Posts Tagged ‘energy’

China denies breaching sanctions on North Korea

July 20, 2018

Both Beijing and Seoul insist they will uphold sanctions after UN report highlights coal shipments that arrived in port after ban came into force

South China Morning Post

PUBLISHED : Friday, 20 July, 2018, 4:42pm
UPDATED : Friday, 20 July, 2018, 5:49pm

China and South Korea vowed to uphold the sanctions regime on North Korea after a UN committee accused the two countries of being reluctant to enforce a ban on coal exports from the North.

Five direct North Korean coal shipments arrived in China last August, according to the UN North Korea Sanctions Committee report.

It also said that two shipments, sent from a Russian port 2,000km (1,200 miles) away from the Korean peninsula, had arrived in South Korea in October.

The Chinese Foreign Affairs Ministry said on Friday that China had obeyed the UN Security Council resolution.

It added that coal imports shipped before August 2017 were legitimate.

The five Chinese shipments, which arrived in Bayuquan, Nantong and Guangzhou in August, had been sent from the North Korean ports of Nampo and Taean in June and July.

“The Chinese side has always implemented the Security Council resolutions comprehensively and strictly, and the relevant departments have issued an announcement for this purpose,” a ministry statement said.

“If China is to report relevant import data to the Security Council’s North Korea Sanctions Committee, [China will provide] completely open and transparent [data], and it will comply with the relevant provisions of the Security Council resolution,” it added.

Seoul also promised not to violate the sanctions regime, adding that the government was investigating two shipments, which the UN report said had been sent from Kholmsk on Sakhalin island to the ports of Incheon and Pohang.

The report claimed that the delivery to Pohang alone was valued at US$325,000.

South Korean foreign affairs ministry spokesman Noh Kyu-duk said earlier this week that Seoul was “making diplomatic efforts, by closely cooperating with the international community and the sanctions committee, so that the UN Security Council can implement its sanctions”.

“I’m aware of an ongoing investigation by the authorities,” Noh added.

Beijing has recently promised to restore its economic ties with Pyongyang.

President Xi Jinping told North Korean leader Kim Jong-un that he would support North Korea’s efforts to develop the economy during Kim’s third visit this year to China last month.

UN diplomats said that on Thursday Russia and China delayed a United States push for a UN Security Council committee to ban refined petroleum exports to North Korea.

The United States last week complained to the 15-member Security Council North Korea sanctions committee that, as of May 30, there had been 89 illicit ship-to-ship transfers of refined petroleum products this year by Pyongyang, which breached the cap of 500,000 barrels a year.

But Russia’s UN mission put a “hold” on the US request on Thursday, telling the committee it was “seeking additional information on every single case of ‘illegal’ transfer of petroleum,” diplomats said.

China backed the Russian request and asked the United States “to provide additional factual information to facilitate all states to study and make a judgment,” diplomats said.

Boo Seong-chan, a research fellow at the Yonsei Institute for North Korean Studies in Seoul, said: “Easing economic sanctions sits at the centre of North Korean economic prosperity, as Kim has vowed to his people that he would move on to an economy-first policy … This means that he must show some fruits for his people in the short-term in order to legitimise his rule.

“After all, authoritarian regimes’ legitimacy to rule comes from their people’s quality of life.”

Park Ihn-hwi, an international studies professor at Ewha Womans University in Seoul, acknowledged that there could be loopholes in the UN sanctions regime that would allow China to boost its trade with the North.

“Some trading may be resumed, especially between China and North Korea, easing the UN sanctions regime … There may also be illegal trading at the border area,” Park added.

North Korea’s gross domestic product. contracted 3.5 per cent in 2017 compared with the previous year, marking the biggest contraction since 1997, South Korea’s central bank estimated on Friday.

Additional reporting by Reuters



How Russian gas became Europe’s most divisive commodity

July 17, 2018
Nord Stream 2 will pipe energy to Germany but critics warn of political tensions
No automatic alt text available.

© Getty
By Tobias Buck in Lubmin

Lubmin is a picturesque resort on Germany’s Baltic Sea coast that boasts a long stretch of sandy beach bordered by soft dunes and a lush pine forest. Located a few hours north of Berlin, the town offers tourists a postcard version of seaside tranquility. Or it would, were it not for the fleet of excavator barges that sails out from the local port every day, and the large building site hiding behind the pines.
Both are part of a fiercely contentious project that has split Europe down the middle, and set Germany on a collision course with some of its closest allies. Out in the sea, the excavator barges are digging a massive underwater trench that runs in a straight line towards the building site on land. If all goes to plan, that trench will soon hold a pipeline filled with the most explosive commodity in European politics today: Russian gas.The Nord Stream 2 pipeline has been in planning since 2015, and is due for completion in late 2019. Its defenders argue the project makes perfect commercial sense: the pipeline will connect the world’s biggest exporter of natural gas with the largest economy in Europe, doubling the capacity of the existing trans-Baltic link, Nord Stream 1 that has been operational since 2011. Together, the two pipelines will eventually be able to carry 110bn cubic metres a year of natural gas, enough to meet almost a quarter of total demand across the EU.

Image may contain: 10 people, people smiling

The Nord Stream landfall facilities in Lubmin, northeastern Germany © Alamy

Critics regard the pipeline — and Germany’s role in it — as an act of betrayal and a geopolitical folly of the first order. Countries such as Poland and Ukraine have denounced it as a blatant attempt to marginalise their own gas pipelines — and a reckless move that will leave them and the rest of Europe at the mercy of Moscow. The European Commission is another opponent of Nord Stream, arguing the project undermines its push for greater energy independence and more diversified supplies.
The most formidable adversary, however, sits in Washington. President Donald Trump has made clear repeatedly that he wants to stop the €9.5bn project — and that he is ready to impose tough sanctions to achieve that goal. Last week, Mr Trump launched a blistering attack on the new pipeline at the Nato summit in Brussels, warning that Germany had become “ captive to Russia, because it’s getting so much of its energy from Russia”.Kirsten Westphal, an energy analyst at the German Institute for International and Security Affairs, likens Nord Stream 2 to an “onion” — you peel away layer after layer of controversy only to discover that the next one is more contentious still. At its core, however, the pipeline poses a simple but crucial question: should the west trust Russia or not?

“Russia’s annexation of Crimea in 2014 and the war in Ukraine have changed everything,” says Ms Westphal. “For many people in the west, the idea that Russia is a dependable partner has gone. There is doubt: given all the geopolitical tensions, should we further expand our energy relationship with Russia? Should we make a bet, despite it all, to keep the channel open?”

For reasons of history as well as naked economic self-interest, that question tends to find a different answer in Germany than in other European countries and the US. It is summed up neatly by Axel Vogt, the mayor of Lubmin and — like most locals — an enthusiastic backer of Nord Stream. “For us, Russia has always been a reliable business partner. And we don’t see any sign that this is changing despite all that is happening on the big political stage,” he says. “For Lubmin, Nord Stream means jobs, it means contracts for local businesses and it means more business taxes,” the mayor says.

He adds that this affection for Russia goes beyond economic gain, and reflects ties forged in the time when Lubmin was part of communist East Germany. “Before reunification there was a very close relationship with Russia . . . and they want it to stay that way.”

For now the project enjoys the official support of the German government (as well as the unconditional backing of the Kremlin). But the chorus of critics in Berlin, including inside the government, is growing ever louder.

Officials at the 2011 opening ceremony of Nord Stream 1 in Lubmin, including chancellor Angela Merkel, former chancellor Gerhard Schröder and Russian president Dmitry Medvedev © Getty
“Nord Stream 2 has divided the EU, and that cannot be in Germany’s national interest,” says Norbert Röttgen, a senior member of parliament for the ruling Christian Democratic Union. “The most important role that Germany has is to bring Europe together, not to divide it. But without Germany, this division would not exist.”

Earlier this year, German chancellor Angela Merkel signalled a subtle but important shift in official rhetoric. Nord Stream 2, she said, was “not just an economic project”. Political factors also had to be considered, she added, not least the need to preserve Ukraine’s status as a transit country for Russian gas. Kiev earns as much as $3bn in transit fees a year, according to Naftogaz, Ukraine’s state gas company, money the embattled government badly needs. The gas link also acts as motivation for the two countries to keep their military and political conflict from spinning out of control. When the gas stops flowing — as it did, briefly, in 2006 and 2009 — both sides stand to lose.

After meeting his US counterpart on Monday Vladimir Putin, Russia’s president said Moscow was willing to “extend this transit contract if the dispute between [Gazprom and Naftogaz] is settled”.

Image may contain: text

Yet circumventing the Ukrainian network is precisely what Nord Stream is about, as Russian officials have made clear. The new pipeline will allow Russia to cut out the middleman for much of its westbound gas shipments — and to avoid the kind of disputes over payments and conditions with Kiev that have flared up in recent years. The fact that Ukraine’s pipelines are in urgent need of repair and investment provides an additional incentive.

For the Russian-European consortium that is bearing the cost of the project, Nord Stream 2 is, above all, a promising investment. Unlike Nord Stream 1, which was a genuine Russian-European joint venture, the new pipeline will be owned entirely by Gazprom, the Russian gas group that controls Russia’s pipeline exports. Half the financing, however, is provided by five European companies: Uniper and Wintershall of Germany, Austria’s OMV, Engie of France and Royal Dutch Shell.

Related image

Nord Stream’s backers are making a simple bet with potentially huge rewards. They know the pipeline will come on stream in 2019 just as supplies of European gas from the North Sea are starting to dwindle. The consortium estimates that even if overall gas demand is stable or declines slightly over the coming two decades, Europe will have to find an additional 120bn cubic metres a year of natural gas by 2035. That gap will be filled by shipping large volumes of liquefied natural gas from countries such as Qatar and the US, or through pipelines from Russia.

Image may contain: sky, outdoor and water

US liquefied natural gas ready for export from Texas © Bloomberg

The looming gas shortfall has sparked a rush to build infrastructure, as suppliers jostle for position. Not far from Lubmin, on the other side of the Polish border, stands one of several new LNG terminals that have popped up on Europe’s coastline in recent years. Most are working well below capacity, reflecting the fact that pipeline gas is as much as 25 per cent cheaper than LNG.
Some German business leaders and officials suspect this is one of the core reasons for the opposition to Nord Stream 2. The US, they say, is simply trying to boost the commercial prospects of LNG. That was the central complaint in an open letter signed by a cross-party alliance of senior German lawmakers earlier this year.“It is not the job of the EU to keep potential competitors off the backs of US companies that want to market their . . . natural gas in Europe,” it said. “American liquid gas is welcome on the European gas market, but it has to face the competition just like others.”


Why should German and European consumers and companies pay a premium for non-Russian gas? The obvious answer, say critics, is politics. Moscow, they argue, is engaged in a broad campaign to split the western alliance, destabilise European democracies and reassert Moscow’s influence in eastern Europe and the Baltics. One of the most potent weapons in that campaign is Russia’s control over energy resources — and Europe’s dependency on them. Concern over what might happen if Russia turns off the taps has weighed heavily on European minds for years. Nord Stream 2 will make those concerns even more acute.

“Last year, Germany received slightly more than 40 per cent of its gas supplies from Gazprom. If we now double the capacity by way of Nord Stream 2, we will see another significant increase in supplies from Russia,” says Mr Röttgen. “I believe this pushes us into a danger zone, both in terms of energy policy and foreign policy. We will lose some of our independence.”

There is, he adds, another consideration: “The whole Putin system rests on two pillars: the military and the export of energy resources. By stabilising that second pillar, Germany is also stabilising the Putin regime.”

Gazprom says that given that its newer gasfields are in Russia’s north-west, Nord Stream 2 will save 2,100km of transit compared with the Ukrainian route, and cut emissions by 61 per cent.

A natural gas pipeline in Donetsk, eastern Ukraine © Getty

Russia has also warned that US threats against it are illegal. “We believe that any sanctions against companies involved in an international project would not be legal,” Mr Putin’s spokesman Dmitry Peskov said this month. “This is an exclusively international, commercial project devoid of any political motives, based on the principles of commercial gain for the countries that participate in it.”
The geopolitical case against Nord Stream 2 is made with particular intensity in eastern European capitals such as Warsaw, where fears over a Russian-German carve-up have a strong historical resonance. That sentiment was expressed in blunt terms by Radoslav Sikorski, the former Polish foreign minister, who likened the Nord Stream project to the 1939 deal between Hitler and Stalin to divide eastern Europe.In Berlin, however, officials prefer to point to a different historical antecedent: the Ostpolitik of Willy Brandt, the German chancellor who pushed for rapprochement with the Soviet bloc in the late 1960s and early 1970s. In economic terms, the policy gave rise to a “gas-for-pipes” deal between West Germany and the Soviet Union. Against fierce US opposition, the Germans agreed to ship steel and pipes to the USSR, in exchange for natural gas imports.

Image may contain: sky, ocean, outdoor and water

Excavators work on a discharge channel of the new Nord Stream 2 Baltic Sea pipeline in the Bay of Greifswald © Alamy

The first Russian gas arrived in Germany in 1973, and imports rose steadily in the decades that followed, undisturbed by the cold war. For supporters of Nord Stream 2, that experience holds a crucial lesson. They see the gas relationship not as one of western dependence on Russia, but of mutual dependence between buyer and seller. Moscow needs western payments as much as the west needs Russian gas.
“I see Nord Stream as a stabilising factor for the relationship between Russia and the West,” says Matthias Platzeck, a former leader of Germany’s Social Democratic party and now the president of the German-Russian Forum, a Berlin-based association designed to foster bilateral ties. “Even at the high point of the cold war the Russians always delivered their gas. Why should that change now? After all, they need the money.”As the political argument continues to rage, the project itself is making steady progress. Over the past two years, the consortium has amassed vast stockpiles of concrete-coated steel tubes, and deposited them at various points on the Baltic Sea. A few weeks from now, workers will begin welding the 12-metre-long pieces together at sea and lowering them into the water. With much of the investment already made, and all but one regulatory permit for the project granted, even critics admit that it will be hard to stop it now.

As long as the project does not hit fresh political and technical turbulence, Gazprom is planning to open the taps at the Russian end of the 1,200km long pipeline in late 2019. The impact at the other end, however, is already being felt.

“In commercial terms, there is a case to be made for Nord Stream 2,” says Ms Westphal. “In political terms, however, it is clear that Germany will pay a heavy price.”

Additional reporting by Henry Foy in Moscow and Helsinki


Putin Says Nord Stream II Won’t Hurt Ukraine, Gets No Criticism from Trump

July 17, 2018
 740 views #BigBusiness

Russia’s President Vladimir Putin hugs Gerhard Schroeder, chairman of the Shareholders Committee of Nord Stream 2 AG and former German chancellor, at the opening of the 2018 FIFA World Cup. Trump criticized Germany for investing in the project while chastising Russia as a political foe up to no good in Western Europe. Trump said U.S. companies will challenge Russian gas in Europe with American LNG. (Photo by Alexei DruzhininTASS via Getty Images)

Vladimir Putin said that President Trump shouldn’t worry about the Nord Stream II gas line into Europe shutting out Ukraine from its traditional position as transit route.

“Donald told me his thoughts on Nord Stream II and said that he is worried that we will use it to no longer rely on Ukraine,” Putin said during a press conference after a closed-door meeting with Trump in Finland on Monday. “We want to extend our contract with Ukraine, but it is based on what the Stockholm arbitrage rulings look like,” he said about the years-long legal battle being waged between Gazprom and Ukraine’s Naftogaz.

Image may contain: outdoor

The two sides have been locked in a legal tug of war since 2014, with Naftogaz winning as many fights as it loses. The legal case disputes transit contracts and payments. Should Russia lose this case, it will make a new transit contract more complicated for Naftogaz. If so, Nord Stream II critics will be proven correct as Gazprom would likely seek to avoid working fully with Naftogaz if hit with massive legal fines.

Nord Stream II pipes are now being placed right alongside the existing Nord Stream pipeline. The pipeline connects Russia to Germany via the Baltic Sea. Gazprom is the majority owner of the venture, with German partners Wintershall and British giant Royal Dutch Shell counted on as partners.

Gazprom expects Nord Stream II to be completed next year.

The gas dispute between Russia and Ukraine is legion. It is the origin story of the entire Russian sanctions story, and marks the beginning of the major rift between Russia and the West. It started in 2014 when then-president Viktor Yanukovych reneged on an EU trade deal in favor of cheaper natural gas from Gazprom. Hundreds of thousands of people protested, leading to Yanukovych’s ouster. When Russia discovered phone conversations between two American officials in Kiev and Washington talking about who should replace Yanukovych, Russia took what close Putin watchers say were evasive actions. Shortly after Washington’s pick Arseniy “Yats” Yatsenyuk took over for the displaced Yanukovych, the Kremlin reportedly orchestrated a secession referendum in Crimea and later annexed the southeastern penninsula. Critics charge that the entire referendum was a sham as Russian masterminds simply used the pro-Russia vote as a way to shove democracy in the faces of Western leaders. Crimea is, and always ways, home to Russia’s only warm water Navy port, making it of strategic importance to the Russian military. The U.S. and Europe sanctioned Russian companies beginning in the summer of 2014, four months after Crimea’s annexation. Relations have deteriorated since.

Image may contain: 1 person, suit

Putin says Ukraine will still be a transit route for Russian natural gas. But he warned that a new deal between them depends on an ongoing court battle in Stockholm. Photographer: Chris Ratcliffe/Bloomberg

Putin’s comment today that Ukraine will still be part of Gazprom’s plans was by no means an olive branch being offered by the Russians. Much hinges on Swedish judges.

Putin met with Trump for a little over two hours on Monday. There was no official agenda, and the two supposedly made one up on the fly. A press conference was held shortly afterward.

Trump said the U.S. considers Russia a “strong competitor” in the oil and gas markets. He added that U.S. LNG exporters will work hard to increase their market share in Europe. Both Russia and the U.S. have become direction setters for world oil prices, surpassing the previous importance placed on OPEC members.

Topics of discussion surprised no one, however: election meddling, nuclear disarmament and Syria dominated.

Over the last 72 hours, Trump faced the ire of members of the media, particularly pundits advocating for Democratic Party positions. Senate minority leader Chuck Schumer said Trump should cancel his meeting. Even Republican friendlies over at Fox News questioned the wisdom of Trump’s trip following last week’s indictment of 12 Russian spy agency staffers discovered to have been behind the hacking of Democratic National Committee servers in 2016.

“During the tensions of the Cold War, the U.S. and Russia were able to maintain a strong dialogue. Our relationship has never been worse than it is now,” Trump told reporters today. “That’s changed as of four hours ago. Nothing would be easier politically to refuse to engage, but that would not accomplish anything. I cannot make decisions on foreign policy based on pundits’ opinion,” Trump said.

U.S. Rejects French Request for Waivers from Sanctions on Iran

July 13, 2018

The United States has rejected a French request for waivers for its companies operating in Iran that Paris sought after President Donald Trump imposed sanctions on the Islamic Republic, French Finance Minister Bruno Le Maire told Le Figaro.

Image result for French Finance Minister Bruno Le Maire, photos

French Finance Minister Bruno Le Maire 

Paris had singled out key areas where it expected either exemptions or extended wind-down periods for French companies, including energy, banking, pharmaceuticals and automotive.

Officials had expressed little hope for securing the waivers, which were critical for oil and gas major Total (TOTF.PA) to continue a multibillion-dollar gas project in Iran and for carmaker PSA Group (PEUP.PA) to pursue its joint venture.

French reinsurer Scor SE (SCOR.PA) said on Friday it will not seek new contracts or renew existing business in Iran, given the U.S. sanctions.

Most international insurers in Iran are working with the shipping and energy industries in the country.

“We have just received Treasury Secretary Steve Mnuchin’s response: it’s negative,” Le Maire told Le Figaro in an interview published on Friday.

Le Maire said Europe needed to react quickly and protect its economic sovereignty.

“Europe must provide itself with the tools it needs to defend itself against extra-territorial sanctions,” Le Maire added.


Washington announced in May it was imposing new economic penalties on Tehran after pulling out of a multilateral 2015 agreement, under which Tehran had agreed to curb its nuclear activities in return for sanctions relief.

Trump’s sanctions are aimed at pressuring Iran to negotiate a new agreement to halt its nuclear programs that might include Tehran’s regional activities and ballistics development. In particular, Washington wants to curtail the oil exports that are key to Iran’s economic revival.

Earlier this month, Iranian President Hassan Rouhani appeared to threaten to disrupt oil shipments from its neighbors if Washington pressed ahead with trying to force countries to stop buying Iranian oil.


Reporting by Richard Lough and Inti Landauro, editng by Larry King and Laurence Frost

Destroying Iran deal would have unforeseeable consequences, China’s Li Keqiang warns

July 9, 2018

China’s Premier Li Keqiang warned on Monday of unforseeable consequences if a nuclear non-proliferation deal with Iran were torn up, adding that the nuclear deal should be upheld.

Image may contain: 1 person

Chinese Prime Minister Li Keqiang gestures as he holds a joint news conference with German Chancellor Angela Merkel (not pictured) at the chancellery in Berlin, Germany, July 9, 2018. REUTERS/Hannibal Hanschke

He was speaking at a news conference alongside German Chancellor Angela Merkel in Berlin. Merkel also expressed her support for the deal, which has been rejected by U.S. President Donald Trump.


Oil Prices Still a Problem

July 3, 2018

Oil is becoming a problem.

Image may contain: ocean, sky, outdoor and water

Nymex crude-oil futures fell a bit today, but have lately rallied to their highest levels in nearly four years, more than doubling from the bottom of a crash a couple of years ago. Prices aren’t catastrophically high yet – at about $74 a barrel, they’re still much lower than the $100 or so of earlier this decade, when the economy was on shakier ground. (And if you want society to swear off fossil fuels, then $74 isn’t high enough.)

But oil is expensive enough that many people, including the most important person in the world, President Donald Trump, are noticing. Trump has tweeted his anger over this situation a couple of times, including a recent declaration that he had convinced Saudi Arabia to pump more oil. That is … not how this works; Saudi Arabia’s OPEC buddies at least have to pretend to be OK with such a thing. And they did sort of agree recently to pump more, partially in response to another Trump tweet. But oil prices have surged anyway, pushing gas prices higher, “timed exquisitely for November’s midterms,” writes Liam Denning. He notes the whole episode illustrates how little Trump controls, or even understands, the oil market.

In fact, Trump’s own policy of squeezing Iranian oil exports has the market worried about supply, at a time when  Venezuela’s ineptitude has crippled its own output, and infrastructure bottlenecks are keeping U.S. shale oil off the market (for now). Add it all up, and it starts to look like an oil-price shock that could eventually crush prices, but by destroying demand first, warns David Fickling. Oil shocks don’t last long, but they do often bring recessions with them.

Electric Feel

Another thing oil-price shocks do is make people look for alternatives. That’s why it’s a good time for an oil-buyers’ cartel to band together to boost electric-car use and other ways to consume less oil, writes Carl Pope. China and India are already talking about such a thing, and Europe and Japan might be convinced to go along (forget the U.S.; Trump’s not much of a “joiner”).

Such a club might be great news for, say, electric-car maker Tesla Inc. – although it still remains to be seen whether Tesla can ever manage to consistently produce enough cars to take full advantage. The company used a manufacturing “burst” to finally hit its Model 3 target production, but Liam Denning wonders whether this is sustainable, or profitable.

Japan aims for 24% renewable energy but keeps nuclear central

July 3, 2018

Japan’s government on Tuesday pledged to modestly boost the amount of energy coming from renewable sources to around a quarter in a new plan that also keeps nuclear power central to the country’s policy.

The plan aims to have 22-24 percent of Japan’s energy needs met by renewable sources including wind and solar by 2030, a figure critics describe as unambitious based on current levels of around 15 percent.

© JIJI PRESS/AFP/File | Six nuclear reactors are currently operating, and utilities face public opposition to activating more despite political support for the nuclear industry

Japan’s own Foreign Minister Taro Kono earlier this year called the goal “significantly low” and described the country’s commitment to renewables as “lamentable”.

The European Union this month agreed to raise its renewable energy target to 32 percent by 2030.

Japan’s policy also envisions nuclear providing more than 20 percent of the country’s energy needs by 2030, reflecting the government’s ongoing commitment to the sector despite deep public concern after the 2011 Fukushima disaster.

The government has reduced Japan’s reliance on the sector, but defends nuclear as an emissions-free energy source that will help the country meet its climate change commitments.

Critics though say the government has done too little to push renewable energy as a viable option.

Japan currently generates around 90 percent of its energy from fossil fuels, and the plan calls for that figure to drop to just over half, with energy efficiency policies to cut demand.

Reliance on fossil fuels like coal increased in Japan after the Fukushima disaster, as public anger over the accident pushed all of the country’s nuclear reactors offline temporarily.

Six reactors are currently operating, and utilities face public opposition to activating more despite political support for the nuclear industry.

Japan’s TEPCO, which operated the Fukushima plant, signalled last week that it was ready to resume work on the construction of a new nuclear plant in the country’s north.

“While we have strong obligations resulting from the Fukushima accident, we believe that it is our duty to ensure sufficient electricity supplies to avoid cuts,” TEPCO chief Tomoaki Kobayakawa said Friday.

The government’s plan also includes a pledge to reduce the country’s 47-tonne stockpile of plutonium, which is large enough to produce 6,000 atomic bombs, though it is mostly stored overseas.

Japan has sought to generate energy from the material, but decades of research has not produced an effective and commercially viable method, leading to international criticism of Tokyo for continuing to produce and possess plutonium.


BP begins operating $28B Azerbaijan gas pipeline to Turkey, Europe

July 2, 2018

British petroleum giant BP has started operating a $28-billion pipeline in Azerbaijan to supply gas to Turkey and elsewhere in Europe, the company said in a statement on Monday.

The “Shah Deniz 2” development is “the starting point for the Southern Gas Corridor series of pipelines that will for the first time deliver natural gas from the Caspian Sea direct to European markets,” it said.

The pipeline bypasses Russia and has been supported by the European Union, which is keen to reduce Europe’s energy dependence on Moscow.

Image may contain: sky, ocean, outdoor, water and nature

“Together with the Southern Gas Corridor pipeline system, Shah Deniz 2 will deliver significant new energy supplies to Europe, further diversifying its sources of energy,” said BP group chief executive Bob Dudley, quoted in the statement.

The giant Shah Deniz field holds about one trillion cubic metres of natural gas, according to BP estimates. The first phase of the its exploration started in 2006.

Azerbaijan inaugurated the pipeline – which will feed into the Trans-Anatolian Natural Gas Pipeline (TANAP) in Turkey – at the end of May. On June 12, President Recep Tayyip Erdoğan, Azerbaijani President İlham Aliyev and Georgian President Giorgi Margvelashvili met in the central Turkish province of Eskişehir to officially open the pipeline.

From Turkey, the Trans-Adriatic Pipeline will take the gas on to Italy.

The Southern Gas Project aims to transport gas 3,500 kilometers from the Caspian Sea to Europe just as the West is looking to reduce its reliance on Russian energy. The $40-billion (35-billion-euro) project consists of three linked pipelines that will bring gas from the vast Azerbaijani Shah Deniz 2 field across Azerbaijan, Georgia, Turkey, Greece, Albania and the Adriatic Sea to southern Italy.

By 2020, the Southern Gas Corridor is expected to bring around 10 billion cubic meters of natural gas to Europe a year. Another 6 billion cubic meters of gas will go to Turkey.

Currently, TANAP has four partners. The Southern Gas Corridor (SGC) holds a 58 percent stake in TANAP, while Turkey’s Petroleum Pipeline Corporation (BOTAŞ) and BP own 30 percent and 12 percent, respectively. Seven percent of SGC’s stake has been recently transferred to the Turkish subsidiary of the State Oil Company of the Azerbaijan Republic (SOCAR).

China can hurt America in trade war six ways from Sunday

June 21, 2018
The threat of a full-scale trade war between the US and China has dominated the news in recent weeks. The countries have exchanged import tariffs on each other’s goods, and are threatening further protective steps.

After numerous threats to tax Chinese imports, US President Donald Trump fired the first shot by approving $50 billion in tariffs that will come into force on July 6. Beijing immediately responded by imposing a 25-percent tariff on American imports worth $34 billion, which will come into effect on the same day.

Image result for china, currency, photos

Russia Today (RT)

Trump issued a threat to impose additional 10-percent levies on $200 billion of Chinese goods coming to the US. This prompted a pledge from China’s Commerce Ministry to “forcefully fight back” with “qualitative” and “quantitative” measures.

Image result for china, commerce ministry, photos

China’s Commerce Ministry

The mutual exchange came two months after the White House slapped China and several other nations, including Russia and India, with an import tax of 25 percent on steel and 10 percent on aluminum. In late May, the measure was extended to the EU, Canada and Mexico.

Now that everyone’s cards are on the table, the question is what else China can do to protect itself and minimize damages in this fierce fight between the world’s two largest economies. Let’s explore the possibilities.

Cutting US investments

Chinese corporations have significantly decreased their investments in the US amid the mounting spat, reports Rhodium Group, a research provider that tracks Chinese foreign investment. The reported plunge totaled 92 percent within the first five months of this year.

China became America’s strategic partner at the end of the last century as part of a US plan to undermine the Soviet Union. This had involved enormous efforts by Washington dating back to the Nixon administration.



US friendly suggestion to China: Buy more American gas if you don’t want more tariffs 

US friendly suggestion to China: Buy more American gas if you don’t want more tariffs — RT Business…

Donald Trump’s economic adviser has a suggestion as to how China can avoid more tariffs on its goods – buy more liquefied natural gas (LNG) from America.

In the early 2000s, however, the George W. Bush administration turned Beijing from a strategic partner into a strategic rival. Chinese companies invested heavily in the US, but Washington’s tougher stance on imports and with US regulators derailing major deals, Chinese investments have been drying up.

Further tariffs on US imports

Beijing could escalate tariff hikes on more American products. While analysts agree that no one would emerge as a winner from the conflict, Beijing says it’s willing to take pain in order to protect its interests. If the trade war escalates, major American corporations would be damaged. China is already targeting American products from states that backed Donald Trump during his presidential campaign. So far, Beijing has taxed American fruit, nuts, pork, wine, soybeans, corn, wheat, rice, sorghum, beef, poultry, fish, dairy products, alfalfa, and vegetables. But Apple and Boeing could be the next targets.



China can substitute US oil with Iranian crude to ‘infuriate Trump’ – analyst 

China can substitute US oil with Iranian crude to ‘infuriate Trump’ – analyst — RT Business News

Beijing’s retaliatory measures against US tariffs can include penalties on oil coming to China from America. A cut in Chinese purchases of US oil may benefit Iran’s sales and anger Washington.

Rejecting US oil and gas

China, the world’s biggest energy consumer, has become one of the key purchasers of US oil since Washington allowed its producers to sell crude abroad after a 40-year ban. At the same time, China is set to become the world’s largest buyer of liquefied natural gas (LNG) in the next decade. Beijing has pledged to announce additional duties on the remaining $16 billion of US goods, including crude oil, LPG, gasoline, naphtha, fuel oil and natural gas.

READ MORE: Yuan going global as China boasts largest foreign reserves & infrastructure megaprojects

China has been the largest Asian buyer of US crude, with its market share rising to 3.5 percent in the first quarter from 0.4 percent over the same period a year ago, according to S&P Global Platts. China accounted for 23 percent of total US crude exports in March, data from the Energy Information Administration reveals. “LPG is expected to face the second biggest impact” Platts said in an emailed report, citing US supplies that accounted for 22.4 percent of China’s total propane imports in the first quarter.

Although LNG is not on the list yet, Beijing might introduce additional tariffs on some of its energy imports from the US, and decrease purchases or completely stop buying oil and gas from the US altogether.

Yuan devaluation

A weaker national currency would help China to boost trade competitiveness. Beijing might relax capital control measures, which have helped the country’s authorities to strengthen the renminbi over the past two years. The step would help the country’s exports.



Trade wars lead to real wars where the strong prey on the weak – economists to RT 

“One would imagine that China will be thinking about currency devaluation again. The yuan doesn’t trade freely, and analysts are often left wondering what the People’s Bank of China has in mind for the currency,” said Rabobank’s senior Asia-Pacific strategist Michael Every, as quoted by Market Watch. “Devaluation is one of Beijing’s most powerful economic tools.”

Dumping treasuries

As a tit-for-tat response, the Chinese government might use the ‘nuclear option’ and take aim at the largest American import – government debt. China held some $1.18 trillion of US treasuries as of the end of April, making it the largest of America’s foreign creditors and the second overall owner of US government bonds after the Federal Reserve. Dumping those holdings could drive bond yields higher and make it more costly to finance the federal government. The step would have a major negative impact on US finances and global investors.

For more stories on economy & finance visit RT’s business section

OPEC, Russia may Inclease Oil Flows To Make up for Losses in Iran, Venezuela

June 13, 2018

An oil production shortfall in Iran and Venezuela may force OPEC and Russia to decide later this month to open their taps, the International Energy Agency said Wednesday.

© AFP/File | OPEC and Russia may have to open their oil taps to plug a supply gap

Even if the supply gap, triggered by the US reimposition of sanctions on Iran and a political crisis in Venezuela, is plugged, the oil market will likely remain vulnerable to disruption next year, the IEA added.

Traders are holding their breath for the June 22 meeting of oil ministers from OPEC member states in Vienna.

OPEC and Russia decided in 2016 to cut their supply in order to push prices up following a crash in prices induced by a global crude production glut.

But the Paris-based IEA, echoing statements from oil producers as well as analyst comment in recent weeks, said there may be a change to the so-called Vienna agreement.

“We have looked at a scenario, not a forecast, showing that by the end of next year output from these two countries (Venezuela and Iran) could be 1.5 mb/d (million barrels per day) lower than it is today,” it said in a report.

“To make up for the losses, we estimate that Middle East OPEC countries could increase production in fairly short order by about 1.1 mb/d and there could be more output from Russia on top of the increase already built into our 2019 non-OPEC supply numbers,” it added.

The IEA meanwhile warned that whatever the outcome of the meeting, “the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption”.

It added: “We support all efforts to minimise supply disruptions that, as history shows us, are not in the interests of either producers or consumers.”