Mar 31, 2010

Will the Moscow Attacks Help Putin? - Room for Debate Blog -

Will the Moscow Attacks Help Putin? - Room for Debate Blog -
March 29, 2010, 5:20 pm

Will the Moscow Attacks Help Putin?

Moscow terrorismDenis Sinyakov/Reuters Near the Park Kultury metro station in Moscow after the rush hour bombing on Monday. View slide show.

“The terrorists will be destroyed,” Prime Minister Vladimir Putin of Russia vowed on Monday, after two female suicide bombers set off blasts that killed dozens in two Moscow subway stations at rush hour.

It had been six years since the last suicide bombers hit the city’s metro, and suspicion fell on pro-Chechen militants, who carried out the previous explosions.

As president and prime minister, Mr. Putin has been credited with reducing the terrorist violence in recent years after a consolidation of power from 2004 onward. Does this attack call into question the effectiveness of the government’s approach, or will it allow Mr. Putin to exert a stronger hand? What are the factors now at play?

Mar 23, 2010

Oath Keepers and the Age of Treason | Mother Jones

Oath Keepers and the Age of Treason | Mother Jones

Oath Keepers and the Age of Treason

Glenn Beck loves them. Tea Partiers court them. Congressmen listen to them. Meet the fast-growing "patriot" group that's recruiting soldiers to resist the Obama administration.
THE .50 CALIBER Bushmaster bolt action rifle is a serious weapon. The model that Pvt. 1st Class Lee Pray is saving up for has a 2,500-yard range and comes with a Mark IV scope and an easy-load magazine. When the 25-year-old drove me to a mall in Watertown, New York, near the Fort Drum Army base, he brought me to see it in its glass case—he visits it periodically, like a kid coveting something at the toy store. It'll take plenty of military paychecks to cover the $5,600 price tag, but he considers the Bushmaster essential in his preparations to take on the US government when it declares martial law.
His belief that that day is imminent has led Pray to a group called Oath Keepers, one of the fastest-growing "patriot" organizations on the right. Founded last April by Yale-educated lawyer and ex-Ron Paul aide Stewart Rhodes, the group has established itself as a hub in the sprawling anti-Obama movement that includes Tea Partiers, Birthers, and 912ers. Glenn Beck, Lou Dobbs, and Pat Buchanan have all sung its praises, and in December, a grassroots summit it helped organize drew such prominent guests as representatives Phil Gingrey and Paul Broun, both Georgia Republicans.
There are scores of patriot groups, but what makes Oath Keepers unique is that its core membership consists of men and women in uniform, including soldiers, police, and veterans. At regular ceremonies in every state, members reaffirm their official oaths of service, pledging to protect the Constitution—but then they go a step further, vowing to disobey "unconstitutional" orders from what they view as an increasingly tyrannical government.
Pray (who asked me to use his middle name rather than his first) and five fellow soldiers based at Fort Drum take this directive very seriously. In the belief that the government is already turning on its citizens, they are recruiting military buddies, stashing weapons, running drills, and outlining a plan of action. For years, they say, police and military have trained side by side in local anti-terrorism exercises around the nation. In September 2008, the Army began training the 3rd Infantry's 1st Brigade Combat Team to provide humanitarian aid following a domestic disaster or terror attack—and to help with crowd control and civil unrest if need be. (The ACLU has expressed concern about this deployment.) And some of Pray's comrades were guinea pigs for military-grade sonic weapons, only to see them used by Pittsburgh police against protesters last fall.
Most of the men's gripes revolve around policies that began under President Bush but didn't scare them so much at the time. "Too many conservatives relied on Bush's character and didn't pay attention," founder Rhodes told me. "Only now, with Obama, do they worry and see what has been done. I trusted Bush to only go after the terrorists. But what do you think can happen down the road when they say, 'I think you are a threat to the nation?'"
In Pray's estimate, it might not be long (months, perhaps a year) before President Obama finds some pretext—a pandemic, a natural disaster, a terror attack—to impose martial law, ban interstate travel, and begin detaining citizens en masse. One of his fellow Oath Keepers, a former infantryman, advised me to prepare a "bug out" bag with 39 items including gas masks, ammo, and water purification tablets, so that I'd be ready to go "when the shit hits the fan."
When it does, Pray and his buddies plan to go AWOL and make their way to their "fortified bunker"—the home of one comrade's parents in rural Idaho—where they've stocked survival gear, generators, food, and weapons. If it becomes necessary, they say, they will turn those guns against their fellow soldiers.
PRAY AND I DRIVE through a bleak landscape of fallow winter fields and strip malls in his blue Dodge Stratus as Drowning Pool's "Bodies"—a heavy metal song once used to torment Abu Ghraib detainees—plays on the stereo. Clad in an oversize black hoodie that hides his military physique, Pray sports an Army-issue buzz cut and is seriously inked (skulls, smoke, an eagle). His father kicked him out of the house at age 14. Two years later, after working jobs from construction to plumbing—"If it's blue collar, I've done it"—he tried to enlist. It wasn't long after 9/11, and he was hell-bent on revenge. The Army turned him down. Blaming the "THOR" tattooed across his fist, Pray tried to burn it off. On September 11, 2006, he approached the Army again and was accepted.
Now Pray is both a Birther and a Truther. He believes he is following an illegitimate, foreign-born president in a war on terror launched by a government plot—9/11. He admires soldiers like Army reservist Major Stefan Frederick Cook, who volunteered for a deployment last May and then sued to avoid it—claiming that Obama is not a natural-born citizen and is thus unfit for command. Pray himself had been eager to go to Iraq when his own unit deployed last June, but he smashed both knees falling from a crane rig and the injuries kept him stateside. In September, he was demoted from specialist to private first class—he'd been written up for bullshit infractions, he claims, after seeking help for a drinking problem. His job on base involves operating and maintaining heavy machinery; the day before we met, he and his fellow "undeployables" had attached a snowplow to a Humvee, their biggest assignment in a while. He spends idle hours at the now-quiet base researching the New World Order and conspiracies about swine flu quarantine camps—and doing his best to "wake up" other soldiers.
Pray isn't sure how to do this and still cover his ass. He talks to me on the record and agrees to be photographed, even as he hints that the CIA may be listening in on his phone. Although I met him through contacts from the group's Facebook page, Pray, fearing retribution, keeps his Oath Keepers ties unofficial. (Rhodes encourages active-duty soldiers to remain anonymous, noting that a group with large numbers of anonymous members can instill in its adversaries the fear of the unknown—a "great force multiplier.") For a time, Pray insisted we communicate via Facebook (safer than regular email, he claims). Driving me from the mall back to my motel, he takes a new route. He says unmarked black cars sometimes trail him. It sounds paranoid. Then again, when you're an active-duty soldier contemplating treason, some level of paranoia is probably sensible.
The next afternoon we join Brandon, one of Pray's Army buddies, for steaks. Sitting in a pleather booth at Texas Roadhouse, the young men talk boastfully about their military capabilities and weapons caches. Role-playing the enemy in military exercises, Brandon says, has prepared him to evade and fight back against US troops. "I know their tactics," brags Pray. "I know how they do room sweeps, work their convoys—if we attack this vehicle, what the others will do."
A strapping Idahoan, Brandon (who doesn't want his full name used) enlisted as a teenager when he got his girlfriend pregnant and needed a stable job, stat. (She lost the baby and they split, but he's still glad he signed up.) Unlike his friend, he doesn't think the United Nations must be dismantled, although he does agree that it represents the New World Order, and he suspects that concentration camps are being readied in the off-limits section of Fort Drum. He sends 500 rounds of ammunition home to Idaho each month...

Window on Eurasia: Putin Wants Israeli Attack on Iran Because That Would Send Oil Prices Up, Latynina Says

 Window on Eurasia: Putin Wants Israeli Attack on Iran Because That Would Send Oil Prices Up, Latynina Says
Paul Goble

Vienna, March 21 – “There is nothing Vladimir [Putin] would like more than for Israel to strike Iran,” Moscow journalist Yuliya Latynina said yesterday, “because they the price of oil would go up” and Russia, which is dependent on the profits from petroleum exports, would be a major beneficiary.
Speaking last night Moscow time on her “Access Code” program on Ekho Moskvy, the outspoken commentator offered this as an explanation for what Putin says that “Russia will help Iran launch the Bushehr Atomic Energy Station,” a statement that appeared “strange” to some given US efforts to enlist Russia’s help (
The reasons for this are clear, Latynina suggested. “The Americans consider that for them Russia is not an important priority because Russia is not an outlaw country.” Thus, from their perspective, “Russia in fact is only pretending” to oppose the West on this, because in the US view, “it is impossible to conduct an aggressive policy while having money in Western banks.”
In brief, Latynina said, the Americans have concluded that Russians “won’t launch rockets against places where [they] have villas and bank accounts.” But, she continued, “Iran is something else. Iran is serious,” and that is why the US “is trying all the time to obtain from Putin support for sanctions.”
So far, the US had been unsuccessful, and Latynina offered the following “hypothesis” as to why that is so: “there is nothing that Vladimir Vladimirovich would like more than for Israel to strike Iran.” Such strikes would send the price of oil upwards, and that would at least in the short term benefit Russia.
Such a hypothesis, she continued, would be consistent with the general pattern of Russia’s general approach in international affairs at present, an approach “which consists of creating situations but not resolving them. Iran is the latest example of the creation of a situation.”
Latynina added that she “strongly suspects that there is only one person in the world who wants the Israelis to hit Iran a great deal more” than the Russian prime minister. “That individual is Iranian President Ahmadinejad,” a figure who beyond any doubt would use any such attacks as a pretext for moving against his opponents and thus solidifying his control.
Whether or not the outspoken Moscow journalist is correct in her hypothesis or not, Latynina calls attention to three important aspects of the current international system that many, especially in the United States, are reluctant to acknowledge because it would call into question their approach.
First, as Latynina’s remarks suggest, the world does not divide simply between a few “outlaws” like Iran and the rest of the international community which wants nothing more than to agree and force the outsiders to join the rest of the world in harmony and accord. Instead, the countries of the world are and will remain deeply divided because of different interests.
Second, one of the biggest of these divisions now is between energy exporters and energy importers. Russia is one of the former and would benefit at least in the short term from a rise in energy prices, especially since it has been suffering from their fall. Western countries and Japan, in contrast, generally are energy importers and would suffer if prices shot up.
And third – and this point is one that the US seems particularly unwilling to recognize at present – the current Russian government is quite prepared to take steps that create crises for others, confident or at least hopeful that it may gain as a result either directly or by putting its competitors like the US in an awkward or uncomfortable position.

President Obama signs historic health care bill

Huge win for President Obama, but split decision for House Democrats - Glenn Thrush and Carol E. Lee -
It’s hard to overestimate the magnitude of President Barack  Obama’s historic victory on health care reform Sunday night — but  the win was a split decision for Democrats, not a knockout.
The victory, almost inconceivable a month ago, provides an immense and  immediate boost for Obama, who had staked his presidency on an all-out  push for reform, and who needs the momentum from the win to have any  hope of pushing through two other legislative goals this year, financial  regulatory reform and new jobs legislation.

Friend or Foe: Does the Obama administration know the difference?

Why is the Obama administration being harder on its allies than on its enemies? - By David J. Kramer | Shadow Government

A slam against the Obama administration heard with greater frequency these days is that it is much harder on its allies than on its enemies (even former enemies). At the same time that it desperately tries to win over "new friends," the administration treats its old friends either with indifference (e.g., most of Europe) or a critical eye. A perfect example of this is the administration's handling of the recent blow-up with Israel over settlements in East Jerusalem as compared with its response to Russia's announcement last week on nuclear reactors in Iran.

Mar 12, 2010

Natural gas: An unconventional glut | The Economist

Natural gas: An unconventional glut | The Economist

An unconventional glut

Newly economic, widely distributed sources are shifting the balance of power in the world’s gas markets

Mar 11th 2010 | HOUSTON | From The Economist print edition

SOME time in 2014 natural gas will be condensed into liquid and loaded onto a tanker docked in Kitimat, on Canada’s Pacific coast, about 650km (400 miles) north-west of Vancouver. The ship will probably take its cargo to Asia. This proposed liquefied natural gas (LNG) plant, to be built by Apache Corporation, an American energy company, will not be North America’s first. Gas has been shipped from Alaska to Japan since 1969. But if it makes it past the planning stages, Kitimat LNG will be one of the continent’s most significant energy developments in decades.

Five years ago Kitimat was intended to be a point of import, not export, one of many terminals that would dot the coast of North America. There was good economic sense behind the rush. Local production of natural gas was waning, prices were surging and an energy-hungry America was worried about the lights going out.

Now North America has an unforeseen surfeit of natural gas. The United States’ purchases of LNG have dwindled. It has enough gas under its soil to inspire dreams of self-sufficiency. Other parts of the world may also be sitting on lots of gas. Those in the vanguard of this global gas revolution say it will transform the battle against carbon, threaten coal’s domination of electricity generation and, by dramatically reducing the power of exporters of oil and conventional gas, turn the geopolitics of energy on its head.

Deep in the heart of Texas

The source of America’s transformation lies in the Barnett Shale, an underground geological structure near Fort Worth, Texas. It was there that a small firm of wildcat drillers, Mitchell Energy, pioneered the application of two oilfield techniques, hydraulic fracturing (“fracing”, pronounced “fracking”) and horizontal drilling, to release natural gas trapped in hardy shale-rock formations. Fracing involves blasting a cocktail of chemicals and other materials into the rock to shatter it into thousands of pieces, creating cracks that allow the gas to seep to the well for extraction. A “proppant”, such as sand, stops the gas from escaping. Horizontal drilling allows the drill bit to penetrate the earth vertically before moving sideways for hundreds or thousands of metres.

These techniques have unlocked vast tracts of gas-bearing shale in America (see map). Geologists had always known of it, and Mitchell had been working on exploiting it since the early 1990s. But only as prices surged in recent years did such drilling become commercially viable. Since then, economies of scale and improvements in techniques have halved the production costs of shale gas, making it cheaper even than some conventional sources.

The Barnett Shale alone accounts for 7% of American gas supplies. Shale and other reservoirs once considered unexploitable (coal-bed methane and “tight gas”) now meet half the country’s demand. New shale prospects are sprinkled across North America, from Texas to British Columbia. One authority says supplies will last 100 years; many think that is conservative. In 2008 Russia was the world’s biggest gas producer (see chart 1); last year, with output of more than 600 billion cubic metres, America probably overhauled it. North American gas prices have slumped from more than $13 per million British thermal units in mid-2008 to less than $5. The “unconventional”—tricky and expensive, in the language of the oil industry—has become conventional.

The availability of abundant reserves in North America contrasts with the narrowing of Western firms’ oil opportunities elsewhere in recent years. Politics was largely to blame, as surging commodity prices emboldened resource-rich countries such as Russia and Venezuela to restrict foreign access to their hydrocarbons. “Everyone would like to find more oil,” says Richard Herbert, an executive at Talisman Energy, a Canadian firm using a conventional North Sea oil business to finance heavy investment in North American shale. “The problem is, where do you go? It’s either in deep water or in countries that aren’t accessible.” This is forcing big oil companies to get gassier.

The oil majors watched from the sidelines as more entrepreneurial drillers proved shale’s viability. Now they want to join in. In December Exxon Mobil paid $41 billion for XTO, a “pure-play” gas firm with a large shale business. BP, Statoil, Total and others are sniffing around the North American gas patch, signing joint ventures with producers such as Chesapeake Energy. A wave of consolidation is likely in the coming months, as gas prices remain low, the drillers seek capital and the majors hunt for the choicest acreage.

Shale is almost ubiquitous, so in theory North America’s success can be repeated elsewhere. How plentiful unconventional resources might be in other regions, however, is far from established. The International Energy Agency (IEA) estimates the global total to be 921 trillion cubic metres (see chart 2), more than five times proven conventional reserves. Some think there is far more. No one will really know until companies explore and drill.

The drillers are already arriving in Europe and China, which are both expected to import increasing amounts of gas—and are therefore keen to produce their own. China has set its companies a target of producing 30 billion cubic metres a year from shale, equivalent to almost half the country’s demand in 2008. Several foreign firms, including Shell, are already scouring Chinese shales. After a meeting between the American and Chinese presidents last November, the White House announced a “US-China shale gas initiative”: American knowledge in exchange for investment opportunities. The IEA says China and India could have “large” reserves, far greater than the conventional resource.

Exploration is also under way in Austria, Germany, Hungary, Poland and other European countries. The oil industry’s minnows led this scramble, but now the big firms are arriving too. Austria’s OMV is working on a promising basin near Vienna. Exxon Mobil is drilling in Germany. Talisman recently signed a deal to explore for shale in Poland. ConocoPhillips is already there. The first results from wells being drilled in Poland, in what some analysts believe is a shale formation similar to Barnett, should be released this year.

No one expects production of shale gas in Europe to make a material difference to the continent’s supply for at least a decade. But the explorers in China and Europe present a long-term worry for those who have bet on exporting to these markets. Gazprom, Russia’s gas giant, is the company most exposed to this threat, because its strategy relies on developing large—and costly—gasfields in inhospitable places. But Australia, Qatar and other exporters also face a shift in the basics of their business.


These producers are already getting a taste of the global gas glut. Almost in tandem with the surge in American production, recession brought a slump in world demand. The IEA says consumption in 2009 fell by 3%. In Europe, the drop was 7%. Consumption in the European Union will grow marginally if at all this year and will not be sufficient to clear an overhang of supplies, contracted through take-or-pay agreements signed in the dash for gas of the past decade. IHS Global Insight, a consultancy, reckons that the excess could amount to 110 billion cubic metres this year, almost a quarter of the EU’s demand in 2008.

The glut has been exacerbated by the suddenly greater availability of LNG. Importers with the infrastructure to receive and regasify LNG can now easily tap the global market for spot cargoes. This is partly a product of the recession, which dampened demand from Japan and South Korea, the leading LNG buyers. But another cause is that many exporters, not least Qatar, the world’s LNG powerhouse, spent the past decade ramping up supplies aimed at the American market. That now looks like a blunder.

America is still taking some of this LNG, but the exporters’ bonanza is over before it ever really began. “You’ll always find a buyer in North America,” says Frank Harris, an analyst at Wood Mackenzie, a consultancy, “but you might not like the price.” And LNG will grow increasingly abundant as new projects due to come on stream this year add another 80m tonnes to annual supply, almost 50% more than in 2008.

 Gas out, money in

Qatar’s low production costs mean it can still make money, even in North America. Others cannot. In February, for example, Gazprom postponed its Shtokman gasfield project by three years because of the change in the market. Some of the gas from that field, in the Barents Sea, was to be exported to America. But Shtokman’s gas will be costly, because the field is complex and its location makes it one of the world’s most difficult energy projects to execute. Some analysts now wonder whether gas will ever flow from Shtokman.

China offers some hope for ambitious exporters, but even there the outlook has become cloudier. The Chinese authorities want natural gas to account for at least 10% of the country’s energy mix by 2020 and are building LNG import terminals. With that target in mind, Australia, which has its own burgeoning conventional and unconventional gas supplies, has been busily building an LNG export business. But warning lights are coming on. In January, PetroChina let a deal to buy gas from Australia’s Browse LNG project expire. The original agreement was made in 2007, when LNG prices were soaring in Asia, but China can afford to be picky now. “Too many Australian LNG plants are chasing too little demand,” says Mr Harris.

The shift in the global market has left China well-placed to dictate prices. This will be another blow to Gazprom, which has long talked of exporting gas to the country. Indeed, while the Chinese and the Russians have squabbled over the terms, Turkmenistan has quietly built its own export route to China. Even if Beijing’s shale-gas plans come to nothing, supplies from Central Asia and new regasification terminals along its coast may allow China to reach its natural-gas consumption targets without pricey Siberian supplies.

The glut has weakened Gazprom’s position in Europe, too. It has been losing market share to cheaper Norwegian and spot-market supplies. In 2007 Gazprom talked of increasing its annual exports to the EU to 250 billion cubic metres. Now, says Jonathan Stern, of the Oxford Institute for Energy Studies, Gazprom will probably only ever supply the EU with 200 billion cubic metres a year (it shipped about 130 billion in 2008). The company forecast in 2008 that its gas prices in Europe would triple, to around $1,500 per 1,000 cubic metres, on the back of rising oil prices, which help set prices in long-term contracts. But the price dropped to about $350 last year and is expected to fall again in 2010. The weak market could last for another five years, believes Wood Mackenzie. Gazprom has been renegotiating with leading customers, injecting elements of spot pricing into contracts to make them more attractive.

Shtokman shtymied

Moreover, Europe’s need for new pipelines to guarantee supplies suddenly looks less pressing. Construction of Nord Stream, Gazprom’s flagship project to export gas directly to Germany through the Baltic Sea, will begin next month. It is due to come on stream in 2011. The scheduled doubling of its capacity to 55 billion cubic metres a year is in doubt, says Mr Stern, because Shtokman was to have supplied the gas for it.

Demand is a bigger problem. Even without recession or European shale, the assumption that Europe’s consumption will keep growing is looking shaky, because the EU’s efforts to boost efficiency and reduce carbon emissions are making gradual headway. Edward Christie, an economist at the Vienna Institute for International Economic Studies, says the EU could be importing a third less natural gas in 2030 than the European Commission forecast in 2005. That makes the case for additional supply lines much less compelling. The IEA expects rich European countries’ demand to grow by only 0.8% a year in the next two decades, against 1.5% for the world as a whole (see chart 3).

An age of plenty for gas consumers and of worry for conventional-gas producers thus seems to be dawning. But two factors could reverse the picture again. The first surrounds the uncertainty about how fruitful shale exploration will be outside North America. A clearer understanding of the geology will emerge from pilot wells in the coming months. Second, there are reasons for caution above ground, too. Despite natural gas’s greener credentials than oil’s or coal’s, shale drilling has critics among environmentalists, who worry that water sources will be poisoned and landscapes despoiled.

The industry says cement casing of wells and the depth to which they are drilled make the practice safe and relatively unobtrusive. But so far it has been drilling mainly in North America, where land is plentiful and people are accustomed to the sight of oilmen’s detritus. In densely populated Europe, the rapacious rate at which shale plays must be drilled to sustain production is less likely to be tolerated.

Even in America, opposition to shale gas is rising. New York state has imposed a moratorium on drilling in its portion of the Marcellus Shale, which it shares with Pennsylvania. Lawmakers in Congress want to study the ecological impact of fracing. The Environmental Protection Agency, a federal body, also raised concerns about “potential risks” to the watershed.

The path of demand in gas’s new age is hard to predict, but abundant new sources could bring about profound change in patterns of energy consumption. Some of the downward pressure on price will ease: despite sedate growth, the LNG glut should dissipate, probably by 2014, says Mr Harris; and low prices will kill more projects, clearing the inventory. France’s Total thinks global demand will recover strongly enough to require another 100m tonnes a year of LNG by 2020, on top of plants already planned. However, the Energy Information Administration, the statistical arm of America’s Department of Energy, predicts decades of relatively weak prices.

If this is correct, it makes sense, for both environmental and economic reasons, for the country to gasify its power generation, half of which comes from coal-fired plants. This could be done cheaply and quickly, because America’s total gas-fired capacity (as opposed to production) already exceeds that for coal. Put a price of only $30 a tonne on carbon, say supporters, and natural gas would quickly displace coal, because gas-fired power stations emit about half as much carbon as the cleanest coal plants. The IEA agrees that penalising carbon emissions would benefit natural gas at the expense of dirtier fuels.

There would be political obstacles. The coal lobby remains strong in Washington, DC. Climate legislation struggling through Congress even includes provisions to protect “clean coal”, a term covering an array of measures, so far uncommercial, to reduce emissions from burning the black stuff. Ironically, oil companies that were once suspicious of proposals to control carbon now regard a carbon price or even a carbon tax as a potential boon to their new gas businesses.

A more radical idea, and one that would have ramifications for the global oil sector, is to gasify transport. T. Boone Pickens, a corporate raider turned energy speculator, has launched a campaign to promote this, and has support from the gas industry. By converting North America’s fleet of 18-wheeled trucks to natural gas, says Randy Eresman, boss of EnCana, a Canadian gas company, America could halve its imports of Middle Eastern oil. EnCana is promoting “natural gas transportation corridors”: highways served by filling stations offering natural gas.

All this is some way off. The coal industry will not surrender the power sector without a fight. The gasification of transport, if it happens, could also take a less direct form, with cars fuelled by electricity generated from gas.

A gasified American economy would have profound effects on both international politics and the battle against climate change. Displacement of oil by natural gas would strengthen a trend away from crude in rich countries, where the IEA believes demand has already peaked as a result of the recent spike in oil prices. Another consequence of the energy market’s bull run, the unearthing of vast new supplies of gas, could bring further upheaval. If the past decade was characterised by the energy-security concerns of consumers, the coming years could give even the world’s powerful oil producers reason to worry, as a subterranean revolution shifts the geopolitics of global energy supply again.

Mar 11, 2010

BBC News - Barack Obama urges China to relax grip on its currency

BBC News - Barack Obama urges China to relax grip on its currency: "Barack Obama urges China to relax grip on its currency
Barack Obama
President Obama believes China could help protect US jobs

US President Barack Obama has urged China to change its currency strategy to help re-balance the global economy.

In a speech in Washington, Mr Obama said China should move to a 'more market-based exchange rate' so that US exporters are not disadvantaged.

US manufacturers have complained that the yuan is being kept artificially low, making imports to China dearer.

Mr Obama's comments risk upsetting Beijing, which regards currency issues as an internal matter.

'Essential contribution'

'For too long, America served as the consumer engine for the entire world. But we are rebalancing. We're saving more. We all need to rebalance,' Mr Obama said.

Currently, developing countries like China and India export more to developed economies like the US and Europe than they import.

In China's case, this trend is supported by the low value of the yuan, which makes Chinese exports cheaper while rendering foreign imports more expensive.

Freeing up the exchange rate would effectively raise the value of the yuan and benefit US exporters.

'Countries with external deficits need to save and export more. Countries with external surpluses need to boost consumption and domestic demand,' Mr Obama added.

'As I've said before, China moving to a more market-oriented exchange rate would make an essential contribution to that global rebalancing effort.'

Currency manipulator?

Big business in the US has told Mr Obama to get tougher with China on trade and currency issues.

In his speech, to the Import-Export Bank's annual conference, Mr Obama said that 'at a time when millions of Americans are out of work, boosting our exports is a short-term imperative.

'When other markets are growing, and other nations are competing, we need to get even better. We need to secure our companies a level playing field,' he said.

Despite Mr Obama's carefully-chosen words, they are unlikely to go down well in Beijing.

US-China relations have soured recently, largely over Mr Obama's meeting last month with the Tibetan spiritual leader, the Dalai Lama, and over arms sales to Taiwan.

And relations could be about to worsen. The US Treasury Department is considering whether to label China a 'currency manipulator' in a report due on 15 April.

Last Saturday China's central bank released a statement pledging to keep the country's currency stable throughout 2010.

Beijing fears that a change in its exchange rate will slow economic growth. Chinese exports fell 16% last year."

EUobserver / New EU states make bid for more diplomatic clout

EUobserver / New EU states make bid for more diplomatic clout: "ANDREW RETTMAN

10.03.2010 @ 17:21 CET

EUOBSERVER / BRUSSELS - Poland, Hungary, Slovakia and the Czech Republic have warned that member states could disengage from EU foreign policy unless they get a fair share of power in its new diplomatic corps.

'The eventual lack of [member states'] involvement in shaping and implementing policies could lead to the loss of their interest in EU foreign policy and could even result in a widening gap between EU and national policies,' the group of four countries said in an informal paper circulated in Brussels late last month.

Visegrad Castle: The EC began in 1957 but local kings have been meeting in Visegrad since 1335 (Photo: David Spender)

The so-called Visegrad states, named after a historic meeting place in Hungary, also urged the established EU powers to make way for newer EU members in the European External Action Service (EEAS).

'We deem it necessary to ensure an adequate geographical balance and a meaningful presence of nationals from all EU member states in order to ensure that the service could draw from a wide variety of diplomatic culture and experience,' the paper said.

'Since geographical balance is a basic ingredient of the EEAS, it should be incorporated in the staff regulation as a binding principle ...[and] requires regular monitoring through ...e.g. yearly reports,' it added.

Austria, the Baltic countries, Bulgaria, Cyprus, Greece, Malta, Portugal, Romania and Slovenia have broadly allied themselves with the position over the past two weeks.

The Visegrad group is keen to grab more influence in Brussels: If the EU goes ahead with suggestions to hold informal summits 10 times a year, the Visegrad countries aim to have a prime minister-level meeting before each one. Visegrad EU ambassadors already meet on a monthly basis. Until 2014, the group has the same EU voting power as Germany and France put together.

The Visegrad paper targets two thorny issues in the creation of the diplomatic corps.

On the one hand, the European Commission has 1,657 foreign relations officials ready to be transferred en bloc into the service, with the incumbents potentially keeping the best posts while member states' diplomats gradually filter in.

On the other hand, just 117 of the commission officials come from new EU countries, meaning that the corps will inherit a severe geographic skew.

A senior diplomat from one of the Visegrad countries endorsed a solution put forward by Malta, the EU's smallest member. The Maltese idea would see all EEAS posts at head-of-unit level or above put to an open competition to EU diplomats and EU officials from day one of the institution's birth.

The appointments would be decided by interview panels composed of delegates from the office of the EU foreign affairs chief, Catherine Ashton, the commission and member states, with Ms Ashton to have the final word.

'You can imagine that there is resistance to this in the commission,' the contact said.

'As thing stand, Spain has three heads of delegation in South America [Chile, Cuba and Venezuela]. But this region is no longer a Spanish colony. You could argue that they have some special expertise. If the EEAS posts were open to competition, then the new countries' expertise would also shine through in places like Belarus.'

Narrowing the field of competition, the foreign ministers of Slovenia, Latvia, Lithuania and Cyprus in a letter to Ms Ashton last week said that: 'In the initial phase, EEAS posts should not be opened to officials from the European Parliament.'

EU leaders last year called for the diplomatic service's rulebook to be agreed by April. But diplomats are currently aiming at the final plenary of the EU parliament before its summer recess, on 5 July, as a more realistic date."

Mar 2, 2010

EUobserver / Germany attacks UK over EU diplomatic service

EUobserver / Germany attacks UK over EU diplomatic service
01.03.2010 @ 09:22 CET
Germany has in a leaked diplomatic note attacked what it sees as the UK's attempt to dominate the EU's emerging External Action Service.
The confidential foreign ministry document, obtained by the Guardian, the British daily, says that the UK has an "excessive" and "over-proportionate" role in the bloc's new foreign policy structures.
"Excessive GB participation is evident," the note says. "Over-proportionate GB influence on the establishment and staffing is to be avoided."
Catherine Ashton: "If we are able to act in a unified way on the world stage, we can safeguard our interests"
The External Action Service (EAS) is to be headed by the EU's new foreign policy chief, British official Catherine Ashton, in a deal struck by member states last November.
Ms Ashton is currently drafting a proposal on the shape of the diplomatic corps with the help of a high-level steering group. The paper is due in April with no decisions made yet on top appointments. But the steering group itself has three British officials on its 13-strong team, compared to just one German.
Ms Ashton's private office, or "cabinet" in Brussels terms, is led by a former UK diplomat, James Morrison.
Meanwhile, another series of Brits is waiting in the wings to take over key elements of the EAS architecture: the EU commission's existing head of foreign delegations, Patrick Child; the chief of the EU Council's military committee, David Leakey; and the head of its intelligence-sharing bureau, William Shapcott.
The British roll-call was offset on Friday (26 February) by Ms Ashton's appointment of Denmark's ambassador to the EU, Poul Skytte Christoffersen, as a "special advisor" on the EAS.
But her relative inexperience and her regular trips to the UK, where she has her family home, have aggravated fears that she is open to manipulation by London.
While the over-arching proposal on the diplomatic corps has yet to be submitted to member states, Ms Ashton's team last week began circulating "vision papers" for the service.
One of the documents, seen by EUobserver, says the EAS "will help to make the EU common foreign and security policy a reality on the ground."
"We need to organise to be heard: if we are able to act in a unified way on the world stage, we can safeguard our interests. If not, others will make decisions for us," it adds.
The paper envisages having "desks for all countries and regions (regional organisations) in the world," as well as specialised units for human rights, democracy and security and defence.
The EAS is also to field its own security service and a "strong and substantive media operation" including internet-based communications on Twitter and Facebook.

Mar 1, 2010

Ex-KGB media mogul pays £1 to buy second British newspaper - RT Top Stories

Ex-KGB media mogul pays £1 to buy second British newspaper - RT Top Stories

Published 01 March, 2010, 16:12

Russian tycoon and owner of the National Reserve Bank, Aleksandr Lebedev, has added another British newspaper to his media empire.
According to British reports he bought The Independent for the token price of £1 – the same as it costs to buy one copy of the newspaper.
Lebedev is taking on all the newspaper’s debts, which supposedly amount to losses of around $10 million a year for both The Independent and The Independent on Sunday. He is also going to pay $15 million to buy the paper out of its already existing printing contract, which is supposed to run for another 10 years. Lebedev will be scrapping all that. He has also gained a lot of respect for that in media circles.
He has re-negotiated the pension packages and redundancy payments for newspaper’s staff.
Lebedev has said that he really cut a very clever deal because the terms of those agreements will no longer be so favorable.
The media mogul will be investing about $50 million into these newspapers over the next five years in an attempt to turn this loss-making enterprise around.
Lebedev has not yet explained his motivation for the deal, but this is by no means his starting point. He already owns 40 per cent of Russia’s Novaya Gazeta newspaper, for which murdered journalist Anna Politkovskaya worked. In January 2009, he bought another loss-making British newspaper, The Evening Standard, and he is currently trying to turn that around.
Of course, one of the things he could get from the acquisition is political clout. He has already been invited to a meeting with Prime Minister Gordon Brown. Apparently the British PM wanted to see the new owner of The Independent in person, and it is said that the meeting went quite well.
Evidently, Lebedev is not going to make a lot of money out of his new acquisition in the short term, but is definitely intending to get some kind of influence and position in British society that he might not get otherwise.
Newspaper consultant Richard Addis told RT that “commercially he [Lebedev] wants to make money, but politically, I’d guess, he wants influence, access, a position in British and international society that he has not quite got at the moment.”
“Staff really do not care , as long as somebody actually pays the wages and keeps the paper alive,” added Addis, “I think the staff are quite relieved to have a new owner with money.”
British public, traditionally opposing Russians coming in and buying anything in Britain, particularly newspapers, reacted not as much as one would expect. When Lebedev bought The Evening Standard there was a lot of controversy involved. But Lebedev has already almost turned the paper around and gained a lot of respect for that in newspaper circles.
The Evening Standard was and still is a loss-making enterprise, but it is expected to turn a profit in two to three years’ time. Lebedev quadrupled the newspaper’s circulation by making it a free paper.
There is a general feeling that newspapers are a failing medium, so anyone coming in and buying those titles and keeping them going and turning them around is welcomed by the industry.
The public have either never heard about the deal or do not care. Some bet on how long The Independent is going to carry on being The Independent.
The deal has not gone through yet, but it is expected to be fulfilled in the next few days.
Time will tell what The Independent is going to transform into: either it will be a free newspaper, like The Evening Standard, or it may become a glossy daily opinion magazine.