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19 July 2014

Press review 19-07-2014 - Raging wars

There are moments like this, when war seems to burst everywhere at the same time. Afghanistan, Iraq, Syria, Gaza, Libya, Ukraine, all filled up front pages throughout the week; and these are just the conflicts the media picks up, there is plenty of other gory stuff going on in Africa, for instance. Tension mounts in a world that is definitely going through a period of re-distribution of power and influence.

In Ukraine the conflict deepened significantly with the killing of hundreds of foreign civilians. The western media blames it on the russophone separatists, while the Russian media blames it on the Ukrainian army. As Aeschylus long ago wrote, "truth is the first casualty of war". Along the way, adequate supplies of gas to Europe the coming winter seem ever more menaced.

Apart from Ukraine, Iraq remains the most threatening case to our energy predicament. The picture is starting to look really bleak for the Baghdad government. Lacking foreign intervention a victory in this war seems a remote possibility.

12 July 2014

Press review 12-07-2014 - Peak Oil in Russia

This week no energy relevant developments came out of Iraq. The Islamic State seems to be still consolidating its territories, facing scant opposition from the Baghdad government. But the spectacular advances seem to be done with, at least for now. Few western media outlets are able to properly report the situation, with gory news now focusing on Israel and Gaza.

The news meat-grinder has recently been profuse in news regarding the breakaway of the BRICS from the IMF and other OECD controlled institutions. This was a setting trend but that has been accelerated by the backlash of the US spying programme and, more importantly, by the intervention of NATO in Ukraine.

In the midst of all this comes almost unnoticed what is probably the most important energy news of 2014: Petroleum extraction in Russia has definitely peaked. Russian authorities are openly bracing for the ensuing decline in exports and revenues. This was one of the points I recently raised supporting the hypothesis of a return to price volatility.

05 July 2014

Press review 04-07-2014 - Waiting for the impact

The flow of news out of Iraq is slowly drying out. The foreign media has access to the Kurdish region, Baghdad and little else. From the newly occupied territories the jihadists are themselves the only reporters available, with gory contents regularly feed to the internet. The Baghdad government launched a counter-offensive last weekend, and although it has failed to gain any relevant territory, it seems to have halted, or at least delayed, the advance of the Islamic State (formerly known as ISIL).

Where will it all end? Can the jihadists content themselves with the Sunni territories or will they seek further expansion? Their organisation and capacities do not cease to surprise, how far can they really go?

So far their methods and efficacy have alarmed everyone else in the region, even Sunni majority states such as Saudi Arabia. For us living here in the so called West, life seems to go on exactly as before, but in fact the world has become a different place the past few weeks.

28 June 2014

Press review 28-06-2014 - “Iraq is finished”

The news meat-grinder is still ablaze with Iraq. Day in day out there are reports of Sunni forces lead by ISIL taking another town, another important infrastructure, another border post. ISIL alone seems in control of the whole section of the Euphrates valley between the Turkey-Syria border and the gates of Baghdad. The huge triangle between that valley, the Tigris valley and the Kurdish autonomous region seems also fully controlled by Sunni forces, ISIL or other.

The reporting by the western media is increasingly contradictory, one day ISIL is in complete control of the Baiji refinery, the following day it is still Baghdad in control. Monday the Sunni are reportedly fighting each other, Wednesday al-Nusra militants are pledging alliance to ISIL. But I reckon that reporting on this story must be anything but easy.

If up to now I considered the threats on Baghdad mostly rhetoric, reported gains by ISIL south of the capital call for reconsideration. It is not clear that ISIL has an army powerful enough to take a city of this size, but its breathtaking advance means it can not possibly be underestimated.
“Iraq is finished,” he said. “Maliki is nothing. Baghdad is finished. Now there will only be a Shiite-stan, Sunni-stan and Kurdistan.”

Peshmerga officer to Mitchell Prothero of McClatchyDC.

21 June 2014

Press review 21-06-2014 - A bleak picture

ISIL still tops the energy news this week as it consolidates and expands its gains in Iraq. It now controls most of the territory between the Tigris and the Euphrates, including the petroleum reserves underground. The impact ISIL is having on Iraq's total petroleum extraction - and most importantly exports - is largely unknown, as the advances of ISIL once again mean the western media left cut off. Contradictory reports flew throughout the week about who controls important cities such as Baiji and Tal Afar.

The US confirmed its intentions to fend off the advance of Sunni factions, but naturally nothing was said of the support it has been lending to jihadists in the region. But if coming, these are still small steps, no relevant military actions are foreseen in the short term. One of the reasons floated by the US media for this hesitation is a lack of intelligence regarding the geographic lay out of the Sunni command hierarchy. Quite ironic, one year after Edward Snowden's revelations - it seems the US has wired the whole world, except for those that really matter wiring.

On the field there are now reports of shortages of refined products; the impacts of this war are definitly coming.

18 June 2014

Extracted - the trailer

Extracted is the title of a book edited by Ugo Bardi, to which I contributed and that was recently published by Chelsea Green. I had previously left a few lines describing its contents, but now an account by Ugo himself has been made available in video.



Not so clear what the methane tap is doing there, but appart from that the video is quite good. This book is an essential piece of the economical and environmental puzzle we live these days; naturally highly recommended. Beyond Ugo's remarks on the cost of source rock fossil fuel resources I'd also note the vast artificial inflation of reserve estimates uncovered recently. Certainly something not in the fix toolbox.

14 June 2014

Press review 14-06-2014 - ISIL launches its Fall Gelb

In Normandy most political world leaders were gathered to signal the 70th anniversary of Operation Overlord. In Iraq a large scale military operation lead by ISIL was under way, that in spite of the screaming irony of the date, more resembles Fall Gelb. A highly mobile force of unknown numbers stormed several cities almost simultaneously: Mosul, Baiji, Tikrit, Samarra, Ramadi, to which added bombings in Baghdad and other cities in the south. A front line of almost 400 km was open.

The usual western media branding of "terrorism" or "sectarian violence" no longer applies to the actions of ISIL in Iraq. A force capable of withstanding and win an urban battle in a city of over 1 million inhabitants is not a terrorist group, not even a guerilla, it is an army, fighting a conventional war. In a week it took two entire provinces of the country: Nineveh and Saladin, amounting to an area the size of Latvia and home to almost 2.5 million folk. Although accurate information is scant, ISIL should now be in control of at least 15% of Iraq's petroleum exports. At the time of this writing ISIL is still expanding its attacks into at least the provinces of Diyala and Sulaymaniyah.