the lesson from that episode should have been: China won’t shy away from leveraging its raw materials to promote its interests.

And the country’s goal of dominating the world market has long since expanded far beyond national borders…

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1. Currently, Beijing is gaining dominance in global lithium extraction. A few weeks ago, a Chinese facility for lithium concentration with an attached mine began operations in Zimbabwe, Africa. Chinese companies are also involved in similar projects in Namibia, Mali and the Democratic Republic of Congo.

2. In Australia, the Chinese corporation Tianqi Lithium has invested in the world's largest producer of lithium mineral concentrates. And the second-largest lithium ore mining site in the world, located in Western Australia, is controlled by a joint venture in which the Chinese company Ganfeng Lithium holds a 50-percent stake.

3. The Chinese are almost hyperactive in South America's lithium triangle: Argentina, Bolivia and Chile. The countries are home to the greatest reserves of the raw material.

4. Almost 50 percent of the world's commercially exploitable reserves – and more than half of the deposits of this key metal discovered to date – are located in the salt flats of the Andes region and under the soil of these three countries. The EU covers its lithium demands almost exclusively from this region.

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One of the few who is attempting to stand up to Beijing’s market domination is Schimmelbusch. Right in the middle of the verdant hills of the Brazilian state of Minas Gerais, among the coffee plantations and cattle grazing lands, is a 180-meter-deep crater. Bulldozers and excavators are digging up the earth, while forklifts are loading up gigantic trucks with plastic bags. They contain spodumene, a mineral ground down into a white powder – and one of the primary commodities from which lithium can be extracted.

Schimmelbusch’s decision to get into the lithium business, which is now responsible for the majority of his 300-million-euro pre-tax profits, was something of a fortuity. As he was flying above his tantalum mine in Brazil in a helicopter several years ago, he looked down, he recalls, "and everything was white.” The mine workers had thrown the white, spodumene ore onto waste heaps, tailings for which they had no use. At some point, he says, "up there on the waste heaps, I decided to get involved in lithium.”

In order to turn a profit, though, he needed help from China – and it came in the form of "Doctor Li,” as Schimmelbusch calls him. Li Nanping is head of General Lithium, one of the market giants from China. Schimmelbusch says that the company immediately bought the largely unprocessed blocks of lithium ore – "and thus took on the associated risk.”

Since 2018, the AMG mine has been producing 90,000 tons of spodumene per year, a total that will be boosted to 130,000 tons starting this summer. The trucks rumble some 20 kilometers across dusty, unpaved roads, bouncing through potholes to a highway. From there, they travel a bit more than 500 kilometers to an industrial port in the state of Rio de Janeiro, where the sacks are loaded onto ships and sent to Shanghai. Once in China, the spodumene is processed into a lithium compound.

That is the cheapest route. But Schimmelbusch’s clients like Mercedes are increasingly prepared to pay a bit more if it means greater supply security. As soon as Schimmelbusch’s facility in Bitterfeld is finished, the ore from Brazil will all be sent to Germany for processing, leaving China out of the equation.

U.S. – Standing Up to China

For now, U.S. President Joe Biden is still in a good mood. "I am impressed. Thank you for not canceling on us,” California Governor Gavin Newsom says into the camera. "Are you kidding me?” Biden fires back. "We don’t have much going on, you know, other than Russia and Ukraine.” It’s February 22, 2022, two days before Moscow’s invasion of Ukraine, and the president is hosting politicians and industry representatives for a virtual round table to discuss critical raw materials.

The issue is tops on Washington’s priority list. In order to build a truly strong economy, says Biden, "we need a future that’s made in America.” He says that he would like to see entire supply chains for numerous products brought back to the country, including the raw materials that go into them. Mobile phones, kitchen appliances, electric vehicles: "Without these minerals, they can’t function.”

To achieve that goal, Biden says it is necessary to invest taxpayer money in domestic industry, and during the virtual meeting, he announces the first such expenditure: The company MP Materials is to receive $35 million to build the first and only refinery for heavy rare earth elements in the U.S. "This is not anti-China … it’s pro-America.”

The border between California and Nevada is home to an austere landscape of red rock that makes up the Mojave National Preserve. Deep inside the park is Mountain Pass Mine. Aside from a few desert tortoises and stray campers, though, nobody is particularly disturbed by the din coming from the mine’s outsized machinery. Once or twice a week is "blast day” at Mountain Pass, when explosives are detonated in the red rock inside the crater. The chunks produced by the blasts are then brought to the surface by gigantic dump trucks and emptied into the crusher: Large boulders are broken up into smaller rocks, the rocks are turned into gravel and the gravel is ultimately pulverized into a powder. The mine is in operation around the clock, seven days a week.

The Mountain Pass mine has been producing rare earths for more than 70 years, but it has never been as active as it is now, says Matt Sloustcher, chief lobbyist for MP Minerals. Into the 1990s, the mine was the largest producer of rare earths in the world, says Sloustcher. But then, China took over the global industry. Now, says Sloustcher, it's time to begin taking it back.

As recently as 2015, just 6,000 tons of material per year was coming out of Mountain Pass. The mine operators only extracted those minerals that could be quickly and easily sold, with the stones being sent from the Port of Los Angeles to China for processing – never to be seen again.

Today, MP Minerals has boosted annual production almost eight-fold, increasing staff from eight to 550 and investing a billion dollars in order to bring the entire value chain back to the U.S. From mining to rare-earth refinement to magnet production, everything is to take place on the North American continent.

Image credit: The MP Materials mine at Mountain Pass.

Foto: Roger Kisby / DER SPIEGEL / Editing by Germán & Co

A finishing facility was built right next to the mine, producing highly purified light rare earth elements. The green and purple shimmering liquids are to be sent from here to Texas, where they will be transformed into the magnets required by every electric motor. Mountain Pass expects that by the end of the year, it will receive the required certification to process heavy rare earth elements at the site as well – making it the only such facility in the entire Western hemisphere.

MP Minerals is particularly proud of its "environmentally conscious” processes. The water used in processing, says Sloustcher, is recycled and reused. There are no polluted lakes of the kind seen in Baotou. The mine, says Ryan Corbett, the chief financial officer of MP Minerals, is proof that the valuable raw materials can be produced in the West as well. The company, he says, is able to earn money in a competitive market while adhering to Western values and laws in an environmental and sustainable fashion.

But the Americans are paying an extremely high price for their independence. Biden’s Inflation Reduction Act (IRA) comes at a cost of $500 billion. The program is designed to put the U.S. on the path toward a "green economy,” and to push China out wherever possible. If they want to benefit from tax relief, companies are required to procure their raw materials from domestic deposits or allied countries wherever possible.

One example is the $7,500 tax credit for electric vehicles, which came into effect in mid-April. It requires carmakers to source 40 percent of the critical minerals they need for their batteries either from the U.S. or from countries linked to the U.S. through a free-trade agreement. That level is to climb to 80 percent by 2027. Furthermore, half of battery components must be assembled in North America, a share that will rise to 100 percent by 2029.

"There is an incredible race currently underway for the best deposits around the world."

Jonathan Evans, CEO of Lithium Americas

Corporate America is responding. From General Electric to General Motors, large and small industrial companies in the U.S. are investing billions in mines, refineries and battery factories. New projects are under development across the continent for lithium, copper, nickel and rare earths. The raw materials industry is experiencing a regular gold rush. Since the IRA entered force, more than $60 billion have been invested in more than 130 projects. Automaker GM, for example, has reserved the majority of the production from MP Minerals for itself in addition to sinking $650 million into production as well, through an investment in Lithium Americas, located near Winnemucca, Nevada. For the next 10 years, GM will be purchasing the entirety of the relatively young company’s production, with an option for extending the deal by another five years.

There is an incredible race currently underway for the best deposits around the world, says the CEO of Lithium Americas, Jonathan Evans, who used to work for Bayer in Düsseldorf. Every carmaker currently needs lithium, he says, since they are all jumping into the electric vehicle production. The market, he says, is unbelievably "tight,” and prices are rising.

Separating from China, Evans believes, will mean five to 10 "bumpy years” for the West. But, he points out, it was no different with the interstate highway system in the U.S.: It took 35 years for President Dwight D. Eisenhower’s plan to become reality. Getting started in the important thing, he says, something that Europe needs to do quickly if it doesn't want to fall hopelessly behind. All the technology and mining know-how, he says, once came from the Old Continent. China then made it big. Now, he says, it's time to turn things around again.

Europe – The Blame Game

Germany's response to this impressive business savvy receives her guest in a slightly rundown office on the outskirts of Dresden. Franziska Lederer of the Helmholtz Institute for Resource Technology is hoping to help solve Germany's raw material problems – with the help of viruses. Between flasks and vials, crucibles and cans of powder, the scientist explains her process for extracting rare earths from old compact fluorescent lights. In a completely environmentally friendly way, without the use of chemicals.

To make that happen, Lederer uses the bacteriophage M13, a virus that exclusively infects bacteria – and, oddly enough, also likes metals. In Lederer's lab, the virus is currently devouring the rare earths lanthanum, cerium, terbium, europium and yttrium, which are in the luminescent powder of the discarded light bulbs.

The bacteriophages can be stapled onto microscopic magnets. Lederer uses them to "fish" the rare earths out of the luminescent powder in a procedure known as "biofishing." It's a method that also works for lithium and cobalt, which are found in old electric car batteries. The method can even be used to extract gallium, the metal from the service water of solar companies.

Mathematically, the potential is huge. By 2020, around 25,000 tons of old fluorescent powder had been collected in the European Union. Because it contains toxic mercury, it is stored as sulfide in old tunnels underground. It could be "easily procured in large quantities and exploited using biofishing," Lederer says. According to her calculations, just under 4,800 tons of rare earths could be recovered in this way – theoretically enough to supply Germany for years to come.

But the process still isn't ready for the market yet. And it's also expensive. Just over 10 percent of Germany's raw material requirements can currently be met through recycling. Overall, says Christoph Helbig, who models global material cycles at the University of Bayreuth, the circular economy is likely to be a similar tour de force to Germany's "Energiewende" transition to green energies. "It will take at least 10 to 20 years" before more than 50 percent of demand for lithium and rare earths can be met through recycling, he says.

Lithium extraction in the Chaerhan Salt Lake in China's Qinghai province

Foto: Qilai Shen / The New York Times / Redux / lai / Editing by Germán & Co

Nevertheless, Lederer is certain of a broad coalition of supporters. No strategy paper from Berlin or Brussels and no gathering of ideas from industry to combat the raw materials crisis can get around the circular economy. Germany and Europe, the strategy papers state, have a good chance of becoming world leaders in recycling technology and of securing a degree of self-sufficiency, at least in the long term, through the reprocessing of electronic waste.

The fact that Germany is so keen on recycling has to do with a narrative that starts in schools. Germany, it is taught in this country, is poor in raw materials, but rich in bright minds. The country's exceptional engineers, avant-garde physicians and world-class chemists are what gave it its economic strength and environmental power – and not, for the last several years, the mineral resources of the Ruhr region, the Lausitz region or the Upper Rhine Plain.

In fact, this is only partly true. There are also reserves of lithium, rare earths and tin under Europe's soils. Sweden's state-owned mining company LKAB, for example, announced at the beginning of the year that it had discovered Europe's largest deposit of rare earths north of the Arctic Circle. In the Upper Rhine Plain, an Australian-German consortium has plans to filter lithium from underground thermal springs. And Schimmelbusch's AMG recently acquired a 25-percent stake in the so-called Zinnwald project on the German-Czech border. Lithium is also to be dredged there. So far, the European Commission has assumed that only 5 percent of the demand for critical raw materials can be met from domestic sources. However, the higher the price of raw materials becomes, the more attractive their exploration and extraction grows.

But even then, domestic mining will remain much more difficult and, most importantly, more expensive than importing for the foreseeable future. There is a lack of capital, at this point even a lack of know-how and a lack of companies that are willing to take risks themselves. Since former mine operator Preussag was transformed into the tourism-focused corporation TUI and the old metals company ceased operations, Germany no longer has a real raw materials multinational in the country. No big companies have been willing to take the risk because operations would be too dirty, too expensive and too unreliable.

Because regardless whether in Chile or eastern Germany, the risk of failure is immense in the raw materials business. It can take up to 10 years to develop a new deposit. That means that before a ton of metal or mineral arrives at the factories in Stuttgart, Wolfsburg or Munich, a decade of investments has to be made. All kinds of things can go wrong on the way: The deposits can prove to be smaller than expected. The political framework can change, global market prices can fall and, with them, the financing.

And then there's popular resistance. If the erection of a wind turbine or the construction of a power line is accompanied by decades of protests in many places, large-scale mining in Germany are likely to be even more unpopular. The same applies elsewhere in Europe, where important raw material treasures often lie under the very soils that are also valuable for tourism, possibly even appearing more valuable in the short term. Places like the Portugal's Algarve or Italy's Po Valley.

Instead of promoting greater acceptance, the industry simply ignored the problem. German carmakers long refused to accept that the era of the internal combustion engine was coming to an end and that in the era of e-mobility, completely different primary products and raw materials would suddenly determine success or failure. Only the pandemic, the Russian invasion of Ukraine and the geostrategic confrontation with China have made it clear to the auto bosses that they will be crushed in the marketplace if they don't gain control of the new key raw materials. "The energy transition has now given way to the materials transition," reads one report on raw materials from Brussels. According to a study by the German Institute for International and Security Affairs (SWP), the world will soon be more dependent on critical raw materials such as rare earths than it is on oil today.

And a horror scenario is already making the rounds: deindustrialization. In the future, the greatest value creation will take place in regions that are rich in raw materials, some automobile industry executives are warning. Trade agreements and raw materials partnerships are needed quickly to secure access to resources Mercedes CEO Ola Källenius recently said, expressing the urgency of the situation.

The industry is crying out for help from the government in Berlin. "The market is no longer functioning, and the shortages will increase," says Matthias Wachter, a raw materials expert at the German Federation of Industries (BDI). "We need political support."

In one paper, BDI's lobbyists seek to blame the German raw materials disaster not on their own members, but on politicians. In other places, BDI argues, there is "targeted government support" for the mining and processing of raw materials.

The German government isn't interested in shouldering the blame. Franziska Brantner, the parliamentary state secretary in the Economics Ministry responsible for raw materials, is astonished by the chutzpah of the corporations. Of course, China is the world's largest supplier of processed critical raw materials and rare earths, she says. "But that has nothing to do with the fact that these substances don't exist elsewhere."

Brantner has been tasked by her boss, German Economics Minister Robert Habeck, with reducing Germany's dependency on key materials. Her many travels on that mission have taken her to Latin America, the United States, Canada and Africa. And before Easter, she was in Australia.

Parliamentary State Secretary Franziska Brantner: "Many were only concerned about getting the cheapest price."

Foto: Dominik Butzmann / DER SPIEGEL 7 Editing by Germán & Co

A member of the Green Party, Brantner says China also owes its rise to a blend of thoughtlessness, specialization and the division of labor at German companies. "Many were only concerned about getting the cheapest price," says Brantner. And China, she says, has always offered that, thanks to low wages and state subsidies. If the business community is now calling for help, it shouldn't "be a matter of the state assuming all the risk, but of supporting the companies." Industry, she says, can't go by the principle of privatizing the profits while making taxpayers carry the risks.

Brantner likes to illustrate just how recklessly industry has relinquished control of the issue of raw materials by pointing to the example of gallium production in Germany. The mineral is essential for the semiconductor industry, and it can also be used in the manufacture of light-emitting diodes. Domestic production continued until 2015, the 43-year-old says. But the plant was no match for much cheaper Chinese production and was therefore abandoned.

In an attempt to ensure that history doesn't repeat itself, Brantner presented a paper at the beginning of the year outlining pathways to a sustainable and resilient supply of raw materials. She also believes that policymakers can do some of the work themselves by, for example, providing financial support for feasibility studies and geological investigations and accelerating processes. A commodity fund is also being discussed with which the state-owned KfW development bank could hedge the risks of exploration in a similar manner to Hermes export guarantees. Berlin is even considering differential contracts under which the German government would assume part of the higher costs associated with raw materials that are produced domestically, fairly and sustainably.

But it is first and foremost the business community that must step up. The European Commission has proposed that large corporations be subject to a kind of audit for particularly critical and strategic raw materials in order to identify their own vulnerability. Brantner also wants to encourage companies to stockpile more critical raw materials. So far, this hasn't been worthwhile for companies for tax reasons, because it requires space and also ties up capital. The latter problem could be mitigated if companies didn't have to pay import duties until the materials were actually processed.

German Finance Minister Christian Lindner would have to implement such a tax break, which companies are strongly pushing for. Lindner appears to be skeptical in light of Germany's tight budget situation, but particularly given that stockpiling can help with short-term supply chain disruptions, like when a ship gets stuck in the Suez Canal, but does nothing to end strategic dependencies.

For the time being, Brantner's only option is to push for government-level raw materials partnerships like the one Economics Minister Habeck recently concluded with Colombia. These partnership agreements promise the mining companies not only fair payment for the use of their raw materials, but also sustainable mining in accordance with German environmental and social standards. More importantly, though: a share of the value added.

It's a more humane counter-design to the neo-colonial style used by China. And an approach that might actually catch on. Chilean President Gabriel Boric recently announced that all private companies in the country wanting to mine lithium in the future must partner with the state in joint ventures. Chile, Boric said, simply cannot afford not to take advantage of its lithium deposits.

In the past, there had been little talk in Germany's raw materials strategy of the country truly being on level-footing with the countries doing the mining. But that's now set to change. With a focus on local value creation, increased sustainability and human rights, you would have a unique selling point, argues Viktoria Reisch of Germanwatch, an NGO promoting sustainability, climate action and global equity in Berlin. "Now it is a matter of linking that approach with the European raw materials strategy," she says.

So far, though, little headway has been made on the latter. It is true that the European Commission just presented its Critical Raw Materials Act (CRMA), with which it intends to tackle the industry's supply bottlenecks and respond to the American offensive. But the paper offers little by way of concrete measures. It doesn't include fixed quotas for the recycling of raw materials or the extraction of metals from domestic soil. Nor does it provide any timetable. "Many had hoped for considerably more," says a German government official.

So, What Comes Next?

On the edge of the city center in Essen, in building Q6 of Thyssenkrupp headquarters, Martin Stillger formulates an answer that many of his customers might not like to hear at all. Stillger presides over a seemingly endless raw materials empire at Thyssenkrupp Materials Services. If the industry is the junkie and China is the drug cartel, then Stillger is the dealer. The man has pretty much everything on offer that creation provides. Steel, stainless steel, aluminum. But also gases and rare earths, precisely the critical raw materials Europe so urgently needs. A quarter of a million customers worldwide buy 16 billion euros worth of goods each year from Stillger.

Of course, Stillger says, China is an important supplier for many products. Sometimes, it's the only one. Nevertheless, there are alternatives, and the pandemic, with all the distortions it brought, has even accelerated their development. The problem: Domestic metals, ores and primary products may be cleaner and safer, but they are also far more expensive.

For 15 years, Stillger steered the fortunes of a medium-sized mechanical engineering company that was once a pioneer in China. In other words, he knows the enemy – at least that's how he might put it. Stillger sees a need for a fundamental change – in the minds of management. The executive has identified a huge management failure on the part of domestic industry, saying that the very people who are now calling most loudly for help from politicians on the issue of raw materials are often the same ones who "always made the decision on the basis of cost alone" in the past. For decades, buyers have been "trained and incentivized to negotiating the lowest price," he says. Everyone thought: Peace and freedom are prevailing. So they bought from China, he says. "Now they are realizing that we're at a dead end and there is no way of turning around."

"We're at a dead end and there is no way of turning around."

Martin Stillger, CEO of Thyssenkrupp Materials Services

He argues that executives are needed "who can withstand the cycles of the commodities industry" and buy outside China even when "the price gap widens." Governments, Stillger says, should only step in and help where corporations are making an honest effort to become less dependent. Otherwise, everything would remain the same. The parallels to the gas and oil supply crunch following Russia's invasion of Ukraine, and the moves made to reduce reliance on Moscow, are clear. It's a principle Stillger calls: "Learning through pain."

In the small town of Zimmern ob Rottweil in Baden-Württemberg, people know what a learning curve of this sort feels like. Predicting growing demand early on, entrepreneur Wolfgang Schmutz entered into a joint venture in 2018 with Bolivian state-owned lithium company YLB to extract tens of thousands of tons of lithium brine from the famous Uyuni salt lake. Schmutz wanted to use it to supply the domestic auto industry. Even then, German Economics Minister Peter Altmaier of the center-right Christian Democratic Union (CDU) party traveled to the signing of the contract for the project, called ACISA.

But things started heading south from there. In the fall of 2019, Bolivian President Evo Morales scrapped the ACISA program, with Schmutz learning about it on the radio one morning. The Bolivians hadn't even informed him. The German government and the Baden-Württemberg state government in Stuttgart were just as surprised as Schmutz, and they were ultimately unable to find a solution. "It wasn't meant to be," he says, dourly. Schmutz has since shifted his focus back to mechanical and plant engineering.

The Economics Ministry in Berlin says the company got involved with the wrong partners. But it also seems clear that the South Americans would almost certainly have dealt differently with a multinational corporation like Mercedes-Benz or Siemens.

The project has since been given to another party. In January, a foreign consortium led by the CATL Group was awarded the contract by the Bolivian government. The treasure in the Uyuni salt lake will now be exploited for decades to come - by a Chinese, state-owned company.

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Seaboard: pioneers in power generation in the country…

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

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The sun sets behind an electricity pylon in Borehamwood, Britain, February 8, 2023. REUTERS/Peter Cziborra / Editing by Germán & Co

UK says it spent nearly 40 billion pounds on power subsidies

According to the business ministry, businesses and other organizations have received around 5.5 billion pounds through the Energy Bill Relief Scheme. Additionally, almost 1 billion pounds have been allocated to other programmes. However, the cost of these subsidies has contributed to the increase in Britain's public borrowing since their launch in October.

Reuters, June 8, 20232

LONDON, June 8 (Reuters) - Britain's government said on Thursday that it has paid almost 40 billion pounds ($50 billion) in energy subsidies since it began to help households and businesses cope with the surge in power bills after Russia's invasion of Ukraine.

Between the launch of the schemes in October and March, nearly 21 billion pounds was spent on the Energy Price Guarantee (EPG) programme that supports households with their bills, the government said.

A further 12 billion pounds was paid under the Energy Bills Support Scheme, which offered homes payments of 400 pounds towards their bills over the winter months.

Businesses and other organisations received about 5.5 billion pounds under the Energy Bill Relief Scheme and almost 1 billion pounds was spent on other programmes, the business ministry said.

The cost of the subsidies has helped to swell Britain's public borrowing since they were launched last October.

The Office for National Statistics has put the cost at 41.2 billion pounds in the financial year ending in March.

The EPG subsidies for households are due to end in July as regulated prices fall below the level of the cap. Support for businesses is scheduled to run until March 2024.

The energy ministry said the some of the funding for the energy subsidies would come from a so-called windfall tax on energy producers which was expected to raise almost 26 billion pounds by March 2028.

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Image by Germán & Co

Taiwan activates air defence as China aircraft enter zone

The government of Taiwan has reported Chinese air force flights near Taiwan, a territory claimed by China and known as "The Land of Chiang Kai-shek." This raises concerns about security risks and territorial disputes between the two nations.

Reuters, June 8, 2023 / Editing by Germán & Co

Airplane is seen in front of Chinese and Taiwanese flags in this illustration, August 6, 2022. REUTERS/Dado Ruvic/Illustration

TAIPEI, June 8 (Reuters) - Taiwan activated its defence systems on Thursday after reporting 37 Chinese military aircraft flying into the island's air defence zone, some of which then flew into the western Pacific, in Beijing's latest mass air incursion.

China, which views democratically governed Taiwan as its own territory, has over the past three years regularly flown its air force into the skies near the island, though not into Taiwan's territorial air space.

Taiwan's defence ministry said that from 5 a.m. (2100 GMT on Wednesday) it had detected 37 Chinese air force planes, including J-11 and J-16 fighters as well as nuclear-capable H-6 bombers, flying into the southwestern corner of its air defence identification zone, or ADIZ.

The ADIZ is a broader area Taiwan monitors and patrols to give its forces more time to respond to threats.

Some of the Chinese aircraft flew to Taiwan's southeast and crossed into the western Pacific to perform "air surveillance and long distance navigation training", the ministry said in a statement.

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Taiwan sent its aircraft and ships to keep watch and activated land-based missile systems, it added, using its standard wording for how it responds to such Chinese activity.

China's defence ministry did not immediately respond to a request for comment.

China completed a second phase of joint air patrols with Russia over the Western Pacific on Wednesday, following flights on the previous day over the Sea of Japan and East China Sea, prompting concern in Japan over its national security.

Japan's defence ministry said it scrambled a jet fighter on Thursday morning in response to a Chinese information-gathering aircraft Y-9 flying over the Pacific Ocean and east of Taiwan.

Japan also lodged a protest against China for its naval and coast guard vessels entering Japan's territorial waters along the country's southwest archipelago on Thursday, Tokyo's top spokesperson Hirokazu Matsuno told a press conference.

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Laura Rosenberger, chair of the American Institute in Taiwan, which manages the unofficial relationship between Washington and Taipei, is visiting Taiwan this week.

On Monday, she told Taiwan media that the United States had an enduring interest in preserving stability in the Taiwan Strait and the United States would continue to arm the island, a source of constant friction in Sino-U.S. ties.

In April, China held war games around Taiwan following a trip to the United States by Taiwan President Tsai Ing-wen.

Taiwan's government rejects China's sovereignty claims and says only the island's people can decide their future.

Reporting by Ben Blanchard in Taipei; Additional reporting by Kantaro Komiya in Tokyo; Editing by Tom Hogue and Raju Gopalakrishnan

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Spcial Edition / News round-up, June 7, 2023

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What a world we live in… Natural gas and water, as element of war…

The occurrence of the global recession can be attributed to four fundamental causes. The first related to the origins of SARC-2 are currently under investigation and subject to speculation. The precise aetiology of the virus is yet to be determined. However, there is a prevailing belief that it could have originated from a laboratory mishap in the biotechnology sector, culminating in a worldwide outbreak (1). The second factor contributing to Russia's aggression towards Ukraine is historical support for Russian imperialism (2). The third factor necessitates a prudent approach towards discussing failure, as it is imperative to recognize that certain European politicians may have committed errors in their decision-making process, knowingly or unknowingly, by aligning themselves with a sole fuel provider whose history remains intricate and obscure. In the current era, characterized by the growing prevalence of autocratic tendencies, it is crucial to maintain objectivity and afford politicians a reputation for integrity and the presumption of innocence (3). The four is the destructions at Nord Stream ,is a condemnable and detrimental incident, regardless of the perpetrator (4). And finalle the situation regarding the blast of the Nova Kakhovka dam is quite concerning and may have severe consequences shortly, e.i. further escalating the war and causing a further increase in grain prices (5).

The confluence of these factors has resulted in substantial worldwide upheaval in the realms of geopolitics and economics.

In light of the present circumstances, it is imperative to implement rigorous security protocols and establish a comprehensive legal framework at the international level. This statement is particularly relevant to Norway, as it stands out as the only European neighbour with which Moscow has never engaged in military hostilities. Despite its smaller population compared to St. Petersburg, Norway occupies a significant position in Europe's energy supply chain owing to its status as the largest natural gas supplier and its abundant crude oil and wind power reserves. Its play in meeting the region's energy demands is of utmost importance. Protecting the vast network of natural gas pipelines, which covers over 9,000 kilometres, along with power and communication cables, is of utmost significance.

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Most Read…

Dam sabotage creates Ukraine’s worst environmental disaster ‘since Chernobyl’

Destruction of the Nova Kakhovka dam threatens tens of thousands of people, the country’s energy grid and the environment.

POLITICO EU BY GABRIEL GAVIN AND VERONIKA MELKOZEROVA, JUNE 6, 2023 

Norway and Russia Face Off in the Far North

Russian trawlers appear to be angling for more than fish, sailors are taking an interest in bridges and spies are being uncovered: In the far north of Europe, the Kremlin appears to be increasing its activity, and Norway is paying close attention.

SPIEGEL By Walter Mayr in Kirkenes, Norway, June 6, 2023

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image credit: POLITICO EU Editing by Germán & Co

Dam sabotage creates Ukraine’s worst environmental disaster ‘since Chernobyl’

Destruction of the Nova Kakhovka dam threatens tens of thousands of people, the country’s energy grid and the environment.

POLITICO EU BY GABRIEL GAVIN AND VERONIKA MELKOZEROVA, JUNE 6, 2023 

KYIV — Worries about a massive environmental disaster in Ukraine have long focused on the Russian-occupied Zaporizhzhia Nuclear Power Plant. But people were looking in the wrong place.

The catastrophe happened early Tuesday when explosions tore through the colossal Nova Kakhovka hydroelectric dam in southern Ukraine — draining one of the Continent's largest artificial reservoirs. It forced the evacuation of thousands of people downstream, polluted land, destroyed a large electricity generator and will cause future problems with water supplies.

Kyiv blames Russia, which seized control of the dam on February 24, 2022, the first day of its full-scale invasion of Ukraine. The Kremlin pointed the finger at Ukraine, but supplied no evidence.

Ukraine has long warned of the danger. In October, President Volodymyr Zelenskyy called on the West to pressure Russia not to blow up the dam, which he said had been rigged with explosives. "Destroying the dam would mean a large-scale disaster," he said.

But while international observers are present at Zaporizhzhia, Europe's largest nuclear power plant, that wasn't the case with Nova Kakhovka. The dam has seen months of fighting as Ukraine pushed Russian troops back over the Dnipro River last year and it now lies on the front line between the two armies.

A human disaster

The immediate impact is on people living downstream; the western shore of the Dnipro is under Ukrainian control, while the east is still held by Russia.

The Ukrainian head of the Kherson region, Oleksandr Prokudin, said as many as 16,000 people in Ukrainian-controlled territory are in danger and many would have to leave their homes.

Vitaly Bogdanov, a lawmaker on the Kherson city council who lives nearby, went to see the scale of the damage on Tuesday morning. "There is no panic, rescue services are working, the police and military are everywhere," he told POLITICO, adding: "Many people are being evacuated."

Bogdanov said he was not planning to leave his home as he has to look after elderly relatives.

Those living in Russian-occupied territory have been left uncertain of what to do next.

Sergii Zeinalov, a film director living in Kyiv, called his grandmother in Oleshki, a town about 70 kilometers downstream from the dam, on Tuesday morning. "At that time there was no water in the town. As far as I know there is no electricity or communication in Oleshki now. As a result information is coming slowly. Meanwhile, water is approaching the houses there."

Environmental impact

Ukraine's Deputy Foreign Minister Andrij Melnyk called the Nova Kakhovka dam breach "the worst environmental disaster in Europe since Chernobyl."

The range of impacts is vast — from displacing people to drowning animals and polluting the environment.

"Now we know that potentially 600 or maybe even 800 tons of oil have been released into the water," Ukrainian Environment Minister Ruslan Strilets said in Brussels. "This oil spill will drift into the Dnipro River, and I'm sure that it will be in Black Sea."

In his overnight address posted early Wednesday, Zelenskyy called the attack "ecocide," saying: "An oil slick of at least 150 tons formed and was taken by the current to the Black Sea. We cannot yet predict how much of the chemicals, fertilizers and oil products stored in the flooded areas will end up in the rivers and sea."

According to Olexi Pasyuk, a campaigner with environmental group CEE Bankwatch, the flood's "temporary impacts" could last up to a week.

"However, later on the bigger impact will be caused by lack of water as Kakhovka reservoir is a source of water for the watering system of south Kherson region," he added. "We can expect significant problems for agriculture and for local people who live off it."

Draining the reservoir could also have a dramatic impact on the illegally occupied Crimean Peninsula. It relies on water from mainland Ukraine; one of the first actions of invading Russian troops last year was to reopen a water channel linked to the reservoir that had been closed by Ukraine after the 2014 annexation.

“It’s going to be a social-economic disaster. Farmers won't be able to grow crops," said Wim Zwijnenburg with PAX, a Dutch NGO, and a contributor to the Bellingcat investigative network. "Ukraine had already [blocked] the river to Crimea prior to the conflict to stop the water flow, which already led to some desertification in the area. It's hard to predict anything — most of the effects will probably play out in two to three years' time.”

Iiulia Markhel, coordinator of Let's Do It Ukraine SOS, the country's largest environmental NGO, called the burst dam a "catastrophe."

"Animals, species, will be destroyed," she said. "It will change the climate of the whole region. Ukrainian agrarian lands have likely been destroyed. The area will be flooded. The places the water will leave will turn into deserts; the places the water will stay will become swamps."

It adds to the vast cost of the war's environmental impact, which has reached 2 trillion hryvnia (€53 billion), said Ukraine's environment ministry.

Power struggles

The destruction of the dam won't have an immediate effect on Ukraine's national electricity grid, said Vitaliy Mukhin, a strategic adviser to Kyiv’s state-owned hydropower company Ukrhydroenergo. Nova Kakhovka, built in the 1950s, has a capacity of 357 megawatts but it hasn't contributed much power since it came under Russian occupation.

It won't be back online anytime soon. Ukrhydroenergo said “as a result of blasts in the machine hall, the Kakhovka hydroelectric power station is completely destroyed. It is not recoverable.”

The hydropower station would have been a key source of clean energy and an important part of Ukraine's post-war energy mix, said Olena Pavlenko, president of Kyiv's DiXi group energy think tank.

Ihor Syrota, the head of Ukrhydroenergo, said Kyiv will build a new plant on the same site once it liberates the territory.

Blowing the Nova Kakhovka dam has a potential impact on the battle-scarred Zaporizhzhia Nuclear Power Plant, also occupied by Russian troops. The plant relies on the reservoir's water to cool its six reactors, but they are now in so-called cold shutdown, and the plant's cooling pool is full so only needs a “few liters per second," said Leon Cizelj, president of the European Nuclear Society.

The International Atomic Energy Agency said there is enough cooling water at the plant to last for about six months.

"The facility has back-up options available and there is no short-term risk to nuclear safety and security," said Director General Rafael Mariano Grossi.

"The conflict keeps pushing new boundaries," said Doug Weir, research and policy director at the Conflict and Environment Observatory. "A lot of people have been worried about these dams but at the same time never really expected them to be breached. The events just keep unfolding, building layers of environmental damage and harm in Ukraine.” 

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Norwegian border guards at the Pasvikelva River, which marks the border with Russia Photo: Patrick Junker & Jonathan Terlinden/Editing by Germán & Co

Norway and Russia Face Off in the Far North

Russian trawlers appear to be angling for more than fish, sailors are taking an interest in bridges and spies are being uncovered: In the far north of Europe, the Kremlin appears to be increasing its activity, and Norway is paying close attention.

SPIEGEL By Walter Mayr in Kirkenes, Norway, June 6, 2023

Norway’s best-known scout is standing in a boat and staring through binoculars to the east. The forested coastline of the Kola Peninsula in northwestern Russia is gliding past, the place where Vladimir Putin’s fleet of nuclear-armed submarines is based.

Not much is known about the Kremlin’s deadly squadron. It was once Frodo Berg’s job to try to learn more, but the now-retired border guard was captured in 2017 during his final mission to Russia. For almost two years, he was held in Moscow’s notorious Lefortovo Prison, subsisting largely on a diet of water and buckwheat porridge.

Berg was released early as part of a spy swap. Still today, the Norwegian insists that he innocently became trapped between the fronts of this new Cold War between NATO and Russia.

On this particular morning, the exposed agent has agreed to make a visit to the border with DER SPIEGEL. Our destination, the very northeastern edge of NATO territory.

We head along the demarcation line in a hovercraft, passing by the still-frozen Pasvikelva River. The factory chimneys of the Russian border locality of Nikel can be seen in the distance.

Norway is the only European neighbor against which Moscow has never waged war.

Lately, though, a growing number of reports have been making the rounds of suspicious Russian shipping activity off the coast of Norway, of strange drones and of an increased number of Russian long-range bombers at the Olenya airbase not far from the border. Disquiet is growing at the northernmost boundary line between Putin’s vast empire and the Western military alliance.

United States Secretary of State Antony Blinken emphasized that fact last Thursday at the NATO foreign minister summit at Oslo City Hall. The partnership with Norway in response to the "Russian aggression," the top American diplomat said, "is quite simply invaluable."

Berg says that he used to make frequent trips to Russia as part of his job. He says he would meet with his counterparts from the Russian domestic intelligence agency FSB for talks, followed by a visit to a sauna and vodka – the standard program at the beginning of the millennium.

"I never thought that the dreaded Russian army would run into such difficulties in a conventional war against Ukraine," Berg says. "But I think it is quite possible that Putin will begin focusing even more intently on hybrid warfare."

Which means that critical Western infrastructure is in the sights of Kremlin strategists. The entire country of Norway may only be home to as many people as the Russian city of St. Petersburg, but it is Europe’s largest supplier of natural gas and it is also rich in crude oil and wind power. Natural gas pipelines stretching out over 9,000 kilometers (5,592 miles) must be protected, in addition to power and communication cables – a need underlined by the as yet unexplained attack on the Nord Stream pipelines last fall.

Those able to disrupt the main channels of energy and communication can gain firm control over the central nervous system of the Western economy. On just a single day, trillions of dollars worth of financial transactions run through undersea cables. And almost the entirety of global communication takes place through deep sea cables.

The End of Peaceful Cooperation

In March, NATO Secretary General Jens Stoltenberg, the former prime minister of Norway, made a symbolic appearance with European Commission President Ursula von der Leyen on the world’s largest natural gas platform, a facility known as Troll A off the cost of Norway. It was Stoltenberg’s father who helped found the Barents Euro-Arctic Council, a body that established cooperation with post-Soviet Russia. His son was then instrumental in 2010 in negotiating the seminal treaty over the border between the two countries in the Barents Sea, complete with the division of fishing grounds and oil and natural gas deposits.

But the era of peaceful cooperation has come to an end. Now, Jens Stoltenberg, speaking on behalf of NATO, is more likely to warn of a fundamentally altered security situation as a result of Russia’s brutal invasion of Ukraine.

Norway’s army has been at a heightened state of alert since November. "It was unimaginable for us that Russia might invade another country," says Lieutenant Colonel Michael Rozmara.

Rozmara commands NATO’s northernmost position, held by the assault battalion in Sør-Varanger, stationed right where the Pasvikelva River divides the two countries. "We first had to come to terms with questions of what might be facing us in the future. For us as a battalion, positioned right on the border with Russia, it’s quite a challenge."

Rozmara commands just over 800 men and women, most of them conscripts.

The battalion’s coat-of-arms includes a wolf. In winter, they head out on skis and snowmobiles to patrol the 198-kilometer-long border with Russia. A visit to the shooting range finds a tightly organized unit, with the young rangers wearing 40-kilogram backpacks and stylish sunglasses as they arrive to practice their marksmanship with HK416 assault rifles.

In the unit’s headquarters on Jarfjorden, there are life-sized puppets wearing original Russian border-guard uniforms so that the soldiers know what their adversaries look like. In March, Norwegian King Harald V. came for a visit. Commander Rozmara says he saw the visit of the commander-in-chief as a sign of respect, and as a clear indication of the tense security situation.

In April, Oslo expelled 15 Russian diplomats for alleged espionage activities. In addition, rules governing Russian trawlers were tightened, though they are still allowed to enter three ports in Norway, a founding member of NATO, despite increased concerns of Russian spying and sabotage.

Those concerns have been fueled in party by journalists from the Norwegian broadcaster NRK. Together with reporters from Sweden, Denmark and Finland, they filmed a three-part series called "Shadow War," which sketched out how Putin’s troops are developing the far north and the waters from the Baltic Sea to the icy waters near Spitzbergen into an operational focus.

"Complete Reversal"

"The people north of the Artic Circle have always had a far different perspective regarding the proximity of Russia than Norwegians far away in the southern part of the country," says Håvard Gulldahl, speaking in the NRK studios located in the port city of Tromsø. He and his fellow reporter Inghild Eriksen meticulously traced the activities of the Kremlin in the region.

Particularly in the waters of the Barents Sea, near where Norway meets Russia, the place where Stalin’s army once freed the population from Nazi rule, there is a deep sense of foreboding about their neighbors. "What is currently taking place is a complete reversal in the relationship to Russia."

Using software he developed himself, Gulldahl – as the team’s tech nerd – followed the movements of more than four dozen suspicious Russian ships, all of them allegedly civilian vessels. Even routes taken 10 years ago can be traced using AIS, which stands for automatic identification system – provided the captains hadn't just switched off their AIS transponders to leave no trace.

The team of NRK reporters sought to examine incidents in which a cable under the Barents Sea was damaged to see which trawlers might have been in the area at the time. They found that Russian ships frequently sailed close to wind parks and military sites – especially when NATO exercises were being performed, such as those that take place in and around the testing grounds on the island of Andøya. Or when, as took place last December, the multibillion-dollar nuclear submarine USS South Dakota sailed into the port of Tromsø – shadowed by the Taurus, a Russian ship officially registered as a trawler.

The Russian trawlers can be seen on a walk along the quays in the Norwegian city of Balsfjord, population 80,000. Ships such as the Sapphire 2, an 821-ton vessel from Murmansk, are tied up here on this afternoon. They come here to unload their catch, refuel, perform maintenance or obtain repairs – in one of three Norwegian ports that are the only places in all of Europe that Russian ships are still allowed.

New Flanks

NATO MEMBER IN BLUE

Tromsø, of course, plays a particularly outsized role in public perceptions of Russian activity in the region. It is here where Mikhail Mikushin was arrested last fall, an allegedly active Russian agent who was working as a researcher at the local university under an assumed name. Norwegian prosecutors accuse Mikushin, who has since been arrested, of gathering intelligence linked to state secrets and saying that he posed a danger to "the country’s fundamental interests."

"Fifth Column"

Mikushin, who is thought to be a member of the Russian military intelligence agency GRU, has denied the accusations against him.

Until his arrest, he conducted research at the Center for Peace Studies, precisely in the department – referred to internally as the "gray zone" – that focuses on the dangers presented by hybrid warfare. The academics working there failed to realize for quite some time that they themselves were actually the focus of his observations. The Center for Peace Studies now says that Mikushin, who began working at the institute under a falsified Brazilian passport, was apparently seeking to establish a secret network that could, should the need arise, carry out orders from Putin as a kind of "fifth column."

Other Russians in Tromsø have also been the focus of suspicions. Andrei Yakunin, son of close Putin confidant Vladimir Yakunin, had to appear in court for flying a drone over the Arctic archipelago of Spitzbergen. The younger Yakunin, who has both British and Russian citizenship and is thought to be worth a quarter-billion euros, spent six weeks in pre-trial detention before he was ultimately acquitted and released.

The fact that Spitzbergen is home to the largest satellite ground station in the world with over 100 antenna, the sensitive data of which is transferred around the world through two fiber-optic cables, may in fact have escaped Yakunin Jr.’s attention. Perhaps the jetsetter also missed the increasing self-confidence with which the Kremlin is behaving on the northern archipelago as he filmed with a drone.

Spitzbergen is a demilitarized, international territory under Norwegian administration. Because of its strategic location and proximity to possible raw materials deposits, it is assumed that in the event of a conflict, it would be contested ground.

The fronts have become particularly hardened in the town of Barentsburg, a 400-person municipality on Spitzbergen and a place where Russia mines coal. The town hosted a Russian parade on May 9 to mark the country’s World War II victory, complete with a Lenin statue and snowmobiles flying the Russian flag. It was led by the Russian general consul, who, according to the Dossier Center run by the Russian opposition, is also linked to the GRU military intelligence service – though he denies the allegation.

Frosty Climate

Spitzbergen is like a thermometer that takes the temperature of relationship between Russia and NATO. The group of islands, according to an analysis from the Norwegian foreign intelligence agency, is of "military-strategic importance" for the Kremlin. The report noted that the Russian presence is likely to increase throughout 2023. The Norwegian governor on Spitzbergen, who regularly meets with the leading Russian representative there, admits that the climate between the two of them has grown frosty.

Contributing to that deterioration is the fact that one of the archipelago's two undersea cables was damaged on January 7, 2022. According to reporters from the broadcaster NRK, the trawler Melkart-5, registered in the Russian port city of Murmansk, had crisscrossed the site of the incident west of Spitzbergen more than 100 times.

Was the ship merely pursuing unorthodox fishing methods or was it intentional sabotage? The incident has never been satisfactorily resolved. The seabed is essentially invisible, which makes it a perfect target for hybrid warfare.

"Kirkenes and the entire Finnmark region could be something like a laboratory where the Russians try out various tools for hybrid warfare."

Police Chief Ellen Katrine Hætta

After the Melkart-5 also made appearances close to natural gas pipelines and fiber-optic cables north of the Norwegian mainland, and also popped up not far from the NATO winter exercise Cold Response, the trawler was documented by the authorities in the Norwegian city of Kirkenes on the Barents Sea as entering the port on July 17, 2022. What then ensued was rather unexpected: Part of the ship’s Russian crew left the ship in a smaller boat and headed across Langfjorden toward the strategically important Strømmen Bridge, the only connection between the isolated port city of Kirkenes with the rest of Norway.

When stopped and fined by local authorities for violating shore leave regulations in the sensitive area, the Russians insisted they had done nothing wrong. A few days later, they left Norwegian waters on board the Melkart-5 and headed home.

"Kirkenes and the entire Finnmark region (of northern Norway) could be something like a laboratory where the Russians try out various tools for hybrid warfare," says Ellen Katrine Hætta.

The energetic police chief, a member of the Sámi people, wears two stars on her epaulettes, the equivalent of being a high-ranking officer in the military. Hætta has 450 men and women under her command – and a significant share of the essentially pro-Russian population against her, animosity that stems from her habit of expressing her concerns openly.

Moscow, she says, is using "pinpricks" to "see how Norway reacts."

There was the incident involving Russian seamen walking through the Kirkenes city center in camouflage. There are the Russian trawlers Ester and Lira that attracted police attention in port because of the Soviet-era radio equipment they were carrying behind locked doors. And there are the regular jamming signals sent out from the Kola Peninsula across the water, causing significant difficulties for the pilots of Norwegian civilian aircraft.

The pilot flying the turboprop plane on the way to Kirkenes on this particular morning gets out during a stopover to check on the propellers herself. She seems relatively relaxed. For many years, the rule of thumb in the region has been "high north, low tension," essentially meaning that an effort was always made in these parts to avoid upsetting the powerful eastern neighbor.

Still Dancing

Is that still the case in Kirkenes? The engraving at the entrance to City Hall would seem to indicate that nothing has changed: It shows the Norwegian lion still dancing hand-in-hand with the Russian bear.

Diagonally across the street, behind the barred windows of the Russian Consulate, nobody believes the relationship will return to normal anytime soon. During the last appearance by the general consul on the anniversary of liberation at the hands of the Red Army, half of the audience turned their back on the speaker in protest.

Kirkenes is Norway’s northeastern outpost, situated 400 kilometers north of the Arctic Circle, home to 3,500 people who live just a 15-minute drive from the Russian border. The ice-free port serves as the gateway to the Barents Sea, with its vast natural gas deposits – and, as a result of climate change, as a possible starting and ending point of a Northeast Passage to Asia, navigable year-round.

It is a place where the presence of Russia is more palpable than anywhere else in the European Union. It is impossible to miss the Russian seamen at the docks and in the city, the huge Russian trawlers tied up in the port, the Cyrillic writing that can be seen here and there in town, and the fresh wreaths recently laid at the monument honoring the Soviet liberators.

Just 100 kilometers away as the crow flies is the Kola Peninsula, home to one of the densest populations in the world of nuclear weapons and nuclear waste depots. Tons of radioactive garbage is dumped in Andreev Bay, while nuclear-powered submarines are based in Gadzhiyevo. The Main Directorate of Deep See Research (GUGI), an elite department specializing in deep-sea reconnaissance and related activities, also has a base on the peninsula.

The concept of "little green men," which saw irregular fighters under the control of the Kremlin infiltrate the Crimean Peninsula in Ukraine to pave the way for a Russian takeover, could be repeated in Northern Europe, says Thomas Nilsen of the Independent Barents Observer. No matter whether it is conventional or hybrid warfare, he says: "We in Kirkenes are far away from Ukraine, but here as there, the same Russia is right across the border. All of the bridges we have built over the last 30 years have essentially been washed away. The Cold War is back."

A New Security System

According to a May 3 report from the Norwegian Defense Commission, it is imperative that the country now arm itself. A fine idea, says the port director of Kirkenes – since an effective army here in the north would also require an effective port, and for that, Oslo must provide the money.

Until recently, the residents of Kirkenes reaped significant benefits from the Russians, with tourists boosting the retail sector and the trawlers bringing money to the port. Should no more Russian ships be allowed to moor there, the port would lose a third of its revenues.

It used to be that fin whales would attract more attention in these parts than submarines, but that has now changed. On this particular afternoon, the Norwegian minesweeper Hinnøy, a NATO warship, is escorting the Russian trawler Proekt I all the way to the quay. The port director says there is "a handful" of usual suspects. He is planning on making it more difficult for wandering sailors in the future, with a fence and electronic security system to be installed around the port in June.

There has been no shortage of suspicious activities involving Russian citizens, says the official in charge of border surveillance at Kirkenes police headquarters, where agents from the domestic intelligence agency PST are also stationed. So far, though, those activities haven’t coalesced into a clear picture. "For now, all we can do is collect puzzle pieces. Others will have to put it together. It’s quite possible that we were too naïve for too long."

A researcher at the local branch of the University of Tromsø refers to the mood in Kirkenes as a "hangover."

The annual conference of the Arctic Economic Council is taking place right now without an official Russian delegation. They have been replaced by the remote presence of Russian opposition activists, who provide "voices from the other side of the Iron Curtain," as the organizers refer to it – as though the Soviet Union had come back to life.

For the 75th anniversary of liberation at the hands of the Red Army, celebrated in 2019, Russian Foreign Minister Sergei Lavrov even made the trip to Kirkenes in person. These days, though, in a new strategy paper, the Foreign Ministry in Moscow warns of "the policy of enemy states" that are "aiming at a militarization of the region." Norway is paying close attention to such rhetoric. The "threshold for a nuclear escalation" is threatening to shrink, according to a threat analysis performed by the country’s foreign intelligence agency in 2023.

Professor Tom Røseth of the Norwegian Defense University says his government must urgently learn the lessons from Ukraine’s fate – namely that the country needs to arm itself and boost deterrence. A former intelligence agent, Røseth teaches intelligence studies at the university, located in the medieval fortress of Akershus.

For our meeting, Røseth chose a city center café where an urbane clientele sips expensive drinks as they work away on their laptops. From prosperous Oslo, the problems near the Russian border seem a world away. "Still today, Norway has hardly any air defenses, very few warships, and the tanks we ordered from Germany must still be delivered," Røseth laments.

And what about the intelligence battle? Has Norway learned its lessons from the case of the exposed agent Frode Berg? Misguided chess moves in the border region are extremely dangerous, Røseth says, but at the same time, his country urgently must "deliver intelligence to NATO." Otherwise, he says, "the U.S. or Britain will do it for us, and that would only ratchet up the tensions with Russia."

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Seaboard: pioneers in power generation in the country…

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

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Ukraine Declares State of Emergency After Nova Kakhovka Dam Attack. Here’s What We Know So Far

The collapse of a huge dam in a Russian-occupied region of southern Ukraine has triggered flooding, with both Russia and Ukraine blaming each other for its strategic destruction.

TIME BY ARMANI SYED, JUNE 6, 2023

The Nova Kakhovka dam, built in 1956 on the Dnieper River—30 km east of the city of Kherson—was breached as the result of an explosion Tuesday morning. Ukraine accuses Russian forces of blowing up the dam, which could also impact the nearby Zaporizhzhia nuclear power plant, while Russian officials say Ukrainian military strikes in the contested region caused the damage, according to the Associated Press.

The Russian-installed mayor of Kherson, Vladimir Leontyev, called the explosion a “terrorist act.” Russia relies on the reservoir to supply water to Crimea, which Russia illegally annexed in 2014. At present, it is unclear which nation is responsible or what either side would serve to gain from damaging the dam, which is said to have already been in a state of disrepair.

The dam is 30 meters (98 ft.) in height and 3.2km (2 mi.) in width, containing a reservoir of around 18 cubic kilometers (4.3 cubic mi.) of water. As such, there are growing concerns that the sheer volume of water will severely damage nearby homes and low lying areas.

Additionally, Ukraine’s nuclear operator Energoatom said via a Telegram statement that the damage “could have negative consequences” for the Zaporizhzhia Plant, which is Europe’s biggest by way of generating capacity and relies on water to cool its facilities. For now, he wrote, the situation is “controllable.”

Residents in 10 nearby villages and parts of Kherson have been advised by the Ukrainian Interior Ministry to gather essential items and evacuate the area. Polluted water supplies and wider environmental consequences are anticipated as a result of the incident. Water levels were expected to reach a critical level within 5 hours of the collapse.

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Global economy struggles amid inflation, pandemic aftershocks and war

World Bank report predicts sharp slowdown on the horizon…

The Washington Post By David J. Lynch, June 6, 2023 

A pair of central bank decisions next week will shape the outlook for a wobbly global economy that the World Bank warns in a downbeat new assessment is battling stubbornly high inflation amid the pandemic’s aftermath and the war in Ukraine.

The gloomy forecast arrives days after one threat to global growth was eliminated when President Biden signed legislation Friday to raise the U.S. debt ceiling and avert a potentially catastrophic government default.

But other risks remain: China’s reopening after the end of its “zero covid” policy is starting to flag, while the German economy has shrunk for two consecutive quarters, meeting one definition of a recession. Even in the United States, where growth remains resilient, most analysts anticipate that activity will ebb in the coming months.

The World Bank is scheduled to release a report Tuesday warning that the global economy is slowing dramatically as higher interest rates take a toll on both advanced and developing economies. Overall, global growth is projected to slump to an anemic 2.1 percent annual rate this year, down from 3.1 percent in 2022, and will remain “frail” through next year, according to the bank’s latest forecast.

Investors now are focused on how much more work the Federal Reserve and European Central Bank must do to stem inflation, which has declined from last year’s highs but remains elevated.

Fed officials have signaled they may pause at next week’s meeting after lifting their benchmark lending rate over the past 14 months at the fastest pace in four decades. European policymakers are expected to increase the euro zone’s key rate by a quarter percentage point when they meet next week.

“The risks for both of them are high, and they always were in this inflationary environment. There is a chance they overdo it,” said Kathy Bostjancic, chief economist for Nationwide.

If U.S. defaults on debts, this company has two months of payroll saved up

If central bankers raise rates too much, the United States or Europe could be driven into recession. But if they fail to raise them enough, inflation will keep eroding living standards.

Striking the right balance is difficult. In the United States, Fed officials warn that the full effects of the rate increases already enacted have not yet been felt. As the Fed considers whether more increases are needed, it must also take into account other forces that are expected to slow the economy, such as tighter lending conditions in the wake of recent bank turmoil and government spending cuts under the debt ceiling deal.

In Europe, meanwhile, annual inflation dipped in May to 6.1 percent from 7 percent in April. Energy costs are falling, after a spike last year at the outset of Russia’s invasion of Ukraine. But food, alcohol and tobacco prices are soaring at a double-digit annual pace, according to the European statistical agency.

“How quickly will inflation come down? How much higher do rates have to go up? We’re obviously focused on that,” said Neil Shearing, chief economist for Capital Economics in London.

Higher interest rates represent a challenge that ripples from big economies to small ones, according to the World Bank.

When the Fed raises borrowing costs, it slows the U.S. economy by making it more expensive for consumers and businesses to obtain loans. That reduces demand for goods produced overseas, hurting growth there. Higher U.S. interest rates also encourage investment in the United States rather than elsewhere. The inflow of capital pushes up the value of the dollar, which makes it more expensive for foreign governments and businesses to repay their dollar-denominated loans.

Spillovers from Fed policy could lead to a financial crisis in the most vulnerable developing nations, which borrowed heavily over the past three years to deal with the pandemic’s health and economic consequences, the bank warned. The danger of renewed weakness in the banking industry could further constrict credit, aggravating those effects.

“The global economy remains in a precarious state,” the bank’s latest assessment concluded.

China’s performance, after ending its stringent zero-covid stance in December, has been mixed. The Chinese economy grew by 4.5 percent in the first quarter but appears to be hitting a soft patch.

China’s official purchasing managers index for May showed the manufacturing sector falling into contraction. The index for services also declined from April’s level but remained in expansion territory. Youth unemployment tops 20 percent, and the heavily indebted property sector remains a worry.

“The post-zero-covid recovery is peaking, and growth is going to slow over the second half of the year,” Shearing said.

Apple told investors last month that its China revenue fell by more than 5 percent for the six months ending April 1. Auto parts maker BorgWarner, which sells 70 percent of its made-in-China output to Chinese auto companies, said its production there has been weaker than anticipated.

So far, the U.S. economy has defied repeated recession forecasts. The Federal Reserve Bank of Atlanta’s real-time forecast says output is growing at a 2 percent annual rate, an acceleration from the first quarter’s 1.3 percent.

The labor market, likewise, remains robust. In May, employers created 339,000 jobs, while government statisticians revised higher the April and March figures by a combined 93,000 jobs, according to the Bureau of Labor Statistics.

In Europe, meanwhile, inflation is higher and growth lower, and countries face twin-barreled strategic challenges. They must replace Russian energy with more reliable supplies while “de-risking” the trade relationship with China, said Carsten Brzeski, global head of macro for ING Research in Frankfurt.

“It’s very easy to see these transitions in the next one to two years will weigh on growth, putting pressure on European industry’s business model and household wealth,” he said. “It’s not like a financial-crisis-style recession. But it’s anemic growth for a couple of years.”

Both the Fed and its European counterpart are determined to quash inflation, which means interest rates will continue going up until it is clear that prices are under control.

The strong U.S. job market makes it likely that the Fed’s expected pause in June will be temporary. Since March of last year, the central bank has lifted rates from near zero to a range of 5 percent to 5.25 percent. Several Fed governors favor taking stock of the effects of tighter credit before resuming rate hikes as soon as the Fed’s end-of-July meeting.

“History shows that monetary policy works with long and variable lags, and that a year is not a long enough period for demand to feel the full effect of higher interest rates,” Philip Jefferson, a member of the Fed Board of governors, said in a recent speech.

Biden seeks expanded domestic production and more robust supply chains

But some economists disagree. Jason Furman of Harvard University said consumer credit markets reacted quickly to the Fed’s change of policy, meaning there is little reason to expect lagging impacts.

The average 30-year fixed-rate mortgage cost increased from 3.8 percent as the Fed began raising rates to 6.8 percent at the end of September. But there has been little change since then, even as the Fed raised rates five more times, Furman noted.

“The full monetary tightening happened 12 months ago and worked its way through the system,” said Furman, who was President Barack Obama’s top economic adviser.

Indeed, overall financial conditions grew tighter even before the Fed’s first rate hike, as investors reacted to public comments by Fed Chair Jerome H. Powell suggesting an imminent move, according to an index maintained by the Federal Reserve Bank of Chicago, which tracks 105 financial-market and banking-sector data points.

One wild card is the potential for lingering fallout from the regional bank turmoil of recent months. In May, the nation’s banks reported tighter standards and weaker demand for commercial and industrial loans, according to the Fed’s most recent senior loan officer survey.

A second unknown is the impact of the Treasury Department’s efforts to refill its general account, which was nearly exhausted during the debt ceiling showdown. To replenish government coffers, Treasury will auction an unusually large amount of short-term debt in the coming months. Those sales of government securities will effectively drain funds from the banking sector, further chilling credit availability.

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NOW…The war is out of control. A Russian attack on the dam supplying water to the Zaporizhzhia nuclear power plant caused Crimea flooding…

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“The Machiavellian war strategy in the supply chain of the natural gas market ...

-Hopefully, …the economic giant of the East will wake up and use the unique key that its economic and political power confers on it to find a definitive way out of this situation that is wreaking havoc on the global economy.

…”Caution is crucial when discussing electricity generation, particularly nuclear power. Decommissioned nuclear power plants in Europe require careful evaluation and a focus on the present rather than the past. The IAEA has called for an immediate end to artillery attacks near Europe's largest nuclear power plant, Zaporizhzhia . The report suggests creating a protective zone around the plant with  agreement from all relevant parties.  IAEA Director General Rafael Grossi warned the UN Security Council during an inspection visit that a catastrophic event could occur, stating, Events like this remind us of the risks associated with certain actions.

The name Zaporizhzhia refers to the position of the city: "beyond the rapids"—downstream or south of the Dnieper Rapids/Editing by Germán & Co

Ukraine accused Russia of blowing up the dam from the inside in a deliberate war crime. Russian-installed officials gave conflicting accounts, some blaming Ukrainian shelling, others saying the dam had burst on its own.

KYIV, June 6 (Reuters) and Germán & Co in Karlastad, Sweden

The Nova Kakhovka dam supplies water to Ukraine's Crimean peninsula and the Zaporizhzhia nuclear plant, both under Russian control. The vast reservoir behind it is one of the main geographic features of southern Ukraine, 240 km (150 miles) long and up to 23 km (14 miles) wide. A swathe of countryside lies in the flood plain below.

The destruction of the dam creates a new humanitarian disaster in the centre of the war zone and transforms the front lines just as Ukraine is unleashing a long-awaited counteroffensive to drive Russian troops from its territory.

Russia has controlled the dam since early in the war, although Ukrainian forces recaptured the northern side of the river last year. Both sides had long accused the other of planning to destroy it.

"Russian terrorists. The destruction of the Kakhovka hydroelectric power plant dam only confirms for the whole world that they must be expelled from every corner of Ukrainian land," President Volodymyr Zelenskiy wrote on the Telegram messaging app.

Russians had "carried out an internal detonation of the structures" of the dam. "About 80 settlements are in the zone of flooding," he said on Telegram.

The Russian-installed governor of Ukraine's Kherson region accused Kyiv of striking the dam with missiles to distract attention from what he said were the failures of Ukraine's counteroffensive in the east. However, other Russian-installed officials said the dam had burst on its own due to earlier damage.

Neither side offered immediate evidence proving who was to blame.

The vast reservoir above the dam supplies fresh water to huge swathes of agricultural land, including the Crimea peninsula, which Russia claims to have annexed in 2014. It also provides cooling water for Europe's largest nuclear power plant, located in Russian-held territory on the southern bank.

The U.N. nuclear watchdog said on Twitter it was closely monitoring the situation, but that there was "no immediate nuclear safety risk at the plant".

Russia's state nuclear energy corporation Rosatom also said the dam breach did not pose a threat for now to the plant and said the situation was being monitored.

SURGING WATERS

The water level at the town immediately adjacent to the breached dam could rise by up to 12 metres, its Russia-installed mayor, Vladimir Leontyev, said on the Telegram messaging app.

Video showed water surging through the remains of the dam - which is 30 metres (yards) tall and 3.2 km (2 miles) long.

Some 22,000 people living across 14 settlements in Ukraine's southern Kherson region are at risk of flooding, Russia's RIA news agency quoted the Moscow-installed head of the region as saying. Kherson is one of five regions, including Crimea, that Moscow claims to have annexed.

The Russian-backed governor of Crimea, Sergei Aksyonov, said there was a risk that water levels in the North Crimea Canal, which carries fresh water to the peninsula from the Dnipro river, could fall. Crimea had sufficient water reserves for the moment, and the level of risk would become clear in coming days.

A Russian-installed official in the town of Nova Kakhovka said residents of around 300 houses had been evacuated, state-owned news agency TASS reported. He said it would likely be impossible to repair the dam.

The dam breach came as Ukraine prepares its long-awaited counteroffensive to drive Russian forces from territory they have seized during more than 15 months of fighting.

Russia said it had thwarted another Ukrainian offensive in eastern Donetsk and inflicted heavy losses. Kyiv has maintained strict silence on the counteroffensive but has dismissed Russia's claims to have thwarted Ukrainian assaults.

Russia also launched a fresh wave of overnight air strikes on Kyiv. Ukraine said its air defence systems had downed more than 20 cruise missiles on their approach to the capital.

The Shebekino district of Russia's Belgorod region near the Ukrainian border came under renewed shelling on Tuesday, local authorities said, urging residents to take cover. Anti-government Russian fighters based in Ukraine claim to have infiltrated the area, seizing villages near the border.

Ukraine's military intelligence agency said on Telegram that Russian forces had blown up the dam "in a panic", in what it said was "an obvious act of terrorism and a war crime, which will be evidence in an international tribunal".

Zelenskiy will hold an emergency meeting about the dam's collapse, Oleksiy Danilov, secretary of Ukraine's National Security and Defence Council, said on Twitter.

UKRAINIAN ATTACKS

Russian President Vladimir Putin sent troops into Ukraine on Feb. 24 last year in what the Kremlin expected to be a swift operation, but its forces suffered a series of defeats and regrouped in the country's east.

Tens of thousands of Russian troops dug in over the winter, besieging the eastern city of Bakhmut for months and bracing for an expected Ukrainian counterattack.

Ukrainian officials have made clear they will not comment on the start of their campaign, although in his nightly address on Monday Zelenskiy was enigmatic, hailing "the news we have been waiting for" and forward moves in Bakhmut in Donetsk.

Russia says it thwarted a major Ukrainian attack in the Donetsk region over the weekend and on Tuesday the defence ministry said a fresh Ukrainian assault had also been repelled.

Writing on Telegram, Russia's Wagner militia leader Yevgeny Prigozhin said Moscow's claims of huge Ukrainian losses were "simply wild and absurd science fiction."

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The drought-1964

By Germán & Co, Published in Spanish in El Caribe, Santo Domingo, DR, September 15, 2022, and in English in Energycentral

Rapid adaptation to change has always been a virtue in human beings. Why is this the case? The answer is simple because so-called human life is not a continuum of happiness and unhappiness or of stability and instability; fortunately, it is not... On the contrary, life's itinerary is complex, with encounters and mis encounters, loves and dislikes, in short .... Sometimes, our ecosystem, jaded by pollution, reveals itself by provoking natural disasters of enormous proportions... And not to mention the aberrations in so-called human beings' minds that lead to excesses that infringe all the moral canons of coexistence imaginable... Our existence is constantly subject to complex tests through extreme and always unforeseen changes, they say... which is perfectly accurate... In the unique minds of science fictions writers throughout the history of humanity, they have managed to visualize the plagues and changes in political systems that would affect us mercilessly over time...

According to the journal Plos Pathogens of the University of Kent (England), on Friday, 17 November 2019, in Wuhan, China, the SARC-COv-2 virus was detected for the first time. An organism with a simple structure composed of proteins and nucleic acids capable of reproducing only within specific living cells, using its metabolism, according to the Royal Spanish Academy (RAE) definition, all this concerning the Coronavirus.

Our affective behavior is the cruelest change humanity has undergone due to the Coronavirus This small monster surely awoke in us the paranoia of terror in a most malicious way…, let us know. Indeed it did, that being in the company of other individuals of our species, by then already submerged by the sophistic evolution of the 2.0 world, where genuine expressions of affection, handshakes and hugs... that do so much good to the intangible of the so-called soul, have been replaced by immaterial faces that flow at an infinite density (billions) per second, devoid of any merciful human contact, would cause us to die. What cruelty we have been subject to…  How many of our loved ones are not whit us today? Due to a mistake made by a human error in a laboratory in the isolated province of Wuhan in the millennian China.

Not even in the mind of that genius of science fiction chronicler, James Graham Ballard (JG Ballard, Shanghai, British International Treaty 1930-London, UK 2009) in his short story The Drought (1964), did he fail to visualize what would affect in the future the colony of individuals inhabiting a small, remote and sick planet, called: Earth.

Not only the human sensory system has been affected by these new living conditions, but also the industry in all its processes, a consequence of the forced confinement of human beings, which prevented them from going to their workplaces usually, is suffering from the shortage of raw materials and components to keep the production chain in operation to supply the basic needs that man requires for his subsistence.

The lack of supply of essential goods and the excessive costs of international sea freight transport triggers the poison known as inflation. Global Accumulative Inflation from January 2020 to December 2021 went from 1.9% to no less than 3.5%, practically doubling in one calendar year. By the end of the period, the prediction is close to 7%, according to World Bank indicators. In other words, in a brief time of three years, cumulative inflation has tripled. There are not national economy or family wallet that can deal with this -financial storm-.

In addition to this adverse economic situation initially, caused by the SARC-COv-2 virus, this economic setback has been exacerbated by Russia's invasion of Ukraine since February of this year, which has hurt the fossil fuel market, specifically on the stable and safe purchase price of natural gas from the Tsarist domain. The reason for this is Russia's brilliant military strategy in the economic order in this conflict, using the systematic cuts of natural gas to its customers on the continent as a new element of warfare, known under the concept: Natural gas is the new "Russian winter" as an element of war…

This clever (Machiavellian) strategy on the part of the imperial government of Russia has deepened the economic crisis to levels unprecedented in contemporary history, accelerating the inflationary process in such a way that it has the finances of almost all nations in check, (weakened by extraordinary expenditures (issuing public debt) through subsidies and investments in the health sector aimed at coping with the pandemic times) that drift to the fragile economy of hundreds of millions of families around the world, who are unable to cope with their basic financial commitments, payment of electricity bills, settlements on mortgage commitments, etc...

There is no doubt about the concern of the political authorities regarding the current economic crisis that it is urgent and necessary to resort to emergency measures to deal with this unsustainable economic situation. However, these political actions in financial matters must be based on objective rationality and the true origin of the crisis; the current inflationary process is the result of the pandemic and the recent armed conflict. The Russian invasion of Ukraine has directly impacted the natural gas market, causing a disruption in prices due to a strategically planned restriction in supply.

Given this, the electricity industry has no direct responsibility for the background of the current economic crisis (neither does the political authority); on the contrary is one of the most affected parties because its production costs have increased exponentially. A financial intervention in the electricity industry through a cap price or increasing of taxes are not the most innovative economic measure because they (the electricity industry) do not have any tools to influence the price of natural gas. It is a governmental issue where politicians are responsible for finding mechanisms to solve the situation. In this sense, some European government officials have put forward reasonable proposals intended at contributing to the relief of electricity supply to both the population and industry without risking, firstly, social peace and, secondly, the financial health of the energy sector, which could lead to a domino effect on other sectors of the economy, based on state guarantees, which could be one of the logical alternatives at this point.

Finally, we must be incredibly careful with the so-called -all in- of all installed electricity generation capacity to the system, as far as the nuclear fleet is concerned, many nuclear power plants in Europe have not been dispatched for years, their current condition is unknown. I insist that we must be extremely cautious here. We must not look back too far: ...- In a detailed report on his visit, the International Atomic Energy Agency (IAEA) said that artillery attacks around the Zaporizhzhia nuclear power plant, Europe's largest, must cease immediately. "This requires an agreement by all relevant parties for the establishment of a protective zone" around the plant, the report: "We are playing with fire, and something very, very catastrophic could happen," warned Rafael Grossi, IAEA director general to the UN Security Council, days after leading an inspection visit to the plant. (Los Angeles Time, underwritten by Hanna Arhirova of Associated Press, 6 September 2022) events to realize the risks of such an action, the worst that could happen is to throw the current crisis back into another horror, as described by the great science fiction writers of the last century.

As an epilogue to these reflections, in the search for wisdom and good sense to prevail over the empire of destruction, in a call for clemency to the gods, in an inshallah of supplication, I have to recall that China, the forgotten ally of the West during the Second World War, was one of the determining factors in bringing the conflict to an end. Now, equally, China, this undesirable economic situation is causing many financial holes in its public finances. Hopefully, out of necessity or common sense, the economic giant of the East will wake up and use the unique key that its economic and political power confers on it to find a definitive way out of this situation that is wreaking havoc on the global economy.

https://energycentral.com/c/hr/drought-1964

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News round-up, June 5, 2023

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Many thanks to Le Monde Diplomatique...

In light of the current tumultuous global news cycle, a unique opportunity exists for a comprehensive analysis of the global geopolitical and energy landscape. This analysis can be a valuable source of inspiration for academics and policymakers. The blog post on the publication of "Pursuing Self-Interest in a Multipolar World" in Le Monde Diplomatique on 1 April received recognition from the famed, century-old editorial magazine through a like and retweet.

The world is constantly changing, and important news is emerging every day. Here is a compilation of some of the latest global developments from Saturday and today.

"Tuesday's Chaos Reflections" editorial note was published on May 30, 2023, in this blog. Is the current war out of control? The prolonged conflict between superpowers has been unsuccessful. The principle of "an eye for an eye, and a tooth for a tooth" dates to ancient times as a well-known concept of justice. Proportionality dictates that punishment should match the harm caused by wrongdoing. Recent military actions by both superpowers, including Russia's missile strikes on Kiev and Ukraine's use of drones to target Moscow, suggest their prolonged conflict has not achieved the desired attrition outcome. The fundamental principle of checks and balances has been eroded, resulting in a feeling of hopelessness and an illogical approach to justice, whereby each action is met with an equivalent and opposing reaction. We must address these concerns and restore balance and fairness in our political systems.

On Wednesday, the Wall Street Journal published an article entitled "Biden Demonstrates Increasing Willingness to Challenge Putin's Boundaries," suggesting the possibility of a peaceful resolution to the conflict may be in doubt. President Biden has expressed his willingness to address the limitations of Russian President Putin. Despite the potential for global conflict, this action is generating apprehension. Concurrently, the former Secretary of State, Henry Kissinger, cautioned that the establishment of a balance of power may potentially result in armed conflict. The implementation of well-defined principles for managing conflicts is crucial, and it evokes memories of the pre-World War I era. Is it possible for China and the United States to coexist peacefully without resorting to military conflict? Mr. Kissinger proposes the promotion of competition and dialogue between Beijing and Washington in strategic domains. The frequency of drone attacks targeting Russian infrastructure and military has been on the rise. The attacks have exceeded the boundaries of the front line. It is possible for military operations to occur prior to Kyiv's counteroffensive. The recent fire at the Afipsky refinery, which may have been caused by a drone, has the potential to test the boundaries of President Putin's leadership.

To further complicate the understanding of the crisis, the week concluded with the publication of an article and eight digital columns on Saturday, June 3rd on Washington Post. The utilization of NATO weaponry in an attack against Russia has raised concerns regarding the level of control exercised by Kyiv.L ast week, a group of Russian fighters, who are opposed to Moscow, conducted a cross-border raid from Ukraine into the Belgorod region of Russia. According to U.S. officials, these fighters used at least four tactical vehicles that were originally provided to Ukraine by the United States and Poland. This raises concerns about the unintended use of NATO-provided equipment and Ukraine's responsibility to safeguard the material supplied by its allies. Is the Telegram application being utilized by you? Please consider subscribing to our channel to stay informed on the most recent developments regarding the ongoing conflict between Russia and Ukraine. According to sources familiar with U.S. intelligence findings, it has been discovered that the fighters who took MRAPs (Mine-Resistant Ambush Protected vehicles) into Russia were in possession of three vehicles provided by the United States and one vehicle provided by Poland. This information has not been previously reported. The individuals in question communicated under the condition of anonymity in order to address the delicate matters. and Western officials have emphasized the importance of Ukraine's meticulous monitoring of the substantial influx of weaponry, valued in billions of dollars, into the country. The supporters of Kyiv have significantly restricted the utilization of Western armaments and machinery by Ukrainian forces in their offensive operations on Russian territory. However, the recent incursion into Russia highlights the potential for equipment to be transferred unexpectedly, resulting in oversight difficulties that are not being acknowledged by many in Washington and Kyiv. The examination of imagery by The Post suggests that Russian forces may have captured at least two MRAPs after the operation.

On June 5th, the crisis may have been further intensified by the publication of an article by POLITICO EU. The article focuses on the Dutch Minister's reaction to Beijing's stance on Ukraine at a high-level security forum. The Minister refuted the viewpoint, deeming it as "very, very false. “The Dutch Minister of Defense has refuted the Chinese assertion that Russia's military intervention in Ukraine is a result of a flawed security framework in Europe. On Saturday, China tested the diplomatic patience of European nations by attributing Russia's military intervention in Ukraine to a flawed security architecture in Europe, as articulated by a seasoned Chinese diplomat. It was incumbent upon the Dutch Minister of Defense, Kajsa Ollongren, to challenge During to former ambassador Cui Tiankai during a panel discussion. The statement is unequivocally untrue. Cui, a former envoy to the U.S. and an unofficial delegation, asserted Europe has had limited success in guaranteeing security of the continent. He recommended other nations at the forum should learn from China and Asia's approach to security. In the past, Europe was often regarded as a valuable source of knowledge and expertise in the field of During the gathering, Cui suggested that contemporary times, Europeans potentially seek inspiration from us. “We do not enforce our methods upon you; however, it is possible that may gain valuable insights stated. Our region can a valuable lesson. During the panel discussion, Cui expressed his reluctance to employ term 'failure' and instead opted for the phrase 'lack “. As stated by Cui, the Asian methods of security management and issue resolution persist. “The proposal for an Asian NATO is deemed unnecessary. "We do not wish to witness the expansion of NATO's role in our region."

Finally, in view of the persistent conflict between Russia and Ukraine, there is a mounting apprehension about the effectiveness of the political and military approaches adopted by both sides, particularly as the situation continues to intensify. The extant evidence suggests that the present circumstances are a matter of significant concern. Unfortunately, the prevailing approach employed in this conflict is that of retributive justice, wherein both factions’ endeavor to obtain proportional retaliation for the damage caused by the opposing party. The erosion of checks and balances within democratic institutions is a significant concern, and this trend is indicative of a global pattern. President Biden's resolute position regarding Putin's territorial ambitions exemplifies his robust leadership qualities, which are further strengthened by his age and lack of personal stakes in the matter. The individual in question desires to be remembered for his contributions towards promoting equality from a historical standpoint. Mr. Kissinger's proposition to improve communication between Beijing and Washington has not garnered extensive backing. The present crisis has been exacerbated by recent developments, such as NATO's deployment of armaments against Russia and China's claim that Russia's intervention in Ukraine was a consequence of a flawed security framework in Europe. The utilization of the —law of club— as a means of maintaining order in modern society is a topic of concern and is widely regarded as outdated.

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Most Read…

When New York City Mourned R.F.K.

At Robert Kennedy’s wake, at St. Patrick’s Cathedral, New Yorkers began lining up before dawn to pay their respects.

The New Yorker By Paul Brodeur and James Stevenson, today,  June 7, 1968

Commodities Slide as Investors Bet on Economic Slowdown

Industrial malaise, particularly in China, is draining demand for energy and metals

WSJ By Yusuf Khan, and Joe Wallace, June 5, 2023 

The tech industry was deflating. Then came ChatGPT

Last year, Silicon Valley was drowning in layoffs and dour predictions. Artificial intelligence made the gloom go away.

TWP By Gerrit De Vynck, June 4, 2023 

Inside the Complicated Reality of Being America’s Oldest President

President Biden is asking voters to keep him in the White House until age 86, renewing attention to an issue that polls show troubles most Americans.

NYT By Peter Baker, Michael D. Shear, Katie Rogers and Zolan Kanno-Youngs, The reporters cover the White House for The Times. June 4, 2023

Kremlin: OPEC+ important to global energy market stability

MOSCOW, June 5 (Reuters) - OPEC+, the group of leading oil-producing countries, is important for providing stability on global energy markets, Kremlin spokesman Dmitry Peskov said on Monday, a day after the group met.

Reuters, June 5, 2023

Very, very false’: Dutch minister quashes Beijing view on Ukraine at top security forum

Dutch defense chief pushes back at Chinese argument that Russia’s war on Ukraine is due to a failed security architecture in Europe.

POLITICO EU BY STUART LAU, JUNE 3, 2023 

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Image by Germán & Co

When New York City Mourned R.F.K.

At Robert Kennedy’s wake, at St. Patrick’s Cathedral, New Yorkers began lining up before dawn to pay their respects.

The New Yorker By Paul Brodeur and James Stevenson, today,  June 7, 1968

Shortly before five o’clock Friday morning, a gray light slipped into the city. The air was warm, the sky was hazy, and everything beneath seemed still. Two flags flanking the Fifth Avenue entrance to St. Patrick’s Cathedral hung motionless at half-staff. On the south side of Fifty-first Street, a long line of people who had gathered during the dark of night emerged in ghostly fashion from the gloom of the cathedral’s granite facade. Fatigue and sorrow could be seen on the faces. The line stretched back along Fifty-first Street to Park Avenue, and with the first glimmer of sunrise reflecting pink against the eastern sky it began to build, as, from all directions, and with almost no other sound than that of footsteps scraping softly upon pavement, the people of New York arrived to mourn the death of Robert Kennedy. Within a few minutes, the line doubled and redoubled itself until it reached Park Avenue, turned south, and began to fill up six-deep behind police barricades that had been set out on the sidewalks. Then, at five-thirty, the line began to move slowly toward the side entrance to the cathedral on Fifty-first Street near Fifth Avenue. People whose heads had been nodding in sleep awakened, straightened, and took stiff, mechanical steps ahead. An elderly Negro woman who had been sitting in a folding chair got heavily to her feet and, assisted by a young man with shoulder-length hair, started forward with a halting gait. Behind her, a man in a wheelchair propelled himself as far as the steps to the entranceway, where two policemen came to his aid and lifted him inside. On the other side of the street, a busboy in a white mess jacket sat on an ashcan before a restaurant and watched the mourners with tears streaming down his cheeks. Inside the cathedral, the line moved through the gloomy nave, down the long center aisle toward a maroon-draped catafalque that stood before the altar. The catafalque bore a plain mahogany casket that was flanked by six tall candelabras with amber tapers, and by six men who had been close to Robert Kennedy, who formed an honor guard. During the night, television crewmen had erected several large scaffolds for their equipment, and a battery of powerful floodlights illuminated the bier with a harsh and unreal glare. The mourners approached the catafalque two by two and then separated to pass it on either side. Some people crossed themselves as they went by the coffin; others reached out and touched its lid; a few bent down to brush it with their lips. At six o’clock, a priest in red vestments began to intone the words of the Mass, and many of the mourners took seats in the pews and stayed on to listen and to pray. Very few appeared to notice that Edward Kennedy, who had stayed near the bier of his brother throughout the night, was sitting on the aisle in the eleventh row, looking straight ahead. Half blinded as they emerged from the darkness of the nave and into the merciless brilliance of the television lights, the mourners seemed to pass numbly through a corridor of total exposure. They included—white and black—nuns, girls in slacks and miniskirts, workmen in shirtsleeves, matrons and children, and businessmen wearing three-button suits and carrying briefcases. The words of the priest continued to echo through the vast cathedral: “Lord have mercy, Christ have mercy, Lord have mercy...” At quarter to seven, Edward Kennedy stood, drew himself erect, and, as if relinquishing himself to a river, joined the line of mourners, walking slowly into the searing light, looking at the casket containing the body of his brother. Then, following the others, he walked through the south transept of the cathedral and out onto Fiftieth Street, where, in the rising sun, the tall buildings, trees, awnings, and other gnomons of this perpendicular city were beginning to cast the shadows that would mark the passage of the day.

It was seven years ago this month that we first saw Robert Kennedy close up, to talk to, and travel with around New York. In the last few years, and especially in recent months, he often moved in a hostile landscape; Bobby, he was called by those who didn’t know him, and some of them said it with contempt. We occasionally experienced a shock when we encountered the man himself. Lindsay always turned out to be Lindsay, Rockefeller turned out to be Rockefeller, McCarthy turned out to be McCarthy, but Kennedy bore little resemblance to most of what we read or heard about him. He was not “Bobby.” We used to see him from time to time, and then, in March, we began to follow him quite closely—to California, to Washington, to Indiana, back to New York. He was, of course, an extraordinary man, a complex one; each time we saw him there was more to see. He could never be accurately measured, especially in terms of the past; he was always in the process of becoming. He was responsive to change, and changed himself. These changes were always attributed to his driving desire to win—except by those who knew him, who were aware of his great capacity for growth, his dedication, the widening of his concern. The people around him, we found, adored him—there is no other word. They would do anything for him, go any distance—and part of it was because they were convinced he would do the same for them. We, too, grew very fond of him. Beyond his associates and friends, however, was the public, part of which mistrusted him; he could not make a move without having his motives questioned. Some weeks ago, Joseph Alsop, an old friend of his, said to us, “So many people have him absolutely wrong. They think he is cold, calculating, ruthless. Actually, he is hot-blooded, romantic, compassionate.” He was at once aggressive and reserved—a combination that was bound to lead to misunderstanding. And in Kennedy there was another rare juxtaposition of qualities: sensitivity and imagination together with a strong drive to accomplish things. He was both the reflective, perceptive man and the doer.

While we were on a ride with Robert Kennedy a couple of months ago, we made some notes. The night before, President Johnson had announced he would not run. There was a press conference in the morning, a lunch with a newspaper publisher, and then Kennedy got into his car to go to the Granada Hotel in downtown Brooklyn, where a hundred-million-dollar mortgage pool was to be announced for residents of Bedford-Stuyvesant. (He had worked hard on Bedford-Stuyvesant; one of his major projects had been to change that community, to save it.) Our notes read:

“On leaving the restaurant, Kennedy had a cigar in his hand. He still has it, but as he goes across town he rarely puffs it; it’s just there. Kennedy scans the front sections of several magazines and the New York Post, turns and exchanges a few remarks, laughs, turns back, and then stares ahead, silent. When a traffic light changes to green, Kennedy’s fingers twitch an instant before Frank Bilotti can accelerate the car. Bill Barry’s eyes close; he is exhausted. He dozes. Kennedy was up until three o’clock. Carter Burden asks, ‘Are you tired?’ Kennedy shakes his head, murmurs no, no—brushing it off as if the question is not worth consideration. On the East River Drive, a taxi-driver recognizes Kennedy and yells, ‘Give it to ’em, Bobby!’ Kennedy waves, then stares ahead again. He is deeply preoccupied now, at his most private. (When Barry wakes and offers everyone chewing gum, Kennedy does not hear him.) He abandons, piece by piece, the outside world—he puts away the magazines, the cigar is forgotten, the offer of gum is unheard, and he is utterly alone. His silence is not passive; it is intense. His face, close up, is structurally hard: there is no waste, nothing left over and not put to use; everything has been enlisted in the cause, whatever it may be. His features look dug out, jammed together, scraped away. There is an impression of almost too much going on in too many directions in too little space: the nose hooks outward, the teeth protrude, the lower lip sticks forward, the hair hangs down, the ears go up and out, the chin juts, the eyelids push down, slanting toward the cheekbones, almost covering the eyes (a surprising blue). His expression is tough, but the toughness seems largely directed toward himself, inward—a contempt for self-indulgence, for weakness. The sadness in his face, by the same token, is not sentimental sadness, which would imply self-pity, but rather, at some level, a resident, melancholy bleakness. For a public figure, Kennedy is a remarkably contained and solitary person, somewhat hesitant with intruders and, according to those who feel they know him well, shy. Silence appears to be his natural habitat. But he will suddenly break out of himself, and then he is very responsive—quick to laugh; funny in a spontaneous, understated way; generous to people who don’t ‘matter;’ considerate, sensitive to others, and direct. He is unusually direct, in both good ways and bad—directness can be a major defect for a politician. Artificial situations make him uncomfortable; he is poor at masking his reactions. He does not indulge in much public self-analysis or explanation; he is inclined to keep quiet until he has made up his mind. This makes him appear cautious, or even devious and makes his actions, when he does move, seem at times abrupt, ‘political,’ or contradictory. Missing from his makeup is the bland protective coloration of a popular politician; when Kennedy feels something, he is apt to speak out—or to remain totally silent, looking sombre or glum—rather than to display indifference or gloss it over with pleasing chatter. There is not much change in the way he talks to one person or to a thousand, except for the formality. When he speaks of right and wrong, in either setting, he does not shift gears.”

We watched him campaign. His energy was limitless. A day of relentless travel by car and plane, speeches, rallies, interviews might end toward midnight, when he and Mrs. Kennedy would stand on a high-school auditorium stage and shake hands with three or four thousand people.

(Mrs. Kennedy’s stamina, cheerfulness, and quiet patience, under difficult circumstances, were extraordinary.) Then, the next day, more of the same. He was, after each primary, exhausted—but he barely paused. Time was always against him. We saw him at his apartment the day he returned from Indiana:

“Kennedy spoke to his prospective New York State delegates in a restaurant early in the afternoon, giving an informal account of what he felt had been accomplished in Indiana and promising an intensive campaign in New York prior to the June 18th primary. Then he met with New York political leaders and others in his apartment. The apartment is still full of people: Ted Sorensen is writing in a back bedroom; another bedroom holds a small gathering; others are in the living room, others in the kitchen. Kennedy moves from one room to another, then sits for a moment in the hall as people stream back and forth past him. He is deeply worn, but nearly a month of intensive campaigning still lies ahead—Nebraska next week, then Oregon, then South Dakota and California. He rubs his face. He has pushed himself to the limit, but he does not mention his weariness. His face is gaunt, weathered; his eyes are sunken and red. He rubs his hand over his face again, as if to tear away the exhaustion. It is not something he has sympathy with, his hand is not consoling as it drags across his face—he is simply trying to get rid of an encumbrance. He responds to questions from a reporter slowly, haltingly, trying to think; the questions seem to goad him painfully to one more effort. In the wake of his success, he admits there are great areas of loss—primarily for his family, and in his privacy. ‘I think... I think… I would make this one effort... and if it fails I would go back to my children.... If you bring children into the world, you should stay with them, see them through....’ He had once thought of teaching, or of starting a new kind of project in the Mississippi Delta, or of working with the Indians, but now he doesn’t know. ‘I think about it,’ he says slowly. ‘I think about it.... I’m not sure.’ The hand drags across the face again, his eyes closed. He mentions privacy. ‘It would be nice taking a walk sometime without someone taking a picture of you taking a walk....’ More people come through the door. Kennedy looks up, gets quickly to his feet, and greets them, alert again, moving.”

We remember an April afternoon at Hickory Hill, in McLean, Virginia, just before Indiana. He had come home for a few hours with his family. He sat in the dining room, eating a sandwich and discussing the farm problems of Indiana with an agricultural expert. A small child sat at the table with him, gazing silently at his father as the talk revolved around hog prices. Other children flowed through the dining room, and each time one came past he would reach out—still listening, not taking his eyes from the expert—and hold, for a moment, his or her hand. After lunch, he played with each child. There was a gentleness in him, a capacity for love, that was not ordinarily revealed in print or in the pictures people saw of him. “Let us dedicate ourselves to what the Greeks wrote so many years ago,” he told a group of Negroes in a parking lot in Indianapolis on the cold, bitter night Martin Luther King was slain. “To tame the savageness of man and make gentle the life of the world.”

The world he lived in was changing fast; the past was less than useless as a guide—it was an obstacle. A man was needed who instinctively responded to what was real—a truly compassionate man with a sympathy for people and for people’s need for change. As he walked, his head was always bent forward; everything for him was ahead. Now he is dead, and we see the films, over and over: he lies on the floor, his head cupped in the hands of others. He will no longer bring to bear on those forces he took such care to understand—the angry, divisive forces of our time—his vitality, his sympathy, his warm concern. His death is, in a word he used so often, unacceptable.

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Image by Germán & Co

Commodities Slide as Investors Bet on Economic Slowdown

Industrial malaise, particularly in China, is draining demand for energy and metals

WSJ By Yusuf Khan, and Joe Wallace, June 5, 2023 

Commodity prices are in retreat, signaling a slowdown in the world economy but lending central banks a hand in their fight against inflation.

The S&P GSCI commodities index has fallen about 11% so far this year through Friday, as prices for energy, metals, grains and other raw materials have retreated. Crude oil is close to its lowest levels since just before Russia’s invasion of Ukraine—even after Saudi Arabia’s weekend decision to cut output boosted prices early Monday.

Wheat hasn’t been this cheap since 2020 and natural gas has taken a tumble in Europe. Almost every commodity besides weather-affected sugar, cocoa and coffee has pulled back. Niche materials such as glass have fallen. Copper, a bellwether for the global economy because of its use in everything from buildings to cars, has slipped 1.3% this year. 

A big driver is sluggish activity in manufacturing, particularly in China, the world’s biggest consumer of metals and second-biggest user of oil.

A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data.

Traders’ hopes for a postpandemic surge in Chinese demand for industrial materials and energy proved wide of the mark. That is partly because China’s recovery has been led by services, rather than the resource-intensive manufacturing and construction sectors that powered previous upswings. 

“Industrial activity is subdued,” said Caroline Bain, chief commodities economist at Capital Economics. Chinese imports of semirefined copper dropped 13% year-over-year in the first four months of 2023, she said.

In the U.S. and Europe, too, manufacturers are in a funk, even as economies grow overall thanks to a stronger services sector. The rise of hybrid working has made economies less oil-dependent, some economists say.

The commodity declines mark a reversal from a year ago, when Russia’s invasion of Ukraine sent prices for energy and grains soaring. That surge stoked inflation in the West, encouraging the Federal Reserve and its peers to jack up interest rates, and led to fuel and food shortages in parts of Africa and Asia.

The selloffs largely take prices back down to more typical levels, rather than depressed ones indicative of serious oversupply or an economic shock. For instance, early on Monday, Brent crude oil was trading at close to $78 a barrel, which would be near the high end of the range in which the benchmark traded between 2015 and early 2022. 

The drops nonetheless point to slowing growth, if not an outright recession in which economic activity contracts. 

“In a recession, demand for commodities lowers,” said Arlan Suderman, chief commodities economist at StoneX Group, a brokerage. “We’re finally getting to data showing decreased demand for commodities.”

A silver lining for consumers and financial markets is that cheaper energy has started to feed into slower inflation. That could eventually help the Fed, and other monetary authorities such as the European Central Bank and the Bank of England, to lower rates. For now, though, other drivers of inflation are sufficiently strong that investors expect further rate rises.

Higher rates are likely to curb demand for commodities even more, said Darwei Kung, who runs commodities investments at DWS Group—one reason why he is betting on lower energy and industrial-metal prices. 

Losers from the decline include commodity companies such as Exxon Mobil and Chevron. The energy sector is the worst performer in the S&P 500 so far this year, having been the best in 2022.

Some states that depend on oil-and-gas sales to sustain their budgets, notably Russia and Gulf oil producers, have experienced difficulties. Saudi Arabia said Sunday that it would cut a million barrels from its daily oil output in an effort to raise prices, after a contentious meeting at which other members of the Organization of the Petroleum Exporting Countries cartel and its allies, known as OPEC+, agreed to extend existing curbs.

Consumers will enjoy the benefits of lower wholesale prices at varying speeds. In the U.S., for instance, lower crude prices quickly feed through to the pump. Average gas prices stand at $3.55 a gallon, according to AAA, down from about $4.82 a year ago.

In Europe, households and businesses won’t feel the drop in wholesale gas and power prices so fast, in part because governments put in policies to ease the pain on the way up.

And food prices are still galloping higher, even though wholesale wheat is down 22% this year, aided by bumper harvests in Russia and Australia, and exports from Ukraine under the Black Sea grain deal.

Many food producers locked in prices near the peak of the market because they feared losing access to ingredients. “It’s a long supply chain for a lot of these supermarkets,” said Dave Whitcomb, founder of Peak Trading Research.

Some analysts see commodity prices leveling off rather than falling further. They expect OPEC+ cuts to drain oil supplies in the second half of the year. Metals could get a boost from a splurge in spending on the electricity grid in China, and in the longer term from demand for materials needed for the energy transition.

For now, though, many say high interest rates and industrial malaise could bring more pressure. “Central banks in developed nations are pushing on the brakes pretty hard,” said Nitesh Shah, head of commodities research at exchange-traded-fund provider WisdomTree.

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Illustration by Elena Lacey/The Washington Post

The tech industry was deflating. Then came ChatGPT

Last year, Silicon Valley was drowning in layoffs and dour predictions. Artificial intelligence made the gloom go away.

TWP By Gerrit De Vynck, June 4, 2023 

SAN FRANCISCO — A year ago, the mood in Silicon Valley was dour. Big Tech stocks were falling, the cryptocurrency bubble had popped, and a wave of layoffs was beginning to sweep through the industry.

Since then, venture capitalists have been throwing money at AI start-ups, investing over $11 billion in May alone, according to data firm PitchBook, an increase of 86 percent over the same month last year. Companies from Moderna to Heinz have mentioned AI initiatives on recent earnings calls. And last week, AI chipmaker Nvidia became one of only a handful of companies in the world to hit $1 trillion in value.

In San Francisco, it’s suddenly impossible to escape the AI hysteria. In bars and restaurants, people are conversing about using ChatGPT and whether AI will take their jobs — or take over the world. AI is one of the only fields here still hiring, and firms are paying huge salaries for the expertise. Workers here are retraining to specialize in the field.

The new AI gold rush — sparked in large part by the release of OpenAI’s ChatGPT in November — is thanks to generative AI, which uses complex algorithms trained on trillions of words and images from the open internet to produce text, images and audio.

“The improvement in quality was much greater than expected,” Dan Wang, a business professor at Columbia University who studies the tech industry, said of the emergence of generative AI. “That took folks by surprise and also released the imaginations of both existing entrepreneurs and aspiring entrepreneurs.”

Following OpenAI’s release of ChatGPT, Microsoft and Google joined the arms race. While they had previously showed relative caution about launching experimental AI tools to real people, both companies suddenly raced to compete by throwing text generators into their core products, including Microsoft Word and Google Search.

“We are at an exciting inflection point,” Pichai said at the conference. “We are reimagining all our core products.”

Facebook and Amazon have also been trumpeting their own AI work, and Apple is expected to spotlight AI research during its big product launch event this week.

Companies are also putting money where their mouths are, and one of the biggest beneficiaries so far is Nvidia.

The company’s video game computer chips have been used by researchers and companies for several years to help them run the massive and complicated algorithms needed to train cutting-edge AI programs. The company began making specialized products and software for AI and had already seen its stock price quadruple from the end of 2019 until the beginning of 2023.

But last week, it announced that it expected to sell $11 billion of new chips in the second quarter of this year, a full $4 billion more than Wall Street analysts had expected. The stock rocketed up 24 percent. It closed with a market valuation of $971.4 billion on Friday.

That’s within spitting range of Amazon, which is worth $1.26 trillion. Nvidia Chief Financial Officer Colette Kress called ChatGPT’s launch a new “iPhone moment” — comparing it to when the world realized mobile phones would completely change how people use computers.

“What can we say other than just ‘Wow!’” C.J. Muse, an analyst with Evercore said in a client note. “We’ve simply never seen a beat like this … ever.” Big companies and start-ups alike are “clamoring” to buy Nvidia’s products, Muse said.

Tech stocks have rallied across the board, a whiplash return to growth after analysts declared the 10-year bull market was finally over. In 2022, the Nasdaq 100, a stock market index dominated by the biggest tech companies, lost an entire third of its value, falling 33 percent in a massive erasure of wealth that had been built up over the past decade. So far in 2023, the Nasdaq 100 is already up 31 percent.

Even Meta, which changed its name from Facebook to signal its commitment to the metaverse, or virtual reality tech, has been pushing AI among its workers to the extent that some of them asked at a company meeting whether the metaverse was still a priority. Amazon executives have assured their own employees the company is working on major AI initiatives, too.

The start-up ecosystem is rebounding back to optimism as well, at least for those focused on AI.

“VC firms compete for access to hot AI deals while eschewing unprofitable conventional software companies,” said Brendan Burke, an analyst with PitchBook. “AI start-ups experience founder-friendly conditions not extended to the rest of the tech ecosystem.”

Around $12.5 billion in investments have gone into generative AI start-ups this year so far, compared with only $4.5 billion invested in the field in all of 2022, Burke said.

Suvrat Bhooshan, a former AI researcher at Meta and founder and CEO of Gan.ai, a start-up that lets people automatically create customized videos of themselves, just raised $5.25 million from investors including Sequoia Capital and Emergent Ventures. The deal came together fast, with some investors giving him full-fledged term sheets just a week after initial introductions, Bhooshan said.

He isn’t the only former Big Tech AI worker who left to begin their own company, Bhooshan said. In the past two years, three or four of the seven people on his team at Meta have left to do their own thing, he said. The same is happening across the industry, showing the desire among AI workers to take advantage of the boom in venture investment to start their own companies.

“The entire transformers team from Google left to start their own company,” Bhooshan said, referring to the Google researchers who wrote the paper on “transformers,” a key aspect of the current crop of generative AI.

The optimism in the AI sector contrasts with the massive layoffs that have been rocking the industry for months. Thousands of tech workers are still out of a job after the massive wave of layoffs that rolled through dozens of start-ups, as well as Microsoft, Amazon, Facebook and Google over the past year. Higher interest rates, which triggered the shakiness for tech companies used to borrowing huge sums to fund their ever-increasing growth, aren’t going away.

And things outside AI can continue to be glum. The number of deals and the valuations start-ups were scoring outside of AI continued to drop through the beginning of the year, with the median late-stage start-up valuation dropping 40 percent from the same time last year, according to PitchBook.

Employees at Google and elsewhere are worrying about more layoffs. Silicon Valley Bank’s collapse spooked tech investors and made it harder for start-ups to get the debt they need to get their businesses off the ground.

House prices are slowly sinking in San Francisco, and the commercial rental market is in crisis, showing the overall impact on the economy.

AI won’t change that overnight, said Wang, the Columbia business professor.

“It’s really exciting,” he said. “But its really hard to say that it’s the kind of thing that will lead the charge back into a bull market.”

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Seaboard: pioneers in power generation in the country…

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

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President Biden just embarked on a campaign asking voters to keep him in the White House four years longer.Credit...Haiyun Jiang/The New York Times/Editing by Germán & Co

Inside the Complicated Reality of Being America’s Oldest President

President Biden is asking voters to keep him in the White House until age 86, renewing attention to an issue that polls show troubles most Americans.

NYT By Peter Baker, Michael D. Shear, Katie Rogers and Zolan Kanno-Youngs, The reporters cover the White House for The Times. June 4, 2023

There was the time last winter when President Biden was awakened at 3 a.m. while on a trip to Asia and told that a missile had struck Poland, touching off a panic that Russia might have expanded the war in Ukraine to a NATO ally. Within hours in the middle of the night, Mr. Biden consulted his top advisers, called the president of Poland and the NATO secretary general, and gathered fellow world leaders to deal with the crisis.

And then there was the time a few weeks ago when the president was hosting children for Take Your Child to Work Day and became mixed up as he tried to list his grandchildren. “So, let me see. I got one in New York, two in Philadelphia — or is it three? No, three, because I got one granddaughter who is — I don’t know. You’re confusing me.” He also drew a blank when asked the last country he had visited and the name of a favorite movie.

The two Joe Bidens coexist in the same octogenarian president: Sharp and wise at critical moments, the product of decades of seasoning, able to rise to the occasion even in the dead of night to confront a dangerous world. Yet a little slower, a little softer, a little harder of hearing, a little more tentative in his walk, a little more prone to occasional lapses of memory in ways that feel familiar to anyone who has reached their ninth decade or has a parent who has.

The complicated reality of America’s oldest president was encapsulated on Thursday as Congress approved a bipartisan deal he brokered to avoid a national default. Even Speaker Kevin McCarthy testified that Mr. Biden had been “very professional, very smart, very tough” during their talks. Yet just before the voting got underway, Mr. Biden tripped over a sandbag at the Air Force Academy commencement, plunging to the ground. The video went viral, his supporters cringed and his critics pounced.

Anyone can trip at any age, but for an 80-year-old president, it inevitably raises unwelcome questions. If it were anyone else, the signs of age might not be notable. But Mr. Biden is the chief executive of the world’s most powerful nation and has just embarked on a campaign asking voters to keep him in the White House until age 86, drawing more attention to an issue that polls show troubles most Americans and is the source of enormous anxiety among party leaders.

“You say I’m ancient?” Mr. Biden said at the White House Correspondents’ Association dinner in April. “I say I’m wise.”Credit...Yuri Gripas for The New York Times

The portrait that emerges from months of interviews with dozens of current and former officials and others who have spent time with him lies somewhere between the partisan cartoon of an addled and easily manipulated fogy promoted by Republicans and the image spread by his staff of a president in aviator shades commanding the world stage and governing with vigor.

It is one of a man who has slowed with age in ways that are more pronounced than just the graying hair common to most recent presidents during their time in office. Mr. Biden sometimes mangles his words and looks older than he used to because of his stiff gait and thinning voice.

Yet people who deal with him regularly, including some of his adversaries, say he remains sharp and commanding in private meetings. Diplomats share stories of trips to places like Ukraine, Japan, Egypt, Cambodia and Indonesia in which he often outlasts younger colleagues. Democratic lawmakers point to a long list of accomplishments as proof that he still gets the job done.

His verbal miscues are nothing new, friends note; he has struggled throughout his life with a stutter and was a “gaffe machine,” to use his own term, long before he entered Social Security years. Advisers said his judgment is as good as ever. So many of them use the phrase “sharp as a tack” to describe him that it has become something of a mantra.

Mr. Biden says age is a legitimate issue but maintains that his longevity is an asset, not a liability. “You say I’m ancient?” he said at the White House Correspondents’ Association dinner in April. “I say I’m wise.”

Still, few people fail to notice the changes in one of the nation’s most public people. As vice president a dozen years ago, Mr. Biden engaged in energetic squirt gun battles each summer with the children of aides and reporters. More than a decade later, he shuffled stiffly across the Edmund Pettus Bridge in Selma, Ala., to mark the anniversary of Bloody Sunday.

Polls indicate the president’s age is a top concern of Americans, including Democrats. During a recent New York Times focus group, several voters who supported Mr. Biden in 2020 expressed worry, with one saying: “I’ve just seen the blank stare at times, when he’s either giving a speech or addressing a crowd. It seems like he loses his train of thought.”

Unease about Mr. Biden’s age suffuses Democratic circles. One prominent Wall Street Democrat, who like others spoke on the condition of anonymity to avoid offending the White House, noted that among party donors it was all anyone was talking about. At a small dinner earlier this year of former Democratic senators and governors, all of them in Mr. Biden’s generation, everyone at the table agreed he was too old to run again. Local leaders often call the White House to inquire about his health.

In private, some officials acknowledge that they make what they consider reasonable accommodations not to physically tax an aging president. His staff schedules most of his public appearances between noon and 4 p.m. and leaves him alone on weekends as much as possible. Jennifer O’Malley Dillon, Mr. Biden’s deputy White House chief of staff, though, insisted his age has not forced changes to his schedule. “Nothing beyond what is done for any president regardless of their age,” she said.

A study of Mr. Biden’s schedule based on data compiled by Axios and expanded by The New York Times found that Mr. Biden has a similar morning cadence as the president he served, Barack Obama. Neither had many public events before 10 a.m., just 4 percent in Mr. Obama’s last year in office and 5 percent in Mr. Biden’s first two and a half years. But the real difference came in the evening. Mr. Obama was twice as likely to do public events after 6 p.m. compared with Mr. Biden, 17 percent to 9 percent.

Aides limit exposing the president to news media interviews when he could make a politically damaging mistake. He has given just a fourth of the interviews Donald J. Trump did in the same time period and a fifth of Mr. Obama’s interviews — and none at all to reporters from a major newspaper. Mr. Biden has not given an interview to the news department of The Times, unlike every president since at least Franklin D. Roosevelt other than Dwight D. Eisenhower. And in the past 100 years, only Ronald Reagan and Richard M. Nixon have subjected themselves to as few news conferences.

White House officials have not made Mr. Biden’s doctor available for questioning, as previous presidents have. In February, Kevin C. O’Connor, the White House physician, issued a five-page letter stating that Mr. Biden is “fit for duty, and fully executes all of his responsibilities without any exemptions or accommodations.”

But he also wrote that the president’s tendency to walk stiffly is “in fact a result of degenerative (‘wear and tear’)” changes in his spine, and partly the result of “tighter hamstrings and calves.” The letter said there were “no findings which would be consistent with” a neurological disorder like stroke, multiple sclerosis or Parkinson’s disease. He takes medicine for atrial fibrillation, cholesterol, heartburn, asthma and allergies.

Like many his age, Mr. Biden repeats phrases and retells the same hoary, often fact-challenged stories again and again. He can be quirky; when children visit, he may randomly pull a book of William Butler Yeats off his desk and start reading Irish poetry to them.

At the same time, he is trim and fit, exercises five days a week and does not drink. He has at times exhibited striking stamina, such as when he flew to Poland then boarded a nine-hour train ride to make a secret visit to Kyiv, spent hours on the ground, then endured another nine-hour train ride and a flight to Warsaw. A study of his schedule by Mr. Biden’s aides shows that he has traveled slightly more in the first few months of his third year in office than Mr. Obama did in his.

“Does he ramble? Yes, he does,” said Gov. Phil Murphy of New Jersey, a Democrat who categorically rejects the idea that Mr. Biden is too old to be president. “Has he always rambled? Yes, he has. Public and private. He’s the same guy. He’s literally — I’m not saying this lightly. I don’t know anyone else in my life who is so much the same guy privately as he is publicly.”

Some friends bristle at the attention to his age. “I think the reason this is an issue is primarily because of the media talking about it constantly,” said former Senator Ted Kaufman, a longtime adviser to Mr. Biden from Delaware. “I do not see anything in my dealings with him that age is a problem. He’s done more than any president has been able to do in my lifetime.”

Andrew Bates, a White House spokesman, noted that Republican hard-liners were grousing that Mr. Biden had gotten the better of Mr. McCarthy in the fiscal deal. “It’s telling that the same extreme MAGA members of Congress who’ve been talking about his age complained this week that he outsmarted them on the budget agreement,” Mr. Bates said.

The question of Mr. Biden’s age does not come in isolation, of course. Mr. Trump, his likeliest Republican challenger, is just four years younger and was the oldest president in history until Mr. Biden succeeded him. If Mr. Trump were to win next year, he would be 82 at the end of his term, older than Mr. Biden will be at the end of this one.

While in office, Mr. Trump generated concerns about his mental acuity and physical condition. He did not exercise, his diet leaned heavily on cheeseburgers and steak and he officially tipped the scales at 244 pounds, a weight formally deemed obese for his height.

After complaining that he was overscheduled with morning meetings, Mr. Trump stopped showing up at the Oval Office until 11 or 11:30 a.m. each day, staying in the residence to watch television, make phone calls or send out incendiary tweets. During an appearance at the U.S. Military Academy at West Point, he had trouble lifting a glass of water and seemed to have trouble making his way down a modest ramp.

Most striking was Mr. Trump’s cognitive performance. He was erratic and tended to ramble; experts found that he had grown less articulate and that his vocabulary had shrunk since his younger days. Aides said privately that Mr. Trump had trouble processing information and distinguishing fact from fiction. His second chief of staff, John F. Kelly, bought a book analyzing Mr. Trump’s psychological health to understand him better, and several cabinet secretaries concerned that he might be mentally unfit discussed invoking the 25th Amendment to remove him.

But perhaps because his bombastic volume conveys energy, Mr. Trump’s issues are not associated with age in the public mind as much as Mr. Biden’s are. In a recent Reuters/Ipsos poll, 73 percent said Mr. Biden is too old to be in office, compared with 51 percent who said the same of Mr. Trump.

Mr. Biden manages his day with more discipline than his predecessor. Jill Biden, who teaches at Northern Virginia Community College, gets up around 6 a.m. while the president wakes an hour later, according to accounts he has given. Mr. Biden has told aides that their cat sometimes wakes him in the middle of the night by walking across his face.

By 7:20 a.m., the first lady leaves for work. Mr. Biden works out at 8 a.m.; he has a Peloton bicycle in the residence and is known to watch shows like “Morning Joe” on MSNBC. He arrives at the Oval Office by 9 a.m. for a morning usually filled with meetings. For lunch, there is a rotation of salad, soup and sandwiches.

Following afternoon events, the president returns to the residence around 6:45 p.m. For dinner, pasta is a favorite. In fact, one former official said, whenever he travels, aides make sure there is always red sauce on hand for pasta to finish his day — even as he balks at the salmon that his wife urges on him.

From 8 p.m., the Bidens often read their briefing books together in the living room of the residence. The first lady typically turns in at 10:30 p.m. and the president follows a half-hour later.

Aides say it is clear he actually reads the briefing books because of the questions that follow. “There’s no one who is better at asking questions to get to the bottom of an issue, calling your bluff, asking the tough questions,” said Stefanie Feldman, the White House staff secretary. “He asks just as tough questions today as he did 10 years ago.”

Some who accompany him overseas express astonishment at his ability to keep up. When Italy’s new leader pushed for a meeting while the president was in Poland, he readily agreed to add it to the already packed schedule. During a trip to Ireland, people with him said he was energized and wanted to talk at length on Air Force One rather than rest.

Still, after fatiguing days on the road, he skipped dinner with world leaders in Indonesia last year and again in Japan in May. Others who have known him for years said privately that they have noticed small changes. When he sits down, one former official said, he usually places a hand on his desk to hold his weight and rarely springs back up with his old energy.

He speaks so softly that he can be hard to hear. For speeches, aides give him a hand-held microphone to hold close to his mouth to amplify his voice even when standing at a lectern with mounted microphones.

Yet aides said that while he can momentarily forget a name or fact, he retains a formidable memory for detail. Preparing to travel to Shanksville, Pa., on the 20th anniversary of the attacks of Sept. 11, 2001, he became frustrated that officials had given him the wrong plan for his movements. He had been to the memorial before and knew the plan made no sense because he remembered the layout of the grounds.

White House officials voice aggravation that concern about age is inflated by pictures on the internet that are sometimes faked or highly distorted. Every week, strategists conduct a word cloud analysis with a panel of voters asking what they had heard about the president, good or bad. After Mr. Biden’s foot got caught in the toe cage of his bicycle and he tumbled over last year, the two words in the bad-word cloud for weeks were “bike fell” — all the more frustrating for aides who noted that Mr. Trump hardly seemed capable of even riding a bike.

Mr. Biden lately has turned to self-deprecating humor to defuse the issue, taking a cue from Mr. Reagan, who won re-election in 1984 at age 73 in part with a well-timed debate quip about not exploiting “my opponent’s youth and inexperience.”

Some who accompany Mr. Biden overseas express astonishment at his ability to keep up. Still, after fatiguing days on the road, he skipped dinner with world leaders in Indonesia last year and again in Japan in May.Credit...Doug Mills/The New York Times

At the correspondents’ dinner, Mr. Biden assured the audience that he supported the First Amendment, and “not just because my good friend Jimmy Madison wrote it.” During the Take Your Child to Work Day event, he looked back on “when I was younger, 120 years ago.”

And at the Air Force Academy a few days ago, Mr. Biden joked that “when I was graduating from high school 300 years ago, I applied to the Naval Academy.” After tripping on the sandbag, he sought to laugh that off too. “I got sandbagged,” he said.

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Image by Germán & Co

Kremlin: OPEC+ important to global energy market stability

Reuters, June 5, 2023

MOSCOW, June 5 (Reuters) - OPEC+, the group of leading oil-producing countries, is important for providing stability on global energy markets, Kremlin spokesman Dmitry Peskov said on Monday, a day after the group met.

OPEC+ pumps around 40% of the world's crude and has put in place cuts of 3.66 million barrels per day, amounting to 3.6% of global demand.

"The Russian Federation is a member of the joint (OPEC+) understanding. The OPEC+ format continues its work, there are common agreements that, of course, everyone will follow," Peskov told a daily conference call with reporters.

"Of course, this format retains its importance and its significance for ensuring stability in international energy markets."

OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, decided on Sunday after seven hours of talks to reduce overall production targets from 2024 by a further 1.4 million bpd in total.

Saudi Arabia will make a deep cut to its output in July on top of a broader OPEC+ deal to limit supply into 2024 as the group seeks to boost flagging oil prices.

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Dutch Defense Minister Kajsa Ollongren challenged the Chinese interpretation of the war in Ukraine | Thomas Niedermueller/Editing by Germán & Co

‘Very, very false’: Dutch minister quashes Beijing view on Ukraine at top security forum

Dutch defense chief pushes back at Chinese argument that Russia’s war on Ukraine is due to a failed security architecture in Europe.

POLITICO EU BY STUART LAU, JUNE 3, 2023 

SINGAPORE — China put European patience to the test on Saturday, with a seasoned Chinese diplomat attributing Russia’s war on Ukraine to a failed security architecture in Europe. 

It fell to Dutch Defense Minister Kajsa Ollongren to challenge that very Chinese interpretation.

“I was actually a little bit surprised to hear it,” Ollongren told POLITICO in an interview moments after she made an impromptu rebuttal of ex-ambassador Cui Tiankai on a panel at the Shangri-La Dialogue in Singapore. “It’s very, very false.”

Cui, a former envoy to the U.S. and unofficially an adviser to the Chinese delegation at this top Asian security forum, told the event on Saturday that Europe had showed little success in ensuring the Continent’s security, and suggested that the other nations at the forum should take a lesson from China and Asia instead.

“We used to look to Europe, for their experience in regional integration. But nowadays, maybe people in Europe instead could look to us,” Cui told the gathering. “We don’t impose our ways on you, but maybe you can learn something useful from our experience, from our success,” he said.

“And our region also should learn something very important — from your lack of success. I don’t want to use the word ‘failure,’ [so] a lack of success,” said Cui, who sat next to Ukrainian Defense Minister Oleksiy Reznikov on the panel.

“We will continue with our Asian ways of managing our security situation and managing all the issues,” Cui said. “We don’t need an Asian NATO. We’ll don’t want to see expansion of NATO’s role in our region.”

While the Ukrainian minister steered clear of criticizing Beijing — saying only that Ukraine needed to win the war, not negotiate — Ollongren hit back at Cui’s assertion.

“There was a suggestion by the ambassador that Europe has not succeeded in managing its security very well, because of the war in Ukraine. Of course, I understand there’s a war in Ukraine — but I think it’s not the result of mismanaging our security situation in Europe. It’s the result of not respecting the way we want to manage security in Europe,” the Dutch minister said.

“I think also, there is no lack of respect for China or lack of respect to the culture of China in Europe; we have very high respect for that,” she said.

Ollongren, whose country has taken an increasingly critical stance on China over ties with Russia and tech advancement in military fields, added after the panel that what Cui had presented was a “false perception of the situation.”

“You cannot blame Europe or European countries for Russia’s illegally invading Ukraine,” she said.

Ollongren added that since Cui is no longer an ambassador, she would wait for Chinese Defense Minister Li Shangfu to spell out the official position in his keynote address on Sunday. 

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AES Hawaii's transition to all-green energy is reminiscent of Kafka's metamorphosis…

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Source: In January 2019, AES and Kaua‘i Island Utility Cooperative (KIUC) commissioned what at the time was considered the world’s largest solar PV + Battery Energy Storage (BESS) facility, the 28 MWdc PV + 100 MWh BESS Lāwa‘i facility on Kaua‘i. We worked closely with the community and the landowner to successfully develop the facility, which delivers up to 11% of Kaua‘i's energy needs and helped KIUC surpass its goal of 50% renewable energy generation four years ahead of schedule.

In February 2016, National Geographic published an article discussing the occurrence of Hawaii's largest waves in years attributed to changing weather patterns. This phenomenon is a consequence of the significant storms generated in the Pacific Ocean due to the El Niño phenomenon.

By Germán & C0, Karlstad, Sweden, June 2, 2023

Hawaii is a group of volcanic islands in the central Pacific Ocean. The distance between the islands and San Francisco is 2,397 miles, while between the islands and Manila is 5,293. The capital of Hawaii is located on the island of Oahu and is known as Honolulu. During the 19th century, the population of Hawaii experienced a significant increase, leading to the establishment of a plantation system that focused on the cultivation of sugar cane, coffee, and pineapples. The annexation of the territory by the United States occurred in 1898. On December 7, 1941, Pearl Harbor was attacked by Japanese fighter planes, which resulted in the United States' entry into World War II. Hawaii achieved statehood on August 21, 1959, becoming the 50th state of the United States. Hawaii, boasting a land area of 28,412 square kilometers and a population exceeding 1.4 million, remains a globally sought-after tourist destination.

AES Hawaii a surreal transformation reminiscent of Franz Kafka's literary work…

Bernerd Da Santos, Executive Vice President, Chief Operating Officer and President, Renewables

Before delving into the history of AES Hawaii, whit Bernerd Da Santos, Executive Vice President, Chief Operating Officer and President, Renewables, a Venezuelan native, joined AES in 2000 and revolutionized the company's operations to offer eco-friendly and innovative energy solutions. The person updated safety, environmental, and supply chain systems digitized IT processes, and created four Smart Centers. He has global experience in corporate finance and business transformation for energy companies worldwide. Bernard is AES's EVP, COO, and President of Renewables. He transformed AES operations to provide customers with safer, more reliable, greener energy solutions. 

In recent years, the energy sector has shifted, particularly in response to Russia's incursion into Ukraine. The military operation caused a significant disruption in the natural gas supply to Europe, thereby underscoring the vulnerability of the region's energy security. Amidst the current crisis, there has been a noticeable trend towards adopting renewable energy sources, a reassuring development. The transition towards sustainable alternatives is paramount in mitigating our reliance on non-renewable energy sources and achieving a more sustainable energy future. It is imperative to prioritize safeguarding the environment and future generations interests by adopting sustainable and renewable energy solutions.

Over the past three decades, AES Hawaii has experienced substantial transformations. The modifications emulate the paradise island ambience of Hawaii, renowned for its colossal waves that attract visitors from around the world, as well as the popular television series Hawaii Five-0…

It is noteworthy to bear in mind that Hawaii exhibits the highest dependence on imported fossil fuels compared to all other states in the United States, thereby emphasizing the criticality of attaining its clean energy objectives. The significance of this matter extends beyond the state's economy, as it also pertains to the preservation of the environment and the assurance of energy security.

To attain the objectives set for the year 2045…

As Hawaii strives to reach a complete transition to renewable energy sources by 2045, collaborative efforts with utilities, communities, landowners, and customers are being pursued to provide ecologically sustainable and technologically advanced energy solutions. Through joint efforts with local leaders and utilities leading the way in the clean energy transition, such as Kauaʻi Island Utility Cooperative and the Hawaiian Electric Companies, we actively develop innovative and sustainable energy solutions. The objective of this initiative is to accelerate the process of energy transition in Hawaiʻi while ensuring that all customers across the state have access to electricity prices that are both dependable and economical.

“The objective of this initiative is to expedite Hawaii's shift towards a future that is free of carbon emissions. Since the 1980s, there has been a concerted effort to address the increasing demand for energy in the region. The Barbers Point power plant, powered by coal and has a capacity of 180 MW, was established on the island of Oahu in 1992 and has remained operational ever since. Over three decades, the power plant has consistently delivered reliable and secure energy, satisfying up to 20% of the island's energy requirements at an economical rate for the local populace. According to Bernerd Da Santos, the plant's retirement on September 1, 2022, is a significant milestone in the joint efforts made a steadfast commitment to supporting the state's transition towards a future of energy free from carbon emissions.

“The implementation of diversity across the islands is underway, with more than 300 MW of solar and wind resources already operational or in development. Bernerd Da Santos, has expressed that the company is collaborating closely with the State of Hawaii and local utilities to devise pragmatic strategies to attain their goals. Hawaii has committed to supporting the state in expediting and responsibly transitioning towards a future of energy free from carbon emissions.

“Finally, according Executive Vice President, Chief Operating Officer and President, Renewables, stated that the newly established objectives for producing renewable energy contribute to stabilizing rates and enhancing the system's reliability. Our operational initiatives have the potential to provide significant support during periods of high demand. In contrast, our persistent endeavours to promote initiatives for renewable energy initiatives will aid in accomplishing the state's objective of attaining 100% renewable energy.

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As U.S. Races Ahead, Europe Frets About Battery Factory Subsidies

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Source: Britain’s Office for National Statistics, Italy’s Industry Ministry and Germany’s Federal Statistical Office By Rebecca Lieberman

The European Union is trying to assemble the building blocks to produce electric cars, but subsidies are luring companies to the United States.

NYT BY *JACK EWING AND MELISSA EDDY, PUBLISHED MAY 31, 2023, UPDATED JUNE 1, 2023

*JACK EWING REPORTED FROM VASTERAS, SWEDEN; OSLO; AND GUBEN, GERMANY. MELISSA EDDY REPORTED FROM SALZGITTER, GERMANY, AND BERLIN.

European leaders complained for years that the United States was not doing enough to fight climate change. Now that the Biden administration has devoted hundreds of billions of dollars to that cause, many Europeans are complaining that the United States is going about it the wrong way.

That new critique is born of a deep fear in Germany, France, Britain and other European countries that Washington’s approach will hurt the allies it ought to be working with, luring away much of the new investments in electric car and battery factories not already destined for China, South Korea and other Asian countries.

That concern is the main reason some European leaders, including Germany’s second-highest-ranking official, Robert Habeck, have beaten a path to Vasteras, a city about 60 miles from Stockholm that is best known for a Viking burial mound and a Gothic cathedral.

Officials have been traveling there to court one of Europe’s few homegrown battery companies, Northvolt. Led by a former Tesla executive, Northvolt is a small player in the global battery industry, but European leaders are offering it hundreds of millions of euros to build factories in Europe. Mr. Habeck visited in February to lobby the company to push ahead on its plan to build a factory near Hamburg, Germany. The company had considered postponing to invest in the United States instead.

“It’s definitely attractive to be in America right now,” Emma Nehrenheim, Northvolt’s chief environmental officer, said in an interview last month in Vasteras. Northvolt declined to comment in detail on the discussions about the Hamburg plant, which the company committed to in May.

The tussle over Northvolt’s plans is an example of the intense and, some European officials say, counterproductive competition between the United States and Europe as they try to acquire the building blocks of electric vehicle manufacturing to avoid becoming dependent on China, which dominates the battery supply chain.

Auto experts said that the tax credits and other incentives offered by President Biden’s main climate policy, the Inflation Reduction Act, had siphoned some investment from Europe and put pressure on European countries to offer their own incentives.

The United States has provoked a “massive subsidy race,” Cecilia Malmstrom, a former European trade commissioner, said during a panel discussion last month at the Peterson Institute for International Economics in Washington. She called on leaders to “jointly invest in the green transition and not compete against each other.”

Biden officials have argued that U.S. and European policies are complementary. They have noted that the government and private money going into electric cars and batteries would lower prices for car buyers and put more emission-free vehicles on the road.

Efforts by governments to promote electric vehicles “will spur a degree of technological innovation and cost cutting that will be beneficial not only to Europe and the United States, but to the global economy and to our global effort to meet the challenge that climate change presents,” Wally Adeyemo, the deputy Treasury secretary, said in a recent interview.

The Biden administration has also been talking with European officials about allowing cars made from European battery materials and components to qualify for U.S. tax credits. And the administration has interpreted the I.R.A., which Mr. Biden signed in August, to leave room for producers in Europe and elsewhere to benefit.

“You’re seeing less of a concern from Europe that those companies may be lured away from Europe to America,” said Abigail Wulf, who directs the Center for Critical Minerals Strategy at SAFE, a nonprofit organization.

Still, the law has forced European leaders to put new industrial policies in place.

In March, the European Commission, the administrative arm of the European Union, proposed the Critical Raw Materials Act, legislation to ensure supplies of lithium, nickel and other battery materials. One piece of the legislation calls for the E.U. to process at least 40 percent of the raw materials that the car industry needs within its own borders. The 27-nation alliance has also let countries provide more financial support to suppliers and manufacturers.

The money that the United States and Europe are pouring into electric vehicles will encourage sales, said Julia Poliscanova, a senior director at Transport & Environment, an advocacy group in Brussels. The legislation, which will need the approval of the European Parliament and the leaders of E.U. countries, would also bring some coherence to the fragmented policies of national governments, she said.

But Ms. Poliscanova added that European and U.S. policies risk canceling each other out. “Because everyone is scaling up at the same time, it’s a zero-sum game,” she said.

Business executives have complained that applying for financial aid in Europe is bureaucratic and slow. The Inflation Reduction Act, with its emphasis on tax credits, is simpler and faster, said Tom Einar Jensen, chief executive of the battery maker Freyr, which is building a factory in Mo i Rana, in northern Norway, and has plans to construct more plants in Finland and near Atlanta.

The I.R.A. has prompted “a dramatic increase in uptick in interest for batteries produced in the U.S.,” Mr. Jensen said in an interview.

The future of European auto manufacturing is at stake, particularly for German companies. Mercedes-Benz, BMW and Volkswagen have already lost market share in China to local automakers like BYD. Chinese automakers, including BYD and SAIC, are also making inroads in Europe. Selling cars under the British brand MG, SAIC has amassed 5 percent of the European electric vehicle market, putting it ahead of Toyota and Ford in that fast-growing segment.

European carmakers are frantically trying to build the supply chains they need to churn out electric vehicles.

In France, President Emmanuel Macron wants to convert a northern region where factory jobs have been in decline into a hub of battery production.

On Tuesday, Automotive Cells Company, a joint venture between Stellantis, Mercedes-Benz and TotalEnergies, inaugurated a factory in Billy-Berclau Douvrin, France, that aims to produce 300,000 electric batteries annually by the end of 2024. A.C.C. also plans to invest a total of 7.3 billion euros, or $7.8 billion, in Europe, including opening factories in Germany and in Italy, a deal sealed with 1.3 billion euros in public aid.

In Salzgitter, Germany, some 25 miles from Volkswagen’s headquarters, steel beams tower above concrete foundations as excavators and dump trucks hum nearby. In a matter of months, the outlines of a battery factory have risen out of a field.

Volkswagen hopes to have battery-making machines installed before the end of the summer. By 2025, the automaker aims to produce battery cells for up to 500,000 electric vehicles a year — a timeline that the company said was possible only because the factory was being built on land it owned.

Volkswagen is also building a factory in Ontario, but the company made the decision to do so only after the Canadian government matched U.S. incentives.

In Guben, a small city on Germany’s border with Poland, Rock Tech Lithium, a Canadian company, is building a plant to process lithium ore. Mercedes has an agreement with Rock Tech to supply lithium to its battery producers.

These projects won’t reach full production for several years. Recently, the Guben site was an open field. The only construction activity was a truck that dumped loads of crushed rock, making an ear-piercing screech.

Europe has some advantages, including a strong demand for electric cars: About 14 percent of new cars sold in the E.U. in the first three months of this year were battery powered, according to Schmidt Automotive Research, twice as many as in the United States.

But if Europe doesn’t move quickly to aid the battery industry, “you will really lose momentum on the ground versus the North American market,” said Dirk Harbecke, chief executive of Rock Tech.

Chinese battery companies have largely avoided the United States for fear of a political backlash. But Chinese battery firms have announced investments in Europe worth $17.5 billion since 2018, according to the Mercator Institute for China Studies and the Rhodium Group.

Political tension between Western governments and China has put German carmakers in a delicate position. They do not want to be overly dependent on Chinese supplies, but they cannot afford to displease the Chinese government.

BMW, Volkswagen and Volvo plan to buy cells from a factory in Arnstadt, Germany, run by CATL, a Chinese company that is currently the world’s largest maker of electric vehicle batteries.

To balance their reliance on Chinese suppliers, European executives and leaders are keen to work with Northvolt, whose chief executive, Peter Carlsson, oversaw Tesla’s supply chain for more than four years.

Northvolt wants to control all the steps of making batteries, including refining lithium and recycling old cells. That should help Europe achieve supply chain independence and ensure that batteries are produced in the most environmentally responsible way possible, said Ms. Nehrenheim, who is also a member of the Northvolt management board. “We’re de-risking Europe,” she said.

The company develops manufacturing techniques at its complex in Vasteras. Northvolt’s first full-scale factory, at a site in Sweden 125 miles south of the Arctic Circle chosen for its abundant hydropower, is the size of the Pentagon. Northvolt also plans to build a U.S. factory, but has not yet announced a site.

Still, the company is ramping up production and is not among the world’s top 10 battery suppliers, according to SNE Research, a consulting firm. And construction on its Hamburg plant is on hold until E.U. officials approve German subsidies.

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News round-up, June 1, 2023

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Crossing the line can be dangerous.

In September 2002, I published on Energycentral.com an essay titled: *"Beware of Starving the Enemy of Oxygen." The paper delved into the dangerous tactic of depriving the adversary of oxygen. The praxis entails maintaining an open door to any potential solution that has been identified. The article "Biden Shows Growing Appetite to Cross Putin's Red Lines," published in the Wall Street Journal, offers valuable insights into President Biden's inclination to confront the limitations imposed by the Russian leader, Putin. Despite the suspicions of a potential global conflict, this action is a subject of significant apprehension. The former Secretary of State, Henry Kissinger, has warned that when two powers of similar strength oppose, it often results in armed conflict. The need for clearly defined principles for conflict management is reminiscent of the period preceding the onset of World War I. The unresolved inquiry concerns the feasibility of peaceful coexistence between China and the United States and whether it can be achieved without the potential risk of military conflict. Kissinger proposes the implementation of measures to foster competition in strategic domains, as well as the establishment of an ongoing high-level dialogue between Beijing and Washington. Unfortunately, there has been a significant increase in the frequency of reports concerning drone attacks targeting Russian infrastructure and military installations. The extent of these attacks has exceeded the confines of the front line. It can be categorized as shaping operations, which may serve as a preliminary step towards a counteroffensive by Kyiv. The recent fire incident at the Afipsky refinery has brought attention to the potential outcomes and advantages of pushing against the limits set by President Putin, as there is a possibility that a drone caused the incident.

*https://energycentral.com/c/og/beware-starving-enemy-oxygen

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Most Read…

Climate Shocks Are Making Parts of America Uninsurable. It Just Got Worse.

The largest insurer in California said it would stop offering new coverage. It’s part of a broader trend of companies pulling back from dangerous areas.

NYT By *Christopher Flavelle, Jill Cowan and Ivan Penn, May 31, 2023

As U.S. Races Ahead, Europe Frets About Battery Factory Subsidies

The European Union is trying to assemble the building blocks to produce electric cars, but subsidies are luring companies to the United States.

NYT By *Jack Ewing and Melissa Eddy, Published May 31, 2023, Updated June 1, 2023

Texas battery rush: Oil state's power woes fuel energy storage boom

To increase reliability, Texas lawmakers this week approved increased subsidies for natural gas power facilities. However, the legislation also includes clauses that, according to business associations, could promote investment in battery storage.

REUTERS By Nichola Groom and Laila Kearney, May 31, 2023

Biden shows growing appetite to cross Putin’s red lines

Despite warnings that arming Ukraine will start a world war, President Biden continues to push the Russian leader’s limits — a strategy that brings risk and reward

TWP By John Hudson and Dan Lamothe, June 1, 2023

Drones targeted Russian oil refineries. Moscow is strengthening its front line, but the attackers' identity is unknown.

Intelligence reports suggest enemy forces are advancing ahead of a planned Ukrainian counteroffensive.

Media Editing By Germán & Co, June 1, 2023

'Henry Kissinger, celebrating his 100th birthday, is as pessimistic as ever'

Le Monde by Alain Frachon, Published today

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

How can strategic investment achieve both economic growth and social progress?… What is the role of renewable energy and battery storage in achieving the goals of the low-carbon economy?…

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Source: A firefighter tried to save a home in Meyers, Calif., in 2021. Credit...Max Whittaker for The New York Times/Editing by Germán & Co

Climate Shocks Are Making Parts of America Uninsurable. It Just Got Worse.

The largest insurer in California said it would stop offering new coverage. It’s part of a broader trend of companies pulling back from dangerous areas.

NYT By *Christopher Flavelle, Jill Cowan and Ivan Penn, May 31, 2023

*Christopher Flavelle, who has long covered the impacts of climate change on the insurance market, reported from Washington. Jill Cowan and Ivan Penn reported from Los Angeles.

The climate crisis is becoming a financial crisis.

This month, the largest homeowner insurance company in California, State Farm, announced that it would stop selling coverage to homeowners. That’s not just in wildfire zones, but everywhere in the state.

Insurance companies, tired of losing money, are raising rates, restricting coverage or pulling out of some areas altogether — making it more expensive for people to live in their homes.

“Risk has a price,” said Roy Wright, the former official in charge of insurance at the Federal Emergency Management Agency, and now head of the Insurance Institute for Business and Home Safety, a research group. “We’re just now seeing it.”

In parts of eastern Kentucky ravaged by storms last summer, the price of flood insurance is set to quadruple. In Louisiana, the top insurance official says the market is in crisis, and is offering millions of dollars in subsidies to try to draw insurers to the state.

And in much of Florida, homeowners are increasingly struggling to buy storm coverage. Most big insurers have pulled out of the state already, sending homeowners to smaller private companies that are straining to stay in business — a possible glimpse into California’s future if more big insurers leave.

Growing ‘catastrophe exposure’

State Farm, which insures more homeowners in California than any other company, said it would stop accepting applications for most types of new insurance policies in the state because of “rapidly growing catastrophe exposure.”

The company said that while it recognized the work of California officials to reduce losses from wildfires, it had to stop writing new policies “to improve the company’s financial strength.” A State Farm spokesman did not respond to a request for comment.

Insurance rates in California jumped after wildfires became more devastating than anyone had anticipated. A series of fires that broke out in 2017, many ignited by sparks from failing utility equipment, exploded in size with the effects of climate change. Some homeowners lost their insurance entirely because insurers refused to cover homes in vulnerable areas.

Michael Soller, a spokesman for the California Department of Insurance, said the agency was working to address the underlying factors that have caused disruption in the insurance industry across the country and around the world, including the biggest one: climate change.

He highlighted the department’s Safer From Wildfires initiative, a fire resilience program, and noted that state lawmakers are also working to control development in the areas at highest risk of burning.

But Tom Corringham, a research economist with the Scripps Institution of Oceanography at the University of California San Diego who has studied the costs of natural disasters, said that allowing people to live in homes that are becoming uninsurable, or prohibitively expensive to insure, was unsustainable.

He said that policymakers must seriously consider buying properties that are at greatest risk, or otherwise moving residents out of the most dangerous communities.

“If we let the market sort it out, we have insurers refusing to write new policies in certain areas,” Dr. Corringham said. “We’re not sure how that’s in anyone’s best interest other than insurers.”

A broken model

California’s woes resemble a slow-motion version of what Florida experienced after Hurricane Andrew devastated Miami in 1992. The losses bankrupted some insurers and caused most national carriers to pull out of the state.

In response, Florida established a complicated system: a market based on small insurance companies, backed up by Citizens Property Insurance Corporation, a state-mandated company that would provide windstorm coverage for homeowners who couldn’t find private insurance.

For a while, it mostly worked. Then came Hurricane Irma.

The 2017 hurricane, which made landfall in the Florida Keys as a Category 4 storm before moving up the coast, didn’t cause a particularly great amount of damage. But it was the first in a series of storms, culminating in Hurricane Ian last October, that broke the model insurers had relied on: One bad year of claims, followed by a few quiet years to build back their reserves.

Since Irma, almost every year has been bad.

Private insurers began to struggle to pay their claims; some went out of business. Those that survived increased their rates significantly.

More people have left the private market for Citizens, which recently became the state’s largest insurance provider, according to Michael Peltier, a spokesman. But Citizens won’t cover homes with a replacement cost of more than $700,000, or $1 million in Miami-Dade County and the Florida Keys.

That leaves those homeowners with no choice but private coverage — and in parts of the state, that coverage is getting harder to find, Mr. Peltier said.

‘Just not enough wealth’

Florida, despite its challenges, has an important advantage: A steady influx of residents who remain, for now, willing and able to pay the rising cost of living there. In Louisiana, the rising cost of insurance has become, for some communities, a threat to their existence.

Like Florida after Andrew, Louisiana’s insurance market started to buckle after insurers began leaving following Hurricane Katrina in 2005. Then, starting with Hurricane Laura in 2020, a series of storms pummeled the state. Nine insurance companies failed; people began rushing into the state’s own version of Florida’s Citizens plan.

The state’s insurance market “is in crisis,” Louisiana’s insurance commissioner, James J. Donelon, said in an interview.

In December, Louisiana had to increase premiums for coverage provided by its Citizens plan by 63 percent, to an average of $4,700 a year. In March, it borrowed $500 million from the bond market to pay the claims of homeowners who had been abandoned when their private insurers failed, Mr. Donelon said. The state recently agreed to new subsidies for private insurers, essentially paying them to do business in the state.

Mr. Donelon said he hoped that the subsidies would stabilize the market. But Jesse Keenan, a professor at Tulane University in New Orleans and an expert in climate adaptation and finance, said the state’s insurance market would be hard to turn around. The high cost of insurance has begun to affect home prices, he said.

In the past, it would have been possible for some communities — those where homes are passed down from generation to generation, with no mortgages required and no banks demanding insurance — to go without insurance altogether. But as climate change makes storms more intense, that’s no longer an option.

“There’s just not enough wealth in those low-income communities to continue to rebuild, storm after storm,” Dr. Keenan said.

A shift to risk-based pricing

Even as homeowners in coastal states face rising costs for wind coverage, they’re being squeezed from yet another direction: Flood insurance.

In 1968, Congress created the National Flood Insurance Program, which offered taxpayer-backed coverage to homeowners. As with wildfires in California and hurricanes in Florida, the flood program arose from what economists call a market failure: Private insurers wouldn’t provide coverage for flooding, leaving homeowners with no options.

The program achieved its main goal, of making flood insurance widely available at a price that homeowners could afford. But as storms became more severe, the program faced growing losses.

In 2021, FEMA, which runs the program, began setting rates equal to the actual flood risk facing homeowners — an effort to better communicate the true danger facing different properties, and also to stanch the losses for the government.

Those increases, which are being phased in over years, in some cases amount to enormous jumps in price. The current cost of flood insurance for single-family homes nationwide is $888 a year, according to FEMA. Under the new, risk-based pricing, that average cost would be $1,808.

And by the time current policyholders actually have to pay premiums that reflect that full risk, the impacts of climate change could make them much higher.

“Properties located in high-risk areas should plan and expect to pay for that risk,” David Maurstad, head of the flood insurance program, said in a statement.

The best way for policymakers to help keep insurance affordable is to reduce the risk people face, said Carolyn Kousky, associate vice president for economics and policy at the Environmental Defense Fund. For example, officials could impose tougher building standards in vulnerable areas.

Government-mandated programs, like the flood insurance plan, or Citizens in Florida and Louisiana, were meant to be a backstop to the private market. But as climate shocks get worse, she said, “we’re now at the point where that’s starting to crack.”

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Image: Northvolt is a small player in the global battery industry, but European countries are offering it hundreds of millions of euros to build factories.Credit...Felix Odell/Editing by Germán & Co

As U.S. Races Ahead, Europe Frets About Battery Factory Subsidies

The European Union is trying to assemble the building blocks to produce electric cars, but subsidies are luring companies to the United States.

NYT By *Jack Ewing and Melissa Eddy, Published May 31, 2023, Updated June 1, 2023

*Jack Ewing reported from Vasteras, Sweden; Oslo; and Guben, Germany. Melissa Eddy reported from Salzgitter, Germany, and Berlin.

European leaders complained for years that the United States was not doing enough to fight climate change. Now that the Biden administration has devoted hundreds of billions of dollars to that cause, many Europeans are complaining that the United States is going about it the wrong way.

That new critique is born of a deep fear in Germany, France, Britain and other European countries that Washington’s approach will hurt the allies it ought to be working with, luring away much of the new investments in electric car and battery factories not already destined for China, South Korea and other Asian countries.

That concern is the main reason some European leaders, including Germany’s second-highest-ranking official, Robert Habeck, have beaten a path to Vasteras, a city about 60 miles from Stockholm that is best known for a Viking burial mound and a Gothic cathedral.

Officials have been traveling there to court one of Europe’s few homegrown battery companies, Northvolt. Led by a former Tesla executive, Northvolt is a small player in the global battery industry, but European leaders are offering it hundreds of millions of euros to build factories in Europe. Mr. Habeck visited in February to lobby the company to push ahead on its plan to build a factory near Hamburg, Germany. The company had considered postponing to invest in the United States instead.

“It’s definitely attractive to be in America right now,” Emma Nehrenheim, Northvolt’s chief environmental officer, said in an interview last month in Vasteras. Northvolt declined to comment in detail on the discussions about the Hamburg plant, which the company committed to in May.

The tussle over Northvolt’s plans is an example of the intense and, some European officials say, counterproductive competition between the United States and Europe as they try to acquire the building blocks of electric vehicle manufacturing to avoid becoming dependent on China, which dominates the battery supply chain.

Auto experts said that the tax credits and other incentives offered by President Biden’s main climate policy, the Inflation Reduction Act, had siphoned some investment from Europe and put pressure on European countries to offer their own incentives.

The United States has provoked a “massive subsidy race,” Cecilia Malmstrom, a former European trade commissioner, said during a panel discussion last month at the Peterson Institute for International Economics in Washington. She called on leaders to “jointly invest in the green transition and not compete against each other.”

Biden officials have argued that U.S. and European policies are complementary. They have noted that the government and private money going into electric cars and batteries would lower prices for car buyers and put more emission-free vehicles on the road.

Efforts by governments to promote electric vehicles “will spur a degree of technological innovation and cost cutting that will be beneficial not only to Europe and the United States, but to the global economy and to our global effort to meet the challenge that climate change presents,” Wally Adeyemo, the deputy Treasury secretary, said in a recent interview.

The Biden administration has also been talking with European officials about allowing cars made from European battery materials and components to qualify for U.S. tax credits. And the administration has interpreted the I.R.A., which Mr. Biden signed in August, to leave room for producers in Europe and elsewhere to benefit.

“You’re seeing less of a concern from Europe that those companies may be lured away from Europe to America,” said Abigail Wulf, who directs the Center for Critical Minerals Strategy at SAFE, a nonprofit organization.

Still, the law has forced European leaders to put new industrial policies in place.

In March, the European Commission, the administrative arm of the European Union, proposed the Critical Raw Materials Act, legislation to ensure supplies of lithium, nickel and other battery materials. One piece of the legislation calls for the E.U. to process at least 40 percent of the raw materials that the car industry needs within its own borders. The 27-nation alliance has also let countries provide more financial support to suppliers and manufacturers.

The money that the United States and Europe are pouring into electric vehicles will encourage sales, said Julia Poliscanova, a senior director at Transport & Environment, an advocacy group in Brussels. The legislation, which will need the approval of the European Parliament and the leaders of E.U. countries, would also bring some coherence to the fragmented policies of national governments, she said.

But Ms. Poliscanova added that European and U.S. policies risk canceling each other out. “Because everyone is scaling up at the same time, it’s a zero-sum game,” she said.

Business executives have complained that applying for financial aid in Europe is bureaucratic and slow. The Inflation Reduction Act, with its emphasis on tax credits, is simpler and faster, said Tom Einar Jensen, chief executive of the battery maker Freyr, which is building a factory in Mo i Rana, in northern Norway, and has plans to construct more plants in Finland and near Atlanta.

The I.R.A. has prompted “a dramatic increase in uptick in interest for batteries produced in the U.S.,” Mr. Jensen said in an interview.

The future of European auto manufacturing is at stake, particularly for German companies. Mercedes-Benz, BMW and Volkswagen have already lost market share in China to local automakers like BYD. Chinese automakers, including BYD and SAIC, are also making inroads in Europe. Selling cars under the British brand MG, SAIC has amassed 5 percent of the European electric vehicle market, putting it ahead of Toyota and Ford in that fast-growing segment.

European carmakers are frantically trying to build the supply chains they need to churn out electric vehicles.

In France, President Emmanuel Macron wants to convert a northern region where factory jobs have been in decline into a hub of battery production.

On Tuesday, Automotive Cells Company, a joint venture between Stellantis, Mercedes-Benz and TotalEnergies, inaugurated a factory in Billy-Berclau Douvrin, France, that aims to produce 300,000 electric batteries annually by the end of 2024. A.C.C. also plans to invest a total of 7.3 billion euros, or $7.8 billion, in Europe, including opening factories in Germany and in Italy, a deal sealed with 1.3 billion euros in public aid.

In Salzgitter, Germany, some 25 miles from Volkswagen’s headquarters, steel beams tower above concrete foundations as excavators and dump trucks hum nearby. In a matter of months, the outlines of a battery factory have risen out of a field.

Volkswagen hopes to have battery-making machines installed before the end of the summer. By 2025, the automaker aims to produce battery cells for up to 500,000 electric vehicles a year — a timeline that the company said was possible only because the factory was being built on land it owned.

Volkswagen is also building a factory in Ontario, but the company made the decision to do so only after the Canadian government matched U.S. incentives.

In Guben, a small city on Germany’s border with Poland, Rock Tech Lithium, a Canadian company, is building a plant to process lithium ore. Mercedes has an agreement with Rock Tech to supply lithium to its battery producers.

These projects won’t reach full production for several years. Recently, the Guben site was an open field. The only construction activity was a truck that dumped loads of crushed rock, making an ear-piercing screech.

Europe has some advantages, including a strong demand for electric cars: About 14 percent of new cars sold in the E.U. in the first three months of this year were battery powered, according to Schmidt Automotive Research, twice as many as in the United States.

But if Europe doesn’t move quickly to aid the battery industry, “you will really lose momentum on the ground versus the North American market,” said Dirk Harbecke, chief executive of Rock Tech.

Chinese battery companies have largely avoided the United States for fear of a political backlash. But Chinese battery firms have announced investments in Europe worth $17.5 billion since 2018, according to the Mercator Institute for China Studies and the Rhodium Group.

Political tension between Western governments and China has put German carmakers in a delicate position. They do not want to be overly dependent on Chinese supplies, but they cannot afford to displease the Chinese government.

BMW, Volkswagen and Volvo plan to buy cells from a factory in Arnstadt, Germany, run by CATL, a Chinese company that is currently the world’s largest maker of electric vehicle batteries.

To balance their reliance on Chinese suppliers, European executives and leaders are keen to work with Northvolt, whose chief executive, Peter Carlsson, oversaw Tesla’s supply chain for more than four years.

Northvolt wants to control all the steps of making batteries, including refining lithium and recycling old cells. That should help Europe achieve supply chain independence and ensure that batteries are produced in the most environmentally responsible way possible, said Ms. Nehrenheim, who is also a member of the Northvolt management board. “We’re de-risking Europe,” she said.

The company develops manufacturing techniques at its complex in Vasteras. Northvolt’s first full-scale factory, at a site in Sweden 125 miles south of the Arctic Circle chosen for its abundant hydropower, is the size of the Pentagon. Northvolt also plans to build a U.S. factory, but has not yet announced a site.

Still, the company is ramping up production and is not among the world’s top 10 battery suppliers, according to SNE Research, a consulting firm. And construction on its Hamburg plant is on hold until E.U. officials approve German subsidies.

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An engineer checks an inverter next to battery banks at GlidePath's Byrd Ranch energy storage facility in Sweeny, Texas, U.S., May 23, 2023. REUTERS/Adrees Latif

Texas battery rush: Oil state's power woes fuel energy storage boom

To increase reliability, Texas lawmakers this week approved increased subsidies for natural gas power facilities. However, the legislation also includes clauses that, according to business associations, could promote investment in battery storage.

REUTERS By Nichola Groom and Laila Kearney, May 31, 2023

May 31 (Reuters) - BlackRock, Korea's SK, Switzerland's UBS and other companies are chasing an investment boom in battery storage plants in Texas, lured by the prospect of earning double-digit returns from the power grid problems plaguing the state, according to project owners, developers and suppliers.

Projects coming online are generating returns of around 20%, compared with single digit returns for solar and wind projects, according to Rhett Bennett, CEO of Black Mountain Energy Storage, one of the top developers in the state.

"Resolving grid issues with utility-scale energy storage is probably the hottest thing out there,” he said.

The rapid expansion of battery storage could help prevent a repeat of the February 2021 ice storm and grid collapse which killed 246 people and left millions of Texans without power for days.

The battery rush also puts the Republican-controlled state at the forefront of President Joe Biden's push to expand renewable energy use.

Reuters drew on previously unreported data and interviewed more than a dozen executives from private equity firms, utility companies and energy storage providers involved in some of the biggest battery storage deals for this report. They described a rush to take advantage of the high returns before they erode.

Power prices in Texas can swing from highs of about $90 per megawatt hour (MWh) on a normal summer day to nearly $3,000 per MWh when demand surges on a day with less wind power, according to a simulation by the federal government's U.S. Energy Information Administration.

That volatility, a product of demand and higher reliance on intermittent wind and solar energy, has fueled a rush to install battery plants that store electricity when it is cheap and abundant and sell when supplies tighten and prices soar.

Texas last year accounted for 31% of new U.S. grid-scale energy storage, according to energy research firm Wood Mackenzie, second only to California which has had a state mandate for battery development for a decade.

While declining, Texas’s share of U.S. grid-scale energy storage capacity will stay the second largest in the country, next only to California where battery development has been state-supported for years.

LEADER IN ENERGY STORAGE

And Texas is expected to account for nearly a quarter of the U.S. grid-scale storage market over the next five years, according to Wood Mackenzie projections shared with Reuters.

Developers and energy traders said locations offering the highest returns -- in strapped areas of the grid -- will become increasingly scarce as more storage comes online and electricity prices stabilize.

Texas lawmakers this week voted to provide new subsidies for natural gas power plants in a bid to shore up reliability. But the legislation also contains provisions that industry groups said could encourage investment in battery storage.

Amid the battery rush, BlackRock acquired developer Jupiter Power from private equity firm EnCap Investments late last year. Korea's SK E&S acquired Key Capture Energy from Vision Ridge Partners in 2021 and UBS bought five Texas projects from Black Mountain last year for a combined 700 megawatts (MW) of energy storage. None of the sales' prices were disclosed.

SK E&S said its acquisition of Key Capture was part of a strategy to invest in U.S. grid resiliency.

"SK E&S views energy storage solutions in Texas and across the U.S. as a core technology that supports a new energy infrastructure system to ensure American homes and businesses have affordable power," the company said in a statement.

UBS and BlackRock declined to comment.

Installed generating capacity in energy storage is forecast by the government to rise over 10 times by 2050 from 2023 as potential investors benefit from new tax credit for the sector under the Inflation Reduction Act of 2022.

U.S. energy storage companies attracted $5.5 billion in investment last year, according to Mercom Capital Group. The U.S. is projected to install 65 gigawatts (GW) of grid storage over the next five years, 15 times the 4 GW added last year, according to Wood Mackenzie, buoyed by a 30% tax credit for energy storage in Biden's Inflation Reduction Act (IRA).

The Electric Reliability Council of Texas (ERCOT), which operates the grid that serves most of the state, has 3.2 GW of energy storage capacity, according to its own data.

The authority said in a statement that more storage was in development. It has pending requests to connect to the grid from plants offering more than 96 GW in storage, according to ERCOT data. ERCOT declined an interview request.

'CLOAK AND DAGGER'

"It's cheaper to build there, the revenue is higher, and the problems are real," said Andrew Waranch, president of Spearmint Energy, which acquired about 1 GW of Texas projects in the last year.

While some investors have focused on specific locations with maximum volatility, more than 80% of the revenue comes from the Ancillary Services Market, which seeks to stabilize power supply across the grid, according to David Miller, vice president of business development at Gridmatic, which uses artificial intelligence to optimize battery use.

Miller said he expects ancillary market prices to "collapse" as more battery storage comes online.

Average energy storage revenue already fell about 18% last year, according to a Gridmatic analysis.

Waranch said battery storage plants coming online in 2025 could take up to eight years to break even compared with four or less for plants that come online in 2023.

The urgency has helped fuel a rush to install projects that can get faster regulatory clearance.

Stem Inc (STEM.N) and other developers said they are focusing on small projects of under 10 MW because they face fewer regulatory requirements.

The diminishing returns have also intensified competition for sites in areas with the wildest wholesale power price fluctuations, industry executives said.

"We want to get maximum volatility," said American Enerpower Chairman Dick Lewis, who scours Texas for plots of land near constrained parts of the grid to develop battery plants. "Placement is very important."

So is timing, said Andrew Tang, vice president of energy storage and optimization at Finland's Wartsila, which has supplied about a third of the Texas battery market.

"There's a little bit of cloak and dagger secrecy," he said. "If they think they've seen a trading opportunity that exists in the marketplace, they don't want to openly brag about it because someone else will jump in and therefore get rid of the arbitrage opportunity," he said.

Chris McKissack, CEO of storage developer GlidePath, said that batteries will likely remain a good bet for a long time -- even if Texas is seeking to bolster traditional forms of energy like natural gas.

"If no new generation is built and all you've got is old generation and load growth, you've got even more volatility," McKissack said. And that, he said, could lead to more opportunity for storage.

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Seaboard: pioneers in power generation in the country…

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

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Image: Germán & Co

Biden shows growing appetite to cross Putin’s red lines

Despite warnings that arming Ukraine will start a world war, President Biden continues to push the Russian leader’s limits — a strategy that brings risk and reward

TWP By John Hudson and Dan Lamothe, June 1, 2023

President Biden and Ukrainian President Volodymyr Zelensky in Kyiv, Ukraine, in February. (Evan Vucci/AP)

President Biden’s decision last month to help Ukraine obtain F-16 fighter jets marked another crossing of a Russian red line that Vladimir Putin has said would transform the war and draw Washington and Moscow into direct conflict.

Despite the Russian leader’s apocalyptic warnings, the United States has gradually agreed to expand Ukraine’s arsenal with Javelin and Stinger missiles, HIMARS rocket launchers, advanced missile defense systems, drones, helicopters, M1 Abrams tanks and, soon, fourth-generation fighter jets.

A key reason for brushing aside Putin’s threats, U.S. officials say, is a dynamic that has held since the opening days of the war: Russia’s president has not followed through on promises to punish the West for providing weapons to Ukraine. His bluffing has given U.S. and European leaders some confidence they can continue doing so without severe consequences — but to what extent remains one of the conflict’s most dangerous uncertainties.

President Biden announced a new $375 million military assistance package for Ukraine during a meeting with Ukrainian President Volodymyr Zelensky on May 21. (Video: Reuters)

“Russia has devalued its red lines so many times by saying certain things would be unacceptable and then doing nothing when they happen,” said Maxim Samorukov, a Russia expert at the Carnegie Endowment for International Peace. “The problem is that we don’t know the actual red line. It’s in one person’s head, and it can change from one day to the next.”

U.S. officials say managing the risk of escalation remains one of the most difficult aspects of the war for Biden and his foreign policy advisers. When deciding what new weapons systems to provide Ukraine, they focus on four key factors, officials said.

“Do they need it? Can they use it? Do we have it? What is the Russian response going to be?” said a senior State Department official. Like others interviewed for this report, this person spoke on the condition of anonymity to discuss sensitive internal deliberations.

The official said Russia’s reluctance to retaliate has influenced the risk calculus of Secretary of State Antony Blinken, a key Biden confidante who has been an influential voice encouraging the administration and U.S. allies to do more to support Ukraine.

“You factor that in your decision-making. We did this — there was no escalation or response — can we do the next thing? We’re constantly weighing those factors and it becomes the hardest judgment call we have to make,” said the official.

Like Blinken, White House national security adviser Jake Sullivan also has viewed the benefits of supplying more lethal weaponry to Ukraine as outweighing the risks of escalation and has worked extensively with European allies on providing F-16s to Ukraine, said a White House official.

The administration has juggled these concerns amid a clamor from Ukrainians and hawks in Congress frustrated by the incremental approach and eager for Biden to move faster in sending more advanced equipment to the battlefield amid Russia’s brutal onslaught.

Russian President Vladimir Putin attends a meeting at the Kremlin in Moscow last week. (Mikhail Klimentyev/AP)

At the outset of Russia’s invasion in February last year, Putin warned that any country that tried to “impede” his forces “must know that the Russian response will be immediate and lead to consequences you have never seen in history.”

As the war has dragged on, the warnings from Putin and his subordinates have only become more bombastic, threatening a nuclear holocaust if Russia faced setbacks on the battlefield.

“If Russia feels its territorial integrity is threatened, we will use all defense methods at our disposal, and this is not a bluff,” Putin said last September.

Dmitry Medvedev, who serves as deputy chairman of Putin’s powerful security council, was more explicit in January. “The defeat of a nuclear power in a conventional war may trigger a nuclear war,” he said.

While Putin has challenged the United States — suspending participation in a critical arms control treaty, imprisoning Wall Street Journal reporter Evan Gershkovich and overseeing a court’s decision to sentence WNBA star Brittney Griner to a nine-year prison term before insisting on a one-for-one trade for a notorious arms merchant — he has not lashed out militarily at Washington or its allies.

But Western officials are cognizant that that doesn’t mean he never will — particularly as the conflict escalates.

On Tuesday, drones struck affluent districts of Moscow in what one Russian politician called the worst attack on the capital since World War II. Ukraine has denied involvement in such strikes within the Russian mainland, and the Biden administration said it neither enables nor encourages Ukrainian attack inside Russia. But Kyiv appears content with Russian civilians experiencing the fears Ukrainians have lived with for more than a year as their population centers have come under relentless Russian missile and drone attacks.

A possible explanation for Putin’s reluctance to hit the West is the diminished state of Russia’s military, according to U.S. officials.

“It would not seem to be in their interest to get into a direct confrontation with NATO right now,” said the senior U.S. official. “They are not well positioned to do so.”

Gen. Mark A. Milley, chairman of the Joint Chiefs of Staff, estimated in a recent interview with Foreign Affairs that Russia has suffered as many as 250,000 dead and wounded since its full-scale invasion began — staggering losses for any conflict.

Putin has replaced them on the battlefield, Milley said, but with reservists who are “poorly led, not well trained, poorly equipped, not well sustained.”

As Russian fatalities have mounted, Putin has recalibrated his war aims, from seizing control of Kyiv and decapitating the government of Ukrainian President Volodymyr Zelensky to controlling and annexing a swath of territory across eastern and southern Ukraine.

Still, U.S. officials remain wary that Russia, home to the world’s largest nuclear arsenal, could escalate in Ukraine or elsewhere. Last year, amid heightened concerns that Russia was considering deploying a nuclear weapon, senior State Department officials privately warned Moscow about the consequences of doing so — messages that were eventually followed by public warnings.

As the Biden administration has weighed such risks, Ukrainian leaders, including Zelensky, have expressed their consternation publicly. The perceived dithering and delay, they’ve claimed, has prolonged the bloodshed by inhibiting Ukraine’s ability to overwhelm the Russian military and force an end to the war.

Republican hawks in Congress, meanwhile, have said the threat of Russian escalation shouldn’t even be a consideration. Rep. Michael McCaul of Texas, chairman of the House Foreign Relations Committee, has called the administration “cowardly” for not sending long-range missile systems known as ATACMS. The weapons have been high on Ukraine’s wish list for almost the entirety of the war.

“Every time the administration has delayed sending Ukraine a critical weapon system, from Stingers to HIMARS to Bradleys, over fears of Russian escalation, they have been proven completely and utterly wrong,” he said earlier this year.

Britain approved the transfer of similar weapons, long-range missiles known as Storm Shadows, in early May.

Ground crews approach a Danish F-16 fighter jet near Vojens, Denmark, on May 25. Denmark is in the process of replacing its F-16 fleet with more advanced F-35s and has committed to training Ukrainian pilots to fly the F-16s. (Bo Amstrup/AFP/Getty Images)

Inside the Biden administration, the Pentagon is considered more cautious than the White House or State Department about sending more sophisticated weaponry to Ukraine, but officials there deny that fear of escalation plays any role in their calculations.

The Defense Department has focused on what Ukraine needs at any given moment, said a senior Pentagon official who defended its role and counsel as Kyiv’s ambitious requests throughout the war have been slow-rolled or turned down. The official cited how the United States has evolved from providing anti-armor missiles such as the Javelin, when it was clear columns of Russian military vehicles would invade, to sending artillery as the war shifted into a bloody duel waged from trenches — and to more recent Western commitments of tanks and F-16 fighter jets.

Before almost any Western arms or equipment can be transferred to the units who will use them, Ukrainian forces first must learn how to operate and maintain what they receive, this person said, praising “how amazing” they’ve been at “standing up what is now a very sophisticated maintenance and sustainment system that did not exist at the beginning of the war.”

In one example, Ukrainian officials for months last year requested the billion-dollar Patriot air defense missile system. U.S. officials held, citing concerns about training, maintenance and cost, but ultimately relented in December after repeated Russian missile barrages targeted Ukrainian civilian infrastructure. One such system donated by the West was damaged after a Russian strike in mid-May, requiring U.S. assistance to repair.

The senior defense official disputed any suggestion that other U.S. agencies are looking to do more to help Ukraine than the Pentagon is. “I think the folks in the Defense Department have a unique understanding of what is practically possible, and how to best support the Ukrainian armed forces in a way that supports them at any given moment on the battlefield,” the official said.

Unquestionably, the Biden administration’s willingness to cross Putin’s red lines has bolstered Ukraine’s ability to defend itself and recapture territory in the east and south. What remains to see, however, is whether Putin will continue to allow the West to defy his threats without consequence.

“Certain red lines exist,” said Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin, “ … but because we don’t have a way to know for sure what they are, that’s what creates risk.”

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Ukrainian troops preparing for battle/Editing by Germán & Co

Drones targeted Russian oil refineries. Moscow is strengthening its front line, but the attackers' identity is unknown.

Intelligence reports suggest enemy forces are advancing ahead of a planned Ukrainian counteroffensive.

Media Editing By Germán & Co, June 1, 2023

According to reports, the Ilyinsky oil refinery in Russia's Krasnodar region was minimally impacted by a possible drone attack. A fire incident occurred at the Afipsky refinery, spreading flames over an area of 1,000 square feet. The regional governor, Veniamin Kondratyev, posits that a drone may have caused the fire, although there were no reported injuries. Regrettably, there has been an increase in drone strikes targeting Russian infrastructure and military installations, which have expanded beyond the confines of the front line. The Russian government has attributed responsibility to Ukraine for these occurrences, and military analysts propose that they may be a component of shaping operations in anticipation of a possible counteroffensive by the forces of Kyiv.

The rise in drone attacks on Russian infrastructure and military targets beyond the front line is worrying. Moscow blames Ukraine, but Kyiv has denied direct involvement in such operations. Military analysts describe the attacks as shaping the stage for a wider counteroffensive by Kyiv's forces. The M1 Abrams tank is a powerful weapon for the U.S., but its complex technology and turbine engine may pose logistical challenges for Ukraine. Drones have been targeting residential buildings in Moscow, including one near a residence of President Vladimir Putin where several were downed. Ukrainian officials denied involvement but expect more strikes. Putin praised Moscow's air defenses but suggested improvements are needed.

Russia is losing the initiative in the Ukraine conflict, say, Western officials. Moscow is reacting to Ukrainian offensives that are setting the battlefield agenda. Russia is reinforcing its defences in Ukraine's east and south. Kyiv claims to be ready for an offensive. The operation will involve multiple brigades with Western-trained soldiers and modern equipment from Ukraine's allies.

Western officials say the nightly drone-and-missile attacks against Ukrainian cities to weaken its air defences and defence capacity has failed. The U.S. has pledged $300 million in military aid to Ukraine, including Patriot munitions, air defence equipment, artillery and tank shells, and mine-clearing systems.

The U.S. has provided $18.7 billion in military equipment from existing stocks and ordered $6 billion in new supplies for Kyiv. The U.S. has given Ukraine over $37.6 billion in security assistance since Russia's invasion. Defense Secretary Lloyd Austin welcomes any support from Japan for Ukraine. Japanese policies prohibit providing lethal weapons to nations at war, so Japan has only given nonlethal aid to Ukraine, such as food rations, helmets, and bulletproof vests.

Western officials claim Russia is using its military to strengthen border areas in response to recent drone attacks and a Ukrainian-backed incursion in Belgorod, Bryansk, and other regions.

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'Henry Kissinger, celebrating his 100th birthday, is as pessimistic as ever'

Le Monde by Alain Frachon,  Published today 

Born on May 27, 1923, the former US secretary of state (1973-1977) and realpolitik advocate is concerned with the spiraling conflict between China and the United States, writes columnist Alain Frachon.

Negotiations on Ukraine should be concluded by the end of the year. But the Chinese-American rivalry may in turn lead to war. With artificial intelligence, the battlefield will be more deadly than ever. We are living in an era similar to that which preceded World War I (1914-1918). These are times without defined rules between the great powers. It is an era in search of strategic norms.

Henry Kissinger is speaking from experience. He turned 100 on May 27. He walks with difficulty, has lost vision in one eye and says he gets tired faster. His voice is less confident, but still deep, with hints of his native Germany. He has been following world affairs since the early 1940s. He is as pessimistic as ever, even more so perhaps than when he was steering American diplomacy from 1968 to 1977. He first served as the head of the National Security Council, at the White House, then as US secretary of State.

Kissinger thinks Xi Jinping would "take a phone call from him" and Vladimir Putin would as well. The Chinese president would do it out of deference to his elders, and his Russian counterpart would do it out of respect for a believer in realpolitik. And Kissinger has things to say. He confided in the journalist Ted Koppel, in a lengthy interview on CBS, and in an eight-hour conversation with the weekly The Economist. This was in April, just before celebrating his 100th birthday.

How will the war in Europe end? Most likely, the Ukrainian army will take back a further portion of the land occupied by the Russians since February 24, 2022. On the other hand, the Russians are unlikely to be driven out of Crimea. "The risk is that both Russia and Ukraine will be dissatisfied," said Kissinger. "It will be a balance of frustration." To find a way out of it, the West needs to use its "imagination" and decide on two things at the same time.

Willingly assertive

The first thing to do is to integrate Ukraine into NATO right away: "If I were speaking to him, I'd tell Putin that it's in his own best interest." Membership of the North Atlantic Treaty Organization will ensure Kyiv's protection, but it will also give a sense of responsibility to an over-armed Ukraine that still lacks strategic experience. The second move will be for the Europeans to imagine a rapprochement with Russia, in order to "stabilize the eastern border" of the Union. "Realistic," really, Dr. Kissinger? With Putin's Russia?

Born in 1923 into a Jewish family from the Bavarian bourgeoisie, Henry Kissinger came to the United States in 1938 with his parents. Thirteen of his relatives and cousins perished in the Holocaust. He has been a Harvard professor, a diplomat, an adviser to the great and always on their side, and an admirable writer and chronicler of his times. He grew up with the memory of his family's tragedy.

He saw the collapse of the Weimar Republic and was aware of the fragility of democracy. He distrusts the idealism of the well-meaning and believes in the balance of power. He implemented normalization with Mao's China and, in 1973, negotiated on the fly between Arabs and Israelis while hostilities were still ongoing.

Willingly assertive when confronted by Ted Koppel, he defended the American bombings of Cambodia and Laos in the name of US "credibility" in the negotiations then underway with Vietnam. In the same way, he justified the United States' association with some of the worst dictatorships of the time as being necessary due to the Cold War. His teacher and friend Hans Morgenthau (1904-1980) had warned him: "The very act of acting destroys our moral integrity." And to what do we owe the enthusiastic imprimatur given to the 2003 invasion of Iraq?

Always borne with humor, Kissinger's brand of pessimism is not running short of fuel, now more than ever. It draws from the degeneration of the American domestic political scene. But his deepest concern is the spiraling conflict that is consuming China and the United States. The United States is convinced that China, having benefited from the international order enacted by the Americans in 1945, now wants to replace it with Chinese-style rules. And China, for its part, is convinced that the Americans intend to prevent it from achieving the dominance justified by its political and economic weight.

The doctor's prescription

"When two powers of this type come face to face," said Kissinger, "it normally ends in armed conflict." The two countries no longer have a guiding principle for managing their conflicts. "We are in the very same type of situation as before WWI."

"Is it possible for China and the United States," asks Kissinger, "to coexist without the permanent threat of war between them?" The answer: "Yes, but success is not guaranteed, and, therefore, we must be militarily strong enough to cope." The doctor's orders? Here again, it is a two-pronged action: support competition with China in all areas that matter strategically, and institutionalize permanent high-level dialog between Beijing and Washington.

The test will be in Taiwan, of course. The mistake the United States must avoid is imagining that a change of regime in Beijing would automatically have a beneficial and stabilizing effect. It would be quite the opposite. The danger that threatens China's leaders is believing that history has a meaning, that the time of decline has come for the United States and, for China, it is the time of leadership. May it be said in Beijing, for so says the venerable centenarian.

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News round-up, May 31, 2023

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Yesterday we reflected on the following: Tuesday's chaos reflections... Is the current state of war is out of control?

The protracted conflict of attrition that both superpowers have been pursuing has proven to be unsuccessful.

The phrase "an eye for an eye, and a tooth for a tooth" is a well-known principle of justice that dates back to ancient times. It suggests that the punishment for a wrongdoing should be proportional to the harm caused by the offense. This concept has been debated and interpreted in various ways throughout history, but it remains a fundamental principle in many legal systems around the world.

The adage "An eye for an eye, and a tooth for a tooth" has its roots in the Code of Hammurabi, a legal code inscribed in the Akkadian language during the reign of King Hammurabi of Babylon between 1792 and 1750 BC. This expression is referenced in the Bible, more precisely in Matthew 5:38.

The military operations conducted by both superpowers, as evidenced by the recent missile strikes launched by Russia on the Ukrainian capital of Kiev and the utilization of drones by Ukraine to target Moscow, indicate that the protracted conflict that both superpowers have been pursuing has not yielded the desired outcome of attrition. The fundamental principle of checks and balances has been eroded, resulting in a feeling of hopelessness and an illogical approach to justice, whereby each action is met with an equivalent and opposing reaction. It is imperative to tackle these concerns and reinstate equilibrium and impartiality in our political structures.

In the context of retributive justice, Mahatma Gandhi famously stated, "An eye for an eye makes the whole world blind," a statement that remains pertinent in contemporary times. The pursuit of vengeance serves to sustain a culture of violence and devastation, resulting in an unceasing pattern of anguish and affliction. Instead, it is imperative that we endeavor to cultivate forgiveness and understanding as a means of attaining enduring peace and harmony in our global community. It is imperative to acknowledge that the experience of anger and resentment can impede our capacity to empathize with others, thereby limiting our ability to understand and relate to their perspectives. By cultivating compassion and empathy, it is possible to break away from this cycle and strive towards a more promising future that benefits all individuals. Let us reflect upon the of Gandhi and opt for the course of forgiveness and comprehension, even when confronted with challenging circumstances.

The topic of food inflation in Europe was addressed yesterday in a comprehensive article published by The New York Times.

Why Are Food Prices So High in Europe?A United Nations index of global food commodity prices, such as wheat, meat and vegetable oil, peaked in March 2022, immediately after Russia’s invasion of Ukraine, which is one of the largest grain producers. The war disrupted grain and oil production in the region and had global impact, too, worsening food crises in parts of East Africa and the Middle East.

This discourse pertains to the continuous drone and missile assaults carried out against non-combatants in Russia and Ukraine. The far-reaching consequences of the ongoing war have exceeded the initial predictions, highlighting the urgent need for a prompt resolution to the conflict in order to restore a state of peace.

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NOW EXCLUSIVE WSJ: Ukraine and Allies Plan Peace Summit Without Russia…

Kyiv has strong European backing for a gathering before NATO meeting in July

Zelensky's peace plan aims to restore Ukraine's control, release prisoners of war, and prosecute war crimes. The proposal suggests addressing nuclear safety and food security, both allegedly jeopardized by Russia's occupation of a nuclear power plant and invasion.

BY BOJAN PANCEVSKI, LAURENCE NORMAN AND JAMES MARSON, MAY 30, 2023

Why Are Food Prices So High in Europe?

Agricultural and energy costs are falling, but basic items remain stubbornly expensive for consumers.

NYT By Eshe Nelson, Reporting from London, Today

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The AES Corporation President Andrés Gluski, Dominican Republic Minister of Industry and Commerce Victor Bisonó, and Rolando González-Bunster, CEO of InterEnergy Group, spoke at the Latin American Cities Conferences panel on "Facilitating Sustainable Investment in Strategic Sectors" on April 12 in Santo Domingo, Dominican Republic.

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Image: President Volodymyr Zelensky of Ukraine/Editing by Germán & Co

NOW EXCLUSIVE WSJ: Ukraine and Allies Plan Peace Summit Without Russia…

Kyiv has strong European backing for a gathering before NATO meeting in July

Zelensky's peace plan aims to restore Ukraine's control, release prisoners of war, and prosecute war crimes. The proposal suggests addressing nuclear safety and food security, both allegedly jeopardized by Russia's occupation of a nuclear power plant and invasion.

BY BOJAN PANCEVSKI, LAURENCE NORMAN AND JAMES MARSON, MAY 30, 2023

Ukrainian President Volodymyr Zelensky’s top adviser told The Wall Street Journal on Tuesday that Ukraine and its allies are planning a summit of global leaders that would exclude Russia, aimed at ending the war on Ukraine’s terms. Photo: The Wall Street Journal

KYIV, Ukraine—Ukraine and its allies are planning a summit of global leaders that would exclude Russia, aimed at garnering support for Kyiv’s terms for ending the war, according to a senior Ukrainian presidential adviser and European diplomats.

Plans for a gathering, while preliminary, have strong support from European leaders including French President Emmanuel Macron who are lobbying for participation by countries that have sided with Russia or declined to take a position on the war.

“We require a unified plan of the responsible civilized world that really wants to live in peace,” said Andriy Yermak, Ukrainian President Volodymyr Zelensky’s chief of staff. Yermak told The Wall Street Journal that direct negotiations with Russia weren’t possible as long as its troops remain in the country. Ukraine won’t compromise on its territorial integrity, he said.

European officials say they are working with Kyiv to recraft Ukraine’s 10-point peace plan in ways that will make it more acceptable to other global powers such as India, Brazil, Saudi Arabia and China.

“The process is not possible without the whole world, including the leaders of the global south,” said Yermak, who is Zelensky’s top adviser.

Kyiv has made a concerted effort in recent months to engage with countries such as China, Brazil and India. Ukraine is ready to talk with all countries and hear their opinions, Yermak said, including representatives of China and Brazil, who visited this month.

Zelensky’s 10-point peace plan calls for restoring Ukraine’s control over its territory, returning prisoners of war and prosecuting war crimes. It also proposes addressing nuclear safety, which it says is compromised by Russia’s occupation of a nuclear power plant, and food security, by protecting grain exports that are hampered by Russia’s invasion.

President Biden and other top leaders from the North Atlantic Treaty Organization would be invited for the meeting, which Western diplomats hope can take place shortly before NATO’s annual summit that starts July 11. That gathering, in Vilnius, Lithuania, will focus on military support for Ukraine and Kyiv’s future relationship with the organization.

Zelensky early this year asked Macron to help him with international outreach to leaders such as China’s Xi Jinping, according to European diplomats. The talks later matured into plans to organize a conference, the people said. Macron has offered to host the conference in Paris, and Denmark and Sweden have also proposed hosting it, these people said.

No clear list of attendees has been established, but European officials have fanned out to capitals of leading world powers in recent weeks, seeking to bring Brazil, India, China and other non-Western countries on board.

One official involved in the discussions said they were hopeful that Saudi Arabia’s Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi would attend, but they were much less sure about Xi.

Modi has at times expressed his concerns about the war. Xi has met with Russian President Vladimir Putin several times since the war started but took more than a year to call Zelensky. Xi made the call after Macron visited him in Beijing. Chinese officials have repeatedly underscored their partnership with Russia and with Putin personally.

Brazilian President Luiz Inácio Lula da Silva earlier this month sent former Foreign Minister Celso Amorim to Kyiv and Moscow for talks, but he didn’t meet with Zelensky in Japan this month when both attended a Group of Seven summit.

A conference would build on Ukraine’s continuing diplomatic outreach to traditional allies of Russia: Zelensky recently traveled to a summit of the Arab League, while his foreign minister, Dmytro Kuleba, has toured African countries.

The Western effort comes as other countries with far closer ties to Russia have sought to take the lead in diplomatic work to end the conflict. Both Brazil and China have sent peace envoys to Moscow and European capitals for discussions on ending the war. Neither country has condemned Russia’s invasion of Ukraine and both have advocated a quick cease-fire, which would leave Russia controlling swaths of Ukraine, for now.

The peace meeting would seek to place Ukraine and its allies back at the center of that international diplomacy. European officials aim to ensure that future talks take Kyiv’s plan as the diplomatic reference point.

“No Russians but everybody else will be welcomed,” a senior European diplomat said of summit planning.

The timing of the conference ahead of the NATO meeting would send a signal to the rest of the world that while Europe and the U.S. will keep supporting Ukraine with arms, they are also seeking diplomatic solutions to a conflict whose economic spillovers have hurt much of the developing world. Western countries have come under fire from rivals including China and Brazil for sending arms to Ukraine, which those countries say is fueling the conflict.

The idea for the conference was initially hatched in a conversation between Macron and Zelensky in Paris in February, European diplomats said, where the French leader pressed his Ukrainian counterpart to accept that there would eventually need to be peace talks with the Kremlin.

Macron raised the issue with Xi during a recent visit to Beijing. The idea was also floated at this month’s meeting of leaders from the Group of Seven advanced democracies conference in Japan, according to U.S. and Ukrainian officials. Zelensky also attended that meeting, as did the leaders of India, Brazil and Indonesia.

On Tuesday, Zelensky spoke with German Chancellor Olaf Scholz. A German statement said the two leaders would stay in close contact “with a view to mobilizing global support for a peace solution.”

Senior Ukrainian officials have repeatedly said they would continue their fight against Russia unless Moscow is prepared to engage with its peace plan, which rejects a temporary cease-fire and calls for Russian forces to be withdrawn before talks start.

Russia has said it is open to peace talks but on the condition that Ukraine effectively recognize the territories it has annexed. U.S. officials have said recently that they believe the likelihood for meaningful diplomacy before the end of the year is low.

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Image: Germán & Co

Cooperate with objective and ethical thinking…

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Why Are Food Prices So High in Europe?

Source: Britain’s Office for National Statistics, Italy’s Industry Ministry and Germany’s Federal Statistical Office By Rebecca Lieberman

Agricultural and energy costs are falling, but basic items remain stubbornly expensive for consumers.

NYT By Eshe Nelson, Reporting from London, Today

It is the most basic of staple food items: sliced white bread. In Britain, the average price of a loaf was 28 percent higher in April, at 1.39 pounds, or $1.72, than it was a year earlier.

In Italy, the price of spaghetti and other pasta, a fixture of the Italian diet, has risen nearly 17 percent from the year before. In Germany, the European Union’s largest economy, cheese prices are nearly 40 percent higher than a year ago, and potatoes cost 14 percent more.

Throughout the European Union, consumer food prices were on average nearly 17 percent higher in April than a year earlier, a slight slowdown from the previous month, which set the fastest pace of growth in over two and a half decades. The situation is worse in Britain than in its Western European neighbors: Food and nonalcoholic drink prices were 19 percent higher, the quickest pace of annual food inflation in more than 45 years. By comparison, the annual rate of U.S. food inflation was 7.7 percent.

The percent increase in staple food prices in the E.U. over the last year

Data as of April 2023

Source: Eurostat By Rebecca Lieberman

Persistent food inflation is squeezing low-income households and troubling European politicians. (In Italy, the government held a meeting this month to discuss soaring pasta prices.)

At the same time, the major costs that go into making food products, including fuel, wheat and other agricultural commodities, have been falling in international markets for much of the past year — raising questions about why food prices for consumers remain so high in Europe. And with rising labor costs and the possibility of profiteering, food prices are unlikely to come down anytime soon. More broadly, rising prices could also put pressure on central banks to keep interest rates high, potentially restraining economic growth.

What is driving up food prices?

Behind the sticker price for a loaf of bread includes the costs for not only key ingredients but also processing, packaging, transport, wages, storage and company markups.

A United Nations index of global food commodity prices, such as wheat, meat and vegetable oil, peaked in March 2022, immediately after Russia’s invasion of Ukraine, which is one of the largest grain producers. The war disrupted grain and oil production in the region and had global impact, too, worsening food crises in parts of East Africa and the Middle East.

But the worst was avoided, in part because of a deal to export grain from Ukraine. European wheat prices have declined about 40 percent since last May. Global vegetable oil prices are down about 50 percent. But there is still a ways to go: The United Nations’ food price index was 34 percent higher in April than its 2019 average.

Sources: Food and Agriculture Organization of the United Nations, Eurostat/ By Karl Russell

Aside from commodity prices, Europe has experienced particularly harsh increases in costs along the food supply chain.

Energy prices soared because the war forced Europe to rapidly replace Russian gas with new supplies, pushing up the costs of food production, transport and storage.

Though wholesale energy prices have fallen back down recently, retailers warn there’s a long lag — perhaps up to a year — before consumers will see the benefits of that because energy contracts were made months before, most likely reflecting those higher prices.

And the tight labor markets in Europe with high job vacancy rates and low levels of unemployment are forcing employers, including food companies, to push up wages to attract workers. This in turn drives up costs for businesses, including in the food sector.

Is profiteering keeping prices high?

Suspicions are growing among consumers, trade unions and some economists that inflation could be kept needlessly high by companies raising prices above their costs to protect profit margins. The European Central Bank said that at the end of last year, corporate profits were contributing to domestic inflation as much as wage growth, but it did not say if any industries had made excessive profits.

Economists at Allianz, the German insurer and asset manager, estimate that 10 to 20 percent of food inflation in Europe can be attributed to profiteering. “There is part of the food price inflation that we see which is not explainable, easily,” said Ludovic Subran, the chief economist at Allianz.

But the lack of detailed data about corporate profits and supply chains has caused a rift in economic opinions.

Some economists and food retailers have pointed fingers at big global food producers, which have sustained double-digit profit margins while raising prices. In April, the Swiss giant Nestlé said it expected its profit margin this year to be about the same as it was last year, about 17 percent, while it reported raising prices almost 10 percent in the first quarter.

Even taking into account expenses like transport and accounting for pricing lags from farms to shelves, Mr. Subran said he would have expected food inflation to come down by now.

In Britain, some economists are telling a different story. Michael Saunders, an economist at Oxford Economics and former rate-setter at the Bank of England, said in a note to clients in May that “greedflation” was not the culprit. Most of the increase in inflation reflects the higher cost of energy and other commodities, he said.

Rather than rising, total profits for nonfinancial companies in Britain, excluding the oil and gas industry, have fallen over the past year, he said.

Britain’s competition regulator also said that it hadn’t seen evidence of competition concerns in the grocery sector, but that it was stepping up its investigation into “cost of living pressures.”

Have food prices peaked?

Despite well-publicized cuts to milk prices in Britain, food prices in general are unlikely to go down in the near future.

Instead, policymakers are closely watching for a slowdown in the rate of increases.

There are tentative signs that the pace of food inflation — the double-digit increase in annual prices — has reached its pinnacle. In April, the rate fell in the European Union for the first time in two years.

Sources: U.K. Office for National Statistics; Eurostat

By Karl Russell

But the slowdown from here is likely to be gradual.

“It appears to be taking longer for food price pressures to work their way through the system this time than we had expected,” Andrew Bailey, the governor of the Bank of England, said this month.

Across the continent, some governments are intervening by capping prices on food essentials, rather than waiting for the economic debates about corporate profiteering to play out. In France, the government is pushing an “anti-inflation quarter,” asking food retailers to cut prices on some products until June. But the finance minister, Bruno Le Maire, said this month that he wanted food producers to contribute more to the effort, warning they could face tax penalties to recover any margins unfairly made at the expense of consumers if they refuse to return to negotiations.

These efforts may help some shoppers, but on the whole there is little to comfort Europeans. Food prices are unlikely to decline — it’s likely only that the pace of increases will slow later this year.

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Image: REUTERS/Bridget Bennett

US solar, storage builders dash west in major test for grids

Rising solar and wind penetration increases the demand for storage and most new solar applications include batteries. Combined, solar and storage accounted for over 80% of new applications.

Reuters By Neil Ford, May 25, 2023

The latest U.S. grid connection (interconnection) data highlights the soaring demand for renewable energy projects as federal and state authorities race towards decarbonisation goals.

Annual grid connection applications hiked by 40% in 2022 to over 700 GW as demand for solar and storage projects soared, the Lawrence Berkeley National Laboratory (Berkeley Lab) said in its annual grid connection report.

In an emerging trend, the West region outside California’s CAISO network saw the fastest growth as project applications jumped 306 GW to leave 597 GW of capacity in the queue. The MISO market in Central U.S. now has the second-largest queue, at 334 GW, surpassing California's CAISO grid and the PJM network in the East.

The rise in applications in the West and MISO outweighed a drop in new applications in CAISO and PJM after the grid operators shelved new applications to tackle a backlog of projects.

CHART: Power capacity in U.S. grid connection queues

Source: Berkeley Lab, April 2023

The Biden administration's Inflation Reduction Act has boosted the economics of renewable energy nationwide, offering tax credits for solar and wind projects and for the first time, stand-alone energy storage.

Some developers have turned their attention to the West while CAISO and PJM reduce their backlogs, but the West also offers strong solar and wind resources along with good land availability and growing power demand is combining with rising renewable energy targets as states and utilities look to decarbonise their power networks.

California, Oregon, Washington, Nevada, Colorado and New Mexico have raised state renewable portfolio standards (RPS) or set out 100% clean energy targets over the last few years, Aaron Vander Vorst, Head of Growth Strategy and transmission at operator Enel North America, told Reuters Events. A large international developer, Enel is developing solar, wind and storage projects across the West.

Utilities such as Bonneville Power Administration (BPA), Arizona Public Service (APS) and PacifiCorp have set decarbonization targets and are issuing requests for proposals for renewable energy that are driving demand, Joseph Rand, Energy Policy Researcher at Lawrence Berkeley Lab, said. These targets will continue to support demand going forward, he said.

The regional utilities manage grid connections in the non-ISO West and the surge in applications will severely test their ability to process applications efficiently and avoid withdrawals that disrupt other projects in the queue.

Nationwide, grid connection delays are growing, Berkeley Lab warned in its report. Much of the capacity will not be built and a growing number of developers are withdrawing applications at a later stage, it said.

Power needs

Across the U.S., 350 GW of solar projects and 202 GW of storage entered grid connection queues last year, the data from Berkeley Lab shows.

Rising solar and wind penetration increases the demand for storage and most new solar applications include batteries. Combined, solar and storage accounted for over 80% of new applications.

In some regions, rising population levels and growing economic activity is supporting demand for renewable energy. In the Salt River Project (SRP) service area in central Arizona, rising power demand combined with a push to reduce carbon emissions is driving up grid connection applications, SRP Director of Resource Planning Grant Smedley told Reuters Events.

SRP predicts peak electricity demand will grow by 1.2 GW between 2023 and 2025, a rise of 16%, due to population growth around the city of Phoenix. SRP is a not-for-profit organization that provides power to 2 million people.

Some of the new projects in the West lie on federal land, where the Biden administration is looking to accelerate deployment. The Interior Department aims to permit 25 GW of renewable energy on federal lands by 2025 and by March 2023 it had approved 8.2 GW of projects, mostly solar.

Developers may also be attracted by lower deposit requirements from some of the utility-owned transmission operators, Vander Vorst said.

"Any transmission company still following [the Federal Energy Regulatory Commission’s] original tariff rules will have lower deposit requirements than regions which have reformed their rules to discourage high volumes of [grid connection] requests," he noted.

California's power demand is set to hike on the back of ambitious climate objectives. Some developers are looking to export into CAISO but transmission capacity is now largely occupied and there are additional regulatory barriers to cross networks, Vander Vorst said.

Enel is among a group of stakeholders advocating a regional transmission operator (RTO) that spans the whole of the West, including California.

A Western RTO would “reduce barriers to effectively sharing power across the region” and encourage more proactive and cost-effective expansion of the transmission system, Vander Vorst said. A reform bill to create a regional RTO has been tabled in the California legislature but it requires approval by lawmakers and it will take years for any reforms to be fully implemented.

Growing queues

As applications surge across the U.S., the average time from connection request to plant operations rose to around five years in 2022, Berkeley Lab said.

The time from connection request to connection approval varied widely across the non-ISO West, but the average was in line with the national average at around three years, the data showed.

CHART: U.S. grid connection approval times, by market

IR = Interconnection Request IA = Interconnection Approval Source: Berkeley Lab, April 2023

Longer timelines increase project costs. Grid connection costs and project withdrawals are highest in congested grids such as the expansive PJM network, where costs for active projects in the queue have grown eightfold since 2019, Berkeley Lab said in a separate study published in January.

Reforms to application processing are critical to reduce queues going forward. Southwest Power Pool (SPP) is leading efforts to reduce approval times by assessing projects in groups, and this could soon be rolled out by other network operators under new rules proposed by the FERC.

Developers need access to grid connection data to assess project risks and FERC is also considering imposing a two-tier process to filter out speculative requests. Developers would gain access to preliminary data before filing a formal grid connection request.

Arizona’s SRP has already found that the ‘first come, first served’ grid connection process has led to a "multitude of speculative [grid connection] requests," lengthening the timeline required to conduct grid connection studies, Smedley said.

This is creating a feedback loop where developers often submit speculative grid connection requests to get prospective projects in the queue in an attempt to meet potential future timelines, he said.

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An engineer checks an inverter next to battery banks at GlidePath's Byrd Ranch energy storage facility in Sweeny, Texas, U.S., May 23, 2023. REUTERS/Adrees Latif

Texas battery rush: Oil state's power woes fuel energy storage boom

To increase reliability, Texas lawmakers this week approved increased subsidies for natural gas power facilities. However, the legislation also includes clauses that, according to business associations, could promote investment in battery storage.

REUTERS By Nichola Groom and Laila Kearney, May 31, 2023

May 31 (Reuters) - BlackRock, Korea's SK, Switzerland's UBS and other companies are chasing an investment boom in battery storage plants in Texas, lured by the prospect of earning double-digit returns from the power grid problems plaguing the state, according to project owners, developers and suppliers.

Projects coming online are generating returns of around 20%, compared with single digit returns for solar and wind projects, according to Rhett Bennett, CEO of Black Mountain Energy Storage, one of the top developers in the state.

"Resolving grid issues with utility-scale energy storage is probably the hottest thing out there,” he said.

The rapid expansion of battery storage could help prevent a repeat of the February 2021 ice storm and grid collapse which killed 246 people and left millions of Texans without power for days.

The battery rush also puts the Republican-controlled state at the forefront of President Joe Biden's push to expand renewable energy use.

Reuters drew on previously unreported data and interviewed more than a dozen executives from private equity firms, utility companies and energy storage providers involved in some of the biggest battery storage deals for this report. They described a rush to take advantage of the high returns before they erode.

Power prices in Texas can swing from highs of about $90 per megawatt hour (MWh) on a normal summer day to nearly $3,000 per MWh when demand surges on a day with less wind power, according to a simulation by the federal government's U.S. Energy Information Administration.

That volatility, a product of demand and higher reliance on intermittent wind and solar energy, has fueled a rush to install battery plants that store electricity when it is cheap and abundant and sell when supplies tighten and prices soar.

Texas last year accounted for 31% of new U.S. grid-scale energy storage, according to energy research firm Wood Mackenzie, second only to California which has had a state mandate for battery development for a decade.

While declining, Texas’s share of U.S. grid-scale energy storage capacity will stay the second largest in the country, next only to California where battery development has been state-supported for years.

LEADER IN ENERGY STORAGE

And Texas is expected to account for nearly a quarter of the U.S. grid-scale storage market over the next five years, according to Wood Mackenzie projections shared with Reuters.

Developers and energy traders said locations offering the highest returns -- in strapped areas of the grid -- will become increasingly scarce as more storage comes online and electricity prices stabilize.

Texas lawmakers this week voted to provide new subsidies for natural gas power plants in a bid to shore up reliability. But the legislation also contains provisions that industry groups said could encourage investment in battery storage.

Amid the battery rush, BlackRock acquired developer Jupiter Power from private equity firm EnCap Investments late last year. Korea's SK E&S acquired Key Capture Energy from Vision Ridge Partners in 2021 and UBS bought five Texas projects from Black Mountain last year for a combined 700 megawatts (MW) of energy storage. None of the sales' prices were disclosed.

SK E&S said its acquisition of Key Capture was part of a strategy to invest in U.S. grid resiliency.

"SK E&S views energy storage solutions in Texas and across the U.S. as a core technology that supports a new energy infrastructure system to ensure American homes and businesses have affordable power," the company said in a statement.

UBS and BlackRock declined to comment.

Installed generating capacity in energy storage is forecast by the government to rise over 10 times by 2050 from 2023 as potential investors benefit from new tax credit for the sector under the Inflation Reduction Act of 2022.

U.S. energy storage companies attracted $5.5 billion in investment last year, according to Mercom Capital Group. The U.S. is projected to install 65 gigawatts (GW) of grid storage over the next five years, 15 times the 4 GW added last year, according to Wood Mackenzie, buoyed by a 30% tax credit for energy storage in Biden's Inflation Reduction Act (IRA).

The Electric Reliability Council of Texas (ERCOT), which operates the grid that serves most of the state, has 3.2 GW of energy storage capacity, according to its own data.

The authority said in a statement that more storage was in development. It has pending requests to connect to the grid from plants offering more than 96 GW in storage, according to ERCOT data. ERCOT declined an interview request.

'CLOAK AND DAGGER'

"It's cheaper to build there, the revenue is higher, and the problems are real," said Andrew Waranch, president of Spearmint Energy, which acquired about 1 GW of Texas projects in the last year.

While some investors have focused on specific locations with maximum volatility, more than 80% of the revenue comes from the Ancillary Services Market, which seeks to stabilize power supply across the grid, according to David Miller, vice president of business development at Gridmatic, which uses artificial intelligence to optimize battery use.

Miller said he expects ancillary market prices to "collapse" as more battery storage comes online.

Average energy storage revenue already fell about 18% last year, according to a Gridmatic analysis.

Waranch said battery storage plants coming online in 2025 could take up to eight years to break even compared with four or less for plants that come online in 2023.

The urgency has helped fuel a rush to install projects that can get faster regulatory clearance.

Stem Inc (STEM.N) and other developers said they are focusing on small projects of under 10 MW because they face fewer regulatory requirements.

The diminishing returns have also intensified competition for sites in areas with the wildest wholesale power price fluctuations, industry executives said.

"We want to get maximum volatility," said American Enerpower Chairman Dick Lewis, who scours Texas for plots of land near constrained parts of the grid to develop battery plants. "Placement is very important."

So is timing, said Andrew Tang, vice president of energy storage and optimization at Finland's Wartsila, which has supplied about a third of the Texas battery market.

"There's a little bit of cloak and dagger secrecy," he said. "If they think they've seen a trading opportunity that exists in the marketplace, they don't want to openly brag about it because someone else will jump in and therefore get rid of the arbitrage opportunity," he said.

Chris McKissack, CEO of storage developer GlidePath, said that batteries will likely remain a good bet for a long time -- even if Texas is seeking to bolster traditional forms of energy like natural gas.

"If no new generation is built and all you've got is old generation and load growth, you've got even more volatility," McKissack said. And that, he said, could lead to more opportunity for storage.

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Punishment: MS-13 and Barrio 18 gang members arrive at the new Terrorist Confinement Centre in Tecoluca, El Salvador, 25 February 2023/ Press Secretary of the Presidency of El Salvador · Handout · Anadolu/The photograph has undergone a process of black and white conversion and refocusing, carried out by Germán & Co.

The social media president who ‘cleansed’ the judiciary and implemented mass incarceration

El Salvador run by ‘the world’s coolest dictator’

Technolibertarians see El Salvador as paradise, but Central America’s smallest state locks up more people than anywhere else on earth and its young president, Nayib Bukele, is ever more authoritarian.

Le Monde Diplomatique by Anne-Dominique Correa, TODAY

Agroup of tourists in baseball caps and colourful Hawaiian shorts wandered the sandy alleys of El Zonte, a surf spot an hour from the capital, San Salvador. They spoke English with American, Australian and German accents. They used the smartest new smartphones to pay for coconuts and pupusas (thick tortillas filled with cheese and beans) with Bitcoin using a QR code. Then, with exotic cocktails in hand, they took selfies as the sun went down, marvelling at tiny hatchling turtles crawling clumsily down the beach toward the sea.

El Zonte has been experimenting with Bitcoin for two years, earning it the nickname ‘Bitcoin Beach.’ In June 2021 El Salvador’s President Nayib Bukele declared it legal tender, a world first, though Bitcoin lacks some key properties of a currency (1). These foreign visitors had made a special trip to El Zonte during the Adopting Bitcoin conference held in San Salvador in mid-November 2022. Some had not bought a ticket home yet. ‘I’m thinking of moving here,’ said Jesse Shrader, co-founder of Amboss, a US startup. ‘With the collapse of FTX [the second largest cryptocurrency platform, on 11 November], the US may start regulating. There’s more freedom here.’

Since adopting Bitcoin, El Salvador has become the destination of choice for technolibertarians, who see this decentralised asset as laying the foundations for their utopia. ‘Many tech-savvy people, content creators, influencers and digital nomads have moved here,’ said Jeremy, who served in the US military and recently settled in El Salvador (he requested anonymity). Soon after arriving, he set up a business to help members of the new diaspora meet administrative requirements. ‘Most come from countries like Canada, New Zealand, Australia, the US, Belgium, the Netherlands or Denmark,’ he said at his apartment in an upscale neighbourhood of San Salvador. ‘These are countries where people that lived there thought that they were living in a more liberal democracy. But after the restrictions around the pandemic, they realised probably for the first time how powerful and restrictive the state was in their day-to-day life… They immediately began peeking over the fence to see if the grass was a little bit greener somewhere else.’

‘Bitcoin City’

Bukele, a member of tech-savvy Generation Y, is fulfilling all their fantasies. In November 2021 he announced ‘Bitcoin City’, which will be built at the foot of the Conchagua volcano in the east of the country. ‘When Alexander the Great conquered the world, he created his Alexandrias,’ he announced from the podium that he had mounted to AC/DC’s You Shook Me All Night Long. ‘For Bitcoin to spread worldwide, we must build the first [Bitcoin] Alexandria here in El Salvador.’ Construction costs will be funded by issuing $1bn in crypto-backed bonds: ‘volcano bonds.’ Crypto-mining activities will be powered by geothermal energy from the volcano. VAT is the only tax that will be levied. ‘A heaven for freedom,’ Jeremy reckoned.

For now, however, only Bitcoin enthusiasts are truly benefiting from this paradise. Beyond El Zonte, the country seems more like a huge prison. On 26 March 2022, following the apparent breakdown of a truce between El Salvador’s warring gangs and the government, the country experienced its bloodiest day in two decades: over 60 people were killed by the MS-13 and Barrio 18 gangs. The next day, Bukele declared a state of emergency. Since then, police have patrolled the streets and entire towns have been cordoned off by the army.

More than 60,000 people have been imprisoned, meaning El Salvador has the highest incarceration rate in the world. According to World Prison Brief, using UN data, El Salvador currently holds 1,086 people per 100,000 inhabitants in prison. An article in La Prensa Gráfica, El Salvador’s biggest newspaper, drawing on data from the Supreme Court of Justice (CSJ), suggests an even higher rate of 1,220 detainees per 100,000. To deal with this exploding prison population, the government opened a hastily built ‘terrorist confinement centre’ in February for an additional 40,000 prisoners.

So is Bukele’s El Salvador symbolised by a futuristic city a stone’s throw from a prison? ‘Bukele’s outer shell is painted in very bright, fresh, trendy colours,’ says opposition member of parliament Claudia Ortiz of the Vamos (Let’s Go) party. ‘But it hides an authoritarian core that recalls our recent history.’ From 1980 to 1992, a civil war that was characterised by violence perpetrated by the armed forces claimed around 75,000 lives. A further 8,000 disappeared.

When he was elected in February 2019, Bukele embodied hope of renewal. ‘The country can finally turn the page on the postwar period and embrace the future,’ he declared on election night, after winning 53% of the vote in the first round under the banner of the conservative Grand Alliance for National Unity (GANA). At 37 he had broken away from the bipartisanship of the rightwing Nationalist Republican Alliance (ARENA) and the leftwing Farabundo Martí National Liberation Front (FMLN), which had been in power since the end of the civil war but had failed to eradicate poverty and violence.

The world, the new world, is no longer in this General Assembly, but in the place where this photo will go. Believe me, many more people will see this selfie than will hear this speechNayib Bukele

Although Bukele had risen to power within the ranks of the FMLN, in particular as mayor of San Salvador (2015-19), the press portrayed him as an outsider (The New York Times, 3 February 2019), an ‘anti-system candidate’ (La Croix, 2 February 2019) and even ‘a new Macron’ (Le Soir, 5 February 2019). Seduced by his tech entrepreneur appearance, his youth and his ‘flair for social media,’ the Washington Post hailed his ‘non-ideological’ position and ‘refreshing’ ideas (5 February 2019).

But sometimes the media bubble has to burst. ‘We’ve never experienced so many democratic rollbacks’ since the peace accords of 1992, says Ortiz. As soon as he took office, Bukele fired FMLN-affiliated civil servants via Twitter. Then, on 8 February 2020, he marched into the Legislative Assembly with a police and military escort to force opposition lawmakers, then still in the majority, to approve a $109m loan to fund his security plans. The Legislative Assembly may have been saved that day through divine intervention; after seeming to pray, Bukele left the chamber and went to greet the crowd outside. ‘God said to me: patience, patience, patience,’ he told them. ‘We’ll get rid of [opposition politicians] democratically’ (2).

A few months later, he did: on 28 February 2021 his new party Nuevas Ideas (New Ideas), in alliance with GANA, won an absolute parliamentary majority, enabling him to steamroller all obstacles. On 1 May 2021 Bukele ‘cleansed’ the judiciary (3). The Legislative Assembly removed the judges from the CSJ’s constitutional chamber, which had stopped him using the army to arrest people for breaching the pandemic lockdown, and dismissed the attorney general. Then, on 27 September 2021, the assembly passed a law forcing a third of judges and prosecutors to retire. ‘There’s no longer independent justice,’ said Juan Antonio Durán, one of the judges who opposed this decision. He claims he has been intimidated by the government.

‘Assaults on democracy are common’

Since Bukele declared war on the gangs, ‘these assaults on democracy have become common,’ says Ortiz, one of the few lawmakers to vote against the tenth renewal of the state of emergency this January. According to the NGO Cristosal, which has recorded 4,071 complaints of abuse of power since 26 March, thousands of innocent people have been detained. ‘Most arrests are arbitrary. There’s been no prior investigation or arrest warrant,’ according to Abrego Verdugo, director of the NGO’s strategic litigation programme. According to the testimonies they’ve collected, having a tattoo (a sign of gang connections) or a criminal record, living in a slum run by gangs, or simply an anonymous tip-off from a neighbour can get someone arrested. This wave of arrests has coincided with an unusual increase in the number of disappearances.

In San Salvador, detainees’ families keep vigil outside prisons and government buildings, hoping for news of loved ones. Marta, who was waiting with her 15-year-old daughter, asked to remain anonymous for fear of reprisals. Wearing a mask and hoodie, Marta stood by the fence round the building of the prosecutor’s office, staring at the ground. Her 22-year-old son was arrested on 28 May last year while on his daily run transporting fruit and vegetables to vendors in his village of San Vicente, about 100km from the capital. Like most detainees, he was accused of being a gang member and is being held in Izalco prison, 60km west of San Salvador.

His mother suspects the arrest was due to a vendetta. ‘My son isn’t a bad boy,’ she insists. When the youngest of her four daughters was raped by a pandillero (gang member) a few years ago, Marta pressed charges and the perpetrator was imprisoned. Now she’s convinced he denounced her son in return for a reduced sentence. But even if she can prove this, her son’s fate is uncertain. The overwhelmed justice system is mishandling cases. ‘Sometimes public defenders deal with over 300 cases and have just five minutes to make a statement,’ says Verdugo. ‘Hearings happen en masse. The largest judged 600 prisoners in one go.’ Marta’s son’s court-appointed lawyer had scheduled a meeting with her today, but didn’t show up. ‘Sometimes he comes. Sometimes he doesn’t.’ As for her son, ‘we don’t even know if he’s alive or dead.’

‘In a war there are always innocent victims and collateral damage,’ Salvadoran vice-president Félix Ulloa told Prensa Gráfica in July 2022. Meanwhile, Bukele appears fixated on the homicide rate. If it goes down, he claims a success. ‘We’re about to conclude the safest month in our history, in the safest year of our history,’ he boasted on Twitter on 31 December, announcing 2022’s 50% drop in homicides (495) compared to the previous year (1,147) (4). He’s even threatened to make prison conditions still harsher. ‘If prisoners provoke a crime spike, we’ll withdraw food from prisons,’ he announced on Twitter in April 2022. On 1 November, the traditional Day of the Dead, Bukele forced inmates to take hammers to the graves of former gang members. Anyone criticising such measures is accused of defending the gangs.

Highest approval rating

Despite all this, Bukele’s popularity rating remains sky-high. According to the latest Gallup poll (October 2022), he enjoys 86% support, the highest presidential approval rating in Latin America. ‘I’m the coolest dictator in the whole world,’ he joked in September 2021 (5), then added this description to his Twitter bio. In the past, Salvadoran presidents were relatively unknown, but Bukele is seen as an inspiration abroad. In Chile, rightwing parliamentarian Gaspar Rivas declared himself ‘the new Bukele’ when he presented a bill to toughen anti-crime measures in August 2022 (6). In Ecuador in September 2022 the mayor of Guayaquil, Cynthia Viteri, asked President Guillermo Lasso to copy Bukele’s policy to tackle crime. Following Bukele’s lead, Honduras’ president Xiomara Castro declared a state of emergency last November to wage a ‘war against gang extortion’ (7).

What explains Bukele’s popularity? ‘The government successfully sells perceptions,’ says Oscar Ortiz, who was a guerrilla before becoming vice-president of El Salvador under President Sánchez Cerén (FMLN, 2014-19). Aside from the reduction in recorded violence, Bukele has not solved the country’s main problems: El Salvador will have the lowest growth rate in Central America in 2023 (1.6%). Furthermore, extreme poverty rose from 4.6% to 7.8% between 2019 and 2021, and half the population is going hungry (8).

But Bukele is a master of marketing. Before entering politics, he ran a family advertising business, Obermet, which helped organise FMLN campaigns. As president, he has applied his expertise to government propaganda, flooding YouTube with slick videos and bombarding Twitter with viral hashtags. Bukele is not shy about creating a buzz, often putting himself centre-stage. In September 2019 he made headlines by taking a selfie on the podium of the UN General Assembly before his maiden speech. ‘The world, the new world, is no longer in this General Assembly, but in the place where this photo will go,’ he said. ‘Believe me, many more people will see this selfie than will hear this speech’ (9). He was right: the photo went viral worldwide.

‘According to our research, it takes Bukele 12 hours to get a subject trending on social media, while social movements need 501 hours,’ says Amparo Marroquín, a communications studies researcher at the Central American University (UCA). ‘When we want to talk about unjustified arrests, his huge PR machine crushes us.’

However, the Salvadoran president rarely exposes himself to press scrutiny. No member of his party or government responded to my interview requests. ‘Bukele’s like a brand that needs to be protected,’ said Florencia Vilanova, the Salvadoran ambassador to Germany, showing a delegation of German Bitcoiners round El Zonte during the Adopting Bitcoin conference. Bukele prefers to promote that brand to influencers or YouTubers, who rarely ask tough questions. On 5 March 2021, for example, he gave a lengthy interview to Juan Bertheau and Luisito Comunica, whose YouTube channel has more subscribers than the population of El Salvador.

The government’s image obsession appears to orientate its politics. Its new party, Nuevas Ideas, seems like an empty shell: it declares no principles in its statutes, nor has it set out a political programme. ‘Once you take away the spectacle, the fireworks, you realise this government’s not changing anything in the country,’ says Ricardo Castañeda, an economist at the Central American Institute of Fiscal Studies (ICEFI). ‘The adoption of Bitcoin is an excellent illustration of this,’ he added: a measure bound to fail.

On its launch in June 2021 Bukele argued that Bitcoin would promote financial inclusion for non-banked Salvadorans (70% of the population) and lower the cost of money transfers from the Salvadoran diaspora in the US (23% of GDP in 2021). Nearly two years later, there’s little sign of these benefits. In the capital, almost no businesses accept cryptocurrency payments and only 2% of transfers from the diaspora use it. Now, due to the fall in Bitcoin’s value, public funds that the government held in the cryptocurrency (an unverifiable amount of $107m according to Nayibtracker.com) have lost more than half their original value. ‘You might as well entrust the country’s economic policy to a casino,’ says Castañeda.

In an interview with Tucker Carlson on Fox News last November, President Bukele acknowledged that adopting Bitcoin amounted to a massive rebranding exercise. But El Salvador isn’t a consumer brand: so how long will the illusion last?

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Seaboard: pioneers in power generation in the country…

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

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Why Are Food Prices So High in Europe?

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Source: Britain’s Office for National Statistics, Italy’s Industry Ministry and Germany’s Federal Statistical Office By Rebecca Lieberman

Agricultural and energy costs are falling, but basic items remain stubbornly expensive for consumers.

NYT BY ESHE NELSON, REPORTING FROM LONDON, TODAY

It is the most basic of staple food items: sliced white bread. In Britain, the average price of a loaf was 28 percent higher in April, at 1.39 pounds, or $1.72, than it was a year earlier.

In Italy, the price of spaghetti and other pasta, a fixture of the Italian diet, has risen nearly 17 percent from the year before. In Germany, the European Union’s largest economy, cheese prices are nearly 40 percent higher than a year ago, and potatoes cost 14 percent more.

Throughout the European Union, consumer food prices were on average nearly 17 percent higher in April than a year earlier, a slight slowdown from the previous month, which set the fastest pace of growth in over two and a half decades. The situation is worse in Britain than in its Western European neighbors: Food and nonalcoholic drink prices were 19 percent higher, the quickest pace of annual food inflation in more than 45 years. By comparison, the annual rate of U.S. food inflation was 7.7 percent.

The percent increase in staple food prices in the E.U. over the last year

DATA AS OF APRIL 2023

Source: Eurostat By Rebecca Lieberman

Persistent food inflation is squeezing low-income households and troubling European politicians. (In Italy, the government held a meeting this month to discuss soaring pasta prices.)

At the same time, the major costs that go into making food products, including fuel, wheat and other agricultural commodities, have been falling in international markets for much of the past year — raising questions about why food prices for consumers remain so high in Europe. And with rising labor costs and the possibility of profiteering, food prices are unlikely to come down anytime soon. More broadly, rising prices could also put pressure on central banks to keep interest rates high, potentially restraining economic growth.

What is driving up food prices?

Behind the sticker price for a loaf of bread includes the costs for not only key ingredients but also processing, packaging, transport, wages, storage and company markups.

A United Nations index of global food commodity prices, such as wheat, meat and vegetable oil, peaked in March 2022, immediately after Russia’s invasion of Ukraine, which is one of the largest grain producers. The war disrupted grain and oil production in the region and had global impact, too, worsening food crises in parts of East Africa and the Middle East.

But the worst was avoided, in part because of a deal to export grain from Ukraine. European wheat prices have declined about 40 percent since last May. Global vegetable oil prices are down about 50 percent. But there is still a ways to go: The United Nations’ food price index was 34 percent higher in April than its 2019 average.

Sources: Food and Agriculture Organization of the United Nations, Eurostat/ By Karl Russell

Aside from commodity prices, Europe has experienced particularly harsh increases in costs along the food supply chain.

Energy prices soared because the war forced Europe to rapidly replace Russian gas with new supplies, pushing up the costs of food production, transport and storage.

Though wholesale energy prices have fallen back down recently, retailers warn there’s a long lag — perhaps up to a year — before consumers will see the benefits of that because energy contracts were made months before, most likely reflecting those higher prices.

And the tight labor markets in Europe with high job vacancy rates and low levels of unemployment are forcing employers, including food companies, to push up wages to attract workers. This in turn drives up costs for businesses, including in the food sector.

Is profiteering keeping prices high?

Suspicions are growing among consumers, trade unions and some economists that inflation could be kept needlessly high by companies raising prices above their costs to protect profit margins. The European Central Bank said that at the end of last year, corporate profits were contributing to domestic inflation as much as wage growth, but it did not say if any industries had made excessive profits.

Economists at Allianz, the German insurer and asset manager, estimate that 10 to 20 percent of food inflation in Europe can be attributed to profiteering. “There is part of the food price inflation that we see which is not explainable, easily,” said Ludovic Subran, the chief economist at Allianz.

But the lack of detailed data about corporate profits and supply chains has caused a rift in economic opinions.

Some economists and food retailers have pointed fingers at big global food producers, which have sustained double-digit profit margins while raising prices. In April, the Swiss giant Nestlé said it expected its profit margin this year to be about the same as it was last year, about 17 percent, while it reported raising prices almost 10 percent in the first quarter.

Even taking into account expenses like transport and accounting for pricing lags from farms to shelves, Mr. Subran said he would have expected food inflation to come down by now.

In Britain, some economists are telling a different story. Michael Saunders, an economist at Oxford Economics and former rate-setter at the Bank of England, said in a note to clients in May that “greedflation” was not the culprit. Most of the increase in inflation reflects the higher cost of energy and other commodities, he said.

Rather than rising, total profits for nonfinancial companies in Britain, excluding the oil and gas industry, have fallen over the past year, he said.

Britain’s competition regulator also said that it hadn’t seen evidence of competition concerns in the grocery sector, but that it was stepping up its investigation into “cost of living pressures.”

Have food prices peaked?

Despite well-publicized cuts to milk prices in Britain, food prices in general are unlikely to go down in the near future.

Instead, policymakers are closely watching for a slowdown in the rate of increases.

There are tentative signs that the pace of food inflation — the double-digit increase in annual prices — has reached its pinnacle. In April, the rate fell in the European Union for the first time in two years.

Sources: U.K. Office for National Statistics; Eurostat

By Karl Russell

But the slowdown from here is likely to be gradual.

“It appears to be taking longer for food price pressures to work their way through the system this time than we had expected,” Andrew Bailey, the governor of the Bank of England, said this month.

Across the continent, some governments are intervening by capping prices on food essentials, rather than waiting for the economic debates about corporate profiteering to play out. In France, the government is pushing an “anti-inflation quarter,” asking food retailers to cut prices on some products until June. But the finance minister, Bruno Le Maire, said this month that he wanted food producers to contribute more to the effort, warning they could face tax penalties to recover any margins unfairly made at the expense of consumers if they refuse to return to negotiations.

These efforts may help some shoppers, but on the whole there is little to comfort Europeans. Food prices are unlikely to decline — it’s likely only that the pace of increases will slow later this yea

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NOW EXCLUSIVE WSJ: Ukraine and Allies Plan Peace Summit Without Russia…

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Yesterday we reflected on the following: Tuesday's chaos reflections... Is the current state of war is out of control?

The protracted conflict of attrition that both superpowers have been pursuing has proven to be unsuccessful.

The phrase "an eye for an eye, and a tooth for a tooth" is a well-known principle of justice that dates back to ancient times. It suggests that the punishment for a wrongdoing should be proportional to the harm caused by the offense. This concept has been debated and interpreted in various ways throughout history, but it remains a fundamental principle in many legal systems around the world.

The adage "An eye for an eye, and a tooth for a tooth" has its roots in the Code of Hammurabi, a legal code inscribed in the Akkadian language during the reign of King Hammurabi of Babylon between 1792 and 1750 BC. This expression is referenced in the Bible, more precisely in Matthew 5:38.

The military operations conducted by both superpowers, as evidenced by the recent missile strikes launched by Russia on the Ukrainian capital of Kiev and the utilization of drones by Ukraine to target Moscow, indicate that the protracted conflict that both superpowers have been pursuing has not yielded the desired outcome of attrition. The fundamental principle of checks and balances has been eroded, resulting in a feeling of hopelessness and an illogical approach to justice, whereby each action is met with an equivalent and opposing reaction. It is imperative to tackle these concerns and reinstate equilibrium and impartiality in our political structures.

In the context of retributive justice, Mahatma Gandhi famously stated, "An eye for an eye makes the whole world blind," a statement that remains pertinent in contemporary times. The pursuit of vengeance serves to sustain a culture of violence and devastation, resulting in an unceasing pattern of anguish and affliction. Instead, it is imperative that we endeavor to cultivate forgiveness and understanding as a means of attaining enduring peace and harmony in our global community. It is imperative to acknowledge that the experience of anger and resentment can impede our capacity to empathize with others, thereby limiting our ability to understand and relate to their perspectives. By cultivating compassion and empathy, it is possible to break away from this cycle and strive towards a more promising future that benefits all individuals. Let us reflect upon the of Gandhi and opt for the course of forgiveness and comprehension, even when confronted with challenging circumstances.

The topic of food inflation in Europe was addressed yesterday in a comprehensive article published by The New York Times.

Why Are Food Prices So High in Europe?A United Nations index of global food commodity prices, such as wheat, meat and vegetable oil, peaked in March 2022, immediately after Russia’s invasion of Ukraine, which is one of the largest grain producers. The war disrupted grain and oil production in the region and had global impact, too, worsening food crises in parts of East Africa and the Middle East.

This discourse pertains to the continuous drone and missile assaults carried out against non-combatants in Russia and Ukraine. The far-reaching consequences of the ongoing war have exceeded the initial predictions, highlighting the urgent need for a prompt resolution to the conflict in order to restore a state of peace.

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Image: President Volodymyr Zelensky of Ukraine/Editing by Germán & Co

Kyiv has strong European backing for a gathering before NATO meeting in July

Zelensky's peace plan aims to restore Ukraine's control, release prisoners of war, and prosecute war crimes. The proposal suggests addressing nuclear safety and food security, both allegedly jeopardized by Russia's occupation of a nuclear power plant and invasion.

By Bojan Pancevski, Laurence Norman and James Marson, May 30, 2023

Ukrainian President Volodymyr Zelensky’s top adviser told The Wall Street Journal on Tuesday that Ukraine and its allies are planning a summit of global leaders that would exclude Russia, aimed at ending the war on Ukraine’s terms. Photo: The Wall Street Journal

KYIV, Ukraine—Ukraine and its allies are planning a summit of global leaders that would exclude Russia, aimed at garnering support for Kyiv’s terms for ending the war, according to a senior Ukrainian presidential adviser and European diplomats.

Plans for a gathering, while preliminary, have strong support from European leaders including French President Emmanuel Macron who are lobbying for participation by countries that have sided with Russia or declined to take a position on the war.

“We require a unified plan of the responsible civilized world that really wants to live in peace,” said Andriy Yermak, Ukrainian President Volodymyr Zelensky’s chief of staff. Yermak told The Wall Street Journal that direct negotiations with Russia weren’t possible as long as its troops remain in the country. Ukraine won’t compromise on its territorial integrity, he said.

European officials say they are working with Kyiv to recraft Ukraine’s 10-point peace plan in ways that will make it more acceptable to other global powers such as India, Brazil, Saudi Arabia and China.

“The process is not possible without the whole world, including the leaders of the global south,” said Yermak, who is Zelensky’s top adviser.

Kyiv has made a concerted effort in recent months to engage with countries such as China, Brazil and India. Ukraine is ready to talk with all countries and hear their opinions, Yermak said, including representatives of China and Brazil, who visited this month.

Zelensky’s 10-point peace plan calls for restoring Ukraine’s control over its territory, returning prisoners of war and prosecuting war crimes. It also proposes addressing nuclear safety, which it says is compromised by Russia’s occupation of a nuclear power plant, and food security, by protecting grain exports that are hampered by Russia’s invasion.

President Biden and other top leaders from the North Atlantic Treaty Organization would be invited for the meeting, which Western diplomats hope can take place shortly before NATO’s annual summit that starts July 11. That gathering, in Vilnius, Lithuania, will focus on military support for Ukraine and Kyiv’s future relationship with the organization.

Zelensky early this year asked Macron to help him with international outreach to leaders such as China’s Xi Jinping, according to European diplomats. The talks later matured into plans to organize a conference, the people said. Macron has offered to host the conference in Paris, and Denmark and Sweden have also proposed hosting it, these people said.

No clear list of attendees has been established, but European officials have fanned out to capitals of leading world powers in recent weeks, seeking to bring Brazil, India, China and other non-Western countries on board.

One official involved in the discussions said they were hopeful that Saudi Arabia’s Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi would attend, but they were much less sure about Xi.

Modi has at times expressed his concerns about the war. Xi has met with Russian President Vladimir Putin several times since the war started but took more than a year to call Zelensky. Xi made the call after Macron visited him in Beijing. Chinese officials have repeatedly underscored their partnership with Russia and with Putin personally.

Brazilian President Luiz Inácio Lula da Silva earlier this month sent former Foreign Minister Celso Amorim to Kyiv and Moscow for talks, but he didn’t meet with Zelensky in Japan this month when both attended a Group of Seven summit.

A conference would build on Ukraine’s continuing diplomatic outreach to traditional allies of Russia: Zelensky recently traveled to a summit of the Arab League, while his foreign minister, Dmytro Kuleba, has toured African countries.

The Western effort comes as other countries with far closer ties to Russia have sought to take the lead in diplomatic work to end the conflict. Both Brazil and China have sent peace envoys to Moscow and European capitals for discussions on ending the war. Neither country has condemned Russia’s invasion of Ukraine and both have advocated a quick cease-fire, which would leave Russia controlling swaths of Ukraine, for now.

The peace meeting would seek to place Ukraine and its allies back at the center of that international diplomacy. European officials aim to ensure that future talks take Kyiv’s plan as the diplomatic reference point.

“No Russians but everybody else will be welcomed,” a senior European diplomat said of summit planning.

The timing of the conference ahead of the NATO meeting would send a signal to the rest of the world that while Europe and the U.S. will keep supporting Ukraine with arms, they are also seeking diplomatic solutions to a conflict whose economic spillovers have hurt much of the developing world. Western countries have come under fire from rivals including China and Brazil for sending arms to Ukraine, which those countries say is fueling the conflict.

The idea for the conference was initially hatched in a conversation between Macron and Zelensky in Paris in February, European diplomats said, where the French leader pressed his Ukrainian counterpart to accept that there would eventually need to be peace talks with the Kremlin.

Macron raised the issue with Xi during a recent visit to Beijing. The idea was also floated at this month’s meeting of leaders from the Group of Seven advanced democracies conference in Japan, according to U.S. and Ukrainian officials. Zelensky also attended that meeting, as did the leaders of India, Brazil and Indonesia.

On Tuesday, Zelensky spoke with German Chancellor Olaf Scholz. A German statement said the two leaders would stay in close contact “with a view to mobilizing global support for a peace solution.”

Senior Ukrainian officials have repeatedly said they would continue their fight against Russia unless Moscow is prepared to engage with its peace plan, which rejects a temporary cease-fire and calls for Russian forces to be withdrawn before talks start.

Russia has said it is open to peace talks but on the condition that Ukraine effectively recognize the territories it has annexed. U.S. officials have said recently that they believe the likelihood for meaningful diplomacy before the end of the year is low.

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