Archives for October 2019

After years of delays, on Wednesday Denmark finally gave the approval for building a section of the pipeline inside its exclusive economic zone off the shore of Bornholm.  With the receiving terminal in Germany well underway, this paves the way for the pipeline’s completion by next year, only slightly behind schedule.

“This is a geopolitical issue, this strengthens Russia and weakens Europe,” Ukrainian President Volodymyr Zelensky said in a press conference with NATO Secretary General Jens Stoltenberg in Kiev on Thursday.

Also on rt.com Full stream ahead! Denmark removes final hurdle for Russian gas pipeline to Europe

Not quite. The pipeline strengthens Russia’s economic position – while it’s Ukraine, not the EU, that ends up weakened politically.

Kiev, Washington, Warsaw and the Baltic States have tried just about everything to halt Nord Stream 2’s construction, citing a variety of arguments. A perennial favorite is that the pipeline would increase Europe’s dependency on Russian gas, while also depriving Ukraine of something like $3 billion in transit fees.

The trouble with these two arguments is that they are mutually contradictory. If the EU were to forswear Russian gas entirely – and replace it, say, with US liquefied natural gas (LNG), aka “molecules of freedom” – Ukraine would lose the transit fees anyway. Not that this is even remotely possible, because the US does not have the capacity to make up for 200 billion cubic meters a year coming in from Russia. Even if it could, it would be at the price point the Europeans could not afford.

Also on rt.com US arm-twisting pipe dreams aside, Europe just won’t quit Russian gas imports

Secondly, although Russia gradually reduces the amount of gas it pumps through Ukraine, it still accounted for about 87 billion cubic meters in 2018. That’s in addition to about 55 billion cubic meters that are pumped on average through Nord Stream pipeline. While Nord Stream 2 will be able to add another 55 billion, shutting off the valve to Kiev entirely would still reduce Moscow’s gas exports. The only way Europe’s “dependency” would increase is if the pipelines through Ukraine continue to run at full capacity – which would mean Kiev would collect transit fees anyway.

Admittedly, those fees might have to be reduced somewhat, as Ukraine would lose its stranglehold on Russian gas exports – which is the actual complaint of Kiev and Washington.

Simply put, Russia’s ability to bypass Ukraine if needed greatly diminishes its geopolitical use to Washington – and after the US spent billions on installing and supporting client regimes in Kiev not once, but twice in ten years.

Back in 2009, the “Orange Revolution” government in Kiev diverted EU-bound Russian gas to its own use, after Gazprom slashed deliveries due to delinquency. This resulted in a total shut-down of gas deliveries in the middle of January, during a cold snap no less. Western media uniformly blamed Russia for the situation. This standoff was the impetus for the construction of both Nord Streams and what would become the ‘Turkish Stream.’

Also on rt.com ‘Molecules of freedom’?! US Energy Department rebrands LNG as ‘freedom gas’

The January 2009 gas crisis was only resolved when Kiev accepted a 10-year compromise deal. That contract is set to expire at the end of 2019, and negotiations to extend it have not made much progress – creating the prospect of a freezing Christmas in much of Europe, and making Nord Stream 2 look that much more attractive.

The US Congress has been threatening sanctions against anyone involved in the construction of both Nord Stream 2 and Turkish Stream, but has not followed through on the threats yet. At this point, it is too late to stop the pipelines’ completion – and the resulting loss of strategic leverage – but that does not mean Washington is above doing something, out of sheer spite and frustration.

One thing should be clear, though: it will have nothing to do with the feigned concerns for the welfare and comfort of Europeans.

Nebojsa Malic, senior writer at RT

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

Article source: https://www.rt.com/business/472341-nord-stream-us-leverage-concerns/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60 percent of total deal, after APEC in Chile was canceled due to unrelated circumstances,” he said on Twitter.

Trump added that “the new location will be announced soon. President Xi and President Trump will do signing!”

China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!

— Donald J. Trump (@realDonaldTrump) October 31, 2019

On Wednesday, Chilean officials said they were cancelling the November 16-17 Asia-Pacific Economic Cooperation summit to focus on restoring law and order in the country. It is the first time a country has pulled out of hosting the international conference at such short notice.

Trump had been planning to meet his Chinese counterpart, President Xi Jinping, at the summit, to discuss a possible trade deal.

Following the cancellation report, the White House said that, although a new location was yet to be found, the US still expected to sign an initial trade agreement with China next month.

Also on rt.com Chile withdraws as APEC summit host after weeks of anti-government protests

“We look forward to finalizing Phase One of the historic trade deal with China within the same time frame,” the White House said.

China’s commerce ministry said on Thursday that the bilateral talks will continue to proceed as previously planned and that the lead trade negotiators from both countries would speak by telephone on Friday.

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

Article source: https://www.rt.com/business/472304-us-china-trade-deal-apec/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to Norway’s national broadcaster NRK, the bloc may unilaterally grant eleven licenses to Latvia, four to Lithuania, three to Poland, and one each to Estonia and Spain.

The EU argues that Norway, which is not part of the European Union, is in violation of the Svalbard Treaty because it discriminates between Norwegian and foreign fishing vessels. The 1920 international agreement guarantees Norway’s sovereignty over Svalbard, while providing opportunities for signatory countries to conduct business and fishing there. It also cements Svalbard’s status as a demilitarized zone.

Also on rt.com Kara Sea may become Russia’s key Arctic fishing ground

Norway’s Fisheries Minister Harald Tom Nesvik insists that no one is allowed to fish for snow crab on the Norwegian continental shelf without a permit from Oslo.

“This is standard procedure. They issue these licenses to the countries that have requested them. But the EU-issued licenses don’t matter. If you want to catch snow crab, the quota from Norway applies,” Nesvik said.

According to him, the fisheries minister is not afraid of any physical contact between vessels in the Svalbard zone ahead of the fishing season. “It would be very stupid, because then they will be arrested for breaking the law. The EU is very much aware of the fact that the quotas are issued by Norway. These are licenses without significance.”

Also on rt.com Fishy fuel: Norwegian cruise ships to be powered by dead fish

Norway believes it has exclusive rights to catch snow crab in the fisheries protection zone around the archipelago. Last winter, the Norwegian Supreme Court rejected an appeal from a Latvian shipping company. Member of the European Parliament Jarosław Wałęsa, from Poland, suggested earlier that EU fishermen are being treated like criminals in Norway.

Snow crabs reside in the North Atlantic and North Pacific oceans, preferring the deep, cold water conditions of these seas. In the Barents Sea, it was first observed by Russian scientists in 1996. Since then, a large stock has established itself around the Norwegian archipelago of Svalbard as well.

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

Article source: https://www.rt.com/business/472279-crab-war-norway-arctic-eu/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“Major movers” such as Russia, China, and the European Union have a strong “motivation to de-dollarize,” Korin, the co-director at the energy and security think tank, told CNBC.

“We don’t know what’s going to come next, but what we do know is that the current situation is unsustainable,” she said, adding “You have a growing club of countries — very powerful countries.”

Also on rt.com Death of US dollar? China launches petro-yuan to challenge greenback’s dominance

She explained that when the greenback is used or transactions are cleared through an American bank, entities are subject to US jurisdiction — even if they have “nothing to do with the US.”

As an example she pointed out to Washington’s unilateral withdrawal from the Iran nuclear deal in 2018 and the following restoration of sanctions on the Islamic Republic.

“Europe wants to do business with Iran. It doesn’t want to be subject to US law for doing business with Iran, right?” she said. “Nobody wants to be picked up at an airport for doing business with countries that the US isn’t happy that they’re doing business with.”

As a result, countries have a “very, very strong motivation” to shift away from using the greenback, she said.

Also on rt.com US sanctions on Iran behind yuan-traded oil futures gain on petrodollar

Korin noted if the dollar declines in influence, other currencies, particularly Chinese yuan, could fill the role traditionally played by the greenback.

Yuan-denominated oil futures (petro-yuan) could serve as an early warning sign for the dollar’s waning dominance, she said. “I think it’s a canary in the coalmine. Look, 90% of … oil is traded in dollars. If you have a sort of a beginning to crumble away (at) the dominance of the dollar over oil trade, that’s a nudge in the direction of de-dollarization.”

She added that while the petro-yuan may be a “necessary” condition for the international abandonment of the dollar, it’s “not sufficient” to make it happen on its own.

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

Article source: https://www.rt.com/business/472270-countries-turning-away-from-dollar/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Concho Resources said that in order to mitigate risk from a potential ban on fracking in 2021, the company is running rigs on its federal acreage now.

The comment comes in light of the relatively strong rise of Massachusetts Senator Elizabeth Warren, who is arguably the front runner, or at least in the top tier. Vermont Senator Bernie Sanders has trailed a bit, although a new poll from New Hampshire has him in first place there. Former Vice President Joe Biden, who offers up a more industry-friendly approach to energy and climate change, has slid in the polls. He is still considered among the top tier, but his fundraising has been anemic, his performance halting and unconvincing, and his momentum heading in the wrong direction.

US shale an ‘unmitigated disaster’ with industry hundreds of billions in debt – shale pioneer

Senators Bernie Sanders and Elizabeth Warren have both promised to ban hydraulic fracturing. As president, neither would be able to outright ban the practice entirely, as it would require an act of Congress. But their ability to disrupt the use of fracking on federal lands would be much greater.

“‘If Sen. Warren were to win…’ was getting a lot of airtime in our meetings,” Jake Roberts, an exploration-and-production analyst at Houston’s Tudor, Pickering, Holt Co., told the Wall Street Journal recently. “We were surprised to see people taking it so seriously.”

Tudor Pickering said that if fracking were banned, oil and natural gas prices would spike and many oilfield services companies would be forced out of business. A mid-October analysis from RBC Capital Markets found that Talos Energy was most exposed to a regulatory crackdown, largely the result of a hypothetical ban on offshore drilling in federal waters.

A Cowen Inc. analyst told the WSJ that some companies that have a relatively heavy reliance on federal lands have underperformed lately, “coincidentally, or not.” Those include, Devon Energy, Concho Resources, and Occidental Petroleum. Meanwhile, companies like Kosmos Energy, Hess Corp., and Apache Corp. would lose little, Sanford C. Bernstein analysts said in early October.

Ironically, some of the oil majors might stand to benefit, since higher prices would boost revenues from their oil and gas sales elsewhere, offsetting their losses in the Permian and other shale basins. Canadian oil producers would also benefit as some of their shale competitors are knocked on their backs, although Canadian pipelines traveling to the US would likely be on the chopping block as well.

Federal lands play a particularly prominent role in New Mexico, and to a lesser degree in Colorado, Wyoming and North Dakota. New Mexico has rapidly become one of the fastest growing sources of new oil and gas production. Permian drillers have increasingly migrated from West Texas into New Mexico, targeting land that has yet to be developed. Even as some counties in Texas have lost rigs over the past year, nearby counties in New Mexico have seen an increase.

The real history of fracking: Oil, bombs and civil war

But the comments from Concho Resources are the most concrete example to date of the industry acting in advance of potential regulatory restrictions. Concho’s Chairman and CEO Tim Leach went out of his way to briefly touch on the company’s risk from regulatory action in his prepared marks on an earnings call on Wednesday. “Today, sentiment toward the sector is low and amplified by campaign promises to severely limit or regulate away oil and gas operations,” Leach said. “Since we don’t know how the politics will resolve, I’ll clarify that our exposure to federal acreage is about 20 percent of our total gross and net acreage position. And our capital allocation toward that acreage is roughly the same.”

When an analyst followed up and asked him how the company plans on mitigating the risk of a federal ban, Leach said: “the things that we are doing to mitigate that are, we have quite a bit of activity on them right now,” before adding that the company could pivot back to the comfort and safety of private land in Texas.  “We’ve always run a program where we have properties right across the state line where you can move rigs back and forth.”

He added: “We have a great deal of flexibility if we need to reallocate that capital.”

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/472271-us-democrats-fracking-boom/?utm_source=rss&utm_medium=rss&utm_campaign=RSS