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Russia: Scary Press Releases
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December 5, 2008: Watching Russian mass media, you'd have a hard time finding out that the Russian stock market has plunged 75 percent in the last four months, and that oil exports have dropped as well. Russia is suffering from a recession, but the state controlled mass media has been ordered to ignore it. Older Russians feel a twinge of nostalgia, for the Soviet period and the need for rumor networks to find the truth that the state controlled press hid. The Internet makes it easier to find the truth, although the government is putting a lot of effort into limiting what news gets into Russia via the web. The government also wants to prevent Russians from getting the truth about Russian history. There is a campaign underway to rewrite the history books and play down the mass murders and state sponsored terror of the Soviet period. During the seven decades of communist, Russia had a third of its population killed off. The Soviet government killed more Russians that German armies and nazi death camps, and the current Russian government wants to keep that knowledge buried along with all of Stalin's victims.

Criminal gangs in the south Caucasus (mainly Chechnya and its neighbors) are growing bolder and more troublesome. The gangs contain separatists and religious fanatics, and are trying to intimidate local police into backing off. Attacks on police stations, and individual cops, are on the rise. The national government has sent down more counter-terror forces, which are also getting hit by the local gangs. Long term, the government usually wins these wars, but determined gangsters can win a lot of the battles.

Russia is making a lot of noise about the U.S. anti-missile systems being installed in Poland and the Czech Republic. Russia believes the anti-missile systems are meant to negate Russia's nuclear weapons (the only really effective military weapon Russia has left). East European countries are fine with that, but the main purpose of the anti-missile system is to knock down the handful of ballistic missiles Iran might be able to fire at Europe in the near future. Nevertheless, Russia sees the anti-missile system as a threat, and has made a series of announcements about new ICBMs being developed that will negate the anti-missile system. In fact, Russia has not been able to develop a new ICBM design, to replace it's "heavy" Cold War era ICBMs (the SS-18 and SS-19). All it really has is the Topol-M (SS-27 in NATO parlance), which was developed at the end of the Cold War. The Topol-M was modified to serve as a new sea launched ICBM (Bulava) and as a heavy ICBM (RS-24) to replace the elderly SS-18s and SS-19s. There is no money for a major new ICBM development program, but Russia can afford to create some scary press releases.

In the last few months, there has been some unrest in the military over major reforms underway. One of these was the dismissal of about half the officer corps. Most of these guys were basically on welfare, with jobs that really had no responsibilities (like commanders of reserve units that lacked equipment, or reserve troops to man the non-existent equipment). Retirement pay is less than active duty pay, and the younger officers won't even get the pension (but a smaller lump sum separation payment instead). With over 150,000 officers getting sacked, there was bound to be some grumbling. But since most of these officers were drones, not go-getters, this is all smoke (and not much of that) and no fire.

Oil exports last month were down 15 percent compared to a year ago, and the oil price continues to plummet (towards $40 a barrel, compared to $140 six months ago).

November 25, 2008:  Russia's nuclear-powered battlecruiser, Peter the Great, the destroyer Admiral Chabanenko, and a supply ship, arrived in Venezuela, to provide to support for the leftist government (and major customer for Russian weapons) there. While Russia has made some well publicized naval deployments, most Russian warships are not getting a lot of sea time.

November 23, 2008: Natural gas is again being used as a diplomatic weapon. Two years ago, Ukraine was paying bargain rates ($130 per thousand cubic meters, which is equivalent to $74 per barrel of oil, a price that is  nearly half what natural gas went for on the world market). After much diplomatic pushing and  shoving, Russia raised the price to $179.50. Now Russia wants to boost the price to $400, and also collect $2.4 billion in unpaid (and disputed) gas bills. Ukraine complains that Russia is demanding higher prices from them than Western Europeans pay. There, the price of natural gas is based on the price of oil. That price has declined over 60 percent this year. At most, Ukraine was expecting to pay $250 per thousand cubic meters of natural gas in 2009. These negotiations make Western Europe nervous, because there were threats of interrupting supplies of Russian gas to Western Europe. Russia can't stop gas shipments to Ukraine without cutting off supplies for Western Europe. Such interruptions were a major issue when Russia first proposed selling natural gas to Western Europe. Russia promised that the gas supply would never become a political issue. Now it is, and West Europe's traditional distrust of Russia is revived. Western Europe is paralyzed by fear of losing a quarter of its natural gas supplies. Two years ago, when Russia cut Ukraine off, the Ukrainians simply diverted gas meant for Western European customers.

November 22, 2008: After earlier hinting, that the long planned deal to lease a new Akula II nuclear submarine to India, was off, officials now insist the deal is still on. The submarine in question, which was completed with Indian financing, was on sea trial last month when a poorly designed fire extinguishing system (it was too easy to accidently turn it on) was activated and killed twenty people. Russia has had major accidents like this in its nuclear subs several times before. Sloppy work and poor design are typical in Russian weapons, even high tech ones. Users learn to live with it, and suffer additional (compared to similar Western equipment) deaths and injuries. India has been using Russian equipment for decades, and knows what they are getting into. The earlier Russian suggestion that the Russians might keep the Akula II sub, was quickly dropped because the Russian government is facing a big deficit because of  how hard Russia getting hit by the global recession. Mainly, the drop in oil prices (off over 70 percent from an earlier peak of about $140 a barrel) and shipments has cut Russia's main source of export sales, and main source of government income.

A U.S. Burke class guided-missile destroyer arrived in Georgia for a four day visit. This annoys the Russians a great deal, as they had long seen the Black Sea as their own private late. The U.S. destroyer visit also reduces the glamour of the Russian battlecruiser visiting South America.

November 20, 2008: Russia agreed to allow Germany to ship military equipment to NATO troops in Afghanistan. Earlier, Russia agreed to allow rail shipment of non-military goods (food, medical equipment, fuel) to NATO troops in Afghanistan.

November 17, 2008: Apparently as part of a deal that had Russia halting shipments of S-300 (similar to the U.S. Patriot) SAM missile system to Iran, Russian arms buyers are negotiating to buy Israeli UAVs. Russia UAVs are a generation or two behind what Israel and the U.S. have. Apparently Israel is going to help Russia catch up, and keep S-300s out of Iran.

November 16, 2008: Russian troops in the south Caucasus continue to allow local militias to cause mischief. Militia gangs in South Ossetia fire, and sometimes move, across the border into Georgia. But if the Georgians fire back, or chase the militiamen into South Ossetia, they risk clashing with Russian troops. Russia is still punishing Georgia for not showing proper deference to Russia. This is something that is happening to all of Russia's borders.  

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john99       12/5/2008 11:49:45 AM
you non stop anti russian PROPAGANDA will get your backers NOWHERE. your propaganda will only unite the world against you even further. your imperialist house of cards is falling down under its own weight.
it's so entertaining to see you fall apart while you wish others the same thing. keep up your BS hallcinations the world is sooo entertained by you idiotic nonsense.  

 
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justbill       12/5/2008 12:54:04 PM

"john99" must be the Russian translation for "jerk off."

 
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jak267       12/5/2008 2:51:32 PM
It's not "anti-Russian propaganda"- it's the truth that the oligarchy that controls Russian doesn't want you to hear. So unless you're in the KGB, you should be spreading the word. Other wise you're just an ignorant yet willing victim.
 
But as for "Russia believes the anti-missile systems are meant to negate Russia's nuclear weapons (the only really effective military weapon Russia has left)" - that's a ludicrous statement. It's only about using the situation to inflame the populace and  justify the government's actions.

 
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Mountaintroll       12/5/2008 7:40:50 PM

you non stop anti russian PROPAGANDA will get your backers NOWHERE. your propaganda will only unite the world against you even further. your imperialist house of cards is falling down under its own weight.

it's so entertaining to see you fall apart while you wish others the same thing. keep up your BS hallcinations the world is sooo entertained by you idiotic nonsense.  



Piss off, Ivan.  We broke you once, we can break you again.  Ask the Germans if you don't believe me.

 
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nyetneinnon       12/6/2008 12:40:51 AM
Hey John...  stop being so anti-Imperialist already!! 
 
Seriously though, I'd agree with about 80% of the content and 60% of the emotion of this editorial.  So I guess I'll agree with John 40% regarding the anti-emotional aspect!
 
Proposal to Obama therefore, given the 80% reality of this content:
 
1) Replace 50+% of US domestic consumption of NG over 8 yrs, with alternative domestic energy sources.
2) Team up with Canada to exploit maximal new NG supplies.
3) Build a NG pipeline from Canada to Iceland to Norway to Denmark.
4) Send maximal captured NG supplies flowing to Europe within 8 yrs. (Help is on the way)
5) Build a second mini-pipeline coupled to main NG pipe.  Europe can send Wine and Beer the opposite way.
6) In the meanwhile, SELL North American NG, via tankers, direct to UKr via Poland, for around $150 per thousand cubic meters, under part of strategic TARP relief operation to Ukraine during the temporary crisis environment.
 
Such a plan, even being announced, could chill out some of the current insecurity and help stabilise the energy conditions across Europe.  Ciao~
 
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nyetneinnon       12/6/2008 1:04:08 AM

Hey John...  stop being so anti-Imperialist already!! 

 

Seriously though, I'd agree with about 80% of the content and 60% of the emotion of this editorial.  So I guess I'll agree with John 40% regarding the anti-emotional aspect!

 

Proposal to Obama therefore, given the 80% reality of this content:

 

1) Replace 50+% of US domestic consumption of NG over 8 yrs, with alternative domestic energy sources.

2) Team up with Canada to exploit maximal new NG supplies.

3) Build a NG pipeline from Canada to Iceland to Norway to Denmark.

4) Send maximal captured NG supplies flowing to Europe within 8 yrs. (Help is on the way)

5) Build a second mini-pipeline coupled to main NG pipe.  Europe can send Wine and Beer the opposite way.

6) In the meanwhile, SELL North American NG, via tankers, direct to UKr via Poland, for around $150 per thousand cubic meters, under part of strategic TARP relief operation to Ukraine during the temporary crisis environment.

 

Such a plan, even being announced, could chill out some of the current insecurity and help stabilise the energy conditions across Europe.  Ciao~



That is: $150 equivalent per thousand cubic meters, per liquified LNG tanker shipment.. (after re-vaporized). 
And as a side note: instead of building a $50+ bn USD NG pipeline from NA to Europe, perhaps it would be easier to build a $20 bn fleet of fuel-cell hybrid powered LNG tankers to just ship the stuff..
 
P.S. in all truth, we should respect and watch carefully the geo-political reality within the current energy spot-price situation and be humbled by it.  But in regards to Kremlin, they apparently are planning a 2 yr national budget around $50/bbl oil.  If it goes below $40 and stays below that or close enough to insult $50 over a couple months, should we be watching for certain geo-political inflamation, generated with goal to maintain minimal targets?
 
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Lance Blade       12/6/2008 2:29:13 PM

It's not "anti-Russian propaganda"- it's the truth that the oligarchy that controls Russian doesn't want you to hear. So unless you're in the KGB, you should be spreading the word. Other wise you're just an ignorant yet willing victim.


It's quite hard to hide the truth when it's right under everyone's noses. Empty shops and mass layoffs are something no media spin will disguise.Long term, it'll cause Russians to distrust their media even more (if that's even possible).
In my opinion, the best thing the "family" could do right now is to publicly blame Putin for everything. They are well on the way towards doing it now. As for Putin, he faces a touch choice. He can either try and use his popular support to take on the entire "family", or he can accept his role as Russia's new scapegoat. He had the chance to run for the door while things were just hotting up, and he didn't take it. The consequences will be nasty. Hopefully he'll take a few of the Family down with him.
 
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Lance Blade       12/6/2008 2:30:44 PM



Piss off, Ivan.  We broke you once, we can break you again.  Ask the Germans if you don't believe me.



What did the Germans do? :))

 
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WarNerd       12/6/2008 3:34:32 PM

Proposal to Obama therefore, given the 80% reality of this content:

1) Replace 50+% of US domestic consumption of NG over 8 yrs, with alternative domestic energy sources.


 8 years is not enough time to develop plans, select sites, and get the necessary licenses approved, much less start construction.  The largest uses of natural gas are for domestic heat (air, water, and cooking) and as a chemical feedstock.  To displace the former you are going to need a LOT of new electric generation.  Electricity cannot be stored in large quantities, so wind power will be limited to less than 5% of the total generation and solar maybe twice that, but only after the environmental and NIMBY issues are settled in court.  For the rest your choices are coal and nuclear, figure 16 to 18 years before you see any of either.
 
The electric grid will also require a massive upgrade to handle both the load and the fact that the wind and solar generation will be coming from new and more distant areas.  Based on current metrics, that will take between 25 years and forever, or until lights keep going out.

2) Team up with Canada to exploit maximal new NG supplies.

Most of the new NG supply is in the extreme north or Alaska, and the environmentalists will fight you tooth and nail.  Figure 4 to 12 years to wildcat and delineate the fields (depending on the availability of appropriate drill rigs) and prepare permits + 2 years for approvals + 8 years in Canadian courts after plans are finalized, then 4 years for construction + 6 to finish the drilling program and reach peak flow. 
 
You also have to build pipelines to bring it to market over native Indian lands.  Negotiating the payments for that can take decades, particularly if they think they have you over a barrel.  Then the environmentalists will take you to court again.

3) Build a NG pipeline from Canada to Iceland to Norway to Denmark.

This idea is so bad I almost do not know where to start.  You are talking about moving a huge amount of gas long distances without the possibility of recompression through deep water.  And for added fun the 1st leg of the route is through the area known in the business as 'iceberg alley'.  I will not say that it is impossible, just incredibly uneconomic.
 

6) In the meanwhile, SELL North American NG, via tankers, direct to UKr via Poland, for around $150 per thousand cubic meters, under part of strategic TARP relief operation to Ukraine during the temporary crisis environment.

Might work, if they had the terminals to unload at and we had the gas and the loading terminals to send it, and if the public would put up with paying more for energy in order to send cheap energy to Europe.  
 
Some better possibilities would be to build LNG production in Nigeria and Angola or gas export pipelines from the middle east through Jordan and Israel to the Mediterranean.
 
All these are national strategic decisions however, because Russia can drop the price and make any of these schemes uneconomical any time they like.  The problem is political.

 
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nyetneinnon    Good post, WarNerd   12/6/2008 9:48:24 PM
Excellent response.
 
I couldn't really disagree with much of your 'hypotheticals' although I guess my basic theme is based on a 'retrofit' so to speak of the old style of doing energy business: i.e., including legal, environmental and bribery et al.
 
It would definitely take a major national agenda and transformation of protocol.  Likely? Maybe not.  Possible?  Would most of us 6 months ago think that oil could be $40/bbl before Cadillacs could sell Hybrid?  I guess I was betting on 'possible'.
 
Point is, where there is a crisis or desperation, there can become a will, under the proper leadership.  And where the proper will, well... perhaps the possible can indeed be fast-tracked and change humanity for the better - according to future historians.
 
For argument sake: very easily 5% of US electrical demand could be generated via wind.  I'd estimate 10% max (of an increased capacity of course).  10% from solar, perhaps 12%.  10% from geo-thermal and biomass.  8% from wave power.  And perhaps 5-8% from ocean current under-sea power.  The remaining demand via Nuclear (personally support this) and hydro.  All this in 20 yrs from Jan. 2009 start point, maybe even 18, if there was a joint-operated will and cause of course.  No problem.
 
As far as the Canada-Europe NG pipeline goes, I concede.. scratch it (economically busted).  As far as increased LNG shipped route goes, given the investment, from new North American terminals and existing African and Mid-East terminals, and other strategic pipeline proposals (I actually support your M.E.-Jordan-Israel NG pipeline concept), heck, throw in Iran too why not!
 
As far as 'politics' go as you say, hell, what's not politics these days regarding NG, (rest of energy), Russia and Europe, etc.. Future alternative investments and strategic security will always involve politics of course, whether in Europe, Russia, Mid-East, North America, South-America, Asia, China, Africa and... yeah don't forget Iceland!
 
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