Friday, October 8, 2021

A global energy crisis is coming. There's no quick fix


Julia Horowitz byline
By Julia Horowitz, CNN Business

Updated 1143 GMT (1943 HKT) October 7, 2021

A global energy crunch caused by weather and a resurgence in demand is getting worse, stirring alarm ahead of the winter, when more energy is needed to light and heat homes. Governments around the world are trying to limit the impact on consumers, but acknowledge they may not be able to prevent bills spiking.

Further complicating the picture is mounting pressure on governments to accelerate the transition to cleaner energy as world leaders prepare for a critical climate summit in November.
In China, rolling blackouts for residents have already begun, while in India power stations are scrambling for coal. Consumer advocates in Europe are calling for a ban on disconnections if customers can't promptly settle what they owe.

"This price shock is an unexpected crisis at a critical juncture," EU energy chief Kadri Simson said Wednesday, confirming the bloc will outline its longer-term policy response next week. "The immediate priority should be to mitigate social impacts and protect vulnerable households."

In Europe, natural gas is now trading at the equivalent of $230 per barrel, in oil terms — up more than 130% since the beginning of September and more than eight times higher than the same point last year, according to data from Independent Commodity Intelligence Services.

In East Asia, the cost of natural gas is up 85% since the start of September, hitting roughly $204 per barrel in oil terms. Prices remain much lower in the United States, a net exporter of natural gas, but still have shot up to their highest levels in 13 years.

"A lot of it is feeding off of fear about what the winter's going to look like," said Nikos Tsafos, an energy and geopolitics expert at the Center for Strategic and International Studies, a Washington-based think tank. He thinks that anxiety has caused the market to break away from the fundamentals of supply and demand.

The frenzy to secure natural gas is also pushing up the price of coal and oil, which can be used as substitutes in some cases, but are even worse for the climate. India, which remains extremely dependent on coal, said this week that as many as 63 of its 135 coal-fired power plants have two days or less of supplies.
The circumstances are causing central banks and investors to worry. Rising energy prices are contributing to inflation, which already was a major concern as the global economy tries to shake off the lingering effects of Covid-19. Dynamics over the winter could make matters worse.
No easy solution
The crisis is rooted in soaring demand for energy as the economic recovery from the pandemic takes hold, and a carefully calibrated system that's easily disrupted by weather events or mechanical problems.
An unusually long and cold winter earlier this year depleted stocks of natural gas in Europe. Soaring demand for energy has impeded the restocking process, which typically happens over the spring and summer.

China's growing appetite for liquified natural gas has meant LNG markets can't fill the gap. A decline in Russian gas exports and unusually calm winds have exacerbated the problem.
"The current surge in European energy power prices is truly unique," energy analysts at the Société Générale bank told clients this week. "Never before have power prices risen so far, so fast. And we are only a few days into autumn — temperatures are still mild."

The dynamics are reverberating globally. In the United States, natural gas prices have risen 47% since the beginning of August. The scramble for coal is also triggering a spike in the price many European companies have to pay for carbon credits so they can burn fossil fuels.

Additionally, the energy crunch is supporting oil prices, which hit seven-year highs in the United States this week. Bank of America recently predicted that a cold winter could push the price of Brent crude, the global benchmark, past $100 per barrel. Prices haven't been that high since 2014.
Jim Burkhard, who leads IHS Markit's research on crude oil, energy and mobility, said there's "no immediate relief in sight."

"There's no Saudi Arabia for gas," he said, referring to a single supplier that can quickly ramp up natural gas production. "This looks like it's going to endure for the winter in the Northern Hemisphere."
Russia could theoretically step up. Société Générale noted that faster approval by German authorities of the politically-sensitive Nord Stream 2 pipeline, which would carry gas directly from Russia to Europe, would ease significant stress.

On Wednesday, Russian President Vladimir Putin suggested that Russia could increase its output, saying that state-owned gas giant Gazprom has never "refused to increase supplies to its consumers if they submit appropriate bids."
But Neil Chapman, senior vice president at ExxonMobil (XOM), emphasized the short-term constraints at an industry conference this week.

"Of course there's great concern," Chapman said at the virtual Energy Intelligence Forum. "In our industry, because it's capital intensive, you can't just turn on the supply."
Crisis with a cost
The best case scenario, according to Burkhard, is that a winter with average temperatures allows pressure to lift in the second quarter of 2022.

But severe weather in the coming months would create huge strain — particularly in countries that rely heavily on natural gas for energy production, like Italy and the United Kingdom. Britain is in a particularly tough spot because it lacks storage capacity, and is dealing with the fallout from a broken power line with France.

"The UK is arguably at the highest risk of Europe's major economies of a winter supply shortfall," Henning Gloystein, director of the energy, climate and resource team at consultancy Eurasia Group, said in a note to clients this week. "Should this happen, the government would likely demand factories to reduce output and gas consumption in order to ensure household supply."

The massive jump in energy costs, which shows no signs of abating, is fanning inflation fears, which already had been forcing policymakers to carefully consider their next steps.
Energy prices in developed countries rose 18% in August, the fastest pace since 2008, according to data released Tuesday by the Organization for Economic Cooperation and Development. And that was before the situation deteriorated significantly in recent weeks.

Higher energy bills could crimp consumer spending on clothing or activities like dining out, hurting the comeback from the pandemic. If businesses are asked to curtail activity to conserve power, that could also hurt the economy.
"There are concerns that rising gas prices will put Europe's post-pandemic economic recovery at risk," Gloystein said.

There's also anxiety that price volatility could feed public skepticism about funding for the energy transition, according to Gloystein, should consumers demand more investment in oil and gas to limit future fluctuations.

Governments that have committed to reducing emissions are preemptively trying to send a firm message: This bolsters, not undermines, the case for investing in a broader mix of energy sources.
"It's very clear that with energy in the long term, it is important to invest in renewables," European Commission President Ursula von der Leyen said Wednesday. "That gives us stable prices and more independence, because 90% of the gas is imported to the European Union."
— James Frater, Laura He, Katharina Krebs and Diksha Madhok contributed reporting.

Greek Grandma, 87, Faces Trial for Shooting Burglar in Her Own Home


By GR Theo Ioannou
October 7, 2021

The 87-year-old grandmother who shot a burglar after he entered her home in a village in Pyrgos, the Peloponnese, spoke to MEGA TV about her experience. Credit: TV Screenshot
An 87-year-old Greek grandmother in Pyrgos, in the Peloponnese, will go on trial for shooting a burglar who broke into her home. The elderly woman says she had simply had it with burglars, who have broken in and stolen from her five times since last July.

The grandmother shot the burglar with an airgun, after he entered her home from an unbolted back entrance. She is facing charges of causing grave bodily harm. She claims she was frustrated and that she didn’t shoot to kill.

In a television interview on Wednesday, the 87-year-old grandmother said that she was lying in her kitchen bed when she saw a man coming into the house. The burglar was looking for jewelry and cash, according to her testimony.

“It wasn’t the first time he had entered my home,” she explained. “They have stolen my money, they have beaten me, hard, and they just won’t stop.” The burglar was attempting to get to the woman’s handbag when he saw her and attacked her with a stick. He hit her in the face, injuring her right eye.

Grandma shot the burglar with airgun
In defense, she took her airgun and shot him in his left arm, without aiming. “I couldn’t take it anymore,” she says, so “this time I shot at him.” The grandma says that the very same two burglars have broken into her house and stolen from her a total of five times.

She claims that the people who have repeatedly broken into her home are two Roma brothers who live in the area. She says she had told the local police about those incidents and had warned the brothers that if they tried it again, she would shoot them.

The wounded burglar disappeared from the scene, but was later arrested by the police. The 87-year-old grandmother will face charges for shooting him, according to Greek law — even though he entered her home and attacked her.

“If I’m still alive by the time I get to court”
That is, that will happen “if I’m still alive by the time we get to court,” she says, pointing out the typical delays in trials in Greece. Often it takes more than five years for a case to come before the court.

According to her village neighbors, the grandmother lived in Toronto, Canada for over 40 years. She came back to her home village to spend the last years of her life in the place where her family had lived and died.

As for the Roma brothers, one of which was the wounded burglar, the 87-year-old says they live in a nearby village and the local people know about them. “Every time they break into my house, they steal more money,” she says. “I don’t care if I go to prison. I’ve been through worse, I will get through this too.”

Thursday, October 7, 2021

Montgomery: "I am afraid of a new conflict in the Balkans"


Former US Ambassador to Croatia William Montgomery has expressed fears that new conflicts could break out in the Balkans.



He believes that the reason is that not s a single problem in the Balkan countries has been solved.

Montgomery pointed out that an additional problem stands in the fact that it no longer attracts the attention of other countries.

"I think that in the 1990s, this place was the main place in the world that our leaders focused on. Today, that is not the case and I do not believe that these countries can solve the issues that bother them. Feelings from all sides are so upset that I do not see solutions", Montgomery pointed out as a guest on HRT, reports the "Klix" portal.

He also stressed that he believes the European Union does not provide assistance and support to the entire Balkan region.

"I think that people here are somehow lagging behind in terms of their views on other European countries. We should not forget that Germany and France were at war for centuries and stopped only after the Second World War. That will happen to this region as well. However, the most important thing is that the help of the European Union will be needed for that, because this region cannot succeed on its own. It needs full support of the West, the United States and the EU for these changes to happen in time," Montgomery concluded.

In the show, Montgomery spoke extensively about the war in Vietnam, which is one of the topics that found a place in his book, then about NATO and Tito, and he says that the current situation in the United States is not good.

"I could not be a diplomat today because I no longer believe that the American way is necessarily right and that our democratic system is right for the world," Montgomery said, adding that there are now two Americas, which are almost divided in half.

According to him, the existence of those two Americas prevent the work on any open and unresolved issue for the time being.

Tuesday, October 5, 2021

Greece/Turkey Arms Race: French Frigates vs. German Submarines?


By Theo Ioannou

October 5, 2021 Greek Reporter

The arms race between Greece and Turkey could lead to a conflict, with the use of French and German weaponry. 

It may sounds like a Balkan remake of “Dr. Strangelove,” but there is an extreme war scenario where the arms race leads Greece’s forces to use French frigates to fight Turkey, using German submarines.

The respective naval deals of Greece with France and Turkey with Germany raise some questions that must be answered in terms of Europe’s push for strategic autonomy.

The Turkey – Germany deal was announced last July. Ankara tried to boost its naval power by procuring six new submarines from Germany, a move that shows it wants to flex its muscle in the Eastern Mediterranean.

Greece and France sealed their “strategic partnership” in late September, with an agreement for the sale of three frigates, with the option for a fourth. The first two will be delivered by 2025 and the third in 2026.

In June, Greek Foreign Minister Nikos Dendias formally petitioned Berlin against the sale of the six subs. He asked that Germany stop arming a country which has repeatedly violated territorial rights of two EU member states, Greece and Cyprus.

According to the German ministry, Thyssen, the company constructing the six type U-214 submarines, is bound by a contract signed in 2002.

Arms race between Greece and Turkey involves France and Germany
As the episode with the Greek Nautical Geo vessel showed the other day, a minor incident in the Aegean could occur at any time. If that leads into an impasse between Greece and Turkey, the arms race with French frigates and German submarines could come into world view.

The Greek Navy will soon have French frigates, while the Turkish Navy will have German subs. Credit: Hellenic National Defense General Staff
Of course these kinds of war games have been hanging over the two countries for over 50 years. Needless to say, both are still members of NATO, despite their endless conflicts.

There have been instances where the two neighboring countries have been close to a war. Turkey’s military invasion of Northern Cyprus in 1974 drew a general Army mobilization on the Greek side. But given the collapse of the Greek junta and the rapid deployment of the Turkish forces, all-out war was ultimately averted.

Crises in 1987 and 1996
Thirteen years later another conflict brought the two countries to the brink of war. Turkey learned that Greece was starting to drill for oil in the vicinity of Greece’s Thasos island, which is disputed by Turkey. In response, the Turkish survey ship Piri Reis was sent to the area with an escort of Turkish warships.

The late prime minister Andreas Papandreou gave orders to sink the ship if it was found in Greek waters. Turkish Prime Minister Turgut Özal said that “If Greece interferes with our vessel in any way, and this is what Papandreou is saying, we will act in the same way against him. As a result, it could be cause for war.”

The crisis was solved when Özal announced that if the Greek government did not enter the disputed waters, the Turks would stay out as well; he participated in a phone call with Papandreou.

And then there was the 1996 crisis over Imia, an uninhabited islet in the Aegean. After the owner of a herd of sheep that remained on the islets hoisted a Greek flag on the island, Turkish journalists from Hurriyet newspaper landed on the islet with a helicopter, lowered the Greek flag and hoisted a Turkish flag.

Greek special forces landed secretly on the east islet undetected. Then Turkish armored units moved to the Green Line on Cyprus, which caused the alert of the Cypriot National Guard, and Turkish special forces commandos also landed undetected on the west of Imia, escalating tensions.

The immediate military threat was defused primarily by American officials. The Greeks and Turks did not speak directly to one another, but were responsive to Washington’s assistance as an informal intermediary. Agreement was given by both sides to the United States to return to the “status quo ante.”

Arms race leads to war games
Greece has always relied on EU support. Turkey is in perpetual negotiations with the EU for  membership. Still, Germany, an EU and NATO member, is arming fellow NATO member Turkey with defense submarines which could be used in a conflict with EU member, Greece.

This might very well be a war game scenario for the ages. It also indicates the terms of “allied rivalry,” if not “allied enmity”, between Greece and Turkey.