FIRST: Al Jazeera, 10:05 AM, 02.12.22 CET, Berlin & Doha: — English audio below, then Arabic video.
SECOND: Asharq (exclusive Bloomberg affiliate, Gulf) , about 10:00 PM, 02.12.22 CET, Berlin & Doha — English Audio below, then Arabic video.
FIRST: Al Jazeera, 10:05 AM, 02.12.22 CET, Berlin & Doha: — English audio below, then Arabic video.
SECOND: Asharq (exclusive Bloomberg affiliate, Gulf) , about 10:00 PM, 02.12.22 CET, Berlin & Doha — English Audio below, then Arabic video.
I was interviewed (Tuesday 01nov22) on the new gas-price cap plan the German government is expected to approve tomorrow.
I was asked four questions by DW’s host Kate Ferguson:
-1- Thomas, it`s interesting to see the government attach conditions to these price caps for companies. How worried is it about a corporate exodus?
-2- German chancellor Olaf Scholz is visiting a BASF factory today – just days after the company announced major cost cutting – complaining that gas prices were up to six times higher at home than in the US. Are these caps enough to prevent OTHER companies from following suit?
– 3- Managing gas prices is one thing. But with a recession looming what ELSE does the German government need to do to keep companies afloat?
-4- The EU hasn`t been able to agree on a COMMON gas price cap. How damaging is it for countries to go it alone? I was not particularly optimistic.
The above were not especially technical energy-sector questions, so my answers combine assessments of energy-sector facts facing Germany with geopolitical and geo-economic assessments of the deep crisis facing German industry, citizens and the political establishment. Read more on my blog: http:GlobalBarrel.com . Continue reading
and Host Ayse Suberker of TRT TV’s Straight Talk from Istanbul.
We analyzed what Putin aims to achieve, and why President Erdogan of Turkey has so rapidly accepted this proposal. This is obviously, I said, a scheme by Putin to try to save his natural gas business to Europe.Continue reading
Our panel included the experts:
The energy security of Moldova, a small, pro-EU state boarding Romania, is precarious and under various and comlpex threats from Russia. This includes direct threats to its gas supplies, which overwhelmingly come from Gazprom.
Meanwhile, Moldova’s 70% of its electricity comes from its region of Transnistria, which is illegally occupied by Russia, and this electricity is produced by gas imported across Moldova by Gazprom.
The remaining 30% of its electricity comes from Ukraine, where recent Russian missile strikes have hit power plants and apparently forced a cut off the Ukrainian electricity supplies to Moldova on the day before we recorded this show.Continue reading
Given the wartime energy emergency in Europe, it is perhaps astonishing that President Macron of France continues to block completion of the Midcat Pipeline.
Completion of this pipeline, whose construction was interrupted well before the Ukraine War began, would enable Portugal and Spain, located on the Iberian Peninsula, to send much of the abundance of LNG and pipeline gas these countries are able to import on northward, across the Pyrenees Mountains, across France and into Germany and other northern and eastern EU Member states, which are being starved of natural gas by Russia.
I am asked for my theory as to why President Macron would block this obviously much needed pipeline from crossing his country. We discuss several other related issues as well.Continue reading
The title above says much more succinctly what I was hoping to get into in this interview. Below are the beginning of an article I was writing for this blog post. However, a USA organization is interested in using it for an Op-Ed. So, only the initial part is below. I hope to post on this fully very soon (i.e., a published article). – Tom O’D.
In my view, the Biden Administration has unwisely gotten into an exaggerated public clash with the Saudis and OPEC/OPEC+ over their 2 mbd quota cut.
The key here is the need for more investment rapidly into both the OPEC states (which have plenty of oil reserves that can be developed) and into USA shale resources (that are also abundant and need to be more rapidly expanded).
The looming global recession discourages investors in both instances, of course. And, the Biden administration has reason to worry, both if a global recession soon begins, slashing oil demand, and especially if it doesn’t (but, it will).
I agree with Ed Morse (video interview on CNN here), veteran oil-market analyst, head of Citibank’s Global Commodities: Regardless of the OPEC quota cut, given the strong trend towards a global recession, which is proceeding relatively slower in the USA than elsewhere, it’s likely oil prices will be “in the $70’s at the end of the year.”
… to be continued.
Dear GlobalBarrel.com readers,
Some upcoming events I’ll attend and post here:
1. I’m invited to speak at the “12th 2BS Forum, one of the leading politico-security conferences in Southeast Europe, organized by the Atlantic Council of Montenegro.” So I’ll be in Budva from 6-9 October. Ukrainian President Zelensky will deliver a keynote video speech from Kyiv. My Panel is 8 August 2022, 14.45 – 15.15:
The Climate-Energy Security Nexus, with speakers:
2. I’m also invited to speak at
I plan to post on the content of these conferences and my contributions, and to try to post more of my media interviews – when they may be of use.Continue reading
04 Oct 22: I was asked, two weeks ago, why did Germany insist on increasing its partnership with Russia in gas even after the 2014 Ukraine invasion? Was this “naivety”? I said this characterization obscures a conscious German geostrategy.
Two common explanations I constantly heard in Berlin over about eight years for the Russian gas partnership was the “Neue Ostpolitik” that originated with Willy Brant’s Cold-War-era Social Democratic Party and the conservative-business version of this, “Wandel durch Handel” (change through trade), held up as an historic lesson of the late-mediaeval Hanseatic Trading League.
Indeed, these traditions certainly did motivate many elite German actors to partner with Russia on energy and on trade generally …
“But according to Thomas O’Donnell, a Germany-based energy analyst, it was also driven by a German desire for ‘strategic balancing — it was a way for Germany to break free from its dependence on the US’.
“Many in the German establishment, he said, resented US dominance in energy matters and disliked ‘this idea of a global fungible market in oil that’s traded in dollars and protected by the US navy’. That resentment, he said, was one of the reasons why Germany kept out of the US war in Iraq in 2003. And it was why it suited Germany to have direct access to Russian oil and gas.” [Guy Chazan & David Sheppard, Germany closes long energy chapter with Russia by turning on Rosneft, Financial Times, 17 Sept 22. https://www.ft.com/content/2fbbe104-93e3-48bb-8d69-211c79069624 ]
In this short post, I can’t fully explain the near unanimity of German elites over two decades (first during the two 1998-2005 Schröder chancellorships of his SPD plus the Greens, and throughout the the five Merkel coalition governments until December 2021, of her CDU/CSU with the SPD or FDP) in support of renewing and further deepening what by 1998 was already two-to-three-decades old energy partnership with Russia.
Within this remarkable unanimigy, various parties and business interests had a variety of rationales. [see Footnote 1, on what I see as the key German foreign policy group, the “realpolitik” group, which included Merkel and Altmaier, beyond the trade-as-geostrategy grouping mentioned above.]
However, both these sections participated/participate in a broad anti-Americanism.
I am speaking here about opposition to USA leadership of the transatlantic alliance most especially on trade matters and in the alliance’s geostrategy, especially when it may involve armed conflicts. This has various geopolitical and geo-economic aspects.
This was exacerbated during the late-Merkel years not merely by the Trump presidency’s open hostility; but by policies of administrations both before and after his administration (i.e., in “normal times”). This has to do especially with German opposition to the bi-partisan, USA strategic posture, initiated under Obama, of “Great Power Competition,” and especially to its international trade implications of decoupling from both Russia and China.
In both the realpolitik sections of German elites, who do recognize the threat Putin-ism represents and the dangers of German reliance on his regime for energy or in any other matters, and in the Putin-Versteher sections who worship trade-as-a-geostrategic-cure-all, the one common characteristic has long been a growing resentment of the USA, aka an “anti-Americanism” as I remarked to the Financial Times. This especially exists among party and ministry functionaries, and certain business associations, so much that this anti-Americanism has become institutionalized, a constant underlying feature of German official geopolitical and geoeconomic bureaucratic life. (Nota Bene: I am not speaking here of the German middle and working classes, where matters are generally quite different, except among various far-left and -right sections. I am speaking of elites.)
Until a few years ago (e.g., during the negotiations over the Transatlantic Trade and Investment Treaty, TTIP up to ca. 2016), this official anti-Americanism phenomena was often noted and discussed by policy and academic experts on both sides of the Atlantic. It is not clear to me why this outward recognition has diminished; but the sentiment itself certainly hasn’t, especially.
Putting aside historical and social-cultural aspects of this “resentment” of the USA, in the political realm it is no secret that, over multiple USA administrations, the German side, often along with other Western European powers, has been deeply opposed to many major USA foreign policy decisions, and indeed many of these decisions did not go well for the transatlantic alliance.
One could point back 50 years, to the VietNam War, or to US coups and interventions in Latin America, or the stationing of intermediate-range nuclear missiles in West Germany (which the Russians did also in East Germany). All of this was clearly upsetting to broad sections of the European population; as this was often within the USA as well.
All these issues would likely have been forgotten by now; however, transatlantic-policy clashes over geostrategy have continued in the post-Cold War era.
These clashes include the two Iraqi Gulf Wars and, for many years USA Iran policy (up till the late-Geo. Bush administrationm when EU attitudes to Iran started to merge with the USA’s), the USA-led NATO intervention against Serbia to end the Balkan wars (which ushered in a renaissance for NATO within Europe that was clearly unwelcomed at the time in broad German circles), the mishandling and human-rights violations of the War on Terror post 9/11, and more recently USA policy w.r.t China and Russia – esp. the shift to a strategy of “Great Power Competition” as it disengaged from the “War on Terror” and USA military over-involvement in the MENA regions.
More generally, the fact that, during almost any post-Cold War crisis confronting the transatlantic alliance, the USA president has been “the decider” (in the words of George Bush), became a source of palpable resentment.
Economic and trade tensions served to fortify these political and geopolitical sensibilities and has been, by far, the primary vector which drew German business circles into resentment of USA leadership of the alliance. In German political parties, this ongoing resentment has been esp. notable within the SPD; in the extreme-right AfD party and, in a less ideological, more pragmatic manner, by conservative business sections of the CDU/CSU, and as always the traditional far-left.
This gave rise to a deep urge among German business and political circles to find ways to escape dependence on and subordination to USA determination of policy within the transatlantic alliance in-general and, till now, on oil and gas in particular, linked as it has been to the Mideast Wars. This only deepened the instinctive urge to fix Germany’s connection to the Russian gas and oil supplies as a “strategic balancing” to the USA’s predominance in global energy markets and in energy geostrategy during the post-Cold War years and especially the “color revolutions” and most especially Ukraine’s struggle against Russian domination.
German elites got deeply involved in a project to guarantee continued Russian natural gas deliveries to their country and on into Europe should there ever be a conflict between Russia and Ukraine that might interrupt the flows transiting Ukraine into Germany and its EU allies’ markets.
Hence, this produced the agreements to assist Putin’s Kremlin to build the detour pipelines Nord Stream 1 and 2 (i.e., a mga-infrastructure plan to completely replace, using “more secure routes,” the Russian-to-Europe export pipeline system of the Cold War Era that mostly flowed across Ukraine, but Poland and Belarus as well, and which itself had only been built due to active West German [and French] participation).
In addition, German elites took the geostrategic and geo economic decision to constantly deepen the vertical integration of Germany (and with it, Europe) with the upstream Russian gas system … not in spite of Russian aggression against Ukraine, but precisely because of the threat and reality of such aggression.
From the CEE, Baltic, American and other opponents’ point of view, this amounted to “throwing Ukraine under the bus.” But, this was precisely the conscious, “realpolitik” decision (my characterization) by both groups of German geopolitical and geoeconomic policy elites. For the “realpolitik” group, there was little in the way of “naivety” … it was a calculated geostrategic gamble. This group benefited from the ideological traditions of Ostpolitik and Change through Trade groups, which had long infected broad sections of German elites, and would repeat the inane refrains this latter group believed in … such as “change through trade” and “this is only a commercial project.”
Footnote 1: On German-elite broad groupings, which supported/support the German-Russian energy alliance:
Group 1: In my view (assessments based on my research), the group who had little illusions about the dangerous and volatile nature of Vladimir Putin’s regime is this “realpolitik” grouping. Despite what was constantly said publicly about the renewal and strengthening of the German-Russian energy partnership being a “non-geopolitical” and a “purely commercial project, this group was actually deeply concerned about escaping the risks associated with Russian gas having to transit “insecure” and “risky” Ukraine in order to arrive in Germany and into Europe generally. Any potential interruption of this flow was widely seen as a looming existential risk to Germany and its EU allies’ energy and economic security.
In this regard, building Nord Stream 1 and 2, and deepening German energy integration with Russia via its Gazprom and other energy firms was seen as of the highest priority for guaranteeing German energy security, i.e., the continued delivery of Russian gas to Germany and on into Europe, no matter what might happen in Ukraine, whether it be war or internal destabilization that could undermine Russian gas transit across the country.
This group seriously misjudged what would happen in the event of a Russian war on Ukraine. Rather than the EU cherishing the transit of Russian imported gas which Germany had “guaranteed” by building the Nord Stream 1 and 2 pipelines as a “lifeline” during the war; Europe has largely been horrified at the Russian brazen rupture of the post-WW2 security system and its atrocities in Ukraine and had in fact made concerted efforts and plans to wean itself off any available Russian gas supplies. The absolute insistence of the USA, esp. the Biden administration, that the new NS2 pipeline must forever be abandoned by Germany from the first day this war began, played a crucial role in pressing (forcing?) Germany to agree to not certify the inauguration of this pipeline.
I called this group of German elites the “realpolitik” group.
Group 2: On the other end of the geostrategic/geo-economic spectrum, there was the “Putin-Versteher” or “Putin understander” among German political and business actors. Some of the most obsequious are pictured at this link from Die Welt, who, in contrast to the “realpolitik” grouping, have had such exaggerated confidence in Putin that some, in the more extreme cases, would be happy with still-deeper German-Russian economic and political integration, not only energy sector integration.
For example, there are actors on the fringes of various parties, nevertheless with positions in parliament or important business associations, who have had a habit of calling, in private meetings at least, for political “unity” with Russia and Austria, specifically adding “against” the Americans. This fringe has gone farther than, for example, Chancellor Schroeder’s public advocacy from the early 2010’s for a Free Trade Zone and some sort of unified polity “from Lisbon to Vladivostok,” albeit short of Russian “full membership” in the EU.
Footnote 2: A few articles I have written related to this analysis follow:
This video is the portion of the TVP show (Warsaw, Poland, in English) with my interview on 09sep22.
We discussedthe present energy crisis in Europe vs. Putin’s Russia – as an additional front parallel to the hot war inside Ukraine.
I gave my views on the causes for Europe’s predicament: this includes over-dependence on Russian energy – long insisted upon by especially Germany and Austria – to over-dependence on variable wind energy without having any significant amout of grid-scale storage installed.
Also, on the necessity of nuclear as a zero-carbon base load generation capaciy, and the most useful applications for larger, Generation 3+ nuclear plants as versus smaller SMRs (small modular reactors). I aso commented on the Polish national energy transistion plan, wich seems much moe flexib .
[Note: TVP is the Polish state-media corporation TV channel. See: https://en.wikipedia.org/wiki/Telewizja_Polska
As the Wiki indicates, TVP is criticized for being partisan pro-government. In my interview, on this topic, this was not the case. I also often go onto German state-media TV, Deutsche Welle (DW), subject to my similar observations when I’ve been on that station. ]Continue reading
EU Commission President Ursula Von der Leyen presented the commission’s plan to address the growing energy crisis before and during the coming winter. Now there will be two weeks of discussions among Member states until their energy ministers gather on 30 September to decide which to endorse.
There will undoubtedly be no price caps on Russian or other natural gas.
There will be liquidity for those energy companies struggling to purchase high-priced gas.
There are measures to decouple the effects, at least, of the coupling of the electricity prices to high natural gas prices in the wake of Putin’s regime cutting its pipeline flows to Europe. The idea here, as I explained, is a sort of “windfall profits taxes” on low-cost energy producers, such as renewables and nuclear, to capture their rents and redistribute them to those citizens and firms struggling to pay energy bills during the crisis.
I explain that this is a wholly appropriate measure during wartime, which is what this is – an economic and energy war vs. Russia to support the Ukrainian people’s fight against Russian aggression.
I was asked, again, as on other networks recently, whether the EU is “divided” on these measures.
I explained how there are absolutely no proposals that the EU (or USA) back down on its sanctions program vs. Russia and esp. vs. Russian energy.
I explained how, despite Orban of Hungary and some similar examples, these have been pretty well handled by the majority of Member states and the Commission and in fact the sanctions and emergency measures have gone forward.
I noted that in two or so years, Russia will be relegated to a second-level energy exporter, and the EU will certainly be able to be independent of Putin’s regime in the energy sector.
My thanks to Al Jazeera’s Katya Bohdan, producer, and the digital team in Doha (English) for this well done “documentary” featuring my point of view on: “What does Russia’s gaas cur mean for Europe?” I think it is self-explanatory (and its short). Watch it below or directly at the AJ link here. Tom OD.
Published Aug 22, 2022 – Dr. Tom O’Donnell, GlobalBarrel.com
In our Asharq interview on 21 August, a Jordanian expert and I discussed Middle East and North African (MENA) states’ food shortages, inflation, and the risk of recession and political unrest as a consequence of Russia’s war on Ukraine.
I especially commented on the troubled domestic policy responses in Egypt (and also in Turkey, which is not a “MENA” state; but deeply involved in Libya, Syria, and etc.).
Beyond the region’s domestic monetary and social policies, I stressed that in external policy, the region should collectively condemn Russia for its Ukrainian war, holding Moscow responsible for driving these crises in MENA. (Unfortunately, there was no time for me to elaborate on this latter point. Hence, I will write more in it, further below here.)
I was also asked to compare the present situation to that which led to the Arab Spring uprisings of 2010-11. (During that period, I taught a post-graduate seminar at The New School, NYC, and spoke at public events on the uprisings). Many of the same precursors exist now as then; however, at what point might this lead to protests or uprisings is not possible to say.
The further reality is that any successes by the EU and other developed states in acquiring scarce food, minerals and energy equates to more difficulty for developing states – especially Pakistan, Bangladesh, Africa and poorer states of the MENA Region – to acquire these necessities.
We both noted, however, that, at the same time, the oil-exporting and LNG-producing states of MENA are now enjoying a revenue windfall, and it is of course their responsibility along with the developed world to aid their poorer neighbors during this crisis.
Note too, that the OPEC states of MENA have reportedly earned a windfall of $1.3 trillion so far this year from high oil and gas prices.
Given the global competition for expensive and temporarily scarce food and energy commodities, poorer MENA states have little recourse. Lebanon, in particular, is in dire circumstances – much of which is the responsibility of corrupt internal political elites and Iranian-backed Hezbollah.
The IMF of course is playing a crucial role now in assisting MENA states.
(I note that the USA this week, according to the UN, purchased 150,000 metric tons of grain from Ukraine to distribute to developing states.)
Meanwhile, Russia is continuing to steal and/or destroy large quantities of Ukrainian grain which would otherwise be exported to MENA states.
My first answer in the interview was rather generic; about the World Bank’s recent report on the Region,
Later, elaborating on the attempt of the region’s central banks to fight inflation with higher interest rates, and the risks of recession this is unavoidably causing, I emphasized that Turkey, at the direction of President Erdogan, is following a highly unorthodox policy (read: monetarily incorrect, and rather corrupt) of lowering interest rates to address inflation. This counter-intuitive decision is known to be a pet theory of the Turkish president. I explained how this dangerous policy caused a spurt of inflation during the latter part of 2021, the first time the central bank implemented lower rates to “fight inflation.” It was widely assumed that would be the end of this experiment. Nevertheless, the Turkish central bank once again cut rates earlier this week. And, again, Turkish lira inflation has begun to soar. This is clearly unsustainable.
I pointed out this policy is exacerbating the crisis for Turkish business and for the Turkish people who are increasingly unable to afford food and other necessities when they are actually available. Further, the central bank is running out of foreign exchange to support the lira.
So too, I discussed the crisis in Egypt, the most populous MENA Arab state. 80% of its flour imports, as I understand (FT), are normally imported from Ukraine and Russia, explaining why the Egyptian wheat crisis is particularly severe. Its central bank head resigned just this week, reflecting the depth of its financial and monetary crisis.
Russia’s contradictory propaganda, and MENA’s response
One point I very much wanted to elaborate, but lacked the time, was the rediculous situation where, in many developing states there are significant sections of the political and business elites who believe – or decided to ‘believe’ – that Moscow”s claim it is fighing in Ukraine to defeat “nazis” and to “preempt” supposed Ukranian and/or NATO plans to atttack Russia. In tandem with this false propaganda, Putin, Lavrov and other Russian leaders are actively offering to aid them with wheat and other aid.
This is all rather absurd in that it is Russia which is exacerbating the global post-COVID food and commodities shortages and high prices by its war, and especially by its systematic stealing and/or destruction of Ukrainian grain. It is the mark of corruption that various business and political elites of developing states are willing to pretend, along with the Putin regime, that Russia is a poor victim of Ukraine and that NATO and the USA had supposedly been positioning themselves for launching future aggression against Russia.
However, what brings this Russian narrative to the level of absurdity is that these same elites in various developing states (along with Hungary’s Victor Orban and some others inside the EU) further accept Russian claims that it is the savior of the Ukraine war’s attendant food and commodities crises. At minimum, what I can say is that this is certainly quite consistent with the tradition of the “Big Lie” pioneered by the Hitler regime in Berlin in the 1930-40’s. In fact, one should not underestimate how this narrative has found resonance among naive and also especially those who – often quite legitimately – feel lingering indignation at historical mistreatment or hypocritical policies of the USA and European powers. This indignation is being manipulated and cynically appropriated both by the Russian leadership and allied local business and political elites in various developing states, including the MENA region. This dangerous fake news (no quotation marks on this expression in this case) must be more actively combated with patient explanations and impactful refutations.
Dear readers: I have so many interviews on the present energy-and-war crisis that I cannot post them all here. Here are two recent ones.
Some comments on the DW interveiw above:
I spoke with DW.de Business show host Daniel Winter about the OPEC decision today, which some decried, and the EU plans to put a price cap on natural gaas – Russian and otherwise. You might find my take on the OPEC decision surprising?Continue reading
My fellow expert-guest, in Moscow, Dr. Stanislav Mitrakhovich, was notably frank.
He did not insist, as have various Russian Federation officials lately, that Nord Stream 1 gas flow has been cut for technical reasons to do with the lack of a Siemens compressor.
The compressor in question was sent to Canada for repairs, but its return has been waived from sanctions restrictions. As Chancellor Scholz rightly said, the lack of a compressor is clearly not what cutting gas to Europe is about. It is political.
Nor did the expert in Moscow claim it was due to bureaucratic German-Russian difficulties with paperwork, as Putin and others have claimed..
He instead pointed out that the EU has said it will stop by year’s end the import of Russian oil, and Germany has said it will not use Russian gas in two years, and, without this and some sort of “political compromise,” gas could undoubtedly be fully flowing again from Russian into the EU.
So, I asked – rhetorically – just what possible sort of “compromise” might Putin be angling for? The Donbas for gas? Odessa for gas?
I asserted my opinion that “Europeans have their sense of dignity” and would never agree to such a “compromise.” Put that way, they will prefer to be cold this winter and to have industries and businesses have to shut for lack of gas.
We also discussed a few details of what sort of suffering – rationing of energy, low temperature heating and closing of businesses – Germany and the EU can expect to have to endure this winter.Continue reading
Al Jazeera asked me how will the cut in gas to Latvia effect that country and other Baltic states?
I said they are much better prepared than Germany, for example. The Baltic states of Latvia, Lithuania and Estonia, as well as Poland, had no illusions about Putin’s Russia eventually weaponizing the EU’s dependence on Russian gas as it is now during the Ukraine war.
Lithuania has a gas import floating terminal and also supplies non-Russian imports to its neighbors, including Poland. Poland also has an LNG import terminal, and is now completing a new non-RUssian-gas pipeline form Norway to Poland.
They are in a much better place, prepared much better than Germany in the event of a complete cut off of Russian imports.
Al Jazeera also asked about the cut in Nord Stream 1 supplies to (and through) Germany to only 20%. I said this will have a heavy effect on Germany and other EU states this winter. Germany will not be able now to fill storage for winter.
We discussed other aspects of this in the brief, 4.5 minute interview on the nightly news show.