Massenbach-Letter: NEWS 21/03/14


Udo von Massenbach

Guten Morgen.

Today a new chapter begins….

· The post-Russian world order * ( )

Massenbach* The Crimea Crisis: Consequences of the Russian-Ukrainian Divide

Posted on March 17, 2014 by IZA Press

The recent serious developments in the Ukraine expose growing tensions between ethnic Russians and Ukrainians in the country, evident since the Orange Revolution. Recent IZA research shows that these tensions reflect deeper divides in political preferences but also economic disparities between the two ethnic groups.

Two recently published studies co-authored by Amelie F. Constant (IZA and George Washington University), Martin Kahanec (IZA and Central European University) and Klaus F. Zimmermann (IZA and Bonn University) shed light on the sources of the deep economic and political divide between the two largest ethnic groups in Ukraine, Russian and Ukrainian.

The first study published in Eastern European Economics shows that voting preferences for the pro-European, pro-Orange, political parties were strongly driven by preferences for western-type market economy and democracy. Independently of preferences for market economy and democracy, however, voting preferences of ethnic Ukrainians and ethnic Russians were markedly different.

As the Russian-Ukrainian differences in voting preferences could not be explained by differences in age, education, region or other socio-demographic characteristics, they rather reflected a deeper ethnic divide in the Ukrainian society.

Specifically, Ukrainian speakers reporting Ukrainian ethnicity (natsionalnost) were shown to be 44 percent less likely to vote pro-European parties, and almost 40 percent (17 percentage points) of this gap was due to ethnicity, the rest being explained by other socio-demographic factors. Interestingly, even those ethnic Ukrainians whose primary language was Russian differed from Russian speakers of Russian ethnicity by 10.5 percent in favor of pro-European parties, of which 34 percent (3.6 percentage points) was due to Ukrainian ethnicity. The gaps were even larger between ethnic Ukrainians who spoke Ukrainian and those who spoke Russian.

The second study published in Economics of Transition sheds light on some economic factors that may explain ethnic tensions in Ukraine. According to this study, whereas Ukraine emerged from the Soviet Union with no ethnic differentials beyond discrepancies that could be explained by regional or socio-demographic differences, an earnings gap between Russian and Ukrainian speakers emerged during Ukraine’s transition.

According to the study, Russian-speaking men earned on average about 28 percent more and Russian-speaking women about 14 percent more than their Ukrainian colleagues. Whereas a larger part of these gaps can be explained by factors such as age, education, or regional differences, 25 percent (6.8 percentage points) of the gap between male workers and 34 percent (4.8 percentage points) of the gap between female workers is due to the ethnic divide between Russian and Ukrainian speakers.

The above studies are downloadable:
A.F. Constant, M. Kahanec, and K. F. Zimmermann, The Russian-Ukrainian Political Divide, Eastern European Economics, 49 (2011), 97-109
A.F. Constant, M. Kahanec, and K. F. Zimmermann,
The Russian-Ukrainian Earnings Divide, Economics of Transition, 20 (2012), 1-35

The studies use IZA survey data discussed in:
H. Lehmann, A. Muravyev, and K. F. Zimmermann,
The Ukrainian Longitudinal Monitoring Survey: Towards a Better Understanding of Labor Markets in Transition, IZA Journal of Labor and Development, 1 (2012), Article 9


U.S. DOE- Moniz Open on Talks for Amending LNG Export Process

U.S. Secretary of Energy Ernst Moniz said he would “welcome consultation” with U.S. Congress on altering the U.S. liquefied natural gas (LNG) export approval process to allow the Department of Energy (DOE) to have sway over the destination of LNG exports.

The invasion of Russian military into Ukraine – with Russian President Vladimir Putin threatening to seize U.S. assets in Russia if the United States and its allies impose sanctions – has generated discussions of how the surge in U.S. oil and gas production thanks to the shale boom could benefit not only the United States but its allies worldwide.

No legislation would be needed for discussions between DOE and Congress to take place, Moniz told reporters at the IHS CERAWeek conference in Houston Wednesday.

“From my point of view this is a situation that would merit a discussion,” Moniz commented. “Obviously a very serious and important situation.”

DOE, which is responsible for approving LNG export licenses to both Free Trade Agreement (FTA) and non-FTA countries, considers a number of factors in its approval process, including the geopolitical impact of U.S. LNG exports. Under current regulations, DOE does not have control over the destinations to where LNG exports would head.

The U.S. Department of State and DOE have had many discussions on providing assistance to Europe and China on development of their unconventional oil and gas resources, Moniz said.

“We think if there is increased production from a more diverse set of geographies, it would be to all of our advantage. This current situation (in the Ukraine) may reinforce that.”

Moniz said the DOE is constantly reevaluating, as part of its responsibility to determine if LNG projects are in the United States’ national interest, the impact of proposed LNG export projects. Moniz would not say whether there was a volume at which DOE would step back and reevaluate, but noted that DOE’s reevaluation may include an update of studies on the economic benefits of LNG exports.

“It may look as though a bunch of factors suggest a new review of update of data is needed,” Moniz commented.

These factors could include:

  • demand side shifts
  • industrial utilization shifts
  • natural gas liquids utilization

The secretary also reiterated advice he has previously given to U.S. energy companies involved in U.S. shale plays – that industry needs to “get out in front” do more to address concerns over the environmental impacts of unconventional exploration and production.

“It’s evident that environmental issues related to unconventional production have in fact slowed development of resources in certain parts of the U.S. but not others,” Moniz said. “Different communities in the U.S. and globally will evaluate the economic benefits versus the environmental benefits differently.”

While the industry is made up of a wide variety and scale of players and obviously cannot completely eliminate environmental impacts such as truck traffic, the industry can be uniformly aggressive in pursuing best practices on well completion, surface water management and methane capture to improve air quality, Moniz added.

“I don’t seek the environmental footprint issue ending U.S. unconventional activity, but it’s certainly slowing down development of shale resources in some parts of the country,” Moniz said. “The more that oil and gas companies pick up the pace, the more beneficial it will be.”

The oil and gas industry also could do a better job of making the case for the United States to lift its ban on crude oil exports. Building this case involves integrating a complicated set of factors in a clear, transparent way, including the mix of oil feedstock and refinery capacity. The balance of exports and reimports and its effect in terms of product exports versus crude exports also has not been addressed in a clear way, Moniz said. Despite the surge in U.S. oil production in recent years, the United States still imports more than 5 million barrels of oil per day, and faces infrastructure issues in moving product from new geographies.

DOE has never set a limit on the amount of LNG that would be allowed for export. The agency has not yet reached the 12 billion cubic feet per day (12 Bcf/d) level used in its economic analysis of LNG exports. While the amount of time between applications varies somewhat, the process itself takes time, given that each application is “pretty” voluminous in terms of comments. To date, one license has received both FTA and non-FTA approval.

Despite the project approvals to date, the molecules “won’t flow for a while”, with optimistic estimates calling for first cargoes to leave the United States in 2017 to 2018, Moniz said. Currently, 35 Bcf/d of export project capacity is in DOE’s approval queue. Given market development and huge capital requirements for LNG export projects, it’s no secret that not all of the proposed projects will make it off the drawing board.

The U.S. unconventional oil and gas boom has granted the country a substantial competitive advantage that should last for some time, Moniz said. The United States not only has an advantage in terms of geography, but market structure and infrastructure.

“We want to see that developed,” said Moniz of the Obama administration.

The surge in shale gas production, which has resulted in low to moderate U.S. gas prices, has resulted in nearly $100 billion in investment in new U.S. manufacturing capacity, President Obama said during his State of the Union of address earlier this year. Moniz believes that the estimate is conservative, with investment actually in the $150 billion range.

“We will continue to support all fuel sources and advanced technologies across board even as we pursue allow carbon future,” Moniz said of President Obama’s “all of the above” energy strategy during a keynote presentation at CERAWeek.


Britain Far from Primed for Shale Gas Exploration, Experts Say

LONDON, March 5 (Reuters) – Britain may be a prime location for shale gas exploration in Europe, but a lack of onshore drilling infrastructure and local opposition will impede development, experts and geologists said at a shale conference in London.

Britain is in the early stages of exploring for unconventional gas to counter growing dependence on imports and to emulate the success the United States has had in lowering its energy prices due to a shale boom.

The current crisis in Ukraine has renewed calls for countries in Europe, including Britain, to diversify away from Russian natural gas. In eastern Europe, Polish gas monopoly PGNiG said last month it had found a new gas deposit in south-eastern Poland, and Ukraine has signed agreements with Royal Dutch Shell and U.S. energy major Chevron for shale gas exploration.

Several companies have announced plans to explore for shale gas in Britain using hydraulic fracturing, known as fracking, a technique of injecting water, sand and chemicals deep into rock formations to release hydrocarbons. "Probably the UK (is Europe’s prime location) from a technical point of view as we have some very thick shale, but there are still a number of question marks," Ron Oxburgh, a former Shell chairman and member of the House of Lords Select Committee on Science and Technology, said on the sidelines of the two-day Shale UK shale conference. "We may get more out of a single hole than in other parts of the world, but we need new onshore drilling infrastructure which we don’t have now. The issue of noise is also a limiting factor in the near term (…) These are brutes, they are big pumping machines," he added.

Wells The British Geological Survey has estimated that rock formations in so-called Bowland Basin in central Britain hold around 1,300 trillion cubic feet (tcf) of gas, far more than the 3 tcf of gas a year currently consumed, but the amount that can actually be extracted is uncertain. The Upper Bowland area, a part of the basin that has already attracted exploration, could have 260 tcf of gas present, said Andy Aplin, professor of unconventional petroleum at Durham University and former adviser to BP. "We would need 33,000 wells to drain all that," he told the two-day Shale UK conference in London. That compares with an annual average of 19 onshore wells drilled in Britain over the period 1902-2013.

Analysts at energy consultancy Poyry estimate that by 2024 around 100 new wells will need to be approved each year to pave the way for significant shale gas production.

But shale gas wells have a short life. Based on the U.S. experience, their flow rate is reduced by 85 percent over three years, compared with a conventional gas well which would still have high flow rates after 30 years, Oxburgh said.

Cuadrilla is the only company so far to have used fracking in its test wells in the Bowland area and has applied for permission to drill and frack at up to four new exploration wells in the area. The company has been repeatedly targeted by protesters and environmentalists concerned about groundwater contamination, earthquakes and the expansion of fossil fuel use. Cuadrilla estimated in 2011 there was around 200 tcf of gas trapped in the shale rock of its licence area in Lancashire but now thinks there might be closer to 330 tcf, according to Huw Clarke, geologist at Cuadrilla.

Other parts of the country have potential as well. Al Fraser, professor at Imperial College and former geologist at BP, highlighted the so-called Gainsborough Trough area of northern England. French oil major Total bought a 40 percent interest in two licenses in that area in January. "I would have picked that. If it doesn’t work there, it won’t work anywhere," he said.


Technology to Create New Water Source for Marcellus Operators

Oil and gas producers working in the Marcellus shale play near Pittsburgh now have a new option for water resources for hydraulic fracturing operations.

Winner Water Services, a Pennsylvania-based joint venture between privately owned technology company Winner Global LLC and Columbus, Ohio-based Memorial Battelle Institute, a private, non-profit applied science and technology development company, was formed a year ago to provide water management services for oil and gas, including source water and water treatment. Initially focused on the Marcellus and Utica shale plays, Winner treats acid mine drainage water, which can be used in hydraulic fracturing in place of fresh water drawn of Pennsylvania’s lakes and streams.

Using technology licensed from Battelle to the Winner family to treat acid mine drainage water, Sharon, Pennsylvania-based Winner has designed and is ready to install its first treatment system next month just outside of Pittsburgh, said John Ontiveros, Winner president and CEO, in an interview with Rigzone. The facility will be capable of treating 140 barrels per hour of water, or 3,400 barrels per day on a 24-hour basis.

Water flowing from abandoned coal mines presents a significant environmental hazard in Pennsylvania, with 3,000 streams affected and anywhere between 300 million and 500 million gallons of acid mine drainage water entered the state’s watershed each day. The company intends to remove iron and sulfate from water and provide that water to oil and gas companies working in the area this year.

The Hydro Flex Process

Winner’s Hydro Flex treatment solution is a chemical treatment process based on ion exchange technology that has three distinct phases – water purification, metal recovery and sulfate recovery – and produces three distant and potentially useful byproducts.

Source: Winner Water Services

In this process, a hydrocarbon solvent extractant is mixed with contaminated water; the metal and sulfate are attracted into the oil layer and removed from the acid mine drainage water, which is then divided by an oil-water separator. The end product is water that is clean and ready to be used as source water or can be discharged into Pennsylvania’s watershed.

Besides clean water, the process produces metal sulfates and sodium sulfates. The sodium sulfate can be used to treat flowback water to remove some of the total dissolved solids. Solvent extraction has been practiced in the mining industry for years to recover copper, uranium and other metals, said Ontiveros.

Lane sees synergies between this technology and its use in treating acid mine drainage with Winner’s wastewater treatment business for flowback and produced water.

“If there is a market for water treatment using this compound, it will expand our business offerings,” Ontiveros noted.

Two skid-mounted Hydro Flex treatment units consisting of a mixer and oil-water separator. Source: Winner Water Services

Winner is also is talking to companies about providing water treatment solution for flowback and produced water. Ontiveros said the company is actively engaging with a couple of companies about these opportunities. Through this second business, Winner can provide a technical solution for treating produced and flowback water to remove total dissolved solids.

“What we have found is that different companies have different standards, and the amount of treatment varies with those standards,” Ontiveros said, noting that the company is technology agnostic. “We’re not promoting a technology, just the best solution to a problem.” That solution could involve consultations, building equipment for a client, and even setting up and operating equipment as a service. “We’re trying to be agile and responsive to their needs.”

Annie Lane, who works for Battelle and provides research and development and technical support to Winner, said Winner is viewed as Battelle’s arm to take new technologies to market from Battelle. Winner in turn brings back specific market requirements to help Battelle find new solutions.

Acid Mine Drainage

Acid mine drainage water coats stream beds and kills aquatic plants, making it difficult for aquatic wildlife such as fish to live in the stream, Ontiveros said. Mine waste water from abandoned and even active sites can fill up underground spaces, allowing the metal and sulfate to leach from the mine into the water. Depending on the level of rain and snow melt, the acid mine drainage water will flow out of the ground at different locations. This water flowing to the surface presents a large problem across Pennsylvania, Lane said.

Acid mine drainage streams are found through the state, but are concentrated mostly in southwestern Pennsylvania and into West Virginia. According to the U.S. Office of Surface Mining Abandoned Mine Lands Inventory System, approximately 504 sites exist across Pennsylvania, Virginia, Maryland and West Virginia. Remediation costs for the sites are estimated $3.8 billion.

Factors taken into account when selecting a technology include shale characteristics and total dissolved solids. Providers of chemical fluids are pushing oil and gas operators to work with increasingly lower quality of water, but contaminants in lower quality water can cause problems in well performance. Winner’s technology is targeted to remove sulfates down to much lower levels than other technologies, Lane noted.

While acid mine drainage is specific to the Marcellus, produced water solutions are applicable across all shale plays. A number of different technologies will be needed to handle the varying level of components found across U.S. shale plays, including barium, as well as the end use of the water. Some examples of these technologies include simple filtration units to extreme, costly measures such as evaporating water and removing salt, said Ontiveros, who previously served as vice president and operations manager of Battelle’s energy, environment and material sciences global business.

The Hydro Flex technology developed by Battelle was initially used to remove chromium from wastewater at U.S. Air Force bases. In 2008, the CEO of Winner Global LLC met the CEO of Battelle on an airplane. Winner discussed with then Battelle CEO Carl Kohrt about the problems with acid mine drainage in Pennsylvania. Battelle’s CEO went back to his staff and asked what kind of technologies might help Winner.

During a 3-month trial period, the technology was used to treat 1 million gallons of water; tests showed that the technology had removed enough sulfates and metals so that it was at near-potable levels.

Use of the technology to treat acid mine drainage did not get off the ground until the Marcellus shale play began heating up. Ontiveros said Winner and Battelle officials recognized that the heavy usage of water in shale exploration and production had created a market opportunity for this technology.

The company will also target the Utica shale play, which is still in its infancy, said Ontiveros. The state does have some abandoned mines, but has not had as much of an issue over water usage due to lower drilling activity in Ohio versus Pennsylvania. The company will initially focus on oil and gas, but will look to expand its services to other industries, including agricultural waste treatment, as its business grows.

Marcellus Boom Significantly Impacts Pa. Water Resources

The boom in Marcellus shale exploration and production activity has had a significant impact not only on the state’s economy, but on its water resources. Water use and management have become issues not only for the Marcellus, but other U.S. shale plays. Water shortages in the United States have put the U.S. oil and gas industry on a collision course with other users because of the large volumes needed for hydraulic fracturing, the Financial Times reported Feb. 5.

With estimated recoverable reserves of 500 trillion cubic feet, the Marcellus shale play is estimated to be North America’s largest natural gas reservoir, said David Yoxtheimer, in a Nov. 3, 2013 article, Water Recycling – a Staple in the Marcellus Shale. Yoxtheimer is a hydrogeologist, extension associated with Penn State University’s Marcellus Center for Outreach and Research.

Shale gas formations such as the Marcellus are “very promising” as an abundant domestic energy source, but development of shale faces environmental challenges, including proper water resources management.

Four to five million gallons of water are typically used to hydraulically fracture a horizontal well in the Marcellus play. Water used in hydraulic fracturing is withdrawn from sources approved by the Pennsylvania Department of Environmental Protection prior to use. In some cases, approval from river basin commissions such as the Susquehanna River Commission may also be required, Yoxtheimer noted.

Besides abandoned mine discharges, water can be sourced from surface water intakes on streams or rivers, groundwater supply wells, water bought from public water suppliers, treated municipal wastewater, or other sources. An estimated 10 to 15 million gallons of water are being withdrawn daily from the state’s water resources for shale development.

Water is being transported to well sites by tanker trucks or through pipelines, or are storing water at sites in temporary above-ground facilities. Over the past few years, the industry has moved towards reusing more produced fluids in the Marcellus and in other U.S. shale plays.

“Reuse of water can be cost competitive when compared to alternatives such as treatment and discharge of disposal well injection, as it reduces the need to purchase or source fresh water,” Yoxtheimer noted. “The ability to reuse treated produced fluid is due in part to the recent development of fracturing mixtures that are brine tolerant.”

A review of the Pennsylvania Department of Environmental Protection’s 2012 records indicate that the reuse rate of flowback and produced fluids was approximately 87 percent, with 23.2 million barrels of fluids reused out of 26.8 million barrels generated. Approximately 85 percent of the recycling occurred in the field; the remaining 15 percent was treated at centralized facilities. Thirteen percent of these fluids were disposed of via Class II-D disposal wells. This may occur due to higher treatment costs or inability to reuse water due to lack of hydraulic fracturing operations in the near-term, Yoxtheimer said.

“The industry has significantly improved its fluids management by utilizing best management practices, such as lining well pads to capture spills, utilizing closed-loop drilling systems, and recycling flowback fluids,” Yoxtheimer said. “Continued improvement in fluid management practices is expected to continue as companies further refine their operations to meet environmental and regulatory challenges.”

The use of acid mine drainage water is growing slowly in the state, with a few operators using this water source. State regulators have developed guidelines to help facilitate its use; Yoxtheimer told Rigzone he expects it will be used increasingly where possible.

Liability Relief Needed to Spur Use of Acid Mine Drainage

In spite the encouragement of Pennsylvania’s Department of Environmental Protection (DEP), oil and gas operators in the state have not yet turned to the use of mine influenced water for gas extraction activities due to liability concerns, DEP spokesperson Morgan Wagner told Rigzone in an email statement.

“Despite the environmental benefits to using mine influenced water to hydraulically fracture wells, this practice is not likely to be adopted by the industry until there is legislatively provided liability relief for the beneficial use of mine influenced water.”

To address this issue, Senate Bill 411, which would provide “good Samaritan” liability relief, is currently working its way through the Pennsylvania Legislature. The bill, which would amend Title 27 in the state’s regulations, would limit the treatment liability of companies that choose to use acid mine water for hydraulic fracturing of oil and gas wells or for other industrial uses.

The liability protections to encourage the oil and gas industry to use acid mine drainage water was among recommendations made in 2011 by Pennsylvania State Gov. John Corbett’s Marcellus Shale Advisory Commission.

“One of the major reasons the oil and gas industry has not fully committed to utilizing acid mine drainage water is the concern with the old adage ‘once you touch it, you own it’. The cost of treatment, and the continued liability associated with acid mine drainage source can often run into the millions of dollars,” according to a Dec. 6, 2012 memorandum by Senator Richard A. Kasunic (32nd District), who authored the bill.

Acid mine drainage projects eligible for coverage would be vetted through a DEP process developed in the Environmental Good Samaritan Act.

The immunity would only extend to activities at the site of the discharge, not to subsequent uses of the water, according to a March 15, 2013 Senate memo from Kasunic, Sen. Gene Yaw (23rd District) and Sen. John T. Yudichak, (14th District). The memo addressed concerns raised by some groups over the bill’s intent.

“The current Good Samaritan Act falls short in that it only limits the liability of a non-profit organization that is treating acid mine drainage, without any financial incentive,” the memo stated. “Unfortunately with today’s economy, non-profits are finding it increasingly difficult to assist in treating the 5,000 miles of streams that are currently polluted with acid mine drainage. Senate Bill 411 offers non-profits the opportunity to partner with entities to address the funding challenges they are facing.”

Acid mine drainage is the state’s large source of water pollution, with an estimated cleanup cost that may exceed $15 billion.

“As state and federal resources towards the treatment of acid mine drainage continue to decline, Senate Bill 411 offers an innovative approach to maintaining funding for its cleanup, while at the same time decreasing the withdrawal demand on fresh water supplies. This is a win-win situation for the Commonwealth and the environment.”

Last month, 35 environmental groups called on the Pennsylvania State Senate to table Senate Bill 411 or vote no on the bill, arguing that the Senate would violate the Pennsylvania Constitution if Senate Bill 411 is enacted without any environmental impact assessment. Citing the constitutional right of Pennsylvania citizens to clean air and pure water, the groups argued that the bill would harm streams and communities where the acid mine drainage water is being withdrawn by allowing the transfer of water out of source watersheds.

Kasunic said he and the other senators intend to work on the bill’s language to address concerns, and are open to an amendment further clarifying the bill’s intent.



Policy= res publica

Freudenberg-Pilster* Ethnic segregation: boon or bane for cultural integration?

Posted on February 24, 2014 by IZA Press

Immigrants are not evenly distributed within countries: they tend to agglomerate in mainly urban areas. In the public eye – not least since the recent riots in the UK, France and even Sweden – such ethnic neighborhoods and the formation of so-called ‘parallel societies’ are perceived as a threat to social cohesion. Yet, theoretically it is far from clear whether ethnic clustering actually limits the prospects of cultural integration or whether instead it helps easing the immigrants’ way into a new country while holding on to aspects of their country of origin.

The recent IZA Discussion paper by Amelie F. Constant, Simone Schüller and Klaus F. Zimmermann analyzes whether and how geographical ethnic concentration affects immigrants’ ethnic identity, that is, their feelings of belonging to both the host society as well as their culture of origin. The demand-driven geographical allocation of guestworker immigrants during the German recruitment phase in the 1960s and early 1970s serves as a quasi-experimental setting for the study. The authors link county-level information from the 1971 and 1987 German Census to individual-level survey data from the nationally representative German Socio-Economic Panel (SOEP).

Providing rare evidence of immigrants’ spatial dispersion in Germany, they find the distinct pattern of immigrants agglomerating in actually very few counties. The vast majority resides in counties where individuals of their own ethnicity are overrepresented. One specific ethnic group, however, does never make up more than 8% of local residents, not even in the most intensely concentrated counties.

Comparing individuals of diverse ethnic origin living in the same county but facing different levels of local co-ethnic concentration, the authors find significant differences in terms of ethnic identification. Living in an area where fellow co-ethnic immigrants tend to cluster appears to reduce the likelihood of an immigrant ‘feeling German’. Very high levels of residential ethnic clustering strengthens immigrants retaining strong ties to their respective country of origin. Interestingly, the authors find these effects to be nonlinear. Overall, the results suggest that ethnic clusters in urban centers should either be avoided or better used to provide incentives for joint ethnic integration activities – if it is desired to strengthen immigrants’ emotional attachment to the host society.

Read abstract or download discussion paper.



Politics: From Vision to Action

Barandat* US Ponders NDN Alternatives, New Silk Road

Mar 12, 2014 15:50 UTC

US Air Force General Paul J. Selva testified yesterday in front of the Senate Armed Services Committee for his nomination as commander of USTRANSCOM. He’s currently heading Air Mobility Command, TRANSCOM’s biggest component by far. He seemed confident that other options to move cargo in and out of Afghanistan are available were Russia to stop access to its chuck of the Northern Distribution Network (NDN). There have been talks of a “new silk road ” to be put together in Asia geared towards commercial ends, but if Russia becomes as uncooperative as Afghanistan, the final months of the drawdown may prove even more expensive than planned.

Northern Distribution Network

The Northern Distribution Network (NDN) has been important in delivering equipment and supplies to Afghanistan, in part to reduce the U.S. reliance on supply routes through Pakistan. Yet significant portions of the NDN go through certain countries, particularly in Central Asia, that have extremely poor track records on human rights and corruption.

What do you see as the major challenges to continued use of the NDN to deliver supplies to Afghanistan or withdraw equipment from Afghanistan as we draw down forces there?

Answer: Sustainment and retrograde cargo volumes have greatly reduced with the reduction of troops in Afghanistan and the increased use of both military and commercial multi-modal operations. Should events in Ukraine strain relationships between the U.S. and Russia and countries strongly influenced by Russia, access to routes north of the Black Sea both for surface and over-flight movement could be limited. Additional concerns include border crossing and convoy security within the country of Afghanistan which could affect surface movement in and out of the country; if the security situation deteriorates, surface access may become very limited.

The NDN accessed through the Mediterranean and the Caspian remain open and reliable as the countries involved are deeply interested in maintaining routes which will help them build the “New Silk Road” initiative.

To what extent, if any, should concerns about the human rights and corruption records of authoritarian regimes, particularly in Central Asia, be taken into account in using access to supply routes along the NDN?

Answer: The DOD agencies, Department of State (DoS), and geographic combatant commands coordinate closely to develop and maintain NDN routes to ensure an efficient and effective means of moving warfighter cargo into and out of Afghanistan. Human rights violations as determined by the DoS, and corruption records, should be considered for participation on the NDN.



Suter* Shared joy is double joy: Girls are more generous than boys

Posted on March 18, 2014 by IZA Press

Classic economic theory has long pursued the concept of homo economicus, which sees human beings as rational actors who are exclusively motivated by self-interest. More recently, this has been complemented by homo reciprocans, a concept describing cooperatively acting individuals who aim to improve their environment. Indeed, altruism has become one of the hottest topics in behavioral economics.

In a new IZA discussion paper, Silvia Angerer, Daniela Glätzle-Rützler, Philipp Lergetporer and Matthias Sutter shed light on the altruistic behavior of children. The researchers conducted an experiment with school-children from the bilingual (German-Italian) town of Meran, South Tyrol. Over 1,000 boys and girls received six tokens each, which they could either exchange for fruits and candy – or donate to a well-known charity for children in need. The 7 to 11-year-olds were not monitored or influenced when they made their decision.

The experiment generated a number of interesting findings:

§ The older the children, the more they donate. While 30% of the youngest children decided to donate nothing, only 13% of the oldest kept all their tokens for themselves. Remarkably, at age 10 and 11, the children acted almost like adults in comparable experiments.

§ Girls are more charitable than boys.

§ A higher IQ makes children more altruistic.

§ Having older brothers decreases children’s propensity to share.

§ There is no difference in altruism between German-speaking and Italian-speaking children.

§ Parents’ socioeconomic status (in terms of unemployment) has no effect on their children’s generosity.

Read abstract or download discussion paper.



The post-Russian world order

by Giles Merritt

Russia’s intervention in Ukraine and the ensuing Crimea crisis is wrongly seen as the start of Cold War II. But, while the fallout from Russian President Vladimir Putin’s defiance of international law and public opinion will be very different from that of the Soviet Union’s long campaign to defeat capitalism, the geopolitical ripple effects are certain to be just as far-reaching, if not more so.

Russia is set to sideline itself from the global economy, and by doing so it will usher in a new era in international relations. International sanctions will be only the first consequence. Markets and banks penalize uncertainty, so the Russian economy will progressively be cut off from international trade and investment and consigned to a future of slow or no growth.

That is Russia’s own funeral, of course. The wider consequences will be a shake-up of international politics and of governments‘ attempts to address common problems, ranging from global governance to climate change. The result may even be positive, with events in Ukraine unexpectedly opening the way to a significant realignment of fast-emerging countries whose twenty-first-century roles will be decisive.

The first result of the West’s standoff with Russia is that it spells the end of BRICS. For a decade or more, the grouping of Brazil, Russia, India, China and recently South Africa has been a major feature of world politics, challenging the might and influence of industrialized Europe and America. But, with Russia set to become a pariah, either pushed out of or withdrawing from global markets and multilateral forums, the days of BRICS summits and institutions, such as the group’s embryonic development bank, appear to be numbered.

BRICS may not be formally dissolved, but it is hard to imagine that the other four members would be willing to place their own positions in a globalized economy at risk by being drawn into Russia’s quarrel with the world. Bit by bit, the idea that the group represents a coherent voice in world affairs will be quietly buried.

A maverick Russia, bent on pursuing assertive foreign policies and creating a “Eurasian Union” trade bloc, poses obvious dangers. The more important outcome, though, will be how Russia’s former BRICS partners realign with other major emerging economies in the G-20.

Cue the arrival on the world stage of MIKTA — a new group made up of Mexico, Indonesia, (South) Korea, Turkey and Australia. These countries‘ foreign ministers plan to meet soon in Mexico to discuss a joint agenda on global governance issues. When they first met under the MIKTA banner on the fringes of last September’s United Nations General Assembly, the initiative seemed little more than a club for countries that for one reason or another did not qualify for BRICS membership but fell short of major-power status.

Russia’s self-inflicted difficulties will change all of that. With the BRICS alliance set to be transformed almost overnight into something of a very different character, the way is cleared for a much larger grouping of countries that share many of the same concerns.

What the MIKTA countries share are rapid economic growth and increasing influence outside of their own borders. They have development problems, but they are also models of economic dynamism and innovation with a substantial stake in the way post-World War II global institutions and rules should be reshaped. Many of their challenges and ambitions dovetail with those of the BICS (BRICS, minus Russia).

In the alphabet soup of international politics, a nine-member jawbreaker like BICSMIKTA might eventually prove too unwieldy to be workable. The bottom line, though, is that Russia’s coming absence from the multilateral scene will be a catalyst for new thinking on global challenges. A key question is whether that will revive the G-20 or destroy it.

It seems clear that Russia’s membership in the G-8 will soon be revoked, and that the group will revert to its origins as the G-7, comprising the United States, Canada, Japan, Germany, France, the United Kingdom and Italy, plus the European Union. But where that will leave the G-20 — including Russia’s continuing participation in it — is much less clear. The G-20 has been a somewhat disappointing mechanism for tackling global issues, and the idea of bringing emerging economic giants into the same forum as the leading industrialized ones has yet to pay off in terms of measurable achievements.

What is clear is that in today’s increasingly interdependent world, Putin’s distancing of Russia from so much of the international community looks self-defeating. A generation after the collapse of communism, Russia’s economy and its people’s living standards have started to recover. But its fast-shrinking population, and its reliance on energy and commodity exports, makes that recovery very fragile. The Kremlin will soon discover that it is far more vulnerable to outside developments than it has so far acknowledged.

*Giles Merritt is the editor of Europe’s World and heads Brussels-based think tanks Friends of Europe and Security & Defense Agenda. © Project Syndicate 2014





* Get Ready for a Russo-German Europe *

The Two Powers That Will Decide Ukraine’s Fate — and the Region’s

The last few weeks have revealed some important truths about Europe. Prior to the crisis in Ukraine, most Americans and Western Europeans had become used to a Franco-German Europe. In this version of Europe, which was designed after World War II to dampen one of the greatest state rivalries in history, France and Germany made the decisions, and Europe’s center of gravity was squarely in the West. But, these days, the real action happens further east.

Ukraine, looking to overcome its Soviet past, was taking its first steps toward becoming one of the European Union’s largest and most populous members until Russia made its move to derail those plans.

And Poland, for years considered a junior member of the European team, has risen as a leader by shepherding negotiations between former Ukrainian President Victor Yanukovych and the Ukrainian opposition. In this new Europe, the Franco-German engine has been replaced by a Russo-German one: as the European Union moves eastward, settling its future borders and borderlands, it is Germany and Russia that will decide who is in and who is out — and under what terms.

To a large extent, the battle for Ukraine has become a battle over the shape that this Russo-German Europe will take. Russia, through its geopolitical boldness, aggression, and sense of entitlement, has proved willing to annex the territories that it wants, building up a Eurasian bloc to balance against the European Union. Ukraine is an essential part of that plan, and Crimea is the leading edge. Russia is very likely to keep what it has now seized, as it has in all other regional conflicts, and continue trying to use its position in Crimea to destabilize Ukraine. That will help Russia as it attempts to draw a sharp line between its values, culture, politics, and economy, and the West’s.

Thanks to Germany’s role as a key state in the European Union and its deep ties to Russia, it is the only country that could thwart or contain Russia’s grand geopolitical ambitions. It was particularly clear during European negotiations this week over possible sanctions on Russia for invading Crimea that Germany, the economic powerhouse of Europe, would ultimately decide how much to pressure Russia and how to balance Europe’s desire to punish the country against its desire to bring Russia closer through economic engagement. Germany held the line against jumping too quickly to sanctions and, instead, channeled Western anger toward Russia into an “off-ramp” solution, in which Russians and the new Ukrainian government would hold direct talks about the future of Crimea, with international mediation.

And that hints at Germany’s reluctance to abandon its long game: Since the end of the Cold War, the country has emphasized economic engagement with Russia in the hope of ushering Russian society along toward modernization. It has sought to build a strong partnership with the Kremlin to underpin a peaceful order in Eastern Europe, just as it joined with France in Western Europe after World War II to prevent conflict there.

*Thanks to Germany’s role as a key state in the European Union and its deep ties to Russia, it is the only country that could thwart or contain Russia’s grand geopolitical ambitions.*

The strategy has deep historical roots: during World War II, German armies shot up dozens of Russian towns and cities and laid siege to St. Petersburg, starving over a million civilians there. Russia resisted at huge cost and then raped and pillaged its way back to Berlin for revenge, starving a million German POWs in return. Both armies marched through Ukraine and fought devastating battles there, including in Sevastopol. This terrible shared history brought Germany and Russia closer together after 1991 in an effort not to repeat it; Germany has taken great pains since then to court Russia and prevent the re-emergence of competition and conflict.

It has offered its industrial might and know-how to Russia to help with important Russian infrastructure projects and industries. Russia has accepted and appreciated those overtures. It, too, has sought to develop a special relationship with Germany, treating Germany as a great power and providing Germany a direct link to Russian gas through its Nord Stream pipeline. This tight relationship — some say too tight — was symbolized by former German Chancellor Gerhard Schroeder taking a well-compensated job with Gazprom upon leaving power in 2005.

The relationship hit new highs a few years ago, between 2008 and 2012, when Dmitri Medvedev served as president of Russia. Germans loved working with him and tended to regard him as a symbol of what a more modern Russia could be. They exalted him as a Russian political leader who spoke their language and supported liberal rights and freedoms. Europeans saw great promise in his Skolkovo initiative to turn Moscow into a high-tech hub, for example. But in their desperation for a good counterpart in Russia, Germans overestimated Medvedev’s importance.

Putin’s tumultuous re-ascension to power in 2012 — and Medvedev’s demotion back to prime minister — shattered Germany’s hopes. German political leaders saw clearly what some had argued all along — that Medvedev was nothing more than Putin’s puppet, a convenient liberal face to an otherwise autocratic reality. Putin’s eagerness to return to power at a time when many Russians wanted him to stay away, his tough talk, and his crackdown on protests in Moscow in 2011 showed that Russia was not, in fact, evolving. Since then, Germany increasingly has been forced to confront the fact that peaceful engagement and economic cooperation don’t always prevent conflict, especially with a Russia dedicated to authoritarian politics at home and expansionist policies abroad. For instance, in Moldova, Russia has launched an open campaign to prevent that country’s pro-Europe government from signing a European Association Agreement and also encouraged ethnic enclaves to break away. German Chancellor Angela Merkel has held the line on Europe’s support for Moldova’s EU ambitions.

As much as Germany has become disillusioned with Russia and would like to isolate it, it now finds doing so very difficult; Germany is inextricably linked to its eastern neighbor as a result of its geography and years of cooperation, competition, mutual benefit, and memories of mutual destruction.

Today, Russia is Germany’s 11th largest export market, after Poland. Russia sells Germany gas and oil and Germany sells Russia expensive cars, machine tools, and manufactured products. A trade embargo or asset confiscations would sting Germany more than any other European power — except Netherlands where Royal Dutch Shell has substantial interests — and far more than the United States. So would a gas cutoff or embargo. But Russia, of course, is far more dependent on the West than the West is on Russia. It needs Europe as a consumer of its oil and gas exports. It is dependent on Germany, in particular, for investment and technical expertise. Economic isolation would be damaging to both sides, but especially to Russia.

And that is why Russia, although it has marched into Crimea, has likely not won the war. Germany, having avoided coming to blows with Russia and having attempted to ease tensions, seems more determined than ever to take Ukraine under its economic wing.

As Ukraine develops, it might be in a better position to assert its independence from the Russian empire. For now, German leaders have started to recover from the shock that Russia would disregard international law so blatantly in Crimea. Leaders in Russia and Germany understand the stakes in their competition to regulate European politics and economics. They are devoted to sharply diverging outcomes, but are also interested in finding a common ground to maintain the peace. Although the tussle in Crimea may end in stalemate, both powers will live to play another day and work toward a vision of Europe that is not yet shared, but could be. That Russo-German Europe is the Europe we will live with, for better or worse.


EU sees Slovak-Ukraine gas link deal by end-April

* EU commissioner hopes physical flows possible by year-end

* Slovak link part of wider debate on energy security

BRUSSELS, March 18 (Reuters) – A reverse-flow pipeline deal to ship gas from Slovakia to Ukraine could be agreed before the end of April, European Energy Commissioner Guenther Oettinger said on Wednesday.

The Commission, the EU executive, has been pushing for months to reach an agreement on a link from Slovakia to shore up Ukraine’s gas supplies and reduce its dependence on Russia.Efforts have intensified as Russia’s relations with both Ukraine and the European Union have hit a crisis over Russia’s annexation of Ukraine’s Crimea region."I’m quite optimistic we can come to agreement before the end of April," Oettinger told reporters, adding talks with Slovakia would continue next week.

Oettinger said he hoped work could begin on new infrastructure as soon as possible after a deal is achieved, with the aim of completing it before the end of the year in time for peak winter demand.

Following previous gas crises involving disruption of Russian gas supplies to Ukraine, a major transit route for Russian gas, the European Union has been working on improving security of supply.

It has already established reverse-flow pipelines to pump gas east as well as west through Hungary and Poland, but the more important link is the Slovakian pipeline, which Oettinger said had the potential to pump up to 10 billion cubic metres per year. Oettinger was speaking in Brussels following talks with Ukraine’s visiting Energy Minister Yuri Prodhan.

Further talks on Thursday and Friday involving the leaders of the 28 EU member states will focus on reducing the European Union’s energy dependence on Russia and how much gas it could ship to Ukraine in the event of any supply disruption.

Ukraine is part of the European Union’s energy community, which aims to develop energy links with neighbouring non-EU countries and create a more joined-up energy market across the region with greater cross-border trade.

Fellow former Soviet republic Georgia is also hoping to join the energy community and attended a second round of talks on membership in Brussels on Wednesday. Deputy Georgian Energy Minister Irakli Khmaladze told Reuters he hoped to sign a deal to join the EU energy community at the end of May."Basically the agreement is there. We hope to a sign a protocol at the end of May," he said, although he added he needed approval from the Georgian parliament. The European Commission said it did not have an immediate comment on when Georgia’s membership talks would be complete.



U.S. Governmental Information Operations and Strategic Communications:

A Discredited Tool or User Failure? Implications for Future Conflict

“For the U.S. Army, the development of strategic Landpower has just begun.

The architects of strate­gic Landpower will need much additional research and analysis on the human domain of conflict.”

Today America’s uniformed military leaders and civilian defense officials are developing ways to use national power more effectively and efficiently. Gone are the days when the United States had such extensive economic and military resources that it could largely disregard the costs of its strategy. The quest to bring costs and benefits into balance places the most funda­mental concepts of American strategy under scrutiny.

One important initiative in the quest for increased effectiveness and efficiency has been the Strategic Landpower Task Force. A joint effort of the Army, the Marine Corps, and the Special Operations Command, this task force was created to remind the Joint Force and policymakers that armed conflict remains a clash of interests in which the antagonists attempt to im­pose their will on each other.

Ultimately, what might be called the human domain of conflict is decisive. Thus, strategic effectiveness and efficiency require an understanding of human objectives and psychological effects. This is challenging. The profusion of informa­tion sources, and interconnectedness of the modern world, make it difficult for strategists to gauge the ef­fect which a given action or statement will have on its intended audience. That many U.S. military activities take place in cultures very different from the Ameri­can one only adds to this difficulty. But however dif­ficult it is to gauge these effects, it is also vital to do so.

All this means that integrated interagency infor­mation operations are an important component of strategic Landpower.

In this monograph, Dr. Steve Tatham, the United Kingdom’s longest continuously serving officer in information activities, uses opera­tions in Afghanistan to identify the shortcomings of U.S. strategic communications, particularly the ten­dency to rely on contractors using methods drawn from advertising and marketing.

While Tatham be­lieves that strategic communications will become a more rather than a less important part of security strategy and thus merits continued resourcing, it can be streamlined. Part of this streamlining is relying on specialists within the military and other government agencies rather than contractors. This is an important consideration as the U.S. military undertakes a broad re-evaluation of the division-of-labor between con­tractors, uniformed personnel, and government civil­ians in the wake of Operations IRAQI FREEDOM and ENDURING FREEDOM.

Effective strategic communications, like the other components of strategic Landpower, requires an in­creased focus on the complexities of the human do­main during leader development and professional ed­ucation within the U.S. Army and the other services. Army leaders must decide both how to do this and how much of it to do, since emphasizing it will come at the expense of some other skill. Future military lead­ers and strategists cannot be experts in every foreign culture, but they do need to understand how to use both hard and soft power to attain psychological ef­fects in cultures radically different from the American one. Both the professional military educational system and the broader process for leader development must find ways to accomplish this.

For the U.S. Army, the development of strategic Landpower has just begun. The architects of strate­gic Landpower will need much additional research

and analysis on the human domain of conflict. Dr. Tatham’s study is an important contribution to this long-range effort.



see our letter on:

Wir wünschen Ihnen ein angenehmes Wochenende. Ihr Team.

Udo von Massenbach – Bärbel Freudenberg-Pilster – Jörg Barandat – Edith Suter



pub1182-U.S. Governmental Information Operations and Strategic Communications.pdf