Massenbach-Letter: NEWS 14/11/14

Massenbach-Letter. News

*Herausgegeben von Udo von Massenbach, Bärbel Freudenberg-Pilster, Joerg Barandat*

· Statement by the President on the 25th Anniversary of the Fall of the Berlin Wall

· Oil Prices Continue to Define Geopolitics

· Valdai Club: Echoes of Munich 2007 in Sochi 2014

· Prof. Björn Bruecher (Richmond, Virginia): „Er kämpft für eine neue patientenorientierte Krebsstrategie“

·

· China Sees Itself at Center of New Asian Order

· China’s Silk Road challenges U.S. dominance in Asia: Kemp

· Former oil company adviser heads Hungary’s new consulate in Erbil

Massenbach* Berlin Nov 9, 2014 – 25 Years Fall oft the Wall

Berlin, Orte. *Niederkirchnerstrasse* – *Potsdamer Platz*

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25. Jahrestag des Mauerfalls
Von John F. Kerry

WASHINGTON – (AD) – Nachfolgend veröffentlichen wir den Namensbeitrag von US-Außenminister John F. Kerry zum 25. Jahrestag des Falls der Berliner Mauer, der zunächst in der Frankfurter Allgemeinen Sonntagszeitung vom 9. November 2014 erschien.

Im Oktober haben Außenminister Steinmeier und ich in Berlin die Mauergedenkstätte besucht. Wir sind an der Mauer entlanggegangen und haben uns dabei noch einmal in dieses dunkle Kapitel der Vergangenheit zurückversetzt. Wir trafen einen Mann, dem nicht nur die mutige Flucht von Ost- nach Westdeutschland gelungen war, sondern der später sein eigenes Leben aufs Spiel setzte, um anderen die Flucht zu ermöglichen. Wir haben uns auch mit deutschen Schülerinnen und Schülern zusammengesetzt, die das große Glück hatten, nach dem Kalten Krieg geboren zu werden. Sie hatten in ihrer Kindheit immer wieder von Verwandten persönliche Geschichten erzählt bekommen über die sichtbaren und politischen Grenzen, welche die freien Menschen im Westen von Familien und Freunden trennten, die im Osten eingesperrt waren.

Einer der Schüler kam am Ende der Veranstaltung auf mich zu und stellte mir folgende Frage: Kann es heute wieder zu einem Kalten Krieg kommen? Viele Menschen stellen sich diese Frage. Genau 25 Jahre, nachdem der Wind des Wandels durch die Staaten des Warschauer Paktes wehte, die Berliner Mauer zum Einsturz brachte und nach dem Kalten Krieg den Weg für ein geeintes, gestärktes Deutschland ebnete, ist diese Frage von besonderer Bedeutung.

Auf der anderen Seite des Atlantiks, in den Vereinigten Staaten, haben wir großen Anteil an dem gewaltigen, jahrzehntelangen Ringen Deutschlands genommen. Jeder Amerikaner hörte gebannt zu, als Präsident Kennedy während seines Besuchs in Westberlin 1963 die berühmten Worte „Ich bin ein Berliner“ sprach, um die Solidarität der Vereinigten Staaten mit den Deutschen auf beiden Seiten der Mauer zu bekräftigen. Mein ganzes Land verfolgte mit, wie Präsident Ronald Reagan 1987 vor dem Brandenburger Tor Michail Gorbatschow aufforderte, die Mauer niederzureißen, wenn er es mit Liberalisierung, Frieden und Wohlstand ernst meine.

Ich war persönlich besonders betroffen, denn ich habe prägende Jahre meiner Kindheit in Berlin verbracht. Mein Vater war für die amerikanische Vertretung in Westberlin tätig, als ein vereintes Deutschland noch ferne Zukunftsmusik war. Mit eigenen Augen sah ich die Unterschiede zwischen Ost und West. Ich konnte sie regelrecht spüren. Es war der Unterschied zwischen Hoffnung und Verzweiflung, zwischen Licht und Dunkelheit. Letztendlich war es der Unterschied zwischen Menschen, die die Chance hatten, etwas aus ihrem Leben zu machen, und Menschen, denen diese Chance verweigert wurde.

Diese Erfahrung hat mich mein Leben lang begleitet, und ich denke bei meiner täglichen Arbeit oft daran zurück. Denn leider ist es traurige Wahrheit, dass die Freiheiten, mit denen Amerikaner und Deutsche heute gesegnet sind – die politisch Verantwortlichen frei wählen, ihre Meinung sagen und ihres eigenen Glückes Schmied sein zu können –, dass diese Freiheiten in zu vielen Teilen der Welt immer noch bedroht sind. Sogar in Europa.

Russlands aggressives Verhalten in der Ukraine ist nicht hinnehmbar. Es ist von entscheidender Bedeutung, dass Deutschland und die Vereinigten Staaten an der Seite ihrer Partner stehen und die ukrainische Souveränität und Unabhängigkeit verteidigen. Die Nachkriegsordnung und die Ordnung nach dem Fall der Mauer, von denen Millionen Menschen weltweit profitiert haben, stehen auf dem Spiel.

Es ist von ebenso entscheidender Bedeutung, dass wir uns um die Erneuerung konstruktiverer Beziehungen mit Russland bemühen, falls Moskau willens ist, die notwendigen Schritte zu gehen. Es ist für uns alle besser, wenn Russland, Europa, die Vereinigten Staaten und Kanada es schaffen, an einem Strang zu ziehen, um globalen Herausforderungen wie Extremismus, Weiterverbreitung von Atomwaffen und ansteckenden Krankheiten zu begegnen, und die Dividende des Friedens, der Stabilität und der wirtschaftlichen Zusammenarbeit einzufahren.

Bundeskanzlerin Merkel ist sich dessen voll und ganz bewusst. Durch ihre unermüdliche Diplomatie hat sie Präsident Poroschenko den Rücken gestärkt, und sie hat auch darauf hingewirkt, dass die Gesprächskanäle zu Präsident Putin offen bleiben. Sie hat eine führende Rolle gespielt, die sonst niemand hätte spielen können, und die Vereinigten Staaten sind ihr hierfür außerordentlich dankbar.

Gemeinsam engagieren sich unsere beiden Länder und unsere Partner in ganz Europa für die Zukunft der Ukraine. Wir setzen alles daran sicherzustellen, dass das Protokoll von Minsk vollständig umgesetzt wird, damit das ukrainische Volk wieder in die Lage versetzt wird, seine Demokratie zivilisiert und friedlich zu gestalten.

Wir engagieren uns, denn wir haben erlebt, was Menschen erreichen können, wenn sie ihren Werten treu sind und zusammen mit anderen ein gemeinsames Ziel verfolgen. Auf diese Weise hat das deutsche Volk die Berliner Mauer zum Einsturz gebracht, und so haben wir es seither immer wieder geschafft, Freiheitsbeschränkungen zu überwinden.

Kann es heute wieder zu einem Kalten Krieg kommen? Die Antwort ist nein, wenn wir uns daran erinnern, dass wir vor 25 Jahren für Deutschland wie auch für Europa Einheit, Freiheit und Frieden anstrebten. Die Antwort ist nein, wenn wir andere Staaten davon überzeugen, die alten Ost-West-Trennlinien hinter sich zu lassen. Die Antwort ist nein, wenn wir uns heute, morgen und in den nächsten Jahrzehnten weiterhin gemeinsam auf diese Ziele konzentrieren.

25 Jahre Mauerfall
Erklärung von US-Präsident Barack Obama

WASHINGTON (AD) – Nachfolgend veröffentlichen wir die Erklärung von US-Präsident Barack Obama zum 25. Jahrestag des Mauerfalls vom 7. November 2014.

Im Namen aller Amerikanerinnen und Amerikaner begehe ich gemeinsam mit unseren deutschen Freunden den Jahrestag des Falls der Berliner Mauer. Wie viele Amerikaner, werde auch ich nie die Bilder von Ostberlinerinnen und Ostberlinern vergessen, die mutig auf die Straße gingen, sich an den Wachen vorbeidrängten und die Mauer einrissen, die sie schon so lange von Familie und Freunden in der freien Welt trennte. Ihr Triumph an diesem Abend war eine Würdigung all jener, die in den Jahrzehnten zuvor bei dem Versuch, in die Freiheit zu fliehen, ums Leben kamen. Er war Zeugnis des unerschrockenen Einsatzes von Generationen Deutscher, Amerikaner und auch unserer Bündnispartner, die während eines langen Kalten Krieges Seite an Seite standen. Und er führte uns vor Augen, dass Betonmauern und Stacheldraht dem Willen ganz normaler Männer und Frauen, die entschlossen sind, in Freiheit zu leben, letztendlich nicht standhalten können.

25 Jahre danach feiern wir die Fortschritte, die erst durch die Ereignisse dieser Novembernacht möglich wurden. Ein geeintes Deutschland spielt eine führende Rolle in Europa und auf der Welt, und die Vereinigten Staaten sind stolz, ihre deutschen Freunde zu ihren stärksten Verbündeten zu zählen. Staaten in Mittel- und Osteuropa sind heute stolze Demokratien. Europa ist weiter zusammengewachsen, wohlhabender und sicherer. Aber das Vorgehen Russlands gegenüber der Ukraine erinnert daran, dass uns noch viel Arbeit bevorsteht, um die gemeinsame Vorstellung eines geeinten, freien und in Frieden lebenden Europas vollständig zu verwirklichen. In Europa und darüber hinaus – überall dort, wo Menschen selbst über ihr Schicksal bestimmen wollen – werden wir uns von dem leiten lassen, was Berlin uns gelehrt hat. Mauern und unterdrückerische Regime mögen eine Zeit lang Bestand haben, aber sie können sich dem Wunsch nach Freiheit und Menschenwürde, der in jedem menschlichen Herzen brennt, nicht auf Dauer widersetzen.

Originaltext: Statement by the President on the 25th Anniversary of the Fall of the Berlin Wall

http://blogs.usembassy.gov/amerikadienst/

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Policy= res publica

Freudenberg-Pilster* Prof. Björn Bruecher (Richmond, Virginia):

„Er kämpft für eine neue patientenorientierte Krebsstrategie“

Amerika Woche-20-27-Okt-2014

Phoenix, AZ (awj) – Ein deutscher Professor für Chirurgie stellt zurzeit die Krebsforschung auf den Kopf. Prof. Dr. Björn Brücher hat mit gleichgesinnten führenden Onkologen, Chirurgen, Radiologen und Pathologen kürzlich zwei richtungsändernde Core­ Papers veröffentlicht. Der hochgradig ausgezeichnete internationale Mediziner denkt aber nicht, dass er die Forschung aus der Bahn bringt, sondern nur die Patienten auf das richtige Gleis stellt.

„Wir Ärzte und Wissenschaftler müssen uns verschärft um eine personalisierte Krebsdiagnose und -Behandlung bemühen", fordert Prof. Brücher. Der aus Germersheim am Rhein stammende Spezialist kämpft in der wissenschaftlichen Arena dar­ um, die individuellen Heilungs­chancen und Lebensqualität von Krebspatienten zu verbessern.

Der Weltexperte in Speiseröhren-, Magen-, Darm- und Bauchfellkrebschirurgie wurde im letzten Jahr an das Bon Secours Cancer Institute in Richmond, Virginia, berufen. Vorher war er Leiter der Tumorchirurgie an der Universität Tübingen. Er gründete 2008 die Theodor-Billroth­ Akademie zur Ausbildung des chirurgischen Nachwuchses. Außerdem ist er Professor for Ethical Leadership (Vancouver, Canada) und wurde 2014 zum American Joint Cancer Commit­tee bestellt, um an den Krebsklassifikationen für 2017 mitzuarbeiten.

Leider, so sagt Brücher, hat die Politik auf dem Markt der Krebsforschung viele Heilungsstrategi­en am Menschen vorbei geleitet. Damit macht er sich im Feld der Medizin nicht sehr beliebt-gerade in einer Zeit, in der Marketing oft wich­tiger erscheint als Inhalt und Zielsetzung.

„Seit Nixon’s War on Cancer im Jahr 1971 wurden etwa 300 Milliarden Dollar allein in den USA in die Krebsforschung ge­pumpt", sagt Brücher. Es seien zwar in Spezialbereichen sehr gute Erfolge erzielt worden, aber bei weitem nicht genügend Ursachen für Tumore geklärt.

„Das ist, als wenn man einen Krieg gegen einen Feind führt, den man gar nicht kennt."

„Nur weniger als 10 Prozent von Krebskrankheiten sind auf Mutation (genetisch) zurückzuführen, 15 Prozent auf Infektion, aber in 75 bis 80 Prozent von Fällen sind die Ursachen sporadisch, und der Krebs wird behandelt, ohne dass man die Ursachen kennt", sagt Brücher. Und diese anderen Ursachen können höchst umfangreich sein, wie das Paper „Epistemology of the Origin of Cancer" (Brücher & Jamall, 2014) aufzeigt.

Dieser Fachbeitrag, von Lan­cet spontan abgelehnt, ging durch einen vielmonatigen Review Prozess, erschien schließlich auf Biomedcentral.com und verursachte ein mittleres „Erdbeben" (Umdenken) in der Fachwelt. Die Gutachter konnten nicht umhin, das Paper dennoch zu befürworten.

Ungleichmäßig viele Mittel werden Brüchers Meinung nach in das Dogma der Genfor­schung und -mutation investiert. „Der Fall der Schauspielerin Angelina Jolie, die sich beide Brüste präventiv amputieren ließ, machte natürlich große Schlagzeilen", sagt er, „aber nur 8 Prozent aller Fälle von Brustkrebs ba­sieren auf Mutation (BRCAl, BRCA2). Diese Mutationen seien zwar wichtig, um die Tumorbiologie zu verste­hen, aber bei 92 Prozent von Brustkrebsfällen träten sie nicht auf und erklärten nichts über deren Risiko.

In der Praxis fand Brücher, dass kein Krebs wie der andere ist. Vielmehr gibt es an die hundert verschiedenen Krebsarten, die zwar Merkmale teilen, aber innerhalb einer Klassifikation verschiedenste physiologische Muster aufweisen können. Deshalb muss der behandelnde Arzt sehr genau und tief in die Diagnosemethoden greifen .

Und hier setzt ein anderes wellen­ schlagendes Paper, „Imagine a World Without Cancer", an. Zusammen mit Brücher haben 25 weitere Experten aus aller Welt eine hoch-spezifische und Patienten­ zentrierte neue Krebsbehand­lungsstrategie formuliert.

„Bis jetzt werden die meisten Krebspatienten nur symptom­technisch behandelt, weil man die Ursachen des jeweiligen Patienten nicht kennt", so der Experte. Fortschritte in der Therapie (Chemo, Bestrahlung, operativ) sind meist nach statisti­schen Zahlen ausgerichtet. Aber Brücher und Kollegen fordern mehr Genauigkeit.

„Die personalisierte und individualisierte Anti-Krebsstrategie besteht aus einer multimodalen Diagnose und Behandlung", sagt Brücher. Biopsien und radiologische Bilder (Tumorklassifi­kation) werden verglichen mit molekularen, metabolischen und immunologischen Werten. Dazu gerechnet werden Psychosomatik, Lebensqualität und Behand- lungsrisiko. Brücher sieht als Arzt dem Patienten direkt ins Auge – nicht der Statistik.

„Biopsien können sich irren, oder an der falschen Stelle gemacht sein", erläutert er. „Bestrahlung kann ein zusätzliches Krebsrisiko erzeugen . Chemotherapie kann sogar den Krebs mutieren lassen. Also muss man alle Erfahrung anwenden und den Behandlungskurs ändern, falls sich eine verschlechternde Tendenz ergibt."

Das Engagement für die Tumordiagnostik und -therapie beinhaltet auch freiwillige Krankenaktenprüfungen und Zuwei­sungen für Hilfesuchende der Organisation ICAN (International Cancer Advocacy Network).

„Marcia [Marcia Horn, CEO & President] schickt mir Patienten mit einem speziellen Tumor von überall in der Welt. Dann gebe ich ihr den Tipp, den Patienten hier oder dort in einer Spezialklinik behandeln zu lassen." Seit fünf Jahren arbeiten der Chirurg und die in Phoenix, Arizona, beheimatete Aktivistin zusammen. Sie weisen Patienten den Weg zu wirklichen Experten. Denn oft werden Patienten Opfer von Fehlinformation, falscher Hoffnung und Todesangst.

Marcia musste zusehen, wie der Krebs ihre gute Freundin Ba­bette Rosen dahin raffte. ,,Aber ihr Mann, Sidney Rosen, machte sich zu ihrem Patientenanwalt und zog die besten Onkologen, Chirurgen und Radiologen zu Rate", sagt Marcia. Anstatt der lapidaren Diagnose von nur 6 Monaten Lebensfrist, konnte Babette fünf Jahre weiterleben.

Aus diesen Bemühungen ent­stand das weltweite ICAN Net­ work mit über 1000 freiwilligen Helfern. „Wir bemühen uns speziell darum, dass kein Patient mit Krebs, egal in welchem Tumorstadium, vernachlässigt wird", sagt die Leiterin. Marcia, von Beruf Anwältin (Standford), hat sich tief in die Medizinkenntnisse eingearbeitet und bleibt kontinuierlich bei der Forschung am Ball. Aus der Zusammenar­beit mit Dr. Brücher – und vielen anderen freiwillig mitarbeitende Krebsspezialisten – hat sich durch ICAN ein effizientes Netzwerk ergeben. „Dr. Brücher ist in unserem Ärztegremium einer der wichtigsten Berater. Durch seinen Tiefblick empfiehlt er die besten nächsten Schritte in Diagnostik und Therapie."

Seitdem Nixon dem Krebs den Krieg erklärt hat, wurde einiges geleistet, aber viel mehr bleibt noch zu tun. Krebs wird immer häufiger. „Krebs ist dabei, die Herz- und Kreislaufkrankheiten zu überholen", sagt Brücher. Die Bevölkerung wird immer älter, und Krebs tritt zunehmend im Alter auf. Bald werden Krebs und neurologische Erkrankungen an erster Stelle liegen, meint er.

Und auch deswegen kollaboriert Brücher mit ICAN. „ICAN machte einen großen Vorstoß. Man kann sich nur verneigen vor Marcia, und was sie für die Menschen tut", sagt er. „Es gibt nichts Schöneres als Menschen zu unterstützen und es in ihre Augen zu sehen, dass man ihnen geholfen hat. Das ist etwas ganz tolles."

Kämpfen und anecken? Warum? Da spricht Marcia für viele ihrer Mitstreiter. „Patienten bekommen eine Kakophonie von Ratschlägen und Marketing Pitches. Wir aber verlangen die beste Behandlung und Lebensqualität für die Patienten."

„Wenn mich ein 65-jähriger Mann aus Las Vegas anruft, schluchzt und mir sagt, dass er jetzt konkrete Hoffnung hat, nachdem erzwei Jahre lang hilflos herum gerudert ist, weil er nun sein Molekularprofil kennt und dadurch gute Aussichten hat-das ist, wofür wir bei ICAN sieben Tage in der Woche arbeiten."

Prof. Brücher stimmt voll damit überein.

AnnElise Makin

ICAN (International CancerAdvocacy Network ) gewanndurch einen Artikel in News­week (2011) internationalesAufsehen. Weitere Information sind erhältlich auf der Web-Pagewww.askican.arg

Prof Björn Brüchers Fachar­tikel „Epistemology of the Origin of Cancer: A New Paradigm und ,,Imagine a World Without Cancer" sind bei http://www.hiomedcentral.rom zu lesen; search „Brücher epistemology" and „Brücher imagine world".

Auf Deutsch: „Personalisierte und individualisierte Tumorthe­rapie" bei htttwllmeinsanofi.de, search „Brücher".

http://www.pressreader.com/usa/amerika-woche/20141020

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Politics: From Vision to Action

Barandat* China Sees Itself at Center of New Asian Order*

Beijing Builds Roads, Pipelines, Railways and Ports to Bind Itself to Region*

HORGOS, China—In a valley flanked by snow-capped peaks on China’s border with Kazakhstan, a vision of Beijing’s ambitions to redraw the geopolitical map of Asia is taking shape. This remote outpost, once a transit point for Silk Road merchants, is where China is building one of its newest cities.

Covering more than twice the area of New York City, Horgos had just 85,000 residents when it was founded in September, enveloping several towns and villages in an area known for lavender fields.

China’s plan is to transform the sleepy frontier crossing into an international railway, energy and logistics hub for a “Silk Road Economic Belt” unveiled by President Xi Jinping last year to establish new trade and transport links between China, Central Asia and Europe.

Horgos is a small element of China’s wider effort to bind surrounding regions more closely to it through pipelines, roads, railways and ports, say diplomats and analysts who have studied the plans it has made public.

The plans also include an Asian-Pacific free-trade deal, a $50 billion Asian Infrastructure Investment Bank and a $40 billion Silk Road Fund that Mr. Xi announced last week, promising aid aswell as investment from Chinese private and state firms.

In a speech to business executives Sunday, he said China’s plans would boost growth and improve infrastructure across the region to help fulfill an “Asia-Pacific dream,” echoing his domestic political slogan of a “Chinese Dream” to rejuvenate the nation. “With the rise of its overall national strength,” he said, “China has the capability and the will to provide more public goods to the Asia-Pacific and the whole world.”

The push is a counterpoint to China’s recent military assertiveness, which has antagonized many neighbors and prompted the U.S. to launch its “pivot to Asia” strategy of focusing more military and other assets on the region. Beijing is now trying to convince countries in Asia and beyond that it is in their interests to accept China as the alpha power in the continent.

China’s road map for a reconfigured Asian order, centered on Beijing and underpinned by new infrastructure, forms the backdrop to a summit of leaders, including U.S. President Barack Obama , that takes place Tuesday at a specially constructed lakeside complex outside Beijing. Mr. Obama arrived in Beijing on Monday.

The annual Asia-Pacific Economic Cooperation summit, being held in Beijing for the first time, will focus as usual on trade and investment among its 21 members and is set to endorse for the first time a “blueprint on regional connectivity” over the next decade.

But this year, the APEC summit is also about the symbolism of President Xi’s playing host to regional leaders at a time when Beijing is trying to claim a place as Asia’s dominant economic and military power. Mr. Xi also met leaders of Pakistan, Myanmar and five other non-APEC Asian nations Saturday to discuss infrastructure.

“China in a leadership role? That’s not a small message,” Robert Wang, the U.S. senior official for APEC at the State Department, told reporters recently. For China, “It’s pride. We’ve arrived. That has a message. Next time you deal with them, you remember it.”

Some foreign and Chinese scholars, including Zhai Kun, a Peking University international-relations professor, liken China’s push to the U.S. Marshall Plan that helped rebuild Europe after 1945. Others compare it to the tributary system through which China dominated East Asia for much of the last two millennia.

Chinese government representatives didn’t respond to inquiries for this story. Mr. Xi last week said the new infrastructure bank and Silk Road Fund would “complement, not substitute” existing lending institutions.

Visit the Remote Town That’s on China’s Silk Road—Again

Horgos, on the Kazakhstan border, is part of China’s aim to bind other countries closer with trade routes.

fullscreen

A gate demarcates the borderline between China and Kazakhstan in the free-trade zone at Horgos. Tim Franco for The Wall Street Journal

China plans to transform its new city of Horgos on the border with Kazakhstan into an international railway, energy and logistics hub that is part of the country’s broader drive to build and expand trade routes. Tim Franco for The Wall Street Journal

Still, the plans have stirred debate among Western and Asian governments, with some welcoming China’s development drive and others wary of its strategic designs.

Some Western officials also worry a flood of Chinese development money will undermine governance standards at existing lending institutions like the World Bank, especially if China channels funds to its own companies, to politically motivated projects or to environmentally damaging ones.

In the run-up to the APEC summit, people familiar with the matter say, the U.S. blocked China’s efforts to begin negotiations on a regional free-trade agreement, the Free Trade Area of the Asia Pacific, because it conflicted with a Washington-backed alternative known as the Trans-Pacific Partnership that excludes China. Beijing continued to promote its preferred deal in presummit meetings but won endorsement for the pact only as a long-term goal.

The U.S. also lobbied against some large economies joining the Asian Infrastructure Investment Bank, which was established in October by China and 20 other nations as an alternative to the World Bank—dominated by the U.S.—and the Asian Development Bank, led by Japan.

Related

Secretary of State John Kerry at a news conference in Beijing on Saturday said the U.S. was a Pacific nation that took its regional interests and responsibilities seriously. He also urged countries in the region to establish rules and norms through multilateral institutions “where all voices can be heard.”

A State Department representative said the U.S. saw China’s Silk Road plans as “complementary to U.S. efforts to promote economic connectivity” but considered it critical that any new international financing bodies upheld existing ones’ standards on governance, environmental and social safeguards, procurement and debt sustainability.

China has long sought to extend its influence in Asia through aid and investment, and to gain access to Central Asian energy resources. Some efforts now under way are rebranded versions of earlier projects.

But the push has expanded and taken on greater urgency under Mr. Xi, who has articulated a more expansive role for China in the world than his predecessor did. In speeches over the past year or so, he has laid out a vision that combines continuing infrastructure projects with ambitious new ones that together could tally tens of billions of dollars of spending.

Mr. Xi proposed the Silk Road Economic Belt, one of the effort’s pillars, on a Central Asia visit in September 2013. He called for building a transport corridor connecting the Pacific Ocean to the Baltic Sea and linking East Asia to South Asia and the Middle East to serve a combined market of some three billion people.

On that trip, he oversaw the signing of deals valued at $30 billion in Kazakhstan, including oil and gas projects, and agreed to pump $3 billion into loans and infrastructure in Kyrgyzstan.

During a trip in Indonesia the following month, he put forward another pillar, a maritime trade corridor he called the 21st-Century Maritime Silk Road. It entails building or expanding ports and industrial parks across Southeast Asia and in places including Sri Lanka, Kenya and Greece, along with a goal of expanding bilateral trade with Southeast Asia to $1 trillion by 2020—more than double its level last year.

He invoked the spirit of Zheng He, a Chinese eunuch admiral who sailed a fleet of treasure ships to Africa in the 15th century and is celebrated as the face of an era of Chinese maritime power.

In May, Mr. Xi was more explicit about his goals in a speech dedicated to a “new Asian security concept” at a Shanghai summit of regional leaders.

“It is for the people of Asia to run the affairs of Asia, solve the problems of Asia and uphold the security of Asia,” he said, calling on Asian countries to “advance the process of common development and regional integration.”

Although Mr. Xi didn’t mention the U.S. by name, many Chinese and Western analysts agree his appeal sent a message to Washington that it should accept a lesser role in the region, which, according to the Asian Development Bank, requires infrastructure investment of $8 trillion by 2020.

“He’s taking these concepts that have been around forever,” says Chris Johnson, a former CIA China analyst now at the Center for Strategic and International Studies, “and then actually doing it, putting the bones on it, putting the money behind it and frankly telling everybody in the system, ‘I’m serious about this.’ ”

Mr. Xi’s plans appear to reflect a worldview in which China increasingly sides with developing powers, he says, rather than working alongside the U.S. within the existing Western-dominated international order.

It is far from clear whether all the intended recipients of Chinese largess will embrace the offers. Past Chinese projects have run into trouble in Myanmar, including a $3.6 billion dam that was suspended in 2011, while a proposed rail link to Pakistan has been held up by political uncertainties.

But some individual projects appear to be gaining momentum and new financing sources, including a $100 billion development bank that the so-called Brics nations—Brazil, Russia, India, China and South Africa—agreed in July to establish with headquarters in Shanghai.

In Kuantan, Malaysia, a state-run Chinese company last year began jointly developing a deep-water container port and industrial park and this year agreed through a subsidiary to invest $1 billion in a steel plant there, a project both countries portray as part of the new maritime Silk Road.

On a tour of South Asia in September, President Xi inaugurated construction of a $1.4 billion Chinese-funded port city in Colombo, Sri Lanka’s capital. That month he oversaw the start of construction on a new section of a Chinese-financed gas pipeline through Tajikistan and Kyrgyzstan. On Monday, China and South Korea are expected to announce a free trade deal—one of several bilateral trade pacts that Beijing is negotiating in the region.

China’s initiatives don’t imply a letup in China’s efforts to assert territorial claims. But China is working harder to present itself as a development ally at a time when some Asian nations wonder about Washington’s wherewithal to underwrite infrastructure projects and military security.

In 2011, U.S. Secretary of State Hillary Clinton proposed a “New Silk Road Initiative” designed to improve Afghanistan’s transport links with Central and South Asia, but U.S. officials say progress has been slow.

China, by contrast, has the resources and political will to back up its plans, Chinese experts say.“For China, it’s a top-level issue—all government departments are focused on this,” says Peking University’s Mr. Zhai. “Also, President Xi has 10 years to promote this, whereas Clinton only had two or three.”

The scale of China’s ambitions is evident in Horgos. For years, the border here was closed due to China-Soviet tensions. Although the border reopened in 1983, trade was negligible until recently because of continuing tensions and poor transport links.

That has changed over the past few years. First came a gas pipeline from Turkmenistan that enters China in Horgos. Then China built an expressway to the border here. In 2012, a cross-border railway link was completed, and a free-trade zone spanning the frontier was established.

China upgraded Horgos to a city in September, giving the local government greater powers to develop land. Official maps and statements now describe Horgos as China’s main land port on the Silk Road Economic Belt.

The upgrade expanded Horgos’s surface area by almost 100 times, says Wu Hao, deputy director of the Horgos free-trade zone. He says more than 20 billion yuan ($3.25 billion) has been invested in the Chinese side of the trade zone, which features five multistory wholesale markets where Kazakh traders buy Chinese tires, furs, electronics and other consumer goods. A luxury hotel and an exhibition center are being built and will be ready by 2017, says Mr. Wu. There are also new warehouses, villa complexes and industrial zones, a fast-track border crossing for large trucks and a new railway station.

The Kazakh side of the free-trade zone has lagged behind, with only a small cluster of cargo containers and tents selling Russian chocolates and other comestibles. Kazakh traders complain that Almaty, the nearest Kazakh city, is a bumpy five hours away.

Kazakh officials say they will start building malls and hotels and finish upgrading the road to Almaty next year. That is one of the last sections of a highway from China’s east-coast port of Lianyungang to Russia’s St. Petersburg, to be opened by 2016.

Trains are already taking cargo from China via Horgos through Kazakhstan and Russia to Duisburg, a German port. It takes about 15 days, compared with about 40 by ship. In September, a shipment of automobiles from Europe entered China by rail for the first time.

Zhang Jian began selling vegetables on the street in Yining, about 60 miles from Horgos, in 1983. Today, he owns a company he says exported $60 million of fruit and vegetables to Central Asia last year.

He plans to build a packaging-and-processing facility next year to export produce through Kazakhstan to Russia, where demand is up, he says, because of sanctions over the Ukraine crisis.

“Horgos used to be a small town with a very low profile,” he says as workers load one of his trucks with garlic to be shipped over the border. “Now it’s changed to a city, its reputation will grow much bigger.”

http://online.wsj.com/articles/chinas-new-trade-routes-center-it-on-geopolitical-map-1415559290?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB10733299186635963427804580256602130591046.html

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COLUMN-China’s Silk Road challenges U.S. dominance in Asia: Kemp

Nov 10 (Reuters) – "The Silk Road, no longer just a concept in history books, has evolved into a story of modern logistics and Sino-European cooperation," Yang Jiechi, China’s top diplomat, told a conference this month.

The New Silk Road Economic Belt – from China across Central Asia and Russia to Europe – and the 21st Century Maritime Silk Road – through the Malacca Strait to India, the Middle East and East Africa – have become the centrepiece of China’s economic diplomacy.

The belt and the road, as China’s diplomats refer to them, are the focus of the Asia-Pacific Economic Cooperation (APEC) summit in Beijing this week. They aim to cement China’s emerging role at the heart of the 21st century economy.

China’s President Xi Jinping has pledged $40 billion to a new Silk Road fund for investing in infrastructure, resources and industrial and financial cooperation across Asia.

Chinese diplomats have also been busy promoting a new Asian Infrastructure Investment Bank, promising to provide half of its $50 billion start-up capital, to help build ports, roads, power projects and other desperately needed infrastructure across the region.

The Silk Road fund and Asia Infrastructure Investment Bank pose a direct challenge to the traditional primacy of U.S.-dominated financial and trade institutions in the region, including the International Monetary Fund, World Bank and Asian Development Bank, all of which were set up following the U.S. victory in World War Two.

U.S. diplomats have been manoeuvring furiously to limit the impact of China’s economic diplomacy. In the past month, Australia and South Korea both declined to join the new Infrastructure Investment Bank following intense lobbying from officials in Washington, which went all the way up to Secretary of State John Kerry and President Barack Obama himself.

U.S. LEADERSHIP CHALLENGED

Officially, U.S. diplomats are concerned about governance standards at the new institutions. There are fears about the large share of the voting rights that will go to China and the willingness of the new institutions to lend for projects that do not meet the social and environmental criteria currently employed by multilateral development banks.

Under intense pressure from the United States, the World Bank and Asian Development Bank will no longer finance coal-fired power stations due to concerns about climate change. But many countries, including India, have indicated they intend to continue building coal-fired plants to bring electricity to millions of homes that are currently without secure and affordable access to modern energy.

U.S. officials fear the new Chinese-led institutions will lend to projects that are unable to secure financing from other multilateral institutions, rendering the conditionality ineffective.

But there is a deeper, unspoken fear that the new institutions will be used to enhance China’s leadership at the expense of the United States and its traditional allies in Asia including Japan, South Korea and Australia.

In the run-up to the APEC summit, U.S. diplomats have sought to keep the focus on the Trans-Pacific Partnership, a proposed U.S.-led regional trade deal, rather than the broader Free Trade Area of the Asia Pacific, promoted by China.

It is part of a mounting economic, political and military competition between the United States and China across the region.

BALANCE OF ECONOMIC POWER

Asia-Pacific is not the only area where the post-war economic and financial leadership of the United States and its network of allies is being challenged.

The U.S. pivot to Asia is being matched by a similar move on the part of Russia, which has sought to reduce its dependence on the United States and Europe by upgrading its economic ties with China. In the past six months, Russia has signed two major deals to supply natural gas to China, which has become Russia’s most important trading partner.

In July 2014, China, Russia, India and Brazil reached agreement on a $100 billion New Development Bank to be headquartered in Shanghai. China and Russia have also been busy promoting economic and military ties across Central Asia through the Shanghai Cooperation Organisation.

The major financial and economic institutions, which experts sometimes call the "international financial architecture", no longer correspond to the balance of power and the shifting centre of gravity in the world economy.

The International Monetary Fund, World Bank and regional development banks are all dominated by the United States and its allies in terms of voting rights, capital structure, headquarters location and staffing.

Efforts to reform them to give a greater role to China and the other fast-growing developing economies have largely proved unfruitful.

The multilateral lending institutions are severely undercapitalised and have nowhere near enough resources to meet the enormous infrastructure needs across Asia, Africa and Latin America.

The result is that many multilateral institutions appear to be outdated, too small and entrenched in colonialist approaches to development.

TRADE AND FINANCIAL FLOWS

There is still an assumption that economies of developing countries are defined by their relationship with their more developed counterparts. But that world has vanished over the last decade.

More than half the exports from developing economies were sent to other developing economies in 2013, according to the World Trade Organization ("International Trade Statistics 2014").

Countries in Asia sent more than 60 percent of their exports to other nations in Asia and to Africa and the Middle East, compared with just over 15 percent each to North America and Europe.

As the world’s greatest export powerhouse, China has accumulated vast foreign exchange reserves and is now becoming a major supplier of capital.

Prior to the financial crisis, that capital was tied up passively and uselessly in U.S. Treasury bonds. Now China wants to use its capital more productively to invest in infrastructure in its major trading partners and at the same time buy more economic and political influence.

There is nothing new in the idea that countries seek to turn financial capital into political power. Britain pursued the same approach in the 19h century, and the United States has done so successfully since World War Two.

Market access and capital can all be traded for various forms of influence. The Marshall Plan traded U.S. economic assistance in European reconstruction for a pro-American orientation in European foreign policy.

As the balance of power within the global economy shifts, it is inevitable that the international economic architecture will have to evolve.

Some western foreign policy specialists have naively assumed that emerging markets would become integrated into existing post-war, western-dominated structures of power and governance.

But it was always at least as likely that those institutions would have to adapt and change to accommodate the rising economic and financial power of emerging markets.

Just as access to American markets and capital was once a key component of U.S. diplomacy, China is now employing its financial and trade muscle to win friends and influence.

http://www.reuters.com/article/2014/11/10/china-apec-silkroad-idUSL6N0T03CY20141110?feedType=RSS&feedName=everything&virtualBrandChannel=11563

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Valdai Club: Echoes of Munich 2007 in Sochi 2014*

SAPIR, Jacques

The speech delivered by the President of the Russian Federation, Vladimir Putin [1], at the occasion of the 11th Valdai Club meeting, held at Sochi, is bound to be significant in the definition of the foreign policy of Russia. It is not the first time that Vladimir Putin engages in such an exercise. He did it already in February 2007 in Munich[2]. Whatever we may think of Russian foreign policy, we must pause and try to understand the meaning of such a discourse. Indeed, it doesn’t happen every day that a leader of the importance of Putin expresses himself in depth on the nature of international relations. A comparison between the speech delivered at Sochi on October 24th, 2014 with the one of 2007 becomes the more important. The Munich speech, coming after the period of international tension provoked by the American intervention in Iraq, amounted in some way to taking stock of the latter. It pointed to an awareness, at least diffuse, of a dangerous crisis of representations in international relations, which needed to be addressed. It is most regrettable that this speech, which at the time was discussed and broadly commented among specialists, did not have more of an impact. It anticipated in an astonishing way on the diverse crises which the world was to go through in the years following. The speech of 2014 arrives again at a time when international relations are much degraded. The Ukrainian crisis has put face to face Russia, supported by a large number of the countries considered as «emerging» and the United States and its allies. This speech may be less rich on the plane of principles, but it is certainly more precise as to the definition of risks and threats, and it also constitutes a strong moment in international relations.

A pessimistic assessment of international relations

In his speech of October 24th, 2014, Vladimir Putin expresses a strong pessimism concerning the evolution of international relations. When the Munich speech of 2007 was in a large part a discourse offering a new logic for these relations, he is presently assessing that, nothing having changed, degradation becomes inevitable. Let’s pick up on his statements; the first observation relates to the nature of the international situation: “First of all, changes in the world order – and what we are seeing today are events on this scale – have usually been accompanied by if not global war and conflict, then by chains of intensive local-level conflicts. Second, global politics is above all about economic leadership, issues of war and peace, and the humanitarian dimension, including human rights.”

We can see here, in the words spoken, and we must remember that with a political leader, words are somehow tantamount to actions, that there is no longer any talk about a multipolar organization of the world, but of what he calls economic leadership, meaning, in reality, the question of hegemony. This question immediately brings up the problem of war and peace. Dramatization of the stakes is in keeping with the times. We have had, since 2011, the war in Libya, the consequences of which have affected the whole belt of the Sahel, particularly Mali, Niger and Nigeria, the war in Syria which is spilling over a large part of the Middle-East and presently a latent war, which doesn’t dare speak its name, but is quite real, in the East of Ukraine.

The assessment drawn is tinged with a profound pessimism as if Putin, and with him a large portion of the Russian political elite, had really believed in the possibility for the international powers to move beyond conflict and to reach an epoch of cooperation, and had been cruelly disappointed by the reality of the behavior of some countries, the United States to begin with. One can see that the incompetence, and also the aggressivity displayed by the leaders in Washington, be it George W. Bush or his successor, have left deep marks with the Russian leaders. But this pessimism is also the result of assessing the alignment of the European Union with the United States and the absence of control forces counterbalancing American policies. In so doing, the words he speaks sound like a requiem for the dream of cooperation. The fact that he is reducing the stakes of the developing events to the question of economic leadership gives a measure of the pessimism inherent in his discourse.

The question of law

Vladimir Putin then refers his listeners to the consequences of this situation and draws up an extremely important parallel between the present situation and the one which had resulted from the Second World War. This passage picks up one of the themes constantly advanced by the Russian President since 2007, the one of international law. Again, he starts with a statement: «Sadly, there is no guarantee and no certainty that the current system of global and regional security is able to protect us from upheavals. This system has become seriously weakened, fragmented and deformed. The international and regional political, economic, and cultural cooperation organisations are also going through difficult times. » This assessment could have been made as early as in 2003, when the United States by-passed the decision of the Security Council in order to invade Iraq. Then, comparing the present situation with the one prevailing in 1945, he formulates the necessity to adopt a system of international relations which would allow for some form of regulation of the interests of the powers. One harks back to a « Westphalian » world, meaning, one ruled by rules, but whose very origin is in the existence of nation-states: “The main thing is that this system needs to develop, and despite its various shortcomings, needs to at least be capable of keeping the world’s current problems within certain limits and regulating the intensity of the natural competition between countries. It is my conviction that we could not take this mechanism of checks and balances that we built over the last decades, sometimes with such effort and difficulty, and simply tear it apart without building anything in its place. Otherwise we would be left with no instruments other than brute force.” One sees here expressed the fear of a world devoid of rules, indeed laid open to what Vladimir Putin calls « brute force ».

This situation derives of course from the conditions of the end of the Cold War. Instead of leading to a stable framework recognized by all, the end of the Cold War has given to one country, the United States, an illusion of almightiness. I have described in a work published in 2008 the consequences of this illusion[3]. I also assessed the imperative necessity to rebuild a framework for international law, an assessment which rested on another: namely that such a reconstruction could only proceed from the States and from a sanctuarisation of the latter. But the absolute opposite has happened. We have proceeded on the slope of the destruction of the rules and of International Law, particularly in 2011 when the Western countries “interpreted” in a unilateral way their United Nations mandate in order to wage a true war of aggression against Libya. Vladimir Putin follows thus: « Pardon the analogy, but this is the way nouveaux riches behave when they suddenly end up with a great fortune, in this case, in the shape of world leadership and domination. Instead of managing their wealth wisely, for their own benefit too of course, I think they have committed many follies. We have entered a period of differing interpretations and deliberate silences in world politics. International law has been forced to retreat over and over by the onslaught of legal nihilism. Objectivity and justice have been sacrificed on the altar of political expediency. Arbitrary interpretations and biased assessments have replaced legal norms.”

But, and of this the Russian President is well aware, reconstructing a framework of international law is a long-term undertaking, which will imply important conflicts, some of which will by necessity be military conflicts. If, within the framework of “Westphalian” law, the sovereignty of the states must imperatively be respected, an important addition was made in 1945, in the Charter of the United Nations, concerning the freedom of peoples to decide for themselves, and on the referendum processes deciding on self-determination. In his speech, it is clear that this is also the principle to which Vladimir Putin is referring, because of its implementation concerning Crimea and Eastern Ukraine.

Putting Russia in a position to face the new international situation

It has not been remarked enough that, from this analysis of the international situation, there proceeds a program for Russia itself.

American might has been perceived since 2003-2004 as a direct threat concerning the security of Russia, and that of its strategic allies. This perception brutally amplified beginning in 2011, but it also underwent a change. If, up to then, the Russian leaders were holding on to the hope of a balanced cooperation, which the countries could have ended up achieving, it seems that at present they are assessing American action as aiming at what they call “world leadership.” Vladimir Putin has been lead to go farther than he had imagined in 2000-2001 or even in 2007. But his action, even if it has been reactive as much as active, has contributed to the failure of the American project and to a re-dealing of cards. From this point of view, the return of Russia has been a significant event. Russia has some arguments to put forward in favor of the constitution of a large “front” of countries refusing American hegemony.

The political vision of the international environment of Vladimir Putin and of his advisers is today clearly more pessimistic than the one they could formulate when they arrived in power in 2000 and this will have a fallout for Russia itself, concerning the organization of the capitalist « model » which is bound to develop in the coming years. This pessimism incites the Russian power to wish for a rapid rehabilitation of technological and industrial capacities in the sector of industries with a strong technological component, and of weaponry. Economic policy becomes determined in part by the analysis of the international situation. Which justifies a reinforcement of the interventionist approach in the economy through the constitution of large public companies in the energy sector (Gazprom, Rosneft, Transneft), but also of publically capitalized groups in aviation, naval construction and non-ferrous metals. The return to some supple forms of protectionism is inevitable. The question of a possible regimen of controls of capitals, never mind the declarations of the government and of the Central Bank, is on the table. One cannot well imagine that Russia could find itself in a protracted confrontation with the United States while remaining open to the totality of financial fluxes, in particular those of the short or very short term. International cooperation is a necessity, and conceived as such. It stands at the crossroads between geopolitical alliances and technological and industrial complementarity. If Russia wished for the constitution of a counterweight to an American influence which it presently analyses as hostile, the impact of this counterweight will not be the same according to the countries in consideration.

It is clear therefore that the events of the last months will provoke a radical change in the model of development which Russia had adopted in the years 2000 to 2004, a model which despite everything gave plenty of room to international cooperation and international exchanges. Assuredly, Russia will not close itself up hermetically. Anyway, this has never been the case in its history, even during the Stalinian period of the USSR. But this will imply important readjustments in the nature of economic relations with its western partners, as we have already had the occasion to evoke in this carnet, as well as important readjustments in the domain of interior economic policy.

Jacques Sapir is Professor of Economics at l’EHRSS-Paris and MSE-MGU (Moscow)

This article was originally published on www.russeurope.hypotheses.org

[1] The original text (in Russian) can be consulted at the following address : http://kremlin.ru/news/46860. For the English translation:

http://valdaiclub.com/russia_and_the_world/73960.html

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Middle East

COLUMN-Will Saudis drive U.S. shale out of business? John Kemp

There has always been a close link between U.S. oil production, international prices and OPEC, so it should come as no surprise that Saudi Arabia and North America’s shale drillers find themselves locked in a battle over prices and market share.

Until the 1950s, the United States accounted for more than half of all global oil production. Big finds like Oklahoma’s Glenn Pool (1905) and the East Texas field (1930) drove oil price changes around the rest of the world.

Since the 1970s, the United States has been a net importer and the direction of causality has reversed, from international oil prices to changes in U.S. exploration and production.

Drilling and output in major oil-producing states like Texas have been closely correlated with the rise and fall in real oil prices. And nowhere has the relationship been closer than North Dakota, where the fortunes of the state’s oil industry have mirrored the rise and fall in prices, resulting in a brutal cycle of boom and bust.

LIGHT THE FLARE

After exploring unsuccessfully for oil for almost 40 years, the first oil was found in North Dakota in 1951, and the first well was drilled into the now-famous Bakken formation in 1953.

The extraordinary story of the state’s dogged oil pioneers was chronicled by North Dakota State Geologist John Bluemle in a 2001 monograph to mark the 50th anniversary of the first successful find.

Photographer Bill Shemorry, who was there on that night of April 4, 1951, later wrote: “When I reached the hill just west of Wheelock I could see the glow of a fire in the sky directly to the east” four miles further on (“Mud, sweat and oil” 1991).

Parking near the well, Shemorry recalled: “The drilling rig and surrounding area were lighted by a huge gas flare. It was almost as if it were daylight. The noise of the escaping gas that fed the flare was so loud spectators had to shout to make themselves heard.”

Clarence Iverson No. 1 well, named after the landowner, went on to produce more than half a million barrels of oil and 800 million cubic feet of natural gas over the next 28 years.

BOOMS AND BUSTS

After the initial burst of excitement, however, North Dakota settled into a role as a niche producer, drilling around 200 wells per year and producing perhaps 50,000 barrels per day throughout the rest of the 1950s and 1960s.

The state’s first oil boom came in the late 1970s and early 1980s as a direct consequence of the Arab oil embargo (1973), the Iranian revolution (1979) and the price increases demanded by OPEC.

The number of new wells drilled increased eight-fold from just 90 in 1972 to peak at 834 in 1981, as the real price of oil surged from $14 to around $100 per barrel at today’s prices.

But the state’s oil industry was plunged into a deep and prolonged depression by the 15 years of low prices which followed the crash of 1986.

In 1989, just 188 new wells were drilled. By 1994, the number had fallen to 111. And in 1999, it fell to just 58.

BAKKEN DREAMS

Even as prices and drilling activity fell in the 1980s and 1990s, some of the most enterprising companies had begun to experiment with drilling horizontal wells in the Bakken formation.

Meridian Oil drilled the first horizontal well in the Bakken in 1987. For a few years, Bakken was the most active oil-exploration play in the state, with dozens of wells drilled each year. “But by the end of 1995, drilling for the Bakken had ceased and the play was over,” according to Bluemle, the state geologist.

Writing in 2001, before horizontal drilling had been successfully coupled with hydraulic fracturing, Bluemle speculated about the possibility of renewed production from the Bakken. “However, for that to happen, we’d need to see the development of a significant new technology,” he wrote.

“Economic volumes of oil or gas cannot be produced using today’s technology. It was the application of an improved technology, horizontal drilling, that spurred the short-lived Bakken play during the late 1980s and early 1990s. But horizontal drilling wasn’t enough”.

“Perhaps some other new technology will be developed that will allow the hydrocarbons trapped in the shale to become mobilized and produced at economic rates. If this happens, many wells will be drilled for the oil and gas in the Bakken formation.”

From 2005, just four years after Bluemle was writing, horizontal drilling and hydraulic fracturing were successfully employed together to release some of the oil and gas trapped in the shale.

The quadrupling of oil prices between 2002 and 2012 provided the financial incentive for another drilling boom.

And just eight years later, the number of new wells drilled topped 2,000 in 2013 and daily production hit 860,000 barrels.

In August 2014, state oil production stood at more than 1.1 million barrels per day, more than nine tenths of it from the Bakken, according to North Dakota’s Department of Mineral Resources.

FORTUNES TOGETHER

North Dakota’s oil industry and other similar shale oil plays across the United States are the product of events and price changes far beyond the state’s own borders — and indeed beyond North America. It is vital to remember that linkage when thinking about the next phase of the oil price cycle.

Bassam Fattouh at the Oxford Institute for Energy Studies has written intelligently about Saudi Arabia’s strategic options as the world’s largest oil exporter confronts a sudden crash in prices (“Saudi Arabia’s oil policy in uncertain times” Oct 2014).

And Craig Pirrong at the University of Houston has expressed scepticism, correctly, about whether Saudi Arabia is using a predatory pricing strategy to drive shale producers out of business (“The Saudis: crazy like a desert fox?” Nov 2014).

There is no evidence that Saudi Arabia is deliberately engineering a volume or price war to stop the shale revolution (or indeed to intensify the pressure on other oil-exporting geopolitical rivals like Iran and Russia) rather than simply responding rationally to protect its market share.

Yet a prolonged period of low prices and a squeeze on the shale business may be inevitable, unless Saudi Arabia and OPEC are willing to accept a big drop in their market share.

Past experience suggests the fortunes of the U.S. oil industry, Saudi Arabia and OPEC are tightly bound together. Part of the adjustment process now underway in the oil market is likely to be a prolonged period of lower prices and a slowdown in the growth of the U.S. shale industry.

North Dakota’s Bakken has become a relatively mature play, so this time around it might be spared the worst of the slowdown. Drilling has slowed in some outlying counties, but in the core of play, counties like Mountrail, McKenzie, Williams and Dunn, continue to report strong activity.

If a slowdown is to occur, it is likely to come on the fringes of the Bakken and in other, less developed, shale oil plays — which have taken Bakken’s place at the frontier for U.S. onshore oil exploration.

John Kemp

Senior Market Analyst

Reuters

http://www.reuters.com/article/2014/11/12/shale-north-dakota-saudi-kemp-idUSL6N0T24MF20141112?feedType=RSS&feedName=everything&virtualBrandChannel=11563

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*Massenbach’s

Recommendation*

Oil Prices Continue to Define Geopolitics

Editor’s Note: Oil prices dropped steeply Oct. 14, with crude oil futures falling 4.6 percent to $81.84 per barrel — the biggest decrease in more than two years. Brent crude dropped by more than $4 a barrel at one stage in the day, dipping below $85 for the first time since 2010. While these are relatively substantial drops, they are just one part of a continuing trend Stratfor has been tracking over the past few months. Factors behind the slump include weak demand, a surfeit of supply and the fact that many large Middle Eastern producers are reluctant to reduce their output.

In light of today’s developments, we are republishing the following diary from Oct. 2, which details the reasons behind the falling prices and how the drops could affect oil-dependent countries around the world.

The global oil benchmark, Brent crude, fell Thursday to about $92 per barrel before rebounding to finish the day at around $94 per barrel, the lowest price since mid-2012. The latest sell-off follows one of the sharpest declines in a quarter in recent years, in which the price of oil slid about 16 percent. It may be premature to forecast sustained international oil prices lower than $90 per barrel, but if the price of oil remains close to where it is now, many oil exporting countries will feel the pain after basing their budgets on previous price expectations.

Simply put, the oil market has gotten overstocked. After spending much of the year producing only around 200,000 barrels per day, Libya has seen its production jump up by about 700,000 bpd since mid-June. The United States has continued its relentless expansion of oil production, with the latest Energy Information Agency figures estimating that U.S. production has increased by about 300,000 bpd since the beginning of August, and Iraq has experienced similar gains. Russia, Angola and Nigeria have also seen marked boosts in production. While most of the recent production increases are one-offs, North America could add another 1 million to 1.5 million barrels of production by the end of next year.

Despite these noteworthy hikes in oil production, sluggish demand by European and Asian (particularly Chinese) consumers has proved just as important to oil prices. While China’s demand will continue to grow, demand in developed countries will remain flat, as it has for a while. These factors only add to the concern that if left unchecked, oil prices per barrel in the $90-$100 range may persist for the foreseeable future.

Lower global oil prices will create challenges for several OPEC producers and others, particularly Russia. While some have suggested that OPEC will lower its production targets, it may not have the ability or the unity to coordinate a large enough drop in production to counter trends elsewhere and bring prices to a level more desirable to it (above $100 per barrel). If oil prices do return to this level in the near future, it likely will have little to do with OPEC’s actions.

The Standoff Between Russia and the West

The first and most import consequence of lower oil prices is the effect it will have on the ongoing struggle between Russia and the West. Energy commodities dominate the Russian economy, particularly its exports. Any sustained drop in oil prices would directly impact the country’s export revenues, and Russia’s GDP would take a significant hit. The Kremlin’s 2014 budget was based on oil prices averaging $117 per barrel for most of the year, with the exception of prices of $90 per barrel for the fourth quarter. For 2015, however, the budget has been pegged at $100 per barrel after much debate within the Russian leadership. While Moscow has significant financial reserves and can run a budget deficit if need be, Finance Ministry officials have estimated that lower oil prices could shave off 2 percent of Russia’s GDP.

Although Russia has been able to weather the effects of U.S. and EU sanctions thus far for its action in Ukraine, the restrictions have already led some firms, such as Rosneft, to ask for financial assistance from the country’s National Wealth Fund. A reduction in oil prices, and in turn lower revenues for Russia’s budget, will constrain the Kremlin’s ability to support Russian businesses hurt by sanctions the longer they are in place. With less of a financial cushion to soften to consequences of sanctions in the longer term, the Kremlin will have to moderate its position in the ongoing negotiations over the future of Ukraine to meet the demands of Western partners and achieve a reduction in sanctions.

Competition in the Middle East

As the West looks to gain from low oil prices in its struggle with Russia, it is also looking for an opportunity to negotiate with a beleaguered Tehran to come to some sort of a resolution on the Iranian nuclear program. For Europe, Iran and its large natural gas reserves represent one of the most promising long-term sustainable alternatives to Russian natural gas. Tehran is facing sanctioned export volumes, lower profit margins and ongoing expenses because of proxy conflicts in Syria and Iraq, and it can ill afford a sustained downturn in global oil prices. Progress on coming to an agreement with the West may be slow, which will only place more pressure on Tehran to negotiate.

Saudi Arabia is also set on maintaining its global market share and has an opportunity in the short term to rely on its considerable foreign exchange reserves and low production costs to wait out other global producers. Riyadh’s oil output is its most strategic resource, and one that the government is quick to use to its advantage. With summer temperatures beginning to cool and regional consumption starting to taper off, Riyadh can free up larger volumes to export, even at lower prices. The Saudis are also looking to leverage their short-term economic stability over rivals such as Russia, especially as they square off with Iran over the future of the Syrian government.

Saudi Arabia also has the ability to take a considerable number of barrels of oil offline if it wants to. Recently, however, it has offered discounts on its crude oil to secure market share for November, perhaps signaling to other OPEC members that while Riyadh may be willing to take its supply offline, others will have to do the same. But there is no incentive for other countries to reduce their output, since most Gulf producers will still manage to make a profit in the $90-$100 per barrel range; lowering production levels, therefore, would only reduce revenues.

The Americas and Beyond

Outside the Middle East, a decline in oil prices will also affect Venezuela. Officially, Caracas sets its budget at the low target of $60 per barrel of oil, a precedent begun by former President Hugo Chavez. Excess revenue could then be funneled elsewhere to off-budget expenditures to satisfy political patrons. Venezuela is in a dire financial position, needing oil prices perhaps as high as $110 to meet expenditures both on and off the book. Sustained low oil prices would severely hamper Caracas‘ ability to finance its imports, perhaps forcing government officials to get serious on selling foreign assets, such as Citgo, and gold from its central bank reserves, or offering even more attractive terms on loans for oil deals with the Chinese, though Beijing has recently balked at this. If oil prices stay low for an extended period, Caracas could also be forced to reconsider its deals with Cuba or programs like Petrocaribe.

Meanwhile, for developed massive oil importers — Japan, China, India and the European Union — low oil prices will give some respite to significant import bills. On the other hand, prices could also increase short-term strain in Europe, where energy has been the main factor pushing monthly inflation lower. While lower energy costs are good for Europe in the long run, they also raise the threat of deflation and inflame tension between the European Central Bank and Germany.

Even though prices have likely bottomed out, the recent plunge in the price of oil serves as a reminder of how geopolitically significant energy prices can be. Energy supplies form the backbone of modern industrial economies, and energy resources are critical export commodities for those who possess a lot of them. As long as fossil fuels remain the dominant source of energy — something that is likely to last at least another few decades — oil supply and oil prices will remain critical.

http://www.stratfor.com/geopolitical-diary/oil-prices-continue-define-geopolitics#axzz3G8Cksprv

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COLUMN-U.S. Clean Power Plan poses risks to electric reliability: John Kemp

The Environmental Protection Agency’s (EPA) Clean Power Plan, published in June, would harm the reliability of the power grid and may need to be modified before it is finalised, according to electric reliability experts.

In an initial review released on Wednesday, the North American Electric Reliability Corporation (NERC) assessed how proposed limits on greenhouse emissions from existing fossil fuelled power stations would impact on the reliability of the bulk power system (“Potential reliability impacts of EPA’s proposed clean power plan” Nov 5).

NERC was careful to stress that it is not advocating for or against the plan, which is a central plank of the Obama administration’s strategy for curbing global warming. But it did raise questions about the realism of some of the plan’s assumptions about future electricity generation and consumption.

Between 108 and 134 gigawatts (GW) of existing generation capacity, around 10 percent of the total, is expected to be retired by 2020, according to EPA’s own assessment of the Clean Power Plan. Most of the closures will be older coal-fired power plants as well as some less-efficient gas and oil-fired power stations.

The plan envisages a wholesale shift away from coal combustion towards more efficient and cleaner burning natural gas combined cycle plants; an increased role for renewables like hydro, wind and solar; and big improvements in efficiency to cut electricity demand throughout the 2020s.

But NERC is worried such a rapid transition will adversely affect capacity margins, make it harder to maintain aspects of power quality, and leave the grid vulnerable to extreme weather such as last winter’s polar vortex.

NERC has questions about each of the four building blocks which EPA is relying on to cut emissions to 30 percent below 2005 levels by 2030.

Reliability experts question whether the industry can make the scale of changes needed in the time available. The industry normally plans generation and transmission changes on a 10-15 year horizon, but the Clean Power Plan would require wholesale adaptation over just 5-10 years.

THERMAL EFFICIENCY

EPA thinks the thermal efficiency of existing fossil-fuel power plants could be increased so the amount of fuel burned to produce a kilowatt of electricity (the “heat rate”) could be cut by an average of 6 percent through a combination of better operational practices (4 percent) and capital upgrades (2 percent).

For example, EPA claims efficiency could be boosted by regular steam turbine overhauls. NERC warns, though, that “regular turbine overhauls are generally not practical or economical, because the procedures require the unit to be out of service for an extended period of time.”

And if coal-fired power plants are replaced by gas-fired units as base load generators, and instead forced to follow load, cycling on and off more often, they will actually become less efficient, because so much energy is wasted while they heat up and cool down.

NERC thinks EPA is overestimating the potential to make easy and cost-effective improvements in power plant efficiency. As the reliability experts note, power plant operators already have plenty of price and cost incentives to run their units as efficiently as possible.

SWITCHING TO NATURAL GAS

EPA is relying on a big switch from coal-fired generation and less-efficient oil and gas-fired units to the most efficient type of natural gas combined cycle power plants to slash emission rates.

At the moment, coal-fired plants tend to provide base load power at a steady rate, while natural gas combined cycle plants play a load-following role, increasing and reducing their output throughout the day in response to changes in demand.

The Clean Power Plan assumes the roles will be reversed. Natural gas combined cycle plants will become base load generators while coal-fired plants will become load followers.

But coal-fired power plants take much longer to reach operating temperature, and in the meantime emit far more carbon dioxide, so they are ill-suited to a load-following role. Using coal-fired power plants in this way could actually push up emission rates, requiring even deeper cuts in other parts of the system.

NERC is also worried that the system will become over-reliant on gas. At the moment, the power industry uses a diverse fuel mix to minimise the risk from unforeseen events. “Fuel diversification is … a component of an ‘all hazards’ approach to system planning.”

But as the power system becomes more reliant on gas, reliability experts are becoming concerned about the increasing interdependency of the two systems and the risk that a problem with gas supplies could threaten the electricity network.

During the polar vortex, which swept down across the United States in January 2014, an alarming number of power plants were unable to operate because they could not secure enough gas, straining reliability to the limit, and forcing operators to take a number of emergency measures.

“With this shift towards more natural gas consumption in the power sector, the power industry will become increasingly vulnerable to natural gas supply and transportation risks,” NERC warns. “Overdependence on a single fuel type increases the risk of common-mode or area-wide conditions and disruptions, especially during extreme weather events.”

ESSENTIAL RELIABLITY SERVICES

EPA assumes a much larger share of power generation will come in future from zero emissions sources including nuclear, wind, solar and hydro.

But some of those nuclear generating assets are at risk from closure. EPA assumes they will remain open. More generally, NERC thinks that EPA may be overestimating the amount of renewable generation that can be connected to the grid over the next two decades.

Conventional generators have a large rotating mass and enormous amounts of inertia which helps stabilise the grid against short-term fluctuations in demand or unexpected problems with generators and transmission lines.

Conventional fossil fuel generators provide all sorts of essential reliability services (ERS), including frequency response, voltage support, reactive power, operating reserves and ramping capability which ensure high quality power is always available to customers.

Zero-emissions sources like wind and solar generally cannot provide these essential reliability services in the same way. More fossil fuelled generators (mostly gas-fired units) will need to be kept on stand-by or operated part-loaded to provide reliability services, which will increase capital, operating and maintenance costs.

FUTURE EFFICIENCY IMPROVEMENTS

EPA assumes increased energy efficiency will actually cut the demand for electricity between 2020 and 2030. “EPA energy efficiency assumptions suggest that electric power savings will outpace electricity demand growth, resulting in negative electricity usage from 2020 through 2030,” NERC explains.

EPA predicts electricity demand will fall by an average rate of 0.2 percent per year throughout the 2020s. No other forecaster is predicting falling demand. The U.S. Energy Information Administration, the Electric Power Research Institute and NERC itself, have all predicted consumption will rise, not fall, next decade.

EPA assumes states can achieve and sustain efficiency savings of 1.5 percent every year but NERC warns “this sustainability is not supported by any peer-reviewed or technical studies of energy efficiency potential”.

NERC worries that if any one of these four building blocks proves unrealistic, there will be pressure to achieve even greater reductions through the others. For example, if energy efficiency savings do not meet the 1.5 percent per year target, or heat rates cannot be improved by 6 percent on average, an even bigger switch to gas and more renewables will be needed.

EPA wants a huge shift in the generation mix to be achieved over a period of just 5-10 years, which will require the construction of lots of new power plants as well as transmission lines. But as NERC notes, the electricity industry normally plans new generation and transmission on a 10-15 year timescale.

Integrating more wind and solar onto the grid will require more transmission lines connecting remote rural areas with the major cities. However, obtaining all the necessary permits and rights of way, as well as initial design and engineering work, and construction, for a new high-voltage power line, generally takes well over five years.

NERC worries EPA is pushing too far too fast and not paying sufficient attention to the question of electric reliability during the transition, pushing up costs and increasing the risk of power failures.

John Kemp

Senior Market Analyst

Reuters

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Kurdistan

Former oil company adviser heads Hungary’s new consulate in Erbil*

ERBIL – Strong ties between Hungary and the Kurdistan Regional Government were reinforced with the opening of a new Hungarian consulate in Erbil on Wednesday.

Csaba Vezekenyi, the first Hungarian consul-general, had worked as a public affairs advisor until this spring at Hungary’s MOL Group, the integrated oil and gas company active in Kurdistan since 2007.

MOL was the only one of dozens of foreign operators with equity stakes in Iraqi Kurdistan to make public its purchase of Kurdish crude after 600,000 barrels was delivered to MOL’s refinery in Croatia in late August.

The new consulate is located next door to the offices of MOL’s wholly-owned subsidiary, Kalegran.

The company has indicated it wants to buy Kurdish crude for its European refineries on a regular basis. Negotiations on this and on a pipeline connecting Kurdish oil fields under development by MOL are ongoing.

The consulate opening ceremony was attended by officials including Alexander Dodds, MOL’s upstream executive vice-president, Tibor Szatmari, Hungary’s ambassador to Baghdad, Qubad Talabani, deputy prime minister in the Kurdistan Regional Government, and Falah Mustafa, head of the KRG’s department of foreign relations.

Mustafa spoke about the KRG’s “open-door policy” towards the international community. “The act of opening a consulate after the events of June and July is testament to our friendship,” he said, referring to Islamic State’s lightening advance across northern Iraq.

International oil companies have since resumed operations although most non-essential staff have remained out of the region.

In another tie-up with Hungary, the KRG was due to sign on Thursday an agreement for an archeological project with Budapest’s Pázmány Péter Catholic University.

Excavation will take place at Dwin Castle, which according to local legend belonged to the family of Saladin, the 12th century Kurdish military hero who overtook the Christian armies of the early crusades.

The castle is about 60 kilometres north of Erbil and the excavation team will initially conduct a geodetic survey and a 3D scanning of the perimeter wall as well as document the surrounding archeological remains, such as buildings and the cemetery.

MOL is a sponsor of the project.

http://rudaw.net/english/kurdistan/121120142

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Italy to set up Peshmarga training camp in Kurdistan

ERBIL— Italy pledged its help in training Peshmerga forces both inside Kurdistan Region and in Italy as part of the country’s efforts to support the Kurdish Regional Government (KRG) in the war against Islamic State militants, a top Italian army official said in Erbil.

“We’ll set up a military training camp in Kurdistan Region for the Peshmerga troops,” Admiral Luigi Mantelli, Chief of the Italian Navy, said on a visit to the Kurdish capital Erbil Monday.

“What the Peshmarga have done against the terrorists is of absolute significance,” Mantelli told Kurdish Prime Minister Nechirvan Barzani.

Mantelli said Italy will “support Kurdistan to obtain advanced weapons” in their fight against the Islamic jihadists who still hold large parts of Iraq and Syria in their solid control.

On a visit to Erbil last August, Italy’s Prime Minister Matteo Renzi expressed his country’s support for the KRG in its fight against the militants and stated that Rome would provide both humanitarian and military aid to the KRG.

“We highly appreciate the Italian position to help the Peshmerga forces,” Barzani said. “The frontline against the IS militants is vast and protracted. We need more military support and heavy weapons including antitank mortars and advanced mine detecting equipment.”

Barzani said more than a million refugees have taken shelter in Kurdistan and “they are being helped without any kind of discrimination.”

“We are thankful for every help we have received from the international community to help these refugees, but we should remember that as the winter comes along, international help will be much more urgent,” the prime minister told the admiral.

The Italian pledge came after Britain said it would provide more advanced weaponry to the KRG at the earliest opportunity.

Michael Fallon, the British defence minister, told Masrour Barzani, head of the KRG’s national security council in London on Friday that there was no political barrier to supporting the Peshmerga.

He was quoted by KRG officials as saying that the Kurdistan Region was in the forefront of confronting ISIS terrorism.

The British military envoy to the region, Lieutenant General Sir Simon Mayall, also reaffirmed his country’s support to the Kurdistan Region and Peshmerga forces.

Thanking the British government for its support, Barzani nevertheless told the meeting that “the provision of heavy and advanced weaponry has so far not reached the required level.”

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