Category Archives: Economic Crisis

My DGAP article | Energiewende vs. USA Shale Gas: Can German industry compete?

ImageIn Germany, the impact of the country’s renewable energy transition on the economy is a very hot topic.  Tuesday, Mrs. Merkel’s  new Minister of Economy & Environment (and chair of the Social Democratic Party), Mr. Sigmar Gabriel, declared: “We need to keep in mind that the whole economic future of our country is riding on this,” (NYT, 21Jan14).

Here’ is my article in the DGAP’s (German Council on Foreign Affairs’) IP Journal of 30Dec13  (submitted 24Nov13):

Germany’s Energiewende (renewable-energy transition) is under intense pressure both from consumers facing soaring electric bills and from German manufacturers fretting about their falling energy competitiveness vís-a-vís the US, where manufacturers are benefiting from the boom in cheap natural gas production. What should be done to address these concerns has become a major topic of the CDU-SPD negotiations forming Chancellor Merkel’s new coalition government.  

From the viewpoint of German manufacturers, there are two ways the US shale gas revolution implies a worrisome competitive challenge. First, cheaper natural gas in the US is lowering electricity and other energy costs for American manufacturers, while Germany’s continue to rise. This is especially of concern to energy-intensive industries, where the EU now has 36 percent of world capacity and the US only 10 percent. Secondly, as the US begins to build facilities for export of liquefied gas (LNG), this capacity could have a significant effect on the price of electricity and gas in Asia. … Continue reading at DGAP’s (Deutsche Gesellschaft für Auswärtige Politik e.V.) IP Journal.

Competing with China in Latin America: Is Germany losing its high-tech advantage?

Wilfredo R. Rodriguez H., CC BYAn article I wrote for the IP Journal of the German Council on Foreign Relations is online today. It examines data on China, the EU and Germany’s trade with Latin America and the Caribbean, including in energy. Here’s a quote from near the end:

…  China’s exports to Latin America in the low-, medium-, and  high-tech categories were below those of Germany and the EU in 2003; but in 2012 [China's exports] exceeded the combined totals of the EU15 in the medium-tech and even in the high-tech categories. The only place the EU15 surpasses China is, rather oddly, in the low-tech manufactured goods …

-> READ THE ARTICLE at GCFP’s IP Journal or at a link from … Continue reading

My talk: JFK Institute, Berlin: How “The Global Barrel” shapes Washington-EU relations

You’re invited to my lecture at The JFK Institute of North American Studies at Freie Universität in Berlin, Germany, Tuesday 6 PM. Here is the flyer, then the Abstract.  Tschüß!

ABSTRACT:

“The Global Barrel”

Today’s globalized market-centered energy system defines Washington’s relations with the EU, Japan and OPEC states Continue reading

Listening to Saudi Oil Minister Al Naimi at CISIS in Washington: Bad news for Venezuela & Iran?

Al-Naimi at CSIS

Al-Naimi at CSIS

 Last week in Washington, I attended a talk by Saudi Oil Minister and head of Aramco, Ali al-Naimi, at CSIS.  Energy and foreign policy veterans from Daniel Yergin to Brent Scowcroft and Dr. James Schlesinge were on hand to hear al-Naimi’s views. You can read the transcript here, or watch the video embedded below.

Al-Naimi’s contrasted his central theme: “the enduring relevance of oil,” to the predictions made for many years by the adherents of “peak oil”–a theory that he said had itself “peaked in 2009” and has now been shown to be “utterly incorrect.”

Bad News for Venezuela and Iran?

Listening to him describe the global impact that the U.S.A. tight-oil “revolution” will have on the market,  plus with Alberta’s heavy oil and so many other new sources from around the globe all coming to market, brought to my mind images of the 1980’s.  The 1980’s were the “lost decade” in Latin America. It strikes me that, if he’s right about the trajectory of the global oil sector, the consequences for OPEC’s “price hawk” faction would be sobering. Continue reading

I’m cited: “(BN) Chavez Buys Enemy U.S.’s Fuel While Lauding Iran”

Presidents Chavez and Ahmadinejad met in Caracas in January (here) and June 2012

I was cited a number of times yesterday in a Bloomberg News article by Nathan Crooks in Caracas and Paul Burkhardt in NYC.  I reprint it below because the authors’ research further illustrates an issue I’ve often stressed here.

That is: in spite of President Chavez’ rhetoric promising to stand by Presidents Ahmadinejad of Iran (and Assad of Syria, and previously Qaddafi of Libya), he is actually in no position to withstand the U.S. sanctions that could be imposed on Venezuela for aiding Iran. Continue reading

Oil Prices: Saudi Pumping Surge & US-EU Iran Strategy

What are the factors driving up the price of oil? Some cite fundamentals, others over-active speculation,

Persian Gulf & Middle East (UTex Lib. 2008)

and there are certainly major geopolitical issues in OPEC‘s Mideast and North African (MENA) member states–which is what this post is about.

The Present Saudi Pumping Surge is a Key Element of the US & EU Iran Sanctions Strategy

It is certain that the Iran confrontation will only intensify as the mid-summer sanctions deadline approaches.  By July, Washington and the EU hope to significantly curtail Iran’s ability to export oil.  In this situation, it is perhaps surprising that prices have not gone higher.

This past week, the normally understated Economist, while noting the Saudis’ extraordinary efforts to pump excess capacity, nevertheless warned that the Iran crisis could trigger a worst-ever oil shock:

Continue reading

A Santos-Chavez Pipeline: Where’s the demand for Latin America’s oil boom?

President Santos of Colombia recently went to Caracas where he and PresidentChavez signed a letter of commitment  for the “Binational Project on the Venezuela-Colombia Oil Pipeline” to run 3,000 km. from Venezuela’s Faja heavy-oil region, west across Colombia to the Pacific port of Tumaco.  (El Universal and El Universal).  After many disappointments in recent years in collaborations with PDVSA, Latin American presidents haven’t endorsed many joint projects lately.  Nevertheless, Santos was beside himself with enthusiasm after the five-hour meeting on 28 November, declaring “Wherever we’ve mentioned this, people’s eyes open wide.” (Reuters)

Let’s look at some data to see if Santos and Chavez are really onto somehing here. Continue reading