Published Articles

Why Gasoline is Going Higher in California

October 11, 2018

It has become raison d’etre to blame President Trump for everything wrong with California; including higher gasoline prices plaguing our state and contributing to a slowing statewide GDP. But in today’s world that is connected via air, land, sea and increasingly cyberspace; globalization and policies knit countries and states together like never before. Many times rendering geography and borders on maps obsolete – consequently, events in one region or country – affect continents, countries and states. California’s decision to never allow pipelines into the state, drill for oil and natural gas off our coasts and certainly not explore the billions in untapped fossil fuel reserves trapped in the Monterrey Shale is rippling across our state in the form of higher gas prices.

The Monterrey Shale – though considered technically hard to recover – is 64% larger than all other shale plays in the lower 48 US states. To believe the Monterrey Shale can’t be unlocked is economically unwise when you consider that in September Kuwaiti oil exports to the US dropped to zero for the first time since the first Persian Gulf War over rising US production. Furthermore, “U.S. net imports of foreign oil have dropped to a 45-year low.”

If California voters and policymakers wanted to lower gasoline prices, unlock poverty-alleviating affordable energy and create millions of high paying jobs then begin working with our world class universities to unlock the Monterrey Shale. It would be like when Governor Pat Brown built universities, highways and water systems that California and the US are still prospering from today. Our high gasoline prices have nothing to do with Trump, Iranian sanctions tightening supply or OPEC. This is a California problem that historically has some of the highest gas prices in the US, a newly instituted 12-cent per gallon tax and, “the most stringent regulations for its gasoline in the nation(US).”

On the ground it means few refineries are willing to produce gasoline for California and the situation becomes more dire when it was announced in September that the South Coast Quality Air Quality Management District (SCAQMD):

“Proposed an option that would ban a critical refinery process technology at two Southern California refineries that is required for manufacturing cleaner-burning gasoline.”

Consider this – of the 5 largest US states – California is #1 in poverty and Texas is #1 for growth. Texas is also the #3 exploration and production (E&P) producer in the world. Former Texas Governor Rick Perry used fracking as a policy tool, which achieved scientific breakthroughs, and corporate investment unlocking Texas shale basins into tax revenue that now has Texas being the #1 wind power generator in the US as well. Texas figured out how to use wind to their advantage and California could do the same with the Monterrey Shale.

The greatest impact a society can have on poverty, homelessness, and inequality along with overall human flourishing is abundant energy. California is blessed with billions of barrels of oil within our state and coastal waters. Moreover, we have enough natural gas to clean our air and continue dramatically cutting emissions like no continent, country or state can imagine. When the US began converting coal-fired power plants to natural gas this caused America to be the only industrialized country in the world to meet the Kyoto Protocol by dramatically lowering its carbon output and emissions through natural gas.

California should be the leader in natural gas E&P instead of legislating through Senate Bill 100 (SB 100) that our advanced society can only be powered by renewable energy (wind & solar). Imagine what gas prices will be like when renewable energy tries to replace the 6,000 modern-day products that originate from crude oil. Moreover, the 2015 US Department of Energy Quadrennial Energy Review (QER) unveils the biggest reason renewable energy will cause gas prices to continue rising in California when it states:

“Energy storage is a key functionality that can provide flexibility, but there is little information on benefits and costs of storage deployment at the state and regional levels, and there is not broadly accepted framework.”

If California fully deploys SB 100 and there isn’t available energy storage – and currently there isn’t according to the Los Angeles Times – then energy from electricity and gasoline prices will naturally rise. Supply will not be able to keep up with demand based upon storage capacity alone.

Back to no interstate pipelines – if California doesn’t alleviate that problem – then gasoline refined outside the state will increase and this will cause intensifying the carbon-intensive use of trucking and shipping petroleum for economic continuity. Domestic and foreign refineries that have less environmental regulations will lead to increased global emissions; and ironically trucking and shipping crude oil, petroleum and gasoline have higher carbon footprints. California will then continue increasing gasoline prices, its carbon footprint and endangering environmental safety since pipelines are the safest method to import oil over ships, trucks or railways. The wise environmental policy choice would be to build pipelines.

Our policymakers should begin understanding that unweaving the intricacies of fossil fuel from our economy is like undoing globalization for trade and commerce. Everything is now interlinked whether we like it or not. Oil and natural gas can power our future or increasing our use of renewable energy and demonizing anyone who doesn’t share the belief that the environment takes precedence over California economic activity can be our downfall.

But with gas prices rising and foolishly slashing fossil fuel use instead of taking Texas’ approach to energy (the all of the above approach: fossil fuels and renewables working together) California voters, citizens and policymakers only have ourselves to blame when gas prices rocket into the $5 per gallon range. With the US shale revolution taking place there is no reason why our prices shouldn’t be in the $2.50-$3 range. Environmental taxes and regulations are choking our economy, increasing our poverty and a big reason business is leaving California.

Link: http://www.foxandhoundsdaily.com/2018/10/gasoline-going-higher-california/

 

The Deep State, Obama, and Destroying America

September 16, 2018

On April 22, national security adviser John Bolton said, “It’s Open Season for Foreign Influence Operations.  It’s not just Vladimir Putin’s Kremlin that is trying to influence our elections.  So are communist China and sharia-supremacist Iran.”

Vitriolic hatred of President Trump has sprung America into an Afghanistan-like “state of collapse, civil conflict, ethnic and disintegration locked in a self-perpetuating cycle that may be simply beyond outside resolution.”  An example is California versus America over energy.  California has chosen 100% renewable energy by 2045 when it’s proven that renewable energy doesn’t work on a scalable, affordable basis now or in the coming decades without immense fossil fuel backup and billions in taxpayer subsidies.

Thankfully, the United States embraced fracking, allowing the U.S. to overtake Russia and Saudi Arabia as the world’s number-one oil producer.  Meanwhile, California dooms its economy to poverty for its citizens with higher energy prices and depressed job growth.

This example illustrates that America’s democratic process is under attack, but it’s against each other and not from foreign interference.  Why?  Because if the Democrats take Congress, they will impeach President Trump and don’t have a plan to actually govern.  This is now Venezuelan-style socialism that only wants power.  These people – mostly unserious Democrats – “are vile, disgusting people.  There is no lie they won’t tell, no person they won’t smear to advance their agenda,” as evidenced by the Judge Brett Kavanaugh hearings.

They will return America back to the anemic growth it endured under Obama, and our enemies will only grow more emboldened.  America will go the way of California-type leaders like Tom Steyer and Gavin Newsom plus the lies coming from the #Resistance and #NeverTrump crowd.  Seemingly, this is exactly what the Deep State, the Democrats, establishment Republicans, and President Obama want.

According to Dr. Victor Davis Hanson, the Robert Mueller investigation is a mockery of justice full of Democratic partisans.  It was never intended to root out Russian collusion; instead, it is to take down the duly elected president, his family, and anyone associated with his past life.  Ask yourself, would this sham collusion narrative be happening if Hillary were in the White House?  Of course not.  Hanson is correct when he writes:

No President has ever faced impeachment for supposed wrongdoings alleged to have taken place before he took office.  With effort to go back years, if not decades, into Trump’s business and personal life, we are now in uncharted territory.

We will have a shooting, civil war on our hands if Trump is impeached over an investigation that has never proven beyond a reasonable doubt that Trump colluded with Russia.  The Democratic Party of Truman, Kennedy, FDR, Scoop Jackson, and Governor Pat Brown is gone.  Back then, Democrats wanted a thriving middle class, single-family homes, great schools to achieve upward mobility, and world-class infrastructure.  Now it’s spying on your political enemies through the unelected intelligence fiefdoms of the Deep State that Trump is trying to destroy.

Issues have come to light revealing the extent of Obama’s troubled presidency and former top officials reckless disregard for unlawfully spying on Trump and thousands of Americans that is destroying America.  Moreover, Obama’s glee at making a nuclear deal with Iran has unleashed Hell on the Middle East by creating a hegemonic Iran.  To illustrate, Politico did an extensive investigative report titled “The Secret Backstory of How Obama Let Hezbollah off the Hook,” because “[a]n ambitious U.S. task force targeting Hezbollah’s billion-dollar criminal enterprise ran headlong into the White House’s desire for a nuclear deal with Iran.”

Additionally, The Atlantic reported that Obama and former high-ranking intelligence officials knew that Iran and al-Qaeda were working together (Hazma, Osama bin Laden’s son, got married in Iran), and more damning was a 19-page document from the 2011 raid in Abbottabad, Pakistan that killed bin Laden, showing that “al-Qaeda and the Iranian Revolutionary Guards in Tehran touched on funding and arming the Sunni terror outfit so it could strike at American targets.”  Former CIA director Mike Pompeo “suggested” that this al-Qaeda-Iran pact was an “open secret during the Obama administration.”  Maybe these revelations are why the Deep State, Obama, Democrats, and negligent Republicans are trying to destroy Trump and the Rule of Law. It can certainly justify why Trump de-certified the Iran nuclear deal.

Unfortunately, “Obama did spy on Trump,” according to former CBS reporter Sharyl Attkisson.  She was also illegally spied on by the Obama administration for writing unflattering stories.  Ms. Attkisson then credibly alleges, “It means U.S. intelligence agencies secretly surveilled at least a half dozen Trump associates.  And those are just the ones we know about.”

Former senior-level Obama officials Susan Rice, James Clapper, John Brennan, Sally Yates, and Samantha Power all admitted to reviewing or “unmasking” political figures.  Obama intel agencies were caught “secretly monitoring Congressional conversations while the Obama administration negotiated the Iran nuclear deal.”  Brennan and Clapper were both found lying to Congress in 2013 and 2014.  And Ms. Attkisson is still fighting the Justice Department in a federal lawsuit over hacking her CBS computer, causing CBS to publicly announce:

Correspondent Sharyl Attkisson’s computer was hacked by “an unauthorized, external, unknown party on multiple occasions,” confirming Attkisson’s previous revelation of the hacking.

Global intelligence firm Stratfor verified this claim in a September 21, 2010 email:

John Brennan [then an Obama Homeland Security adviser] is behind the witch hunts of investigative journalists learning information from inside the beltway sources.

This Deep State behavior grew when the intelligence community “expanded its authority in 2011 so it can monitor innocent U.S. citizens.”  Then, in January 2016, a top-secret inspector general report “found the NSA violated the very laws designed to prevent abuse.”  Also in 2016, Obama officials “searched through intelligence on U.S. citizens a record 30,000 times up from 9,500 in 2013″ during an election year.  Two weeks before the 2016 presidential election, NSA officials before a FISA court hearing overseeing government surveillance “confessed they’d violated privacy safeguards with much greater frequency” than previously admitted.  The presiding judge accused the NSA of “institutional lack of candor and a very serious Fourth Amendment issue.”

If it weren’t for Congressman Devin Nunes, chairman of the House Permanent Select Committee on Intelligence the public would be in the dark “about the unethical and often illegal behavior of the FBI, CIA, National Security Agency and Department of Justice” under the former administration.  Chairman Nunes also exposed the politicized leak of former NSC director Michael Flynn’s contact with the Russian ambassador in a January 2017 Washington Post column.  Nunes’s investigation further uncovered that Clinton’s campaign paid for an unverified dossier in 2016 from former British intelligence officer Christopher Steele that was used by Obama’s FBI and Justice Department to obtain a warrant from the Foreign Intelligence Surveillance Court (FISC) for illegal surveillance on former Trump campaign aide Carter Page.

What Brennan, Clapper, Rice, and others have done is “monetize access” to classified intelligence for political and private financial gain.  Obama intelligence chiefs – and now the Deep State – weaponized intelligence.  Past and present high-ranking intelligence officials believe that it was correct to revoke Brennan’s security clearances and that others should follow.  These Obama-era officials and current Deep State employees are pursuing political agendas via the anti-Trump media, with the U.S. Department of Justice standing back and doing nothing while America is destroying Trump, the office of the president and the freest, greatest country in the history of mankind.

Link: https://www.americanthinker.com/articles/2018/09/the_deep_state_obama_and_destroying_america.html

Land Use Issues Affecting Renewable Energy in California

August 24, 2018

California leads the nation in renewable energy – however the justification behind Senate Bill 100 (SB 100) – would result in even higher energy rates when we already lead the United States (US) in having the highest electricity rates in the nation. SB 100would commit California’s utilities, “to getting all of their electricity from renewable sources by 2045.” According to Californians for Affordable and Reliable Energy (CARE) California pays 47% higher rates and bills have gone up 22% since 2010. Additionally:

“Californians paid $5.3 billion more for electricity than the average ratepayer. Employers pay nearly an additional $10 billion more in higher electricity costs, which get built into the costs of every product and service bought in the state.”

Heavily minority and poorer areas of California in the rural and Central Valley pay 52% higher rates than the Bay area; and 44% higher in the Inland Empire than the Los Angeles basin. SB 100 doesn’t consider how this will directly hurt working families, job creation and continue missing out on the energy revolution taking place across the US; particularly, Texas.

The US Energy Information Administration (EIA) reported in mid August that Texas exported more crude oil than imported in April. Exports from the Houston-Galveston port district that is part of the Texas Gulf Coast terminals exceeded imports by 15,000 barrels per day (bpd) in April and by May exports exceeded imports by 470,000 bpd. Meaning, total US oil exports are projected to hit a record of 2 million bpd this year with Houston-Galveston’s share exceeding 70%. Texas is on track before year’s end to be the biggest oil producer after Russia and Saudi Arabia through calculations from HSBC by producing roughly 6 million bpd. If the Monterrey Shale and coastlines were opened for even limited exploration California could be creating well-paying entry-level, Middle class and white-collar jobs and economic growth. Instead we are pursuing renewable energy.

Renewable energy has major problems dealing with intermittent delivery (sun not shining correctly or wind blowing at a steady pace), more expensive than natural gas and nuclear when levelized costs are factored into the energy equation and renewables need continual backup from fossil fuels so electricity is delivered to ratepayers. And presently, California produces excess energy from solar that California ratepayers pay other states to take off our antiquated grid. According to the EIA the California Independent System Operator (CAISO), which runs the electrical grid, pays as much as $25 per megawatt-hour to a state like Arizona when typically utility buyers would pay on average $14-$45 per megawatt-hour when there isn’t a glut of electricity from solar.

But there is a larger issue that hampers renewable energy that rarely receives attention; and that is the “huge land requirements,” that SB 100 would require according to Robert Bryce, senior fellow at the Manhattan Institute in a Los Angeles Times article titled, “All-renewable energy in California? Sorry, land-use calculations say it’s not going to happen.” In the article Mr. Bryce shares a study that Stanford civil and environmental engineering professor Mark Z. Jacobson did when he added up the numbers of what it would take for California to achieve 100% renewable energy from SB 100. Professor Jacobson reasonably estimates:

“It would require 124,608 megawatts of onshore wind-power capacity, 32,869 megawatts of offshore wind capacity, and 236,243 megawatts of solar-energy capacity.”

In 2017, “global solar capacity totaled about 219,000 megawatts.” California would need more solar capacity than currently exists globally and Jacobson’s energy-math would need, “33,000 megawatts of concentrated solar plants, or roughly 87 facilities as large as the 377-megawatt Ivanpah solar complex.” Ivanpah is located in the Mojave Desert and covers 5.4 square miles. Environmentalists put up a fierce fight to stop or limit Ivanpah over the endangered desert tortoise.

Wind energy also has a large onshore or offshore footprint that breaks down, “to about 3 watts per square meter,” according to the Department of Energy. Professor Jacobson postulates that California would need 124.6 billion watts of onshore wind capacity, which means state officials would need to set aside, “41.5 billion square meters or about 16,023 square miles of turbines.” Los Angeles is a little more than 4,000 square miles – and if SB 100 is passed and implemented – California would cover a land area four times larger than Los Angeles County (the largest county in the US) with nothing but windmills.

Political issues also affect wind power when in 2015 the Los County Board of Supervisors unanimously voted to ban large wind turbines in unincorporated areas of LA County. San Diego, Solano, and Inyo counties also have passed restrictions on turbines. The head of the California Wind Energy Association told the San Diego Union-Tribune, “We’re facing restrictions like that all around the state…It’s pretty bleak in terms of the potential for new development.” California now has 5,632 of megawatts installed wind capacity, 153 megawatts less than in 2013. The anti-turbine restriction policies seem to be winning.

Now begin to do the math of the amount of land that it would take for wind and solar to achieve energy parity when San Onofre Nuclear plant (SONGS) is closed. San Francisco (SF) is about 46.89 square miles (121.4 km), for wind to replace San Onofre it would take land 6 times the size of SF and for solar it would require land 12% the size of SF. Furthermore, it would take 84 acres to produce 2,200 megawatts of power whereas SONGS only requires 0.13 square miles. To replace Diablo Canyon’s 2,160 megawatts will also require enormous land sprawl from wind and solar to achieve one-for-one megawatt replacement.

Even once popular wind projects like the 468-megawatt Massachusetts Cape Wind Project – met fierce opposition that ultimately scuttled the project – over locating dozens of turbines offshore. Would Californians accept onshore or offshore wind projects that are many times larger than what was proposed in Massachusetts? If California doesn’t want drilling to occur off pristine coastlines are they willing to wreck home values, expropriate vast amounts of land and wreck local land-use policies that expanding renewable energy requires to run our modern, technologically advanced state? That is difficult to envision once you understand the math behind the projections that it would take for SB 100 to achieve.

Link: http://www.foxandhoundsdaily.com/2018/08/land-use-issues-affecting-renewable-energy-california/

The Future Is Incredible For US Oil Production

August 2, 2018

HSBC predicted in a recent report that Texas is set to outpace Iran and Iraq in oil production. Furthermore, HSBC stated the Permian Basin in West Texas and the Eagle Ford are likely to produce 5.6 million barrels per day (bpd) by 2019. Iraq is expected to produce 4.8 million bpd and Iran 3 million bpd. If HSBC’s analysis comes true then Texas would become the world’s number three-oil producer.

This news means the United States should surpass Russia and Saudi Arabia in 2019 as the number one oil producer in the world based on Texas’ output. The Energy Information Administration (EIA) expects US production to reach 12 million bpd by late 2019. A stunning accomplishment when you consider during the Saudi-led war on US shale that crashed oil prices in 2014, bankruptcies overtook the Permian Basin and production in the US fell from 9.6 million bpd to 8.5 million bpd.

There are three reasons why US oil production is skyrocketing. Number one is demand is rising. OPEC has recently forecast that global oil demand should, “surpass 100 million barrels per day next year.” The group sees demand increasing by “1.45 million bpd next year,” however trade tensions between the US, China, Canada, the EU and other longstanding trade agreements in question could temper growth. OPEC qualified their report about demand rising over trade worries by saying, “If trade tensions rise further and given other uncertainties, it could weigh on business and consumer sentiment.” With the US and the EU working towardsresolving a looming trade dispute over increased tariffs in late July this is a positive first step towards global oil demand staying strong.

Second, US federal tax policies are favorable towards exploration and production (E&P), which will assist with production increases. President Trump’s America First Energy Plan states:

“That we (the US) have vast untapped domestic energy reserves. We must take advantage of the estimated $50 trillion in untapped shale, oil and natural gas reserves, especially those on federal lands.”

According to Karen Alderman Harbert, President of the U.S. Chamber of Commerce’s Global Energy Institute believes record-breaking oil production will also lead to, “an explosion in exports.” Growth in exports will allow additional supply to be sold that otherwise wouldn’t come to market. Expanding energy development – particularly, expanding fossil fuel exports – will be a top priority for the Trump administration as they will also use energy as a geopolitical tool. Texas is the example for the US moving forward of government and private business working towards expanding oil and natural gas production. US government policies will continue moving in this direction.

The third and biggest reason is use of technology where the US is making their greatest gains towards increased production. Since the 2014 crash shale companies have slashed costs, but also employed automation and cutting edge technologies like robotics, sensors and smart phone to keep drilling. The oil and gas industry is undergoing a modernization push.

This was on display in June at the Unify Conference, “an industry forum on digital technology put on by Baker Hughes,” in Houston Texas. At this conference technology companies like Google and Microsoft pitched energy executives to purchase cloud and artificial intelligence deals. Darryl Willis of Google who presented at Unify said, “Energy companies have reams of data but only use 5% of it, a serious problem in the digital economy.”

Silicon Valley believes they can manage data better than E&P firms. Chevron signed a seven-year deal with Microsoft to, “capture and store the terabytes of data Chevron generates around the globe, “ said Bill Braun Chevron’s chief information officer. Other firms use the cloud to, “find more oil and predicting needed maintenance on equipment before it breaks down.” Inefficient and antiquated ways that kept US oil production lower is now being replace by complex but diversified approaches to new technologies to stay competitive in an ever-changing global environment.

Shale growth is increasing on a monthly basis but geopolitical tensions could dramatically lower this growth. Trade disputes with China where Trump has threatened over $500 billion in tariffs or a war with Iran could send oil prices into the $100 and above range. This would also lower oil demand and send countries and consumers into lower cost energy options like renewable energy and electric vehicles. In other words, only extreme geopolitical situations can lower US oil production, otherwise the future is positive based on growing demand, favorable governmental policies and embracing technology.

Link: http://www.eurasiareview.com/02082018-the-future-is-incredible-for-us-oil-production-analysis/

Brennan And A Disastrous Legacy

July 29, 2018

A Record Of Unparalleled Failure And Lies

In a previously published article in December 2016 I detailed the disastrous tenure of former Central Intelligence Agency (CIA) Director John Brennan and his quest to appease President Obama, John Kerry and Obama’s former national security apparatus by pushing for the Iran nuclear deal. Thankfully, President Trump dumped that deal into the dustbin of history. If Brennan’s miscalculations about Iran weren’t enough, he also voted for the Communist party Presidential candidate in 1976. Brennan’s judgment is biased, flawed, and his national security credentials should immediately be revoked by Trump. His continued attacks against Trump and current United States (US) foreign policy and national security are destabilizing US relations globally and particularly in Asia.

Brennan’s blasts against Trump are not based in reality as demonstrated by two events that have rattled the Chinese government. A recent South China Morning Post reiterated the danger to Chinese companies if the US goes through with its threat of trade wars to adjust trade imbalances between the two nations. Du Wanhua, Deputy Director of an advisory committee to the Supreme People’s Court said,

“It’s hard to predict how this trade war will develop and to what extent, but one thing is sure: if the US imposes tariffs on Chinese imports following an order of US $60 billion, US $200 billion, or even US $500 billion, many Chinese companies will go bankrupt.”

While no one wants a trade war, this could possibly be a step towards stopping President’ Xi’s escalating tensions with Taiwan. Without a strong economy this could end China’s harassment of Taiwan. But Brennan never takes this type of policy action into account when it comes to his criticism of the US executive branch of government. Moreover, Trump is widely criticized by western media – led by Brennan – over his abrasive, confrontational tone and use of Twitter but what if it is working in Asia?

A late July article in the international Financial Times titled, “The Chinese are wary of Donald Trump’s creative destruction,” shows the US is finally challenging China militarily, financially and diplomatically something no US President, Congressional leader or former CIA Director has done in recent memory. This is a welcomed policy move for Eurasia and Asian peace and prosperity.

Brennan’s lies are now coming back to haunt him, and he is becoming recognized as nothing more than a mouthpiece for the former administration, the US Democratic party and US media outlets that pay him on a consistent basis to speak against US foreign policy and national security. These news outlets are openly hostile to the US-led post World War II order – and if it collapses – the consequences are devastating for Asia. At this time Brennan is their spokesman.

The CIA hasn’t been left in this bad of shape since the abrupt resignation of former CIA Director John M. Deutch under President Clinton. At least the vast majority of former CIA Directors had the experience and gravitas for the position unlike Brennan. Esteemed historian Victor Davis Hanson has written about Brennan being, “the poster boy for a lack of veracity.” Disturbingly here are facts about Brennan’s career before assuming the CIA post according to former CIA operative Sam Faddis:

“Brennan was never a spy, case officer, experienced or seasoned analyst; nor did he ever work in far-flung CIA outposts recruiting sources or running operations. It’s doubtful – based on your record – you [Brennan] ever understood human intelligence. What propelled your career was earning the designation of CIA Presidential briefer. You gave Clinton in-person Presidential briefings – the job of a junior analyst – by reading intelligence gathered, analyzed and written by others to the then Commander-in-Chief.”

What Brennan did was establish a personal relationship with Clinton that he used to propel his career unlike few others have ever done. He gained a job within the Obama administration, because he was an established US Democratic Party apparatchik who did their bidding, instead of giving unbiased, rational analysis. Certainly Brennan never voted on or made decisions on whether to send men and women into harm’s way. Freedom of speech is celebrated in America and western democracies but you’re also not allowed to yell, “fire,” in a crowded building, which is what Brennan is doing by consistently attacking Trump and Asian security without understanding a new direction was needed after Brennan’s time at the CIA.

Reviewing the world Brennan left behind is what reveals his disastrous tenure helming the CIA. Brennan approved giving the world’s largest state sponsor of terrorism – Iran – via the nuclear deal $150 billion, a ballistic missile program and a pathway to nuclear weapons without ever considering how Israel, Saudi Arabia, Jordan, the United Arab Emirates and other affected nations would react. His policy of “strategic patience” with North Korea produced zilch. Foreign Affairs chronicled in late July how Brennan and the previous administration did very little to deter cyber attacks against US elections, the power grid or Russian hackers.

Additionally, Japan needs an entirely new military strategy since under Brennan’s watch the Chinese were allowed to militarize the East China and South China Sea. Of course Brennan would never admit what a fool he was sitting idly by when the Chinese built 29 PLA air force and naval bases within fighter range of the Japanese-held Senkaku Island (known in China as the Diaoyu). The US and Japan only have four bases within the same distance.

With Russia Brennan believed talking tough and having former Secretary of State Clinton present Putin with a red reset button would normalize relations. Nary a word was said when Obama said on a hot mic to President Dmitri A. Medvedev of Russia that he would have “more flexibility,” after his 2012 reelection campaign. Surely Brennan would have known that flexibility would produce the Crimean annexation, weaponization of Russian energy sources for Putin’s geopolitical gains and partnering with Shia militias through Iran to rescue Syrian President Assad.

Brennan allowed Russia to set the Middle East on fire – creating Syria – the disaster for a generation and upending decades of regional balancing that has now stretched into Afghanistan, Pakistan, India and Southeast Asia. He also let Venezuela implode, Libya be destroyed, and sat befuddled while Yemen descended into Iranian backed civil war (through the Houthi’s) that has been called by the United Nations, “an entirely man-made catastrophe.”

Nothing Brennan says or does should be trusted. Senator Rand Paul should continue his campaign to discredit Brennan and never let him near national security secrets while Trump is President. Brennan is harming Asian and Eurasian interests and global security by his continued Twitter-rants and media appearances. Asia at-large would be wise to discard what Brennan says.

Link: https://andmagazine.com/us/1532799398.html

US Shale Continues Breaking Records

July 14, 2018

Energy Independence Means A New World Order

For the last 40 years, since the Arab oil embargo, we’ve had a mindset of energy scarcity, but as a result of the shale revolution, the US has emerged as an energy superpower.

According to the International Energy Agency (IEA), the United States (US) will surpass Saudi Arabia and Russia with record oil production topping over 10 million barrels a day (mbp) while approaching 11mbp faster than analysts expected. These are figures that haven’t been seen since the Nixon administration when fracking wasn’t used on the wide scale that it is now.

Daniel Yergin, economic historian and author of The Prize: The Epic Quest for Oil, Money and Power, states:

“This is a 180-degree turn for the United States and the impacts are being felt around the world. This not only contributes to U.S. energy security but also contributes to world energy security by bringing new supplies to the world.”

New technologies like artificial intelligence (AI) and machine learning (ML) from companies like Sensoleak in Houston, Texas that are using data analysis to detect and prevent pipeline leaks and ruptures in aging pipelines across the US are helping deliver oil that was once unrecoverable. This energy renaissance is causing US pipeline construction to boom. According to a recent ICF (NASDAQ: ICFI) study, “private section investment in energy infrastructure could total $1.34 trillion by 2035, supporting 1 million jobs each year.” ensuring energy affordability across the US and globally for decades; causing domestic energy dominance that seemed unimaginable ten years ago.

Shockingly, the US Census Bureau in early February reported that the US exported roughly 700,000 barrels of light domestic crude in December 2017 to the United Arab Emirates (UAE). The EIA iterated the significance by pointing out the U.A.E. is the fourth-largest OPEC producer and a first time importer of US oil. The US net oil imports hover close to or under 3 mbp, whereas in 2006 the US imported over 12 mbp. The EIA reports that by 2029 the US “could become a net petroleum exporter from rising crude exports and overseas sales of refined petroleum products such as gasoline.

US oil production has now reached roughly 10.900 million barrels per day (bpd). The 11 million bpd mark will likely be reached before Labor Day upsetting oil and geopolitical markets.

With energy policy following President Trump’s controversial, “America First Energy Plan,” this will be the first time the US will take concrete steps towards energy independence. The Energy Information Administration (EIA) Annual Energy Outlook 2018 believes the US will be the world’s leader in exploration and production by the end of this year. The potential to upend geopolitics from Russia to the Middle East into China’s industrial landscape will be good for America, but will it be good for the planet?

Many critics like the Post Carbon Institute’s (PCC) new report, “Shale Reality Check,” question the sustainability, long-term production prospects and viability of US shale; but are critics like the PCC missing an opportunity to diminish the force of the modern petro-state led by OPEC? With trade wars between the US, European Union (EU) and China heating up this will increase OPEC’s ability to set prices. OPEC’s cartel status is what’s upsetting markets globally instead of trade wars. What PCC also doesn’t understand is the US has the proven oil and natural gas reserves to finally counter and even break OPEC’s global status. Fracking has unlocked this potential beyond analysts and policymakers expectations.

For decades American, Western and Asian diplomats have tiptoed around Middle Eastern nations – particularly, Saudi Arabia – since they needed vital oil and natural gas for continued economic growth. What environmentalists miss about shale’s resurgence is it allows the US to no longer rely as heavily on Middle Eastern oil and gives the Trump administration the ability to sanction Vladimir Putin’s Russia that relies on the weaponization of state-run oil giants to fund Russian geopolitical adventures.

Trump, however, desires energy dominance by opening US coastlines to oil and natural gas drilling, including the politically sensitive, though lucrative Arctic National Wildlife Refuge, “which has an estimated 11.8 billion barrels of technically recoverable crude.” Critics counter that the US could run into problems with more supply hitting the market, thus lowering prices and discouraging renewable energy – although renewables have significant problems to overcome – before reaching large-scale viability.

Ted Nordhaus of The Breakthrough Institute believes shale’s output has downside since carbon emissions rose in 2017, “after the previous three years saw near zero growth.” During the George W. Bush administration domestic oil output was on the decline, causing him to set a course that looked to replace oil with biofuels like ethanol. Environmentalists argue:

“That by increasing oil and gas supplies and lowering prices for consumers, shale drilling is extending the life of fossil fuels to the detriment of the environment and the development of cleaner energy.

What Mr. Nordhaus and environmentalists don’t understand is in late 2014 it seemed America’s oil independence was a pipedream and the Saudi’s would force America into renewable energy when they targeted shale drillers for elimination by flooding world markets with new supply. Throughout this Saudi-led war on US shale, bankruptcies overtook the Texas Permian Basin and Bakken Formation in North Dakota; production also fell in the US from 9.6 mbp to 8.5 mbp. Shale companies though never declared defeat; instead, they slashed costs, employed automation and adopted cutting edge technology (robotics, sensors, smart phones) to keep drilling. By 2016 OPEC and the Russians agreed to production cuts and US shale was driving this new geopolitical landscape.

The US is now supplying China and India while “slashing imports from the Middle East and Africa,” causing the Saudis to now try and invest in US shale properties. This new oil boom according to The New York Times, “gives the U.S. a new edge in energy and diplomacy. It also allows the US to undercut Russian energy dominance over Eastern Europe.” This energy dominance now allows the US and its allies to withstand political turmoil in Venezuela, Libya, Nigeria and Iran – all major OPEC suppliers – when historically supply disruptions cause prices to skyrocket and slow global growth. These geopolitical impacts from increased US shale production allow Washington to apply sanctions on Russia, Iran and Venezuela with zero energy repercussions.

However, geopolitical darkness arises when a scenario of Iran and Saudi Arabia going to war or Iran-Hezbollah-Syrian-Israeli tensions spilling into a conflict engulfing the entire Middle East no longer has to involve the US. Increasingly, the US doesn’t need the Middle East, but the Middle East still needs the US diplomatically for political and military stability.

Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University speaks about this new geopolitical reality:

“For the last 40 years, since the Arab oil embargo, we’ve had a mindset of energy scarcity, but as a result of the shale revolution, the U.S. has emerged as an energy superpower.”

With the US as the new emergent superpower, OPEC is presented with an unprecedented challenge; if they cut production shale drillers boost output, which undermines OPEC’s market share and impacts OPEC and inherently dependent on higher oil prices. This new reality also means China, Japan and Southeast Asia have become more dependent on US oil than on the Middle East. Depending on your vantage point that is either positive or negative, but the US can now argue the global order they have ensured since World War II should become a shared burden financially and militarily for global shipping lanes and economic access.

These are possibly good problems to have, but geopolitics is never that linear or clear; riches for Americans can mean heartache on multiple continents. In the 1970’s during the Arab oil embargo energy independence was only a dream. Now that it is reality it will bring with it a host of ripple effects. Energy accomplishments that bring economic freedom should be celebrated but don’t forget about the geopolitical backlash that waits for America and the world from shale drillers superior advantages reshaping global energy markets.

Link: https://andmagazine.com/us/1531531981.html

California Needs a New Energy Policy

July 17, 2018

A famous quote from Virgil’s Aenid 5.231, says, “They can, because they think they can,” comes to mind over the recent headline by the San Francisco Chronicle, “California slashes emissions, hits major greenhouse gas goals years early.” The California Air Resources Board (CARB) on June 11th released data showing California’s greenhouse gas emissions, “dropped 2.7 percent in 2016 (the latest year available) to 429.4 million metric tons.” But these lowered emissions numbers don’t tell the full story and have been disputed by the California Center for Jobs and the Economy in a report titled, “California’s Progress on Greenhouse Gas Reductions: A Review of the Numbers,” for including such factors as favorable weather and job destruction to demonstrate emission reduction.

In 2007 Governor Schwarzenegger signed AB 32, The California Global Warming Solutions Act of 2006, “which mandated the state cut greenhouse gas emissions back to 1990 levels by 2020.” Governor Brown went further with the environmental mandate by signingSB 32 and AB 197, “requiring California to cut emissions 40% below 1990 levels by 2030.” And if California continues believing, “Climate Change Matters More than Anything Else,” the problems could become catastrophic for California families and the poor that reduced emission numbers don’t take into account.

A new report from the Center for Demographics and Policy at Chapman University that came out before the CARB numbers shows that despite increased costs and efforts by California we are cutting emissions at a lower pace. From 2007-2015, California cut greenhouse gas emissions (GHG) by 9% but the remainder of the United States (US) cut them by 10% or more in some cases without costly environmental laws and regulations. This means, “that on a per capita basis 41 states outperformed California on CO2 cuts.” Chapman’s Joel Kotkin expounded on this theme in a recent article for City Journal by stating:

“California is unlikely to achieve even its modest 2020 goals. California has accounted for barely 5% of the US’ GHG reductions. Ohio, Georgia, Pennsylvania and Indiana are about 5 times greater than California’s. Even Texas has been reducing its per-capita emissions more rapidly.”

Reliable, affordable energy isn’t what California is currently producing and is a leading factor why Governor Brown and the Legislature’s energy policy is undermining our blue collar sector in Los Angeles County and the Inland Empire. Millennials, Latinos and African American’s ability to purchase single-family homes are in serious peril over failed energy policies that produced higher home prices. This could be why a recent poll found 46% of residents in the Bay area are looking to leave California. Kerry Jackson of the Center for California Reform at the Pacific Research Institute also found between 2007-2016, 6 million people left the state, versus only 5 million moving in. Therefore, is it important emissions are lowered if most residents are unable to afford homes and need to leave the state?

Governor Brown is widely known for being an environmental leader, but his policies have not made an impact on worldwide climate change since California accounts for less than 1% of global GHG emissions. Considering the Paris Climate Agreement – California’s policies will have no discernable affect on GHG – and the Chapman study reported, “If California ceased to exist in 2030, global GHG emissions would still be at 99.54 percent of the Paris Agreement total.” The CARB report doesn’t address these issues.

Moreover, California’s economy is slowing, and our green policies seem to make energy affordability tougher for people to move forward economically. The more California attempts to alleviate GHG the worse they become. Undiscernibly, CARB, the Governor’s Office and Legislature don’t advocate for biomass use, nuclear energy that cuts emissions affordably, and hydroelectric doesn’t count towards renewable energy percentages. These are all forms of energy that cut emissions, but doesn’t lead to job destruction.

The CARB report also never takes into account that California imports about 1/3 of our electricity from other states. Our large energy-intensive tech firms: Apple, Google, Facebook outsource their GHG emissions to China and other less environmentally friendly US states to signal their lower carbon output, which also isn’t factored into CARB’s data. In reality California has exported pollution to other regions of the world and the US. The Chapman study also showed that in 2015 our international imports (energy was one of the largest) accounted for roughly 35% of the state’s total emissions. This origin of material and energy imports is also never figured into emission calculations.

These energy policies are also making income inequality continue rising by limiting single family homes being built over the belief that limiting home construction will lower global warming. Joel Kotkin again writes:

“The state’s determination to undo the primarily suburban, single-family development model in order to “save the planet” has succeeded both in raising prices well beyond national norms and creating a shortfall of some 3 million homes.”

California also has some of the highest electricity prices in the nation and climate change regulations like solar panels having to be installed on all new home construction are making cities like Los Angeles now have some of the highest poverty rates in the US. The tragedy about renewable energy is that it leads to increased emissions since it is an intermittent energy source that has to be backed up by dirty fossil fuels like coal.

Leading environmentalist Michael Shellenberger  has also expressed doubts about California’s renewable energy polices and if this leads to lowered emissions in four recent articles: “If Solar And Wind Are So Cheap, Why Are They Making Electricity So Expensive?,” “Solar And Wind Lock-In Fossil Fuels, And That Makes Saving The Climate Harder And More Expensive,” “If Solar Panels Are So Clean, Why Do They Produce So Much Toxic Waste?, and ”If Renewables Are So Great for the Environment, Why Do They Keep Destroying It?” Shellenberger has even gone so far as to opine California’s environmental polices are poverty inducing and racist in nature. The emission number may be lower, but the cost is steep and is destroying California society. However the answer to California’s GHG, inequality, and lack of middle class job growth (because of higher energy costs) is natural gas.

No form of energy at this time is cleaner, as scalable, or in such abundance as natural gas. A company outside of Houston – NET Power – has claimed it can burn natural gas for energy consumption while capturing 100% of carbon emissions. Even if that isn’t the case the United States is the only industrialized country in the world that met the Kyoto Protocol obligations by using more natural gas than coal according to Russell Gold’s bookThe Boom: How Fracking Ignited the American Energy Revolution and Changed the World. What natural gas also provides is a way for renewable energy (mainly solar and wind) – which at this time doesn’t work on a scalable, or economically feasible way – to improve battery technology and overcome the intermittent weather issues that keep renewables from being an effective energy source. Natural gas is the best answer at this time to lead California’s new energy policy.

Unless rational dialogue is brought to California’s energy problems then increased racial and inequality divides will become worse. Poverty and overregulation seem to go hand-in-hand during this debate instead of looking at the facts of what works (natural gas, nuclear for lower emissions). A just California shouldn’t mainly tout lower emission numbers, but the policy conversation should begin with stable, low-cost energy as the first building block towards a sustainable society. When 200 civil rights leaders sue CARB, “on the basis that state policies are skewed against the poor and minorities,” it is time for California’s elected officials to sit down and have a serious discussion about energy policies in California that may produce lower emissions but doesn’t bring prosperity to all Californians.

Link: http://www.foxandhoundsdaily.com/2018/07/california-needs-new-energy-policy/

 

Prime Minister Modi Is Supercharging India

The United States Should Enhance Their Economic Relationship With India

Prime Minister Narendra Modi is turning India into an economic powerhouse. It is time for the United States to recognize this and establish a special relationship with India similar to the one the US has with Britain. Modi came to office with great promise but faced difficult economic challenges. Growth had plummeted to 5.9%. That was down from a 9-year average of 8.2%. Inflation had averaged 9.7% for over two years. Corruption had also crippled the outgoing government’s ability to complete large infrastructure projects and make structural reforms to the government and private sector.

Fast forward to today. New Delhi has succeeded in cutting inflation to 4.3%, and growth has averaged 7.3% since Modi came to power in May 2014. Demonetization unleashed the young, vibrant, intelligent Indian worker powering this growth. Moreover, Modi replaced byzantine layers of central-and-state-level taxes with a single good and services tax (GST). These effective measures have built trust in the government’s handling of the economy and societal issues like never before in India’s modern history.

Taken together – long-term growth, prosperity and cultural enlightenment – are now the trajectory for India. And the US in many ways needs India every bit as much as India needs the US to check China and deliver high-tech goods and services the Indian economy desperately needs.

US Energy Secretary Rick Perry met with his Indian counterparts in April to enhance bilateral energy cooperation. Outside of military partnerships – energy, particularly, the US energy sector – is where the Trump administration is outlining benefits for both nations. Secretary Perry said, “India offers an ‘amazing opportunity’ on clean coal, carbon capture, cooperation in oil and gas power, and renewable energy”. Perry also highlighted how in the last three years India increased oil imports of US crude from 300,000 to 8 million barrels, “and is a huge market for American energy products.”

Civil nuclear cooperation has been a backbone of US-India relations since 2006 under the George W. Bush administration. The cooperation expanded under a 2016 deal and Westinghouse committed to build six AP1000 reactors in Andhra Pradesh. Perry had to assure his Indian counterparts the reactors would be delivered since the US Company is emerging out of bankruptcy protection. Western governments and investors worldwide are noticing Modi’s economic plans are working, and India is now arguably one of the best emerging markets in the world.

The World Bank Ease of Doing Business ranking for India went from 140 to 100 between 2014 and 2018. Modi can be credited for this success since it’s known he regularly attends and presides over meetings of senior staff member and ministers in charge of projects that affect India’s efficient governance and economic progress. These government policies have brought relief to job applicants by streamlining the use of digital services to store diplomas and, 40 million poor rural households have replaced dirty wood-and-coal-burning stoves with clean liquid petroleum gas instead.

Still, it’s the fight against corruption since demonetization took place on November 8, 2016 that is changing India’s future. This move by Modi ended the legal status of 500 to 1,000 rupee notes immediately while also “temporarily wiping out 86% of the nation’s currency in circulation.” While negative sentiments over the policy abound – like black market currency finding its way back into the Indian economy – the positives have outweighed the perceived injustices that were thought to have taken place.

India’s banking sector has also closed hundreds of thousands of shell companies, disqualified an equal number of company directors and demonetization, “led to a 25% decline in the value of real estate eroding a substantial amount of black wealth held in building and structures.” Modi has shown Indian citizens, the US and international investors that New Delhi has effectively countered the ability of frauds, cheats and crooks to keep gaming the Indian economy.

Efficiency under Modi has improved by replacing the Indian Planning Commission with the more modern National Institution for Transforming India (NITI). The NITI is a governmental institution that actively promotes Modi’s market-friendly agenda. This allows New Delhi and outer Indian states to work together and seek one another’s advice formulating sound economic policies.

Three other “special projects are worth mentioning. First, biometric cards (the Aadhaar government ID program) issued to all Indian residents, “for a strong digital identity scheme affecting banks, payments, security, compliance and financial inclusion – and is already seeing results.” Second, Pradhan Mantri Jan Dhan Yojana (PMJDY), Modi’s People’s Wealth Scheme, “which is a government program that aims to expand and make affordable access to financial services such as bank accounts, remittances, credit, insurance and pensions in an affordable manner.” Both programs are controversial, but these policies have brought over one billion citizens into government-assured banking services. Lastly, toilets are being built throughout India via the Swachh Bharat Mission – to curb and eliminate open-air defecation – and clean up India’s cities, towns and rural areas.

Modi’s other “structural reforms,” include:” Deregulation of gasoline and diesel prices, further opening to foreign direct investment (FDI), greater labor-market flexibility, shifting to Direct Benefit Transfers (DBT), Goods and Services Tax (GST) and the Insolvency Bankruptcy Code (IBC) producing bankruptcy law.”

For all Modi’s accomplishments there are still obstacles to overcome. International trade is still falling short due to Indian tariffs and trade barriers on textiles and apparel, which slows growth through lukewarm investments in those sectors. Additionally, over 45% of India’s workforce remains in agriculture, which is a sign of an immature economy that needs that high of a percentage of its citizenry in low productive employment. Nevertheless, India has the ability and the wherewithal under Modi to expand global exports and overcome these obstacles.

The US needs to understand that Modi is the leader they are searching for to counter China in South Asia. Working with Modi and accelerating India’s economic growth is in the interest of both the United States and India. A prosperous India means a counterweight to China in the Indian Ocean, Central and Southeast Asia.

Link: http://andmagazine.com/us/1530569971.html

Trump Was Right to Leave the Iran Nuclear Deal

June 26, 2018

Historian Stephen Kotkin said in Foreign Affairs, “The arc of history bends towards delusion.” Nowhere is that more clearly seen than in the delusional prognostications experts and policymakers have taken towards President Trump leaving the Iran nuclear deal, otherwise known as the Joint Comprehensive Plan of Action (JCPOA). National security, foreign policy, and realist balancing are under assault by emotions and groupthink instead of careful, factual analysis. This was on open display in the Obama administration’s bad deal, which was long on promises but short on verifiable claims of denuclearization by the Iranian regime. Examining Iran’s behavior after the documents were signed and the fallacies that it took for this deal to take place will show the Trump administration made the correct decision, “leaving the horrible Iran nuclear deal.”

Let’s build a case as if we were in a court of law as to what Iran is guilty of and why the United States (US) should never re-negotiate the JCPOA with the governing Mullahs. Consider how two former British officers who commanded coalition and British troops in Iraq and Afghanistan reported for the Jerusalem Center for Public Affairs how Iranian-supplied weapons killed hundreds of American and British soldiers via the Iranian Revolutionary Guards (IRG), Hezbollah, and Shia militias. These actions also fueled insurgencies across the Middle East, particularly in Yemen and Syria.

Even more devastating, top Iranian official c admitted in an early June released interview:

“That Iran knowingly helped al-Qaeda terrorists – including some of the 9/11 attackers – travel secretly through the Middle East. Their movements were under the complete supervision of Iranian intelligence.”

President Obama would have known this since it was a main accusation leveled against Iran in the 9/11 Commission Report.

In mid-June, Iran’s foreign minister, Abbas Araghchi warned, “In the coming weeks a potential withdrawal from the deal would take place,” and the deal is in “the intensive care unit,” in light of the US decision to unilaterally withdraw from the JCPOA.

Then Business Insider reported this in late June:

“Iran’s supreme leader (Ayatollah Ali Khamenei) just torpedoed his country’s best chance to get off the terror financing blacklist by opposing joining the global anti-money laundering convention, which is the Financial Action Task Force, that was established by a G-7 Summit in Paris in 1989.”

This suggests that Tehran doesn’t want to prevent money laundering or stop being the world’s largest state sponsor of terrorism. To exit this blacklist, an action plan drawn up by the Financial Action Task Force (FATF) would need to be signed, one that includes the UN Convention on the Suppression of Terrorism Financing, which has 132 signatories with 188 parties involved that went into effect in 2002. The Supreme Leader in Iran has just thumbed his nose at the former administration’s nuclear deal, the UN, and cutting off the IRG and its terror-supporting proxies.

According to the Washington Post editorial, Obama took lying to new heights with the Iran Deal, secret side agreements negotiated by the Obama administration between Iran and the International Atomic Energy Agency (IAEA) were never reported to Congress when the nuclear accord was delivered to Capital Hill. Members of Congress only found about these secret agreements when they were in Vienna for a meeting with the IAEA. The Obama administration also secretly sent a plane loaded with $400 million to Tehran the same day Iran released four American hostages (post JCPOA signing) and two more secret flights followed that carried another $1.3 billion in cash.

Even more damning is a recent revelation that the Senate Permanent Subcommittee on Investigations revealed in a new report released in May:

“The Obama administration secretly tried to help U.S. banks convert $5.7 billion in Iranian assets, after promising Congress that Iran would not get access to the U.S. financial system.”

President Obama and his administration continued lying to Congress by, “granting a specific license that authorized a conversion of Iranian assets worth billions of U.S. dollars using the U.S. financial system.” Furthermore, officials from the Office of Foreign Assets Control (OFAC), encouraged U.S. banks to convert the funds, but both banks approached declined over, “reputational and legal risks associated with doing business with Iran.” This was after former Treasury Secretary Jack Lew testified before the Senate Foreign Relations Committee in July 2015 over the Iranian accord that “Iran will continue to be denied access to the U.S. financial and commercial market.” Now imagine if Trump had done any of this related to Russia collusion narrative? There would have already been calls for his impeachment. Meanwhile, the former administration gets off freely while lying to the American people, Congress, allies, and exceeding the mandate of the JCPOA.

Ben Rhodes, the former deputy national security advisor, was the biggest advocate in misleading the American public over the deal when he said this in an interview given to The New York Times magazine:

“The way in which most Americans have heard the story of the Iran deal presented — that the Obama administration began seriously engaging with Iranian officials in 2013 in order to take advantage of a new political reality in Iran, which came about because of elections that brought moderates to power in that country — was largely manufactured for the purpose for selling the deal.”

Foreign Affairs even called Rhodes an “a-hole” after this interview went public while condemning his lack of experience in diplomatic or international affairs.

The case I’ve laid out is only the tip of the iceberg. Wall Street Journal reporter Jay Solomon’s book, The Iran Wars: Spy Games, Banks Battles and the Secret Deals That Reshaped the Middle East gives a devastating account of the weakness and chaos this deal unleashed on the Middle East, the European Union, and NATO.

Maybe President Obama wanted to be known as a peace-President or ideological emotions overtook sound realist judgment and the quest for a “legacy-making agreement.” But in reality the deal was an untruthful foreign policy disaster sold to a war-weary American public when it is clear that Iran never had any intention of moderating its belligerent behavior. Financial rewards have been pocketed to sow discord in the Middle East and double down on proxies’ illicit behavior that was encouraged all for the sake of a nuclear deal. No rational expert, analyst or voter can trust the former administration’s diplomacy with Iran when it was, “nothing more than a stimulus package for jihadists.”

Trump was correct leaving the JCPOA.

Link: https://www.geopoliticalmonitor.com/trump-was-right-to-leave-the-iran-nuclear-deal/

Debunking the Intellectual Lethargy of Foreign Policy Elites

May 18, 2018

 

Palaver-filled torpor is an apt description for an article published by Foreign Affairs on April 30, titled “Time for a New U.S. Foreign Policy Narrative: A Better Alternative to Trump’s ‘America First,” by Ian Bremmer and Joe Kennedy III.

They begin the piece demonizing Trump’s understanding of the U.S.’s role in the world: “Refugees and immigrants were cast as villains, repressive regimes like Russia and China were regarded with admiration, and human rights and democratic freedoms were pushed to the sidelines.”

As historian Dr. Victor Davis Hanson wrote, “[President] Truman May Have Been the Proto-Trump,” with his low approval ratings, crass demeanor, and foreign policy achievements that rivaled any of his predecessors.  Democratic elites were flummoxed when Truman, condemned as a Midwestern country bumpkin, arguably made the best geopolitical decision of the 20th century by firing MacArthur, replacing him with General Matthew Ridgway, and stopping at the 38th parallel.

Now Twitter-crass Trump will meet with Kim Jong-un on June 12 in Singapore to possibly bring peace to the Korean peninsula.  The Foreign Affairs article never mentions the fact that Presidents Clinton, Bush 43, and Obama never made this type of headway with the North Korean regime.  But to Bremmer and Kennedy, Trump’s America First monikers and wanting to protect “the well-being of the American people” from the largest influx of unskilled immigrants in American history make him a monster.

Messrs. Bremmer’s and Kennedy’s piece never acknowledges what Trump inherited from the former administration.  In 2011, when President Obama announced a sudden drawdown of forces from Iraq – after the U.S. had the country under control and Gaddafi in Libya had given up his nuclear weapons – a Middle Eastern bloodbath ignited under his national security team’s watch.  The U.S. won in Iraq.  If we had stayed in Iraq the way we did in Germany, Japan, and South Korea, then Iraq and the entire Middle East wouldn’t be infested with Iranian Quds Forces, Russian military hardwareTurkish forces, and raging jihadists.  Bremmer and Kennedy never investigate the Middle East wreckage that continues in Syria.  Though ISIS is under control in Northern Syria, other Islamic extremists benefited and strengthened during this period.  Mainly, al-Qaeda, Ahrar al-Sham, Jaysh al-Islam, and the Sunni insurgency have flared again in Iraq, while a new group called “White Flags” has surfaced in Kirkuk and Diyala.

It’s the Iran deal that did nothing to stop Iran’s nuclear program and set in motion Iran’s dangerous ballistic missile program.  Simply put, Iran lied about its nuclear weapons program, according to Israeli prime minister Benjamin Netanyahu.  Furthermore, hundreds of billions in economic gains for the world’s largest state sponsor of terrorism and a policy of containment that had been in place for decades under Democrat and Republican administrations were dismantled.

When the Iran outreach policy was executed by Obama, John Kerry, and former CIA director John Brennan, Iraq became a puppet state, Syria was taken over by Shia militias led by the Quds Force, and Yemen went up in flames.  This outreach policy correlated with Iranian troops now sitting on Israel’s border, causing oil prices to skyrocket.  Additionally, Hezb’allah now has 150,000 rockets and missiles capable of hitting any part of Israel at a moment’s notice.  And former NATO ally Turkey was caught in the middle and now has swung to Iran’s and Russia’s sphere of influence.  Messrs. Bremmer and Kennedy never dissect this aspect of the former administration’s legacy.

Moreover, while Obama was in office, Crimea was annexed by the Russians in 2014, and nothing was done while China claimed the South China Sea as territorial waters.  Now a series of fortified artificial islands that have been militarized to make the Chinese claims a reality to U.S. allies is in full force, while trillions in economic activity that passes through those waterways is essentially under Chinese influence.  China’s hegemonic moves now threaten political and economic stability over this strategic waterway for the entire Asian hemisphere, Australia, and India.  Bremmer and Kennedy should have noted that these Chinese efforts have gone unchecked by U.S. administrations, Congress, and NATO.  By no means is Trump perfect, but who can fault the man for running on “Make America Great Again”?

Bremmer and Kennedy should have examined the human rights and democratic freedoms that were taken away over the disastrous policies the former administration undertook.  If both men want to ask what America’s overarching national security strategy is, that is a worthy article long overdue.  What this article reeks of is hyperbolic shouting from the rooftops that consists of no coherent policy recommendations other than meandering into tired Russian collusion arguments and unfettered campaign sloganeering.  Bremmer knows better as president of the Eurasia Group, and Kennedy as well, since his namesake – JFK – was an ardent defender against conceding ground to America’s enemies in the name of appeasement.

What these two authors should have examined is the reasoning behind the former administration and previous ones letting the Iranian people down by not supporting their “Green Revolution.”  Or both men could have done a case study on how corruption, bad governance, and Venezuela’s failure embracing socialism tear away at the social values of Latin America.  If Bremmer and Kennedy want the former administration’s policies or some vague notion of human rights, then debate Eli Lake; Michael Oren; and Jay Solomon, who wrote the bestseller The Iran Wars.  All three men contend that the foreign policy establishment wanted a nuclear deal with Iran to preserve Obama’s and their legacy.

The raison d’être of their piece is proclaiming that the era of Pax Americana is over.  However, “America’s role in the world is still being written.”  Instead of America under Trump, there is China’s “alternative model for global leadership,” or, put another way, authoritarian capitalism that destroys the environment and puts the Communist Party above the U.N.’s Declaration of Human Rights.

Both men have lost their way with this article.  Their entire argument is centered on their hatred for Trump and Republicans and their conviction that the U.S. Democratic Party is the beacon of light for the upcoming election cycle.  Vote how you want – the US is a free country – but examine the facts of what U.S. foreign policy and Western-aligned nations wrought with implementing “leading from behind” on the world stage.

If they believe in multilateralism and international institutions and a bipartisan foreign policy consensus that was in place since FDR, then how do Bremmer and Kennedy believe that the U.S., NATO, the E.U., and Asian allies confront China, Russia, and Iran?  The policy implications are evident: war, terrorism in Europe, Islamic radicals emboldened, the Middle East and Africa in flames.

Pax Americana led by Trump works better than “globalism with Chinese characteristics,” Putin yearning for Russian glory days, or tyrannical Iranian ayatollahs.  Brennan and Kennedy use lofty rhetoric and Trump-bashing without examining the cold, hard facts of international relations and realist foreign policy.  Every one of their points and arguments should be dismissed into the dustbin of history.

Read more: https://www.americanthinker.com/articles/2018/05/debunking_the_intellectual_lethargy_of_foreign_policy_elites.html#ixzz5HZBaixqW
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It’s Time for India to Take on a Larger Role on the World Stage

May 29, 2018

New Delhi needs to realize the strength it currently possesses and start acting like a world power. Currently, India isn’t a member of the UN Security Council or the G-7. That needs to change by having the Modi government and diplomatic corps pressing for a larger role in world affairs to balance China and Pakistan. Particularly China, which has increasingly asserted its regional posture, threatening India and upsetting the balance of power in Southeast Asia and Central Asia.

It’s time for India to shed its emerging power title and become a major global player.

India has resources and strength that at times it doesn’t seem to appreciate. It has the world’s third-largest military by personnel, fifth-largest defense budget, and seventh-largest economy. Furthermore, in the not-so-distant-future, India will overtake China for having the largest population in the world – that is young, intelligent, and motivated to shed religious and caste biases which have gotten in the way of the country’s development process.

Daunting obstacles that have yet to be overcome have hindered India’s growth and allowed the country’s ambitions to be put on the backburner in terms of its geopolitical influence in the region. Over 270 million Indians live in crippling poverty. Infrastructure needs keep India at third-world status according to India’s finance minster, who recently concluded that “$1.5 trillion of major investments (infrastructure) are needed in the next decade.” Still, its the friction between India’s complicated social structure and diverse population that perpetuates hate based on “gender, caste, religion, or region,” hate that is also a major hurdle to overcome. Until the Modi government solves the dual issues of hate and discrimination in the country’s societal structure, India is at risk of muddling in the trenches of irrelevancy instead of becoming a more assured country ready to shape global agendas.

Former Prime Minister Manmohan Singh long chafed at the fact that the world never saw India as a world power and Prime Minister Modi is asserting India’s place in the world as a leading power because of its size and being the largest democracy in the world. However, India still lacks a seat on the UN Security Council, something it has long coveted. Singh led the charge for that seat when he pushed for India’s “due place in global councils.” India’s growing military clout, economic prowess, and focus on warm relations with countries like the U.S. and Iran give prime ministers Singh and Modi’s earlier assertions a ring of truth: India is arriving as a regional player.

India’s long-overdue ascent as a player on the international stage coincides with warmer relations with the U.S. Former diplomat and historian Dennis Kux described the previous relationship as that of “estranged democracies,” but now each country speaks of “a strategic partnership,” and this cooperation aids India, “to leave behind some of its old defensiveness on the world stage, a vestige of its nonaligned worldview.” President Trump remarked in June 2017 that the Indian-American partnership “never looked brighter.” Trump also asked India to do more on economic development in Afghanistan. This marks a drastic change from his predecessors, presidents George W. Bush and Barack Obama, who never explicitly asked for this level of help with Afghanistan, thus elevating India’s status in Central Asia.

There are some domestic overhauls India should consider in facilitating its ascendance into new international agreements. Historically, India remains fiercely independent, and will occasionally break formal trade negotiations and agreements to suit its immediate policy needs. This has hampered the U.S. and other nations which are eager to build military and trade alliances with India. While New Delhi wants closer trade and economic ties along with a potential defense partnership, it will need to improve market access in keeping with the liberal, US-led order that India has shunned for decades. This access will help to forge tighter relationships with Japan, South Korea, and other Asian nations betting on prosperity and stability within India’s sphere of influence.

According to a 2016 CEO survey conducted by global consulting and accounting firm KPMG, India is a top growth opportunity for the next three years. India’s economy has a GDP of over $2 trillion at current exchange rates, surpassing Canada and Italy. Moreover, US government projections, backed by the Bank of America, forecasts India to become the third-largest economy in the world by 2029. India has already overtaken Brazil and Russia through purchasing power parity measured by the International Monetary Fund. This blossoming economic influence illustrates the power and prosperity that India will continue to garner through this decade and beyond.

Multinational firms like Apple, Bosch, and Whirlpool now manufacture goods in India because of its growing middle class, which is estimated to number between 30-270 million according to Deutsche Bank Research and the National Council on Applied Economic Research. McKinsey Global Institute over ten years ago called India “a bird of gold” because of its middle class, which is expected to grow to over six hundred million people by 2025. India’s increasing self-identification as “a leading power” is one of the reasons Ford, Suzuki, and Tata are building more cars in India than Mexico and slightly below South Korea. India also became the largest global market for motorcycles and scooters in 2016, overtaking China. Just one generation ago it was unheard of for India to have an advanced automotive industry.

New Delhi’s newfound power will coalesce in two key areas: its nuclear weapons programand the Indian Ocean. There are positive and negatives coinciding with India’s military taking a larger global role. The International Institute for Strategic Studies (ISS) counts India’s strengths at having 1.4 million troops on active duty and roughly 1.2 million reservists. Further military growth is echoed by the Stockholm International Peace Research Institute (SIPRI), which estimated that India became the world’s fifth-largest military spender in 2016, ahead of France and the United Kingdom. Yet there’s still room for improvement: India’s Controller and Auditor General (CAG) raised major concerns in a recent report to parliament questioning the country’s military preparedness and capacity for mobilization across all branches of their armed forces.

India lives in a dangerous part of the world. By diversifying its partners and strategic hedging that further asserts its role as the largest democracy in the world, India can finally leave the dredges of its developing country status behind and realize Modi and Singh’s conviction that “India’s time has come.”

 

Link: https://www.geopoliticalmonitor.com/its-time-for-india-to-take-on-a-larger-role-on-the-world-stage/

New Solar Mandate Will Dramatically Raise Energy Prices in California

Renewable energy (RE) doesn’t workand it exacerbatesclimate change by locking in fossil fuels as a backup fuel over RE’s inherent unreliability and intermittent qualities that makes electricity prices more expensive than fossil fuels (oil, natural gas and coal) and nuclear energy. Countries like Denmarkand Germanythat have embraced renewable energy wholeheartedly now find segments of their population suffering energy poverty over higher electricity rates. Unfortunately on May 9ththe California Energy Commission (CEC) by a 5-0 vote approved, “a first-in-the-nation plan to mandate the installation of solar panels on all new homes beginning in 2020.” Later this month the regulation is expected to gain final approval for implementation by the California Building Standards Commission (BSC).

This pro-solar decision will cause California to suffer the same fate as Germany and Denmark. Since California’s solar-energy build-out began in 2011, energy prices have risen 24 percent. Abigail Ross Hopper, the Solar Energy Industries Association’s CEO believes this a positive, momentous decision by California when he stated:

“California has long been our nation’s biggest solar champion. Now, California is taking bold leadership again, recognizing that solar should be as commonplace as the front door that welcomes you home.”

Many proponents of RE – particularly solar advocates – consistently speak about falling solar panel prices and lower energy when using solar: here,hereand hereas examples. That isn’t the case. Michael Shellenberger, Forbes contributor and President of Environmental Progress gives a hypothesis that says, “as electricity from solar and wind became cheaper, other energy sources like coal, nuclear and natural gas became more expensive.” Thus prices were raised eliminating overall energy savings.

The exact opposite happened. Natural gas declined 72 percentbetween 2009-2016 due to fracking and European natural gas prices droppedby almost half during the same period. The price of coal and nuclear stayed flat during these time frames, “despite increased demand for those two fuels in California and Germany.” Then why did California’s prices go up 5X more than the rest of the US between 2011-2017? RE is the answer and implementing solar panels on all new homes after 2020 will dramatically raise prices more than $10,000, which the current speculation says, will occur.

Shellenberger gives another hypothesis stating, “the closure of nuclear plants resulted in higher energy prices.” Evidencefor this shows that nuclear energy leaders Illinois, France, Sweden and South Korea, “enjoy some of the cheapest electricity in the world.” However, California, since 2010 closed one nuclear plant that had 2,140 MW installed capacity while Germany closed 5 nuclear plants and 4 different reactors at operating plants with 10,980 MW total. Electricity is 42 percent cheaper in Illinois than electricity in California and in France it is 45 percent cheaper than it is in Germany.

The facts point to RE causing energy prices to move higher when extensively deployed in the case of California. The Los Angeles Times reportedin 2017 that California electricity prices were increasing, “but failed to connect the price rise to renewables.” This provoked a heated rebukefrom UC-Berkeley economist James Bushnell who said:

“The story of how California’s electric system got to its current state is a long and gory one, but the dominant policy driver in the electricity sector has unquestionably been a focus on developing renewable sources of electricity generation.”

But why would cheaper solar panels – so the rational goes – at the CEC be a terrible regulation? In 2013, a German economist, Lion Hirth published a paper in Energy Policythat correctly predicted, “that the economic value of wind and solar would decline significantly as they become a larger part of electricity supply.” The reason is RE’s (particularly solar):

“Are ‘fundamentally unreliable,’ and produce excess energy that societies and electrical grids aren’t equipped to handle. Thus solar requires, “that natural gas plants, hydro-electric dams, batteries or some other form of reliable power be ready at a moment’s notice (peak demand) to start churning out electricity when the sun stops shining.”

Places like California, Germany and Denmark now payother states and nations to take their excess solar and wind energy. California even set new records for solar reduction in Marchand April. The new regulation will worsen this problem.

Hirth postulated the value of solar, “would drop by 50 percent when it got to just 15 percent of energy consumption.” In 2017 California reached 23 percent of energy generation from solar so it doesn’t matter if solar panels are cheaper, or if the CEC mandates their widespread use, this regulation will cause electricity to further increase and home prices to escalate more than $10,000 per newly built home. UC-Berkeley economist Lucas Davis remarkedabout the mandate, “As more and more rooftop solar gets installed, that pushes the cost onto all the non-solar customers.”

For California policymakers, the CEC, and BSC there are additional factors to consider. California regulators believesolar roofs will only add $9,500 in new building costs though “the average priceof a solar roof in California is $19,380.” California already has thesecond-most-expensive homesin the nation, the third worst state home ownership for millennials and we are in the deepest housing crisis since the Great Depression. Solar roofs are also twice as expensiveas solar farms; currently, California receives five percent of its electricity from solar roofs, and 11 percent from solar farms. Statistically speaking – it would take California over 100 years of solar-roof-building– to replace the clean energy produced by both state nuclear plants. During those 100 years, “all solar panelswould need to be replaced at least three times, given the degradation of panels.”

This prompted the state’s top energy economist, UC-Berkeley’s, Severin Borenstein to criticizethe CEC over approving the new regulation with little public debate or discussion by stating to CEC Chairman Robert Weisenmiller: “This would be a very expensive way to expand renewables.” The main driver of higher electricity prices is the state’s heavy deployment of solar and other renewables. California will bankrupt itself and its citizens by pursuing RE and relying heavily on solar energy. Two inherent reasons that policymakers should consider before final adherence to this policy is solar relies on sunlight that is dilute, requires, “10 to 15 times as much materials and mining, and up to 5,000 times more land, than non-renewables (fossil fuels and nuclear).”

Besides needing fossil fuel backup that enhances reliance on fossil fuel, adding solar panels to California’s grid in larger quantities will only increase the cost of electricity and “increase the environmental footprint of energy production.” Proponents argue that emissions decreased in California because of RE policies – and yes emissions did decrease by 19 percent in 2016 – but two-thirds of that declinecame from hydro-electric dams due to a rainier year – only one-thirdcame from increased solar or wind. The state’s energy policies had nothing to do with emission reduction. Fluctuating energy that even comes from state dams show that RE cannot be relied upon in any scenario to deliver homes for Californians, save money for ratepayers or reduce climate change. This policy should be rejected by California elected officials, ratepayers and homeowners.

Link: http://www.foxandhoundsdaily.com/2018/05/new-solar-mandate-will-dramatically-raise-energy-prices-california/#facebook-comments

Recent Prop. 47 Study and Article Fail to Give Full Analysis on Crime in California

April 13, 2018

More people are leaving California than entering; so the question is why? Could it be higher than national average home prices, unfriendly family policies or could it be the possible uptick in crime? Underlying social pressures highlight the difficulty of staying in California and the continuance of progressive, Democratic voters to not look at the reality of what’s plaguing our state. But the patterns of who’s moving in, and who’s moving out, underline some of the social and economic pressure that have made California, and other coastal areas, so prohibitively expensive; but also progressively unsafe.

If you believe a recent article by Sal Rodriguez in the OC Register who quotes a study by University of California Irvine (UCI) professor of criminology, law & society, Charis Kubrin that concludes, “Prop. 47, didn’t have any significant uptick on crime,” then why are so many Californians complaining about increased crime while others are fleeing the state?

Before raising troubling aspects about this study, what does one part of the Los Angeles County Sheriff’s office, have to say about the Prop. 47 numbers? According to the Los Angeles County Sheriff Department’s Crescenta Valley Station (www.CrescentaValley.LASD.org) here are the facts about Prop. 47:

“Following the implementation of AB 109 & Prop. 47, communities across California have experienced increases in property related crimes. An 8.1% increases across the State and a 10% increase in LA County.”

So whom do you believe – Professor Kubrin and Sal Rodriguez – or the men and women who do actual law enforcement? What Professor Kubrin doesn’t point out is how Prop. 47 downgraded serious crimes such as “drug possession, repeated shoplifting, forging checks, gun theft and possession of date-rape drugs,” which were all felonies before Prop. 47’s passage. The Sheriff’s Department also states:

“A criminal can engage in recurring theft activity as long as the value of what is stolen during each theft is less than $950. Illegal drugs – including cocaine, heroin and methamphetamine – have been reclassified as a misdemeanor.”

Professor Kubrin and Mr. Rodriguez – neither one – asked, studied or considered why homelessness is on the rise in Los Angeles and Los Angeles County in general though voters and Democratic elected officials have attempted to address this growing issue. Drive through downtown Los Angeles, Santa Monica or San Francisco and witness the amount of strung-out homeless to belie the fact that higher dollar amounts for felonies means what once landed an addict into drug rehabilitation programs now puts them back onto the streets to the detriment of the individual, businesses, neighborhood safety and communities-at-large.

Furthermore, what the UCI study doesn’t take into affect is how Prop. 57 (the ‘Public Safety and Rehabilitation Act’) and Assembly Bill 109 (released 45,000 felons from California prisons) were passed simultaneously in 2016. To study one without factoring in the other is biased, negligent and misleading. Mr. Rodriguez and Professor Kubrin, who authored the study, should have known better, also this was nothing more than an agenda-driven piece to appeal to a lowest common denominator that will assist more Democrats being elected in 2018.

Take Prop. 57, according to the non-partisan Legislative Analyst’s Office, Prop. 57:

“Allows the State to release 30,000 criminals convicted of ‘non-violent,’ felonies and classifies these crimes as non-violent: rape by intoxication, rape of unconscious person, human trafficking involving sex act with minors, drive-by shooting, assault with a deadly weapon, hate crimes causing physical injury, and corporal injury to a child.”

Mr. Rodriguez didn’t report this and Professor Kubrin didn’t add Prop. 57 or AB 109 into her study. Shoddy research is what can be taken away from her study by not including these official reclassifying of crimes that were once felonies. Now add AB 109, which requires local jails –that don’t have the money, resources or ability – to house violent felons and what takes place is tens of thousands of supposedly low-level convicted felons back on the street; but this wasn’t added into her study or Mr. Rodriguez’s article as well. AB 109 has now taken criminals with serious felony violations and placed them in local jails instead of state prisons.

Disgust though lies at the feet of Professor Kubrin’s misleading and faulty research methods. First when you click on the actual study on the UCI website you are only given a Fact Sheet whose graphs are barely readable without being defined, definitions not put into context with Prop. 47, and most importantly on this “Fact Sheet,” how independent and dependent variables are calculated. As someone who has done studies, regressions and econometrics there is nothing of the sort in Professor Kubrin’s study.

She then states and Mr. Rodriguez blithely reports on a variable defined as “synthetic California,” that is part of the “Synthetic Control Group Study Design,” which reminds me of graduate and undergraduate studies and degree in economics where microeconomics is defined as having, “perfect competition.” Anyone who has ever held a job or attempted a business in the marketplace knows there is no such thing as “perfect competition,” just as there isn’t such a concept as “synthetic California.” And when you read the Fact Sheet the reader will find the study isn’t completed so that makes Mr. Rodriguez’s reporting misleading at best and a fire able offense at worst for so grossly understating the problems as public record.

Understanding regressions is very important, because Professor Kubrin states there was no causation or even correlation when she either doesn’t know what she’s doing running regressions or isn’t telling the truth on purpose. Regressions are used in econometrics and statistical analysis and goes back to high school geometry using the formula Y=mx+b where Y is the dependent variable and mx+b are the independent variables that either move the Y variable (causation) or merely cause them to move together along a regression line (correlation). If Professor Kubrin, Mr. Rodriguez and the entire UCI department of criminology, law & society doesn’t include AB 109 and Prop. 57 into their regressions or econometric studies then it doesn’t pass confidence interval levels. A fancy, boring regression term for how something has to be at least true 90% of the time to even warrant mentioning; and then it scales up to 95% and 99%.

To say Prop. 47 doesn’t show causation is irresponsible and she should be demoted or be made to take a graduate level econometrics and statistics for public policy analysis course. I took both and Professor Kubrin is doing the level of work that would get her kicked out of class, graduate school or possibly brought up on charges of plagiarism for gross academic violations.

Run the regressions, report on the economic analysis; and more importantly factor into the study and regressions the affects of felonious crimes going from $250 up to $950 as a variable and watch the causation affects of Prop. 47 coupled with AB 109 and Prop. 57 move upwards on the regression line into the 99% confidence interval level is what I’d predict. This is why people don’t trust universities and academics such as Drs. Victor Davis Hanson and Walter Williams believe most colleges outside of the hard sciences (accounting, engineering and medicine) have lost their way. Professor Kubrin proves that’s the case and Mr. Rodriguez shows bush league reporting without checking his sources. Next time, before reporting something, make sure the study has actually been published and more recent data was used for the study and article. Laughingly, the data used by UCI, Professor Kubrin and Mr. Rodriguez came from 2015. California should trust the L.A. County Sheriff Department over this worthless study.

Link: http://www.capoliticalreview.com/top-stories/recent-prop-47-study-and-article-fail-to-give-full-analysis-on-crime-in-california/

How Iran’s Continued Belligerent Behavior Could Raise California Energy Prices

March 30, 2018

Oil prices have regained over half their losses since the 2014 crash. OPEC production cuts led by Saudi Arabia have cut into storage levels and better economic conditions have raised demand for crude oil. To further bolster prices the Saudi oil minister Khalid al-Falih told Reuters, “We still have some time to go before we bring inventories down to the level we consider normal.”  OPEC has reiterated the Saudi claims that Organization for Economic Co-operation and Development (OECD) countries oil inventories are only 44-million barrels above the five-year average, which means oil markets are nearing “re-balancing,” at a rapid pace.

But President Trump’s cabinet reshuffling could have a major impact on oil prices rising higher, leading to an increase in gasoline prices for California drivers. Trump choosing “hawkish,” John Bolton to replace H.R. McMaster as National Security Advisor reveals a shift in foreign policy that could dramatically raise the odds for a major conflict with Iran affecting the entire California transportation sector.

However, Iran’s actions since the 2015 nuclear deal will likely have the greatest impact on California energy prices and economic health in the near future more than Trump shaking up his foreign policy team. The former administration’s nuclear agreement hasn’t stopped the Iranian regime from continuing to make aggressive moves that violate the spirit of the agreement and taking advantage of concessions that has Ayatollah Khamenei more dangerous than ever.

Saudi-Iran tension has risen further when a recent intercepted missile over Saudi airspace caused a Saudi spokesperson to say, “We reserve the right to respond against Iran at the right time and right place.” Also, in late March the US Justice Department charged:

“Nine Iranians and an Iranian company for attempting to hack into hundreds of universities worldwide, dozens of companies, and parts of the U.S. government, on behalf of Tehran’s government.” The Justice Department described the attacks, “as one of the largest state-sponsored hacks ever prosecuted.”

With California having the leading universities in the world, more than likely, California universities were penetrated. Even more concerning is how Iran continues supporting President Assad’s government in Syria according to Foreign Affairs. After the nuclear deal economic integration was supposed to be the norm; instead an Iranian airline under US sanctions violated the agreement by, “ferrying weapons and fighters into Syria repeatedly and illegally bought U.S.-made jet engines and parts through Turkish front companies.”

Israel and the U.S. are also attempting to come up with a proportional response to Iran’s recent threats against Israel, Tel Aviv and Prime Minister Netanyahu along with how to cogently deal with Iran’s lethal, ballistic missile program. Unfortunately for California’s large Jewish population, Iran is still, “the epicenter of genocidal, Jew-hatred.”

A Politico report in late 2017 detailed how cutting off Iranian sanctions allowed millions of dollars to flow towards Iran-backed militias fighting for Assad in Syria. Even worse, according to The Washington Times, the U.S. government discovered billions in post-sanction relief money ended up:

“With Hezbollah, and the Quds Force (Iran’s special forces), which has an extensive history of state-sponsored terrorism, and Houthi rebels in Yemen fighting the Saudi monarchy and government.”

Energy though is where California officials should have some of their greatest concerns. The US, Britain, France and Germany are currently working to amend the Iran deal over worries that Iranian recalcitrant actions will drive up oil prices. What also doesn’t bode well for energy prices is Iran’s “elaborate oil sanction-skirting scheme,” which doesn’t alleviate concerns that Iran is using their oil and natural gas reserves as a weapon the way Russia weaponized, state-run, oil company Rosneft. Bloomberg did an extensive story on Iran skirting oil sanctions here. Since California is rapidly moving towards unreliable renewable energy, Iran has incentives to punish America and California by using their abundant energy resources as a military, foreign policy and terrorism tool to achieve their geopolitical goals.

Returning to Hezbollah, Iran and Israel – Hezbollah Secretary General, Hassan Nasrallah in a televised address in February – warned Israel about its claim to a oil and gas field off the southern coast of Lebanon called Block 9. Nasrallah said, “Hezbollah could disable Israel’s offshore oil installations within hours.”

With oil and natural gas still the backbone of California’s economy this type of inflammatory rhetoric has caused Israel to warn Lebanon, Iran, Hezbollah and international oil and gas companies from participating in any tenders that doesn’t recognize Israel’s maritime rights and territorial waters. Hezbollah activists in Lebanon are now fanning the flames over these disputed oil and gas sites that could cause another war to break out between Hezbollah and Israel. This would spike oil and gas prices to levels not seen since 2014 when $100 a barrel oil was the norm. This would have enormous impacts on California’s ability to create jobs, sustain a clean energy economy and continue addressing affordable housing issues through higher taxes.

What we know is that the battlefields of Syria, Iraq, Yemen, parts of Saudi Arabia, and Hezbollah’s influence in the global drug trade and illicit weaponry sales, Iran is the central figure. What California policymakers and voters who overwhelmingly support dismantling traditional energy resources for electrical vehicles, wind, solar and other forms of speculative renewables should realize is that Iran can cause chaos at a moment’s notice; splitting the American and California economy into pieces.

Iran could be welcomed into the world community and flourish immediately with its young, literate and highly educated population. By choosing authoritarian rule cloaked in religion this makes for a volatile mix, but California elected officials, and appointed commissions like the Coastal Commission and California Air Resources Board could mitigate dangerous Iranian actions by increasing fossil fuel energy production while pursuing renewable energy policies that are sensible and realistic.

 Link: http://www.foxandhoundsdaily.com/2018/03/irans-continued-belligerent-behavior-raise-california-energy-prices-todd-royal/

On Iran, USA is in Big Trouble

March 26, 2018

The United States and the other powers who signed the infamous “Iran deal” are in a major bind.

Former President Obama wanted a world without nuclear weapons, and the 2015 nuclear weapons agreement with Iran had the intention of rolling back the Iranian nuclear program and setting up a stringent compliance program.  But however well intentioned Obama’s policies were, they haven’t stopped Iran from continuing to make aggressive moves that violate the spirit of the agreement and taking advantage of concessions that have rendered Ayatollah Khamenei, the Iranian Revolutionary Guard Corps (IRGC), and the Quds Force more dangerous than ever.

These Iranian entities now have a “Shia crescent,” fortified with Iranian generals, Shia militias, and Hezb’allah enforcing the new Middle East.  The architect and face of Tehran’s Middle East ambitions and newfound global clout is General Qassem Soleimani, whom U.S. officials credit with thousands of American soldiers deaths.  It’s uncertain if General Soleimani controls Iran’s cyber-attacks on the west, but the U.S. Justice Department in late March charged: “nine Iranians and an Iranian company for attempting to hack into hundreds of universities worldwide, dozens of companies, and parts of the U.S. government, on behalf of Tehran’s government.”  The Justice Department described the attacks as “one of the largest state-sponsored hacks ever prosecuted.”

Here’s what decades of Iranian aggression, Western appeasement, and believing that Iran will integrate into the world community has wrought.  Iran went all in to save Assad against democracy-seeking rebels in Syria, and according to Foreign Affairs:

“Roughly 400,000 people have been killed, 5.5 million have fled Syria, and 6 million are internally displaced.  The UN estimates 13 million Syrians need humanitarian assistance.”

The Iran nuclear deal was supposed to curb these hegemonic behaviors and lead to economic integration.  Instead, an Iranian airline under U.S. sanctions violated the nuclear agreement by “ferrying weapons and fighters into Syria repeatedly and bought U.S.-made jet engines and parts through Turkish front companies, investigators said in a mid-February recent government filing.”

And Syria is only getting worse.  Intelligence has surfaced that U.S. officials are now monitoring regional reports that, with Iranian assistance:

“North Korea has neared completion of the construction of an underground military base located near Qardaha in Syria, the hometown of President Assad, that could be used for advanced weaponry and nuclear-related work.”

Moreover, Syrian news outlet Zaman Al Wasi has reported that “according to satellite images and a military source the underground facility has been under construction since the beginning of the Syrian revolution in March 2011.”  The U.S. State Department has monitored and condemned North Korea for providing Assad with chemical weapons while knowing that Iran is the main supporter, along with its proxy, Hezb’allah, of the Syrian regime.

Geopolitical realism leads one to infer that the recent Trump-Netanyahu meeting wasn’t about working toward Israeli-Palestinian peace or a solution to Syria; instead, it was “how to show a common front versus Iran.”  These are only some of the issues with Iran that have made President Trump want to completely change or scrap the 2015 nuclear deal entirely.  Israel and the U.S. are also attempting to come up with a cogent, proportional response to Iran’s recent threats against Israel, Tel Aviv, and Netanyahu along with Iran’s lethal ballistic missile program.

The bone-chilling scenario is where Israel backs up its “never again” slogan over the Holocaust and decides to use nuclear weaponry as a first strike option against Iran.  Never again means never again, and “the epicenter of genocidal Jew-hatred” begins in Iran.

It was the West, led by the Obama administration, that erupted these troubles through cutting off crippling sanctions for engagement at all costs – from knowing and allowing Osama bin Laden, his family, and his close associates safe haven and passage in and out of Iran to “the Obama administration hobbling a covert initiative (by the U.S. Drug Enforcement Agency) that tracked Hezb’allah’s web of criminal activities, allowing millions of dollars to fall into the hands of Iran-backed militias,” according to a Politico report.

Further, an effort by former President Obama to bury Iran-sanctioned Hezb’allah activities was born of the desire for a historic presidential legacy that a nuclear deal with Iran would produce.  The former administration also paid Iran $1.7 billion to release five Americans held by Iran, and the regime was allowed to do this without any repercussions.  Even worse, according to The Washington Times, the U.S. government discovered that the money ended up, “with Hezbollah, and the Quds Force, which has an extensive history of state-sponsored terrorism, and Houthi rebels in Yemen fighting the Saudi monarchy and government.”

Energy is where Western officials have some of their greatest concerns.  The U.S., Britain, France, and Germany are working to amend the Iran deal over worries that Iran’s recalcitrant actions will drive up oil prices.  Trump nominating hawkish Iran skeptic John Bolton as his new national security adviser doesn’t bode well for lower energy prices.  Nor does Iran’s “elaborate oil sanction-skirting scheme” alleviate fears that Iran is using its oil and natural gas reserves as a weapon the way Russia weaponized state-run oil company Rosneft.  Bloomberg did an extensive story on Iran skirting oil sanctions here.

Returning to Hezb’allah, Iran, and Israel, Hezb’allah secretary general Hassan Nasrallah in a televised address in late February warned Israel about its claim to an oil and gas field off the southern coast of Lebanon called Block 9.  Nasrallah said, “Hezbollah could disable Israel’s offshore oil installations within hours.”  With oil and natural gas being the backbone of world and Middle Eastern economies, this type of inflammatory rhetoric has caused Israel to warn Lebanon, Iran, Hezb’allah and international oil and gas companies from participating in any activity that doesn’t recognize Israel’s maritime rights and territorial waters.  Hezb’allah activists in Lebanon are now fanning the flames over these disputed oil and gas sites that could cause another war to break out between Hezb’allah and Israel and spike oil and gas prices to levels not seen since 2014, when $100-a-barrel oil was the norm.

But whom do you believe about Iran’s actions since before and after the nuclear deal?  On one side is Vali Nasr, dean of advanced international studies at John Hopkins University, who writes:

“Iran’s willingness to engage with the US over its nuclear program showed it is driven by hardheaded calculations of national interest, not a desire to spread its Islamic Revolution abroad.”

Then there is Mohammed al-Sulami, a Saudi columnist who has a Ph.D. in Iranian studies.  He disagrees with Dean Nasr: “exporting Iran’s revolution is a pleasant euphemism for regional chaos.”

What we know is that among the battlefields of Syria, Iraq, Yemen, and parts of Saudi Arabia, along with Hezb’allah’s influence in the global drug trade and illicit weaponry sales, Iran is the central figure.

Unless confronted, Iran will eventually split apart the Middle East.  Iran could be welcomed into the world community and flourish immediately with its young, literate, and highly educated population.  Instead, it chooses authoritarian rule cloaked in religion – all in the name of stability that does nothing to loosen its iron-fisted governance.

Iran will never change until its Islamic regime is put on the dustbin of history.  Here’s sincerely hoping it doesn’t come to total war among the U.S., NATO, Iran, Israel, Middle Eastern Sunni nations, and all parties interested in the outcome.

Link: https://www.americanthinker.com/articles/2018/03/on_iran_the_usa_is_in_big_trouble.html

How the World Should View China: Friend, Foe, or Somewhere Between?

March 11, 2018

In the brutal 2014 World War II movie Fury, a soldier definitively states, “Ideals are peaceful.  History is violent.”  That’s what the entire world and particularly Southeast Asia should be pondering about China’s ascendant rise.  Are the Chinese peaceful, violent, or somewhere in between?  The evidence suggests more violence than peaceful coexistence if the global community doesn’t allow unfettered Chinese ambition.

The maritime disputes that China has with Japan in the East China Sea and in the hydrocarbon-rich and multi-trillion-dollar trade route in the South China Sea with Taiwan, Vietnam, Malaysia, Brunei, and the Philippines caused Admiral Harry Harris, commander of the United States Pacific Command, to say during the New Delhi Raisina Dialogue in mid-January, “I believe the reality is that China is a disruptive transitional force in the Indo-Pacific.  They are the owners of a trust deficit.”

With navy chiefs from India, Japan, and Australia who compose the four-nation realist balancing structure against China known as the “Quad,” while also supporting the Association of Southeast Asian Nations (ASEAN), Admiral Harris’s statements were significant and could be one of the chief reasons President Trump imposed tariffs on Chinese products.  Moreover, the Center for Strategic and International Studies’ Asia Maritime Transparency Initiative has “satellite imagery” detailing Beijing’s “long-term strategy employing coercion and military force to establish dominance over the South China Sea.”

China’s actions undermine the claim that it wants an equitable and fair resolution to these land-grab and intimidation quarrels in its oceanic influence.  And while there is military dialogue among China, the Quad, and ASEAN in these maritime disputes, the political dialogue is lacking, thereby ratcheting up tensions and potential for warlike escalations.  But does that need to be the case when China has said “that it has no hostile intent, that its military (PLA) is for defensive missions, and that defense spending is transparent”?

The PLA, which is the world’s largest military, has recently asserted that it needs double-digit budgetary increases “to deal with increased global uncertainty.”  The Chinese military-industrial establishment has also “flexed its muscles domestically” against President Xi because its members believe that Trump’s threats of force against their proxy, North Korea; attempts at self-rule by Taiwan; and continued border disputes with India over the Himalayan region of Ladakh and Bhutan’s Doklam plateau, which borders India and China, are threats against Chinese growth.

India’s troubles with China are particularly troubling since over two billion people are involved when combining the two countries’ citizenry.  China’s presence on the plateau caused Prime Minister Modi to send troops in a confrontational stance against the PLA in 2017.  These probes have rattled Modi’s government in India and caused him to refuse endorsement of Beijing’s ambitious One Belt One Road Initiative (BRI), “a sprawling plan aimed at connecting China with much of Asia, Europe, the Middle East and Africa.”

This ambitious though troubling initiative takes on deep geopolitical significance over the release of a new study by the Center for Global Development that found elevated debt risks over the BRI linked to Chinese predatory lending practices:

“For the 68 countries identified as potential borrowers in the BRI, 23 were found to be already at ‘quite high,’ risk of debt distress and nine countries, particularly Pakistan, Djibouti, Laos, the Maldives, Sri Lanka, Montenegro, Tajikistan, Kyrgyzstan and Mongolia have problems servicing their debt.”

This “backlash” across the region against the BRI over China creating indentured nation-state servants adds further distrust of Chinese intentions when taking into account the PLA’s “saber-rattling” through increased military drills.  Vietnam is showing its displeasure with Beijing by a growing military relationship with the U.S. when it allowed the USS Carl Vinson aircraft carrier in early March to dock in Da Nang.  Even peaceful Australia finds itself pushing back:

“A hidden world of Chinese inducements, threats and plausible deniability that sits between the poles of economic attraction and military force where soft power gives way to more precise concerns about covert interference by the Chinese Communist Party (CCP).”

This new “Life in China’s Asia” should cause capitals from Washington to Tokyo and all the way to the E.U. grave concern.  Sure, the U.S. is still the dominant power in Asia, but China is rapidly closing that gap.  A Chinese regional hegemonic march could be derailed by domestic or economic concerns; however, China will “supplant the United States as the region’s economic, military and political hegemon” soon, according to the book Unrestricted Warfare by PLA Colonels Qiao Liang and Wang Xiangsui, upending seventy years of liberal, peaceful security and coexistence since the end of WWII.  Then the U.S., Australia, Japan, South Korea, the Philippines, Taiwan, and all of Asia will need to ask difficult questions about security cooperation, free trade zones, and whether to accept Chinese dominance the way they have Washington’s since the late 1940s.

According to Chinese analysts, now that Xi has cast aside presidential term limits by saying “he could rule for the foreseeable future,” a new era of China returning to “strongman rule,” where power is grabbed and “ideological ambitions” are on full display, means that authoritarianism will be exported by China.  Possibilities of a new Cold War between the U.S. and China while Xi takes on Mao-like status have enabled his ability to govern without restraint, promote Communist Party ideals like never before, and truly give the world an autocratic form of government as a viable substitute to U.S. leadership.  Now that Xi and the party are seemingly above the law, state-owned enterprises and private companies that all have “communist cells” embedded in their endeavors are now above legal and regulatory oversight and answer only to the president.  If the BRI is any indication of Chinese leadership under Xi, then the consequences of him being ruler for life are chilling for Asia, the U.S., and world security.  Xi’s biggest priority seems to be legitimizing his authority for life and placing the party above all aspects of China, the Indo-Pacific areas, and possibly the world.

Is this all the West’s fault for decades of hapless economic giveaway policies to China and for believing that China, like Russia and Iran before it, will take on Western Judeo-Christian standards of human rights while evolving into a “benign regional hegemon”?  Yes, it is.  While the CCP has to restrain the PLA and global hegemonic appetites in the name of economic growth dependent on trade, that doesn’t mean Beijing will embark on peaceful relations with its neighbors.  Recent examples backing up this claim are Iran’s land grabs in Iraq, Syria, and Yemen and Russian annexations in Crimea, South Ossetia, Abkhazia, and Georgia.

However, Xi stated that China “never engaged in colonialism or aggressions thanks to its ‘peace-loving cultural tradition.'”  Typically, the way regional and aspiring global hegemons behave is that they wield economic power for dominating purposes, build large militaries, confront near and far rivals, and use institutions to broaden their scope of influence.  That describes Xi’s China at this time.

Dr. Victor Davis Hanson says, “Strategic deterrence had been lost due to the prior US administration allowing unchecked Chinese ascendance and a comatose approach to North Korea.”  Germany, Japan, Italy, and South Korea integrated into the world community because of heavy U.S. and allied military presence and economic pressure.  Otherwise, those countries faced being annihilated by the Soviet Union and North Korean regimes.  Fantasies of China doing the same may not be well founded.

Massive U.S. Defense Department cuts for over five years and NATO’s unwillingness to approach 2%-of-GDP spending have allowed China’s rise.  “Strategic patience,” didn’t work, though forcefully attempted.  The years ahead will need vigilance and policies for challenging “an ideologically driven Chinese government.”

Link: https://www.americanthinker.com/articles/2018/03/how_the_world_should_view_china_friend_foe_or_somewhere_between.html#ixzz59ZGj5cJQ

California Moves Hard Left

February 23, 2018

Our next election season is underway and unless something changes, Gavin Newsom will be our next governor. Even Gov. Jerry Brown is concerned about the “self labeled state of resistance” against Trump, Republicans and people of faith that is pushing California’s policies and political debate further left. Republicans, church pulpits that founded America or leading conservatives aren’t giving counterarguments or providing checks on unhinged spending and social policies that degrade families, single-family homes and middle class incomes. U.S. Senate races, statewide offices and Legislature races will be filled exclusively with Democrats – setting up races between the left and even harder left – foreshadowing the direction of the party in California and nationally. This younger generation of Godless, leftist Democrats who mock the values that built California will destroy our state the way Chavez ruined Venezuela.

Additionally, unhinged immigration that rewards chain migration, encourages a diversity visa lottery system and doesn’t deport every illegal alien in prison will turn this country deep blue the way California, New York, Illinois and increasingly former red state Virginia are now. Liberal magazine The Atlantic was prescient when it statedin early 2016 that America is moving left and unchecked immigration will destroy this country by importing people who bring leftist and communist values from China, Latin America and Islamic African nations.

To overly pious Christians, leading conservatives, #NeverTrumpers and the Republican establishment that hates Trump, his voters and what he stands for, let Joel Kotkin, a self-described Truman Democrat, be your guide on how he illustrates what the Democratic Party has become. Mr. Kotkin breaks down these “post-industrial information age Democrats” into three groups:

Corporate oligarchs exemplified by Google, Facebook, Silicon Valley, Causists obsessed with hot button issues (abortion on demand, gay marriage, global warming) the most critical to long-term Democratic ascendency, and Populists who bear much of the party’s ‘social democratic message and legacy’ (they are the least of the Democratic Party that gave America FDR, JFK, Pat Brown, Scoop Jackson).”

Each group exemplifies faux compassion while using the media, entertainment, education, government and the courts to intimidate and control any who oppose their policies to bow in serf-like fashion to their whims and desires. Foolish Republicans in California who believe that Democrats can be understood and worked with, instead of being fought against, don’t comprehend how systematically corrupt; evil and plain wrong are today’s Democratic Party.

Two examples illustrate this truth when leading Democrats attended a private dinner with the president of Iran and Louis Farrakhan in 2013 while former President Obama had a smiling picture taken in 2005 with the vile, anti-Semite Farrakhan when he was a Senator. The press, Congressional Black Caucus and Democratic leaders buried these secrets to further the cause of electing Democrats and warring against American values. Meanwhile, Trump has a better approval rating than Obama, despite the relentless attacks, at the same point in his presidency, which is simply amazing.

And what have decades of “phantasmagorical imbecility,” from feckless Republicans and leftist Democrats wrought California for my generation to clean up? The poorest business climate, some of the highest tax rates, and largest number of people living in poverty. Moreover, Los Angeles now ranks as having the worst traffic congestion in the world, California is possibly in another drought without any water capture infrastructure built in recent memory; and The Stanford Pension Institute says, “that CalPERS has a $1.4 trillion unfunded liability.” These could be some of the reasons why more people are migrating out of California. California could use economic growth since our GDP growth rate has slipped to 35th in the nation.

The irony is Trump’s economy has rescued California’s Unemployment Insurance Fund, which has been insolvent since 2009. It was bailed out by the federal government under the Obama administration but the “Trump bump” means California can pay back the $10.2 billion borrowed from the Treasury between 2008-2012. But California’s Democratic legislators never miss an opportunity to “trash President Trump.” Environmental policy and “settled science,” though, is where the Democratic Party isn’t willing to have a serious, reasoned debate to answer what if anything can be done; or if there even is man-made global warming since climates obviously change.

However, is that due to carbon emissions or the earth’s weather patterns that have taken place for millions of years? Two recent studies question the earth warming and the worst case scenarios touted by Al Gore and former President Obama being void of scientific validity. Billions keep flowing for Democratic politicians, interest groups and those vested financially to keep the science settled and the environmental shibboleth of global warming moving forward into the next election cycle while California will ban any crude oil coming from Trump’s offshore drilling plan that could provide billions in economic benefits.

So what can be done against this type of incompetent rule? Fight back. For starters here’s how to approach environmentalists with this statement and then question by Dr. Walter Williams:

“Sixty-Five million (65) years ago the Earth experienced one of the most rapid and extreme global climate changes recorded in geological history named the ‘Paleocene-Eocene Thermal Maximum,’ when oceans were 18 to 27 degrees hotter than today and Antarctica was home to temperate forests, beech trees and ferns. The earth also had no permanent polar ice caps. In the past 65 million years, the Earth’s temperature has increased and decreased with no help from mankind. Therefore, can mankind really stop climate change and what is the correct earth temperature?”

Make no mistake we are in a fight the way the Marines were in an inch-by-inch fight for territory in the Pacific during World War II. Walk precincts, support candidates with your money and realize it will take numerous election cycles, but voters are realizing Trump’s economic strategies are working. It really is the economy stupid. Most importantly, WALK PRECINCTS and get the message to voters about Trump’s economy that is helping Republicans, why single-family homes aren’t being built causing prices to skyrocket (appointed agencies like the Southern California Association of Governments that has counterparts in San Diego and Northern California are the reasons) and why we are terribly vulnerable to the next recession due to some of the above-mentioned reasons.

Inform voters about unfunded pension obligations in the trillions, horrible inequality, sensible ways to protect children in our schools and Democratic leaders that don’t reflect their communities; but most of all, fight back. Run for office locally, regionally, statewide and federal offices but have your facts down, platform legitimized and reasons for running, because Democrats are on the hegemonic march to crush your lives, kill off families and destroy anything that gets in their path by any means possible.

Link: http://www.capoliticalreview.com/top-stories/california-moves-hard-left/

The US’ Dilemma In Pakistan – Analysis

February 21, 2018

Arguably the toughest geopolitical stalemate in the world is the intersection of India-Pakistan relations that use Afghanistan as a proxy battleground when each foe attempts to use realism to balance the other’s power. Enter President Trump using tougher rhetoric and cutting aid to Pakistan in an attempt to change their behavior that rewards the Taliban and other extremist proxies in its fight against India while harming America’s interests in the region.

In President Trump’s famous book, The Art of the Deal, he’s consistently depicted using madmen-like, outlandish negotiating tactics to win business deals; seemingly Trump’s employing the same tactics dealing with Pakistan. Could his madman approach work with a duplicitous, reluctant ally the United States (US) has given $34 billion since 2002? No one in his administration or other allied governments are certain, but something has to change when it comes to the US and Pakistan. Past US administrations never wanted to antagonize Pakistan over US logistical dependence in Afghanistan and Pakistan being to big to fail since they are a nuclear power. But Trump doesn’t seem to care about Pakistan’s threats and “well curated myth of too big or dangerous to fail.”

It’s not clear, however, which approach will work. There are two schools of thought on this issue: the soft power approach or the “hard power” diplomatic, economic and military method that Trump’s using. Regarding soft power, former President Obama rebuked Pakistan, but also used diplomatic avenues. However, Obama veered into hard power when he sent Navy Seals to kill Bin Laden in a safe house a mile from Pakistan’s version of West Point. Obama said he would stand firm on his threats, but couldn’t see how it was in the US’ best interest during his Presidency. This caused his Pakistan policy to waver between soft and hard power.

Trump seems to be following through on ridding the US Defense and State Department of all security-related assistance using economic hard power; but then Trump hasn’t publicly stated he won’t backtrack on his new policy towards Pakistan while simultaneously moving closer to India for realist balancing and support in the region.

Obama’s generosity didn’t seem to work so will a January 1, 2018 Trump tweet that invoked “lies and deceit,” were emanating from Islamabad be the tipping point? Could this also be the point where hard and soft power crescendo into Pakistan changing their ways and flushing terrorists out of their tribal region along its border with Afghanistan? The Brookings Institute and western intelligence agencies for years have called this tribal region of Pakistan a “haven for terrorists.”

Pakistan through their intelligence service – the highly skilled and competent – Inter-Services Intelligence Directorate’s (ISI) plays India, China and Afghanistan against one another. This achieves their realist gains against India while working closer with China through the China Pakistan Economic Corridor (CPEC) and militarily by aiding the Taliban’s ruthless Haqqani branch inside Pakistan.

For Pakistan this geopolitical balancing fosters governmental instability and terrorism inside Afghanistan to offset India, China’s and America’s influence in Central Asia. The Trump administration’s new policy to make Pakistan a more pliable ally takes on greater geopolitical significance when you consider the CPEC is an avenue for China and increasingly Russia to push the US out of the “trillion dollar race for the Arctic,” that has opened up in recent years for shipping and oil and gas production.

But Pakistan needs to be understood by the US, NATO and the UN Security Council if these issues are to ever be resolved. Pakistan fears a strong Afghanistan aligned with India against their interests, however, they also fear their neighbor becomes a safe haven for anti-Pakistan interests. This is why Pakistan supports the Taliban over US consternation that has now vexed three US administrations since 9/11. To understand Afghanistan from a balancing perspective, Pakistan argues if they target the Taliban or Afghan-oriented militants groups this will stir their restless Punjab heartland and Federally Administered Tribal Areas. That will then demonstrate Pakistan’s lack of governmental authority over militant groups they sponsor through the ISI and control over sovereign-held territory inside Pakistan to their sworn enemy, India.

Trump counters the US have allowed Pakistan’s double-dealing, “to support, train, fund and give sanctuary to various militant groups killing Americans and their allies in Afghanistan.” Afghanistan is America’s never-ending war and the longer America allows Pakistan to balance India via American and NATO lives the stronger Trump’s case is for allowing aid to continue.

If Pakistan disclosed institutional, governmental weakness then it shows political-military-intelligence failure from a nuclear power that could embolden militant groups, India and additional outside interference from the US, China and Russia. This also diminishes Pakistan’s influence in international bargaining for economic assistance, fighting terrorism and clipping India’s ascendant rise. These are some of the issues that have caused Shuja Nawaz of the Atlantic Council to bellow that Trump’s Pakistan policy is deeply flawed and will cause Islamabad to close access to US’ air-and-ground-based supply routes through Pakistan into Afghanistan.

In the end the US is limited in how far they can influence Pakistan and that is the dilemma with Pakistan. Coercive power only goes so far, and the US has genuine geopolitical considerations in Pakistan that go beyond Afghanistan; and so does Pakistan. Does Pakistan want to embrace China that has been predatory in its overseas economic relations when it built in Sri Lanka an “economically unviable port at Hambantota?” Now China is investing in an economically questionable port in Gwadar– which Pakistan should be wary of – and not embrace in Balochistan that historically has shown hostility to foreign influence.

The US needs to ensure the stability of Pakistan’s nuclear weapons and dispel the notion to Pakistani generals that tactical nuclear weapons can be deployed without possibly falling into terrorist’s hands. If proliferation occurs – and that is a major problem India has with Pakistan – then the Modi government goes on the offensive; increasing the likelihood a major Pakistan-India war erupts that the US doesn’t want.

Trump could attempt soft power through encouraging younger, educated Pakistani’s to embrace democratization and stronger governmental structures that are battling warlord in Pakistan and Afghanistan. It shouldn’t be an either or choice. Find the reformists in Pakistan and support them when possible, otherwise the critics of the new policy could be correct. Pakistan’s threats are real and they can discontinue nuclear safety measures, enflame border insecurity in the Punjab and postpone confidence-building measures with India. Where Pakistan can do significant damage to US interests is shutting down the Afghanistan-Pakistan border for US military air, ground and logistical routes.

The best the US can hope for is being the leader in an India-Pakistan peace settlement or rapprochement that defuses the continued geopolitical, nuclear-tipped crisis while understanding that achieving these gains could take decades. Patience and attempting to develop rule-of-law, administrative stability and a business climate that supports patent protection and a technocratic class are worthy goals. Further, economic growth and political engagement that draws Pakistan towards a peaceful existence are long shots but worth the risk because the US has nothing but bad choices while fighting the Taliban and other extremist elements in Afghanistan and Pakistan’s tribal areas.

Altering the strategic calculus in Pakistan is anyone’s guess; and the power distribution Pakistan’s intelligence and military apparatus gains by using the Happani network and Afghan Taliban against India won’t be severed anytime soon. Aid being cutoff may not alter Islamabad’s behavior but they shouldn’t dismiss Trump’s seriousness or US resolve.

Link: http://www.eurasiareview.com/21022018-the-us-dilemma-in-pakistan-analysis/

Shale 2.0 – California is Missing Out on Transforming the State

February 16, 2018

Hardline energy policies against fossil fuel exploration and production (E&P) originating from Sacramento are causing California citizens and taxpayers to miss the boom coming from United States (US) shale production taking place in Texas, North Dakota, Pennsylvania, Oklahoma and Colorado that has forced OPEC to raise crude supply forecasts for 2018. California could use this economic growth from shale E&P since our GDP growth rate has slipped to 35th in the nation.

Moreover, Los Angeles now ranks as having the worst traffic congestion in the world, California is possibly in another drought according to the New York Times, and The Stanford Pension Institute says, “that CalPERS has a $1.4 trillion unfunded liability.” These could be some of the reasons why more people are migrating out of California – even beautiful San Francisco isn’t immune to net migration – and regulations are also making it tougher to grow the economy, hire workers and bring tax relief to the middle class.

But there is hope for California that energy E&P could pave the way to relieve many of these problems along with upgrading our outdated infrastructure, older schools, and overreliance on wealthy taxpayers to fund a majority of the state budget.

According to the International Energy Agency (IEA), the United States (US) will surpass Saudi Arabia and Russia with record oil production topping over 10 million barrels a day (mbp) while approaching 11mbp faster than analysts expected. This type of energy production hasn’t been seen since the Nixon administration. Daniel Yergin, economic historian and author of The Prize: The Epic Quest for Oil, Money and Powerstates:

“This is a 180-degree turn for the United States and the impacts are being felt around the world. This not only contributes to U.S. energy security but also contributes to world energy security by bringing new supplies to the world.”

Shockingly, the US Census Bureau in early February reported that the US exported roughly 700,000 barrels of light domestic crude in December 2017 to the United Arab Emirates (UAE). The EIA iterated the significance by pointing out the UAE is the fourth-largest OPEC producer and first time importer of US oil. The US net oil imports now hover near 3 mbp, whereas in 2006 the US imported over 12 mbp.

The EIA reports that by 2022 the US “will become a net petroleum exporter from rising crude exports and overseas sales of refined petroleum products such as gasoline. This new reality has the Energy Information Administration (EIA) Annual Energy Outlook 2018 confident that America will be the world’s leader in oil and natural gas E&P by the end of this year.

For California, the untapped, unexplored Monterrey Shale and Pacific Ocean could hold trillions in new revenues and economic activity. The question is will voters and elected officials understand the significance of wise, regulated energy exploration in one of the largest shale plays and ocean reserves in the world? If Texas, North Dakota and Pennsylvania can figure out reasonable E&P then California’s technological giants based in Silicon Valley and universities like Cal-Tech can certainly come up with best practices to ensure environmental safety while growing California’s economy.

Many critics like the Post Carbon Institute’s new report, “Shale Reality Check,” question the sustainability, long-term production prospects and viability of US shale. But are critics like the Post Carbon Institute missing an opportunity to diminish the force of the modern petro-state led by OPEC that in the past has crippled California’s economy and caused our Marines based in Camp Pendleton to be deployed overseas to fight in their never-ending, expensive wars?

For decades American, western and Asian diplomats have tiptoed around Middle Easter nations – particularly, Saudi Arabia – since they needed vital oil and natural gas for continued economic growth. But the US no longer needs as much Middle Eastern oil. This will make it tougher for OPEC to agree on production guidelines that raise prices at the pump while limiting Russia’s foreign policy that relies on the weaponization of state-run oil giants to fund their geopolitical adventures.

In late 2014 it seemed America’s oil independence was a pipedream and the Saudi’s would force America into renewable energy when they targeted shale drillers for elimination by flooding world markets with new supply. Throughout this Saudi-led war on US shale, bankruptcies overtook the Texas Permian Basin and Bakken Formation in North Dakota; production also fell in the US from 9.6 mbp to 8.5 mbp. Shale companies though never declared defeat; instead, they slashed costs, employed automation and adopted cutting edge technology (robotics, sensors, smart phones) to keep drilling. There is no reason why California can’t be the leader in these technologies, E&P and oilfield services.

West Texas intermediate crude is now in the 60s and the US is supplying China and India while causing the Saudis to now try and invest in US shale properties. Taking aim at Russia – a California priority after the 2016 elections – is taking place since the US is now a major exporter of natural gas and can “undercut Russian energy dominance over Eastern Europe.” The US is now able to withstand political turmoil in Venezuela, Libya and Nigeria – all major OPEC suppliers – when historically supply disruptions would have risked global growth. California now doesn’t have to concern itself as much with unstable countries and regions as we have for decades.

Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University and former Obama administration energy official speaks about this new geopolitical reality:

“For the last 40 years, since the Arab oil embargo, we’ve had a mindset of energy scarcity, but as a result of the shale revolution, the U.S. has emerged as an energy superpower.”

This new reality also means China, Japan and Southeast Asia have become more dependent on the US and potentially California than on the Middle East. The US and California can now argue the global order they have ensured should become a shared burden financially and militarily.

These are good problems for California to have, and when energy independence was only a dream in the 70s over the Arab oil embargo now fossil fuel superiority can bring California benefits for everyone in our state and the US. Energy accomplishments that bring economic freedom should be celebrated; and the geopolitical advantages that America and now California enjoy from shale drillers reshaping global energy markets could bring us decades of prosperity if only we will take advantage of them.

Hardline energy policies against fossil fuel exploration and production (E&P) originating from Sacramento are causing California citizens and taxpayers to miss the boom coming from United States (US) shale production taking place in Texas, North Dakota, Pennsylvania, Oklahoma and Colorado that has forced OPEC to raise crude supply forecasts for 2018. California could use this economic growth from shale E&P since our GDP growth rate has slipped to 35th in the nation.

Moreover, Los Angeles now ranks as having the worst traffic congestion in the world, California is possibly in another drought according to the New York Times, and The Stanford Pension Institute says, “that CalPERS has a $1.4 trillion unfunded liability.” These could be some of the reasons why more people are migrating out of California – even beautiful San Francisco isn’t immune to net migration – and regulations are also making it tougher to grow the economy, hire workers and bring tax relief to the middle class.

But there is hope for California that energy E&P could pave the way to relieve many of these problems along with upgrading our outdated infrastructure, older schools, and overreliance on wealthy taxpayers to fund a majority of the state budget.

According to the International Energy Agency (IEA), the United States (US) will surpass Saudi Arabia and Russia with record oil production topping over 10 million barrels a day (mbp) while approaching 11mbp faster than analysts expected. This type of energy production hasn’t been seen since the Nixon administration. Daniel Yergin, economic historian and author of The Prize: The Epic Quest for Oil, Money and Powerstates:

“This is a 180-degree turn for the United States and the impacts are being felt around the world. This not only contributes to U.S. energy security but also contributes to world energy security by bringing new supplies to the world.”

Shockingly, the US Census Bureau in early February reported that the US exported roughly 700,000 barrels of light domestic crude in December 2017 to the United Arab Emirates (UAE). The EIA iterated the significance by pointing out the UAE is the fourth-largest OPEC producer and first time importer of US oil. The US net oil imports now hover near 3 mbp, whereas in 2006 the US imported over 12 mbp.

The EIA reports that by 2022 the US “will become a net petroleum exporter from rising crude exports and overseas sales of refined petroleum products such as gasoline. This new reality has the Energy Information Administration (EIA) Annual Energy Outlook 2018 confident that America will be the world’s leader in oil and natural gas E&P by the end of this year.

For California, the untapped, unexplored Monterrey Shale and Pacific Ocean could hold trillions in new revenues and economic activity. The question is will voters and elected officials understand the significance of wise, regulated energy exploration in one of the largest shale plays and ocean reserves in the world? If Texas, North Dakota and Pennsylvania can figure out reasonable E&P then California’s technological giants based in Silicon Valley and universities like Cal-Tech can certainly come up with best practices to ensure environmental safety while growing California’s economy.

Many critics like the Post Carbon Institute’s new report, “Shale Reality Check,” question the sustainability, long-term production prospects and viability of US shale. But are critics like the Post Carbon Institute missing an opportunity to diminish the force of the modern petro-state led by OPEC that in the past has crippled California’s economy and caused our Marines based in Camp Pendleton to be deployed overseas to fight in their never-ending, expensive wars?

For decades American, western and Asian diplomats have tiptoed around Middle Easter nations – particularly, Saudi Arabia – since they needed vital oil and natural gas for continued economic growth. But the US no longer needs as much Middle Eastern oil. This will make it tougher for OPEC to agree on production guidelines that raise prices at the pump while limiting Russia’s foreign policy that relies on the weaponization of state-run oil giants to fund their geopolitical adventures.

In late 2014 it seemed America’s oil independence was a pipedream and the Saudi’s would force America into renewable energy when they targeted shale drillers for elimination by flooding world markets with new supply. Throughout this Saudi-led war on US shale, bankruptcies overtook the Texas Permian Basin and Bakken Formation in North Dakota; production also fell in the US from 9.6 mbp to 8.5 mbp. Shale companies though never declared defeat; instead, they slashed costs, employed automation and adopted cutting edge technology (robotics, sensors, smart phones) to keep drilling. There is no reason why California can’t be the leader in these technologies, E&P and oilfield services.

West Texas intermediate crude is now in the 60s and the US is supplying China and India while causing the Saudis to now try and invest in US shale properties. Taking aim at Russia – a California priority after the 2016 elections – is taking place since the US is now a major exporter of natural gas and can “undercut Russian energy dominance over Eastern Europe.” The US is now able to withstand political turmoil in Venezuela, Libya and Nigeria – all major OPEC suppliers – when historically supply disruptions would have risked global growth. California now doesn’t have to concern itself as much with unstable countries and regions as we have for decades.

Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University and former Obama administration energy official speaks about this new geopolitical reality:

“For the last 40 years, since the Arab oil embargo, we’ve had a mindset of energy scarcity, but as a result of the shale revolution, the U.S. has emerged as an energy superpower.”

This new reality also means China, Japan and Southeast Asia have become more dependent on the US and potentially California than on the Middle East. The US and California can now argue the global order they have ensured should become a shared burden financially and militarily.

These are good problems for California to have, and when energy independence was only a dream in the 70s over the Arab oil embargo now fossil fuel superiority can bring California benefits for everyone in our state and the US. Energy accomplishments that bring economic freedom should be celebrated; and the geopolitical advantages that America and now California enjoy from shale drillers reshaping global energy markets could bring us decades of prosperity if only we will take advantage of them.

 Link: http://www.foxandhoundsdaily.com/2018/02/shale-2-0-california-missing-transforming-state/

Geopolitics Has Caused the Oil Price Rally

January 22, 2018

The Wall Street Journal recently published an article titled: “Five Potential Risks to the Oil Rally,” that details how geopolitics is one of the leading reasons Brent crude is on the upswing; many analysts though believe oil is overpriced. The rally has many optimistic, particularly after a Goldman Sachs conference January 10-11 in Miami where shale drillers said they would exercise discipline, and not drill excessively, thus lowering returns to investors and shareholders.

But that narrative counters the Energy Information Administration (EIA) announcement in early January statingthe reasonable expectation of U.S. oil production topping 11 million barrels by the fourth quarter of 2019. The EIA also raised its forecast for U.S. production to 10.3 million bpd, 300,000 barrels a day higher than it forecasted in December 2017.

Shale production exceeded the original EIA estimate of 9.3 million bpd by 11% in 2017. Those numbers alone should have market watchers questioning this rally, plus recent U.S. tax law changes that benefit energy companies. Only a shortage of shale workers could stop their production gains, which remains a real possibility.

Demand for oil is strong, because of cold winter months, strong economic growth from China, India, and the U.S. – and a weaker US dollar. But with OPEC concerned that higher oil prices will lead to increased shale production, it seems reasonable that shale production will counter higher prices. That is unless geopoliticscontinues to overtake economic reason.

This rally seems heavily predicated on the speculative, ever-changing nature of geopolitics, yet there are real concerns warranting attention that could cause oil price fluctuation. India has successfully tested a ballistic missile that worries China. Fighting continues in Syria. China and the U.S. could engage in a devastating trade war in 2018 over China’s trade surplus. North Korea’s nuclear problems persist. And Russia and Ukraine are still engaged in conflict over eastern Ukraine after Russia annexed Crimea in 2014.

The Middle East is split into geopolitical factions, where most Sunni nations fear Shia Iran’s nuclear ambitions. Adding some geopolitical levity to the dangerous Iran-Saudi rivalry, Hans van Cleef, energy economist at ABN Amro said, “An escalation [in Saudi Arabia or Iran], in which also oil production would be hit, seems unlikely because of strong mutual economic interests.”

While the specter of war is a real possibility that could disrupt oil supplies, the rational actor model in international relations and the U.S. being one of the largest fossil-fuel energy producers in the world, negate the geopolitical aspects of the rally currently taking place.

The rational actor model comes from “rational choice theory,” and posits a nation-state makes rational decisions based on: “goal setting/ranking, options, consequences and profit-maximization.” As an example – Shia Iran versus Sunni Saudi Arabia – have too much to lose economically and socially by reverting to total war against one another. They have options, (use proxies to fight each other), can assess consequences (war means U.S. increases market share over OPEC), and profit maximization loss (long-term struggle leads to regime instability through economic hardship).

Putting the theory to the test, North Korea is seen as an unstable, hair-trigger foe ready to launch nuclear missiles at the U.S., Japan, South Korea, et al. Each missile test the North Korean regime launches can send oil prices upward, causing the market to behave irrationally.

Current CIA Director, Mike Pompeo, sees the situation in North Korea differently and in a way that could have a profound effect on oil prices long-term. Director Pompeo believes Kim Jong-un of North Korea can be planned for and dealt with on the international stage and through negotiations, stating: “We in the intelligence community…have said that Kim Jong Un is rational.” Of course totalitarian war-seekers can use provocative behavior against their neighbors, but that doesn’t necessarily mean rational models of decision-making don’t hold true. Geopolitics, outside of interstate war, just isn’t a valid reason for prices to keep moving on their upward trajectory.

Moreover, the world community may not like Kim, Putin, or Assad, but intelligence agencies, militaries, and governments can make rational decisions as to how they will act. Oil prices rising and falling off the actions of these states are why analysts like Richard McGuire of Rabobank strategists tell Bloomberg: “We could argue that an ongoing rise in oil prices provides an important explanatory factor regarding the rise in long-end yields this week and in recent month.”

Bond yields rising with higher oil prices based on the specter of war between Iran and Saudi Arabia via the troubles taking place in Yemen is devastating regionally, but it won’t affect the global economy, oil supplies, or demand since both countries have rational reasons for not wanting an all-out war.

There are some valid reasons for oil prices to increase. Venezuela’s oil industry and production “collapsing” is an economically sound reason based on supply and demand for oil prices to rise; not the bluster of immature leaders. The oil price rally will continue based off of supply taken off the market and storage being drawn down. Geopolitical anxieties will subside and nervous investors shouldn’t let developments across the globe reported on immediately in our 24/7 news cycle disrupt sound investment strategies.

Link:  https://www.geopoliticalmonitor.com/geopolitics-has-caused-the-oil-price-rally/

Steve Bannon is Worse Than the #NeverTrump Republicans

January 16, 2018

Despite having over 91% of all mainstream news stories negative against President Trump, he still has accomplished cutting corporate and individual taxes, repealing the Obamacare individual mandate, appointed Neil Gorsuch to the Supreme Court, added a record number of conservative judges to the circuit courts, rid the booming economy and stock market of unnecessary regulations, destroyed ISIS and approved energy exploration and transformative pipeline projects in states like North Dakota; accordingto Byron York of the Washington Examiner. Additionally, eleven Obama legacy items have been repealed.

Enter Steve Bannon and his “dubiously sourced,” gossip-laden new book that trashes Trump, but now he’s “apologizing” for what he said. Unfortunately he’s doing that awful Republican trait of eating our own. He brokeReagan’s 11th commandment: “Thou shalt not speak ill of any Republican.” And for that Bannon is now worse than the #NeverTrump Republicans while becoming “his own worst enemy.”

Seemingly, liberal icon George Clooney was prescient when he trashed Bannon, and certainly Bannon’s usefulness came to a conclusion when he lost Alabama by endorsing Judge Roy Moore. What he should be doing now is showing penance for his stupidity.

Certainly the California Republican Party (CRP) doesn’t need this type of press or derisive confusion that now emanates from the Bannon brand of Breitbart-Republicanism. The maddening part is Andrew Breitbart would more than likely applaud Trump who actually fights back and doesn’t roll over the way the Bush’s, Romney and McCain Republican-types have for decades.

For all Bannon’s bluster he seems to have forgotten what happens when Democrats have absolute control of a state (California). More about California’s woes in ensuing paragraphs, because there are different choices when it comes to both imperfect parties. The adage, “the enemy of the good is the perfect,” is true. However, Bannon took it to mean let’s blow up the Republican Party without consideration of what that means. The national Republican Party and CRP have their problems, but anyone who thinks Democrats or independents are the solution doesn’t understand what it means to have a viable society.

The days of my father’s Democratic Party that included FDR, Truman, JFK, and Pat Brown is over, replaced by a no-growth, regulation-heavy, environmentally beholden anything goes “cultural leviathan,” that did nothing to deter Iran, Russia, China and North Korea while shunning traditional allies.

The contrast between Trump and the Obama-inspired Democrats couldn’t be more different and this is where Bannon tragically fails. The numerous policy and philosophical differences between Trump and Obama, including the horrible divide between Trump and Democratic California is only growing. Exemplified by California legalizing marijuana, which has been a disaster for Colorado.

View the differences – big and small – Trump is more press accessible than Obama ever was and allows his Cabinet officers to do their job that wasn’t previously the case. His Russian policies are tougher and more effective than the #NeverTrumpers or Bannon ever realized. Trump would never vote for Bernie Sanders – but that’s exactly what took place in the last election when President George H.W. Bush bragged about voting for Hillary Clinton over Trump.

Trump’s economy is booming compared to Obama’s with labor growth and consumer confidence both at seventeen-year highs. African-American unemployment rate is at record lows and something Republicans and the CRP should pounce on in this next election cycle. What does Bannon and the #NeverTrumpers have to say about those figures that affect all Americans? Moreover, Obama governed based on division of race, gender, ethnicity, sexuality and curtailing religious freedom, growing the administrative state and stretching the limits of the constitution. Whereas, Trump believes in America exceptionalism and a regime based on the actual constitution – not a living constitution.

I’d posit that Obama governed all facets of America the way James Burnham in Suicide of the West wrote about modern liberalism:

“Liberalism permits Western Civilization to be reconciled to dissolution. The Principle function of modern liberalism is to facilitate the suicide of Western Civilization.”

When Bannon ran Breitbart he understood this truth about Democrats and Obama, but Bannon along with the #NeverTrumpers, have lost the existential battle Republicans and decent Californians are engaged in against the Democratic Party. It’s a struggle where the very lives of our babies depend on us beating the hegemonic totalitarianism that are today’s viciously vapid Democrats.

The biggest difference that affects the entire world is the differences in foreign policy. Syria is a disaster for a generation, China is on the march in the South China Sea, North Korea is a nuclear menace, Russia annexed Crimea, the Arab Spring has left the Middle East in shambles; and now Iran is a bigger threat than all the above problems combined based on their capabilities and the awful, Hezbollah-enabled, falsified, Iran nuclear deal. Protests – though well intentioned – aren’t changing the totalitarian, theocratic Iranian regime. Only an armed-to-the-teeth American military will deter the Ayatollah, IRGC, and Quds Force.

All of this happened under Obama and embraced by California Democrats. What does Bannon have to say about this? Nothing, because it’s easier to criticize Trump and make a bigger name for yourself than assist the President in dealing with problems that we haven’t seen since World War II.

Does Bannon realize that either Trump or his deregulatory experts (Scott Gottlieb, Scott Pruitt, Ajit Pai, Ryan Zinke, Betsey DeVos, Elain Chao, Neomi Rao) succeed over the #NeverTrump chattering class of (Max Boot, Michael Gerson, Jennifer Rubin, Bret Stephens, The Weekly Standard and National Review, etc.) because if Trump fails then the United States and California will fail. The rosy delusion printed recently by the Los Angeles Times doesn’t exist and won’t exist in the future unless men like Bannon and the #NeverTrumpers support Trump’s policy views.

If Bannon wants a place to fight then choose California and assist the CRP restore the home of Reagan. Just one of our pensions (CalPERS) has a $153 billion unfunded liability while our economy has slowed because of state worker pensions. According to the Social Science Research Council, California suffers the worst income inequality in the nation, the third worst economic environment for middle class families and over one-third of California’s population is at or near poverty. Tech-driven growth is nearing completion since the Bureau of Economic Analysis (BEA) revealed California’s GDP was 35th in the U.S. And The San Jose Mercury Newsreported the Bay Area lost 4,700 jobs – and 1,000 from the tech sector – because of a lack of affordable housing.

Our schools are in disarray, the Black Lives Matter movement isn’t addressing the issues killing black men and women, infrastructure needs over $800 billion in improvements and we still haven’t built any dams, reservoirs or canals to capture rainwater from the previous drought. Joel Kotkin calls it, “the what, me worry?” state of California. The CRP, Republican candidates and citizens being crushed by the California Democratic environmental-jihadists and tech oligarchy could use Steve Bannon’s help. But that is real work and change of this sort is a slow-motion effort to undo the “social opprobrium” that Trump and Republicans have with California voters.

Bannon has given fresh ammunition to the ilk trying to remove the duly elected president since the night he won. Proclaiming virtue is for CNN; Bannon should be learning how to bring manufacturing, single-family homes and blue-collar jobs back to California. Faulting Trump and putting the CRP on the defensive is inexcusable and time for Bannon to leave the political stage into the dustbin of history.

Link:  http://www.capoliticalreview.com/top-stories/steve-bannon-is-worse-than-the-nevertrump-republicans/

Venezuela’s Loss Is Russia and China’s Gain

January 4, 2018

As Maduro pushes his country to the brink, Moscow and Beijing gain footholds in the Western hemisphere.

Petroleos de Venezuela (PDVSA) is indicative of the state of Venezuela. The once thriving company, which is responsible for exploration of the world’s largest proven reserves of oil and gas, is on the brink of collapse. Maj. Gen. Manuel Quevedo—a loyal follower of President Maduro who has no known energy sector experience—is now leading the company. Critics are viewing it as a safeguard against a military coup for Maduro who gutted PDVSA of top talent through arrests and firings as he tightens his grip on power. Before the purge, oil facilities were and still are crumbling, production has plummeted and Venezuela owes billions to Russia and China, which has South America and the United States concerned about geopolitical stability in the region.

The failures at PDVSA and the Maduro administration are a symptom and cause of the nation’s economic spiral, since Venezuela relies overwhelmingly on oil and gas sales for their economic well-being. Energy prices are now in recovery from the 2014 oil crash, but Venezuela is getting worse. With deepening troubles at PDVSA the nation is destabilizing rapidly and now, “The government is facing a dire recession, soaring inflation and unbridled crime, as well as food and medicine shortages.”

A decade ago, Venezuela was the richest country in South America and aspired to be the nexus of a diplomatic and trade alliance in the entire Western hemisphere. But now isolated, broke, and with Maduro regarded as a left-leaning despot in a region that has “shifted politically to the right,” Venezuela is looking to China and Russia for assistance. Beijing and Moscow have sought for decades to assert greater influence in America’s backyard—Maduro and his broken country have given them the perfect opening.

The rift with the United States worsened when Todd D. Robinson, a career Foreign Service Officer who was recently ambassador to Guatemala and is now the ambassador to Venezuela, said in an introductory video posted online, “that he would look for opportunities to help bring democracy and prosperity to Venezuela.” This was seen as American heavy-handedness by Delcy Rodriguez, President of Venezuela’s National Constituent Assembly who rebukedAmbassador Robinson by saying, “he had arrived to our country on the wrong foot.”

There are dangers to country’s meddling in Venezuela’s inner workings. Juan Gonzales, former White House and State Department official in the Obama administration who worked on Latin American policy said that, “Marginalizing the Venezuelan kleptocracy is important, but total isolation will cede the ability of regional leaders to shape political events on the ground to actors outside the region.”

This isolation by South America neighbors and Western hemisphere countries has consequences. According to statistics by the National Assembly, inflation in November was up 57 percent—anything above 50 percent is considered hyperinflation. Undeniable shortages of food, cash and public services has driven emigration, robbing the country of valuable citizens. As a result, Venezuelans are now literally starving. So the question is engagement or marginalization; but this third option of allowing China and Russia greater economic and diplomatic access seems to be winning.

As diplomatic affairs have turned sour in the region, Maduro is making increased overtures to Russia and China. Maduro visited Russia in October andthanked President Vladimir Putin for, “all the support, political and diplomatic, in difficult times which we are living through.” This gesture to Putin landed Maduro a lifeline by “restructuring $3.1 billion in debt.” In early December Maduro then met with Igor I. Sechin, chief executive officer of Rosneft, andnegotiated the right to new ventures and two offshore gas fields in Venezuela.

Historically, China has taken a longer-term view on countries like Venezuela that are rich in natural resources. China is the world’s largest energy consumer and Venezuela will continue to be seen as a national and geopolitical priority for them to secure additional oil and natural gas. They will see their investments in Venezuela as risky but have a higher tolerance for the opportunity and vulnerability to manipulate Maduro, his government and country’s resources to their advantage. This is the perfect opportunity to lend billions, which China has done. As PDVSA falls behind on debt payments, Beijing is then able to scoop up precious Venezuelan energy and land assets for pennies on the dollar. It’s a perfect storm of opportunity for China and Russia to gain geopolitical influence over America, Canada, Central America and Mexico.

Russia and China have played the biggest role keeping Maduro’s crumbling regime afloat. In mid September, Evan Ellis, senior associate at the Center for Strategic International Studies and professor at the U.S. Army War College, appeared for a hearing before the US Congress’ Western Hemisphere subcommittee of the Foreign Affairs Committee and emphasized:

How Russia and China, in pursuit of their commercial and strategic interests in Venezuela, have provided capital, goods, services, and political backing that has indirectly enabled the populist regime to ignore and ultimately destroy the mechanisms of democratic accountability.

The downfall of Venezuela and the empty shell that is now PDVSA will have rippling geopolitical consequences that will be felt in Washington, Caracas, Moscow and Beijing. Since energy is the driving force of modern societies, expect Russia and China’s grip on Venezuela to tighten. What the Western hemisphere and South American nations in particular do to counter their moves are unclear at this time and anyone’s guess leading into 2018.

Link: http://nationalinterest.org/feature/venezuelas-loss-russia-chinas-gain-23937?page=2

GOP Tax Bill Is A Boon For Oil And Gas

January 4, 2018

A few days before Christmas, the U.S. House and Senate passed the most comprehensive tax reform plan since 1986. Upon signing the bill, President Donald Trump called it “an incredible Christmas gift for hard-working Americans.” But Trump’s allies in the GOP Congress gave an incredible end-of-the-year gift to energy companies.

Defenders believe a windfall of exploration, production and investment will emanate from energy companies in 2018, while critics say it will lessen renewable energy at the expense of the environment by unleashing further fossil fuel exploration.

American businesses in general will reap billions in tax savings from the cutin the corporate income tax rates from 35 percent to 21 percent, but with the treatment of capital expenditures lessening business tax exposure, this is a particular boom for energy companies.

Exxon Mobil (NYSE:XOM) Vice President of Investor Relations Jeffrey Woodbury said, “The first things that are being funded [after the tax cuts are implemented] are our dividends and our investment program.” Though EM had a negative tax rate last year, in previous years they have paid as high as 33 percent diminishing investor returns.

The renewable energy industry had to fight efforts to eliminate their tax credits, but eventually avoided proposals that would have been tough for U. S. solar and wind to remain profitable. In the final version of the bill, production and investment tax credits were left in place, ensuring renewable energy will continue to grow at taxpayer expense. The electric vehicle industry was also spared, thanks to the retention of the $7,500 tax credit when an electric vehicle (EV) is purchased.

But to the dismay of environmentalists, the bill opened up portions of the politically-charged Arctic National Wildlife Refuge (ANWR) to oil exploration. It was a make-or-break issue for the tax bill to clear the senate, since Alaska Senator Lisa Murkowski said that was the only way she would vote yes.

The biggest benefit overall for the energy industry is the cut in the corporate tax rate. Barclay’s equities analysts calculated:

“The 14 percent point cut in the corporate tax rate will add $1 billion to the profits of the U.S. oil and gas exploration production firms, equivalent to a $1 a barrel increase in oil prices, and the tax cut could add five percent to the earnings per share of Exxon Mobil and Chevron.”

For capital-intensive companies (and the oil and gas industry qualifies for this designation), lowering the effective corporate rates and expensing provisions—in which companies can expense 100 percent of their investment over five years—is a dramatic impact.

Oil refiners will also see new corporate profits from the plan. Pavel Molchanov, energy analyst at investment firm Raymond James, believesthe corporate rate cut is most beneficial for independent oil refiners. He estimates the earning per share for refiners “will jump by an average of 23 percent.” Integrated multinational oil companies like Exxon Mobil, Shell and Chevron will also see new profits since they own oil refineries. International earning will also be taxed differently, and at lower rates, further assisting large energy firms.

Oil investors were also rewarded with additional benefits for master limited partnerships (MLPs). This corporate vehicle is popular with oil pipeline companies and renewable energy projects. It’s been used by Energy Transfer Partners (NYSE:ETP)—owner of the Dakota Access and Rover lines—and uses “pass-through entities”, meaning taxes aren’t paid at the partnership level; only investors pay the applicable taxes. Under the previous U.S. administration, pass-through rates investors paid were the same as their personal income rates, but the new tax bill slashes the pass-through rates to 20 percent. Another boom for the energy industry.

The power of the energy industry was also evident in the new tax bill when congress didn’t eliminate the Renewable Fuel Standard, the oil depletion allowance and tax breaks for intangible drilling costs by independent firms, or the 15 percent tax credit for enhanced oil recovery.

Utility companies did well by having their corporate rates cut and being allowed to fully expense capital investments that will save billions. Industry lobbyists also convinced the GOP-led congress to preserve their tax-saving ability by deducting their state and local taxes.

“Due to the regulated nature of the electric power industry, this is a huge win for customers as the drop in the corporate rate is mostly flowed back to them over time in rates,” The Edison Electric Institute said in a statement.

Many claims will be now be tested to prove whether these tax breaks and elimination of tax burdens will benefit American energy companies and their constituents. A recent Monmouth poll showed 50 percent of Americans believe their personal taxes will go up under tax reform. So it’s no wonder the majority of Americans believe the bill is bad for them and that energy companies will use the benefits only to enrich themselves and shareholders.

Whatever the case, nothing creates job and opportunities the way oil and natural gas exploration does at this time. Disaster has been foretold for this bill. Now let’s see what takes place for energy companies in 2018.

Link: https://oilprice.com/Energy/Energy-General/GOP-Tax-Bill-Is-A-Boon-For-Oil-And-Gas.html

Iran Could Be a Bigger Problem Than North Korea

December 25, 2017

The Middle East is in a shambles, as Iranian proxy wars and other wars dominate Syria, Iraq, Lebanon, Mali and Egypt.

Iran is on the march in the Middle East following the P5 + 1 nuclear agreement that brought billions in sanctions relief, which means the Iranian regime is now the biggest threat to regional stability. Iranian proxies, which include Hezbollah, Hamas, the Muslim Brotherhood and the Houthis in Yemen, allow the Iranian regime to project force on an unprecedented scale in the Middle East and emboldens other bad actors on the world stage.

The Middle East is in a shambles, as Iranian proxy wars and other wars dominate Syria, Iraq, Lebanon, Mali and Egypt, along with a Palestinian civil war possibly being around the corner. Now that the United States has recognized Jerusalem as Israel’s capital and Turkish prime minister Erdogan has called Israel “a terrorist state,” passions are on the rise, which has allowed Iran to escalate its attacks on Israel and Sunni nations that disagree with its Shia interpretation of Islam.

The geopolitical situation with Iran has seen tensions increase further the second half of 2017. In October, the U.S. Navy defended itself from missile strikes by Houthi rebels, backed by Iran off Yemen’s coast. The P5+1 agreement was intended to usher in the dawn of a new era for relations between Iran, the West and Sunni-led Middle East nations; instead, other bad actors have perceived weakness in the United States and Western resolve to ensure the post–World War II order.

Iran recalcitrant actions in the Middle East have seemingly emboldened the Russians to threaten nuclear war, and the Chinese to crackdown on freedom of speech. Moreover, the overthrow of international law in the South China Sea continues unabated along with rising tensions involving the Japanese government and the North Koreans testing an ICBM.

When the sanctions were in place the Iranian government understood Western global military force and political fortitude to fight terrorism and bring its economy to the brink of disaster. Unless the EU, NATO, Western-aligned Asian allies re-engage Iran on the world stage with military strength, crippling economic sanctions, deterrence and forceful balance of power, then Iran’s future nuclear program will be a bigger problem than the North Koreans. When small countries like the Philippines openly mock the United States, EU, and NATO that is an example that allows the Iranians to believe they can march forward in the Middle East the way they have in Iraq and Syria.

The Iranian nuclear deal, led by President Obama, was built upon false information and the unreliable narrative that Iran would give up being the world’s largest state sponsor of terrorism. The book: The Iran Wars: Spy Games, Bank Battles and the Secret Deals that Reshaped the Middle East, by Jay Solomon details the inept schmoozing during negotiations, sordid details and unbelievable danger the United States and world are now in since this agreement has been executed.

It’s also believed the Iranians got the best of the United States and Western nations at the negotiating table. This also benefits the Chinese, Russians and North Koreans by opening up illicit funds to sponsor terrorism and proxies that are reshaping the Middle East. Germany intelligence officials have said that Iran has “continued trying to illegally procure nuclear equipment from Germany after forging the landmark nuclear agreement with world powers.”

Angelo Codevilla, in his book Character of Nations, wrote about a multi-polar world instead of the current post–World War II order if the west appeased Iran. Codevilla saw a future where America no longer polices the world that is advocated by Anders Fogh Rasmussen in a piece for the Wall Street Journaltitled, “The United States Must Be The World Policemen.” Even Gen. Martin Dempsey, former chairman of the Joint Chiefs of Staff, has openly opined about needing to invade the Iranians, because the nuclear deal with them only made them more—not less—hostile towards peace-loving nations.

Sanction relief from the agreement gave the Iranians finances and economic growth they never would have gotten. Even the socialist French thought the deal would embolden the Iranians to cause additional trouble. The need to have peace at all cost while denying human nature, ideology and the history of the Iranian regime will lead to additional belligerence from the Islamist regime. While certain segments of Islam are peaceful and even poetic in their nature, that has never been the approach of the Iranians.

Now that oil prices are recovering from the 2014 crash, that progress will benefit the Iranians on the world stage—and particularly the Middle East. This has led Western governments to believe terrorism is the new norm.

The wild card is the Saudis. Now that Afghanistan is in play by the Iranians and Saudis, and oil prices aren’t reaching $100 a barrel this year or next, what will the Saudis try to accomplish moving forward? It’s publicly known that they are changing their economy so that it is no longer based solely on fossil fuel, but what the Saudis will do as the Iranians become stronger is turn to Israel for assistance. In a “unprecedented interview,” with the Saudi newspaper Elaph, Israeli military chief Gen. Gadi Eisenkot described Iran as “the biggest threat to the region, and Israel would be prepared to share intelligence with ‘moderate’ Arab states like Saudi Arabia in order to deal with Iran.”

This was a very public rebuke and confrontational tone coming from Iran’s two biggest enemies: Israel and Saudi Arabia. Now that there is a détente between the Egyptians, Saudis and Israelis over the transfer of the Tiran and Sanafir islands to the Saudis by the Egyptians, collaboration to “deal with” Tehran becomes a three-country strategic balance of power against the Iranians. The reciprocity the P5+1 thought would be gained by Iran has achieved the exact opposite of its intended effect. Instead, it will make Iran more difficult to deal with in the coming new year and possibly for years to come.

Link: http://nationalinterest.org/feature/why-iran-could-be-bigger-problem-north-korea-23783?page=2

It’s Time for the California Republican Party to Fight

December 12, 2017

The Democratic Party and the city of San Francisco are officially dead. The acquittal of illegal alien, Jose Garcia Zarate, who shot Kate Steinle on the San Francisco pier in cold blood, has now officially killed the party of the common man and woman. A jury of her peers found him not guilty and this was a crystallizing moment to understand there is a clear choice – of life and death – between a Republican and a Democrat. Whereas Democratic San Francisco protected Mr. Zarate, the Republican Justice Department issued an arrest warrant. This isn’t about “sanctuary cities,” or stricter immigration reform, this is about protecting American citizens versus Democrats – the party of the left – who seemingly only lust for power and control reminiscent of Marx, Trotsky, Lenin and Stalin. The days of Scoop Jackson, FDR, Truman and Kennedy died in that San Francisco courtroom when the drug dealing, six-time-deported, zero-skilled, Mr. Zarate was acquitted.

It’s time for the Republican Party to stop wasting their majority in Congress and the CRP to stand up and fight, because you’ll never hear illegal immigrant advocates shed a tear for Ms. Steinle who collapsed and died in her father’s arms. Those are the Democrats who run California that decided it wasn’t a problem for her to die this way.

However, men like Republican consultant, Mike Madrid, who is now helping Antonio Villaragoisa’s gubernatorial campaign are also the problem. If he wants to cash a liberal Democrat’s checks then go become one, because he’s in the same class as McCain, Romney, et al who still believe that Democrats are just like us; but don’t have the ability or temerity to understand what ordinary people are up against anymore. We don’t have the option to opt out of the very laws that are supposedly passed on our behalf. And the Democratic supermajority in the legislature isn’t doing anything to protect staffers and female lawmakers from sexual harassment; Minority Leader Pelosi has now been accused of protecting sexual predators for decades.

Here is what Democratic policies that have run California and most major cities across America into the ground wrought on the citizenry’s backs for generations. San Francisco and other Democratic progressive cities have the “worst housing inequality in the nation,” according to Wendell Cox. Meaning, there are less homes to purchase at higher prices, which obliterates individual and family incomes while stagnating the economy of those cities. San Francisco Unified School District is becoming a real-estate investor to alleviate housing shortages by spending $44 million to develop the Francis Scott Key annex for teachers who can’t afford San Francisco homes or rental units.

Joel Fox has debunked Los Angeles Times columnist Steve Lopez’s solution for the growing California homeless problem: taxing homeowners’ equity. Fox has detailed how taxing homes won’t solve the problem, possibly make it worse, and that Los Angeles now has the worst homeless problem in the U.S. The problem is so severe the Los Angeles County Board of Supervisors approved in August a program to pay L.A. County homeowners up to $75,000 to house homeless people on their properties.

Natural gas is the most effective, clean, scalable, abundant and job-creating energy available. However, California is moving from this form of energy into unstable, unreliable and intermittent renewable energy, causing California to have the highest energy costs in the U.S. And California’s energy policies are killing fossil fuel investments and driving jobs out of the state according to the Frasier Institute. Moreover, AB 32, the global warming law isn’t causing emissions to dip, instead it’s the weather, but the environmental leaders in the Democratic Party, led by Tom Steyer, would never acknowledge this fact.

Our public schools – not all of them – but the majority are “unaccountable” and failing while the legislature wants higher taxes for “better schools.” No public official or school board has ever definitively defined what constitutes a “better school.” Unfortunately, the California School Dashboard revealed:

“Fifty percent of California schoolchildren can’t read at grade level, and for African American (AA) children, almost seventy percent failed to read at grade level.”

The CRP should make this the number one issue aggressively going after AA families and voters by showing the Democratic and teacher union-led California schools are failing you, your families and your children. If Democrats lose a sizable bloc of AA voters, they lose California, and eventually they lose the country.

As President Clinton’s first presidential campaign famously stated, “It’s the economy, stupid,” which propelled Clinton to the presidency. This issue still resonate, particularly when California’s economy is ranked 35th in the nation. Chris Reed writes, “California job creating incentives fall short – again,” and Dan Walters in CalMatters exposes disturbing budgetary facts facts that Mac Taylor, the Legislatures’ top advisor disclosed in November:

“Governor Brown, lawmakers and voters have made the state’s longer-term situation potentially even worse since off-budget debts, especially for pensions and health care for retired state workers have increased.”

To Brown’s credit he is now attempting to rectify the pension issue while defying his Democratic base in the process. Brown realizes cities like Los Angeles have underfunded pension liabilities totaling over $9 billion, and other California cities hold hundreds of billions in pension debt that will cut government services and raise taxes – otherwise bankruptcy is a strong possibility. Even once-thriving Ventura County is now losing jobs while government employment rises. The pension and job loss issues are where the CRP can gain crucial votes in deep blue California.

There are a myriad of other issues that Democrats are pushing that will hurt most Californians from the economic devastation the high-speed rail in the Central Valley will bring to having the highest taxes, worst roads, and over a trillion dollars needed for infrastructure improvements and construction. Additionally, California is ranked at the bottom or near bottom in business-friendly policies and the Democrats answers is to make suing President Trump, “a team sport.”

At one time Pat Brown, who built water systems, world-class highways and the best universities in the world, exemplified the Democratic Party. That isn’t the case anymore; instead a gentrified class of technology billionaires, climate enthusiasts and entertainment executives litter the Democratic Party; while Democratic-supporting unions ask for more tax payer dollars with less to show for their gains. California has real problems and if the CRP doesn’t stand up and support candidates who understand these issues and fight for them in the upcoming mid-term elections than they are doomed to irrelevancy that will spread across the U.S.

Link: http://www.capoliticalreview.com/top-stories/its-time-for-the-california-republican-party-to-fight/

How China and Russia are Teaming up to Degrade U.S. Influence in South America

December 4, 2017

A July 2017 meeting between President Xi Jinping of China and Prime Minister Dmitry Medvedev of Russia laid the business and political foundation for China’s Arctic Route to link with its Belt and Road Initiative (BRI) that includes a technological, strategic partnership with Russia in the Arctic; the partnership ultimately seeks to unite the two nations in the western hemisphere through Nicaragua’s ongoing construction of a replacement to the Panama Canal.

In the early 2000s, global maritime trade saw unprecedented growth when China became a main trading partner of developed and developing economies alike. The Arctic Route and BRI create a geopolitical scenario where China and Russia establish a solid foothold in Nicaragua and then another foothold in South America via Chinese investor Wang Jing’s company, HKND Group. Jing’s company was licensed by President Daniel Ortega in 2013 to build the canal and was given a fifty-year concession on its operation. The Nicaragua canal will be “three times as long and twice as wide” as the Panama Canal, creating a new shipping option between China and America’s East Coast.

The BRI along the historic Silk Road route involves sixty-five countries with 4.4 billion people affected and 30 percent of the world’s GDP. Beijing’s investment will total a trillion or more dollars. A typical project of the BRI is the Sino-Pakistan Corridor (CPEC) totaling roughly $62 billion. If the BRI connects with the Arctic Route, then it is a win-win in economic cooperation like the Shanghai Cooperation Organization (SCO), which brought clashing neighbors India and Pakistan together for peaceful development. This typifies China’s policy of stability through cultural and social integration while understanding there isn’t prosperity without security.

Once China connects the two projects with Russia, then both countries will have the ability to influence the Arctic Council and Europe, thus diminishing the power of the United States and NATO. Also, lessons learned in the Arctic can be applied to Nicaragua because there is a peaceful aspect to developing the maritime portion of BRI through the Arctic by “diversifying trade routes involving neighboring states in port projects and scientific research.”

China wants to move goods through the Arctic to Europe, which would reduce shipping distances 20–30 percent, cut down on the amount of fuel required to move the goods and decrease shipping emissions. Since 90 percent of Chinese goods are transported by sea, the anticipated reductions represent larger savings and bigger profits for domestic and foreign firms. In mid-November China launched the Xuelong icebreaker (Russia has two nuclear icebreakers) via the Northwest Passage in the Arctic to assist with linking BRI to the Arctic Route. This allows China to leave the Dalian port and arrive in Rotterdam in two-thirds the time.

There are three viable routes in the Arctic: the northeast route, the northwest route and the “north-north” route, which crosses the poles. Financially and geopolitically is where these routes find a Russian-Chinese intersection because the absence of infrastructure along with hostile weather makes the Arctic Route an expensive proposition—especially since the three routes can only be used four months out of the year. The north-north route remains inaccessible until 2050 according to scientific consensus making the other routes even more expensive.

But these routes for Russia—and China, particularly—are invaluable. As an example, the Suez Canal, which is how China now reaches Europe, takes twelve thousand nautical miles versus the Northwest Passage, a route that cuts the journey to less than seven thousand nautical miles. The opportunities are tremendous, which is why Beijing is investing in overseas ports as witnessed by China’s first foreign base in Djibouti (important to the United States and China due to the strait of Bab-el-Mandeb locality) and infrastructure at an unprecedented rate. Anything China can do to reduce shipping time and increase profit using Russian assistance will be a central node of the connection between BRI and the Arctic Route.

Russia will likely learn from and acquiesce to China in Latin America due to the advantages of the Nicaragua canal and what Beijing is undertaking economically and politically in the region. But China will learn from Russia in the Arctic and gain the ability to exploit hydrocarbons and other natural resources with glaciers now melting at a rapid pace. With Russia’s ability in the Arctic and China’s need for resources and finances to sustain expensive infrastructure this titanic project of linking both routes will be offered as an alternative to the United States post–World War II order. That means countries will be able to choose between working with the United States or a Chinese-Russian economic bloc that is keen on doing business and geopolitics at the same time.

The viability of a gargantuan canal in Nicaragua since the Panama Canal recently completed a $5.2 billion upgrade seems foolish, but not when you consider the Chinese position that gives them new shipping and canal technology while learning how to reduce research and development costs. Although some people believe the Nicaragua canal is a pipe dream, China sees it as a means to ease congestion in the western hemisphere, create new economic opportunities, shorten journeys and build pipelines, railway lines, fiber-optic cables, telecommunication lines and other infrastructure.

China wants secure routes for its goods and Russia wants to be a global influencer by using Russian oil companies and state-run banks as a credit line to struggling South American nations. Through the massive infrastructure projects that the Nicaragua canal represents, China and Russia can connect different regions of South America and push out U.S. political influence through peaceful, economic ways. According to the London School of Economics United States Centre, China’s four interests in Latin America are: securing resources, acquiring political and economic support in regional and international forums, encourage nations to recognize China instead of Taiwan, and opening new markets for Chinese goods.

Strategic investments, security and the ability to project power economically, politically and geopolitically with financial undertones are the reasons for why China and Russia will link arms in the Arctic to gain a foothold over the United States in South and Central America—and possibly the Caribbean. Investment and connectivity are the visible goals of the BRI and Arctic Route, but connectivity to the Nicaragua canal into the western hemisphere seems to the ultimate gain for China and Russia’s increased trade relationship.

Link: http://nationalinterest.org/feature/how-china-russia-are-teaming-degrade-us-influence-south-23458?lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_recent_activity_details_all%3BZFin82dLRcGAqGA%2B2L/fKQ%3D%3D

The Trump Dossier’s Implications for California

November 15, 2017

Lost in the most important foreign policy trip of Trump’s Presidency and escalating Saudi-Iran war cries are the revelations about President Obama, Hillary Clinton and the dark deeds both partook in to discredit and deceive the American people and Donald Trump. Meanwhile, California focuses on the sexuality of the Palm Springs City Council, instead of electing officials who can deal with CalPERS’ $1.4 trillion in unfunded liabilities and CalSTRS’ $200 billion of obligations in the red.
California’s Trump-hatred has made our Democratic supermajority state obsessed with a dossier and Russian collusion. We should be fixated on what Trump is getting from President Xi of China over Kim Jong-un’s nuclear arsenal that is now able to annihilate California. It will be difficult for Trump to receive any concessions on North Korea on the Asian trip while the American media led by California and its electorate bent on Trump’s destruction by focusing on the Russian red herring.
Here’s what we know about Clinton and Obama’s actions undermining Trump’s ability to take on real threats to California. With Obama, he used intelligence agencies (CIA, NSA, DNI) and the FBI as a political handgun to neutralize opponents throughout his Presidency. Intelligence agencies were weaponized against Democrats and Republicans in Congress and then candidate-Trump. This is chilling for California, because Obama’s actions are worse than anything Nixon did during Watergate. According to The Weekly Standard’s Stephen F. Hayes who wrote an in-depth article titled, “The Big Reveal: The Story of How 470,000 Documents from Osama Bin Laden’s Compound Finally Got Into the Open,” reveals a number of treasonous actions taken by Obama.
Less than 24 hours before Trump was sworn in the Director of National Intelligence, James Clapper released 49 documents that he said, “Closed the Book on bin Laden: Intelligence Community Releases Final Abbottabad Documents.” These 49 documents were only 571 out of 470,000; but why when more should’ve been released? A military intelligence briefing to reporters on May 7, 2011 at the Pentagon disclosed, “As a result of the raid, we’ve acquired the single largest collection of terrorist materials ever.” Tom Donilon, Obama’s national security advisor said, “we could fill a small college library,” with the amount of terror documents and sources from Bin Laden. Hand picked documents (one showed deep tied between al Qaeda and the Taliban) though were given to the Combatting Terrorism Center at West Point to confirm that al-Qaida was defeated and Obama’s path to reelection in 2012 was secure. This means Obama misled the country, Congress and the P5+1 partners negotiating nuclear stoppage with Iran to ensure his administration’s narrative about defeating al-Qaida and the Taliban when it wasn’t true.
The worse part is the Iran / al-Qaida deep affinity and connections to each other. Now that these documents are being examined it’s come to light that Bin Laden considered Iran as “the main artery” for al-Qaida, which led the Treasury Department to designate Iran a terror-sponsoring-entity while causing U.S. intelligence analysts to undo the assumption that Shiite radicals in Iran would never back their Sunni counterparts. Obama and his leading national security officials either lied, covered up or looked the other way so their President could have his signature foreign policy achievement – negotiated peace with Iran – used for posterity to validate Obama’s legacy.
In a 2011 interview, David S. Cohen, a senior Treasury Department official who became deputy director of the CIA said:
“There is an agreement between the Iranian government and al-Qaida to allow this network to operate. There is no dispute in the intelligence community on this. Iran was providing a core pipeline of support that included safe haven for al-Qaida members and the facilitation of travel and the flow of money and weapons.”
What this means for California is we are on our own politically and possibly for our national security if a devastating nuclear attack takes places in the near future. If California voter overwhelmingly supported Obama throughout his first election, re-election and Presidency then Trump’s tax plans will go after our high deductible state, local and property taxes as political revenge. Obama can lie, cheat and steal and he’s loved by California, but the ever-evil Trump should be vilified for locker room talk and deep affinity for Christians, conservatives and his America-first agenda.
In the world of realpolitik, international geopolitics and nuclear jockeying Iran, Saudi Arabia, Israel, Russia, China, the U.S., et al., false nuclear deals and backing the Iranians over the Israelis and Sunni allies showed the Russians, Chinese and North Koreans that America was shirking her post-World War II responsibilities under Obama’s leadership. California doesn’t realize that we have a target on our back from being the world’s fifth-largest economy because of Obama’s actions written in Robert G. Kaufman’s book “Dangerous Doctrine: How Obama’s Grand Strategy Weakened America.” Our beautiful coasts, stunning weather and world class technology and educational firms won’t save us from the Iranians, Chinese and Russians who would love to crush us according to Angelo Codevilla’s book, “The Character of Nations.” Argue your hatred for Trump all you want, but first acknowledge Obama’s sin and shortcomings that have put California in a vulnerable, precarious position.
Clinton’s actions revealed by the Washington Post are directly undermining the U.S. presidency. Hillary Clinton’s campaign and the Democratic National Committee funded a dossier on then candidate-Trump that wasn’t true, taken actions that could be construed as treason, tangled former FBI Director Mueller in a web-of-deceit causing questions to be raised on investigating the investigator. Clinton also used intelligence agencies and the FBI to her campaign’s false-benefit.
Clinton has a history of obfuscations but her undignified, feigned outrage about the dossier put together by the malignant firm, Fusion GPS and losing to Trump reads like a bad Tom Clancy novel. To make matters worse Buzzfeed published a batch of lies back in January that Clinton never disassociated from. What the Washington Post correctly reported was that the dossier had unproven claims about Trump; and the DNC and Clinton’s campaign paid for a Democratic law firm, Perkins, Coie to finance “salacious and unverified,” (James Comey’s words) evidence taken from a former British intelligence officer, Christopher Steele to write these falsehoods.
The worse part is Clinton’s still upset the media didn’t print lies to swing the election her way despite shaky allegations. Congressman Adam Schiff goes along with this nonsense while never considering the geopolitical realities described above. Discredit the president; national security and California’s safety if it means Democrats win the governorships in Virginia and New Jersey. That seems to be California’s unenlightened mantra.
What Clinton, Obama and #NeverTrumpers would ever acknowledge are these facts about the dossier, Trump and the entire hacking narrative. In a barely reported story, a group of former intelligence veterans called VIPs sent President Trump on July 24th a memo on the subject of the Russian hack and how insiders leaked it with access to DNC computers and databases. William Binney who designed the National Security Agency’s signal intelligence center debunked the entire Russian-collusion-hacking affair. Their (the VIPs led by Binney) executive summary to Trump concluded:
“On July 5, 2016 forensic studies revealed the data was leaked (not hacked) by a person with physical access to DNC computer, and then doctored to incriminate Russia. An insider copied DNC data onto an external storage device and that ‘telltale signs’ implicating Russia were then inserted. The speed of copied data after the independent forensic investigations shows the speed exceeded an internet capability for a remote hack.”
Mueller or congressional Republicans are investigating none of this. If the #NeverTrumpers have reached this level of vitriol towards Trump and it seems they have witnessed in a recent article by Anne Applebaum for the Washington Post that implies Trump’s America First movement mirrors the 100-year Bolshevik revolution and 100 million-plus people murdered by communist regimes since their Bolshevik beginnings. If Applebaum and others believe this then why not pin Russia on Trump instead of investigating Clinton and Obama.
Many establishment Republicans – Bush 41 confirmed this – voted for Clinton over Trump. If former presidents, defeated politicians, intelligence lackeys from Obama’s administration and media pundits who only vote Democrat keep this up then Trump will allow California to flounder. We are the leader in the highest taxes, worse infrastructure, poorest schools, highest inequality and abysmal business environment over the other 49 states.
This type of California Republican – from the Hoover Institute to Orange County enclaves blame Trump and won’t heavily investigate Obama or Clinton – when in actuality they should look themselves in the mirror and ask why they allowed California to go from solid Republican to solid socialist via the Democratic Party. If real investigations don’t happen to Obama, Clinton and I’d add #NeverTrumpers undermining Trump then don’t be surprised when our nation and beloved state is attacked. Our enemies are watching and grinning at our self-inflicted, nihilistic turn taking place and California should be chilled. But we aren’t and whether its our inept churches, hipster millennials or entitled baby boomers there is a reckoning that is coming our way unless we change direction and begin to support Trump whether we like it or not.

Link: http://www.capoliticalreview.com/top-stories/the-trump-dossiers-implications-for-california/

The Geopolitical Implications Of Renewable Energy

November 5, 2017

An October report from BlackRock (BLK)—the world’s largest publicly traded investment management firm—wisely states, “markets are calm but geopolitics are anything but.”

Wind and solar energy—two leading renewable energy options—could possibly become a dangerous part of an energy mix as the world continues on a downward geopolitical slope.

Both are intermittent and unreliable, and can only produce consistent energy under certain weather parameters, and neither, at this time, can be stored at scale. Renewable energy options are also tough on the environment because wind and solar energy requires large amounts of land compared to conventional, reliable fossil fuel energy.

However, renewables are consistently publicized as growing faster than fossil fuels, but that’s misleading. Unless hydroelectricity is being produced under a controlled scenario with dammed water then renewable energy is inferior to coal, nuclear and natural gas powered electricity.

While renewables don’t emit carbon dioxide, they may not, unfortunately, be the solution to lower emissions. This is where renewables can create a dangerous geopolitical climate for nations pursuing them wholeheartedly.

A new paper by the Center of the American Experiment, “Energy Policy in Minnesota the High Cost of Failure,” chronicles Minnesota’s $15 billion experiment with wind energy over traditional fossil fuels, which didn’t lower CO2 emissions and caused Minnesota’s price of electricity to rise above the national average for the first time on record.

Imagine this on a larger scale. Think Africa—where 635 million citizens are without any form of modern energy at this time. This lack of scalable, affordable energy that fossil fuels and nuclear energy provide can be construed as a direct correlation for the inherent instability of Africa, its lower economic growth, higher rates of overpopulation and lacking the wherewithal to combat radicalization by groups like ISIS throughout the continent.

The geopolitical nightmare of the reliable energy problem grows when you include figures by the International Energy Agency (IEA) that states 1.2 billion worldwide are also without power.

People like hip-hop artist Akon mean well when they make big plans like attempting to install solar solutions for 14 African countries, but there seems to be a lack of understanding some critical environmental implications of those actions, like not addressing the problems and higher costs that renewables cause. If the United States still can’t figure out how to lower electricity costs using renewable energy, then it’s doubtful that Africa can right now.

This could doom over a billion people to higher costs they can’t afford, unreliable energy and more than likely needing high emitting, coal-fired power plants as an energy backup. The smarter decision is to follow Warren Buffet’s lead by investing in fossil fuel to help avert the geopolitical disasters that renewables could cause fragile nations in need of scalable, reliable energy options. The Energy Information Administration (EIA) estimates that 77 percent of the world’s energy needs by 2040 will still be met by fossil fuels.

Electric vehicles (EVs) also run into the same geopolitical problems as renewable energy, while also requiring enormous government subsidies. This is something that Buffet discovered when he bought a controlling stake in Pilot Flying J, the truck-stop chain that sells food, coffee and diesel to truckers on U.S. cross-country hauls.

Buffet believes that EVs or autonomous vehicles won’t replace combustible engines powered by gasoline. He reiterated this stance on a Bloomberg Television appearance, stating, “Who knows when driverless trucks are going to come along and what level of penetration they have?”

Bloomberg and Bloomberg New Energy Finance (BNEF) have said that EVs will overtake cars run on gasoline by 2025 in affordability. Buffet may have read that in BNEFs fine print in these reports that explains for EV forecasts to be true, government regulators have to push taxes, mandates and publicly-funded rebates to make EVs as cost effective as a gasoline-powered vehicle.

Fiat loses $20,000 on every EV, General Motors loses $9,000 on every Chevy Bolt, and Tesla sustains profits by selling zero-emission credits to conventional car companies. If California and other countries ban gasoline-powered cars, then where would the profits be replaced? If you consider what Russia did once oil crashed in 2014, it’s not hard to imagine other countries going this EV path to make hegemonic movements the way Russia did when it annexed Crimea and pushed into Syria while aligning with Iran.

Where this becomes geopolitically troubling is when China, India, the U.K., France and even California talk of banning the combustible engine between 2030-2040. As an example, it will be difficult for California to ban gasoline-powered cars the same way it will be nearly impossible in the coming decades for the other above-mentioned countries to accomplish that goal. This British EV push is particularly troubling since they implemented Brexit and are moving away from the European Union along with the security of the post World War II order of economic prosperity.

Going back to that example, and the massive amount of energy needed to match a typical filling station, along with what an EV-only station would require when gasoline-powered cars are banned, Canadian engineer David Booth reported, “An electric filling station would have to have the 30 megawatts of capacity available, equivalent to the electricity use of 20,000 homes to supply electricity to charge 25 or 30 million vehicles in California.”

Thinking geopolitically, what happens to energy legacy industries (coal, natural gas, gasoline) during the phasing-out process? The Chinese example is particularly troubling, as they’re building the dirtiest emitting coal-fired power plants in Pakistan. India counters the China-Pakistan alliance by building the largest coal-fired power plant in recent memory on the Great Barrier Reef in Australia.

These type of energy policies lead to environmental degradation that causes wars, water shortages and business decisions that seem to be more about establishing green credibility instead of energy stability. China, Pakistan and India going back and forth using energy as a weapon is similar to how Russian state-owned energy firm Rosneft is the Kremlin’s weaponized, foreign policy instrument against the west.

Rosneft has used what the New York Times called, “Rosneft’s Venezuela model,” to support belligerent governments in Syria and Iran while driving a wedge between NATO, Turkey and the West. Going with unstable, intermittent energy (renewables) and costly transportation options (EVs) is a means for geopolitical influence and counter pressure points to be used against peaceful nations and governments.

Energy is the building block for thriving, human flourishing to exist. Stable, reliable, scalable energy that coal, nuclear and natural gas provides can be used as a counter to nations like China, Iran, and Russia (CIR) that seem to be on a hegemonic march to acquire additional energy resources. As popular as renewable energy and electric vehicles are at this time, they can be used geopolitically against peaceful nations. This weaponization of energy can be stopped by western-aligned nations embracing the abundance that fossil fuel provides and bringing over a billion people out of energy poverty.

Let’s keep working on futuristic energy and transportation, but stop playing energy checkers while CIR-nations play energy chess.

Link: https://oilprice.com/Geopolitics/International/The-Geopolitical-Implications-Of-Renewable-Energy.html

How Should the California Republican Party Respond to Steve Bannon

November 3, 2017

California doesn’t have any easy races for Republicans to win. So the question becomes: is it better to have a Representative who somewhat votes Republican or to be a purist? The challenge as presented by Steve Bannon’s fiery, populist speech at the recent California Republican Party (CPR) convention should give pause to Republicans across California.

Bannon’s arguments play out against a roiled political landscape.
With fanfare lauded by media outlets like CNN and The National Review Republican Senators Jeff Flake and Bob Corker both announced they won’t seek re-election. What these media concerns failed to illustrate was both Senators would’ve lost their respective Republican primaries, but why? Each has consistently voted with Trump on policy issues – even the “skinny repeal,” but Bannon targeted them and other Republicans for defeat when he recently said in an interview: “The days of establishment Republicans who oppose the people’s ‘America First,’ agenda are numbered.”

Bannon wants to take the fight to Democrats and Republicans who work with them. But somehow the CRP has to reach the very voters Bannon wants to crush while protecting the party and President Trump. The CRP has to reach out to Democrats and Independents who lean Democrat by focusing on how California Republicans can work with the Democratic Party that helped win the Cold War and helped establish the deep-lasting ramifications the post-War War II order put in place. This becomes increasingly difficult as Bannon takes the fight to Democrats and incumbent Republican alike. This leaves the CRP in a quandary that Bannon needs to help them solve if he keeps attacking Republican lawmakers.

But this “rift,” in the Republican Party that engulfs the CRP comes across as an exercise in narcissism. Problems are reduced to riling up crowds, and intelligent, thoughtful policymakers are relegated to the sidelines. Bannon also has to answer for his isolationist rhetoric versus Anders Fogh Rasmussen’s argument that the world needs America to be the policeman; otherwise China, Russia and Iran will fill that void.

Bannon hasn’t addressed that issue though the deeply respected David P. Goldman, Spengler, wrote a glowing piece for Asia Times about Bannon’s worldview, strategic insights and complete understanding over what is causing America and the West’s decline. If that’s the case then Bannon should work on those issues with the CRP and take on California and America’s staggering debt that has become an economic-shibboleth. With California schools and infrastructure in abysmal shape and our debt exploding, Bannon could help shape a message that brings California Republicans back to the forefront.

Still, Bannon can’t be dismissed when he asserts that when Corker and Flake fight Trump on the way out of office there motivation doesn’t seem to be country or party first –instead of explaining how their actions help America overcome the greatest geopolitical challenges facing the country and California since the beginning of WWII. These challenges and Bannon fighting them have relevance since California is being targeted by North Korea’s nuclear arsenal.

What the CRP needs to be fully aware of though are the risks associated with taking Bannon’s influence and elevating it to party kingmaker. In 2010 the Republican activist wing of the party nominated candidates for seats in Nevada and Delaware (conservative, Tea-Party nominees) and lost to liberal Democrats that it can be argued weakened America through defense sequestration, the Affordable Care Act tax platform and having a poor understanding about what would rise (ISIS) to fill the void by leaving Iraq.

This activist wing, which Bannon now leads, has to answer for these decisions. The CRP should focus on helping to maintain Republican’s slim majority in the US Senate, reversing the Democratic super majority in the California Assembly and building a ground game that includes higher Republican voter registration and walking door-to-door with candidates in 2018. This becomes harder with incumbents leaving because of Bannon’s influence.
If Bannon wanted to take Senator Corker to task it should’ve been over his Iran nuclear deal vote, and what were his reasons for aiding the world’s largest state sponsor of terrorism. Those are issues to take someone like Corker to task over instead of escalating petty feuds that engulf California Republicans at all levels.

Now that skirmishes are moving into open political, intraparty warfare, new questions are raised about whether the Republican majority can repeal the Affordable Care Act, rebuild the military and pass sweeping tax reform by rewriting the code. Any of these issues could consume Congress for its term, but Bannon and the activists are destroying hopes for delivering policies that can grow the economy, deliver billions back to many Americans and ensure that another Syria doesn’t happen under Trump’s watch. The Republican Congress is consistently dropping the ball internationally and domestically. It doesn’t need more fuel added to their fire when it is obvious they weren’t ready to govern. Bannon has that part correct but it also backs the CRP into a political corner that is hard to recover from by 2018.
The CRP should tread with caution in its dealings with Bannon and when seats can be won that should be the top priority, but this back and forth is bad for the CRP, bad for the Republican Party and bad for the US in general. Anger, resentment and visceral hatred should be reserved for policies that destroy the country. That is why Republicans got elected – to reverse the last eight years – otherwise our enemies around the world are watching this fiasco and contemplating when they can strike America and California. Mr. Bannon, I hope you are listening and adjusting your political warfare accordingly.

Link: http://www.foxandhoundsdaily.com/2017/11/how-should-the-california-republican-party-respond-to-steve-bannon/

Obama set precedent for abusive surveillance

October 16, 2017

Donald Trump was ridiculed in March when he made this tweet: “Terrible! Just found out that Obama had my ‘wires tapped’ in Trump Tower just before the victory. Nothing found. This is McCarthyism.”

CNN and MSNBC dismissed the US president’s allegations, but now CNN has reported that the Federal Bureau of Investigation (FBI) did indeed wiretap Paul Manafort, manager of Trump’s 2016 election campaign, with the likelihood that his conversations with Trump were unmasked as well. It’s possible then-president Barack Obama didn’t know this was happening, but even so, such revelations must be raising the eyebrows of allies such as South Korea, Japan, the Philippines and Vietnam. Were they also being spied on by the Obama administration’s surveillance apparatus, and if so, why?

It sows doubt in the minds of Asian leaders moving forward when they consider assisting the United States with the North Korea crisis, the South China Sea dispute and the US-led world order that has been in place since the end of World War II.

Top Obama intelligence and national-security officials who wiretapped Americans and foreigners without proper Foreign Intelligence Surveillance Act (FISA) court warrants haven’t been thoroughly questioned about why they took these actions.

High-ranking Obama officials allegedly caught abusing intelligence practices included his United Nations ambassador Samantha Powers, who supposedly tried to “unmask American citizens on a daily basis”, former Central Intelligence Agency (CIA) director John Brennan, and former national security adviser Susan Rice. Former director of national intelligence James Clapper and former acting attorney general Sally Yates have both admitted that they reviewed communications of political figures secretly collected under Obama’s presidency.

Among the most damning revelations is the acknowledgement that US intelligence agencies secretly monitored conversations of members of Congress while the Obama administration was negotiating the Iran nuclear deal.

Seemingly, US intelligence agencies had been politically weaponized, and that has far-reaching implications for how Asian allies will trust the CIA, FBI, National Security Agency, US Justice Department and the White House itself.

These actions caused a FISA Court judge to accuse the NSA of “an institutional lack of candor”.

So, is it outside the realm of possibility that Asian or other allies working with the US on the North Korea problem might ask if they are being spied on without their knowledge by the Trump administration? Not at all, since the precedent has been established.

US allies in Southeast Asia should be asking what the US did or is currently doing to undermine their governments and policies through secret wiretaps and surveillance. With China on the march throughout Asia, these actions have consequences that affect billions of people.

The bigger issue isn’t Trump’s tweets saying Obama spied on him, rather it’s that foreign and US media along with quasi-news sites have continually published false and misleading quotes and stories denying his allegations. What needs to be reported is that Asian allies that have the most to lose from North Korea’s nuclear program won’t trust the US any more to stick by its agreements or deal with them truthfully, and might even undermine them through illegal surveillance activities.

In light of the geopolitical earthquakes taking place in North Korea, Russia, Iran, Syria – and the brewing war between Shiite and Sunni interests in the Middle East – why would any ally, or current foe that could be turned into an ally, trust the United States?

Asian allies spread the blame all around when it comes to US intelligence incompetence: the deep state, Obama administration holdovers, Trump tweets and enemies or unchecked intelligence agencies. But privacy concerns for domestic and foreign interests coinciding with abusive intelligence activities are ruining the United States’ ability to present cogent intelligence to Asian allies working against the North Korea threat, or dealing with the disputes in the South China Sea.

FISA warrants, which originally were meant to target “foreign spies inside the US”, now have far-reaching legal power and an entire surveillance apparatus. FISA Section 702 as an example allows collection of data from Google, Facebook and other social-media sites if it is deemed that a foreign power or individual is under investigation.

Asian countries lead the world in technology, mobile=phone use and social-media savvy, which puts them directly at risk of US spying. The FISA law expires on December 31, and Asian allies should begin furiously lobbying the Trump administration and Congress against continued abuses affecting their countries and their governments’ sovereignty.

If this unlawful behavior moves forward unabated, rogue regimes across the world will continue to believe the US and its allies are weak and ripe for the taking. Vladimir Putin, Xi Jinping, and Iran’s Islamic Revolutionary Guard will take advantage of apparent US weakness to detriment of America’s allies.

Top current and former US administration officials seem satisfied to let this behavior slide without thinking of the geopolitical consequences. Instead of mocking President Trump’s tweets, especially those that happen to be true, consider that Asia may find it necessary to make its own pivot away from the US and the post-World War II order in light of these intelligence abuses.

Link: http://www.atimes.com/unmasking-president-barack-obama/

Should the US decertify the Iran nuclear agreement?

September 27, 2017

As North Korea gets closer to being able to strike the United States with a long-range ballistic missile, there is a correlation between the former North Korean nuclear agreement delivered by president Bill Clinton and the Iran nuclear deal negotiated by president Barack Obama.

Some of America’s allies are worried the US will either strike North Korea or they will have to live with an unstable nuclear regime in Pyongyang. After President Donald Trump’s tough address to the United Nations General Assembly this month, in which he accused Iran of being a “murderous regime,” many are left wondering if Trump is foreshadowing what is to come for Iran. Observers in northeast Asia are wondering whether the US will allow Iran to go nuclear, a fear shared by Israel and Gulf state allies, as it pertains to North Korea as well.

These concerns are not misplaced – especially since Trump has said he has made a decision about whether to stay in the Iran deal or to decertify the agreement.

In 1994 the Clinton administration signed the “Agreed Framework” that would “freeze and then dismantle” North Korea’s nuclear program and promised Asian allies – specifically South Korea – that they would be “better protected.” The deal collapsed because of North Korea’s duplicity and failure to keep its commitments. This failed agreement led to North Korea acquiring a nuclear bomb and it is now coming closer to having a submarine-launched nuclear missile.

The question the US and Trump will need to ask is whether the flaws in the Agreed Framework mirror those of the current one with Iran.

In his address to the UN General Assembly, Israeli Prime Minister Benjamin Netanyahu stated that unless the “sunset clause” was taken out of the agreement, then Iran would become the next North Korea.

The geopolitical ramifications of the US pulling out of the Iran deal, which was agreed by all five members of the UN Security Council plus Germany, could sour diplomatic relations further with Europe, Russia and China. Iran to its credit has kept to the letter of the agreement, but what geopolitical actions has it taken since the deal took place? And will US efforts that have failed in the past to stop North Korea from attaining nuclear weapons prove any more successful with Iran?\

Iran’s young population is eager to join the international community, and this could possibly make the current and future regimes more susceptible to pressure and incentives
One ray of hope is that the Iranian population is more dynamic, educated and open than North Korea’s. Iran’s young population is also eager to join the international community, and this could possibly make the current and future regimes more susceptible to pressure and incentives. But make no mistake – no Iranian government is going to give up its nuclear ambitions unless properly motivated, either militarily with a pre-emptive strike or diplomatically and economically with a complete welcome into the US-centered “world community” with a full removal of all sanctions.

In the meantime, aided by Hezbollah, Iran is now on a march through Lebanon, Iraq and Syria aimed at challenging the current US-backed hegemony. This strategic expansion has allowed the Iranian military to modernize by purchasing new arms from Russia and China, while allegedly expanding its cyber capabilities and organizing more than 50,000 Shiite militia fighters to keep President Bashar al-Assad in power in Syria.

Meanwhile, Iran’s growing ballistic-missile program has its opponents in the Middle East on edge. Iranian President Hassan Rouhani warned in early August in an address to Iran’s parliament that “Iran could restart its nuclear program in a matter of hours” if the US imposed further sanctions in violation of the multilateral 2015 nuclear deal or backed out of it altogether. These fears led General Joseph Votel, commander of the US Central Command, to claim this year in testimony to the US Congress: “Iran is the most significant threat to the Central Region and to our national interests and the interests of our partners and allies.”

While Trump has said he has made his decision on the nuclear deal, administration officials are still working on a “comprehensive policy review” of Iran and the supposed threats posed by Tehran. The fear is that whatever strategy emerges on US recertification of the nuclear deal, it won’t stop Iran on its march toward a “Shia crescent” in the Middle East.

The precursor to Trump’s decision should be the evolving challenges coming from Iran and a response that protects the US and its allies. Otherwise, the myriad good and bad reasons to certify or decertify the nuclear deal will be lost in the confusion.

The US has an explosive decision to make in the coming months.

Link: http://www.atimes.com/us-decertify-iran-nuclear-agreement/

Is China capable of showing restraint as the US has with North Korea?

September 21, 2017

number of well-meaning articles have been written about how China isn’t understood regarding its stance on North Korea, or that the West can no longer deal with China’s rise. However, they completely misinterpret why the United States, India, Japan, Australia, Vietnam, Taiwan, Bhutan, the Philippines and the entire Asian hemisphere is considering joining a nuclear arms race against North Korea since China will not control its proxy, or stop oil exports to North Korea or the ascent of Pyongyang’s nuclear program.

Meanwhile, many would argue that North Korea should have nuclear weapons as the ultimate deterrent against the US, Japan, and even China itself. If Ukraine had kept its nuclear arsenal, Russia would never have dared annex Crimea and continue to threat Ukraine’s eastern borders and territory. The Iranians could make the same argument: Look at what the Americans did to Iraq – we don’t want the same thing to happen to our regime, government and way of life.

US President Donald Trump this week gave a speech to the United Nations General Assembly in which he called North Korea, Iran and Venezuela grave threats – but particularly North Korea and the 2015 nuclear deal agreed with Tehran by the US administration of Barack Obama. Trump called that deal an embarrassment to the US, since it could put Israel in the horrible position of having to use its own nuclear arsenal against Iran and its proxies in Lebanon, Yemen, Iraq and Syria.

Critics are blasting Trump for his General Assembly speech, and asking why he could not be conciliatory like French President Emmanuel Macron, who supposedly gave “the exact opposite speech to the General Assembly”. But why should he? No one has ever called on France to be the world’s policeman against hegemonic regimes in Iran, Russia, North Korea and China the way former NATO secretary general Anders Fogh Rasmussen did in 2016.

Imagine Asia without the US Navy’s Seventh Fleet as a deterrent, buffer and protector in the South China Sea disputes. The alternative would be trillions of dollars worth of commercial activity controlled by Communist China to harass Asia with economically and militarily. And the post-World War II worldwide prosperity forged by the US and its allies would be over.

As an example of China’s recalcitrant behavior, the European Union begged China early this month to open up their its to forge closer ties, but the answer was no. Is that the action of a country that wants to rein in North Korea or be a good international citizen? No it isn’t, and the Chinese continue to say one thing and mean another – just as they do with North Korea to the world’s detriment.

Chinese President Xi Jinping says he wants to lead the world away from poverty and war and toward economic liberalization because the US has backed away from that commitment under Trump. Furthermore, he wants to be a progressive leader against environmental devastation by promoting the false Paris Climate Agreement, which won’t do one thing to alleviate Chinese pollution, or the world’s emissions for that matter.

If Xi wants to lead the world, then he should start by getting rid of North Korea’s nuclear-weapons program. China could solve this problem immediately, but it feels that if it did so it would have a failed state on its border. That concern is understandable, but what’s worse, Korea starting a nuclear war or a failed state on your border? Most would say a nuclear war.

Far from being held back, North Korea’s economy is growing with China’s abundant assistance, and who is to say the North won’t become an economic powerhouse like South Korea? But China still clings to its historical World War II grievances, and it infuriates the Communist leadership that the US is still the top economy and military power in the world.

So consider what China would have done if the tables were reversed and, let’s say, South Korea, Japan, India or the EU were continually stating that they were going to blow China off the map. What if all of these US allies were authoritarian dictatorships that brutalized their citizens and hijacked the European or Asian hemisphere with threats to more than a billion Chinese citizens while the US did nothing? How would China react? Maybe Xi would also give an angry speech to the General Assembly the way Trump did.

Moreover, what if Trump or other officials in the US government or the North Atlantic Treaty Organization said this was China’s problem and not their concern? Then, what if US largess delivered the only economic lifeline available to the above-mentioned rogue regimes – allowing them unfettered access to military technology and energy resources – which led to nuclear weapons and a fleet of long-range missiles?

What if North Korea and China were both freedom-loving, democratic, benign regimes that housed some of the largest companies in the world the way Japan and South Korea do currently? Would China sit back and allow crazed US-allied leaders to threaten nuclear obliteration of Pyongyang, Hong Kong or Beijing – while knowing this had gone on for decades without any serious consequences?

These were the actions taken by US president Bill Clinton and former secretary of state Madeleine Albright when they offered North Korea billions in economic relief while being lied to their faces. Would China have done nothing to prevent further duplicitous behavior? That’s difficult to imagine, yet the last two US presidents tried to find peaceful solutions: Obama preached “strategic patience”, and George W Bush tried engagement and negotiations that didn’t work.

American presidents and the US Congress have been vexed by North Korea and China for decades now. Would China have allowed its leadership to be lied to, vexed and harassed for decades without any consequences while the world’s media called them every name in the book and questioned their sovereignty to protect their nation and citizens?

Article 51 of the UN Charter allows for self-defense. The biggest questions China’s defenders aren’t asking is this: How long would China allow an unhinged, tyrannical, infantile dictator to point nuclear warheads at its major cities while allowing the US to feign complete ignorance its happening all the while propping up its rogue allies economies? Probably not very long.

And what if for good measure the Pentagon used US proxies as deterrents to keep the Chinese off balance in the South China Sea and Asia at large? It’s laughable to imagine this scenario, because China would have already engaged in pre-emptive and preventive wars. But somehow the US, Japan, South Korea, India and all of Southeast Asia are supposed to sit back and let this take place without responding.

If there’s one lesson learned from World War II it’s that the Americans went crazy. They turned their economy into one giant war-machine factory that supplied mechanized vehicles to the Soviets and enough aircraft carriers, fighter planes and ultimately nuclear weapons to cripple and obliterate Imperial Japan. The same could be said of the attacks of September 11, 2001: The US went nuts and is still going after jihadis 17 years later.

Charles Krauthammer said it best in a 2004 speech to the American Enterprise Institute titled “Democratic Realism: An American Foreign Policy for a Unipolar World”. He described how Americans want to be left alone to eat at McDonald’s and travel to Las Vegas and the Grand Canyon while selling stuff around the world, hoping everyone wants to do the same thing. If Xi doesn’t clip the wings of his North Korean proxy, then the McDonald’s-chomping Americans and their allies will go crazy. History proves this fact.

If geopolitics is teaching us anything it’s that enemies become friends during war. And a nuclear war would make the most Trump-hating Americans want revenge if NATO or the US were attacked.

Two world wars should have taught the world that America will fight back, and Chinese leaders are smart enough to understand history. When America got serious in Korea, China felt the brunt of North Korea’s unwise decisions. Let’s hope it doesn’t repeat the same mistake by letting Kim Jong-un launch nuclear weapons at the US or its allies. And its fairly certain that’s exactly where we are headed unless Xi and his officials stop this madness.

Link: http://www.atimes.com/china-capable-showing-restraint-us-north-korea/

The Cautious British Example When It Comes to Electric Vehicles

September 15, 2017

It has become raison d’être that electric vehicles (EV) will keep increasing in use without considering serious factors that could hamper their growth. The British electrical grid example and the growth of EVs should bring pause to California consumers, investors, Governor Brown and the Legislature promoting there unconstrained usage.

According to the British National Grid, “the growing use of electric vehicles could increase electricity peak demand by 3.5 gigawatts (GW) by 2030.” This will occur since sales of EVs are expected to be more than 90% of all British car purchases by 2050 highlighted in its Future Energy Scenarios Report. The British government mandated in July that all new petrol and diesel cars would be banned by “2040 to reduce air pollution and assist cutting carbon emissions by 80% by 2050 from 1990 levels.” Moreover, the National Grid stated:
“Peak electricity demand could even rise by as much as 8 GW by 2030 without ‘smart charging’ during off-peak hours and 18 GW by 2050 as the pace picks up to decarbonize.”

Where all interested parties should be concerned is the cost to achieve the above mandates. Britain will need billions of pounds of new investments into new power plants (either renewable or fossil fuels), transmission lines, smart grid network technology and EV charging points and stations throughout the country. Otherwise, Britain could potentially suffer power shortages when EVs overtake fossil-fueled vehicles. California’s electrical grid already can’t handle additional energy from spikes in renewable energy much less the additional stress of adding millions of EVs mandated inSB 100.

Britain like California has the technology to support millions of EVs over the next two to three decades but drivers would have to recharge their vehicles overnight or face billions in costs. This is when spare capacity on the grid is abundant and that is typical for most developed nations pursuing EV policies. Huge infrastructure costs could be kept down for British and California drivers if they can be persuaded to charge mainly at night.
The British grid operator though still faces local network issues when consumption of electricity to accompany EVs is expected to rise 15% in overall demand and 40% during peak times. Johannes Wetzel, energy markets analyst at Wood Mackenzie surmises the dilemma for the British and all California EV investors, consumers, governments and taxpayers when he recently said:
“It will be a challenge and a lot of investment is required – in generation capacity, strengthening the distribution grid and charging infrastructure.”
EVs sales are expected to reach 20 million in Britain by 2040 whereas today they have roughly 90,000 on the road. But Britain already faces a “power supply crunch,” because older nuclear reactors and coal-fired power plants are being phased off the grid by 2025. California is following similar policies. Yet no one at the National Grid, Parliament or the Prime Minister’s office has stated how this power will be replaced to support a huge surge in electricity demand caused by widespread EV adoption. California hasn’t come up with widespread EV adoption policies as well.
The British could attempt to build natural gas plants, which are cheaper, faster to build and allow grid flexibility, but that isn’t being pursued since they produce carbon emissions. Renewable energy has problems when it comes to EVs because of supply and demand problems. Solar panels for example produce energy during the day, but they don’t at night when the British and California drivers would need to recharge their EVs to avoid large infrastructure costs.

Though estimates can vary from British government figures of EV adoption, analysts surveyed by Reuters said, “Anything up to an extra 50 terawatt hours (TWh) would be needed for them (EVs) by 2040.” Again, nothing from California grid operators or policymakers has been pursued this vigorously to ascertain how much additional grid capacity would be needed to meet millions of new EVs on California roads. And since California’s economy is larger than Britain’s the costs and need for additional electricity could be significantly higher.

Off-peak grid incentives could be the solution by encouraging charging only at night, “when demand is currently only about a third of during peak periods.” The transition to EVs would then pose no significant stress to the national grid. But the British government would need to make sure off-peak grid demand is properly incentivized and enforced. California would need to do the same thing.

This can be achieved since Britain is making significant progress in energy efficiency when there overall peak power demand fell around 14% between 2005 and 2016; and the economy also grew around that same amount as well. This bodes well for British EV expansion without significant costs associated with that growth. This could also mean there is slack in the National Grid’s transmission and distribution system that could take additional stress during peak power demand. California also leads the US in energy efficiency, which bodes well for EV use.

The National Grid, which also operates the British transmission system said:
“The rise in peak demand can be kept up to 5 GW if there is smart charging and time-of-use electricity tariffs.”
However, the British National Grid will need off-peak EV charging essential to keep costs down and stress on the grid to minimum levels. What happens though for the British and California economies and investors if peak demand isn’t enforced, smart grids aren’t widespread and energy storage isn’t technologically feasible on a widespread, affordable basis to support increased power usage during peak hours for EVs?

The Scottish and Southern Electricity Network tested this theory and found “uncontrolled EV charging would double the usual domestic load to 2 kilowatts (kW) when using a 3.5 kW charger.” At this time nothing of this scale has been attempted to test California’s grid.

To meet these demands Britain has opened the largest gas plant in two decades at 884 MW that came online in Manchester last year but the costs were over 700 million pounds. Unfortunately, two additional natural gas plants near Manchester have stalled because the developer has been unable to raise the dual project’s 800 million pounds required for them to be built. Additionally the risk with more fossil fuel being used to meet additional EV needs could mean that Britain emits more greenhouse gases with widespread EV adoption than conventional vehicles. California would also run into the same problem and have to overcome AB 32 that set specific limits on emissions.

Nuclear is also an option to meet growing energy needs, but Britain has struggled to have nuclear projects built since they also have high costs. EDF’s 3.2 GW Hinkley Point C nuclear plant won’t open until 2025 at the earliest since these costs fall on the private sector. To address these concerns British energy regulator Ofgem has been called upon to ensure multiple power sources, infrastructure to support EVs and more interconnectors are dispersed throughout the country to offset these costs. California is vigorously pursuing closing the Diablo Nuclear Power Plant that is a source of clean, green energy without noting how they will replace this lost power.

The final reality of mass EV adoption deals with jobs and profits. In early September, China also pledged to outlaw the combustion engine though the Chinese government didn’t say when. Daimler the builder of Mercedes gave details about their EV program that should give investors; policymakers and advocates of mass zero-emission motoring stop and take notice. Daimler warned that:
“Planned electric Mercedes models will initially be just half as profitable as conventional alternatives – forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs.”

Daimler boss Dieter Zetsche also recently told reporters, “In-house production is almost irrelevant to the consumer.” If German jobs are threatened then British, Chinese and California jobs could also be eliminated. The factors of job elimination, infrastructure upgrades and the tens of billions it will take to have EVs overtake the combustible engine should give constituents and elected officials grave concern. Private energy investors in particular should understand the costs and tradeoffs before investing in the British, California or other developed nations EV market. Going down the EV path should be preceded with caution.

Link:http://www.foxandhoundsdaily.com/2017/09/cautious-british-example-comes-electric-vehicles/

Rational actors – including China – must rein in Kim

September 11, 2017

North Korea is nearing a nuclear threshold from which few ever return – a nuclear-tipped ICBM capable of hitting targets in Asia and its supposed arch-nemesis, the United States.

Pyongyang’s weapons capability is now undeniable. But the bigger question when it comes to any nuclear-armed nation is how rational its leaders are. In the case of the former Soviet Union, its leaders were rational actors, but when it comes to the North Koreans, many policymakers or interested parties would have their doubts.

So who believes Kim Jong-un is a rational actor? Does his newfound capability pose a threat, or is he only reassuring his own existence?

Russia, China, France, Britain and Israel could annihilate their perceived or real enemies with their nuclear arsenals, but no one believes Vladimir Putin, Xi Jinping, Theresa May, Emmanuel Macron or Benjamin Netanyahu would launch. Can the same be said of the North Korean regime?

Foreign Affairs argued convincingly in a recent article that Kim’s father Kim Jong-il could be “informed and eminently rational, in the estimation of world leaders who actually dealt with him, such as former US secretary of state Madeline Albright, former South Korean president Kim Dae-jung, and former Japanese prime minister Junichiro Koizumi”.

That’s doubtful; Kim Jong-il was about as rational as Josef Stalin. Both were homicidal maniacs and liars who deceived any ally or country wanting to bring them into the international order. But current US Central Intelligence Agency director Mike Pompeo believes Kim Jong-un is being rational when he goes against US President Donald Trump, Asian countries, Putin and even his main benefactor, Xi.

History should be Pompeo’s guide, and history shows that North Korea will use whatever means necessary to acquire further weaponry to threaten Asia, for the simple reason that it needs hard currency to continue hosting the most repressive regime in the world.

A recent analysis by SBS News’ Kelsey Munro laid out two basic scenarios for the world consenting to North Korea’s current trajectory: “Accept a nuclear North Korea or prevent it from becoming nuclear as soon as possible. But geopolitical experts seem to be split on which scenario is the more sensible one to follow.”

The scenarios play out this way – if acceptance happens, then war is averted; moreover, this stops hundreds of thousands of casualties from happening, the entire Asian economy isn’t disrupted and oil prices don’t skyrocket. If compliant acceptance is the route and Pyongyang continues its aggressive nuclear push, then more than likely Japan, South Korea, Taiwan and possibly the Philippines and Vietnam all go nuclear under US guidance or under their own sovereign jurisdiction. This pushes the world closer to a nuclear war, and now China has historic enemies with nuclear capability, which should be avoided at all costs.

UK-based consultancy Wood Mackenzie reported last month: “An open military conflict in Northern Asia would disrupt more than a third of global seaborne crude-oil trade. Some 65% of North Asia’s production and refining capacity would be crippled that is located in China, Japan and South Korea.”

Unless China stops supporting the Kim regime, proxy war seems inevitable. And sanctions haven’t worked because China has allowed them to be flouted while North Korea’s economy continues to grow.

These actions have caused China to stock up on crude oil, and its oil majors will watch the North Korea predicament play out with grave concerns. Certainly China will watch its economy crater if North Korea launches a nuclear weapon, and the humanitarian disaster will overwhelm the Xi government.

China is still the game changer when it comes to North Korea, but there are influential voices in the Trump administration calling for a military solution. US National Security Adviser H R McMaster asserts that no one can be deterred – particularly North Korea – using classical deterrence theory, since “the kind that prevented war with the Soviet Union does not apply to a regime that imprisons and murders anyone who seems to oppose that regime, including members of the leader’s own family, using sarin nerve gas in a public airport”.

Within the Trump administration, McMaster is the leading advocate for military options on the Korean Peninsula. None of his counterparts in Southeast Asia have strongly countered his narrative. Few would content that McMaster is nihilistically reckless or seeks brutality.

Others keep calling for direct negotiations, but that tired channel hasn’t worked, and those folks keep forgetting the history of negotiating with, buying off or placating the Kim regime. “Economic engagement” is another buzzword or catchphrase that supposedly will deter the North Koreans’ current trajectory, or at the very least “cap their capabilities and render them less threatening by reducing hostilities”.

Only China can inflict direct economic pain on North Korea by shutting off the border, closing down all imports from and exports to its neighbor, and wholeheartedly supporting the latest round of United Nations sanctions. Per Reuters these include imposing an oil embargo, banning its exports of textiles and the hiring of North Korean laborers abroad, and subjecting Kim to an asset freeze and travel ban.

It is time for the Chinese to inflict blunt pain on North Korea, otherwise this will be their mess and their fault entirely. If Xi gave the word, this made-up crisis would be over in a week, but since China still holds World War II grievances, and keeps playing geopolitical chess with its proxy as a counter to perceived US hegemony in the Asian hemisphere, this crisis will only continue to grow more dangerous.

According to Walter Russell Mead, the US is at a crossroads. Mead states that the United States has “two deeply undesirable alternatives”. On the one hand, it can “abandon seven decades of national strategy and risk growing instability in Asia; on the other, it can risk an ugly and dangerous war with a vicious and unprincipled opponent”.

In other words, Mead and other leading experts won’t make the hard call that needs to be made: Prepare for war with North Korea and even China. That is a horrific thought but no one has any better options other than waiting for North Korea to come to its senses while possessing intercontinental ballistic missiles (ICBMs) and eventually marching toward acquiring submarine-based nuclear weapons, the most deadly part of a nuclear triad.

Mead and others like him around the world won’t use sober language and the variables of history, human nature, ideology and regime type to come to the conclusion that China won’t make North Korea change and Kim’s regime will only grow deadlier as each day passes.

For the sake of billions of people and the threat of generations of progress coming to a grinding halt, let’s hope the Chinese, Russians, Asian allies, and the US come to their senses and prepare for war – at least economic war – to stop Kim Jong-un’s nuclear ambitions.
Link: http://www.atimes.com/rational-actors-including-china-must-rein-kim/

Can the EU Shake Its Russian Energy Habit?

September 4, 2017

In 2005, Poland Foreign Minister Radek Sikorski compared Nord Stream AG – a conglomerate of European firms and the Russian state-owned energy company Gazprom proposing to build the world’s longest undersea natural gas pipeline – to the Molotov-Ribbentrop Pact (MRP) of 1939. The Pact of course was a non-aggression arrangement between Stalin’s Russia and Hitler’s Germany which eventually led to the joint invasion and takeover of Poland.

Warsaw regarded the first Nord Stream (NS1) as a geopolitical risk because it would unduly increase the sway Moscow and Berlin held over European domestic gas supplies. As Russia has become more aggressive in recent years since the annexation of Crimea and intervention in the Syrian civil war, Mr. Sikorski’s fears of Russia weaponizing its natural gas supplies and pipelines now seem prescient.

Sovereignty issues could also be in play for Europe the same way Myanmar’s energy’s crisis could be solved by purchasing electricity from state-owned Chinese energy firms. Preliminary discussions have outlined how buying Chinese electricity could solve extended energy blackouts at the cost of sovereignty by submitting Myanmar to undue Chinese influence.

Europe could also face this same dilemma if Nord Stream 2 (NS2) is built. The pipeline is currently projected to be finished in 2019.

The consortium of companies that built NS1, and now NS2, would connect the Russian city of Vyborg to Greifswald. This allows Gazprom to service European gas markets directly through Germany, which has turned Germany into a major gas hub. It also ensures supply consistency should the Ukraine crisis flare up; NS2 would keep furnaces running in northern Europe winters and allow Moscow to isolate Kiev’s energy supplies.

EU officials initially dismissed, even mocked Mr. Sikorski’s comparison of the Nord Stream to the MRP as a gross exaggeration. No EU official is saying that now. NS 2 will bring Russia and Germany even closer together with major consequences for Europe’s energy supply portfolio.

This has caused increased energy-related stress for Central and Eastern European nations, including Slovakia. Russian arm-twisting is nothing new, and President Putin has proved willing to weaponize his country’s energy supplies in order gain political and territorial concessions.

The economic benefits of NS2 are hard to discount. The pipeline will cost $11.8 billion to build; however, it will double Russian gas supplies to central, southern and Eastern Europe. Moreover, this will weaken Ukraine’s gas pipelines to European markets and create a rift between EU members that favor the project and those that oppose it. The largest issue is that this will generate hundreds of millions, even billions in revenue for Gazprom, which in turn help to directly subsidize Moscow’s foreign policies.

The wars in Crimea, Eastern Ukraine, Syria and the expansion of the Black Sea Fleet were enabled in part by revenues provided by NS1. Propaganda aimed at undermining German elections, anti-European parties funded by Russia that push to dissolve NATO, restrict immigration, and disband the EU entirely will all be potentially on the table with the monies generated from NS2.

The European consensus is that steps can be taken to mollify Russian geopolitical aims using energy by expanding the use of renewables and unconventional energy. But there are problems that have been well-documented with relying on renewable energy over fossil fuels. Vaclav Smil has written a new book titled, Energy and Civilization, where he states:

“That any transition to renewables would take far longer than most ardent proponents acknowledge. With nearly two billion people still relying on wood and dung for heating and cooking, renewables in 2015 after decades of heavy government subsidies, solar and wind power still provided only 1.8% of global energy.”

A recent piece in Foreign Affairs outlines some other problems Europe would run into relying heavily on renewables over Russian or some other imported gas to meet their energy needs. Since solar and wind are “too diffuse and unreliable, nor can hydroelectric power achieve energy parity to replace fossil fuels,” this leaves Europe reliant on Russian natural gas.

Europe could plausibly consider cutting energy consumption, but the past 40 years per capita energy consumption has risen globally. Without accessible, reliable, scalable energy that natural gas provides to Europe – European standards of living would drop.

There are other geopolitical headaches that can result when renewables are used over fossil fuels. A new report from the Belfer Center illustrates the geopolitical problems of rare earth minerals mined for renewables in some of the most dangerous, vulnerable countries in the world: “Cobalt in the Democratic Republic of Congo, indium in China, lithium in South America” are all examples of the Europeans trading the Russian geopolitical problem for potentially bigger human rights issues in other regions. Clean technology isn’t necessarily clean, in the same way a diamond could well be a “blood diamond.”

Russian natural gas will naturally take on the role of a comeback, transitional fuel. Furthermore, the EU’s domestic gas production is falling – particularly in the Netherlands – which will lead to increased imports from Russia via Germany. Those reasons alone will mean greater Russian market share of the German and EU energy market. Unless Europe finds a way to expand domestic fossil fuel production, it should diversify its natural gas holdings by building liquefied natural gas (LNG) import terminals and sourcing LNG imports from the United States, Australia, and Middle Eastern countries.

If the European Commission doesn’t find state energy policies and solutions to satisfy their diversified union, then looking for other LNG imports outside of Russia is the best geopolitical solution. Political will shouldn’t have to be unified or favor narrow parameters; instead, all stakeholders and member states should realize the fact that when you deal with Gazprom, you are ultimately deal with Putin. The interests of the entire EU should be at the forefront of making these complex energy decisions and finding safer natural gas resources.

Link: https://www.geopoliticalmonitor.com/can-the-eu-shake-its-russian-energy-habit/

Obama will rue the day he made the Iran nuclear deal

September 1, 2017

Almost immediately from the moment Barack Obama decided to pull US troops out of Iraq, one disaster after another has overtaken the United States and its historical allies in the Middle East, Asia and Europe.

A completely predictable quagmire ensued once Obama decided not to enforce his red line over chemical-weapons use in Syria – what is now the disaster of a generation, the Syrian civil war. Shiite and Sunni constituencies now make war on a regular basis and the peace the former president predicted for Syria has turned into the fear of history repeating itself.

Recently, a US-led coalition bombed a road and small bridge in the Syrian province of Deir al-Zor to stop ISIS fighters retreating from the western part of the country as part of a peace agreement brokered by Hezbollah, the Lebanese Shiite militant faction that is Iran’s main proxy in the Middle East and which has helped stabilize the Bashar al-Assad regime in Syria.

The peace deal provoked justified anger from Iraqi Prime Minister Haider al-Abadi, who said, “Transferring terrorists from Qalamoun [an area on the Lebanese-Syrian border] to the Iraqi-Syrian border is worrying and an insult to the Iraqi people.”

This backstabbing by Shiite Iran of its client state Iraq has broad geopolitical implications and could be the reason firebrand Iraqi cleric Muqtada al-Sadr met with Saudi Crown Prince Mohammad bin Salman and other top Saudi officials. This transfer of ISIS savages has also infuriated the Iraqi Kurds, since 300 jihadis have returned to the Iraqi border with 300 family members in tow, which allows movement for its fighters to continue their quest for an Islamist caliphate.

But the post-Obama chaos is not limited to the Middle East. North Korea’s missile launch over Japanese territory now have the Japanese contemplating pre-emptive strikes, nuclear first-strike capability and other offensive measures, including the United States’ THAAD (Terminal High Altitude Area Defense) missile system.

Prime Minister Shinzo Abe called the missile launch “the most serious and grave threat ever” against his country, while Seoul conducted extensive bombing drills near the North Korean border in case of an emergency, an official with the South Korean Defense Ministry told CNN.

Chinese Foreign Ministry spokeswoman Hua Chunying warned that the situation in North Korea had reached a “tipping point approaching a crisis” after the ballistic-missile launch over Japan. North Korea has also used bellicose rhetoric to threaten that its next target is Guam.

The policy of “strategic patience” from Obama didn’t stop North Korea from acquiring and then modernizing further nuclear weapons. Strategic patience only seemed to encourage North Korea’s belligerent behavior toward the world community.

Deferred strength instead of robust deterrence backed by traditional allies along with a growing North Korean economy have led Kim Jong-un to believe he can get away with these actions. Trump can state all he wants that “all options are on the table”, but unless he is willing to have Seoul order a total war against North Korea and possibly China as well, then he only has bad options.

As bad as the above news is, the ramifications of the former US president’s policies have reached a new low with the news coming from Iran about the so-called nuclear deal he negotiated. This could overtake the problems of North Korea and Syria to plunge the world into nuclear chaos in a few short years.

Iran is doing everything possible to dismantle the false narrative that it is a peace-loving regime by thumbing its nose at the US and other signatories to the P5+1 nuclear deal. The people of Iran want peace and engagement with the world, but not their government headed by Ayatollah Ali Khamenei, the Supreme Leader of Iran.

Congruent events highlight Iran’s duplicitous nature. Iranian officials rejected US Ambassador to the United Nations Nikki Haley’s request in August for military sites in Iran to be inspected for nuclear activity. Haley was told: “No one sees military sites without the Ayatollah’s permission.” The flawed nuclear deal supposedly included mechanisms for inspections of nuclear materials at military sites on demand, but that isn’t the case.

Obama’s post-presidency legacy will be haunted by his belief that he could trust the Iranians. Israeli intelligence has reportedly discovered that Iran is building weapons factories in Lebanon and Syria. Israeli satellite intelligence unveiled the photos of a “construction site for an Iranian long-range missile production facility in northwestern Syria” to visiting UN Secretary General Antonio Guterres in late August.

Additionally, US investigators have allegedly caught Iran “shipping Iranian soldiers and proxies to Syria on commercial flights in violation of the nuclear deal”. The new photographic evidence published by a right-wing Washington think-tank purports to prove that Iran is using its flagship commercial carrier Iran Air to ferry militants, jihadis and Hezbollah fighters to Syria, where they are fighting against rebel and Western coalition forces in the region. The Trump administration is now contemplating new sanctions against Iran over this alleged violation.

Obama’s decisions could be seen to be understandable, even rational, if they had been undertaken calmly, peacefully and democratically by the majority of the US Congress when he was in office, but that wasn’t the case.

Pernicious, pseudo-political factors overcame common decency and moral law as Obama assured the world community of the fact-based, ecumenical nature of the Iran deal when it was nothing of the sort. There weren’t extenuating circumstances to make an arrangement with the Iranians necessary; sanctions were crippling them.

Obama is a historical figure but he isn’t exempt from rules or logic. What the falsehoods that this deal unveiled was a president who sent “flashy signals of superior virtue” without ever understanding the cost of leadership. Waving to adoring crowds could not stop the Islamic Revolutionary Guard Corps acquiring nuclear weapons.

The world and Obama himself will rue the day that will soon happen unless something is done to stop Iran from building, acquiring and possibly using nuclear weapons.

Link: http://www.atimes.com/obama-will-rue-day-made-iran-nuclear-deal/

Will Iceland’s Shameful Abortion Laws Rise in California?

August 30, 2017

Iceland is killing babies in the womb who have Down syndrome for no other reason than they are considered an inconvenience to their parents and socialist government.

Abortion, except when the woman’s life is in danger, is murder plain and simple, and there are many doctors and clinics complicit in this butchering in the same manner the Nazi’s burned Jews across Europe over seventy years ago. This isn’t a religious screed as I’ve written about the implications of abortion and the causes of declining birth rates since abortion’s enactment, here and here. This is about defending unborn children in Iceland and ultimately California.

Furthermore, vulnerable women in the United States are dying in these supposed women’s clinics as well for no reason at all other than they had an abortion. Atrociously vile Margaret Sanger, the founder of Planned Parenthood, has quotes that the defend abortion actions that Iceland is taking and she advocated for eugenics, killing babies through abortion, advocating for the KKK and racial purification by eliminating all black men, women, children and unborn babies.

California communities, churches, synagogues and parishes that continue voting for Democrats and Republicans who defend abortion have to answer for their complicit quiet on this issue; meanwhile they are supposedly upset over white nationalists and leftist Antifa thugs fighting a pretend racial skirmish in nowhere Virginia, USA.

60 million babies have been killed in the U.S. since abortion was legalized so spare me your faux outrage over some idiot giving a Nazi salute to another violent, Antifa idiot who was paid to be there by George Soros linked groups.

Anecdotally drive through a predominant minority community (African-American in particular) and notice how many Planned Parenthood abortion clinics they have; it’s for a reason – to kill innocent, beautiful black and brown babies and fetuses for profit. And California Democrats overwhelmingly defend these actions; Senator Kamala Harris specifically has chosen political power over defending her ancestors, family and constituents.

Iceland is committing genocide by claiming they are “eradicating Down Syndrome babies,” when in actuality they are using prenatal screening to then abort the affected fetuses; and CBS is duplicitous in how they reported the case of Iceland supposedly “solving Down’s syndrome,” when the report said:
“The number of babies born with Down syndrome has significantly decreased but few countries have come as close to eradicating Down syndrome births as Iceland.”

Any person who touched the Iceland report at CBS (they have locations in Studio City and Los Angeles, CA) should at the very least be fired and next be prosecuted for aiding and abetting the killing of defenseless, unarmed human beings. It’s depraved evil what Iceland and CBS are doing and have done. The world hunted those beasts down in World War II who slaughtered innocents for their own personal gain. Children in the womb are the most vulnerable people on the planet – they literally have zero defenses against the knives, hoses and vacuums at the abortion worker’s arsenal to kill.

The people and leaders of Ireland and anyone who advocates for slaughtering innocent babies, because they have Down syndrome, should be treated as depraved criminals. Puppies are treated better than abortion-targeted children. PETA would never stand for animals being killed this way if they had a deformity that inconvenienced their owner. That is exactly what Iceland is doing, but more importantly, people with Down syndrome have a voice, conscious and dignity.

Moreover, CBS television in California attempts to backpedal or at least cover their tracks when they stated in the report: “Many people born with Down syndrome can live full, healthy lives, with an average lifespan of around 60 years.”

Actually in 2011 the American Journal of Medical Genetics found in its research and studies:
“That 99% of individuals with Down syndrome report being happy, 94% of their siblings express pride in their brother or sister with Down syndrome, and just 4% of parents.”
Larger countries are also practicing abortion-eugenics on Down syndrome screened unborn children in high percentages like Denmark (98%), France (77%) and disgustedly the United States at 67%. But its really a simple reason this is happening: The diagnosed child in utero with Down syndrome is being killed – and not over a medical condition.

California elected officials including abortion in their official party platform have also voted for children being labeled an undue burden to their parents, society and in Iceland medical professionals have said, “It will be better for them (the Down syndrome fetus).” But when that human being is being sucked out by a vacuum while screaming and fighting for their life and then discarded like a piece of trash, how is that good for them?
Why not stretch that argument to an older person who no longer pays taxes or any of the millions not in the U.S. workforce at this time? Let’s discard them as well. They can’t pay taxes so what use are they or others if a person is simply an economic unit for my happiness.

In a horrifying moment of candor, Icelandic geneticist, Kari Stefansson admitted, “it wasn’t for medical reasons to kill fetuses, but rather it’s due to heavy-handed genetic counseling, or pressure by authority figures to abort.”

Another pregnancy counselor in Iceland also stated:
“We don’t look at abortion as murder. We ended a possible life that may have had a huge complication, preventing suffering for the child and for the family.”

So what California elected officials, the voters who put them in office and Republicans who support abortion are saying is trust us we know what’s best for the slaughtered child. If we crush their heads, break their limbs and suck out their brains using vacuums (and all this happens during abortions) then it’s for their own good and yours as well.

This behavior was how the Nazis justified killing Jews, homosexuals, gypsies, Christians, Catholics, intellectuals, and any other group that didn’t conform to their Darwinian-Nietzschian worldview at the barrel of a gun. The first people the Nazis killed were those with disabilities.

This is using medical technology available through prenatal screening to enact eugenics at a state and worldwide level not seen since World War II. These children are being exterminated and these societies will fail. Historically fallen regimes from the Aztecs to the Romans and Greeks up to Imperial Japan all disintegrated because they didn’t value defenseless life.
If California, the U.S. and Europe don’t wake up to this remorseless holocaust then we have no hope. Forget bashing Donald Trump and bring fire and brimstone to marches, rallies and occupy movements to children unlucky enough to have parents who can afford a prenatal screening. It’s time to act and time for hard questions to be asked about what kind of society we want for California, the U.S. and the world.

Link: http://www.capoliticalreview.com/top-stories/will-icelands-shameful-abortion-laws-rise-in-california/

Asia must get serious to counter China’s hegemonic rise

August 24, 2017

book published last year by Angela Duckworth called Grit: The Power of Passion and Perseverance points to the preoccupation the West, and United States in particular, has with the underdog or the person who overcomes all odds to succeed. American icons Steve Jobs and Tom Brady are the archetypes of the gritty success that many Westerners value.

China, on the other hand, could not care less about American grit, and if the US, members of the North Atlantic Treaty Organization (NATO) or the European Union, Southeast Asian countries and anywhere else China takes a national interest in don’t understand this equation, they are doomed to be enveloped in the Chinese stratosphere.

The American post-World War II liberal order isn’t perfect, but nations that fall under the sway of China and the Communist regime’s whims should jettison their infatuation with Donald Trump and wake up to a new, Chinese hegemonic reality.

These illiberal thoughts were best explained by Chinese Foreign Minister Yang Jiechi’s response to complaints over his country’s military assertiveness in the South China Sea at an Association of Southeast Asian Nations conference when he said: “China is a big country and other countries are small countries, and that’s just a fact.” He said this in front of former US secretary of state Hillary Clinton, who at the time was the frontrunner to be the next US president.

The leaders of the US and China continually butt heads because both countries see themselves as exceptional. Chinese exceptionalism is actually more sweeping than America seeing itself as “a bright city on a hill”.

Writer Harry Gelber surmised in his 2001 book Nations out of Empires how the Chinese defined civilization as the Han people or nothing at all, and President Xi Jinping in his 2014 book The Governance of China wrote “that China’s continuous civilization (over 5,000 years old) is not equal to anything on Earth, but a unique achievement in world history”. Xi has a point when it comes to national longevity, but his country’s claim to exceptionalism is questionable.

Does the world, and particularly Southeast Asia, want a rules-based system like that which has restrained the US since World War II or a Chinese-type system that plays into a Darwinian-Nietzschean level of geopolitical behavior where the strong master the weak? The answer sometimes isn’t cut and dried when you consider the success Singapore has enjoyed under its authoritarian system, and certainly the Chinese since communist economic liberalization with firm state control that was instigated under Deng Xiaoping and continues unabated today.

Martin Dempsey, former chairman of the US Joint Chiefs of Staff, explained in an interview with Foreign Affairs magazine last year how China’s long-term view is overtaking Western shortsighted behavior:

One of the things that fascinated me about the Chinese is whenever I would have a conversation with them about international standards or international rules of behavior, they would inevitably point out that those rules were made when they were absent from the world stage.

One admirable trait of the Chinese government is its willingness to speak about World War II atrocities and how that experience still affects its geopolitical behavior. There are drawbacks, though, to this continued behavior, as evoked during Shanghai-based venture capitalist Eric Li’s TED Talk that reminded the audience of “China’s civil war, being dismembered by foreign aggression during World War II, but now they are the second-largest economy in the world, an industrial powerhouse and its people live in increasing prosperity”.

Samuel Huntington’s essay “The Clash of Civilizations” explained that cultural fault lines are the issues defining the post Cold-War order. And while this explanation has been helpful in dissecting the fissures between Western and Islamic values, it has been less successful identifying the gaping differences between China and American systems.

Huntington elaborated on the differences between a Western (US) versus Asian (Chinese) mindset when he wrote: “The very notion that there could be a ‘universal civilization’ is a Western idea, directly at odds with the particularism of most Asian societies and their emphasis on what distinguishes one people from another.”

This deep, enduring conflict will persist unless addressed and comprehended. Chinese values are different from, say, those of the EU and NATO in regards to human rights, religious freedom, limited government, the state setting economic policy, and the concept of time and history. Europeans also have a point when they criticize Americans for their short national history compared with those of European nations and China, which measure their concepts of time in thousands of years.

China’s culture is utterly different from Western-style rugged individualism. The Chinese term for “individualism” is gerenzhuyi, which suggests “a selfish preoccupation with oneself over one’s community”. An admirable trait that has religious overtones and gives the Chinese people further value is when they insist “upon a harmonious community and obeying Confucius’ first imperative: Know thy place”.

American historian Richard Hofstadter explains how Americans understand Western values without ideology, whereas the Chinese believe order comes from hierarchy and if it is not obeyed, they invite chaos.

Another laudable sentiment, but it’s China’s foreign-policy dictum that should questioned.

China’s conception of government and its foreign policy have the potential for lethal hegemonic activity. What NATO, the EU, most of Southeast Asia and the United States don’t seem to comprehend is the strategic patience inherent in China’s thinking.

If harassing the Philippine island of Thithu using Chinese naval vessels and Coast Guard ships doesn’t gain immediate advantages, then use long-term, strategic behavior to gain objective strength over the Philippines and draw it away from its traditional ally – the US. Seemingly the Chinese now use foreign policy and geopolitics the way a weiqi (Go) master dominates the center of the board to conquer an opponent.

Unfortunately for all of Asia, the US suffers from what Gore Vidal called USA, the United States of Amnesia. Americans are short-term problem-solving thinkers by nature, and the Chinese are the exact opposite – to Southeast Asia’s detriment. China’s leaders, including Xi, exhibit these traits in abundance: patient, domineering behavior, long-term thinking, and comfortably waiting out problems using management skill over resolving the matter in question.

The Chinese, unlike the Americans and their European allies, would have never pulled out of Iraq. The US formerly had long-term strategic traits like the Chinese when they stayed in Germany, Japan and South Korea to ensure worldwide peace and prosperity.

The Chinese have skillfully since 1949 waited out the supposedly rogue nationalists of Taiwan. Xi, if cornered, would insist that Taiwan is a part of China, even an integral piece, and China will tighten the noose economically, militarily and socially to bring them back into the fold.

But this false Chinese notion of rationality has played out dangerously on the world stage, with the evolving dispute with Japan over the Diaoyu/Senkaku Islands, demanding that Vietnam stop energy exploration on its Vanguard Bank, and the Doklam standoff with India. The India dilemma has coincided with China’s propaganda war to pull Bhutan closer to Beijing instead of traditional ally New Delhi, unveiling the true nature of China’s strategy.

Many foreign-policy experts believe the US and China are advancing toward a Thucydides’ trap, but China is too smart and sophisticated for that to happen. What Beijing is now achieving is a Hobbesian jungle that involves areas like the South China Sea, patiently pushing aside smaller countries while entangling the US, Japan and South Korea in a tug-of-war with China’s proxy, North Korea.

When China makes these moves it does so with a keen eye on geo-strategic placement (an example is a new overseas base in Djibouti to counter India’s Indian Ocean dominance), diversified mineral wealth and using gains at others’ expense for potential Chinese exploitation.

Henry Kissinger wrote in his 2011 book On China of the Chinese term shi, which means “the potential energy or momentum inherent in any circumstance at a given moment comprising geography, terrain, weather, balance of forces, surprise, moral and many other elements”.

Kissinger elaborated that the Chinese planner spends his time “observing and cultivating changes in the strategic landscape”. That is exactly what is taking place in the border dispute with India, attempting to conquer the South China Sea and displacing the US out of Southeast Asia with a phony nuclear threat involving North Korea while the Chinese manifestly prop up Kim Jong-un’s regime with expanded trade.

The results would seem inevitable, that China will clash with its neighbors who seek their own sovereignty, and certainly with the US, but there are solutions that the Cold War proved will work. Deterrence backed by a modern, three-pronged nuclear umbrella can stop the inevitable, and it should begin with Japan and South Korea having US nuclear weapons.

While China would have every right to be furious at such a ploy, Southeast Asian countries and the US have that same prerogative given unrestrained Chinese hegemonic behavior. Authoritarian regimes deserve a response.

Realize as well that China isn’t full of ideologues, but its leaders are still communists and understand one thing – strength combined with power – and the US and its allies should press onward with South China Sea “freedom of navigation” patrols and energy exploration and support India’s confrontation with China over Bhutan.

Meet the Chinese with unabashed power, precision and an unconstrained military buildup in Japan, South Korea, Vietnam and the Philippines. This isn’t a war cry, but if the Chinese want realpolitik, then freedom-loving or at least sovereignty-loving nations should deter them, because they aren’t backing down. China’s geopolitical moves indicate that its leaders have swiftly gone from playing chess in a conventional sense to playing a game of never letting their country be ransacked as it was in World War II ever again.

The world had better take notice and adjust its thinking accordingly.

Link: http://www.atimes.com/understanding-chinas-hegemonic-rise/

The Western-led devastation of declining birth rates

August 17, 2017

Western civilization is in decline. And it begins with Western nations no longer having children to keep up with the 2.1-per-woman replacement rate, which means immigration to the West will explode from poorer nations that continue having children above the replacement rate.

Parts of the United States plus Japan, South Korea, Singapore, Russia, China and all of Europe are suffering from substandard replacement rates. Some European, Asian and Russian leaders are now going to extreme measures to encourage their populations to have children.

Russia has offered women who have more than one child “cars, refrigerators and other prizes”. Singapore established a “government-run dating service”, since it has one of the lowest fertility rates in the Asian developed world. But none of these measures by any country in the developed world has worked. Childlessness is actually on the rise.

Every country will feel the squeeze of declining populations straining social-safety nets.

George Weigel of First Things magazine has chronicled the fact that many European leaders – in Germany, Britain, France, Italy, the Netherlands, Sweden and Luxembourg – are childless. This alone shows why Europe has opened its doors to immigrants. They need the bodies, and the risks associated with this policy justify continued economic rewards.

Historian Niall Ferguson says Europe’s low birth rates “have put it on track for the greatest sustained reduction in European population since the Black Death in the 14th century”.

European leaders don’t seem concerned that Pope John Paul II foresaw the looming crisis when he challenged European culture “to reject demographic suicide and rediscover the joy of creating the future through having children”.

Without changes taking place in Western and increasingly Eastern cultures’ outlooks on marriage, children and how their societies are demographically put in place, what John Paul II called a “culture of death” will only permeate.

Anecdotally, travel to such far-flung cities that vary from the city-state of Singapore to cosmopolitan London and sprawling Los Angeles – even Beijing and Hong Kong – shows that all have one thing in common: They aren’t in any way welcoming to families or children.

For Europe, China, Japan and Singapore the beginning of the solution would present itself by different zoning and planning that encourage single-family homes in suburbs, instead of landscape-dominating skyscrapers that are great for singles or childless married couples, but do nothing to birth replacement future workers that will be needed to take care of aging workers or older people dependent on social safety nets.

Increasingly, the future will be decided by who has more children, marriage and families that will make these variables move correspondingly to economic growth and military might. Otherwise, the ignorance that most Western nations exhibit about their history will be the downfall of Western civilization.

Link: http://www.atimes.com/hold-western-led-devastation-declining-birth-rates/

Trumps New Energy Plan is Upending Global Geopolitics

August 10, 2017

Newly appointed United States (US) Secretary of the Interior Ryan Zinke has cultivated an image from his 23 years as a Navy Seal and now Cabinet position as a “roughrider.” What that means is he views his duty overseeing over 500 million acres of U.S. surface land and nearly five times as many subsurface acres onshore and offshore as a “conservative conservationist.” This mindset along with President Trump’s America First Energy Plan is upending global geopolitics using energy production (mainly fossil fuels) as a carrot and a stick in global diplomacy.

The plan has included leaving the inadequate Paris Climate Agreement, getting rid of the Clean Power Plan (noted constitutional scholar Jonathan Adler had grave misgivings about the CPP), and undoing the EPA’s ‘Waters of the U.S.’ rule, which assists further in fossil fuel production. These moves are attempting to “increase wages by more than $30 billion over the next seven years,” with executive actions. Moreover, Secretary Zinke’s agency under the U.S. executive branch’s prodding has estimated there is over $50 trillion in untapped shale oil and natural gas – particularly on federal lands.

This federal tax revenue, wage growth, and boosts in economic growth are only part of the picture. The new plan also sees a role for geopolitics in leveraging US shale oil and natural gas reserves.

The U.S. is now doing what Russia, OPEC, Germany, and China have done for decades: using domestic economic platforms as a geopolitical weapon. Like Germany dumping exports on the European Union (EU), China purging steel from their domestic companies onto world markets, or Russia withholding natural gas in January 2009 against the EU and former Soviet satellite states, Trump’s U.S. is reversing the former Saudi-led war against U.S. shale by using energy as a geopolitical weapon. Trump has specifically stated:

In addition to boosting energy production being good for the economy, it is also in America’s national security interest. Achieving energy independence from the OPEC cartel and any nations hostile to our interests while working with Gulf allies to develop a positive energy relationship is part of our anti-terrorism strategy.

At the end of July, U.S. oil production hit over 9.43 million barrel per day (bpd), the highest since August 2015. Morgan Stanley forecasted further production hikes of 900,000 bpd by the fourth quarter. Zinke and Trump have both made cutting domestic regulations in all facets of the U.S. economy one of their highest priorities, which has attributed to the large gains in oil, natural gas, and coal productivity and production. If this trend continues it’s not unheard of to believe the U.S. could hit between 11-12 million bpd in fourth quarter 2018 and use those additional tax revenues towards military upgrades, domestic infrastructure improvements, or exporting fossil fuels to specific markets such as the EU, Southeast Asia, India and China.

The Trump administration has also committed to using revived coal production as a domestic economic kick-starter in the Midwest and eastern states like West Virginia. This has drastic geopolitical repercussions across the globe, particularly if Zinke’s Interior Department, working with the U.S. Commerce Department, opens up clean coal technology to resuscitate America’s coal industry.

This would put America in the position of competing directly against China, Japan, South Korea, and India for the next generation of clean coal technology. The U.S. is now pushing the U.N Green Climate Fund to construct clean coal power plants around the world. This illustrates how the new administration is using newfound geopolitical influence in all sectors of “global energy and climate bodies to promote carbon capture technologies.” This would have been unheard of in the previous U.S. administration.

Coal is an interesting case study, because most news reports lead viewers and readers to believe it is dying industry and since the Paris Climate Agreement no one wants to use it as a power source anymore. However, there are 600 million Africans without power at this time and coal is abundantly available in Asia to power the most important geopolitical region in the world. Southeast Asia and Sub-Saharan Africa’s energy needs are growing every year and coal is best suited to meet this burden when it comes to cost, scalability, and the cheapest and most efficient way to bring hundreds of millions out of energy poverty and food scarcity.

The newly installed U.S. sanctions against Russia present another interesting dilemma for energy and the interplay of Russia, the U.S., and the EU. Nord Stream 2 (NS 2) is the second Russian pipeline carrying natural gas from Russia to the Finnish border, beneath the Baltic Sea, and arriving in Greifswald, Northern Germany for European distribution. Nord Stream 1 was commissioned five years ago and NS 2 runs parallel. But now EU regulators and regulations are questioning the overreliance of the EU on Russian gas and whether the additional capacity is needed.

Brussels wants diversification and this is where the US steps in to compete against Russia, North Africa, and even Qatar – the world’s largest supplier of liquid natural gas (LNG). The EU has constructed LNG terminals to diversify their LNG options in Qatar and North Africa. But Putin’s dream of reversing the breakup of the Soviet Union, which he called, “the greatest geopolitical disaster of the 20th century,” has involved his energy resources being as active on the global geopolitical stage as his nuclear arsenal. Moscow repeatedly rejected the possibility of opening up Russia’s domestic pipelines up to competition or breaking up Gazprom.

The EU, protected as it is by NATO, realizes this too, but there are difficulties here for the U.S. to overcome. Since there is a deep mistrust of the Trump administration, European nations are speaking openly about foregoing decades of alliance-built relationships. Instead they want to pursue their own energy interests outside of Russia or the U.S. Regardless of this, the U.S. has indicated it will export LNG to the Europeans if NS 2 is shut down or not fully utilized.

Critics contend it will take years for this to happen, and the EU will continue to pursue its Middle Eastern and North African LNG options. Yet these same critics believed that US shale would fold under OPEC’s price war. The opposite occurred, and now it’s OPEC folding to US domestic drillers. Geopolitics and self-interest rightly understood would trump domestic political considerations, especially in Europe where they are more concerned about the Russians than their hatred of Trump and US interference.

The Europeans hated Reagan, nevertheless security took first priority when Soviet missiles were pointed at them. The same thing will happen more than likely with US energy, and LNG exports specifically. More importantly, the US has shown no one can ramp up all facets of energy production, refinery skills, and export shipping like the US oil industry.

Trump and Zinke have overcome many of the geopolitical barriers that the US put in place to restrict energy production. Global institutions and leading nations should take notice that the U.S. is reviving fossil fuels so developing regions around the world can make use of their own resource wealth. The Trump administration, unlike the Obama administration, is shifting away from renewables, and while environmentalists may hate this switch, nonetheless they can’t ignore how the US has entered the beginning stages of weaponizing their vast oil, natural gas, and coal reserves.

Link: https://www.geopoliticalmonitor.com/trumps-new-energy-plan-is-upending-global-geopolitics/

The Republican Party Legislative Incompetence

August 2, 2017

Let me preface this piece by stating no party better encapsulate the values and policies – unfortunately not today’s actions – that have made America the greatest nation in the history of mankind than today’s Republican Party. It was my great honor to be elected to the recent California Republican Party Presidential Platform Committee in 2014 and I was stunned by what came out of the committee – a document that was about economic growth, limited government, families, protecting the unborn, religious freedom and overall prosperity in all facets of life for all Americans and immigrants – legal or otherwise.

Chad MayesThe party of Lincoln and Reagan, the party that fought against slavery, the KKK, and overwhelmingly voted for the Civil Rights Act and Voting Rights Act is at a crossroads … and it has nothing to do with President Donald Trump. The party has lost its way – the national party and more importantly the California Republican Party – epitomized by Republican Assembly Leader Chad Mayes who just supported huge tax increases while never thinking about the awful fiscal outlook for California. Moreover, Minority Leader Hayes has a complete lack of understanding for how California and the United States thrive in our dangerous, geopolitical world.

The best way to describe the disarray of the national Republican Party that bleeds down to the CPR is a recent comment by Pennsylvania Republican Senator Pat Toomey. He had a candid response at a Town Hall when local ABC27 News Anchor Dennis Owens asked about the Republican struggles with the failed repeal of Obamacare and overall health care reform. Senator Toomey said:
“Look, I didn’t expect Donald Trump to win, I think most of my colleagues didn’t, so we didn’t expect to be in this situation.”
After seven years of railing against President Obama and the Democratic Party, the Republican Party had nothing to show for the over 60 times they voted in Congress to repeal or replace Obamacare led by the ineptitude of Senator John McCain. People voted for a repeal of Obama’s health care law, tax and regulation cuts to bolster the economy, American trade interests being at the forefront of economic treaties, defunding Planned Parenthood, enforcement of our borders and laws along with a more robust deterrent in our foreign policy. Instead the American voter received John McCain’s cowardly health care vote and the other Republicans who voted with him. They voted to be thought of favorably at D.C. cocktail parties and on Morning Joe than what’s best for their constituents and America.

The American public and California voter was also told that Secretary of Health and Human Services, and leading Obamacare critic when he was in Congress, Tom Price had a plan of action ready to repeal and replace President Obama’s signature legislative achievement. Thus far Secretary Price has been silent on Capital Hill, and neither Secretary Price, nor the Republican leadership (led by Californian Kevin McCarthy), or critics of the current Republican health care overhaul have any answers on how to make health care more affordable and accessible for all Americans.
What should concern any Republican or independent is California Senator Kamala Harris becoming President Harris, because of Republican malfeasance on health care reform. Republicans bemoan they aren’t being given a fair chance and fake news is difficult to overcome while searching for health care solutions. Those sentiments are why we will lose, and lose big if we don’t get our act together immediately. Either stand up and fight for Republican values or else.

If Congressional Republicans, particularly California Congressional Republicans need assistance (and they do!) then listen to shows like Mark Levin, Hugh Hewitt or Dennis Prager who consistently interview health experts of all political stripes with answers and solutions to these problems; or contact the American Enterprise Institute, Heritage Foundation or RAND for detailed legislation that can be immediately voted upon.

However, if those are to far right then click on the Brookings Institute website for various plans and solutions to Obamacare – even the ultra-left leaning publication The Atlantic has answers.
Additionally it has been over seven years, and now a Republican majority of not anticipating for someone like Donald Trump to win doesn’t have an idea of what legislatively comes next. It’s mind-numbingly incompetent, and why Democrats will take back the House and Senate if something substantial isn’t put in place on how to govern before the year is over. Where are Darrel Issa, Kevin McCarthy and the dwindling California Congressional delegation? If Secretary Clinton were President Clinton does anyone believe she wouldn’t be pushing her Godless, radical agenda down America and California’s throats at this time? Not hardly.

The Democratic Party is no longer the party of the workingman or women or middle class, but is only about the top 1% in technology, entertainment, media and universities. Democrats are now about appeasing all sorts of anarchists and radical Islamists along with economic and energy policies that will deeply hurt America. The Party of Governor Pat Brown, and Presidents FDR, Truman and Kennedy is finished – the Scoop Jackson wing of the party is also dead. In finality, the Democratic Party’s policy ideas will kill America and a world in desperate need of California and American leadership.

According to the new, controversial, best-selling book The Strange Death of Europe: Immigration, Identity, Islam by Douglas Murray, Europe is committing national suicide implementing the same polices as U.S. Democrats want ad nauseum to occur immediately in America. Yet Republicans like John McCain and the editors and contributors at The National Review and The Weekly Standard should learn that Donald Trump is not the enemy. It’s the social, economic, education, energy, and national security policies of the Democratic Party led by Chuck Schumer, Jerry Brown, Kamala Harris, Elizabeth Warren, Nancy Pelosi, Barack Obama and Bernie Sanders that should be fought against with World War II-like vigor.

Outside of confirming Neil Gorsuch – using a Democratic legislative trick – Republicans also haven’t rid the world of the disastrous Iranian Nuclear Deal that hasn’t worked, housing is now depressed because of Democrat polices from the previous administration, and China is a continued menace; but somehow Republican leaders believe passing higher taxes on Democratic-controlled states is tax reform. Moreover, North Korea has missiles that can obliterate this state.

But Kevin McCarthy, Paul Ryan, Mitch McConnel, Darrel Issa and the rest of the Republican-controlled Congress seemingly can’t put together a plateful of legislative pancakes without choking them all over California and the American public. Democrats seem to never have that problem.

What Trump proved and Republicans aren’t grasping are Democrat-controlled states and California can be won with a pro-growth, pro-jobs, and pro-American message. Trump won states that haven’t been won in a generation with that message. The solution is to find real candidates for state and federal positions who can articulately convey the message of growth, putting American interests first, and watch the bluest state of all – California turn back to its pro-growth, pro-prosperity roots – that made it a beacon of light for the post World War II generation.

Link: http://www.capoliticalreview.com/top-stories/the-republican-party-legislative-incompetence/

China must tackle its unreported internal problems

August 2, 2017

Chinese President Xi Jinping’s government has numerous serious issues that need to be dealt with before the upcoming 19th National Congress of the Communist Party of China (CPC), where he will attempt to consolidate his power. This will make him a Mao-like figure in total control of an economic dynamo.

This will be a power that subdues his citizens into complacency, but continues to deliver false economic growth that will hinder world growth and eventually put China on the path to further foreign adventures (such as the India-China border dispute) outside the South China Sea.

China continues to put forward a good face for the world community, particularly the environmental movement, by touting its commitment to clean energy. But it is doing the exact opposite of upholding the Paris Climate Agreement or pushing away from fossil fuels by building more coal-fired power plants, importing copious amounts of oil and not taking aggressive action to clean up its dirty cities, waterways and air.

This could be the greatest year for the Chinese in recent memory if they deal with their problems of overseas investments versus domestic consumption, the management of their debt-ridden economy by their central bank and the quizzical nature of Chinese bond defaults on the rise.

Further, their real-estate boom has all the makings of the type of crash that still haunts the US economy and real-estate markets. Additionally the falling birth rates for China (in fairness, also a massive Western-led problem) and the entire East Asian region could overtake the biggest problem of all, North Korea, China’s proxy – which so far Xi is allowing to flourish, instead of reining in.

Worldwide investments have allowed China to project soft power and have economic influence unheard of in the Hermit Kingdom a generation ago. However, Beijing made the unprecedented step of asking Anbang, a Chinese holding company that owns the Waldorf Astoria in New York City, to begin selling assets abroad, and bring the resulting billions of dollars home. This will further move the Chinese economy from an export-based system to a domestic growth model. The downside will be that real estate and financial services purchased by Chinese firms across the world that have firmed up soft power and influence will wane if firms start unloading assets at fire-sale prices.

How the People’s Bank of China handles deleveraging by forcing financial institutions “to cut debt but ensure the process is smooth and orderly to limit its impact on market liquidity” was the main point made recently by assistant PBC governor Zhang Xiaohui. With the five-year leadership transition to take place at the 19th Congress, this will be Xi’s biggest risk to economic stability – this smooth process occurring – with a debt-to-GDP ratio of 250%, among the highest in the industrialized world. Xi will also want to maintain an appropriate and prudent money supply and credit growth to keep liquidity steady if he wants total control within his government.

With poor disclosure practices, graft and corruption the norm along with a shaky legal foundation, bond buyers are seeing record number of bond defaults taking place. Only an open society, an unobstructed Internet and outside transparency can save China’s bond market from further defaults.

Zombie firms in China could be paving the way for a real-estate bust that will be larger than the one in the US that caused the 2008 recession. Small Chinese cities are seeing a boom in construction, but supply is greater than demand. This surge in construction has CPC leaders and Xi worried ahead of the Congress, since real-estate market stability is a hallmark of his regime.

Two variables risk stability: First, increased construction leaves large swaths of inventory untouched, and second, small cities such as Bengbu in Anhui province that already have surplus inventory from the housing downturn three years ago will have further housing headaches ahead for local policymakers to solve.

US President Donald Trump continues pressing China about North Korea, but it seems there is a bigger threat that has just been put into the North Korea-US-China equation: South Korea’s quest for nuclear weapons to counter the China/North Korean menace.

If South Korea acquires a nuclear arsenal or triad, then Japan and the remainder of Asia will also want a deterrent nuclear ability. China has reasons to be concerned about the THAAD (Terminal High Altitude Area Defense) missile system in South Korea, but if it doesn’t stop worrying about World War II-era grievances and address the instability of its North Korean proxy, then a nuclear arms race could be unleashed in the most important geopolitical region in the world.

The US made four moves in July letting China, North Korea and, I would contend, Russia know it is serious about solving the North Korean nuclear-weapons threat that the previous administrations of Bill Clinton, George W Bush and Barack Obama wouldn’t counter.

First, the US fired a barrage of missiles off South Korea’s coast under the guise of an exercise. Second, THAAD testing persists, which continues rattling China’s sovereignty. Third, B-1 bombers flew over South Korea in a show of defiance aimed at China and North Korea. And finally, Trump fired his political chief of staff, Reince Preibus, in favor of 4-star General John Kelly, who understands and can fully execute service to a wartime president if the US, China and North Korea clash in the near future.

Leading realist foreign-policy magazine Foreign Affairs, the publication of the Council on Foreign Relations, advocates a “good cop, bad cop” scenario playing out with Pyongyang and even Beijing. Realistically, Xi and China have options they should consider immediately, from complete economic isolation of North Korea to working with the United Nations to implement crippling sanctions.

But China’s domestic problems – especially the debt-to-GDP issues – will severely hamper Beijing and prove problematic for world gross domestic product unless steps are taken before the 19th Congress this autumn.

While North Korea garners the majority of news coverage, the domestic issues also need to be reported on, which could cause China to make structural reform and attempt policy solutions. To counter the falling birth rates, China wisely disbanded its one-child policy. This example illustrates that China can make necessary changes when pressed.

Analyzing China’s history and behavior in the South China Sea, Xi will use foreign meddling and military adventures to paper over domestic problems, ensuring his reign isn’t shut down by the Politburo or other powerful CPC bosses. The time for China to act is now.

Link: http://www.atimes.com/china-must-tackle-unreported-internal-problems/

The California Republican Party is at a Crossroads

July 26th, 2017
The California Republican Party (CRP) is in worse shape than the national party, because they believe leaders like Rocky Chavez are the future of the party who said this after voting for the crony-filled Cap-and-Trade gas tax: “You’re right, we’re a very small component of the world on this (only 1% of global greenhouse emissions come from California), but that doesn’t mean we shouldn’t be leaders on something that’s threatening the world.”
More than likely, the CRP or Assemblyman Chavez have no idea about a peer-reviewed June 2017 report that stated all figures from the global warming debate are meritless, temperature findings have been cooked to reflect higher temperatures for political gain, and currently there isn’t global warming.

Here are California’s current problems that should’ve been handled by the CRP, Rocky Chavez, Chad Mayes and every Republican who foolishly supported Cap-and-Trade. California has the highest housing costs in the country squashing the young, middle class, and minorities. Three Democrat-approved planning agencies based in San Diego, Los Angeles and San Francisco keep single-family homes from being built using global warming as the excuse.

Twenty-seven percent of Californians aren’t native to America; which causes our public schools to lag behind nationally in reading, writing and math, yet we spend more than anyone in the nation on education. Our prisons release felons because of AB 109 and Prop 47, advocated for by Democrats. A third of Californians are on welfare, and our cheap labor issues with uncontrolled immigration means we have the worst inequality in the country while owing trillions in unfunded pension and health care liabilities since Democratic-controlled unions control our elected officials. Governor Brown wisely called for earlier this year the legislature to cut spending since California is heading for a fiscal disaster.

We also have the highest taxes in the nation and our businesses are not hiring, because of the regulatory burden – most notably the draconian environmental laws – exhibited by the Global Warming law (AB 32) signed by Republican Governor Schwarzenegger.
Our infrastructure is crumbling and needs $800 million to over a trillion dollars worth of maintenance repairs or new construction. Instead Democrats and some Republicans focus on a travel ban to U.S. states that don’t tow the LGBTQ agenda allowing open bathrooms and locker rooms for any gender at any time; no matter if it is a grown man walking into a first graders locker room or your local fitness center’s bathroom.

The California dream is over and will descend into Venezuela-like socialism unless the CRP competitively tries to win Los Angeles County. As LA County goes, so goes California, and I’d argue the nation. Leaders like John Goya who ran for State Assembly out of Long Beach in 2014 should’ve been nurtured and groomed for future runs by building up his campaign war chest and letting him speak across LA County and the state. Republicans have been their own worse enemy choosing candidates who look good and have great track records (Mike Antonovich and Steve Fazio), however both lost since neither was able to convey messages that spoke to today’s Democrats, Independents or complacent Republican voters.

They were terrific people, but had no idea how to win in today’s California. The day of the older white male who can’t explain why abortion, being against traditional marriage, global warming and higher taxes aren’t good for LA County or California will not be able to win. After spending time with John during my own 2014 Assembly race, he could’ve won in 2016 or by 2018, which could’ve created a snowball affect on LA County. In my own Assembly district (the 43rd), a motivated Republican candidate with state party backing can beat Laura Friedman.

What Trump proved and California Republicans aren’t grasping are Democrat-controlled states and California can be won with a pro-growth, pro-jobs, and pro-American message. Trump won states that haven’t been won in a generation with that message. The solution is to find real candidates for state and federal positions who can articulately convey the message of growth, putting American interests first, and watch the bluest state of all – California turn back to its pro-growth, pro-prosperity roots – that made it a beacon of light for the post World War II generation.

Link: http://www.foxandhoundsdaily.com/2017/07/california-republican-party-crossroads/

Why it’s difficult to trust China or Russia

July 20, 2017

Interpreting and understanding political movements and societal disruptions usually don’t occur in large macro-settings like the recent Group of 20 Summit. Other than bashing Donald Trump along with China and Germany for their unwillingness to take on larger global roles from the United States, nothing significant happened. To track global movements it is the micro, internal actions of nations that should be followed.

There are two recent examples, both of which illustrate why China and Russia still can’t be trusted on a moral, geopolitical scale.

Recently human-rights pioneer Liu Xiaobo died of liver cancer after being locked in a Chinese prison because the Communist regime believed he was “inciting subversion of state power”. Liu famously said in response to this charge, “I have no enemies and no hatred.” For those timeless words he was awarded the Nobel Peace Prize in 2010, “for his long and non-violent struggle for fundamental human rights in China”.

This petty, vindictive micro-behavior by the Chinese government shows that it is still not ready for the world stage – no matter how many climate agreements it says it is ready to enforce or islands it steals in the South China Sea. China is the biggest impediment to peace and stability in Asia, not North Korea, its proxy.

Duped Westerners continue believing that China will save the Paris Climate Agreement, yet few of them have actually read what China has pledged. According to projections from the US Energy Information Administration, China will actually increase emissions 32% through 2040. Moreover, The Wall Street Journal reported that China’s five-year energy and economic plan would “raise coal-fired power capacity from around 900 gigawatts last year to as high as 1,100 gigawatts by 2020”.

Reuters investigated China’s climate pledges and found that a joint venture with Pakistan would produce over the next 15 years a dozen coal-fueled power plants across the country at a cost of roughly US$15 billion.

But it is Beijing’s treatment of Liu Xiaobo and what that revealed about the Chinese population and government that is the most troubling, not the doubts over its supposed environmental credentials.

Non-violent protests in China are often met with government intimidation, harassment, arrests and unfounded criminal prosecution. It’s revealing that authoritarian regimes such as China are so unsure of themselves, but that’s the nature of socialism and communist governments. Vulnerability is their very nature, and suppression of information to keep their own citizens in the dark.

Very few Chinese have ever heard of Liu, and in numerous surveys the government enjoys unparalleled levels of trust and approval; however that comes with a caveat. The Communists aren’t ignorant of history, and understand that what happened to the Soviet Union could occur on their watch. They knows that unless they control the flow of information and maintains high economic growth fueled by debt, their regime could collapse.

But at least China wants to sustain economic growth. Meanwhile, President Vladimir Putin and his cronies are intent on destroying whatever is in their path so they can create a buffer zone to protect Mother Russia.

What China and Russia have in common, besides not being ready for the world stage, are the ghosts of World War II that haunt them both.

The Ukrainian Institute for the Future (UIF) has released a damning report titled “Crimea: Three Years of Occupation”. The report paints a picture of the horrific human and economic costs of Russian rule in the region. It further claims that the Kremlin’s Crimean project is a threat to Russia and the Crimean population. It metaphorically compares the Russians to the locusts that devoured Egypt in the story in the Old Testament.

Under Putin’s administration, Crimea has seen the imposition of a large number of draconian new laws, an uptick of human-rights abuses, “systemic persecution” of Crimea’s indigenous Tatar population (even banning the Tatar governing body – mejlis ­– branding it a terrorist organization), and subjugating the local population to Moscow’s control.

To date more than 2 million Crimeans, out of a population of 20 million, have fled, creating a refugee crisis that has been unreported though it is similar in size and scope to that caused by the Syrian crisis. But the shrewd Russians have replaced them with Russian civil servants, military personnel and retirees – who have been given generous state subsidies and perks – to reside in Crimea. One study also notes plans to move an additional million Russians into the region over the next five years.

All of these moves have caused the Crimean economy to become a cash-intensive society a kind that is usually seen as a backward macroeconomic step.

What each narrative shows is how underreported and overlooked issues, which are the heart of micro-analysis, are many times what can reveal the movement, or lack of it, of nations in terms of human rights, equality for women, and differing points of view.

Both China and Russia portray reclamation of lands as their destiny, culminating in halting the hegemony of the US and its allies in the post-World War II order. But economic millstones hang around both countries’ proverbial necks. Sanctions, low oil prices and unusually high debt-to-GDP ratios will doom both economies, which will cause them to become expansionist powers.

The UIF’s lead study editor, Tara Beresovets, claims: “Crimea is a time bomb for Russia.” And I’d add that North Korea is one for China. These neo-imperial projects in Crimea and the South China Sea threaten Europe, Asia and global economic growth and peace.

What this should teach nations in both countries’ sphere of influence is to proceed with caution and arm militarily, treat your economy as a geopolitical weapon, use intelligence apparatuses wisely and consider acquiring nuclear deterrents. Independence should not be taken lightly when it comes to China and Russia. Their micro-movements reveal their macro-ambitions.

Link: http://www.atimes.com/ds-difficult-trust-china-russia/

Understanding the limitations of the electric vehicle market

July 13, 2017

Practically every day, headlines expound the narrative that electric vehicles (EVs) are revolutionary and will replace those driven by internal-combustion engines and rid the world of carbon emissions from tailpipes. While the use of EVs is growing, they have nowhere to go but up, compared with other forms of transportation.

Gasoline-powered automobiles have the dominant share of world markets, so their growth is minimal compared with EVs, which are projected by most reasonable estimates to account for only 8% of automobiles on the roads by 2040.

Bloomberg New Energy Finance (BNEF) published a recent study showing that Volvo will phase out gasoline and diesel vehicles by 2019, but only achieve 54% of its sales through EVs by 2040.

However, rhetoric will not keep nations from burning coal, leaving the so-called Paris Climate Agreement, building nuclear reactors, burning natural gas and continuing their over-reliance on fossil fuels while not caring about the benefits of EVs.

There are no such things as global interests or environmental stewardship, as nations will prioritize cheap, abundant, scalable energy if it defeats their enemies and fights back terrorists bent on nihilistic destruction. When interests diverge from environmental concerns – and that’s exactly what an EV is attempting to accomplish – powerful alternatives including renewables will be pushed aside, which is why the most likely outcome won’t be a takeover by EVs, but the continued growth of the internal-combustion engine.

Geopolitics and history show that nations will scrap the first thing that is against their interests if it is a fad, which the EV is at this time.

But more important is the question of whether EVs are ready to compete fairly in the automotive market without subsidies, and the answer is decidedly no. A recent New York International Auto Show had an example worth noting: The Chevrolet Bolt electric car was US$37,500 while the Chevy Cruze was $17,000. Now do away with the $7,500 tax credit offered on EVs in the US and the Bolt would cost more than twice as much as a Cruze.

The automotive-research company Edmunds did an intriguing study and warned, “If the US tax credit is eliminated, it is likely to kill the US EV market.” Edmunds further reiterated what happened in Georgia, which became a leader in US EV sales when it added a $5,000 incentive. Sales of EVs jumped dramatically to almost 4% of all car sales in Georgia, but when the incentive was discontinued, sales plummeted.

This wasn’t just a US phenomenon, or a case of a partisan, conservative state objecting to environmental concerns that EVs attempt to resolve. The same thing occurred in progressive standard-bearer Denmark when it eliminated its generous taxpayer-subsidized credit for EVs. Sales dramatically dropped in a country that has arguably done more to spur EV sales than any on Earth.

The drop in sales proves the market simply isn’t competitive for overpriced EVs without large subsidies. Things got so bad for EV sales in Denmark that on April 18 the government had to reinstate subsidies to offset prices, or the EV market would have eventually withered away. According to Laerke Flader, head of the Danish Electric Car Alliance, “The new tax regime completely killed the market. Price really matters.”

But EVs can be viable alternatives when they are market-based. Georgia proved that even when tax credits expire, luxury EVs – led by Tesla’s Model S – can dominate their market. The Model S succeeds because it is quicker, has a longer driving range and has advantages its similarly priced rivals don’t have when it comes to Autopilot and wireless software updates. When parity is achieved without government assistance, then EVs can overtake gasoline-powered vehicles in the marketplace.

The Model S is now the No 1 selling large luxury vehicle in the US. But EV manufacturers can’t only rely on the high-end market to make a sizable dent in overall car sales. Cheaper EVs need a proven track record so an EV like the Nissan Leaf can outsell a Chevy Cruze. And so far – or in the projected future – that isn’t the case, and when the US tax credit for EVs expires in 2018, it will be the test case for the future of EVs.

Will the world’s largest car market still buy EVs? Only time will tell, but the future doesn’t look positive, measured against the facts.

Link: http://www.atimes.com/understanding-limitations-electric-vehicle-market/

Will California lead America into the second American Civil War?

July 7, 2017

America and California are at a crossroads, and it is reminiscent of the Civil War in 1861-65. The first American civil war was fought over slavery and states versus federal rights, but this one is different, and possibly more insidious, because California is leading the charge to take down the duly elected president of the United States, Donald Trump. But what isn’t being reported shouldn’t be the phenomenon of the “deep state,” or “fake news,” but why former U.S. National Security Adviser Michael Flynn was pushed out of his position. This is the real reason the former elements of the Obama administration and the entrenched bureaucracy are trying to now ruin President Trump.

The former U.S. administration in September 2014 explained their surprise and the “intelligence failure” of the U.S. intelligence community and national security advisers to President Obama being caught off guard at the rapid advance of ISIS. But in 2012 when Michael Flynn was in charge of the Defense Intelligence Agency (DIA) a prescient analyst in the DIA’s Middle East office wrote a report predicting the rise of ISIS, fall of Iraq and the Syrian War.

Former Deputy Director of the CIA Michael Morell argued the memo was conjecture and conspiracy theory heresy, but Morell also knew Flynn had appeared on Al Jazeera during retirement confirming this information was shared at the highest levels of the CIA and policy briefings at the White House. Flynn embarrassed former White House and intelligence officials, and this caused them (the deep state) to look for a reason to ruin Flynn and now Trump.

Even more damaging is how former Deputy Director of the FBI under Obama, and now acting FBI Chief Andrew McCabe’s wife took over $500,000 for her failed Senate bid from now Virginia governor, Terry McAuliffe. Acting-Director McCabe is also under sexual harassment charges against Flynn’s top counter-terrorism official, Supervisory Special Agent Robyn Gritz. Flynn intervened to testify against McCabe and other top FBI counter-terrorism officials for sexual harassment.

Donald TrumpWhile Trump’s twitter account is bombastic and seems un-presidential, the charges Trump has made about the “deep state” being out to get him and having world media outlets as co-conspirators makes more sense examining how ISIS rose from Syria and now Trump is embarrassing former top Obama officials. If Flynn ever testifies, which I don’t believe he will, then careers, reputation and legacies could be at stake if the truth ever comes out about former NSA Susan Rice, former Attorney General Loretta Lynch, former U.N. ambassador Samantha Power, and former CIA Director, John Brennan and possibly President Obama.

Then add Trump’s bashing of President Obama’s signature foreign policy achievement – the Iran nuclear deal into the equation – and questions need to be asked who is out to take down President Trump and why? Also, why is California so hell-bent on taking down Trump, led by Congressman Adam Schiff, when Trump doesn’t need California for re-election or political capital to abolish Obamacare, pass tax cuts, cut environmental programs or gut California’s stake of the federal budget?

This new American civil war where shots aren’t being fired, but lives across the globe are being lost, takes on deeper meaning when considering that each day seemingly brings a new foreign policy crisis landing at the doorstep of Asian, European, Central American, South American, Middle Eastern and American leaders doorsteps. From the provocative behavior of Russia to the militarization of the South China Sea and the inevitable collapse of Venezuela.

When California elected leaders are more concerned about defying Trump, instead of being troubled when the governor of Illinois says his state is “like a banana republic,” then the U.S. is in deep unrest. California is also in the nuclear crosshairs of North Korea. It’s not an unheard scenario where California isn’t vigorously defended as our leadership, Hollywood entertainment chiefs and electorate continue poking the presidential bear. This could leave our state in the position to defend itself if and when North Korea launches their nuclear arsenal at our western coastline.

Whether you like Trump or not isn’t the question for California, as an equal amount of U.S. citizens didn’t care for President Obama, but rule of law should take precedence over obstruction of justice. Especially when hegemonic, adventurous nations such as China, Iran, Russia and North Korea (CIRN) are watching U.S. political behavior and searching for ways to undo the liberal global order for their own gain. If California cares about environmental laws, regulations and eradication of climate change they should embrace Trump. Since it recently came to light China, India and Europe are all building or keeping in place coal-fired power plants to compensate for the intermittent unreliability of renewable energy.

This undoing of America has become a “lawyers war,” that has produced soft, war-like moves bordering on a coup at American political leadership. Historian Victor Davis Hanson has listed 12 actions meant to undermine the U.S. government that range from nullifying federal law to using the 25th amendment to declare Trump unfit for office. California has embraced all of these methods to our detriment and I’d argue eventual demise.
Additionally, world media, universities and Hollywood popular culture seek to have Trump impeached from office, or worse prosecuted for some alleged misconduct that doesn’t have a law-breaking statute attached to the allegations. Now anything Trump attempts is deemed venomous and he needs to be reduced to a pariah, worse than a tin-pot dictator or authoritarian. The irony is let the American “resistance,” of academia, universities, Hollywood and political elites on both sides of the political spectrum try this “resistance” with the North Korean regime, and they, and their families would die, or be sent to a concentration camp.

What resistance-acolytes like U.S. Senator John McCain seek is power at all cost, and still upset their egos were hurt by Trump during and after the U.S. presidential election. McCain has gone from statesman to part of the resistance that now accepts money from the loathsome George Soros. McCain, who fought and literally bled for freedom, has become what he fought against as a young man. McCain is no better at this time than Maxine Waters, Gavin Newsom or Jerry Brown. Let’s hope Vietnam War hero McCain reforms his ways.

Interestingly, President Obama spoke about the use of power and fighting evil during his first term when he accepted the Nobel Peace Prize. Obama said:
But as a head of state sworn to protect and defend my nation, I face the world as it is, and cannot stand idle in the face of threats to the American people. For make no mistake: Evil does exist in the world.

What Obama understood during that speech, but didn’t carry over during his presidency, was explaining the burden a U.S. president has constitutionally as the Commander-in-Chief – mainly, the use of force – and confronting evil across the globe as the world’s policeman. This U.S. trifecta of resistance coming from universities, media and Hollywood has descended into smears, campus violence and bludgeoned rhetoric meant to ruin lives. And foolishly California funds this un-prudent political behavior through two-faced men like Tom Steyer.

U.S. Democrats, Republicans and European leaders don’t consider the inherited mess left to Trump. Instead of fighting real evil coming from CIRN, and their proxies, California elected focus on undermining Trump and his political appointees. Yet, make no mistake that CIRN are watching, waiting and salivating at the opportunity to parcel up territory for their ravenous, national-pride appetites. Imprisoning, eliminating and carving up California would be a top priority.

Consider what would happen to the Philippines right now if the U.S. hadn’t come to their aid fighting ISIS? ISIS is nothing compared to the Chinese Navy, Russian Spetsnaz, Iranian Quds Force, or North Korean nuclear missiles. Does California really want U.S. political instability? Chancellor Angela Merkel, who doesn’t like Trump, recently commented about U.S. leadership being at the forefront over Russian and Chinese influence. She may dislike Trump, but is shrewd enough to know the Russians would overrun her country and Europe in days without the U.S.-led NATO alliance.

This California political resistance should ask themselves why they are advocating war-like maneuvers and tactics without realizing that at some point maybe their alacrity will be pushed right back in their faces? If that happens then a shooting war in the U.S. will take place, and that could be the start of World War III. But, may cooler heads prevail and morality not be jettisoned to the backseat of global geopolitical struggles tearing at the social fabric that has held the world together for over 70 years.

Link: http://www.capoliticalreview.com/top-stories/will-california-lead-america-into-the-second-american-civil-war/

Decimation of Mideast Christians a threat to peace

July 6, 2017

The Christian population in the Middle East is being decimated. Repeated attacks by Muslim extremist groups along with indifference by Middle Eastern governments have resulted in this religious minority fleeing their historical homelands in record numbers. But it is not only Christians who will suffer if this exodus continues: It will eventually result in loss of Muslim lives as well, since Christianity has been a positive influence for centuries in the region.

Maria Abi-Habib, a Middle East correspondent for The Wall Street Journal, wrote in May: “The exodus (of Christians, and Coptic Christians particularly) leaves the Middle East overwhelmingly dominated by Islam, whose rival sects often clash, raising the prospect that radicalism in the region will deepen.

“Conflicts between Sunni and Shiite Muslims have erupted across the Middle East, squeezing out Christians in places such as Iraq and Syria, forcing them abroad” to Europe, the US and elsewhere.

While stories of how good Christians had it in Iraq before the US-led invasion in 2003 may be exaggerated, it can’t be ignored that Saddam Hussein kept Islamic extremists at bay during his reign. According to some estimates, in 2003 there were roughly 1.5 million Iraqi Christians, and today there are only 300,000.

The current chaos in Syria has brought similar results for Christians in their historical homeland. In 2011 there were reportedly 2.5 million Syrian Christians, and today that number has been cut in half. Syria is a disaster for Christians and Muslims alike.

Abi-Habib noted: “More Arab Christians live outside the Middle East than in the region. Some 20 million live abroad, compared with 15 million Arab Christians who remain in the Mideast.”

And it’s even worse when Coptic Christians are included in the equation. The largest Arab nation – Egypt – enforces strict anti-Coptic laws dating back to the subjugation of that country under the Ottoman Empire, and the persecution of this large Christian minority heated up during the 2011 Arab Spring revolution and continues today.

ISIS bombed a Coptic Orthodox Cathedral compound on December 11, 2016, and formally announced that it had entered Egypt two months later via a video proclaiming the Copts as instigators of the Crusades. Thus far the Egyptian government has battled ISIS in the Sinai and elsewhere in the country, but its efforts to protect Copts has been limited.

Ironically, Coptic Christians weren’t part of the Crusades. Their Christian brethren in the West, because of theological differences, have never understood Copts, and these differences made them outsiders during the Crusades – as, indeed, they are today.

Currently there are 9 million Egyptian Copts, and they form the Middle East’s largest Christian and non-Muslim population. However, they are treated as second-class citizens without equal protection under the law, as is is also the case for the majority of Christians in the Middle East.

But if Islamist extremists can dehumanize and systematically kill Christians – as ISIS did in Iraq – then what will happen to the Middle East when these barbaric practices are not stopped, or are even encouraged? If nothing is done, the region will experience destabilization similar to that seen during World War II.

Where Islamic extremism is allowed to succeed, death and the withdrawal of civilized society follows. What’s hard to grasp is a recent Pew Research Poll indicating that 74% of Egyptian Muslims wanted sharia law governing their country, and nowhere in the poll or subsequent research did Islamic adherents speak about protecting Christians.

The international security threat is tied to attacks on Christians in the Middle East this way. ISIS has cleansed northern Sinai of its tiny Christian population through deftly making sure that Muslims aren’t harmed while they surgically strike and drive out Christians. Islamist terrorists then use suicide attacks and other violence to push Christian refugees into Israel, Jordan, Europe and the United States. But what Egypt and other Middle Eastern governments could face if they don’t stop attacks on Christians under their jurisdiction is that their militaries could be forced to fight asymmetrical wars in urban environments that are nearly impossible to win.

In Syria, Iraq, and anywhere else that urban, asymmetrical warfare exists, damage occurs that tears at the social fabric, rips apart economies and leads to large numbers of refugees. Polarization could then drive the Muslim world into fought on ideological lines.

The United Nations, Nato, the European Union and the US need to pay attention to a great geopolitical disaster happening at this time, otherwise persecution of the world’s largest religion will continue unabated – to the detriment of the Middle East.

Link: http://www.atimes.com/decimation-mideast-christians-threat-peace/

Oil prices continue to slide as US fossil-fuel supplies build

July 3, 2017

For the first time since 2008, the US Energy Information Administration (EIA) revealed in early June that total stockpiles of crude oil and gasoline in the United States have reached their highest levels. Additional stress was placed on oil markets when Opec said production rose through revived output in Libya, Nigeria, and Iraq.

The political climate in the three countries has improved, helping to increase production. And they are also exempt from the extended Opec production cuts that began last November intended to boost market prices for oil. An International Energy Agency report stated: “If … (Libya and Nigeria) continue to increase output, those extra barrels will delay Opec’s goal to re-balance the market.” Iraq is the wildcard because Baghdad isn’t going along with Opec production limits and that signals continued downward pressure on the price of oil.

Despite Opec’s extension of production cuts, the worldwide glut of oil, “the world is awash in oil” is keeping the price from rising. But other issues are contributing to the descent into what some are predicting will be a $20-a-barrel range. The unconstrained pro-fossil fuel policies of President Donald Trump’s administration are fueling this decline, unlike his predecessor — Barack Obama — who advocated for clean energy and no exploration and production on federal lands.

US boosts fossil-fuel output, confounds Opec

The US is setting the market for world oil prices led by shale plays involving hydraulic fracturing (fracking) in Texas, North Dakota, Oklahoma and Pennsylvania. Whatever price hikes Opec believed could be achieved through lower production quotas have been displaced by record-breaking US shale output and higher weekly rig counts. Even floating tanker storage of crude is on the uptick in Southeast Asia, furthering the glut.

Moreover, according to the Wall Street Journal, market volatility has diminished and global economies have recovered from the 2008 recession. Wall Street’s “fear gauge,” is historically low, and global dynamics that fostered negative reaction in Europe have largely subsided with the election of French President Emmanuel Macron and continued German leadership under Angela Merkel.

Events such as Chinese currency devaluation or Brexit instability are no longer hampering markets. Hedge funds and private-equity investors have pumped over $19 billion into US shale exploration for the near future. Oil markets, like all financial markets, seek stability and this is exactly what is being cited for increased oil and gas production, particularly in the US.

Renewables have a clear future, just not now

Renewables are the future, but they won’t replace fossil fuels anytime soon. The unanswered questions regarding large-scale renewable viability are numerous, along with how to achieve scalability, storage, and smart-grid diversification. Without those factors in place, renewables will stay a niche energy source — not unlike electric vehicles (EVs) — which need tax incentives, government marketing, and affluent populations to achieve higher sales over the combustion engine.

Intermittent renewables are still a problem overtaking fossil fuels because they need those very fuels (natural gas and coal) as a backup when wind and solar fail. It’s difficult to envision renewables overtaking fossil fuels and the 6,000 petroleum products that are supported by increased production outputs. The future is bright for renewables, but the remainder of this decade points to oil as the choice for global energy growth and consumption.

But the biggest influences leading oil into the 2020s will come from three factors: “Smarter management of complex exploration and production systems, data analytics, and automation.” These will allow oil and natural gas companies to deliver even more product to an oversaturated world market while lowering costs as never before.

Smarter management of complex systems allows exploration and production firms — no matter the size — greater efficiency drilling for oil and gas. As an example, deepwater breakeven costs have gone from US$100 a barrel in 2014 to $40 to $50 in the Gulf of Mexico. Projects once stalled are now producing oil and providing high-paying jobs through standardized drilling platforms that are easy to duplicate. Shell Oil is now applying lessons learned in their fracking operations to their mature deep-water operations.

Lower costs and fewer equipment failures

Better analytics allow oil companies to use complex algorithms and seismological testing to scour large amounts of data germane to finding oil and gas that was once undiscoverable. Also, “predictive maintenance” is now used through enhanced data analytics and historical records to predict equipment failures during the entire E&P process. This practice, which was first put in place by aircraft engine companies, has now been adopted by oil companies to cut costs and chronic equipment failures.

Dangerous jobs such as fitting pipes during the drilling process and exploring for hydrocarbons in hostile environments once performed by oil-field roughnecks will now be carried out by automated systems and robots. This new era of automation greatly enhances the chances of bringing more product to market than was previously thought possible. Robots are being developed by companies to inspect offshore pipelines and underwater equipment. But where automation is seeing its greatest transformative effect will be in the industry’s workforce. According to a McKinsey & Co. study, “within 10 years, oil and gas companies could employ more data scientists with Ph.D.’s than geologists.”

Geopolitical turbulence, however, could stop the oil price decline in the 2020s. War-like posturing in Syria between the US, Russia, and Iran, China militarizing the South China Sea, and Venezuela moving towards failed-state status are geopolitical pressure points that could cause oil prices to skyrocket quickly.

Increased oil production and supply have made the US a paradoxical nemesis for Opec — in the words of Roman general Lucius Cornelius during the wars of the Republic: “No better friend and no worse enemy.”

Low oil prices are good for consumers and domestic consumption but will transform the energy industry in unforeseen ways, not unlike the unpredictability of wars and international relations. But one thing is clear: The world is awash in oil with insufficient demand to soak up the excess. This will cause oil prices to continue their downward trend unless a dynamic event occurs on the world stage.

Link: http://www.atimes.com/oil-prices-moving-lower-will-continue-path/

Libyan Exports Rain on OPEC’s Parade

June 26, 2017

While Syria is the disaster of a generation, Libya isn’t far behind. Currently, Libya is upending global oil markets through increased oil production for export. This latest occurrence is overturning the OPEC production limit deal that exempts Libya, Nigeria, and Iraq.

While Nigeria and Iraq have their own domestic and geopolitical issues, it’s Libya and the various factions that should be of grave concern to the world community. Once NATO overthrew the Gaddafi regime without a nation-building plan in place, Libya became an attractive safe haven for ISIS and various other tribal factions warring over Libya’s fossil fuel resources, which represent billions a year in potential income.

The various armed factions (government-sponsored, Islamic, and military) are all vying for the opportunity and riches that comes with boosting Libya’s crude oil production to one million barrels per day (bpd) by the end of July. Recently, some of these factions signed an agreement with German Wintershall (GW) to get oil fields back online, adding another 160,000 bpd of output which would otherwise have been idle in the chaos following the invasion by Western powers.

Geopolitical forces were in play, but the various factions in question put their differences aside to put this deal in place; the result is that world oil markets are seeing more supply. The National Oil Corporation (NOC) and GW had formerly been locked in negotiations over disputed past payments for oil field services rendered. With these negotiations finally resolved, oil production has surged ahead crashing the OPEC deal, and the internal focus has shifted toward fighting ISIS instead of each other.

Reconciliations between rival factions have caused production to grow from 178,000 to over 902,000 bpd. Since oil accounts for an overwhelming majority of Libyan economic activity, this reconciliation has major geopolitical implications in the MENA region. New oil revenue allows the fledgling government to wage war against extremists, and set up a somewhat functional state in the midst of a troubled region.

Yet nothing is certain in Libya anymore, and the political system continues to be fractured as ever. If oil exports collapse over internal or external struggles, or Libyan militant groups decide to exert their own pressure on oil facilities, tensions will spike, output will drop, and government revenue will dry up. What Libya is then reduced to is an oil-producing state whose terminals, fields, and pipelines are at the frontlines of combating Islamic extremism and stopping the flow of immigrants from North Africa, the Middle East, and Central Asia that are overwhelming European policymakers.

Moreover, the Qatar crisis has exacerbated tensions in Libya between the various militias and groups vying for oil and political power. The eastern government in Libya joined with its financial backers in Egypt and the UAE by denouncing Qatar’s actions, and wanted oil companies operating in Qatar to cease and desist operations immediately.

These factions wanted Qatar Holding to stop doing business with a Swiss commodity trading giant, Glencore. However, Glencore has an oil export contract with the NOC as the only official and legal business allowed to export crude from Libya. Politics and business mixed together earlier this year when the eastern government and NOC chairman praised the Libyan National Army (LNA) in assisting the NOC to restore control over four key oil export terminals in the Libyan oil crescent.

The LNA is affiliated with the government in Benghazi, but given Libya’s internal political struggles, the situation on the ground can change quickly with regards to oil production and the fight against ISIS. Political and macroeconomic certainty is ever elusive in Libya since Gaddafi’s ouster.

In terms of Libya, the allegiances underpinning the Qatar crisis can be broken down into the following: Qatar supports Islamic militias in Misrata and other units loyal to Sadiq al-Ghariani, the Mufti of Qatar, but the UAE and Egypt support General Khalifa Haftar, the leader of the LNA who’s aligned with the government based in Tobruk.

Ever since the LNA took over oil terminals and relinquished control to the NOC, production disruptions have been less frequent. The NOC target of one million bpd seems achievable this summer unless ISIS is able to expand operations or another large-scale civil war erupts.
With Libyan oil production transforming back to higher, disruptive levels, the energy industry could be in for lower prices for the remainder of this year and next. As this Libyan revolution unfolds, energy investors can expect the unexpected, and changes in political leadership, economics, and various factions looking to destabilize the fragile government will have policymakers and business leaders treading lightly with regards to Libya.

The paradox is that, for starters, the resulting lower energy prices weaken both the Libyan economy and the economies of Arab states that rely on oil markets for geopolitical influence. With cheap and abundant oil resources since the 2014 crash, new policy responses are coming from nations like Saudi Arabia, which launched Vision 2030 and recently empowered the young son of King Salman as the next Saudi monarch. Other oil-reliant nations will have to respond as well if oil continues its downward trend.

Understanding Libya is a difficult assignment, but one thing is clear. As the country nears one million bpd in exports, any hope of stabilizing oil prices – and by extension politics in the MENA region – will remain elusive for years to come.

Link: https://www.geopoliticalmonitor.com/libyan-exports-rain-on-opecs-parade/

What Will It Take For California Voters To Change Their Minds?

June 6, 2017

In Malcolm Gladwell’s famous book, The Tipping Point his central thesis is how events collate together to form a “tipping point,” that changes individuals, companies, governments and society. Has California reached a tipping point? Seemingly it has, then why do voters keep electing the same Democrats, and allow the Republican Party to fade away into oblivion?

Moreover, apathetic voters don’t care that the Democratic Governor and Legislature say one thing, and do something completely opposite as long as the hot causes are in line with the media and Democratic Party’s narrative of gay marriage, abortion and global warming. Those three shibboleths of California public policy have overtaken the central tenets of state government:infrastructure, public safety and education – since all three are in shambles or disarray at best.

For Democratic voters, independents who lean conservative, but never hear an organized message, along with Republican voters who still long for Reagan, here are issues to consider along with our downward trajectory. Your apathy and unrealistic expectations are taking California to a brutal tipping point that could easily mirror the disaster being ignored by the mainstream media (LA Times, NY Times, ABC, CBS, NBC) about Venezuela since it doesn’t fit their false narrative that socialism espoused by Bernie Sanders should be emulated.

The next number of paragraphs will begin showing the current path for California this year and decades ahead. It is sobering to envision what California will look like for our children if changes in voting patterns and the domination of the Democratic Party aren’t broken.

Governor Brown and the Democratic-Super-Majority-Legislature raised taxes again, and openly misappropriated the funds giving middle class families and businesses additional reasons to flee the state. If these two trends push forward in the future and the CRP does nothing about this with candidates who can explain what’s taking place in California – versus not supporting a Republican President during election seasons – then the CRP will be relegated to the dustbin of history. Translated, California will remain having the worst environment in the nation for job creation and business friendliness.

Unfortunately, Democrats are now job killers and only believe in the above-mentioned public policy shibboleths along with hating Trump. The days of Governor Brown’s father, FDR, Truman, JFK and Scoop Jackson are over – Democrats who believed in strong defense, single-family homes, infrastructure, education and two-parent families as the backbone of stable, thriving societies. Imagine a California Democrat who didn’t back abortion-on-demand, gay marriage and global warming and was pro-life instead, questioned the sanctity of marriage and was against global warming – even doubted the veracity of the environmental movements claims? That person wouldn’t win a City Council race against a dead person in San Francisco.

Pensions as currently configured are 100% unsustainable, no matter what the stock market achieves in the near future using historical rates of return. Democrats and Republicans who don’t make a case for pension reform will bankrupt California, and don’t expect Trump or Pence to rescue us. Even Sacramento has ominous pension problems. Hundreds of billions, even trillions are owed, yet voters are only concerned about the three shibboleths?
Unions now run California’s education standards, and three new bills (AB 450, 1209 and SB 63) would further influence the destruction of our economy and labor practices all in the name of being progressive Democrats. Yet voters keep voting for these measures and legislators, instead of sensible, business-friendly, moderate Republicans like David Hadley (though I disagreed with him about not supporting Trump during the Presidential election).
Social issues that have nothing to do with California’s upward trajectory are en vogue by Democratic legislators and their supporters: a former teacher at Diablo Valley College was arrested for attacking a Trump supporter with a bike lock at the Berkeley protests and AB 1576 would tax items and their price equivalent based on gender for businesses who don’t price items exactly the same throughout California. Litigation for consumers and businesses will skyrocket costs.

Republicans who only want to be moderates and worry about taxes, business growth and strong defense should understand that gender, class and race are additional shibboleths added onto the social diagram of how Democrats beat Republicans in this state. The days of not articulating reasonable social policies are now over since President Obama introduced all three into public policy and the national media to win elections and fragment the United States (US).

While Governor Brown and the Democratic-controlled legislature obsess over nothing, Joel Kotkin states:
“In the coming years, California’s claim of being the economic exemplar of the country may be further undermined bylegislative overreach. The statewide rise in the minimum wage will hit the lower-wage sector, particularly outside the coastal enclaves. Various plans to boost the welfare state, such as a single-payer health care system (costs $400 billion annually) that includes the undocumented, and a host of union-driven initiatives, seem certain to drive up costs and impose an ever-heavier tax burden on the state’s struggling middle class. Perhaps most threatening, over time, may be a host of new environmental laws which will impose enormous burdens on affordable housing, energy prices and industrial growth.”

This warning is coming from a self-described, “Truman Democrat,” and not a Tea Party Republican or Trump supporter. Somehow, Los Angeles believes receiving an Olympic bid in 2024 or 2028 will alleviate these concerns, without considering what prior cities have done with billion dollar stadiums in bankruptcy, disrepair and out-of-use? What our society should care about and attempt to alleviate before the Olympics being awarded is dropping the homeless rate in Los Angeles – which surged 23% according to the Greater Los Angeles Homeless Count.

San Francisco has taken the illegal-immigrant debate to a new level. Mayor Ed Lee stated in his 2017 State of the City address, “We are a sanctuary city, now, tomorrow, forever,” without understanding the implications of HR 2431 that punishes sanctuary cities by withholding federal monies. In 2016 San Francisco received $509,260,129 in federal grants and direct payments. And Democrats who control all levers of state government want to burden businesses with immigration policy, which will only drive more of them out of the state.

California isn’t in a shots-fired civil war, but we are dangerously close to moving in that direction when the Mayor of California’s most prominent city so openly defies the federal government. The Civil War decided that federal laws supersede state laws whether we like it or not.

State, county and local monies for mobility are allocated towards public transportation that the public either doesn’t want or use commiserate to cost, or the cost-to-benefit ratio is negative when you consider as an example, the miniscule affect on traffic that bike sharing produces. Meaning, billions are wasted on transportation projects that don’t improve pedestrian safety or traffic mobility. Whereas a better use would be the construction of quality-of-life infrastructure: schools, roads, highways, sidewalks, bridges and water systems.

The biggest killers to California are environmental issues that strictly pertain to global warming as fact and the regulations that will kill this state. As an example, President Obama’s last year in office, he produced regulations that totaled $2 trillion according to the Competitive Enterprise Institute. The Clean Power Plan was just one type of environmental regulation that California wholeheartedly embraced along with the Paris Climate Agreement without understanding the costs or zero affect either would have on cleaner air, efficient use of environmental resources or how China and India wouldnegate any gains by California adhering to these onerous regulations and agreements since both are still building coal-fired power plants.

Moreover, renewable energy and electric vehicles (EVs) don’t currently work now or in the near future as envisioned by Governor Brown, and State Senator Kevin de Leon. Both (EVs and renewables) have vast unanswered questions and technologies that need to be solved before either is scalable the way fossil fuels and the combustible engine is at this time. Since all environmental strategy and policy is based on man-made global warming in California through the Democratic-controlled legislature then the questions raised here need to be answered before moving forward with global warming-centric political hysteria. That’s not how good policy is made, or to truly answer the questions about the climate changing and what that means for California, the US, industrialized nations and the developing world.

As a former Republican State Assembly nominee (43rd State District) I call on the CRP to begin soberly asking why they can’t win elections anymore? Particularly, Los Angeles County (as goes LA County so goes this state) when candidates like Pete Peterson should’ve been embraced, his campaign funded by the party, and should currently occupy a top CRP leadership position while gearing up to either run for Governor, Lieutenant Governor or Secretary of State again. Imagine if now, Dean Peterson (Pete is the Dean of Pepperdine University’s School of Public Policy where I am a December 2015 graduate) were Secretary of State?

Dean Peterson ran on a platform of transparency, efficiency and effectiveness for the office, instead of the politicized entity it currently is that knowingly has illegal immigrants on its voter rolls. Anyone who believes there aren’t differences in a Democrat or Republican begin trying to clean up voter rolls, and the mess that brings up to find out the differences. Dean Peterson would’ve have accomplished that task, or at least wouldn’t have added to the disaster. The CRP and national party should embrace him and others vibrant candidates like him as well.

California has gotten lucky economically through Silicon Valley exploding, Los Angeles exploding home prices and the popular Presidency of Barack Obama protected by and prodded forward by the media. A narrative not unlike Pravda during the Soviet Union’s days, but still we have the highest poverty rates, welfare usage, income inequality and fleeing of citizens over the other 49 US states. We’ve created a system that is no longer sustainable in the long-run and unless voters change their minds, character or sources of voting information then the words of Samuel Johnson, in Oliver Goldsmith’s The Traveller, will come true: “How small, of all that human hearts endure, That part that laws or kings can cause or cure.”

Link: http://www.foxandhoundsdaily.com/2017/06/will-take-california-voters-change-minds/

President Trump’s foreign tour recharges US global strengths

June 1, 2017

The Great War of 1914-18 was supposed to be the war that ended all wars. Theory suggests that if the United States had accepted Article X of the Versailles Treaty in 1919 establishing the League of Nations and if today’s enlightened countries accepted the ad-hoc authority of the United Nations, then war would be a thing of the past. And despite the 1928 Kellogg-Briand Pact outlawing war, it failed to prevent history’s deadliest conflict: the Second World War.

Under the presidency of Barack Obama, the idea of war was a thing of the past, embodied in his 2009 Cairo speech when he never mentioned terror or terrorism. This was in stark contrast to President Donald Trump’s recent speech in Saudi Arabia during which he mentioned the word “terror,” or “terrorism,” 30 times.

Here’s the outcome of President Obama’s bowing to dictators, his war on terror, his foreign policy and the loss of deterrence: Syria’s destruction allowed Russia and Iran to take a strategic foothold in the Middle East, unwisely leaving Iraq and thus allowing the creation of ISIS, acquiescing to North Korea through “strategic patience,” and signing the Iran nuclear treaty that is now a disaster. However, Trump confronting Arab leaders during his trip to Saudi Arabia let the world know that the words of former Nato secretary-general Anders Fogh Rasmussen have renewed meaning: “Only America has the material and moral greatness to stop the slide into chaos and foster peace.”

Saudi welcome for Trump outshines Obama

No one would’ve predicted that the home of Salafi piety and Sunni-Wahhabi Islamic terror would open a terrorist monitoring center, and that Saudi King Salman would lavishly welcome Trump, while his predecessor, who was devoted to Iran, was snubbed by the Sunni king on his final visit as US president. Trump is the best hope for the Middle East and Asia.

Instead of the feckless Europeans, and an administration infatuated with global warming, deterrence, a balance of power and a forceful re-entry of the US to combat evil are now on display — and are economically successful. Even oil companies are thriving again. Whereas Trump is tackling real evil and lives lost, Obama is giving speeches on global warming while spewing CO2 from private aircraft and large motorcades. North Korea, Iran, ISIS and China laugh at the US and a global community that believes in the weak nothingness of the environmental movement. War is never far off when ridiculous Western proclamations about climate change are at the forefront, instead of confronting and eliminating evil through strong militaries, nuclear triads and active intelligence methods.

The world is growing more dangerous as each day passes, because of non-contributing Nato countries, and the toothless former US administration that allowed evil to run rampant. Trump and Asia have inherited a world that could erupt in conflict at any moment. North Korea continues testing ballistic missiles, and boasts they can hit the US anytime they want. Meanwhile, the Europeans at the G7 and Nato summits didn’t speak about North Korea, Chinese aggression in the South China Sea or Russia on their doorstep, but choose to obsess over the Paris Climate Agreement that will do absolutely nothing to alleviate unproven global warming.

It’s laughable, if it wasn’t so terrifying, how the left thinks about Iran: that the Iranians just elected a moderate president, according to Kasra Naji in a recent issue of Foreign Affairs. Unfortunately, President Hassan Rouhani has amassed Iranian-led troops near American forces in Syria, built a third underground ballistic-missile factory and broken the recent Opec production-limit agreement. And Rouhani recently said: “We don’t need anyone’s permission to test ballistic missiles,” while the US-Saudi-Iranian rift deepened after Trump chose the Sunni-led Saudi’s over the militant Iranian Shias.

Sending the wrong signal to rogue states

Additionally, China has started harassing US aircraft again, and Russia continues violating airspaces. Why Trump, Nato and Asian allies don’t take defensive measures is beyond reason — and dangerous — because it allows rogue, and undeveloped countries to believe they are strong.

That’s also what a robust nuclear deterrent has accomplished — keeping the world at bay — without a major world war in more than 70 years.
Deterrence isn’t difficult to lose, but nearly impossible to reacquire. Yet that is exactly what is happening from North Korea to the Middle East. It doesn’t require shots fired or lives lost, but respect has to be its No. 1 outcome. That’s also what a robust nuclear deterrent has accomplished — keeping the world at bay — without a major world war in more than 70 years. While the weapons are hideous, they serve their purpose. But that’s what deterrence does — it deters the aggressor from engaging in war-like behavior.

However, the West is harming itself by attempting a bloodless coup against Trump through a series of unfounded leaks, a former CIA director who politicized the job, and the Obama administration which oversaw vast intelligent breaches that earned a severe rebuke from the US Foreign Intelligence Surveillance.

Trump’s foreign tour produced respect in the Middle East, but muddled resistance elsewhere. When the Pope and European leaders lecture Trump and the US on climate change (whose rules should be eliminated) yet crave the US military and Asian money to prop up their destructive governments and economies, then war-like trouble is on the horizon.

Pragmatic realism has overtaken the Trump administration that was lost when President George W. Bush bowed to American and European media that strongly resisted him over Iraq. The new Axis of Evil now has a new member — China — and they are on the march along with Russia, Iran and North Korea. Let the first bomb drop, and the Europeans, South Koreans and others will beg the hated Donald Trump to protect them from the devastation that awaits if they continue acquiescing to this expanded axis.

Deterrence and realism have re-entered the American presidency, calling out enemies and making new economic friends. It’s the best hope the world has to allay the beasts of a third world war from escaping their cage and fulfilling the words of Lenin: “Who can do what to whom?”

Link: http://www.atimes.com/donald-trumps-audacity-hope-tour-restore-deterrence/

Obama should be made to testify over the Iran nuclear deal

May 17, 2017

Another damning revelation was recently brought to light over the deal former US president Barack Obama negotiated with the Islamic Republic of Iran. The latest discovery revealed that Iran will soon launch two brand-new domestic satellites into space, which is likely cover for the test-firing of advanced intercontinental-ballistic-missile (ICBM) technology that could be used as part of Iran’s nuclear program, according to US national-security insiders.

Not surprisingly, Iran continues, in defiance of the P5 +1 nuclear agreement, to test ballistic-missile technology, tests that coincide with North Korea’s provocative moves. Tehran and Pyongyang have allegedly been partners in illegal sales of missile technology and arms on the black market for years, but now they are mirroring each other in their advancement of ICBM capability.

Obama should be asked under oath why he made a nuclear deal with Iran knowing that country’s dubious history. Further, if he and his national-security officials knew there was collusion between Iran and North Korea, why continue a so-called nuclear deal while implementing “strategic patience” with the North Koreans? This is when conspiracy theorists come out of the woodwork, but no one is asking these questions of the former US president. Instead, he should be called in front of Congress and made to testify over the consequences of Iranian actions.

Ironically, sanctions against Iran were working: It was getting desperate for hard currency, its oil industry was in shambles, and the economic situation for most of the Iranian people was in a free fall until Obama came to the rescue. But why would he do this, knowing that history would judge him on these actions that could see the sponsor of Hezbollah, Hamas and other terrorists across the world acquire ICBMs capable of hitting the US or, at the very least, Israel?

Now Iran is flush with billions in post-sanctions relief from the US to “engage in an unprecedented military buildup meant to transform the Islamic Republic’s fighting force into an offensive juggernaut”, according to conservative publication the Washington Free Beacon. President Hassan Rouhani announced in late April that the Iranian military’s budget had increased by 145%. Iran now has the ability to project power outside of its borders for the first time since the Islamic Revolution. The consequences are frightening. To believe Obama didn’t know dealing with Iran could backfire defies reason.

The Harvard-educated, erudite president must have had a briefing from national-security advisers giving plausible reasons for how this could happen. The point needs to be reiterated: Should Obama be held liable for treason over the Iran nuclear deal? Because under the current Iranian regime, there is no way this ends well, and Rouhani is seen as a moderate.

The most troubling aspect of the entire agreement and now its ramifications are that the Iranians got to stay on their weapons-grade-enrichment path while economic sanctions were lifted. Iran keeps its nuclear program, recoups billions in frozen assets, and never has to enter peaceful existence with the US and its allies. This is the equivalent of Japan and Germany being able to be rebuild after World War II, but never having to change. That scenario played out after the First World War, which led to the second.

Iran can use this false deal for as long as it’s strategically useful, because it does not have to change. With the world’s leftists trying to undo Brexit and the election of US President Donald Trump, the Iranians are laughing all the way to nuclear weapons and a revived economy. Meanwhile the Germans stood by and did nothing to deter the Iranians before or after the deal and other Europeans reaped billions in economic benefits from the P5 + 1 deal without having to make any hard changes, compromises or security overhauls.

Yet many still believe Obama knew nothing at all while believing it is in the best interest of the US and its European and Asian allies to allow Iran to flourish while hiding an ICBM program, growing its military and booming economically. The former president should be made to testify to what he strategically and tactically thought when he put the world on this path of appeasement with Iran.

Expect Obama as he re-engages in domestic and international politics to double down on the virtues of the agreement while Iran strengthens Hamas and Hezbollah – both allegedly Iranian war-making proxies – instead of owning his disastrous mistake. Shiite Iran will use its unvarnished diplomatic recognition to “fund more terrorism [and] offer more provocations to Israel and the Sunni Gulf States”, as historian Victor Davis Hanson wrote in 2013.

Saeed Ghasseminejad, research fellow and expert on the Iranian regime at Washington-based think-tank the Foundation for the Defense of Democracies, believes the Trump administration should impose new sanctions on Iran in specific industries related to its military buildup and nuclear program. These sanctions should target the country’s petrochemical, mining and metallurgy, telecommunications, automotive, oil and gas and electronic industries, Ghasseminejad has been quoted as saying.

The world learned the lesson of appeasement when Obama backed down to the Iranians in Syria, which only reinforced President Bashar al-Assad’s violence toward his own people. While the US begged for restraint and asked the feckless United Nations for assistance, Iran (after the nuclear deal) along with Russia swooped into Syria and the US lost influence and deterrence capability and projected weakness. The North Koreans were certainly watching and capitalized on this feebleness.

Former US secretary of state George Schultz has called the relationship between the US and Iran “troubled”, and given the lies that predicated the nuclear deal, it is staggering not even to consider launching an investigation into Obama, John Kerry and the US negotiating delegation. Even some in the French administration reportedly thought Obama was naïve and that the US Congress should scuttle the deal.

The lesson to be learned is that once you capitulate to a foe, your foe dominates. Restraining the Iranians will be as hard as regaining the deterrence lost under the presidency of Barack Obama.

Link: http://www.atimes.com/obama-made-testify-iran-nuclear-deal/

The election of Moon Jae-in could mean war in Asia

May 12, 2017

In canto 32 of Dante’s Il Purgatorio, the voice of God comments: “Oh, my poor vessel, how badly you’ve been loaded.” While God was speaking about state religion on Christianity, the good Lord could’ve been speaking about the disastrous decision of the South Koreans to elect Moon Jae-in as their new president.

Predictably, the man of the left believes that through sheer force of personality and being on the side of the angels, he can, like former US president Barack Obama, convince the North Korean regime to change course. That fallacy pervades state-sponsored religions, individuals who actually believe in humans altering the weather via global warming proclamations, and negotiating with murderous regimes bent on domination and destruction.

Obama bent over backwards to get a deal with Iran and now the supreme leader of the country – Ayatollah Khameini, a fanatic who hates the West – will have nuclear weapons in the near future.

Negotiations and kowtowing to the Iranians didn’t work. The agreement means Tehran is now emboldened to acquire and test additional missiles with a more deadly range and speed.

If President-elect Jae-in believes openness will work with North Korea, he will learn a vicious lesson in realpolitik before his term ends. And this time, it doesn’t seem likely that US President Donald Trump will come to South Korea’s rescue the way previous American administrations have in the past.

If President-elect Jae-in believes openness will work with North Korea, he will learn a vicious lesson in realpolitik before his term ends
Negotiating a so-called “Sunshine Policy” with North Korea was attempted and it failed. US presidents Clinton, Bush and Obama all failed when they tried the carrot-on-a-stick approach. They were only duped into weakness and financial giveaways, instead of sending a fleet of US naval vessels, which is the current policy. This liberal idea of bending over backward to bring North Korea into the fold of progressive nations by offering friendship failed. UN Security Council sanctions also did nothing to deter North Korean nuclear ambitions and created the appearance of weakness. Looking the other way and hoping for the best only assisted the North Koreans, who now menace Asia with nuclear weapons. Moreover, the Chinese now have zero incentive to work with the US and its Asian allies to deter North Korea from firing weapons at Japan and South Korea along with targeting the US west coast with ICBMs.

Understandably, the South Koreans were tired of corruption, and want good jobs, a thriving economy and an education system that will ensure prosperity for their nation. What they weren’t thinking about during this election – to the detriment of Asian self-preservation – was their hostile northern neighbor. But the power of emotions and non-rational thought overwhelmed South Korean voters when they should’ve voted for a candidate who took the US stance on North Korea. This would’ve nurtured economic and social stability in the most important geopolitical area in this century. Asia more than the Middle East, North America or Africa will be the hub for either vicious wars or unparalleled human ingenuity.

Yet South Korea will regret Jae-in for decades unless they expand THAAD (the US anti-ballistic missile system) shut down all economic ties with North Korea, and encourage the US and its Asian allies to continue conducting naval patrols throughout the South China Sea and Sea of Japan. Powerful militaries can defeat communism, which is only concerned with brutality and blind power exemplified by Nietzschian philosophy, not the concerns of the common citizen.

In addition, Jae-in has domestic troubles he can’t avoid. He doesn’t have much of a mandate because the opposition party is in shambles, his competition was an “utter disgrace,” and the impeachment of former president Park Geun-hye has left the country rudderless. The most ominous sign for Jae-in is the term “pragmatist,” which The Guardian bestowed on him. While normally that is a positive term for a politician, in this case, it could lead to war for South Korea.

Jae-in’s pragmatism is positive when it comes to taming the chaebols – the multinational conglomerates that dominate South Korea’s economy and business environment. But this weak pragmatism takes a dark turn regarding North Korea – and that’s where South Korea may have chosen a leader who could guide them passively to annihilation. Jae-in has made it painfully clear that he will pursue the misguided policy of choosing a friendlier course toward North Korea by reopening the Kaesong joint industrial complex.

This facility was wisely closed by former president Park; a sham facility that employed slave labor and allowed hard currency to enter North Korea to fund its gulags and missile and nuclear programs. But the mindset of Jae-in isn’t about confronting evil – he wants to appease dictators and idle his presidency with environmental warnings about carbon dioxide emissions, which makes no logical sense.

This obvious feebleness of Jae-in’s new government will set South Korea and the Trump administration on a collision course, which is the last thing Asia needs at this time. According to The Weekly Standard’s Ethan Epstein:

“North Korea will keep pushing, and Kim Jong-un did not test a nuclear weapon around the time of his grandfather’s birthday in April – as widely expected – to help Moon’s chances of taking the Presidency.”

But the votes are cast, and the fireworks of passivity and plea-bargaining South Korea’s soul are under way. Kim Jong-un got exactly what he wanted by bullying the South Koreans into electing a pacifist who believes he can lead North Korea to the path of glorious change and that his name will go down in the annuls of history, and of course a Nobel Peace Prize. Except the South Koreans, Asia and observers of the geopolitical framework currently changing in the clash between North and South Korea would be wise to read Peace They Say by Jay Nordlinger outlining the controversies and devastations of a morbid peace, instead of a decisive victory.

North Korea won’t give up, and the 38th parallel will only become further militarized. Was the former impeached president perfect – of course not – but South Korea should’ve swallowed their emotional pride and elected a leader who believes in strong, forceful, non-compromising deterrence. The hardest part of deterring North Korea isn’t the deterrence itself, but once it’s lost – and now it is – the deadly geopolitical maneuver to reacquire it usually means war when the fear North Korea should have towards its benign neighbor could’ve been kept in place by electing a military hardliner. Niccolo Machiavelli said in Discourse, “It is truer than any other truth that if where there are men there are not soldiers it is the fault of the prince, and nothing else.” Prepare yourselves South Korea for this lesson to come to fruition under the presidency of Moon Jae-in.

Link: http://www.atimes.com/election-moon-jae-means-imminent-war-asia/

The deep, entrenched fallacy of the ‘Asian pivot’

May 4, 2017

China doesn’t have the economic ability, societal will or political transparency to lead the current world order. Even the Chinese would concede that an open, liberal post-World War II system led by the Xi Jinping government, instead of America and Asian allies such as Japan, South Korea and the Philippines, would collapse. This is because additional, unambiguous liberalization threatens the entire communist house of cards, particularly the Chinese system of a controlled market economy with iron-fist-rule.

It’s under this cloud of inconsistency that the former US administration conceived its policy of a pivot towards Asia. While it achieved the Trans-Pacific Partnership (TPP) trade deal, which should’ve been ratified by the Trump administration, the use of the word “pivot” was a poor choice. Most of all, actions towards Asia, the most geopolitically important region in the 21st century, have spurred the current crisis with North Korea and China’s continued rivalry and historic hatred towards Japan.

Outside of sanctions that will take years to implement, and cyber attacks on North Korean missiles, not much can be done to stop the Kim Jong-un regime’s development of an ICBM unless China – Asia’s most important nation – intervenes. That seems unlikely since trade between China and North Korea has dramatically surged since the mutual belligerence began immediately after Trump’s inauguration.

Former US president Barack Obama’s “strategic patience” with North Korea was an abject failure, and the crisis can be laid at the doorstep of Obama, Ben Rhodes, Susan Rice, John Brennan, and other US national security officials who did nothing while Kim armed his country and threatened the entire Korean Peninsula and Chinese stability. What this means is US leadership is without equal in Asia, and while the pivot was ill-conceived, no other country, and certainly not Asean, has the economic, military, intelligence or diplomatic reach to deter North Korea or ultimately win a war against them the way the US won in Iraq (please read Dr Victor Davis Hanson’s Savior Generals, Chapter Five on General David Petraeus for verification of the US’s victory).

Xi offered a vision of the world that he can’t replicate after seven decades of US leadership.
The Pivot by Kurt Campbell and The End of the Asian Century by Michael Auslin both detail the dangers that lie ahead because of the pivot and the risks that will need to be managed, otherwise the region could see failure on the scale of WWII. Both books illustrate the need for leadership to ensure continued prosperity and peace in Asia. What’s fascinating about the Chinese, though, is how they speak out of both sides of their collective, governmental mouths.

At the World Economic Forum in January, President Xi assured the audience that China was ready to lead the liberal order built and protected by the US while offering a “strong defense of globalization.” That speech was a smokescreen cloaked in a myth. Xi isn’t prepared to offer communist China as an alternative to the US or a way to stop the erosion of that order. Further, Xi didn’t say what the Chinese or their allies are prepared to do to ensure economic prosperity without environmental degradation, which the Chinese crave. Xi offered a vision of the world that he can’t replicate after seven decades of US leadership. While Beijing loves reminding the world of inconsistent American leadership that is in full retreat, Xi’s government offers no other consistent policy.

What should be American policy towards Asia is a consistent theme of not allowing any hegemonic power “exclusive control over Asia or the Pacific.” The tension over North Korea touches on the very cornerstone of US policy since the late 1700s. The biggest concern for Asia when it comes to security and the nuclear umbrella America provides is making sure the current administration balances its European, Middle Eastern and Asian strategic policies. When Asia was an afterthought (pre-WWII, Obama’s foreign policy retreat), then predictably self-determination in the negative takes over, as seen by the current North Korean belligerence and China militarizing the South China Sea.

America found out during WWII that the Pacific Ocean doesn’t ensure security. Therefore, Asia and America should solve the North Korean crisis with every diplomatic, intelligence and possibly military tools available. The economic tug-of-war taking place between China and the US over protectionism versus free trade pales in comparison if all of Asia doesn’t take its collective head out of the sand and once and for all deal with North Korea and eventually Chinese ambition. Xi allowing North Korea to thrive is a deeply flawed policy that will backfire on his government. Fortunately, US Vice President Mike Pence’s tour of Asia in April outlines the beginnings of a new security for Asia and US policy in general that pivots from that deeply flawed policy.

Now that the US pivot is a thing of the past, what should Asia look to accomplish during this time of nuclear crisis if the North Koreans develop an ICBM and the Chinese sit back and let their proxy do their dirty work for them. The strategic mess the US created is now Trump’s to clean up with “patience, prudence and perseverance,” according to Dr Robert Kaufman of Pepperdine University’s School of Public Policy. Sending three US aircraft carriers to the Korean Peninsula reassures Asia of a US-led order the pivot lacked. Hard power beats lofty rhetoric every time. But the unforeseen threats of “economic stagnation, demographic pressures, unfinished political revolutions, the lack of regional unity and war” will have to be undertaken immediately by Asian nations without China being the leader of this coalition. Xi’s insistence that China is undergoing a “great rejuvenation” is just a Communist Party slogan for a Chinese-led order that is long on hegemonic ambition but short on contemporary leadership. The accommodation of strategic leadership will come into play once Asia-Pacific nations come together and check the rising Chinese influence that has been allowed by the false pivot under Obama. Until that occurs, realpolitik balancing under the current US-led order is the wisest way to move forward.

Link: http://www.atimes.com/deep-entrenched-fallacy-called-asian-pivot/

California Is Headed Into a Very Dark Pit

May 2, 2017

As California still continues thumbing their nose at the brute, non-global-warming believing Donald Trump, we the people may need him now more than ever. After eight years of doing away with 70 years of post World War II deterrence, realpolitik, balancing hostile nations and leading the world, supposedly California voters thought it was more prudent “to lead from behind.” And now the price to restore global deterrence that will protect California is being paid.

These actions, where elections have consequences, now find California in the cross hairs of North Korean nuclear missiles. Global warming, human rights (whether gay rights or religious freedom) and despising Donald Trump/Republicans won’t take precedent when the threat ignored by “strategic patience” takes aim at Los Angeles and San Francisco for nuclear annihilation. Eight years of hand wringing and indecisive rhetoric has produced North Korea, Iranian, Chinese and Russian belligerence. Each of these war-seeking nations will strike California (the heart of the U.S. economy) if and when they are given the chance.

None of these issues are crossing the California Legislature or Gov. Brown’s collective minds at this time. If that’s the case then what is the state of the state? We’re on our way to passing the largest transportation tax in the history of California, according to State Senator John Moorlach, that will do nothing to alleviate the current transportation issues, address concerns about former transportation taxes that were appropriated elsewhere or address Cal Trans union-led inefficiencies, instead of accounted for transparency. Additionally, CalSTRS continues missing investment return rates, and the unfunded liability will drain state, city and county finances in only a few years. Other California pensions aren’t doing much better, and these workers who were promised one thing will more than likely never see there money in the coming decades.

Something will have to give – pensions to public employee unions. The promise was, we (the Democratic controlled state), will promise you hundreds of billions of taxpayer money, if only you keep electing us without ever actually asking how that plays out in the real world of diminished returns, an aging society and an already overtaxed electorate. California is also trillions in debt along with almost a trillion dollars of infrastructure (roads, bridges, dams, canals) work that needs to be done immediately.
Through this maelstrom, Gov. Brown is leading in polls to replace Senator Feinstein if she retires and the California Legislature has solid approval ratings. Yet crime soars in all major California cities after the passage of anti-cop, anti-incarceration propositions (47 and 57) and AB109. Democratic voters, moreover, allow the governor to reign over a “green clergy or green clerisy state,” says Joel Kotkin, to the detriment of the very constituents he claims to help with his anti-carbon, non-negotiable environmental policies.

Now cities such as Hermosa Beach want to be carbon-free without ever asking the economic, long-term, scalable viability of renewable energy to replace coal or gas-fired power plants. With the difficulties imposed by environmental mandates, (which do nothing to offset coal-fired carbon use by countries such as Germany, the U.K., China, India, most of Asia and Africa), the U.S. Census Bureau now reports housing permits and construction have slowed in Los Angeles County. Los Angeles, where I am based, continues to pass higher taxes while flouting federal immigration law. When does the madness stop? Or does it ever, particularly if Prop. 13 is overturned and state revenue would soar. That is an ever-looming possibility to solve budgetary gaps, but California continues voting for Democrats who govern this way.

What California has become, moreover, is a paradox of dysfunctional Republicans and Democrats who aren’t the kind of Democrats our parents grew up under – Pat Brown, FDR, Truman and Kennedy – men who cared about middle class prosperity and jobs, instead of billionaire Tom Steyer’s environmental edicts. Which is ironic, since he made billions off fossil fuels. We also lead the nation in illegal immigration, increasing welfare recipients, decreased incarceration causing skyrocketing crime rates and a overregulated middle class that is fleeing the state. But this is good for Democrats since the arriving poor take their place hoping for generous entitlements, service jobs or some type of government employment that benefits the California Democratic Party. It’s a perfect storm of how California is headed into a very dark pit of titanic proportions.

According to a Social Science Research Council report California has the most un-equitable levels of income, education levels and standards of living between coastal and inland communities. But as Joel Kotkin states: “Our emerging republic of climate” will only exacerbate these problems while tech, entertainment and media companies keep headquarters in California, but the real work is done in Texas, Nevada, North Carolina and other low cost, low tax states. California, however, was once the heart of the American dream, but the Democratic Party and apathetic, longing-for-Reagan-Republicans have killed that dream until voters change their patterns.

California losing its manufacturing base, aerospace and military industries is analogous to the U.S. losing deterrence; seeking to recapture that lost spirit is among the most dangerous moments when great powers lose their way. California and the U.S. will find this out at their peril whether this year or in the near future – but we will find out.

Allowing the North Koreans to develop an ICBM or signing a nuclear agreement with the world’s largest sponsor of terrorism – Iran – or letting the Chinese militarize the $5 trillion a year South China Sea while backing down to Assad continuing to gas his population are the same as California wholeheartedly believing in climate change/global warming without ever asking the consequences of your actions? California and the U.S. are on a sure-fire path to war – militarily and economically – because what was once normal (deterrence and middle class prosperity) have been replaced by fashionable, progressive policies. The false canard of sloganeering has taken over from that passé, dullard way of studying how economies grow, jobs are created and families being at the epicenter of public policy is no longer in vogue.
I implore California voters to begin asking themselves, their families and friends why they keep voting for the same public officials while expecting different results. Further, President Donald Trump doesn’t need us – and would beat Hillary Clinton again if the election was held today – so the Legislature and Gov. Brown should make nice immediately. One strategically placed nuke flips California’s massive electoral college votes to the next Republican running for president. That’s not made up scenarios, but realpolitik at its scariest. So stop the nonsense and imprudent hatred of the president. Our lives and state may depend upon it, quicker than we want to believe.

While elite, California enclaves decry high crime rates, they voted for the very people who put in place the propositions that treat criminals the way a parent treats a child who takes an extra piece of candy. Deterrence works – for societal criminals, murderous, nation-state tyrants and for California policymakers – but for now, sticking our heads in the sands and hoping for the best while Senator Kevin de Leon and Gov. Brown shove climate change legislation down our economic throats won’t stop North Korea or the downfall of California.

Link: http://www.capoliticalreview.com/top-stories/california-is-headed-into-a-very-dark-pit/

Why the once-fearsome Russian bear is on life support

April 28, 2017

What the United States missile strikes on Syria on April 7 illustrated was that neither the US nor China respect the so-called Russian bear. When Presidents Donald Trump and Xi Jinping were having dinner during their first face-to-face meeting, Trump ordered the strikes against Russia’s client, Syria. It is unclear whether the US missiles bypassed Russia’s deadly S-400 air defense system or the Russians chose not to deploy. But one thing was clear – the US attack went ahead even though the Russian had been alerted.

The Americans have also blamed the Russians for continued Syrian gas attacks on the civilian population. It’s difficult to see the US having taken such actions against Russia during the Cold War at the height of Moscow’s power.

Russian President Vladimir Putin has done everything he can to reverse what he called “the greatest geopolitical disaster of the 20th century,” the collapse of the USSR, since he came to power in 2000, succeeding Boris Yeltsin. But while Putin attempts his grand restoration, the power of the US, China and, it can be argued, Iran (especially since the 2015 nuclear agreement) have rocketed past the Russians.

Moreover, Putin has never learned that communism was in fact the greatest geopolitical tragedy in recorded history, a moral failure that caused needless loss of human life. The best-seller The Black Book of Communism: Crimes, Terror, Repression does a superb job of revealing in voluminous detail, in the words of one reviewer, the actual “terror, torture, famine, mass deportation and massacres” that Soviet bloc communism unleashed on the world. This legacy is the main reason Putin’s Russia is now in a death spiral.

Russia cannot compete with the US or China economically, militarily or demographically, because of the proliferation of atheist beliefs resulting in anti-family policies beginning during the Bolshevik Revolution, high alcoholism rates and widespread use of abortion. This failure causes the Russians to continue being a geopolitical menace.

Russia has visions of greatness through military adventures in Syria and invading Crimea, the latter being the first illegal land grab in Europe since World War II. Russia cannot afford these adventures with oil prices in the US$50 range and the world awash in oil, and its economy is not diversified beyond the export of oil, natural gas and minerals. Its shrinking domestic economy and low export rates for natural resources create a dangerous situation for the country, its citizens, and former Soviet satellite countries.

If Putin had not been a former colonel in the KGB, then possibly he could have restored a country blessed with abundant natural resources, an enormous land base and STEM-based (science, technology, engineering and mathematics) talent into a thriving nation. Instead, the Russians under Putin did not attempt democratic or market reforms. They coalesced around Putin’s cult of personality and, bolstered by record-high oil prices, they squandered trillions, not unlike Middle Eastern autocrats, on restoring the Russian bear of centralized government control and powerful security services, all in the name of “Mother Russia.”

Unless major corrections occur, the Russian economic situation reliant on high energy prices and a downward demographic spiral will leave the country vulnerable, along with its religious and ethnic divisions. These issues will cause the Kremlin to weaken further and lose the projection of power
As Russia takes steps to bolster its image and power by invading and intimidating neighboring states it controlled during the height of Soviet power, all of these efforts may prove in vain as factors the Russians refuse to confront and correct spiral out of control, the demographic decline and moral rot being the biggest factors in their dying country.

Meanwhile, multinational companies such as Exxon can’t evade Western sanctions, leaving trillions in economic activity unfulfilled and foiling the Russian people’s attempt at regaining respect. In this regard, becoming an efficient, effective and transparent society instead of a corrupt kleptocracy would be a better use of Russian technical expertise and natural resources.

Unless major corrections occur, the Russian economic situation reliant on high energy prices and a downward demographic spiral will leave the country vulnerable, along with its religious and ethnic divisions. These issues will cause the Kremlin to weaken further and lose the projection of power.

Losing his grip on Russian areas that bristle at Putin’s heavy hand will be another factor looming on the horizon for peripheral areas of the country. Putin’s government has taken steps to boost the country’s birth rate, but those changes will take decades to realize, and unless abortion rates are reversed, it could turn into a state of affairs where it is one step forward and two steps back. The natural replacement rate and Putin’s pro-child policy have not overcome Russia’s devastatingly high abortion rates; only China has a higher rate at this time.

While Russia remains an economic power, competition from other countries with a natural-resource base (US shale oil and natural gas as an example) exposes long-term weaknesses that have not been fixed, and it does not seem that Putin’s government will address these issues in 2017. India, China, Europe and the US rising from the great recession – particularly India – spells trouble for Russia’s attempts to keep up with global powers that have emerging and regional ambitions Moscow can’t match. It is reminiscent of the US outspending the Soviet Union, which bankrupted Russia’s economy and ended the Cold War.

The world needs Russian expertise and the resilience of a people who defeated the Nazis and catapulted the Allies toward victory in World War II. But given the factors against Russia and Putin’s authoritarian, corrupt leadership, many, including this writer, question whether the country’s slide into oblivion can be reversed. Unless the demographic decline is altered and an over-reliance on exporting natural resources is replaced with a mature, diverse economy, Russia will not be the great power it envisages when it attempts to compete with the US, China and India on the world stage.

The period of Russian decline masked by macho-adventurism abroad will only crush it in coming years. Here’s hoping, for the sake of world economic stability and continued energy production, that the bear finds its way out of its self-imposed trap.

Link: http://www.atimes.com/putin-fearsome-russian-bear-life-support/

Is The Geopolitical Risk Premium In Oil Overrated?

April 27, 2017

When OPEC instituted their recent production cuts, the theory was that oil markets would balance after crashing in 2014. After Donald Trump won the presidency, many speculated that price fluctuation would become the norm based upon his inexperience in public office and statements during the U.S. presidential campaign. Popular news outlets also conjectured that he would start World War III and possibly limit democracy. So far none of those fears have come to fruition and it’s now time to realize that the geopolitical risk which has caused oil prices to rise in recent weeks is overblown. Brimming crude inventories and U.S. shale record output are the key factors keeping prices depressed. But if prices were to rise, the reason should be a drawdown in inventories, not overheated, geopolitical rhetoric.

According to Matthew Kroenig Senior Fellow at the Atlantic Council:

“On almost every front, the U.S. is positioned for the challenges to come with the current team and policies in place.

There are, of course, worldwide geopolitical challenges that could affect oil prices and supplies. The U.S. deployed the controversial THAAD missile defense system in South Korea sparking fierce protests from China and further straining the already tense relationships between the U.S., North Korea, Japan and China over this issue. Around the same time, North Korea attempted another missile launch in mid-April and news surfaced that the test was disrupted using cyber-warfare. An increase in tension in this area of the world could, of course, impact oil markets. But through all of this chaos, President Xi of China has called for stability, “in what is the equivalent of an election year in one-party China.” Xi doesn’t want a war between the U.S. and North Korea with China caught in the middle. It’s simply bad economics for the U.S. and China. After the recent meeting between Trump and Xi, the Chinese are considering a tougher stance on North Korea, lessening the chance of a geopolitical standoff, which is welcome news for global oil markets.

Syria remains another important geopolitical factor for oil markets. French intelligence services reported forces loyal to Assad, “carried out a sarin nerve gas attack on April 4 in northern Syria.” , confirming earlier suspicions of Western intelligence services. The report also states that Assad has carried out over 140 gas attacks while being backed by Russia and Iran. These developments could potentially be troubling for oil price stability if the U.S. and other allies were to respond again with force. The Trump administration even alerted the Russians before his recent targeting of a Syrian airfield, and the U.S. is still a signatory to the landmark P5+1 nuclear deal between Iran and western powers.

Foreign Affairs Magazine reported that U.S. Secretary of State Rex Tillerson had “tense but engaging meetings,” with his Russian counterpart and Vladimir Putin in late April. Each side believes “the glass is half full in their relationship,” after the Syrian strikes, and neither side believes there will be any direct military or diplomatic conflicts taking place. It seems that at this point, Putin isn’t going to let Syria dictate his relationship with the U.S. or his stance on energy policies.
Related: Russia Thwarts ISIS Attack In Far East Oil Hub

The current international environment is undeniably tense, but one should be wary of oil prices rising based purely on political or geopolitical risk. What should concern bullish investors are announcements by the Saudi Energy Minister stating, “It is too early to decide if OPEC will extend production cuts,” along with Libyan political instability, Venezuelan production going offline, and Nigerian unpredictability. These are geopolitical issues that can greatly affect crude prices. But even if we take these OPEC related factors into account, a pre-2014 crash price level for oil seems further away than ever before as the world is still awash in oil.

Next to outages and production cuts in OPEC member states, there are also a number of facts pointing to increased oil output, which could continue depressing prices in the long run.

According to Mark Papa, chief executive of Centennial Resource Development. “We are still in a carbon-based economy, and we see more demand than ever.” U.S. drillers are increasingly eager to invest money in short cycle projects, resulting in a surge in U.S. oil rigs employed, which have now hit a two-year high along with drillers in the Gulf of Mexico reporting a record high output of 1.7 million bpd in January based on numbers from the EIAs Short Term Energy Outlook.

Goldman Sachs has taken a somewhat contrarian view from other investment banks and firms who follow oil prices as it predicts oil at $50 a barrel based on:

“Improvements in technology and costs involved with shale extraction. Price fluctuations are now likely to be within the realm of 10-20 percent, rather than quadrupling noted when new technology methods were being tallied.”

The strategic case for oil rising has solid reasons, and while there is geopolitical uncertainty, the market is still flush with crude. It doesn’t seem wise to let geopolitical corrections cloud oil and gas investment decisions. With the Trump administration potentially adding to the supply glut by opening up federal lands and other previously untapped, U.S. offshore drilling sites through an executive order, it seems unlikely that U.S. oil production growth will subside anytime soon. Supply and demand along with large-scale supply cuts should be at the forefront of pricing decisions, and if geopolitical risk is part of that model, then it should be objective, unbiased geopolitical analysis, not simply the hype that we have seen recently.

Link: https://oilprice.com/Energy/Energy-General/Is-The-Geopolitical-Risk-Premium-In-Oil-Overrated.html

Geopolitics becoming main driver of global oil prices

April 21, 2017

The first summit earlier this month between US President Donald Trump and Chinese counterpart Xi Jinping focused on the North Korean nuclear threat and trade accords between the two global superpowers. The impact of the two-day meeting will also affect fossil fuel and related energy policy for Asia and the world more than any action by Opec or the prices set by major oil producers.

China is now the largest buyer of US oil exports, according to Bloomberg. And since Beijing has blocked North Korean coal imports to sanction Pyongyang for its nuclear and ballistic missile programs, China is buying US coal instead. The coal blockade indirectly helps Trump fulfill a continued pledge of “putting US coal miners back to work.” China’s economy is still dependent on the country’s coal-fired power plants, and the move to buy more US coal in support of UN sanctions against North Korea illustrates how geopolitics will drive energy policy.

Additionally, Chinese concerns over a US missile system being deployed in South Korea and possibly in Japan are reasons the Asian markets should be cautious about investing or taking hedge positions based on lower or higher oil prices.

Oil price affected by a variety of factors

The geopolitical convulsions this year — and that began in 2014 for oil markets — are the manifestations of much deeper forces at play throughout Asia. The US “pivot” to Asia during the administration of President Barack Obama didn’t affect oil prices. Rather, China’s economic slowdown, lower demand after decades of record growth, and crushing debt are more important for oil prices than any US policy change that doesn’t involve military force.

These economic and geopolitical factors are issues the Trump administration will attempt to exploit along with risky Chinese corporate debt. Energy policy will become a weapon as much as a US Navy carrier strike group en route to the Korean Peninsula.

Trump’s pro-fossil fuel energy agenda benefiting US shale oil producers, major energy firms, and coal companies is an opportunity to use oil sales as an economic weapon to deal with global foreign policy uncertainty.

Saudi Arabia is attempting the same tactic by instigating an oil price war in Europe against Russia, Iraq and Iran who have been cutting into Saudi’s lucrative European markets. The Saudis, moreover are slashing oil export prices in Asia to maintain market share and have a geopolitical counter against the Shia Iranian government that is warring against Sunni Middle Eastern governments backed by Saudi Arabia. Oil is the new weapon of choice in economics and geopolitical nation state conflict.

Jason Bordoff, a former energy advisor to President Obama and now director of Columbia University’s Center on Global Energy Policy says:

“The US is expected to produce more oil [and export it] over the next several decades — which puts the US in a stronger position to have conversations around the world. If a future US president wants to persuade other leaders to not buy oil from a particular nation, it could help that the US can step in and provide oil.”

Political risk will determine oil supply and price

Under Trump, American energy is no longer neutral. Simply put, he will use economics — energy in particular, as a weapon — the way former presidents used the military. And that has major implications for Asia. Political risk will determine extraction and production every bit as much as recoverable assets and lower fossil fuel break-even points.

Moreover, because of US shale oil production, the days of higher prices are likely over, unless war erupts between major powers. Libyan political instability, Venezuelan production going offline, and Nigerian unpredictability are also reasons for Asia to plan for geopolitical risk.

The world is still awash in oil. However, if Iran and Russia continue cooperation, then whatever political issues affecting Libya, Venezuela or even Nigeria will be offset by Iran and Russia bringing their oil to market making up for shortfalls. But there is a downside to this cooperation echoed by Matthew Kroenig of the Atlantic Council, a US-based think tank:

“Nato must be able to deter a Russian nuclear attack, counter the nuclear coercion inherent in Russia’s hybrid warfare strategy, and assure Nato members that the Alliance is prepared to defend them. This requires strengthening Nato’s existing nuclear deterrence strategy and capability.”

Oil price hike linked to nuclear deterrence

Kroenig and the Council on Foreign Relations believe Europe should have additional nuclear weapons to deter Russian and Iranian influence. These geopolitical moves would cause oil prices to rise significantly if every European country in Nato acquired the so-called nuclear triad — land-based intercontinental ballistic missiles, strategic bombers, and submarine-launched ballistic missiles.

Trump’s policy of having energy, national security and geopolitics comingled will help US shale oil firms to continue as production leaders and keep introducing innovations to increase output and lower prices.

President Xi doesn’t want a war between the US and North Korea with China caught in the middle. If Xi decides to support harsher sanctions against North Korea to secure stability, “in what is the equivalent of an election year in one-party China,” then millions of barrels of oil sold to the Chinese at below-market prices from the US and Saudi Arabia could solve one of the deadliest geopolitical standoffs in the world.

Since cheaper oil hit the market, Saudi foreign reserves have fallen from US$746 billion in 2014 to US$536 billion in 2016. The US shale oil revolution and the election of Donald Trump will deeply affect oil and gas markets this year. The surprise airstrike on a Syrian airfield by the US has added geopolitical risk to the price of crude in Asia and across the world. Geopolitical events are now interlocked and could move oil prices in ways we haven’t seen since the Opec oil embargo in 1973.

Link: http://www.atimes.com/geopolitics-swing-oil-prices/

There’s no choice for Asian security — America must take the lead

April 6, 2017

The world is beset by regional conflicts, civil upheaval, and instability that seem to defy ready solutions. The civil war in Syria continues to shock with daily reports of heavy civilian casualties, forced migration of refugees and disastrous consequences for succeeding generations. Iran seems determined to pursue a troubling strategy to broaden its influence in the Middle East.

A resurgent Russia persists with its aggressive moves in eastern Ukraine, driven by the territorial ambitions of Soviet Federation President Vladimir Putin who believes the downfall of the Soviet Union was the greatest geopolitical disaster of the 20th century.

There are severe problems in parts of South and Central America. China is building islands in the South China Sea raising alarm among bordering maritime countries for the risk to freedom of navigation on the vital economic seaway.

Today’s world order, in which disputes are settled at the United Nations or through recognized diplomatic channels, is in jeopardy. In his new book, The Will to Lead, Anders Fogh Rasmussen, a former prime minister of Denmark and secretary-general of Nato, writes that only the United States can guide the world out of the geopolitical abyss represented by North Korea and China’s threats against sovereign Asian countries. “There is only one nation [the US] in the world capable of putting out these fires,” Rasmussen states. “Only America has the diplomatic reach, financial resources, and military firepower to lead the world against the autocrats, rogues states, and terrorists.”

When America doesn’t lead against evil, then disastrous regional and global conflicts ensue. Is there any credible reason to believe that any country except the US could have stood resolutely against the Soviet Union during the Cold War? And now America must confront North Korea and China — if not, then human rights as epitomized by the UN’s Universal Declaration of Human Rights won’t be realized in Asia.

Unless these threatening nation-states are defeated, deterred, isolated or balanced by the US and its allies — South Korea, Japan, Vietnam and the Philippines — then the choice is either freedom or despotic rule. Faced with these challenges, will the possible incoming leftist government in South Korea try another round of fruitless negotiations with North Korea? Yes. As Britain’s prime minister Winston Churchill is said to have advised during a White House luncheon in 1954: It is better to “Jaw-Jaw is better than War-War.” But even Churchill realized during the war that he was dealing with regimes that wanted war. Discussion wasn’t an option. The North Koreans seem intent to follow that path.

Rasmussen warns that when America doesn’t lead, national morality whithers, countries with hegemonic ambitions come to the forefront, and refugees proliferate. Russia’s annexation of Crimea in Eastern Ukraine in March 2014 was the first European land-grab since the end of the Second World War. Former US secretary of state John Kerry decried the incursion. “Unbelievable act of aggression,” he said. “And you just don’t, in the 21st century, behave in 19th-century fashion by invading another country on a trumped-up pretext.” Those forceful words (but only words) didn’t persuade the Russians to withdraw from Crimea. If anything the Russians have only grown more emboldened to misbehave, as have the Chinese with their lawless militarization of the South China Sea.

This type of thinking by Kerry is dangerously naïve. Admiration and feel-good statements won’t help Asian countries facing the North Korean nuclear menace — a threat China refuses to interdict. The First and Second World Wars during which it’s estimated that as many as 80 million people died may have been avoided with forceful American deterrence. Only America using realist foreign policy can counter-balance China and North Korea. Now isn’t the time for the US and its Asian allies to turn inward. The post-Second World War order will end unless America leads. No Asian power is strong enough or has the diplomatic clout to balance and deter China.

Only America understands the responsibility of leading while not taking land and crushing people’s dreams — or the danger of retreating into isolationism. America conquers, and then gives back its conquests — what other power in history has given back gains from wartime victories? This reason alone means America is the only country with the moral authority and military might to confront the evils plaguing Asia: sex-trafficking, terrorism, and nuclear proliferation by powerful regimes.

Some countries don’t agree with or seem to misunderstand balance of power, deterrence, and pre-emption. South Korea, Japan, and other Asian allies would be wise to pressure President Donald Trump and Congress to enforce security treaties that counter North Korea’s nuclear program and Chinese threats.

If Asia, and particularly Southeast Asia, wants stability and the vast worldwide economic expansion that has lifted millions out of poverty since the Second World War, then the US and Asia must use their economic might. The fires blazing in the Asian hemisphere and other regions of the world won’t be extinguished if America abandons its role as world policeman.

Unfortunately, policymakers can’t simply sit down with Chinese President Xi Jinping or North Korean supreme leader Kim Jong-un and quote philosophers like Voltaire, Montesquieu, and Locke and then believe those leaders will change their diplomatic postures. The world is more primitive than we care to admit, and if we don’t return to an American-realist political order and its military strength to lead in Asia then the peaceful post-Second World War order will be obliterated.

Link: http://www.atimes.com/theres-no-choice-asia-america-must-lead/

Japan should acquire nuclear weapons to deter China and North Korea

April 3, 2017

Since the end of the Second World War Japan has relied on the US-led liberal order for its prosperity, peace, and security. However, with the threat of North Korean nuclear weapons and China’s claim to a large part of the South China Sea, the hostility towards Japanese national security hasn’t been this virulent since the war years. And now, with the US pulling out of the Trans-Pacific Partnership (TPP), which had been in negotiations for more than nine years, the rules-based order Japan has relied upon for decades is in decline.

This leaves the Japanese vulnerable to economic retaliation from China, which has imposed sanctions on South Korea over its deployment of the Terminal High Altitude Area Defense (THAAD) system. China won’t thwart North Korea’s military ambitions because it maintains historical animosity towards Japan over its actions before and during the Second World War. North Korea’s recent missile launches have underscored the existential threat to Japan. Jeffrey Lewis, director of the East Asia Nonproliferation Program, recently said:

“The North Koreans’ recent behavior was the sort you see from a state that is planning to deploy nuclear weapons to its military units.”

But a bigger threat could loom for Japan as the rhetoric continues to heat up between the US and China. US Secretary of State Rex Tillerson said this in mid-March: “I urge China to cease its economic retaliation against South Korea over its plan to host a US missile shield, it’s unnecessary, inappropriate and troubling.” This puts Japan in the middle of a geopolitical squabble between its biggest ally and a menacing-superpower-in-the-neighborhood — China.

What should Japan’s security posture be to answer these threats? Interestingly, while the Japanese constitution prohibits the country from being an aggressor or waging war for national gain, it doesn’t rule out preemptive strikes. Why can’t Japan protect itself against North Korean missiles? If China wanted its proxy, North Korea, to halt its missile program and join the world community, that’s exactly what would occur. But Beijing has shown it has no intention of reversing that policy anytime soon.

So, how does Japan enhance its defensive capabilities without further inflaming tensions in East Asia? Currently, Japan has a two-tiered missile system in the Sea of Japan. Its destroyers are equipped with Aegis missile-defense systems — a first-defense interceptor — and Advanced Capability-3 (PAC-3) that provide another layer of protection. With North Korea’s expanding capabilities, that still isn’t enough to deter Kim Jong Un’s regime. The problem for Japan is the system is somewhat effective, but if multiple missiles were launched at different targets, Japan would be unable to stop them.

Japanese Prime Minister Shinzo Abe told parliament that the North Korean threat had reached, “a new stage.” And former defense minister Itsunori Onodera, chair of the ruling Liberal Democratic Party committee dealing with the North Korean missile threat, told Reuters: “If bombers attacked us or warships bombarded us, we would fire back.”

Tokyo is committing US$1 billion to upgrade the PAC-3 interceptors, and recently conducted a successful joint test with the US on the Standard Missile-3 Block IIA system. This missile-interceptor system works with the Sea of Japan-based Aegis to expand defense capabilities on both land and sea as a deterrence against North Korea.

Japanese policymakers are also considering adding THAAD to their defensive arsenal. THAAD can intercept nuclear missiles at high altitudes, but North Korea would still be able to penetrate this shield, so offensive weaponry is needed.

What Japan should purchase from the US are Tomahawk missiles, F-35A fighters, and Lockheed Martin’s precision-guided Joint Air-to-Surface Standoff Missile. These preemptive options will work in conjunction with Japan’s destroyers in the Sea of Japan as a first-strike option. Deterrence theory, moreover, states that Japan should procure offensive long-range strategic bombers and establish an ICBM program, thus completing nuclear-triad arsenal.

The threat to Japan should outweigh the limits on Japanese use of force against a belligerent North Korea and ever-hostile China. A case can be made that self-defense and preemption are constitutional if the strikes come from weaponry based in Japan. A cruise missile could pass that constitutional roadblock.

Deployment of offensive military systems could backfire in Japan’s pacifist society. But the cost of doing nothing outweighs the hope that North Korea will come to its senses or that a US-led surgical strike will stop the hermit regime’s militaristic program. Chinese Foreign Minister Wang Yi recently said: “Any chance for dialogue (between major powers and North Korea) must be seized, as long as there’s hope.” China already knows the situation is deteriorating, but Beijing still does nothing to rein in North Korea.

As 17th-century political philosopher Thomas Hobbes noted: “Without a common power to keep (people) all in awe they are in that condition called warre; and such a warre, as is of every man, against every man.” History has proven that national interests, petty rivalries, and unquestionable bitterness will eventually win over a rules-based, orderly system. Even if North Korea were forced by China to negotiate and change its behavior, the process would be slow, difficult and costly.

North Korea’s self-perceived grievances and China’s hatred of Japan would seem to resist solution without the existence of nuclear deterrence. In this Hobbesian world of geopolitical-international relations, how do the Japanese live in peace while the North Koreans want to obliterate them? Only a madman wants a Hobbesian world — or as actions by the regime of Kim Jong Un demonstrate, Japan would be wise to arm itself with every weapon possible and let the chips fall where they may.

Link: http://www.atimes.com/japan-acquire-nuclear-weapons/

Will Trump Send Oil Prices Crashing?

March 13, 2017

Oil markets are looking particularly bearish this week, with WTI once again below $50, the OPEC cuts in jeopardy over Iran and Iraq ramping up production, the second U.S. shale revolution underway, and an overwhelming U.S. supply glut which shows no signs of easing. In this environment, signs that President Donald Trump’s energy policies could further disrupt markets are worrying for the industry.

With his pro-drilling nominations for the Departments of State, Energy, Interior, and EPA, the American renaissance of oil and natural gas production is set to skyrocket, which will cause prices of WTI and Brent to move lower in the foreseeable future. Some of the geopolitical conflicts that could offset this downward pressure are: 1) Rising tensions in East Asia involving the U.S., China, South Korea, and Japan, 2) Iran’s aggressive stances towards the west, 3) Russia’s movements against NATO in Ukraine, and 4) the possible collapse of Venezuela.

But for now prices seem to be stuck on a downward trajectory because there is still too much supply on the market and record amounts of storage according to the EIA. While hedge funds have made historic long investments that prices will move upwards, they don’t seem to have factored President Trump’s policies into their positions. Nor has anyone else, and that’s where the danger for investors and prices lie. If those positions continue being held and expanded, those funds, and their investors, are opening themselves up to the possibility of a sharp fall. The same way so many were caught off guard during the last severe downturn in prices.

To add to this, the U.S. shale boom appears to have returned in full force. The number of oil and gas rigs in the U.S. has doubled from its lowest level in seventy-five years. And while OPEC continues to record high production cut compliance rates, larger than normal global supplies are keeping oil prices depressed. Since late 2016, U.S. output has increased by half a million barrels a day. If this rate endures, the new shale boom will break all-time high production levels by this summer.
Related: Rise Of U.S. Shale Could Jeopardize OPEC Deal Extension

This shale boom is different however, with the industry having been transformed by the oil price crash. After 2014, drilling operators shut down rigs at an unprecedented rate, but what rose from the ashes was an industry that employs fewer workers, has less rigs producing more oil through automation while employing nearly 90 percent of all new rigs on shale formations. The U.S. is now producing over 9 million bpd, and it took twice as many rigs in 2014 to yield that amount. What shale drillers are doing is unprecedented, and they will continue to become more efficient while attracting some of the best-capitalized oil and gas companies in the world to further their gains.

That is why Harold Hamm, the billionaire shale oilman said this at the CERA Week by HIS Markit conference in early March: “The U.S. shale industry could ‘kill’ the oil market if it embarks on another spending binge. It has to be done in a measured way.” The U.S. government has also announced that by next year domestic oil output will surpass the record high set in 1970.

What formerly held shale back was high break-even costs, but now break-evens occur in the sub-$30 prices throughout the Ford and Permian basins. A staggering drop considering the obstacles they have overcome in the last 2-4 years. This means shale players can spend more to ramp up further production while remaining profitable. Moreover, President Trump will encourage this policy, and the success is being seen with his recent strong jobs report numbers. All signs point to further exploration (even in places like Alaska) with a compliant administration that wants the high-paying jobs from the fossil fuel industry.

The one issue that could somewhat stall production and raise break-even costs for shale drillers is the rising cost of frac-sand. Still if shale drillers overcame the 2014 crash, it seems they can overcome higher frac-sand costs. It’s also not out of the realm of possibility that President Trump and his Cabinet wouldn’t ask Congress to tweak the tax code to allow tax breaks for shale drillers if costs for frac-sand, water, or chemicals rise above acceptable rates.

Though all of the above issues and concerns can either depress prices or raise them, what isn’t being discussed is how President Donald Trump’s energy policies could make oil and gas stagnate or dip into the $30 or lower range. He has come into office promising to be the biggest defender of fossil fuels in a generation. He has already used his executive powers to authorize the construction of the Dakota Access and Keystone XL pipelines. By this action President Trump has brought back a possible 1,280,000 bpd (450,000 from Dakota Access and 830,000 Keystone XL) that wasn’t factored into the OPEC compliance cuts.

As an example of what can be done for E&P in America under Trump, we’ve already seen resurgence in the coal industry under his administration. Coal production, and areas of the U.S. heavily dependent upon those jobs that coal provided, was dying off under the former U.S. administration’s tough anti-coal regulations. Yet now they have rebounded after Trump rescinded the stream protection rule. West Virginia and Pennsylvania have credited the rebound in the region’s coal mining areas with President Trump’s “aggressive, pro-energy agenda.” Prices for metallurgical or “met coal” – the type of coal used to make steel – has doubled in price from a year ago.

Imagine what will happen for U.S. shale drillers and the fossil fuel industry in general if this pro-energy President and his Cabinet departments that control oil production does for the drilling business what he has already accomplished for coal prices. The U.S. could overtake the Saudi’s, Russians and other high producers before his first term ends under current pro-drilling conditions.
Related: Why Is Big Oil Backing The Paris Climate Agreement?

No longer will fossil fuels be as harshly regulated as they were by the former administration that wouldn’t allow drilling on federal lands, enforced penalties on coal-fired power plants, mandated strict regulations on methane emissions and strongly emphasized renewable energy and electric vehicles over growing fossil fuels. Instead, after years of having to overcome these regulations, the oil and gas industry in theory can bring as much product to the market for domestic use and export as the market can handle.

Cautious optimism should inform energy investment decisions, and while OPEC compliance cuts are important, you should factor the pro-drilling Trump Presidency on oil prices. Otherwise, it will be difficult to understand why WTI and Brent are stuck in the 50s or lower. In addition, if hedge funds haven’t understood this phenomenon, then governments taking their advice and the investment vehicles they manage that are dependent on higher oil prices could see huge losses in upcoming financial reports.

President Trump like President Obama is a transformative presence. To not account for how he and his Cabinet will directly create millions of bpd of new oil for the market is to not understand how his energy policies will affect prices. Hopefully, investors, companies, and governments have considered President Trump into their investment risk premium.

Link: https://oilprice.com/Energy/Energy-General/Will-Trump-Send-Oil-Prices-Crashing.html

Will Creditors Get Paid Back by Venezuela?

March 9, 2017

A recent internal document from Venezuela’s state-run oil company, PDVSA, verifies that they have fallen behind in payments by some $750 million in a Chinese and Russian oil-for-loan program to Venezuela. The shipments of oil comes at a time when Venezuela is on the brink of running out of money, which could perpetuate social, economic, and possibly political collapse. Further, Russia and China have provided a total of $55 billion in credit to the beleaguered nation; and with oil accounting for the vast majority of Venezuela’s export revenue, this brings on another crisis it is ill-equipped to handle at this time.

Venezuela is already suffering from triple-digit inflation, food shortages reminiscent of the former Soviet Union, and currency devaluation similar to Weimar Germany. Credit rating house Fitch has reports that PDVSA’s default is probable as well. The main reason behind this dire economic outlook is the Maduro administration’s habit of using loans from China and Russia to finance social benefits and infrastructure.

Now that Fitch has provided new insight, along with internal documents showing the operational failures and crippling impact PDVSA struggles are having on Venezuela’s solvency, bigger questions need to be asked by China and Russia moving forward about falling oil prices and geopolitical stability in South America.

As of the end of January, PDVSA still owed both countries’ oil firms close to 10 million barrels of not just crude, but a refined product as well. Currently, shipments from PDVSA are being delayed by at least 10 months, and China’s state-run China National Petroleum Corporation (CNPC) is owed another 3.2 million barrels of crude. According to a daily press briefing by Foreign Ministry spokesman Lu Kang last month: “China has paid great attention to its relationship with Venezuela, and at present, Venezuela’s providing oil to China to repay the loan is basically normal.”

So far the Kremlin hasn’t been outspoken on the matter and allowed Russian state-run firm Rosneft to take the lead since they are also owed $5 billion in oil by Venezuela.

The biggest question for both countries will be understanding the nature of falling oil prices over the short-term, and how that relationship coincides with Venezuela’s financial problems. OPEC now has near 100% compliance on its production cut, but world oil markets still aren’t seeing prices rise sufficiently. That’s because gains are being offset by U.S. shale production that has increased US production to nearly 9 million barrels per day. What this means for Venezuela is that prices aren’t moving upward anytime soon. Ultimately, in a low-price environment, Venezuela will continue having a tough time meeting their oil-for-loans obligations to China and Russia.

Onerous for Venezuela is the looming threat of entering into some type of receivership agreement with both nations. These loans and the subsequent payment structures were entered into when oil was much higher than its current range of $50-60 a barrel. It’s a never ending swirl of hopelessness for Venezuela and the PDVSA, because what they need to be doing is shipping crude to countries such as the U.S. and India who would pay in desperately-needed cash. Instead, with this $55 billion figure hanging over them, they can’t meet their loans obligations.

In the words of Francisco Monaldi, a fellow in Latin American Energy Policy at the Baker Institute in Houston, Texas:

“What falling oil prices mean are heavier debts and the PDVSA is taking a legal risk by postponing cargoes to key customers (China and Russia) and a financial risk if it also delays deliveries to customers who pay by cash. And if the PDVSA can’t meet its obligations to Russia and China, the countries could recover money through projects or assets outside of the oil sector.”
These Chinese and Russian financing mechanisms offer Venezuela and the PDVSA repayment flexibility, so what could have turned into an escalation will more than likely discreetly play out through diplomatic channels. Yet the yield on Venezuelan bonds is 21% higher than benchmark U.S. Treasury bonds, adding further pressure on Venezuela on the issue of who to pay first – bondholders, China, or Russia (for that matter, will they even have the money to pay anyone?). Madura could be presiding over an insolvent failed state this year.

Whatever Russia and China have said in public, or more importantly what they have not said, won’t stay that way much longer. Particularly for Russia, which can ill afford to float billions in loans when its own economy is failing due to sanctions from the Ukraine crisis and lower oil prices. Another pressing question for China and Russia is: What happens if Venezuela defaults on its bonds and oil repayments? Each country would be able to demand prompt payment on defaulted bonds, but then does the Trump administration allow Russia to take over Citgo? Citgo is a U.S. subsidiary of PDVSA; it has pledged almost half of the firm to Russia as collateral.

The most disturbing part of this entire scenario is that there is no need for Venezuela to be in this kind of terrible economic shape. A 1980 Economic Freedom of the World Annual Report ranked Venezuela the 14th-freest economy in the world, with the “highest standard of living in South America.” Moreover, the largest Venezuelan diaspora community resides in the United States, where they are likely to speak fluent English and have some level of college education, according to the Pew Research Center.

Maybe Venezuelans will rise up and do away with the legacy of leftist leaders who have dragged down the fortunes of their country. While Daniel Ortega was again reelected in a landslide victory in Nicaragua, Evo Morales in Bolivia is now fighting an uphill battle to remain in charge, and impeachment proceedings removed Dilma Rousseff from office in Brazil. What becomes of Rafael Correa, the president of Ecuador will be telling, since the citizen’s revolution law prevents him from running for a fourth term. Will he rise again, Putin-like, in future elections?

Corruption and repression have ruined Venezuela. As Latin America moves toward the center-right, one can only surmise that China and Russia will want their loans paid back. Politics makes strange bedfellows, and it isn’t hard to imagine both countries allowing democratic-authoritarians along the lines of Singapore or a centrist, Trump-type of figure to assume power under the guise of rebuilding the economy to pay back their loan obligations. Anything is possible when it comes to billions of dollars, and the looming failed state of Venezuela.

Link: https://www.geopoliticalmonitor.com/will-creditors-get-paid-back-by-venezuela/

The Disaster of Believing in 100% Renewable Energy

March 1, 2017

Solar panelsSenate Bill 584, the California Renewables Portfolio Standard Program, introduced by state Senator Kevin de Leon, would reformulate the calculations for how much energy California would receive from renewables while eliminating fossil fuels. Senator de Leon wants to amend Section 399.11 of the Public Utilities Code relating to energy that currently states by December 31, 2030, California would have retail sales of renewable energy at 50 percent. Under the senator’s bill, California would have 100 percent of energy only from renewables. Currently, the U.S. receives around 10-13 percent from renewables, according to the Energy Information Administration (EIA), and sees that figure only reaching 21-26 percent by 2050.

With California it’s more severe than in other parts of the country for how much renewable energy is required for consumers and business, because the California Renewables Portfolio Standard Program already states:

“The Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, as defined, so that the total kilowatt hours of those products sold to their retail end-use customers achieves benchmarks of 25 percent, 33 percent, 45 percent, and 50 percent.”

California already has some of the highest electricity rates in the country, and passing this bill would only exacerbate the problem while sending more companies and jobs to other states or overseas. There is a direct correlation between higher business costs (electricity being a large cost) and business relocation. Why is Senator de Leon risking this happening by upping the cost of electricity when even the EIA says a large, fully-developed economy – that is California – will have a difficult time thriving and keeping middle class families and workers with skyrocketing energy costs? Not to mention we owe trillions in outstanding debts.

Believing renewable energy is scalable, and not downtrodden when intermittent weather occurs, while having excess energy storage issues follows the same misguided policies guiding electrical vehicles. Where even with generous tax credits and beautiful vehicles built by Tesla and all major car manufacturers has still only allowed EVs to capture roughly 1 percent of worldwide car sales.

But there are even bigger problems with renewables, and this bill that need to be ascertained by Senator De Leon, Governor Brown and other advocates for turning California into a 100 percent renewable energy state. Internationally, we are seeing that countries that attempt to do away with fossil fuel realize they can’t. A great example is the U.K., which in 2016 saw oil production gains for the second straight year. Not coincidentally the U.K. also saw the best economic growth in the world per these gains in 2016. There is direct causation between oil, natural gas, and coal production linked with economic prosperity for all sectors of society.

The facts about renewables are the issues that need to be overcome before proceeding forward with SB584. According to the BP 2016 Statistical Review of World Energy – the most popular forms of renewable energy – wind and solar accounted for less than 2 percent of world energy consumption. The U.S. electrical grid will have to be completely updated and overhauled, costly trillions of dollars, because The American Society of Civil Engineers gives the U.S. grid a D+ grade in every category of electrical use. Without a state-of-the-art grid that can handle spikes and fluctuations in energy that renewables create and cause (particularly wind and solar) then California will have blackouts and expenses worse than previously experienced in the early 2000s.

During the recent rain and snowstorms that were unprecedented that is when some of the biggest energy needs occur that renewables can’t handle. Natural gas is a flexible fuel, along with coal and oil (WTI & Brent), but all forms of renewables need a fossil fuel backing them up. In other words what SB584 doesn’t address is reliability and the costs to the grid compared to fossil fuels. Beijing, China recently switched from coal to just coal-based electricity and saw costs rise 100 percent from $200 a month to $300 a month. Renewables will be more expensive than what Beijing experienced.

Moreover, Senator de Leon and legislators agreeing with SB584 need to make sure they are using the correct calculations for Energy Return on Energy Invested or at least consider the overall levelized costs. Boundary issues are relevant to wind and solar but more accurate analysis needs to use “point of use,” because wind and solar need massive changes as described above for them to work on a scalable, statewide basis. Many publications touting renewables don’t calculate this properly, and in some cases could be less than 1:1 energy-to-energy ratio.

Storage isn’t discussed enough either. If you want heat in the winter and cool air in the summer then somehow wind, solar, biomass and hydroelectric have to be stored. For now small amounts can be stored, but for extreme weather, even overbuilding solar farms and wind turbines doesn’t solve the intermittent weather and storage problems that would be caused by SB584.

Some countries such as Sweden, Norway, Finland and Switzerland have large shares of their electricity from all types of energy mixes, but even that is deceiving. The BP Statistical Review confirms these four countries have high proportions of their energy from multiple sources, but each country has low populations and significant hydroelectric supply. Currently, as an example, the Oroville Dam is old, decaying and giving away to torrential rains; therefore, would the legislature be willing to appropriate billions towards new dams and maintenance of old ones to up California’s percentage of hydroelectric? So far the answer seems to be no for environmental reasons. The EIA (source: Gail Tverberg, OurFiniteWorld.com) has also confirmed that hydroelectricity deals with the problems of intermittency, reliability, scalability and storage – the same as all other renewables.

What California needs to decide in their quest for a 100 percent renewable energy portfolio are how much consumers are willing to pay in their quest for energy parity? Californians can only purchase what wage growth predicates, and if the cost of a commodity increases (energy) then wages, though rising, aren’t keeping up with the cost of living or doing business. Peak energy is a myth, and there is more oil and gas than the world can fathom. Thus energy demand comes not from a lack of supply but from a lack of affordability, seen from the Beijing example.

Rising costs don’t translate necessarily into a more prosperous society. What SB584 doesn’t take into account are what happens to fossil fuel companies that still have to pay interest on loans, continuing retirement benefits for workers and pipelines that have to operate for 365 days a year. The question isn’t renewables versus fossil fuels or vice versa, but the question is whether California is willing to pay for two systems of electricity. There’s the rub, and more than likely, unless you can afford higher electricity costs, the state will see more businesses and middle class families along with their taxes, leave the state.

Link: http://www.capoliticalreview.com/top-stories/the-disaster-of-believing-in-100-renewable-energy/

Iran and North Korea: Is The Geopolitical Risk Premium Back?

February 18, 2017

It’s difficult to ascertain what non-OPEC, and even some OPEC members, will do about future supply cuts. According to energy trader, Martin Tillier, “90 percent compliance is a good sign for OPEC, but Venezuela, UAE and Iraq aren’t following commitments.” Contrary signals are also coming from Nigeria and Libya. Libya is a wildcard due to the Misrata militia, the Libyan National Guard, and Government of Nation Accord all struggling for power. New specters of doubt have also been raised about whether Nigeria will be able to deliver the vast amounts of new oil to the market that it had promised.

Although OPEC has reported a respectable compliance rate, prices are still struggling to reach the $60-70 range because of oversupply concerns. The market is having a tough time finding equilibrium, and U.S. shale producers are now ramping up production, causing prices to stay in the mid-50s. These are all interesting aspects of energy markets, but there are other factors to consider.

What investors should begin concerning themselves with, more than President Trump’s energy policies, shale producers, and OPEC compliance, are the two dynamics that could make oil jump significantly in the future – the geopolitical rumblings coming from Iran and North Korea.

These geopolitical-investment risks are financial pieces not being mentioned enough for WTI and Brent. Both countries have shown belligerent signals in the last couple of weeks, and while this doesn’t bode well for consumers, it could prove to be a financial windfall for the oil and gas industry.

Recently, the National Iranian Oil Company (NIOC) reported the discovery of multiple new fields, holding up to 30 billion barrels of oil. Currently, Iran is already ramping up exports to Europe in spite of other OPEC members cutting back on exports. Iran is now nearing an oil production of around 4 million bpd.

Higher exports and increased oil production gives Iran billions in additional resources to fund its military and controversial ballistic missile program. However, the major uncertainties for energy markets are whether the Iranians continue flouting United Nations (UN) ballistic missiles sanctions. This geopolitical event, by a powerful nation and member of OPEC, reveals the underlying significance and implications of future energy developments.

For investors, the Iranians are not the pre-sanction weakling they once were, but instead, are a rising global energy powerhouse with the means and capability to develop any type of military weapon system they deem necessary for the regime’s survival.

The western world and Iran began pursuing détente towards normalizing relations in 2015 with the nuclear weapon agreement between the P5 + 1. Markets welcomed those stabilizing signals, but that isn’t the case anymore. Iran is now a Middle East hegemonic force that must be understood by oil and gas investors and firms.

Nicholas Hereas of the Center for a New American Security believes:

“In order to confront Iran or push back more fiercely against it, you may find you’re in a conflict far more far-reaching and more destructive to the global economy.”

This plausible scenario could cause oil markets to return to the days when wars in Iraq, Sunni-Shiite tensions, and Hezbollah fighting Israel in Lebanon caused oil to rise above $100 a barrel. Only focusing on supply and E&P profitability, without considering geopolitical-investment risk, could either be a boon or a curse depending on your position. Hedge funds have taken long bets on oil rising, but wars and conflicts cause markets and governments to move in unforeseen ways.

This is why The Institute for the Study of War in a recent report said:

“For the first time in its history, Iran has developed the capacity to project conventional military force for hundreds of miles beyond its borders. This capability, which very few states in the world have, will fundamentally alter the strategic calculus and balance of power within the Middle East.”

The abovementioned developments could increase the geopolitical risk premium on oil for energy investors, and markets overall. Having an investment risk equation that doesn’t account for how Iran acts in the Middle East, now that their influence stretches from Tehran to the Mediterranean, while simultaneously fighting conflicts in Syria, Iraq, and Yemen seems misguided. Unfortunately, political risk and production are now equal partners when it comes to Iran and oil prices.

North Korea is never mentioned in relation to oil prices, but could be the biggest reason oil prices skyrocket. Thae Yong-ho, one of the highest-ranking officials in the North Korean government to ever defect ardently, believes Kim Jong-un would attack the U.S. with nuclear weapons if his regime were on the brink of failure. Mr. Yong-ho elaborates:

“His ability to wreak harm should not be underestimated if his very survival were threatened he would lash out and destroy whatever he could and once there was an effective nuclear arsenal the leader would be prepared to use it.”

In early February, North Korea tested a ballistic missile which could be used to further its quest for an intercontinental ballistic missile (ICBM). A U.S. Pentagon spokesman, Navy Captain Jeff Davis stated:

“North Korea openly states that its ballistic missiles are intended to deliver nuclear weapons to strike cities in the United States, the Republic of Korea (South Korea), and Japan.”

For investors to not imagine, or have developments built into your investments where North Korea has the ability to strike major oil producers and consumers doesn’t seem shrewd. The difficult part for oil and gas investors are how to measure into your portfolio the advancement of the North Korean missile program.

Additionally, China is now angered that North Korean and Iranian sanctions placed on those countries have affected Chinese firms. China has close economic and diplomatic ties with both countries, but particularly North Korea, with whom they share a border. North Korea needs China since they are its biggest trading partner, along with its main source of food, arms and energy. Despite all this, China has allowed North Korea to continue multiple nuclear tests, and doesn’t appear likely to stop them anytime soon.

Long-arching trends have been building up between North Korea and western-aligned nations for decades. At least Iran has OPEC and Russia to influence its political agenda, but North Korea only has China to keep it from having a negative enduring impact on the global economy. It is hard to imagine that China would allow North Korea to fire off an ICBM if it would have a lasting impact on the stability in the region, inflicting serious economic damage upon the Chinese economy. The South China Sea standoff is just one example of confrontational geopolitics and economic trade colliding – and the results could be disastrous – unless properly managed.

Relative oil and gas price stability has returned since prices have risen in the last few months, but 2017 could see energy upheaval along with too much supply. Geopolitical turmoil could cause everything within the energy value chain to wildly escalate; catching investors and energy firms flat-footed, the way the housing crisis in 2008 caught many banks off guard. The economics of oil and gas can manifest frustration in many ways, but what shouldn’t be overlooked, is how Iran and North Korea are impacting the geopolitical risk premium for markets.

Link: https://oilprice.com/Energy/Energy-General/Iran-And-North-Korea-Is-The-Geopolitical-Risk-Premium-Back.html

Current Geopolitics a Recipe for War

February 5, 2017

Yesterday’s problems haven’t changed with a new US president, Brexit moving toward completion, or the Chinese and Russians taking a larger geopolitical role on the world stage. If anything, things are getting worse not better, and no country or alliance wants to step up and deal with the issues plaguing geopolitics. This isn’t a morbid essay, but a realistic look at careening events on the world’s geopolitical-stage.

The Russians are again on the move in Ukraine and the Artic in their biggest repositioning since the Cold War. Russian separatists in Ukraine started making these moves in light of President Trump wanting better relations with Putin. But that hasn’t stopped the Kremlin from destabilizing Ukraine.

Thae Yong-ho, one of the highest-ranking officials in the North Korean government to ever defect, ardently believes Kim Jong-un would attack the U.S. with nuclear weapons if his regime were on the brink of failure. Mr. Yong-ho further elaborated the North Korean leader lives a secretive, isolated life that includes no one having the location of where he even lives. Kim Jong-un is further painted:

“His ability to wreak harm should not be underestimated. If his very survival were threatened, he would lash out and destroy whatever he could and once there was an effective nuclear arsenal, the leader would be prepared to use it.”

Mr. Yong-ho seems to be iterating that nuclear weapons are the only guarantee Kim Jong-un has outside of China protecting its proxy.

In late January, Houthi militants controlled by Iran killed three crewmembers and injured three others in an attack on a Saudi frigate on patrol west of the Hodeidah port in Yemen. The attack, which is the third carried out on Saudi-coalition ships in the past six months, was actually intended for U.S. warships patrolling the area. Also in Yemen, Houthi militants killed an American commando who was put in place as part of the first counterterrorism operation authorized by President Trump. Following these offenses, the U.N. is scrambling with the Saudis to monitor a fragile ceasefire that is continuously being violated by the Houthis, who now control Yemen’s capital.

The above actions have prompted President Trump to realign the U.S. with the Saudi-led coalition by promising to enforce the Iran nuclear deal and counter Iranian aggression. U.S. officials further confirmed:

“Tehran test-fired a medium-range ballistic missile on Sunday that violates a U.N resolution passed last year after the nuclear agreement between the P5 + 1 and the U.N Security Council.”

Iran’s provocations caused Trump’s National Security Advisor, Michael Flynn, to put Iran ‘on notice.’ U.S. surveillance satellites detected the launch that flew 600 miles, but Tehran insists it was not illegal since it did not carry nuclear warheads and is not part of the agreement. Iran’s recent actions reflect the 2016 remarks of Iranian defense minister Hossein Dehqan, who then stated that the missiles would go into production, defying both the U.N. and the spirit of the nuclear agreement.

What this means for balance of power in the region, deterrence that includes NATO or not, along with other nations joining this renewed commitment to check Iranian influence wasn’t spelled out.

And since nothing is being done to check Iran’s hegemonic march in the Middle East, a new Iranian ‘axis of resistance’ has risen according to Foreign Affairs. Tehran has also defied Article 49 of the 4th Geneva Convention and begun transferring Sunni populations from Syria, Lebanon and Iraq, and replacing them with Shia, who are friendly to Iran. This was a popular tactic used by the Nazis in World War II (WWII).

This Iranian ideology has evolved from being crushed by sanctions a few years ago to a state-centered enterprise with military and industrial-means gaining traction along, with the will to engage enemies. This transnational project, supported by organic proxies, has morphed into networks of popular armed movements across the Middle East. The Levant-crescent that starts with Iran encompasses Lebanon, Syria, and Turkey to some extent, along with the acquiescing Russians playing the role of military-industrial supplier to an Iran that is now flush with post-sanctions economic resources. Hamas, Hezbollah, and the Shia militias who were once crushed or irrelevant, will now have to be taken on by nation-states with considerable military resources and the will to fight.

In further military decisions abdicating Iranian civilian politicians, Iran appointed Brigadier General Iraj Masjedi, senior advisor to IRGC-Quds Force Chief Qassem Soleimani as its ambassador to Iraq in early January. According to the Foundation for the Defense of Democracies research analyst, Amir Toumaj, “This shows Iran’s commitment to ensure that its political and military influence will continue to dominate its western neighbor.” Iran has also increased influence in Lebanon by having Hezbollah take over the country’s presidential election and get its candidate, Michael Aoun elected, ensuring Iran effectively controls Lebanon.

Who has resources besides the Americans, Europeans, and NATO to check the Iranians, Russians, and now Chinese who have also made very provocative moves recently? Though the Chinese let it be known they were staying out of a renewed Russia-US nuclear arms race, that isn’t really the truth. However, China tested a new version of its long-range missile that is capable of carrying ten warheads. Further the South China Morning Post reported:

“China is stepping up preparedness for a possible military conflict with the U.S. over the South China Sea. The Chinese army believes the chances of war have become ‘more real’ amid an increasingly complex security situation in Asia.”

China, with the aid of North Korea, seems intent on turning the South China Sea into its own private harbor. Perceptions are reality and the possibility of a ‘conflict,’ or ‘war’ between the two great powers of our day has historical allies nervous about who to trust and which side to pick. The post-WWII order could be disrupted with one misplaced shot or a nervous pilot on patrol in East Asia.

Tackling all these challenges requires both economically and militarily dismantling both these entities, and the trend of growing terrorism as well. Unfortunately, the clock can’t be turned back on over a decade of feeble resistance, which has allowed smaller countries to thrive off chaos without repercussions. Now social support is also in place for a more muscular China, expansionist Russia, and ascendant Iran across their spheres of influence. Many of their combatants will die to keep power, but as an example of the other side’s weakness, would the Germans be willing, able or even capable of fielding an army to take on the Russians? While Germany may not be able to overcome their WWII sins, it’s doubtful the Japanese would suffer from that malaise.

Either the facts on the ground change or the means for credible engagement becomes harder each time an un-deterred geopolitical move on the world’s chessboard transpires. Freedom-loving nations must work pragmatically with hard and soft power to begin taking back the pieces that have been lost in the South China Sea, the Levant, Africa, South America and the Central Asian periphery that is being ignored. Russia working with the Taliban proves that Central Asia can’t be ignored any longer no matter how long nations have been at war in that graveyard of dynasties. Marginal pressure will yield failure and warlike conditions unless the old rules of the Cold War are brought back online. Diplomacy and statecraft are necessary tools, but will only yield the slowing down of evil, not stopping its forward progress. Setting false demarcation lines and managing the rise of China, Russia and Iran won’t work now that conflicts across the globe are raging from the Middle East to failed states in Africa. This new form of war – using proxies and obfuscation through their deaths on the battlefield – without paying a political price has to be met with international backing. Countries like Egypt, Vietnam, Columbia, and Mexico need to acknowledge these new realities and do away with historical vocal criticisms leveled at western hegemonic ambitions. Instead Shiism as a political entity, Russian worship of strength – whether Stalin or Putin – and China veering towards Maoism in the form of Premier Xi strengthening his power can only be met with foreign alliances, new and old.

The free world has a choice, either fight or be perceived as lacking any convictions, which means authoritarian regimes win. Washington is trying by scatter-shooting its way to re-engaging ‘special relationships.’ No one wants to admit or even believe that Russia, Iran, and China cause other bad actors like Sudan, Venezuela, and the emergence of authoritarianism in Hungary and Poland to be nothing other than believing placating evil. The solution is muscular deterrence backed by blue-water navies and divisions of NATO infantrymen. Failure by gradually conceding control of Western and East Asian coalitions to authoritarian Axis’ will come at a high cost.

Conflict resolution can be seen as a strength, and not a weakness, but the commitment to only seeking peace without military-deterrence will lead to protracted crisis or war. The choice is freedom-loving people and nations either stand up for human rights, backed by the will to fight, or consider a replay of WWII.

But this time with the technology that nations now possess we could truly witness the wars to end all wars. Let’s surmise hope against hope and believe that deterrence, balance of power, historical alliances, robust militaries and the post-WWII order stay in place by powers that have benefited from this relationship for over seventy years. They need to wake up and come to their senses, otherwise the consequences are difficult to imagine.

Link: https://www.geopoliticalmonitor.com/current-geopolitics-a-recipe-for-war/

How to Improve California’s Growth

February 3, 2017

California has problems that could lead to economic failings and if that happens there will be no help from Washington. But there are things California can do to encourage economic growth, the state’s saving grace.

Unfortunately Senator Harry Reid and President Obama endowed the modern presidency with unforeseen powers. Trump now has a pen and a phone the way Obama did, and he will use both tools as he sees fit. If California fails economically, as our pensions, deficits and environmental edicts push us closer to the abyss, it is a fallacy that the federal government will come to our rescue.

Here are some things that could bring better results to all Californians.

Do away with environmental-nihilism, and instead embrace economic growth. With growth comes innovation and prosperity along with clean air and water. The Breakthrough Institute, The Property and Environment Research Center (PERC) in Montana, the EPA, and Bloomberg’s New Energy Finance (BNEF have all confirmed that growing economies and innovation coexist while keeping the environment clean.

Encouraging entrepreneurship by cutting the $800 a year LLC tax is a common sense way to unleash revenue that is sitting on the creative sidelines. Let’s stop our grand social experiment and unleash the type of economy Governor Pat Brown presided over that built the world’s best water systems, universities and infrastructure. It can be done, but first California’s voters have to change their current political tune.

Governor Brown and the legislature need to make reform to CEQA a priority, and pass laws allowing single-family homes to be built. This would bypass the policies of transit-oriented zones, which causes increased density in the form of apartment and condominium towers in California cities. The current planning regimes at (SCAG), (MTC), (ABAG), and (SANDAG) have caused home prices to skyrocket by favoring density over single-family homes. Even millennials prefer single-family homes to density.

Americans have always understood having a growth rate above 4-4.5% glosses over political misfortunes and allows for changes. But what would really shock California’s economy and begin addressing the state’s difficulties would be to get away from one-party rule. Choose lawmakers who actually understand a simple tax code, cutting regulations, incentives for investment, and an open energy market for fossil fuels and renewables. This would rocket California’s economy to have the ability to pay our existing bills, deficits, and unfunded liabilities. Until Democrats cross the aisle the way they did nationwide electing Trump, we will continue stagnating until financially we implode, and then what?

Link: http://www.foxandhoundsdaily.com/2017/02/improve-californias-growth/

These Factors Are Holding Back An Oil Price Rally

February 1, 2017

Ever since OPEC announced their production cuts the markets have hit irrational exuberance without examining the factors for why oil isn’t rising anywhere near pre-crash levels. Moreover, there are eleven different causes for why oil is stuck in the 50-60 dollar range. Maybe it will rise into the high 60s and 70s, but for that to happen powerful market forces have to be overcome.

Yes, OPEC compliance is still important along with currency movements, but U.S output, according to weekly surveys is nearing 9 million barrels per day. That figure hasn’t been hit since March 2016. Here are the distressing factors holding oil prices in the 50s.

In 2016, China’s economy reported its lowest rate of growth in over a quarter of a century, because of restricting issues with looming debt and possible protectionist actions from the U.S. Though it seems China’s economic fortunes have rebounded from 2016. Analysts at UBS point out: “China’s debt-to-GDP ratio had risen to 277% at the end of 2016 up from 254% the previous year.” New credit is now being used to pay debt servicing cost ratios. What this means for economic growth, and demand for oil imports in China is tough to quantify, since debt continues spiraling upwards.

Another mid-term threat comes from pipeline builders. Keystone XL pipeline builder TransCanada is primed to move forward and has already filed a new application. The Dakota Access pipeline will also be built as the political landscape changed for pipeline construction in the U.S.

Keystone XL could transport as much as 830,000 barrels of oil per day (bpd), and the Dakota Access pipeline will supply 500,000 bpd. More importantly, with the installation of the Trump administration, the business environment has changed for good, allowing for both abovementioned pipelines, and others to be build in the near future.

Iranian sanctions being lifted have allowed the National Iranian Oil Company (NIOC) to recover, and begin shipping crude to Europe. Whether or not they comply with OPEC production cuts will be difficult to quantify. What isn’t complicated to understand is one of the world’s former oil and gas leaders has the ability to bring vast amounts of new fossil fuels to an already oversaturated market. A recent report also stated:

“Global ship insurers were about to resume near full coverage for Iranian oil exports from next month without involving US-domiciled reinsures.”

The Iranian resurgence is a big reason why oil will have a tough time rising significantly in the coming months.

Baker Hughes has been chosen by Saudi Aramco to audit their oil reserves for their upcoming 2018 initial public offering. It is believed the Saudis hold roughly 15% of the world’s known oil reserves, which translates into 261-265 billion barrels of oil at this time. Gaffney, Cline & Associates, a unit of Baker Hughes, will carry out the review. A $2 trillion dollar valuation has so far been placed on Saudi Aramco, and an influx of funds from the IPO allows the Saudi’s to invest more in fossil fuel exploration.

In a symbolic move to help pay for strategic petroleum reserves (SPR) infrastructure upgrades, the U.S. is selling $375 million worth of oil from the SPR. Selling off this oil could shake markets.

U.S. shale continues to defy expectations by bringing new crude supplies online faster than OPEC or analysts predicted. On top of that, exploration on Federal lands, which are believed to hold up to 1/5 of the U.S.’ known oil and gas reserves could soon start. The Trump administration’s native-American policies during the transition period and into his Presidency are led by Markwayne Mullin, a U.S. Congressman from Oklahoma and Cherokee tribe member who chairs President Trump’s Native American Affairs Coalition.

Recently Congressman Mullin said:

“As long as we can do it (drill for oil, gas and coal) without unintended consequences, I think we will have broad support around Indian country.”

Now with red tape for drilling looking to be cleared, and possible privatization of their lands, this opens the door for more oil and gas drilling.

Libya and Nigeria – two conflict plagued countries which are currently exempt from the OPEC deal – are bringing new supplies back to the market. Ole Hansen, a commodities analyst with Danish investment banking firm, Saxo Bank, said:

“The speed at which the oil market rebalances depends on two volatile producers, Libya and Nigeria. Both are producing well below capacity, and as long as they see consistent improvement they will be able to increase production further.”

Each country will pose a major challenge for OPEC and oil gaining price momentum unless more cuts come from OPEC or non-OPEC countries, which at this point in time isn’t likely to occur.

Link: https://oilprice.com/Latest-Energy-News/World-News/These-Factors-Are-Holding-Back-An-Oil-Price-Rally.html

The Implications of the Paris Climate Deal

January 30, 2017

Rational people want a clean environment. Usually it has been western, wealthy nations leading the environmental movement with California and the California Air Resources Board (CARB) leading the way. California can afford to clean up their air, water and be concerned about carbon emissions; now that their economies are mature enough since Maslow’s hierarchy of needs have been met. Not so for large parts of Africa, Asia, Russia, South America, China, and the American electorate that is more concerned about jobs and the economy.

Except the environment in California has now taken on a shibboleth-like quality of an either/or proposition. Instead, it should be seen through the lens of deliverable, scalable energy while fostering prosperity and energy security for every California County. However, under the current terms, the Paris Climate Agreement was an incredible achievement of nations coming together, but other than symbolically – it wouldn’t do much to help California’s environmental health – or economy.

The Paris Climate agreement was signed by 178 countries in 2016, and will be implemented over 14 years at a projected cost of $1-2 trillion per year according to the Stanford Energy Modeling Forum and The Asia Modeling Experience. Giny McCarthy the former EPA administrator at a June 22, 2016 testimony before the United States (U.S.) Congressional Committee on Science, Space and Technology couldn’t quantify how much global temperature would be reduced under this agreement.California has wholeheartedly embraced this agreement, but would they if Governor Brown and the Legislature understood the details and costs?

Unfortunately when statements by the EPA can’t give hard facts for how this deal will lower global temperatures that is a major problem for its effectiveness. This causes the agreement to be seen as nothing more than vague promises when actual environmental action needs to be accomplished in China, India, and thedeveloping world. For California the Inland Empire and Los Angeles’ San Fernando Valley need to have cleaner air; by valuing scalable, low-carbon assets as hydroelectric, nuclear power, fuel-efficient vehicles, clean coal technologies, and natural gas are more effective than embracing the Paris Climate Agreement.

According to Bjorn Lomborg, President of the Copenhagen Consensus Center using the United Nation’s Climate Model the Paris Climate Agreement will only postpone temperature rise by less than 0.3 F. What would be better for California’s prosperity would be to follow the model recently announced by Bill Gates for $7 billion in clean energy research and development to come from private individuals. TheBreakthrough Institute has also done commendable work on clean energy while emphasizing technology and human ingenuity to solve the world’s clean energy problems. Mr. Gates and the Breakthrough Institute both appeal for clean energy without entities like CARB getting in the way.

There are answers to deliver energy at a lower cost that isn’t dirty like conventional coal while being environmentally clean. This means of energy delivery further brings a robust answer to how millions of Californians could achieve prosperity without killing off their society through pollution-filled skies. The answer is natural gas.

Currently, renewables can’t meet California’s energy needs. The basic building block of California’s economy is energy. We need a proper energy portfolio that doesn’t rely on dubious carbon treaties, caps on emissions, CARB regulations and taxes from our legislature; instead millions will suffer in dirty, polluted conditions that natural gas and clean coal could deliver them from at cheap, low-cost, scalable prices. Not the dirty infestation of coal or poorly built natural gas plants that are currently killing Chinese, African, European, and Indian skies – and all this – could happen in California. But a technologically superior energy product that a cheap, even clean version of coal now being developedin Japan, China, and South Korea offers to California along with abundant natural gas.

The Paris Climate Agreement had good intentions, but the cost of $100 trillion by the year 2100 while only lowering the temperature 0.3 F – (and that is with full implementation of all pledges and promises by the signatories) – isn’t worth the cost. If we really want green energy innovation while not costing economies trillions, then nothing lowers CO2 emissions like natural gas.
In Russell Gold’s book: The Boom, Mr. Gold writes on page 265:
“The United States is one of the few places in the world that decreased its carbon output – and decreased it dramatically. It never ratified the Kyoto Protocol – a United Nations effort to enact greenhouse gas emission reductions – but is on pace to exceed the targets anyway, even though many signatory nations have failed to meet their obligations.”

Further Mr. Gold states The International Energy Agency (IEA) has also forecasted that increased natural gas use “will lower CO2 output in the United States and other industrialized nations – even China – if they adopt natural gas as their main energy source.”

This demonstrates how California could have clean energy while still allowing California to thrive economically without the job constrainers that AB 32 and SB 32 have become. The two don’t have to be rivals – commerce and ecologically sound environments – but with natural gas the best of everything is offered. Further when the value chain is put into the natural gas equation this is the definition of California energy security and environmentally sound policy-making working together to create jobs. After reliable energy nothing is more important than good jobs that create thriving middle classes in California.

The other interesting point that natural gas offers is that a natural gas power plant can turn on and off quickly (usually within 1-6 hours) and could form a type of symbiotic relationship with renewables. Renewables biggest issue is intermittent weather. Meaning, their power comes and goes with sun and wind. Capturing the abundant availability of natural gas that California has.
What should be happening is clean coal should be developed, and Bill Gates’ genius for business and new technology fostered as never before; but use natural gas to build billion dollar plants, meet societal needs and hire thousands to build infrastructure around energy’s building blocks for California.

California Senate leader, Senator Kevin de’ Leon should be focusing on an all-of-the-above solution for energy, and not only seeing renewable energy as the only viable option to meet California’s growing needs.

Being correct on energy is important, and the Paris Climate Agreement made a valiant attempt, but to truly have energy security then natural gas and other fossil fuels make the most sense at this time while the obstacles holding renewable energy back are being overcome. Energy as a commodity and giver of human progress began with the industrial revolution and led by the discovery of how to deliver oil, natural gas and coal to growing economies. With the new U.S. administration being a believer in natural gas, technologies to boost its use can be developed by California companies that boost profits, create jobs, and protect the environment as never before.

Link: http://www.foxandhoundsdaily.com/2017/01/implications-paris-climate-deal/

Why California’s Finances Could Derail Their Energy Plans

January 26, 2017

According to State Senator John Moorlach, R-Costa Mesa, California has real financial problems that need to be immediately addressed. A self-described Truman Democrat, Joel Kotkin, in a recent syndicated article echoes the same sentiments. Some of the problems are California has the highest taxes overall in the nation, worst roads, underperforming schools, and the recent budget has at least a $1.6 billion shortfall.

Moreover, depending on how the numbers are analyzed California has either a $1.3 or a $2.8 trillion outstanding debt. This is before counting the maintenance work needed for infrastructure, particularly roads, bridges and water systems. Yet tax increases aren’t covering these obligations, and even the bullet train project, which held so much promise when it was passed are now billions over budget.

However, the financial strain also has California’s net financial position running a $169 billion deficit according to the Comprehensive Annual Financial Report, which puts California ranked last in the nation. Deferred maintenance on our state roads and highways is roughly $59 billion. Estimates of California’s unfunded pension liabilities – assuming a rate of return – above 5% has CalPERS at $114.5 billion, CalSTRS at $76.2 billion and UC Pension at $12.1 billion.

California in addition has the highest unfunded retiree medical liability in the nation, second highest gas taxes when cap and trade is added, highest corporate and individual income taxes, and lastly has the worst business competitive environment in the U.S. as well.

Our biggest issue of all could be that our nation’s unfunded pension liabilities have reached upwards of $5.6 trillion with California’s share at $956 billion. These above-mentioned sobering assessments of our state’s financial and societal health are reasons to question why California has become an outlier of progressive policies – particularly when it comes to energy – with renewable energy being at the forefront of our overall energy portfolio.

At one time California was the leader in sensible environmental, education, manufacturing and cultural polices, but those days have seemingly passed. As the country moved to the right during the recent election, California has entrenched itself as the stronghold of the left-leaning, progressive movement. Nowhere has this played itself out than in California’s embrace of global warming with AB 32 and SB 32. Both energy policies are known to restrict economic growth, and make all forms of energy more expensive. Whether you believe or not in global warming and climate change, California’s embrace of the fundamental tool for economic growth – affordable, scalable energy – has now become harder than ever to achieve with the voters, California legislature and Governor’s full embrace of these policies.

At this time California isn’t creating middle or upper middle class jobs, except in the northern California region. With San Francisco leading the way. Apple just announced they are creating 2,000 jobs in Arizona with firms such as Toyota, Tesla and Carl’s Jr., having followed suit the last few years. Recent labor announcements about California creating 21,600 private sector jobs in December turned out to be a false narrative.

According to payroll processing company Automatic Data Processing Inc. working with Moody’s Analytics Inc., put the figure at only 2,400 “goods producing types of jobs.” Meaning that nine out of ten jobs created were service sector, minimum wage paying levels jobs.

With this type of employment opportunities being created how are Californians expected to pay for an energy portfolio that strongly relies on renewable energy? This could be turned around with great paying careers that the oil and gas industry provides. As an example, according to Russell Gold’s book “The Boom,” page 62, the average oil-field worker made $91,400.

Renewable energy at this time doesn’t work on the type of basis that could power neighborhoods, cities, counties, or this state. Additionally, renewable’s technology hasn’t solved a number of key issues for energy security, reliability and scaling at a cost effective measure to reach all California markets.

These main problems are: 1) storage of excess energy, 2) intermittent weather issues when using wind and solar, 3) generous tax credits needed for profits (Tesla as an example), and 4) modernizing the grid needs to take place, because renewable energy causes surges that California’s grid isn’t able to handle from over 38 million Californians.

As California relishes its role fighting the new President, it is hard to imagine his administration doing anything to assist California lowering its energy costs. It’s not hard to imagine that if you live in Los Angeles, San Francisco or other expensive coastal enclaves that a $200,000 a year salary isn’t enough once taxes are paid. Therefore, why is California nudging the new President towards confrontation?

Gun control, immigration, and even snubbing him at his inauguration, members of the California Congressional delegation are playing a dangerous game. Joel Kotkin has many times called California’s energy policy an amalgamation of “green clergy, or a clerisy.” Trump also has control over federal dollars. California is expected to receive $105 billion this year, with $78 billion going to health and human services programs. Likewise Trump has nominated pro-fossil fuel advocates to the Departments of State, Energy, Interior and the EPA. It doesn’t seem wise for California to not want to work with the Trump administration on opening up parts of California to energy exploration to assist with politically disagreeable problems now in the mix.

California has billions of gallons of oil and trillions of cubic feet of natural gas sitting off our coastlines and in the Monterrey shale. Jobs aren’t being created that can sustain working families, infrastructure is lagging and our energy portfolio isn’t functioning correctly to contain costs. Our high-energy costs are one of the biggest factors why companies and CEOs are leaving California.

Many astute energy observers believe California will need to cut 100,000 jobs and increase energy prices to meet our ambitious climate goals. These goals could be met with moving towards natural gas and nuclear-powered plants.

A desirable goal for the new year would be for voters to begin considering voting for moderate, business-friendly Democrats, and sensible environmental Republicans who believe in an all-of-the-above approach when it comes to energy policy.

This perfect amalgamation of animosity rapidly approaching California could be mitigated with sensible, low-cost energy policies that benefit all of California.

Link: http://www.capoliticalreview.com/top-stories/why-californias-finances-could-derail-their-energy-plans/?utm_source=CAPoliticalReview.com&utm_campaign=996913bcbe-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_b855a22bd3-996913bcbe-302970917

Expect A New Shale Boom This Spring

January 24, 2017

U.S. shale has now rebounded to a solid financial equilibrium that it makes sense for companies to begin investing in drilling again. The International Energy Agency (IEA) expects U.S. shale drillers to add over 500,000 bpd throughout 2017. Current announcements show the oil price floor, installed by OPEC’s production cuts, have allowed companies such as Hess Corporation and Noble Energy Incorporated to ramp up their budgetary spending by 60%.

Hess in particular is bullish on the Bakken in North Dakota with a $2.25 billion budget for 2017. Noble Energy will spend $2.5 billion – a 67 percent jump from last year’s $1.5 billion budget. On top of this, Noble plans to purchase Clayton Williams Energy based in the West Texas Permian for $2.7 billion, giving Noble another 4,200 prospective wells on 120,000 acres.

In other words the spigot has been opened, and more rigs and workers are being put back to work. Texas is leading the way with companies like RSP Permian Inc., increasing their budget by 97 percent to $600 million. Recently, geologists in Texas discovered the largest shale opportunity in the U.S.: The Midland Basin of the Wolfcamp Shale area.

According to the United State Geological Survey (USGS) this discovery is estimated to have 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids. This find is three times larger than the assessed amount of oil in the Bakken formation in North Dakota.

With the imminent approval approval of the Keystone XL and Dakota Access pipelines there is nothing standing in the way of U.S. shale drillers from delivering hundreds of thousands of barrels of new oil and gas to the market. As an example, the Dakota Access pipeline will deliver, “470,000 barrels of oil each day from oil fields in western North Dakota to much of the Upper Midwest en route to Illinois.” Billions in new investments, and larger budgets from world-class shale drillers, are reasons that could possibly negate the effects of the OPEC cuts.

Moreover, oilfield service companies are announcing larger than expected capital budgets. Unheard of is a better way to describe this news, because months ago the OPEC deal had not brought oil prices up to a level where companies could spend money, invest in the future, and hire workers. The 32nd Annual Barclays E&P Spending Survey found:

“Eighty percent of survey respondents said they expect oilfield service (OFS) costs to rise in the supply chain, and the OFS is among the most under-owned sectors in the S&P 500.”
Related: Markets Buy The OPEC Cuts, But Fear U.S. Supply

This leaves room to add the above-mentioned firms in your portfolio, but with the risk and rewards that OFS brings this segment of the oil and gas industry.

This predicted surge in spending will also find oil field service providers such as Schlumberger Ltd. spend more as well. Paal Kibsgaard, Chief Executive Officer of Schlumberger believes the global market will take longer to rebound, but witnesses, “many global operators are not as well funded or nimble as American producers.”

This renewed confidence comes on the heels of two years of austere budgets, layoffs that totaled over 150,000 U.S. oil workers and hundreds of bankruptcies. Idle rigs began littering the shale landscape since the 2014 crash, but now that same shale patch is firing them up once again.

The main key to understanding how U.S. shale companies have adapted to the new oil price environment has been the ‘’can-do attitude’’ of petroleum engineers and oilmen from the Bakken to the Marcellus shale formations in combination with favorable financing conditions. These companies, and their ability to withstand the crisis of plunging oil prices has made them more flexible, better funded, leaner and more able to bring oil and gas rigs back online in seemingly no time.

And now with a tsunami of deregulation coming to the U.S, this could unleash investments and even more oil and gas drilling. U.S. shale companies have withstood the Saudi price war aimed at annihilating them, but 2017 could see a convincing comeback.

U.S. shale, unlike many other oil industries in the world has managed to adapt to the new $50 oil reality. Denver based Extract Oil & Gas, CEO, Mark Erickson says, “$45 oil has proven to be a sweet spot for the company, any improvement in price just means stronger returns and more activity are on the way.” This year’s shaping up to be a very good year for U.S. shale.

Link: https://oilprice.com/Energy/Crude-Oil/Expect-A-New-Shale-Boom-This-Spring.html

Deterrence Works and We Need to Get It Back

January 17, 2017

During the Cold War and World War II (WW II), the world was safe because of deterrence. A balance of power existed between aligned nations cloaked in vibrant, robust militaries ready to defend their countries. The enemies of peaceful nations knew the costs, as President John F. Kennedy echoed that sentiment during his famous inaugural address about defending freedom and defeating foes. Those days are now gone, however, they can be revived again using deterrence that keeps worldwide war at bay.

We are living in treacherous times, and war could break out anywhere on the seven continents across the world. Our current predicaments are beginning to make the early 1930s look pale in comparison to what is happening today, because deterrence has been allowed to linger and stall since the collapse of the Soviet Union.

Collectively, we seem to have thought that history has stopped since the East and West German divide came down; but instead, we are witnessing a sharp upticks in wars, constant belligerence from the Middle East, the South China Sea dispute, and Mexico’s unending drug war. New threats are doing away with the resources to cope with refugee problems, the spread of terrorism, but most importantly the embrace of negative constructivism to resolve conflict.

Foreign Affairs magazine describe ten hotspots for 2017, or flashpoints globally that if not dealt with swiftly and even harshly could lead to war.Interestingly enough, Foreign Affairs didn’t mention China, North Korea, Russia or Iran. It can be argued that North Korea claiming they can fire an ICBM anytime and outgoing Secretary Kerry saying, “the U.S. may need more forceful ways of dealing with North Korea,” is a hotter spot than Ukraine.

Deterrence is the best answer for dealing with those nations. The type of deterrence at the forefront of the Cold War, which had far-reaching geopolitical implications, otherwise the future is cloaked in profoundly destabilizing actions by those four nations.

Gambling with the four above-mentioned nations without proper deterrence won’t work, but if done forcefully, then the other ten described foreign policy unknowns can be solved. If not, then jittery states from Europe to East Asia will begin to parse out safe real estate for their citizens if someone doesn’t step up. Historically that has been the United States (U.S.) since World War II. The U.S. structured a system based upon mutually agreed upon principles between major powers to keep World War III at bay.

Certainly that order has been was in flux recently, and disagreements rage about how this new discombobulating order began. There isn’t a correct answer. Moreover, add in the Rwanda genocide, the Yugoslavia breakup, and leaving Iraq after a brutal, tentative victory was achieved, and still there aren’t answers, which is the problem. But this cooperative, championed order, leading to unprecedented prosperity and peace, is suffering its share of dire crisis unless deterrence is restored. And Washington’s and NATO’s retrenchment is only leading to what will eventually see Japan, South Korea, and the Sunni coalition led by the Saudis join the nuclear club.

Let’s also not forget about India and Pakistan, who play a daily nuclear cat and mouse game in Kashmir. If Kashmir explodes, then does the U.S. intervene? China has an interest, and believes they can overtake India quickly. If China commits troops would other countries in the region follow suit? Another dangerous tightrope situation without a net while the basics of geopolitics continue forward wondering who will do the heavy lifting to sustain the international system.

Furthermore, will it be U.S. hard power or European soft power that restores deterrence? The perceived threats that the Iran nuclear deal were supposed to buffer haven’t kept the Islamic Republic from buying uranium and keeping oil prices low by taking advantage of OPEC’s weakness to boost their market share.

The Russians have seen fit to meddle in U.S., European, and former Soviet satellite elections at will while still threatening Ukraine. If Ukraine goes back to the Russians and out of NATO’s orbit then Europe will have to grow NATO and American troop presence more than it has in recent years.

The echoes of Russian aggression will have returned to Cold War levels, but it’s the correct move for deterrence to work, moving troops into Poland and Norway. The world wants peace, and this is a perfect example of military moves bolstering deterrence without a single shot being fired.

The European structure is being shaken as never before, and while some see a messy Brexit, that’s not what the facts say. Recently it was reported Britain has the number one growing advanced economy in the world. Yet what happens if Germany, the Netherlands and France leave the EU based upon these facts? Can the world afford to lose the European voice, its large economy, and its reliance upon soft power? Will Europe become splintered and fractured at best, and at worst, allow regional historical rivalries to return, sparking conflicts that could make the proxy wars taking place in Syria, Iraq and Yemen seem tame. The balance Europe brings can’t afford to be lost.

Here’s why the international system needs robust deterrence without war. Terrorism is the pretense of a common enemy, but that model can’t sustain itself. It is an illusion for nations to endlessly fight without a tactic to define a strategy. World War II was decisive, because there was a common, definable enemy that allowed for tactics and strategy leading to victory. Today’s terrorism fight has none of those modalities in place.

Thriving on chaos will not lead to building blocks for a stable future. This type of tactical bargaining has no long-term strategy or common values within their policies. Maybe a Turkish-Russian rapprochement holds promise, but historical enmity more than likely will win over long-term solutions being offered in Syria through this false promise. Considering Beijing’s war-like posture towards East Asia, the incoming Trump administration, Africa, and Latin America – what the world needs is overwhelming deterrence when dealing with China. Chaos can be managed, but only through deterrence.

Realpolitik and deal-making isn’t a guide to stable long-term solutions. Economic sanctions were crippling Iran until they were removed, and can work again if world powers have the vision to do what is necessary. That is a great example of soft power deterrence backed by hard power. Yet deals, like fluid relationships, can be broken, and our world is now made up of diverse states with globalized, vested interests. It can’t be stated enough that someone has to step up and keep the order with military-powered deterrence or with crippling economic sanctions to pull these nonstate actors and proxies off the world stage.

Many would say no single power could have singularity when it comes to controlling major powers or events. Manipulation can take place in the case of Libya when NATO, led somewhat by the U.S., bombed them into a fractured society. But real deterrence with military hard power had brought Gadhafi to his senses. He was working with the Americans, Europeans, and democratized Asian countries to denounce his nuclear program and terrorism. That only came about because he saw what happened to Saddam Hussein. That was lethal deterrence in force, and not a sanitized environment that brought Gadhafi to his senses.

Here’s what should immediately happen for deterrence to be restored. First, build a large, lethal blue-water navy, as the incoming U.S. administration is proposing. Iran, Russia, China, and North Korea have to be checked globally, and a fully equipped naval presence from freedom-loving nations accomplishes that task. Next, other NATO alliance members should follow the example of Norway, and their policy of burden sharing toward Europe’s collective defense. They pay their fair share when so many others don’t. NATO led by the U.S. has to demand every alliance member dedicates 2% of their budget to their military, which assists keeping the NATO alliance intact. Economically, push infrastructure and energy portfolios led by fossil fuel with renewables in the background while they overcome their problems.

If developing nations pushed natural gas as soft power deterrence, and worked on infrastructure bottlenecks delivering inexpensive natural gas from the Marcellus shale in the U.S. to exporting LNG across the globe then the most basic component of modern life – cheap, scalable energy – is secured. Nations that thrive economically are less willing to interrupt their prosperity with war and hostility towards other nations. Not every deterrence-issue has to have the big impact of a weapon to be effective.

No major, world power, such as the U.S., or China can single-handedly control world events. NATO, the U.S., the IMF, World Bank, and other post WW II conflict-negating entities can’t contain every fire, but with deterrence they can keep sparks from igniting into flames. Our globalized, messy world is now a fact, and deterrence is the best tool to keep our world from entering World War III.

Link: https://www.geopoliticalmonitor.com/deterrence-works-and-we-need-to-get-it-back/

What Is Holding Renewable Energy Back?

January 15, 2017

Bloomberg is now reporting that solar energy is cheaper than coal, and could become the lowest form of energy within a decade. Economies of scale are causing solar to drop from an average of $1.14 a watt all the way to 0.73 cents per watt by 2025.

Several agencies, from the U.S. Department of Energy’s National Renewable Energy Lab to the International Energy Agency, all confirm this rapid decline in costs. Capacity for solar is doubling, causing the supply chain to be lower for bank loan premiums and manufacturing capacity in the solar energy space. Now with Tesla’s gigafactory opening the cost of batteries is also expected to drop for electric vehicles and home battery systems.

China also plans to invest over $360 billion on renewable energy and fuels to help decrease the smog issues the country is currently experiencing. Unsafe, coal-fired power plants are currently suffocating the country’s air supply.

We could be entering a new era in energy, and an era renewable investors and environmental advocates have been touting this century. Unfortunately, there are glaring weaknesses being over looked. For renewables to truly breakthrough into a low-cost, scalable energy along the lines of coal, oil, and natural gas numerous obstacles such as costs, back-up generation power, storage, and grid modernization will need to be solved.

Yes, costs are technically going down for solar and wind, but can that truly be translated onto a larger scale? While costs for manufacturing and kilowatts per hour are dropping, the final costs when it comes to large-scale renewables are more nuanced. For this reason, despite the need for clean fuel in both emerging and developed economies, renewable market share remains well below that of conventional forms of energy. The BP Statistical Review of Global Energy in 2015 showed renewables provided only 2.4 percent of total worldwide energy needs, hydroelectric power generated 6.8 percent and nuclear came in at 4.4 percent. Moreover, no matter how much renewables are touted as a replacement for fossil fuels, and even with positive economies of scale, it is unlikely that they will overtake coal, oil and natural gas in the near future.

While hydroelectric is not impacted by the intermittency issues of wind and solar, the process of damning water for electric use can run into serious environmental issues. Hydroelectric is actually the most reliable renewable, but it still has tremendous issues. Once natural waterways are diverted for energy, whole towns, valleys and mountain ranges can be significantly impacted. In this way, hydroelectric and nuclear are similar, because they are two clean sources of energy with the potential for large social and environmental impacts.

If the sun isn’t shining and the wind isn’t blowing then solar and wind become difficult to use without fossil fuels – particularly natural gas and coal-fired power plants – backing them up. Batteries have not caught up to enhance storage for renewables, and they aren’t productive enough for entire cities, countries, and nations.

When looking at the total cost of renewables versus coal, natural gas, and oil there really isn’t a comparison in the near-term because wind and solar can only generate intermittent electricity, while nuclear and hydroelectric energy face significant social and environmental resistance. Fossil fuels can be run without backup supplies, and factoring in those expenses – even with renewable technology having achieved significant cost reductions – fossil fuels are the most economical, scalable choice. Total costs, or levelized costs, still make renewable energy underproductive as a wide-scale fuel for developed, emerging and third world countries.

While mature economies such as Germany and California have trialed large-scale renewables successfully, these successes weren’t achieved without fossil fuels backing them up. The Energy Information Administration’s Annual Energy Outlook 2017 to 2050 has renewables at only 18-26 percent penetration by 2050. Electric vehicles currently have 1 percent of the market and are projected to have only gained 6 percent by 2040.

Energy storage and grid modernization are separate issues, yet linked together in many ways. How energy is stored from fluctuating renewable sources (wind and solar) is important for accommodating, “multiple grid services, including spinning reserve and renewables integration.” To improve the problem of intermittent generation for resources such as wind and solar the EIA recommends that companies:

“Examine the potential for transmission (grid) enhancements to mitigate regional effects of high levels of wind and solar generation while developing higher resolution time-of-day and seasonal value and operational impact of wind.”

Further, the EIA sees utility rate structure for different levels of photovoltaic solar generation being needed to control costs for consumers and industry when using renewable energy. What the EIA is saying is that renewables fluctuate in power generation based upon different weather patterns, which causes the grid to fluctuate. These upward grid spikes are then passed on in higher electricity costs to utility customers. It is one of the reasons California has some of the highest energy costs in the United States due to its heavy reliance on renewable energy.

The most important component in the entire process of renewables overtaking fossil fuels for a cleaner future is grid modernization. According to T. Boone Pickens, “the electrical grid of the future will have to be built,” for renewable energy to overcome the above-mentioned hurdles.

Renewable energy has incredible potential but, until power grids are modernized, they will lag behind fossil fuels. The current electric grids can’t handle millions of electric vehicles and fluctuating, spiked energy from wind and solar nor does it have the ability to be flexible the way a natural gas power plant is at this time. The best power plants for energy efficiency and lowering carbon emissions while keeping costs reasonable are natural gas plants. Natural gas-fired power plants are the biggest reason coal is losing market share in the United States.

Most individuals want renewables to work on a large-scale basis to provide cleaner air, water and an overall healthier environment. But instead of renewables like electric vehicles taking on a fad-like quality without the technology having caught up to the hype, energy policy makers need to look at the facts, and not the emotions. Let’s not pit renewables against fossil fuels, but look to incorporate the different energy sources into what’s best for the U.S. and the world community.

Link: https://oilprice.com/Energy/Energy-General/What-Is-Holding-Renewable-Energy-Back.html

The Math Doesn’t Add Up For The OPEC Deal To Work

January 12, 2017

The basic laws of supply and demand can easily cause the OPEC production cuts to not work, but there are other factors to also consider. These factors include U.S. shale production, political stability returning to Libya and Nigeria, the amount of oil sitting in storage and rising role of renewable energy.

U.S. shale producers were a leading factor in the 2014 oil crash because of how much oil they brought to domestic and international markets. Since then they have shed billions in unproductive assets and have lowered break-even costs, which means they can quickly start to replace supply that OPEC is attempting to cut. OPEC could be taking a huge risk betting against shale producers.

No one is as technologically experienced or has such large shale finds ready to be exploited like the U.S. OPEC will need 100% member compliance to ensure shale doesn’t keep oil prices lower than is currently being assumed.

There are approximately 30 oil-producing U.S states, and with a more energy-friendly incoming administration, pipelines such as the Keystone XL and Dakota Access are likely to be approved, leading to increased heavy oil flows from Canada and the Bakken. Has this potentially significant new amount of oil been factored into the production cuts causing prices to rise? It doesn’t seem it has.

Libya is ramping up oil exports after political reconciliations facilitated by the United Nations, and they are exempt from OPEC cuts. In the near-term, Libya could put 700,000 to 900,000 barrels per day on to the market. However, the Libyan government believes they can ramp up production to 1.1 million bpd by the end of 2017, which is a significant amount unaccounted for during this current trading uptick.

There are still challenges in Libya between the Petroleum Facilities Guard and the Libyan National Army, but even if these tensions endure, significant amounts of oil will be shipped to an already oversupplied European market.

Another complicating factor is Nigeria which has been trying to reach some kind of settlement with militants which have been bombing its oil facilities while trying to woo oil majors to raise investment and production. All of their internal problems aside, the African nation still produces around 1.6 million bpd with near-term goal according to President Buhari to reach 2.2 million bpd.

Another indicator that could put a damper on rising oil prices is the amount of crude currently sitting in storage. The U.S. has roughly 500 million barrels in storage, OECD nations have another 375 million barrels, and China has over 400 million barrels in storage while attempting to expand its reserves to 500 million barrels. At some point investors and the market have to account for this inventory.

The storage issue is further complicated by Supertankers used for storage. These massive vessels that are now parked from Singapore to Europe are under no obligation to report accurate supplies as well. They can be tracked by satellite and reporting done at docks and ports, but this makes for cryptic and volatile markets. For an investor or interested parties in the OPEC production cuts it should be understood how fast can this crude be sold on the market and how much it could affect prices.

Cheating on the production cut quotes by the likes of Iran, Iraq and potentially Saudi Arabia are other influences not being put into consideration by anyone who has a vested interest in oil reaching the $60-70 dollar per barrel range. If OPEC members fail to live up to production quotas, prices might fall much faster than anticipated as supply will continue to outpace demand.

With the Chinese economy now emphasizing stability over growth, and uncertainty about the growth prospects of the European economy, these large economies are reducing demand growth and this doesn’t bode well for oil prices rising in 2017.

Above mentioned are some of the issues that can cause oil to plateau before even reaching $60 a barrel. Every energy investor and interested party in fossil fuel’s stability wants to see job growth and geopolitical steadiness. Particularly, countries that depend heavily upon higher oil prices to fund their government budgets. Failing to understand the factors that can stall this rally could bring back a 2014 scenario that saw investors, companies and governments lose hundreds of billions of dollars.

Link: https://oilprice.com/Energy/Crude-Oil/The-Math-Doesnt-Add-Up-For-The-OPEC-Deal-To-Work.html

The Unintended Geopolitical Consequences of Abortion

January 5, 2017

Using moderate counts of worldwide abortions there have been over 1.2 billion babies aborted since 1980. This works out to approximately one death by abortion for each second of the year. Seemingly there’s no comparison to the efficiency of ending human life than abortion. Murderous regimes, plagues and even the HIV-AIDS virus, which has ravaged mankind, all pale in comparison to abortion. Nothing equals abortion for having the geopolitical and social ramifications for nations and regimes. The extreme impact is now being seen globally.

As an example, take the low birth rates in countries such as Germany, Japan and Russia. These countries are below the replacement level, and their diminished birth levels, not counting abortion into the mix, are 1.5 babies or lower. These developed nations, and the United States, have older citizens retiring at rapid rates in places like Southern California and other affluent areas worldwide. California isn’t having babies anymore, and that is a direct affect of polices popularizing abortion. No American state is more pro-abortion than California, and the results are disastrous for the United States, and its geopolitical standing in the world.

Popular entitlement programs, such as the U.S. Social Security system, are in danger of insolvency, as populations shrink via lower birth rates and abortions. The issue becomes having less people working and paying taxes into these programs, and abortion is a major factor towards these issues.

European nations have to let in immigrants – they don’t have a choice – Europe is literally withering away. Immigration in Germany and Japan is needed to boost productivity, maintain the current size of the population, and provide youthful infusion into their societies. If wealthy nations want to compete in global economics, they have to let in all sorts of immigrants, refugees and anyone who will work, no matter the circumstances. Germany in 2015 let in one million immigrants, while Spain, Portugal, Italy, and the U.K., also need more, not less immigration. Europe’s largest economy, Germany is projected to shrink by over 6 million workers by 2030. Europe is looking at a direct threat to economic growth, pension stability, single-payer healthcare and basic social services.

Add abortion into the mix with low replacement rates, and the makings of a geopolitical disaster looms on the horizon. Nowhere has abortion affected world economies and geopolitical rumblings more than China’s one-child policy, which it has finally renounced. Though the disastrous, emotional trauma still lingers, a policy that supposedly made sense at one time, has now proven an albatross around the Chinese and world economy’s neck.

Deng Xiaping’s move to limit population growth allowed China to focus more on industrialization, or so the theory went, but according to the United Nations, China has one of the slowest population growths in the world while aging exponentially. China doesn’t have enough youth, and young adults to overcome the amount of aging and infirmed in China, which is causing their economic expansion to rapidly halt. And that means trouble for the developed and developing world economies that rely on China being a fully integrated economic partner. Not an interloper of old age stagnation.

China has averaged over 13 million forced abortions a year since the one-child policy began in 1978 and now has over 30 million more male bachelors than women. The geopolitical question to answer is what does China do with disgruntled men who will have a hard time finding wives, starting families and living under a slower economy? If China even has a portion of the Middle East’s problems associated with male disgruntlement, then the world could be looking at disasters it hasn’t grappled with since World War II. China will have 60 million fewer people under the age of 15, because of their one-child policy. That’s the size of Italy – just one portion of abortions in China – has lessened the population more than a major European country.

Russia is another problem for the world. Their high ranking of abortions versus live births could have something to do with their foreign and domestic policy now being a global geopolitical headache. In 2008, Russia had equal number of births to abortions, and their demographic replacement rate is also dropping to insufficient levels according to the Russian Health Ministry. It can be argued that Russia is invading neighbors, because they are a dying country that needs the people and resources; by whatever means necessary.

Bolshevik rule implemented a public abortion culture the devalued human life, and it is now costing Russia dearly. Birth control can cost more than abortion procedures in Russia, and the ripple of Bolshevik population control policies have come to fruition. A 2013 U.N. report revealed Russia had 37.4 abortions per 1000 women aged 15-44. This was the highest figure of any country in the report.

A failed U.S. policy of resetting with Russia against the backdrop of NATO leaders recently meeting about a galvanized Cold War adversary should cause the world to take action against abortion. As Russia continues to arm itself with updated nuclear weapons and weaponry this should also give pause to anyone who cares about world stability and peace. But when your population is dying from an atheistic, birth-control policy, then Russia has to do something; invade neighboring sovereign nations, put Russian warships and fighter jets in close proximity to NATO military hardware, or attack a U.S. diplomatic official at the door of the American embassy in Moscow. Nothing is out of the question when you are aborting your future citizens at alarming, irreplaceable rates.

World leaders question why Putin is building up his nuclear triad, and armed forces, instead of working with the world community for greater economic gain and integration. Neocons would see weakness on the part of the U.S. as the issue, whereas western, social democrats find the root cause residing from the fact that Putin lives in a non-civilized existence.

While both reasons are correct, could it not be argued that abortion ravaging a population has caused the Russian leader to look elsewhere for the next generation of Russians? If abortion continues its destructive path among Russian women, then we could only be witnessing the beginning of Russia’s geopolitical adventures across the globe.

The most serious problem that overtakes Europe, Russia and China is the United States where the U.S. has aborted over 59 million babies since Roe v. Wade. The world’s largest economy and traditional defender of freedom now has a declining fertility rate, even with a stronger economy. Traditional U.S. people-groups who have usually had larger replacement rate (defined as 2.1 children per woman for population stability), Hispanic women are no longer true. No group’s fertility has fallen faster in a particular demographic group in the past 25 years. The U.S. should be producing babies at a faster rate than during the recession, but according to the University of New Hampshire, 3.4 million fewer births have taken place since 2008. Fifteen percent fewer children have been born since 2007 in the U.S., and that is a catastrophe.

The United States is now becoming Germany, and other low-birth rate European countries, as we are opening the floodgates to immigration that has never taken place in American history. Opening the U.S. to unstable areas such as Central America, drug-lord-ruled Mexico, the Middle East, East Asia and Africa for new immigrants, because of high abortion rates and low replacement rates will change the United States’ geography, politics, military preparedness and economic future.

Things are becoming so dire that according to ASPCA there are now 43 million households with dogs whereas in 2014 there are only 33 million American households with their own children.
Syndicated columnist Joel Kotkin puts it best about the future of American society when he writes:

“Without a strong familial structure the United States will be facing a rather grim future, as an expanding older population grows ever more dependent on a shrinking base of young working-age people. In the 1980s the Reagan boom benefited from demographics that had more workers than retirees – no such expansion may even be possible today.”

Now imagine if the U.S. had even half of the 59 million aborted? Would the same things about our economic future and demographics be contemplated – probably not – because more than likely – the numbers wouldn’t be so grim. Abortion will be the geopolitical game-changer in the coming decades, because of the United States. Yet greens and environmentalists such as Bill McKibbon believe in smaller families and more, not less abortion, as a way to save the planet.

This small, even childless future is their ideal-shibboleth, because these unwanted children only represent themselves as carbon emitters. Kotkin also calls men like, McKibbon, and Gov. Jerry Brown, “the green clergy, or clerisy,” in their attempts to limits families and do away with single family homes; which are best suited for raising children, in favor of high-density apartments for the masses. Believers in this doctrine (the U.S. Democratic Party’s platform – see page 19), Al Gore, and most left-leaning environmental organizations should be discredited and thrown out into the dustbin of history for their policies that favor killing helpless babies.

But nowhere has abortion killed an entire generation of people the way it has black Americans. This group of Americans is being slaughtered by abortion when you consider they make up only 12 percent of the U.S. population while accounting for almost a third of total abortions. One out of two black women choose an abortion over keeping the baby, and “a black baby is five times more likely to be killed in the womb than a white baby.” There have been over 16 million abortions since Roe v. Wade, which has caused a 36 percent reduction of the black population. In places such as New York City, and other large metropolitan areas, black babies are being aborted at a faster pace than being born.

Putting this into perspective there have been roughly 1,100 blacks killed by police officers in the last 10 years, yet abortions kill over 2,000 black babies every week. In 2015, police killed 300 black people, yet abortions wipe out that many black babies in one day. Certain African-American inspired political movements continue to stay silent about abortion, and even support the process vehemently, when enough black babies have been killed to fill over 200 football stadiums across America. But somehow law enforcement is evil, and the problem in black communities, yet the facts tell another story.

We have wiped out decades of Booker T. Washingtons, Michael Jordans and Robert L. Johnsons while black men and women overwhelmingly support the U.S. Democratic Party that advocates for the wholesale destruction of babies that America, and the world needs.

This abortion crisis, which has merged into a low-birthrate-immigrant-catastrophe will haunt and eventually overrun some of the world’s greatest cultures unless countries such as the United States, Russia, China and all of Europe begin to outlaw abortion and value children. Syria and North Africa immigrants alone will change Europe into something Saladin dreamed of, but never achieved without ever firing a shot. Abortion has changed everything for the worse.

It has become fashionable to ignore problems, and believe they will go away, but abortion is changing demographics and cultures in unimaginable ways. But it has to be remembered that the U.S., and Europe in particular, need low-skill, low-income, immigrants and migrants from the developing world to replace our weakened Christian foundations that has allowed abortion to flourish. Despite widespread opposition by electorates across the globe from unfettered immigration, it doesn’t matter what they say or vote, because the developed world needs the people, even if they come from the daily chaos of their developing nations.

Economic engines in Europe (Germany in particular), the U.S., Japan, Canada, Australia and even Singapore will grind to a halt without immigrants and migrants from countries that produce children and have lower abortion rates. If abortion continues under current projections then 99 percent of the world’s growth will take place in despondent countries, which leaves the future of the developing world bleak at best. This crisis of abortion is a clarion call to save black babies, save babies worldwide, and save storied countries who are literally dying as each day passes, because of abortion.

Link:http://www.capoliticalreview.com/top-stories/the-unintended-geopolitical-consequences-of-abortion/

Chinese Coal Industry Sees Earnings Explode In 2016

December 28, 2016

China recently reported rising coal industry earnings. The Chinese National Bureau of statistics mentioned a growth of “157 percent in the first 11 months of 2016”, while industries such as oil and gas drilling along with power supply saw profits decline in the subsequent period.

This continued use of coal mirrors the rise in coal-fired power plants under construction or completed by China and India, African nations, and many European countries (Germany and Britain are shockingly big users of coal) as well. According to the International Energy Agency (IEA), global coal demand growth is slowing, but at least growing until at least 2020, the equivalent of an increase of 3.8 million-barrels-oil per day. There are reasons why coal will continue to rise in use.

Earnings were so strong in China that factory inflation spiked to a five-year high because of coal, which allowed their manufacturers: “to cut debt, invest more, and delay efforts to reduce excess capacity.” Coal in China and elsewhere continues to make investors and governments money. Yet China has promised to stop increasing emissions by 2030, and attempt to get one-fifth of required electricity from renewables while continuing to rely on coal and other fossil fuels for the remainder of their growing energy needs.

Chinese, Indian, African and European nations will continue to use coal for a simple reason – it is inexpensive – compared to renewables, nuclear, or even natural gas. Very dirty, but very cheap, and that’s what is driving the Chinese and others to use so much coal.

Moreover, economics will drive the debate while mechanisms that were agreed on in the Paris Climate Agreement (PCA) prove to be expensive, hard to quantify, and difficult to pay for in the near and distant future. Leaders in Poland, Australia, South Korea and Japan now believe that new coal plants in the works can meet tough climate regulations through efficiency and new technology.

But a new study by the World Wide Fund for Nature (WFF) and Ecofys doesn’t agree with that assessment. Russell Gold, the lead energy reporter for the Wall Street Journal, makes the case in his book: The Boom; that if environmental groups would place natural gas on equal footing with renewables, a possible lowering of coal use and emissions is doable.

On the continuation that the PCA is being ignored, the World Energy Outlook 2016 from the IEA: “projects in its ‘New Policies Scenario’ that over the next 35 years, the amount of electricity the Chinese produce from coal will increase by 4.3 percent.” But an interesting twist adds to the intrigue and opportunity for investment possibilities to exist.

China, Japan, and South Korea are leading the way in “adopting the latest super-critical and ultra-super-critical low-emission-coal technology.” This process operates at higher temperatures, pressures and increases coal’s electricity capacity by 30 percent which: “enables new technology power stations to generate more electricity while emitting less CO2, particulates, sulfur dioxide and nitrogen oxides.” Ironically China will have a coal-based economy while being one of the largest users and investors in the world of renewable energy.

What about the U.S. and its use of coal and advocating for a cleaner future without coal? America is already a much cleaner and more efficient user of energy and this is where many nations of the world take issue. The United States has four times the economic output per tonne of carbon dioxide emissions compared to India and five-and-a-half time compared China. Incredibly large discrepancies, and for coal not to make an impact, both China and India along with most of Asia and Africa would need substantial reductions in emissions to come from them, not the U.S.

Practically speaking, it is hard to imagine these countries along with Eastern European nations to opt for emission reductions, instead of lower electric bills. Long-term economic analysis dictates that mitigation will come from financial feasibility in growing economies, and not doing away with coal. Oren Cass of the Manhattan Institute noted the PCA, “resulted in nothing more than a pledge and review process,” and not real emission cuts through verification, certification and severe punishment for non-compliance.

Coal isn’t going anywhere, least of all in China. And the geopolitical situation in China has Premier Xi only gaining more strength, and not giving up power when his current term expires. This means Premier Xi will continue ramping up coal use and looking for cleaner, more efficient coal technology for the ever-growing and ever-changing Chinese economy.

One can only hope the Chinese and others follow the U.S. model and opt for natural gas over coal to produce results that only the Americans have found in how to truly reduce carbon emissions. Coal may be inexpensive and abundant, but only natural gas provides what the Kyoto Protocol wanted and the PCA believes it will achieve moving forward. While not popular, coal could still see some great returns in the near term. The Chinese, Indians, most of Asia, Africa, and even some Europeans seem to agree.

Link: https://oilprice.com/Latest-Energy-News/World-News/Chinese-Coal-Industry-Sees-Earnings-Explode-In-2016.html

The World Needs Strength

December 28, 2016

In number 51 of the Federalist Papers, James Madison writes, “If Men were angels no government would be necessary.” A strikingly similar sentiment to thousands of years ago when the Jewish prophet Jeremiah said, “The heart of man is exceedingly wicked, who can know its evil ways.”

The world, led by the West has tried appeasement, isolationism, and moral equivalence to avoid war; instead of a Cold War type of coalition that President Harry Truman began to check the Soviet Union. We are reaching a precipice where ISIS is still thriving, Aleppo is in ruins, Crimea was annexed, Ukraine was invaded, and the world does nothing.

This view that appeasement and minding your own business will make troubles and problems go away is naïve at best, and a precursor to the beginning of World War III at worse. Somewhere in between is a world where billions are still living under dictators with no hope in sight.

Where are the words of Kennedy, Reagan, and Walesa crying for even one soul living under deplorable conditions? They are nowhere to be seen or heard from these days. If the world doesn’t wake up, and leave its listless slumber, then the echoes of 1933 will be replaced by a Russia-Chinese-Iranian axis that will make the previous axis look small in comparison. No more commerce, no more globalization, no more growth thru fiscal or monetary policy dominating the front pages of our news – wars that we have never seen, or imagined – will take over our lives and our countries.

It is time for the world to arise, and that’s why the world needs to be strong again for individual freedom, national sovereignty, functioning governments, and begin to check and aggressively retaliate against this decade’s axis of evil: Russia, China, and Iran. Those three menaces are now leading the world in terrorism, environmental degradation, and hegemonic behavior in the fragile Middle East.

International relations expert Professor Robert D. Kaufman of Pepperdine University’s School of Public Policy, speaking on China’s own bid for hegemony, says: “East Asia is the most important power center of the 21st century.” Sage words, yet the U.S. has its Asian allies very worried after doing nothing when China brazenly stole US military hardware outside Subic Bay, near the Philippines in international waters.

US and allied restraint doesn’t endear the Chinese to the West, but only encourages more outlandish, provocative behavior. Asian allies should be more than worried, and prudence calls for Japan, South Korea, Australia and the Philippines to consider their own positions with China while pursuing larger military budgets that include a nuclear deterrence.

And the world further better wake up to the fact that China has their own proxy, North Korea, more dangerous than Iran’s proxies – Hamas and Hezbollah – that have caused nothing but misery and destruction. North Korea, with China’s blessing, now has a nuclear arsenal capable of reaching Europe and North America. The world needs a strong response to China. That is the only thing Beijing will understand.

What appeasement also does is not assess your enemies through the lens of deterrence, balance of power, and a vibrant NATO coalition that should have stood up to Putin years ago. Simply put, “Putin is not our friend.” To think otherwise is laudable for the amount of foolish thinking that requires.

He’s a bloodthirsty, greedy, former KGB colonel who was never going to let democracy and rule of law thrive in his country. The Russians made a Faustian bargain of so-called security for autocratic rule. Now, mob-like conditions exist, and you are either a billionaire autocrat with the Kremlin’s blessing, or you are an exile who at some point has spoken out against this regime’s criminal behavior like Garry Kasparov.

But does the world care? It sure seems we do at this point.

Why the North Koreans are so dangerous is the very reason the Iranians become more and more dangerous. Another Faustian bargain here though, that if a Western country gives enough money and incentives, rogue regimes will stop their bad actions. Nothing could be further from the truth, whether it’s the North Koreans or the Iranians. Agreements, deals, or even cold, hard cash will never change these regimes. They only understand the barrel of a gun or an aircraft carrier knocking at their doorstep.

That’s the cold, hard, ugly reality of geopolitics. You don’t have friends, only interests that align and the willingness to enforce behaviors that lead to individual freedom and thriving economic markets. That is usually it, and moreover believing a nation is nothing more than interest is better left for the religious, and not the astute nation that wants a winnable peace.

The Iranians haven’t changed their ways since the P5 +1 agreement, if anything, they have gotten worse; and now the UN solidifies their actions by saying it is okay for them to build nuclear submarines since 99 U.S. Senators voted to resume sanctions. The Europeans were incorrect in the early 1930s about the threats they faced, and they are wrong now. The world needs strength, not capitulation.

What’s more worrisome than the activities of China, Russia, and Iran is how leading Western voices, such as the eminent President for the Council on Foreign Relations; Richard N. Haas continue to misunderstand the threats the world is currently facing.

Mr. Haas recently wrote a beautiful article titled, “The Case for Sovereign Obligation.” He writes movingly about how the world needs to come together in what he affirms as World Order 2.0. A world “That includes not only the rights of sovereign states but also those states’ obligations to others.” The Peace of Westphalia, international order, and responsibility to protect (R2P) with all three sovereign doctrines speaks of an:

“Obligation a government has to its own citizens that, if ignored, are supposedly enforceable by other states through measures up to and including military intervention.”

Mr. Haas should be commended for writing these words from such a prestigious institution, but they don’t address how do you intend to make China, Russia, and Iran live up to these heightened, lofty ideals? The Council on Foreign Relations has written repeatedly on the nobility of the P5 +1 agreement, and how it is working when in reality it isn’t. Who doesn’t want the agreement with North Korea and Iran to work and avoid bloodshed? Any sane, rational person – that’s who.

But what our pre, during, and post-World War II order taught us are regimes bent on destruction only understand force, and winning the peace is key, not half-measures, or haughty Westphalian orders without mechanism to ensure adherence. This current order is unraveling, and when sometime allies – Turkey and Russia – have broken trust, as witnessed by the assassination of the Russian ambassador to Turkey, then bloody responses will be in order.

What a connected global world has done is to illuminate apathy and hypocrisy by the West, and free forming societies in Asia. Enemies of freedom and order are using globalization to spread their malicious influence. Unless the West finds the words of Churchill when he said: “We sleep safely at night because rough men stand ready to visit violence on those who would harm us,” then unabated violence will continue.

If the free world doesn’t begin to reflect those values, and back them up with at least the threat of force, then more Aleppos will be laid to waste. And next time, who’s to say the cities won’t be Paris, New York, or Tokyo. Beijing, Tehran and Moscow would only be too happy to make that a reality. We can no longer say we don’t know, or understand the threats now facing free people.

Link: https://www.geopoliticalmonitor.com/the-world-needs-strength/

The Bearish Case For Oil In 2017

December 21, 2016

Tis’ the season to not be a curmudgeon, but let’s not throw common investment sense away, because OPEC made a deal. This cutback on production has been a long time coming, and possibly the Saudi-Iranian rift has taken on cooler heads, but there are numerous problems that aren’t being considered by the market moving forward. Supplies, according to the Energy Information Administration (EIA), are still at an all-time high, and the U.S. shale market is more nimble and better positioned than ever to fill the gap left by OPEC.

Basic economics dictates that a stronger dollar will also put added downward pressure on crude reaching the $60-70 a barrel range. The dollar has reached highs not seen since 2003, and with the Federal Reserve raising rates, the Dow rapidly moving towards 20,000 and inflation on the uptick, there are many reasons to not let irrational exuberance overtake sound decision-making. But it’s this oil glut, and not enough demand, that will drive this market. Still, the strong dollar being reinforced by major banks and brokerage houses worldwide is worrisome for price spikes regardless of production cuts.

When making prudent financial decisions it also helps to understand what the biggest market maker for OPEC, Saudi Arabia, is saying – being publicly for a cut but privately, and even longstanding Saudi oil and gas kingmakers are suggesting this, the Kingdom wants something entirely different. Former Saudi-oil minister Ali Al-Naimi said in November at a Center for Strategic and International Studies event, “OPEC’s agreement to cut production has the potential to balance the market, but unfortunately we tend to cheat, and there’s still more supply than demand.”

In the past, OPEC members have not lived up to their pledges of cutting oil production, but still it is surprising that such a high-ranking former oil minister would be so blunt.

Saudi Arabia also announced an Aramco event in Dhahran that they have signed a ten-year joint agreement with the U.S. firm, Nabors Industries Ltd. to build 50 onshore rigs. What this means for OPEC’s largest supplier’s eagerness to abide by their decision to cut production at or below 10mbp is illogical at best.

Cushing, Oklahoma is an unlikely reason to not believe the OPEC cuts will restore fortunes, but this tiny U.S. town is being overlooked. This is the corridor in the U.S. where oil goes to live, and right now they have more oil sitting in storage than they know what to do with. This is the reason OPEC is worried, and traders should be as well. The amount of oil sitting in storage at the largest facility in the U.S. is at record levels. Factoring this in to your investment decisions and going back to the basics of supply and demand suggests that oil will hover in the 50s.

Unless China, the U.S., Europe, India, or South America can hit sustained growth that requires vast amounts of energy, then tiny Cushing, Oklahoma will affect OPEC more than supply cuts from them and other non-OPEC producers.

It’s hard to argue that the winners of this production cut are U.S shale drillers. Since the downturn, and Saudi led war against Shale, these firms have grown more effective, efficient and profitable. An example is the monstrous new frac-job currently being drilled by Chesapeake Energy. At $100 barrel oil prices, debt loads and unbalanced balance sheets were the norm, with banks lining up to give easy credit. Once the market pushed downward though, those easy credit terms dried up.

But shale-drilling companies have learned to adapt, and to adopt frac-sand as another way to reduce their cost of drilling. These companies are more agile now, and seemingly could weather production outpouring and now production cuts. The OPEC deal will have a hard time staying firm once these supplies come back into the market.

Libya and Nigeria have also announced they are both bringing large terminals and oilfields back online. Both countries were exempt from the deal – though somehow Iraq wasn’t interestingly enough – because of domestic militancy unrest. Hundreds of thousands of barrels of oil are at stake if both countries can bring these resources back to the market. They are saying they can, and the majors are moving back into these countries to restore their lost fortunes.

Demand is another factor weighing against this deal working. According to the International Energy Agency (IEA) the bigger issue not considered in the agreement is weakening demand, because of prices rising and Asia, led by China, experiencing moderate economic difficulty. Higher U.S. rates have historically caused downward pressure on demand and consumption. The U.S. dollar and Federal Reserve, along with worldwide demand, will need to be considered, and not an agreement to cut between 1.2 to 1.5 mbd.

The biggest factor not being understood that could raise prices above the $70 a barrel range is the geopolitical situation. The U.S. and Iran are sparring again over a sanction continuation after 99 U.S Senators voted to continue them, which led Iran to expedite a nuclear submarine program. Further, the markets will possibly be spooked by China seizing an underwater, innocuous U.S. drone for reasons that haven’t been given yet by the Chinese government. This could possibly be over breaking the One-China policy when President-elect Trump spoke with his counterpart in Taiwan. Considering China, and what can be accomplished with Iran for markets to run smoothly are reasons to also understand your positions moving forward into the New Year.

Emerging and even mature economies can be hurt by higher U.S rates, a stronger dollar (since oil is priced in dollars) and a potential trade war with China that would cause domestic and foreign economies to choose sides. Just some of these issues would be a challenge for OPEC and the current oil rally, but if supply, consumption or inventories respond too quickly we could be in for another downward cycle. It promises to be an interesting 2017 for oil prices.

Link: https://oilprice.com/Energy/Energy-General/The-Bearish-Case-For-Oil-In-2017.html

The Undeniable Folly of the Iran Nuclear Deal

December 6, 2016

Outgoing CIA Director, John Brennan said it would be, “folly,” for President-elect Donald Trump to tear up and disregard the Iran nuclear deal, as Trump has reiterated both recently and during the US presidential race. But the folly lies with Director Brennan, Secretary of State John Kerry, former Secretary of State Hillary Clinton and President Obama for believing this deal would ever work. Has Iran stopped belligerent behavior since sanctions were lifted and the agreement was signed? No, and to believe otherwise is the worse form of constructivism.

Good intentions don’t take the place of a true understanding of the Iranian regime. It was laudable to try negotiations, though that had been done under the previous Bush administration led by former Secretary of State Condoleezza Rice. If Director Brennan wanted the Iranian deal to work – and it could’ve worked – then he and the president’s team should’ve understood history, ideology, and regime type.

The current Iranian leadership fits into that model using Islam as an excuse for repression of individual rights. To think the Ayatollah or President Rouhani thought differently was naïve at best, and dangerously misguided without understanding their history.

Moreover, Rouhani is beholden to the Islamic Revolutionary Guard Corps (IRGC), the military wing and defender of Islamic fascism within the Iranian governmental structure. Without the IRGC this deal isn’t worth the paper it’s currently written on, and means nothing to the Ayatollah. Rouhani is still an Islamist fascist who duped the Americans in particular, and used the financial lust the Russians, Chinese, and Germans had for market access for his gain.

The other laughable notion has always been that Rouhani is a moderate, and the West can do business with by negotiating away their nuclear weapons program. Rouhani is shrewd, but he isn’t Gorbachev. The Iranians were on the pathway to economic ruin, until President Obama did away with sanctions. Iran is not the decrepit, broke country the U.S.S.R. was when Reagan negotiated with Gorbachev. Reagan also had the strongest U.S. military post World War II, whereas President Obama has led to shrinking the world’s policeman’s military.

The Iranian regime type has always been one built on fear, intimidation, and a militarized version of Islam. Wars the Iranians have fostered in the past, and continue to foster as the world’s largest sponsor of terrorism, can only mean on thing: exchanging sanction relief for nuclear weapons will never work, at least until this regime renounces Islamic terror.

There’s a reason 99 U.S. senators just voted to reinstate sanctions on the Iranians. These senators have a better understanding – at least recently – of what they’re dealing with than the Republican senators, President Obama, and Secretary Kerry who ushered in this false notion of peace. But at what cost is the question?

And the lies, falsehoods, and downright deception this non-treaty, treaty was based on will leave a legacy of bloodshed, according to former Chairman of the Joint Chiefs, Martin Dempsey. Director Brennan will call President-elect Trump’s criticism of the Iran deal folly, but did he call out President Obama, Deputy National Security Advisor Ben Rhodes, Secretary Kerry, et al over the folly of treating Iran the way you would treat a trade agreement with the British. Of course he didn’t.

Does anyone seriously believe the ideology of the Iranians means they will abide by the contents of the agreement? Would someone ask Director Brennan if he understand the Islamic term, “Taqiyya,” where it is permissible to lie in advance of Islamic beliefs?

It’s the highest form of folly negotiating a multi-billion dollar deal with a country that militarizes Hezbollah, Hamas, and possibly the Muslim Brotherhood. That active ideology alone means sanctions should have been left in place, or at the very least, Director Brennan shouldn’t speak at all about the issue. What his CIA did or didn’t do to advance this geopolitical disaster is unfathomable for a man of his stature. It was a gross dereliction of duty on his part, and many others in the P5 + 1, led by President Obama.

The most famous example of folly is Chamberlin never looking at the truth about history, regime type and ideology of Germany and the National Socialist Party, but instead believing peace at any cost will advance national interests. Director Brennan has made the same fatal mistake, and his flaw is letting U.S. Democratic Party ideology not look at the truth about the Iranian regime.

It’s not weak to speak with enemies, but it’s foolish to believe you can change their mind, because you believe it so. That is one of the many reasons populist insurgencies are remaking the democratic world at this time.

People may not understand the intricacies of the Iran nuclear agreement, the way most of us don’t comprehend advanced engineered infrastructure and avionics, but if a bridge doesn’t work, or a plane falls from the sky, then we know something didn’t work. And that is exactly how Donald Trump got elected – people know something is wrong in the world. This is a fallacy-caked agreement, and the quest for a presidential legacy that created it is fueling an electoral pushback from the Rhine to ‘Main Street’ USA.

What Director Brennan’s ideology revealed was he led during the time an agreement was put in place with the Iranians that even French socialists thought was setting a bad precedent. What’s stunning is how Director Brennan never thought it was folly for the U.S. military to continue to take unprofessional, provocative behavior from the Iranians while never responding in kind. Has he ever publicly uttered the word folly, naïve, or war-like behavior this past year when Iran has been on the hegemonic march throughout the Middle East? He should’ve been fired for letting it happen, or not speaking truth to the P5 + 1 powers.

Director Brennan should quietly step aside, and prepare for the next administration and director to take his place. Using words such as folly only embolden our enemies, and after eight years of leading from behind, the world needs leaders who understand deterrence, balance of power, and the use of military force as an option. If regime type, ideology, and history aren’t considered – as which seems to be the case with Brennan’s choice of words – then doing nothing for a few more weeks is the best option.

Link: https://www.geopoliticalmonitor.com/the-undeniable-folly-of-the-iran-nuclear-deal/

Does A Renewables Future Dim Under Trump?

November 28, 2016

With the world still up in arms over Donald Trump winning the United States election, more than ever, it’s time to understand where are the next, great energy investments under an entirely different energy philosophy. US Presidents make a difference, and with a stroke of a pen, President-elect Trump could usher in a new era of for fossil fuels while making it more difficult for renewable energy to thrive.

Forecasting what Trump will and won’t do is going to make energy investing tougher than ever. One day he’s against climate change, the next he isn’t. The same goes for his views on the Paris Climate agreement. The policies that he has committed to however, will certainly hinder or grow energy investments in the coming years.

EPA restrictions on coal will be rolled back and could even be sacked altogether, along with the emission-restrictive Clean Power Plan. It is not a question of if, but rather when these Obama-era regulations will be negated, with solar and wind power sure to have a harder time returning a profit if lucrative subsidies and tax breaks are scaled back or done away with altogether. This could then usher in an era where China, India, Europe and other developed and developing nations no longer pursue the green century that is currently envisioned by various world governments and leading environmental organizations.

President Obama led the world in promoting alternative energy sources such as wind and solar, and while both have grown, neither is ready to make the leap away from taxpayer largess to support their industries. Lucrative financial incentives are the linchpin for renewables to continue their growth, and without Trump wholeheartedly supporting continued tax dollars going their way, it is difficult to see a future where renewables grow at a sustainable rate, compared to oil and natural gas.

If Trump puts pro-fossil fuel, anti-climate change officials in charge of the EPA, and U.S. Department of Interior, which seems likely, then the remainder of this decade could unleash levels of oil and gas exploration and investment in areas such as Mexico that have never before been seen. If America is optimistic, then the world will probably follow. And that bodes well for fossil fuel investments.

Renewables will keep “chugging,” along, but why move up a steep hill when you can race towards the world’s greatest way to create wealth – fossil fuel exploration. The much-touted electric car revolution isn’t happening anytime soon, due to numerous issues. One of the biggest of these being the current glut of oil making gasoline cheaper than it has been in years. Cheaper gasoline means larger vehicles, and the EIA sees continued growth for fuel consumption. Peak oil demand will not happen, if anything, we’ll see growth for decades to come. And though President Obama has blocked Artic and Atlantic drilling, along with limiting methane emissions, the Trump administration will more than likely overturn these rulings.

While Trump’s approach to energy is vexing and now possibly misleading with his new interpretation of climate change, it still doesn’t change the fact that he will usher in one of the most deregulated eras for U.S. oil and gas in decades. Wind and solar, like electric vehicles, don’t have a chance at real growth unless government subsidies worldwide continue; even Tesla has real issues with profitability if you take away their emission credits.

Further, no one truly knows what will happen if the Trump administration halts or severely curtails research and development for wind and solar. The questionable long-term viability for wind, solar, and biofuels without solid taxpayer and governmental assistance may mean that renewables will have a tough time building investor confidence.

If China continues their push for renewables, and will open up their markets – which is a big if – then Chinese firms leading this area is certainly something to consider. The fallow farm grounds of North Carolina for solar is another region of the world to search for investments in renewables with a solid track record; and Texas is still a proven winner in the U.S. for wind power generation and investments. Other places across the world, and the U.S., for renewable energy investments should be cautiously studied at this time. The 440 MW Ivanpah Solar Power Facility in the California desert is an example of the importance of understanding the cost of renewable energy before outlaying billions of dollars.

There are still factors against renewables fizzling out in the U.S. and around the world. It can’t be stated enough that, according to the IEA, oil demand will continue to grow, in spite of the Paris Climate Agreement. China, India and the Europeans continue to use carbon-based energy, and though they have attempted, and are attempting, renewables on a large-scale, this energy solution can’t run on its own without fossil fuels backing it up.

New U.S. shale discoveries recently announced by the United States Geological Survey (USGS) as the largest technically recoverable oil discovery it has ever assessed – the Wolfcamp Shale in the Midland portion of the Texas Permian Basin – has an estimated 20 billion barrels of oil. And every week seems to bring more new discoveries of oil and natural gas worldwide. With infrastructure in place for fossil fuels, and barrels of oil never reaching $100 a barrel again unless a natural disaster or a worldwide war occurs, fossil fuels remain the future. Renewables will grow, but not at the rate investors and stockholders expect on a quarterly basis.

The final reason to cautiously invest in renewables is the game changing impact that U.S. LNG exports are having on worldwide markets. Having the world’s largest and most dynamic economy go from being a net importer to a net exporter of natural gas will cause reverberations that still aren’t properly understood. What should be understood is that smart investors will be looking to find a key foothold in this expanding market.

Donald Trump’s election will affect all sectors of the global economy, but nothing like the oil and gas sector. Depending on how it’s measured, the United States has the world’s largest reserves of oil and natural gas, only rivaled by Saudi Arabia, Russia and Venezuela. And while all three countries desperately want to continue exploration, neither country can match the U.S. in terms of technology, drilling expertise, and infrastructure to bring their reserves to the market.

Moreover, the U.S. shale revolution has changed oil and gas exploration in the U.S., and now that technology can be exported around the world under a friendly Trump administration. Yes, renewables will grow, but like the electric vehicle, when you are starting at a small percentage of the overall global energy portfolio currently being used, any amount of new installations shows monstrous growth. Don’t let emotion over a zero-carbon future cloud statistical analysis and your overall portfolio by choosing a windmill over the Permian basin, or the opportunity to grab shares of Saudi Aramco when they go public.

Depending on how you analyze the science – climate change and clean energy are important, but future, immature energy innovations will take budgetary hits under the new administration stifling renewables growth and investor returns. The devil is in the details for how U.S. energy will shake markets, but as an investor you want unparalleled returns on your investments; and in the near future that is going to be in the oil and gas worldwide markets.

Link: https://oilprice.com/Energy/Energy-General/Does-A-Renewables-Future-Dim-Under-Trump.html

Who Will Lead in a World on Fire?

November 21, 2016

The state of global affairs hasn’t been this poor in over seven decades. Russia blatantly affected US presidential credibility in many ways by overtly and covertly meddling in the process. And they still keep amassing troops in Belarus and the border with Ukraine. Putin, for good reason, seems to believe the Europeans will do nothing to stop him from causing utter disarray on Europe’s eastern flank. Meanwhile, President Obama continues an apology tour in Europe by encouraging anti-Trump protesters. Putin has wagered correctly that the West is weak and vulnerable.

Iran continues breaking the so-called peace deal they made with the P5 + 1. Not only have they recently hijacked an American boat and buzzed US warships, but have made frequent promises to destroy Israel and America. Was this the peace deal western powers had in mind when they supposedly reigned in Iran’s nuclear weapons program?

The United Nations International Atomic Energy Agency signaled recently the Iranians again broke the spirit of the agreement, by creating excess heavy water; a material used to cool reactors that produce plutonium. Anyone who actually believes this agreement did anything to stop the Iranian hegemonic march in the Middle East and other parts of the world is delusional at best, and dangerously naïve at worst.

North Korea is delusional, but as long as China has their proxy’s back in manufacturing chaos to allay the world’s interest away from them grabbing the South China Sea then Kim Jong-un may actually believe he could win a war with Japan, South Korea and the U.S. North Korea is testing ballistic missiles that could reach the western U.S. Imagine California seceding from the U.S., striking a peace deal to avoid imminent nuclear destruction. They already moved politically away from the U.S. as a reaction to Trump’s election by unanimously electing liberal Democrats over Republicans.

Political correctness has Western leaders not able to articulate the threats taking place with Russia and China while still bellowing the hollow assertion that if it weren’t for Guantanamo Bay, all the world’s problems with radical Islamists would abate. Then striking at non-elite citizenry who dare attempt uttering the words, “Islam,” and “terror” in the same sentence. Tongue-lashing and finger pointing ensues while ruining lives with the claim of Islamaphobia, sexism, or racism yet never looking their own hollow cowardice in the mirror.

Returning to the Middle East, a region never known for tranquility has certainly not been this bad. US leadership has left the world stage after leading from behind, and a giant void has been left in its place. Civil wars simmer and are raging in Iraq (which the U.S. should have never left) Libya (which the US, NATO, and the Europeans caused), Syria (in which the U.S. didn’t back up its threats), and Yemen (which the Iranians felt emboldened to invade via their proxy the Houthi’s after the nuclear agreement).

Simmering fights are brewing in Egypt (which the US abandoned for the Muslim Brotherhood), South Sudan, Turkey, and these could easily spill over to Algeria, Jordan, Lebanon, Saudi Arabia and the one country to come out democratically from the so-called Arab Spring, Tunisia. Higher levels of tension are noted between Iran and Saudi Arabia; the two are in the early stages of a full-fledged religious fight not seen in centuries between Sunni and Shia Muslims. For once, the Israeli-Palestinian peace process has taken a break from violent levels not seen since WWII.

A few countries such as the United Arab Emirates, Kuwait, Morocco, Oman and Qatar have sailed through the storm, but have they really when oil prices continue below $50 a barrel? Shots may not be fired in these countries, but how long will their citizenry, which expect largesse based upon government handouts through oil receipts, stay tranquil under autocratic benign dictatorships? Kenneth Pollack of Brookings states, “not since the Mongol invasions of the 13th century has the Middle East seen so much chaos.”

Drug violence and instability racks Central America, and South America still has drug-lord instability and the Columbian peace process with FARC is in shambles after the electorate pulled a Brexit-Donald Trump election surprise by voting no to peace. Mexico continues their almost decade long uprising against former Mexican Special Forces now turned drug terrorists that have the US border in constant flux.

The Congolese civil war is in its 22nd year, Peru’s at 36 years, and the perpetually unstable Afghanistan enters year 37 of its civil war. What makes each of the above conflicts, wars, and tensions so malicious are the spillover effect. Without intervention that could last decades in the case of US troop presence still active in Germany, Japan and South Korea none of the problems will go away. Instead they only feed upon themselves, and metastasize into something far more insidious and ravaging.

Since the U.S. has morphed into an angry bastion of electoral infantile behavior, and the Europeans continue their march toward self-inflicted destruction, who will lead? Jordan and Tunisia are somewhat stabilized but now with the vituperative Philippines marching towards the Chinese that adds further Pacific instability to the world’s problems. What issue then should be tackled first?

The short answer is every issue needs to be confronted with the U.S., NATO and Pacific-based democracies leading the way. The U.S. should immediately rescind sequestration, and begin building their blue-water navy to Cold War levels, which peaked at 594 vessels in 1987 through a combination of new construction and keeping older ships afloat longer.

Incoming president-elect Trump should also allow the Japanese to build a larger navy and troop presence along with South Korea to deter the North Koreans and Chinese. But the real issue is the instability of the Middle East, and the aggressive nature of the Iranian regime’s hardliners. Not only should the U.S. confront them with new sanctions and scrapping the nuclear deal, but also NATO, led by the Europeans, should triple the size of the NATO Response Force. With Libya teetering on the edge of collapse a plan to confront armed factions at Europe’s doorstep needs to be in place along with securing their borders against an influx of displaced refugees and armed terrorists.

Further, Western allies can work with sympathetic Middle Eastern regimes whose “tipping points” for societal breakdown aren’t just going away. Jordan, Kuwait, Tunisia, and Egypt are a few examples where the U.S., NATO, and Pacific democracies reliant on economic stability can provide logistics, military command and control structure, intelligence and combat-advisors.

Every at-risk country mentioned needs Western economic assistance, cheap energy provided by coal and natural gas, stable infrastructure, political reform without democracy being the end-goal, and trade benefits for political reforms to possibly take hold. Transparency, rule of law, respect for private property and the elimination of graft in the public sector are the goals, while seeking a fair distribution of goods and services to all citizens regardless of religious affiliation, gender, and sexual orientation.

Good governance is the aim toward nation-state stability otherwise the spillover affect will plague the Middle East, South America, North Africa and eventually the Pacific rim.

Unfortunately paralyzed Western democracies aren’t given to provide military assistance – meaning boots on the ground – because problems the military could solve in the past no longer work in an era of a 24-hour news cycle to shape the message in a way that looks disadvantageous to Western political leaders. War and civil war in particular are messy affairs where millions can be killed and displaced. Disengagement from regions across the world have only emboldened the Chinese, Russians and Iranians to make the world in their image, instead of the post-WWII order that is now crumbling.

Disengagement has been disastrous in Iraq, and has pulled that country into a vicious civil war where security apparatchiks litter the region. Unless security is the first goal then eradicating the illness with pinprick assistance will only prolong the inevitable. Larger blue-water navies to confront the Iranians in the Middle East, Russia in the Mediterranean and the Chinese in the South China Sea are a beginning.

Over the past fifteen years the U.S. and other allies have killed scores of Salafist jihadists, but the problem only grows larger. The scorched-earth policy of President George W. Bush in Iraq provided a road-map to what peace in the Middle East looks like: unleashing militaries to kill, stabilize and bring all political parties to the table. Not the model Western democracies currently follow that have grown factions of self-important educated media elite, London School of Economics grandees, climate change billionaires, financial plutocrats and coastal corridor snobs from California to Lake Cuomo who talk leftism inequality, but live better than the French Monarchy ever dreamed.

This governing elite is now losing their grip on power, and will confront a world that doesn’t care about climate change, renewable energy or eating organically. Instead this new world under men such as Duterte, Trump, Putin, the Iranian Quds Force, and Premier Xi understand strength through military power. Will the U.S., Europeans, NATO and Pacific elites understand this new equation? If they don’t, then World War III is a distinct possibility. Spillovers and tipping points for squashing civil wars and vicious hegemon growth aren’t contained with the crumbs of good intentions, but more than likely at the end of a soldier’s gun. Let’s sincerely hope it doesn’t come to this.

Link: https://www.geopoliticalmonitor.com/who-will-lead-in-a-world-on-fire/

Trump’s Energy Policy: A Look Under The Hood

November 18, 2016

The stark difference between Hillary Clinton and Donald Trump was crystal clear when it came to energy before and after the election. Clinton wanted to kill coal, and since Trump was elected three coal companies stocks in particular did remarkably well in the market: Arch Coal (ARCH), Peabody (BTUUQ and Alliance Resource Partners (ARLP). While clean coal is a myth, and natural gas has been taking over coal since the fracking revolution began in the mid 2000s – Trump’s love for West Virginia coal miners has given those companies – and miners across America new life.

Under the Obama administration’s strict EPA regulations on utility emissions, particularly on coal has decimated an industry already reeling from low prices. Trump most likely will attempt to roll back these regulations, but it is still a dirty energy rapidly losing luster in the United States (US). Europe has said it is done with coal, but surprisingly the British and Germans are still relying on its cheap source of energy with China and India leading the world in coal-fired power plants.

Trump could attempt to lead a resurgence of coal as a major energy source for U.S. states, and as an export product to other nations, although in the current environment for coal, it seems quite a challenge.

Trump will also have an affect on controversial, yet possibly needed pipelines.

Prime Minister Trudeau of Canada has done an about face against the Canadian environmental movement, and is close to approving the Kinder Morgan pipeline. President Obama and President-elect Trump have both signaled they want the Dakota access pipeline approved. The Keystone XL pipeline once again looks like it will now be approved as well.

While Trump wants to “clear the approval for oil pipelines,” yet what these approvals show for the US and Canada is leaders recognizing jobs as a viable factor, but politicians missed a key point. The world is already awash in oil, and OPEC continues missing opportunities to bump up the price of crude at/or above $60 a barrel or higher. With the Iran-Saudi Arabia geopolitical spat not dissipating anytime soon, especially over oil, the bigger question world leaders need to answer is whether or not these pipelines are needed? Outside of domestic politics and the ability to create jobs for their citizens, which financial entities are willing to invest in pipelines that will have a tough time breaking even in a world awash in crude and natural gas?

Under the Obama administration public lands have been off-limits for oil and gas exploration though President Obama and his former Interior Secretary Jewell (a former petroleum engineer) and current Energy Secretary Moniz have both been key endorsers of fracking for American energy independence, emission reduction, and as a jobs creator. While it may seem Trump is extreme in his environmental views, he isn’t much farther off on environmental policy as President Obama’s Cabinet is currently.

What will be seen under Trump is that regulations are slashed so exploration can be undertaken on Federal lands and coastal areas under Federal moratoriums. The real issue will then be whether or not Federal regulatory agencies have the ability to overtake State law? California as an example, which has billions of barrels of oil and trillion of cubic feet of natural gas off its coastlines, will vehemently fight President Trump and his pro-American energy administration. This is just one of the many legal battles the Trump administration may face from pro-environment-movement US states.

Fracking and drilling for US oil and gas according to President Obama was a key factor, if not the biggest factor, for why the US left the recession quicker than other countries. This agenda could unleash growth that is desperately needed for the tens of millions of Americans contributing to an all-time low Labor Participation Rate (LRP).

Joel Kotkin surmised it best why Trump won:

“Working and middle-class voters went for Donald Trump and helped him break through in states – Michigan, Wisconsin, Iowa – that have usually gone blue in recent Presidential elections.”

Nothing makes value and supply chains thunder towards jobs prosperity the way oil, gas and mineral exploration does at this time.

Link: https://oilprice.com/Latest-Energy-News/World-News/Trumps-Energy-Policy-A-Look-Under-The-Hood.html

Questions for the California Electorate

November 1, 2016

California is about to overwhelmingly elect, and sustain for decades, one-party rule. There’s more money going to the Democratic Party and Republicans don’t seem to have any hope making a dent in L.A. County outside of Steve Fazio and Mike Antonovich possibly winning state Senate seats. But there are a number of public policy questions to be raised, as to what is causing this transition.

Here are a number of questions for voters who only want one-party rule, and aren’t considering other options either out of views on social stances (abortion, gay marriage, transgender bathroom options), belief in higher taxes on the rich – with no qualifying indicator ever given to determine what rich is – and a progressive stance on society. The irony is that progressive views began with bible-believing Christian women who wanted alcohol outlawed in an attempt to control alcohol-related domestic violence against women and children.

But I digress; here are the questions for all of us in California:
Why do California voters believe higher taxes mean better public services, higher quality schools for all schoolchildren, and an overall higher quality of life? California has the highest taxes (income, gas and sales) in the nation per capita and generally has the worst roads, no idea how to pay for hundreds of billions, even trillions worth of infrastructure improvements, and a pension system that is insolvent by all accepted accounting standards.
California also has some of the lowest test scores in the nation while having exploding taxes for education. Please explain to me why Californians continue one-party rule based on these above facts?

Why does the electorate continue to let California be two separate societies consisting of the coastal rich and the Los Angeles west side while the rest of California ekes out existences among high-tax coastal elites who never have to worry about their decisions affecting the remainder of California?

Meanwhile, California’s middle-class residents are being driven out of the state and we now overwhelmingly have the highest poverty rates and welfare recipients in the nation. Do voters consider the millions of Californians that fall into these categories when voting for one-party rule? On top of that, about one-quarter of California residents weren’t born in the U.S. This isn’t some Trumpian diatribe, but real questions have to be asked on how to educate, feed, employ and house them.

Does climate change and/or global warming do away with building what once was the greatest transportation system in the world? California formerly had quality highways, dams, canals, bridge, airports and other infrastructure but maintaining it wasn’t as important as saving endangered fish and making sure Tesla had generous tax credits for cars that very few could ever afford. Why has this been allowed to happen especially since electric vehicles, as an example, have more questions than answers to overtaking the combustible engine?

Finally, what about housing? Why do voters continue one-party rule that stops single-family houses from being built? If it’s to stop global warming and climate change, with the belief that high-rise density accomplishes that goal, McKinsey and Company has debunked this California theory imposed through regulatory fiat by California planning agencies. As Joel Kotkin notes, there are other ways to accomplish climate reduction such as “working at home to keep vehicles off the road, dispersed employment from urban centers and tougher fuel standards.”

Most people want to live in single-family homes. It is now being proven that millennials entering their 30s want single-family homes in neighborhoods instead of dense, traffic-clogged, noise-tsunami ridden urban centers. Why do Californians continue to put up with one-party rule – including millennials who overwhelmingly vote for only one party – instead of rising up and voting for another party?

Our society is rotting before our very eyes, yet we don’t consider a moderate Republican, sensible Independent, or business-friendly Democrat that doesn’t tow the California rhetoric about social, environmental and tax issues. Declining groups from history have always pulled the cover over their eyes, instead of sensibly addressing what raises the tide for all boats. California is witnessing post-modern, progressive policies to the fullest. Will we ever change our ways? We shall see what the future holds.

Link: http://www.capoliticalreview.com/top-stories/questions-for-the-california-electorate/

Iran Nuclear Deal Reflects Dangerous US Weakness

October 17, 2016

The MENA region is in shambles, as Iranian proxy-wars, and other conflicts dominate Syria, Iraq, Lebanon, Mali, and Egypt, along with the possibility of a Palestinian civil war around the corner. Recently, the US Navy has defended itself from missile strikes by Houthi rebels, backed by Iran off Yemen’s coast. The P5+1 Iran nuclear deal, or treaty, was a gross dereliction of duty by all countries involved in the negotiations. The Republican-controlled US Congress, for doing absolutely nothing to exercise its constitutional control over implementation, also holds blame along with the Germans and French.

We still live in a world where the U.S. is the sole superpower, though reluctantly under President Obama, and someone has to lead. Unfortunately, and with dire consequences, President Obama chose to believe the world’s leading state sponsor of terrorism and negotiate a partial stop to their nuclear weapons program.

This agreement/treaty, which was supposed to be the dawn of a new era for Iran – the cradle of civilization – instead, has only emboldened Russia to now threaten the U.S. and world with nuclear war. It has also emboldened the Chinese to become more insistent on their crackdown of domestic freedom of speech, to cast aside international law in the South China Sea, and to raise tensions with the Japanese.

And the Chinese are sitting idly by while their proxy – the North Koreans – are drawing near to testing another nuclear weapon. Negotiating with the Iranians has done nothing but embolden bad actors across the globe, actors that only understand military strength, crippling economic sanctions, deterrence, and forceful balance of power. Even the once staunch western ally, the Philippines, now openly mocks the U.S. and looks to improve ties with the Chinese. When tiny, inconsequential countries mock the U.S., EU, and NATO those are problems that can’t be solved unless something changes with the above entities’ weakness on the world stage.

The Iran nuclear deal, led by President Obama, then Secretary of State Hillary Clinton, and current Secretary of State John Kerry was built upon lies, and unfathomable, naïve weakness. Hillary Clinton in 2008 nailed it when she stated that Barack Obama’s foreign policy was “naïve.” In the new book: “The Iran Wars: Spy Games, Bank Battles and the Secret Deals that Reshaped the Middle East,” by Wall Street Journal Chief foreign correspondent, details the inept schmoozing, sordid details and unbelievable danger the U.S. and the world is now in since this agreement has been implemented.

The Iranians, the Russians, and Chinese torched the U.S., led by President Obama at the negotiating table, and pacifist Germany laughed all the way to the bank. Business is booming with the Iranians, and now weaker Iran and other foes have been led to believe that nothing will stand in their way to whatever it is they want to accomplish in their neighborhoods, and the world stage.

The post-WWII order, established and led by the U.S., is now dead. In its place is a multi-polar world that no one knows where is headed – but actually men such as Angelo Codevilla predicted in his book Character of Nation exactly what will take place.

Mr. Codevilla saw a world where America will not come to the world’s rescue, and at that point all bets are off from World War III happening. Mr. Codevilla believes the West will cave to Islamists, Russia, an abrasive China, along with Mexico on the southern US border – all in the name of peace. Not a hard-fought peace, like that which was won in WWII, which has endured for over seventy years, but one not unlike the book by Phillip K. Dick, The Man in the High Castle where Germany and Japan divided the world up after winning WWII.

If the Iranians develop a nuclear weapon, the Russians become more belligerent and the Japanese and Chinese start a shooting war in the East China Sea what happens next? The Iranians aren’t going anywhere, and now are flush with post-sanction relief money. According to General Martin Dempsey, the former Chairman of the US Joint Chiefs, he has openly opined about needing to invade the Iranians, because the deal with them only made them more, not less hostile towards peace-loving nations.

We’ve witnessed what happened when the US pulled out of Iraq, and now world economies are beginning to greatly slow down, and not recover from the 2008 financial crisis. This is because of the retreat on the world stage by the U.S., Britain, NATO, and other former allies. But the question to ask is who will lead the world unless the Americans lead it? This questions was forcefully and eloquently asked by Anders Fogh Rasmussen, former Prime Minister of Denmark and Secretary-General of NATO in a Wall Street Journal editorial where he pleads with America to once again lead the world, and not make dangerous deals with maniacal Islamic fatalists.

This P5+1 agreement was built on lies, ego-driven-nihilism for the sake of presidential legacies, and the need to have peace at all costs while denying human nature, ideology, and the history of the Iranian regime. The Iranians have been two-bit bullies since the Islamists took over that country. While certain segments of Islam are peaceful, and even poetic in their nature, that never was the Iranians.

Why President Obama led the coalition to negotiate with Iran is still a mystery. But it isn’t a mystery to know that they aren’t backing down, and they certainly aren’t leaving the world or petroleum stage anytime soon. They now know that they have backed the U.S., EU and NATO into a corner. Impotent Western governments believing terrorism is the new norm; a US presidential election based upon sexual harassment; and an agreement that even the Socialist French thought was horrible – it all only spells disaster for the world.

The wild card is the Saudis. Now that Afghanistan is in play for the Iranians and Saudis, and oil prices aren’t reaching $100 barrel this year or next, what will the Saudis try to accomplish moving forward? It’s publicly known they are changing their economy into a 21st century one, and not its current model based mainly on petro-dollars. That’s a good thing, but the eerie part is where will they turn as the Iranians become stronger and more adventurous?

More than likely, the Saudis will turn to the Israelis to purchase nuclear weapons in the near future now that there is a détente between the Egyptians, Saudis, and Israelis over the transfer of the Tiran and Sanfir islands to the Saudis by the Egyptians. Though initially blocked in Egyptian court, it is believed the Egyptian parliament will approve the transfer to gain a three-country strategic balance of power against the Iranians.

Western sophisticates and real-world political strategists such as Vladimir Putin and Chinese Premier Xi believe war is impossible to one and a means to an ends for the others. Man’s nature never changes, but remains unforgiving of past aggression and irrational in structure. Appeasement with thugs is only seen as timidity to be used to crush weaker nations. The reciprocity the P5+1 which was thought to be gained from the Iranians has done the exact opposite: made madmen into believers that the weak can take on the strong, and win, while being celebrated on the world stage by the disciples of Neville Chamberlin.

Link: https://www.geopoliticalmonitor.com/iran-nuclear-deal-us-weakness/

Investing in the Electric Vehicle Market

September 16, 2016

Understanding the overall electric vehicle (EV) market, it could be ascertained; EVs will overtake fossil fuel vehicles in the near future; especially in California. While the EV future isbright – California should be cautious – before spending billions of taxpayer dollars without proper due diligence.
Elon Musk is a genius, and Tesla’s are spectacular cars, but Tesla and his other ventures (Solar City) are not profitable while burning through investment funds. Tesla, the leading EV carmaker is burning through cash flow, and that has to be understood why this happens to Tesla and the overall EV market. Further, infrastructure requirements for EVs to thrive in California, and come close to the record amount of new cars Americans purchased in 2015 will be a tough task to accomplish in a state that already needs over $750 billionworth of infrastructure improvements. And EVs are still not growing in percentages as high, when compared against non-EVs.

If EVs grow at the torrid pace that Bloomberg New Energy Finance expects and with far-reaching ramifications then this will require the California business community, local and state governments to work together investing untold billions facilitating EV growth for these vehicles to thrive.

One of the biggest problems is California electrical use will surge, and for the United States’ (US) antiquated, failing electrical grid, how this will play out, is an unknown factor that isn’t being discussed publicly when contemplating EV use.

The US has the worst performing, interconnected electrical grid in the developed world. If EVs reach their projected mark of millions being sold every year in California then local, county and state governments will need to begin planning for and investing in large-scale grids, micro-grids, or some other type of power delivery mechanism for the surge of electrical use that is expected with EVs continued growth.

If millions of potential California EV drivers need a reliable grid to charge their cars, and with climate change a real threat between hotter summers and colder winters taxing the Western US grid, then what happens when spikes in unreliability reach higher proportions? Additionally, when you take into account that even a country such as Norway – which has extremely generous taxpayer subsidies for EVs – still has high oil use, and projects to go higher, what occurs when these subsides are withdrawn? Norway is mulling that option currently. Will California continue their subsidies into perpetuity?

EVs will flourish in the coming future, but with roughly 90 million barrels per day of crude oil consumed worldwide; it seems a giant leap to believe EVs will do away with, or significantly reduce the oil and gas industry. More than likely, a middle ground where EVs and crude oil grow exponentially together will take place. Fossil fuel growth for decades to come in places such as China, India, most of Asia and Africa are a foregone conclusion, but California, parts of the US and Europe will be the drivers of EV growth.

EVs are a smart move for California, but energy-starved nations will choose cheaper, more abundant, and reliable options that the combustible engine provides. According to theBreakthrough Institute, the number one driver of growth to alleviate poverty and bring nations into solid economic growth is low-cost, resilient energy sources. Renewables stand-alone ability and EVs aren’t currently providing that option, and the electrical surges each produces harm electrical grids. Grid security will be a looming negative for EV growth until this issue is resolved.
Until low-cost batteries and energy storage on a mass-scale can be invented, produced, and sold at reasonable prices for California’s middle class citizens then EVs will not sell in a way that shows significant market-led reductions in fossil fuel use, emission reductions, and possible climate change alleviation. California has promised all of these, but so far hasn’t been able to come close to the EV results they predicted.

With so many questions in the near future for EVs, the California legislature and Governor Brown should consider lithium mining in areas like Clayton Valley, Nevada, methane hydrates called “fire ice,” as an energy buffer, and enticing car companies with solid financial outlooks and clean balance sheets back to California.

Ford Motors would be a company to cautiously stay away from until their stock recovers, but cogitate BMW, Mercedes, Toyota, Nissan and closely watching Tesla are smart options for California. Each company has strong EV divisions, but Tesla has numerous hurdles to overcome.

The final, larger question to study for EV growth to continue, and the needed technology and infrastructure to follow are how world events will affect growth in this hot sector of the car business. For EVs to overtake non-EVs, crude oil will need to rise, and stay at the $100 a barrel level for an extended period to change consumer behavior. Though California has artificially curtailed oil and natural gas exploration while using more renewable energy this summer, US and California car buyers are still in love with their pickups and SUVs. The automobile industry is on track for record sales in 2016. California taking a more reasoned, balanced approach to EVs and fossil fuel vehicles seems wiser in ever-changing times, instead of choosing one over the other.

Link: http://www.foxandhoundsdaily.com/2016/09/investing-electric-vehicle-market/

US Presidential Race: Who Should You Choose?

August 31, 2016

It’s become trite palaver to bemoan the US presidential choices. Hillary Clinton and Donald Trump – it is what it is. Now isn’t the time to sit back, but instead take an active look at the severe state of the world. The deeper question to ask each candidate for the US presidency is – do you want to preserve American primacy or not; not exceptionalism, but primacy?

Here’s where we stand after almost eight years of President Obama’s foreign policy, executed by Hillary Clinton and John Kerry. The Republican Congress also takes as much blame as the Obama Administration for their handling of this election, foreign policy, and certainly the Iranian nuclear deal. They were just as complicit as President Obama and Secretary Kerry.

When war arrives to the US mainland because of this deal, and there is a strong possibility it will, since we no longer practice strong deterrence against our enemies, the Republicans and President Obama will rue the day they ever made a deal with bloodthirsty Iranian mullahs and tyrants. And the US State Department acknowledged we gave the Iranians $400 million in ransom for our kidnapped naval personnel while previously they disobeyed UN sanctions by firing off ballistic missiles. Voting patterns have deliberate outcomes.

The “Pivot” to Asia hasn’t worked. China is stronger than ever. The rules-based international order the US and its allies have promulgated since the end of WWII is under siege in Europe, the Western Pacific, and Persian Gulf. ISIS is still carving up Syria while Russia and Iran bomb innocent Syrian children. Not enforcing redlines has consequences.

Putin has 40,000 troops ready to invade Ukraine. The US has acknowledged North Korea’s nuclear readiness has advanced – meaning the advance warning time for their nuclear weapons hitting US soil has shrunk. And remember this deal, under the Clinton Administration, as the Obama Administration’s deal with Iran is similar. Each agreement has done nothing to stop either regime’s nuclear ambitions and hostility towards their neighbors, the West, and the US in particular. Hillary Clinton and Madeline Albright didn’t understand history, ideology, and regime type when dealing with Iran and North Korea. Will Clinton be different as Commander-in-Chief? Would Trump? No one knows, and more than likely the upcoming debates won’t reveal these vital answers.

Iraq and Libya are both still in shambles. Iraq’s hard fought gains and victory have been given back under President Obama’s lead from behind strategy. In 2008 candidate Obama scrubbed Iraq from his website, because the surge worked, and the US won.

Imagine the Middle East if President Obama hadn’t left Iraq? Iraq could’ve become South Korea, Germany, or Japan after those devastated countries joined the world community as economic powerhouses and US allies, because we didn’t leave. There would be no ISIS. A neutralized Al Qaeda. Diminished terror. Certainly no Russia and Iran in Syria, no false hope from the Arab Spring, and no possible Turkey-Russia-Iran alliance, which has terrifying consequences for energy markets and peace-loving nations.

The President still hasn’t fully explained why he didn’t support the Iranian Green Revolution. The birthplace of civilization could’ve become a world leader again, and not the Islamic fortress without hope that it is for millions of its citizens.

The China South China Sea problem isn’t going anywhere. China’s military is growing daily while the US counters with freedom of navigation patrols. But with a smaller US Navy than previous decades, and one that’s continuing to shrink, surely China knows and will call the US’ bluff. The Philippines, Japan, Brunei, Vietnam, Malaysia, Australia, and now India are warning China. Vice President Biden even suggested the Japanese acquire nuclear capabilities. Does President Obama and Hillary Clinton support that position? Historical grievances against Japan would erupt overnight if they went nuclear.

Sanctions won’t deter the Chinese, as they haven’t stopped Putin, nor have hollow threats made by President Obama, his administration, and a complacent, angry Republican Congress. Speaker Ryan should also answer for his actions as well.

Then how should a US citizen vote? Hillary Clinton the architect of our current world chaos or an unproven, ballistic Donald J. Trump? What would aggressors believe either would do if elected? Will Clinton govern against Iranian deals, and be a traditional Democrat in the vein of Harry Truman, or will she keep President Obama’s foreign policy vision intact? Trump for all his bellicosity against illegal immigration and Mexico has gotten the President of Mexico to agree he would meet with Trump, and visited flood victims in Louisiana. Trump seems to agree with the world vision laid out by Ambassador John Bolton, but he was deeply disliked when he was UN Ambassador under President Bush.

Given these uncertainties, Americans would be wise to be vigilant, and hold the current administration accountable for their geopolitical blunders. The months remaining on the President’s time in office may resemble a Tom Clancy novel more than measured, reasonable deterrence based upon decades of experience.

Hillary Clinton or Donald J. Trump? Will our enemies know why, how or when the American people will make the decisions they make, other than how they feel? Feelings, which shape both sides of the political aisle, are never prudent for the world’s only superpower, and main police force since WWII.

Link: https://www.geopoliticalmonitor.com/us-presidential-race-who-should-you-choose/

Why Oil Investors Should Look Beyond The OPEC Meeting

August 25, 2016

The recent rally had investors of all sizes ecstatic at the prospect of oil rising when in reality it had more to do with short seller contracts coming due. For better or worse oil isn’t going back into the $100 a barrel range or anywhere close unless something drastic happens to cut supply.

A stable and climbing market won’t be sustained based upon rumors or even confirmations that Iran will or won’t attend next month’s OPEC meeting in Algeria. Saudi Arabia is still pumping oil at record volumes over OPEC’s protests, and now the Chinese want to export oil products as well. The Saudi’s have increased production, fighting for market share with Iran, Russia and U.S. shale.

The Chinese government will further dampen oil demand, and temper prices, as they are curtailing oil production at hundreds of facilities ahead of the G20 Summit in September, in Hangzhou, to move towards clean air and skies while they are front and center on the world stage.

Further factors weighing against oil rising are potential increased production coming from Iraq, Libya, Canadian oil sands, and a possible ceasefire with rebels in Nigeria that could bring hundreds of thousands of new barrels of oil to an already oversupplied market. Meanwhile, the global economy is not exactly growing at an impressive pace.

With oil flirting with $50, numerous shale drillers have indicated returning to the market. If these heavyweights are willing to drill at much lower prices than seemingly they could a year or two ago, that could lead to downward pressure on crude prices. There isn’t enough demand to chase all the oil the world currently has. Simply put, we could be seeing a replay of 2014 all over again.

But there is a bright side to the negative news. When noted distressed debt buyers are spending hundreds of millions of dollars buying oil assets that is great news for investors with long-term outlooks. Once the U.S. Presidential situation is resolved and other federal and state elections that will also bring stability to shaky markets.

But here’s where this gets tricky – there are disputed interpretations of the current state of the oil market. Merrill Lynch believes oil will rise significantly the next ten to twelve months, but Goldman Sachs believes the exact opposite. What can savvy, common sense investors attempt to glean from contradictory news? A few ideas to consider when purchasing any oil assets.

Look past the headlines and into companies where there are opportunities to purchase debt into equity ownership. Oil and gas markets have been down this road before, and eventually oil will rise again. Populations continue rising in places such as India and Africa, and while their economies develop, they will continue needing oil and natural gas for long-term economic growth. Energy and growth have direct causation on countries moving in positive directions.

Oil is still an incredible growth opportunity based upon the fact that investment management firms have amassed over $100 billion to purchase energy assets. Banks are no longer allowing energy firms extended credit, or loans to keep companies afloat. Prospects abound.

There is a reason $100 billion has been raised, and now is the time to find companies with solid energy assets that supposedly no one wants or considers investment grade worthy. Wise oil investors won’t pay attention to whether or not Iran is attending an OPEC conference, and instead look for developed or undeveloped fields with mature to spectacular potential on the cheap.

Link: https://oilprice.com/Energy/Crude-Oil/Why-Oil-Investors-Should-Look-Beyond-The-OPEC-Meeting.html

A Rare Bipartisan Consensus in US Politics: The Iran Deal was a Bad Idea

August 10, 2016

More than likely President Obama had good intentions when it came to the Iran deal. He didn’t want another Middle East quagmire, and possibly thought it could achieve Sunni Muslim and Israeli dialogue. That has been achieved, as the hatred Saudi Arabia, Egypt, Qatar, and the United Arab Emirates have for Iran after the United States’ (US) nuclear deal has been unprecedented. Dialogue and open relations are now the norm between former enemies.

What if that is what the president and former Secretary Clinton, and Secretary Kerry wanted all along. A balance of power strategy, based upon realist foreign policy that ties former enemies together based upon a mutually agreed upon threat. The way we now see the Asian nations led by Japan and South Korea united against a more formidable China that negates international tribunal rulings over threatened waters in the South China Sea.

But agreements like this which the US takes the lead on have consequences. President Obama was warned by former secretaries of state on the Right about the disastrous consequences of formulating a quasi-treaty with Iran. And now Salon.com, a leading intellectual site for the Left, has agreed with the Right and Congressional Republicans – this is a bad deal for America and the world. In our hyper-partisan environment to have a leading Democratic-friendly site refer to the agreement as a “travesty,” we know this is an unfavorable deal.

This wasn’t The National Review, The Weekly Standard, or right-leaning talk radio making this hyperbolic statement – this was Salon.com. That the president of the United States has the mendacity to scoff away concerns about airlifting $400 million in hard currency to the Iranians for American hostages means we are no longer in the best of times, but the worst of times.

Americans of good conscious should want our Presidents to succeed – whether Democrat or Republican – but when agreements with the largest sponsor of terrorism in the world are negotiated, and then undone, President Obama, Secretary Kerry, and Democratic nominee Clinton should answer for their policy decisions. To never consider Iranian history, ideological positions, or rogue behavior is naïve bordering on narcissistic national suicide.

Did the President have America’s best in mind, or was he only thinking about his presidential legacy? I never begrudge a president taking vacations, golfing, or spending every weekend at Camp David – but with the Wall Street Journal’s revelation about the US paying Iran money for hostages – maybe the president needs to cut his Martha’s Vineyard vacation short. The left and the right both agree that the President has possibly broken the law, or at the very least endangered Americans worldwide with his actions on Iran.

And this is our supposed partner for a new Middle East, with Ayatollah Khomeini now flouting his disregard for negotiating with the US. He now says he can’t trust the US, and because of Iranian actions, other center-left foreign policy elites are now urging the US to stay tough on Iranian sanctions. Do the president and deputy national security advisor, Ben Rhodes, who pushed, coddled, and basically lied this deal through Congress have any idea?

The Iranians seem to have an idea where this deal is headed, and for them it more and more seems about money. Money for their oil infrastructure, and more missiles for their proxy – Hezbollah – to fire at Israeli cities while not considering the consequences of the Arab League, OPEC, and Israel’s new friends. Saudi Arabia isn’t going to sit back and do nothing the next time Hezbollah attacks Israel through Lebanon. Too much is at stake for these countries where self-interest rightly understood is at stake, and now Egypt has even more of the leverage it needs to oppress its citizenry, all in the name of killing ISIS terrorists in the Sinai.

The Council on Foreign Relations makes clear Iran has not changed its behavior, while multi-national banks still won’t do business with the regime. Hundreds of billions of new loans, fees, and revenue are at stake, but still they keep the Iranian regime at arm’s length. Though President Obama and Secretary Kerry have made numerous concessions attempting to integrate Iran into the world community, Iran is still a malignant force in actively pursuing regional aggression, money laundering, weapons proliferation, and making its continued threats against Israel.

That Salon.com article is now actively quoting the futility of this deal:

It subsidizes Iran’s hegemonic ambitions, and demonstrates the nuclear deal has merely emboldened Iran to further provoke America, secure in the knowledge the White House will do almost anything to protect its signature foreign policy achievement,” according to Tzvi Kahn, Senior Policy Analyst at the Foreign Policy Initiative.

The frightening irony is leading Democrats realize the destructive policies regarding Iran by the Obama Administration, yet President Obama, Secretary Kerry, and Democratic Presidential nominee Hillary Clinton don’t seem to want to address the issue.

Link: https://www.geopoliticalmonitor.com/a-rare-bipartisan-consensus-in-us-politics-the-iran-deal-was-a-bad-idea/

California Energy Plans Must Consider Geopolitics

July 14, 2016

The political actions of energy producing states such as Saudi Arabia, Russia, Iran, and the United States (US) impact energy prices. And no state seems to affect the nation, and it could be argued the world, more than California. California and its landmark global warming law affect how energy is consumed, produced and the impact it makes on society and the environment. Yet California is now beginning to lag behind in personal income taxes collected, which could drive more people out of the state, because of poor state services, high cost of housing, and crushing energy prices. California’s electric rates are now fifteen times higher than competing states.

California must now have a better understanding of the changes in global energy markets, such as shifts in global energy demand, reducing supply through artificial means, and the increased competition in global gas markets. Moreover, the California legislature and Governor Brown must grasp the interplay among nations – that geopolitical unrest in one part of the world – triggers responses in other regions. Foreign policy and national security decisions are now as influential in driving energy investment trends as economic action and trade agreements.

Popular opinion states that renewable energy sources will insulate markets and shield investors from the dramatic shifts in energy prices held hostage to the energy geopolitical paradox. Yet renewables only comprise 11% of worldwide energy sources, and it is estimated that by 2040 renewables will only provide 15% of global supply.

While California is attempting to lead in renewables, these estimates highlight the three major challenges presented by renewables in their present state. First and second are issues related to storage and transmission of the energy produced. The inadequate technology to harness the supply of natural sunlight and wind necessitates using fossil fuels as a substitute during periods of energy shortages and fluctuations. Further, delivering energy to the end users on a global scale would require grid modernization, the cost of which would escalate to the trillions of dollars.

With California needing hundreds of billions in infrastructure and road improvements this is a daunting figure for the US’ most populous state. Most nations are not likely to spend vast sums of money given the abundance of oil and natural gas at very low costs. Finally, these challenges underscore the heightened cost of renewables, which are more than double the cost of traditional fossil fuels.

Bad policies cause bad results. Mandates to generate an ever-increasing fraction of electrical power from renewable sources will raise the cost of electricity production, as it has done in places like California and Western Europe. This means that the cost of over six thousand every-day products will become more expensive to purchase because they are now more costly to produce. The fossil fuel industry will also suffer due to burdensome government interference. Carbon policies in Germany, Britain, and Spain, for example, have resulted in soaring electricity rates, tax-heavy subsidies, energy poverty, and industrial flight, yet they have missed their intended goal to meaningfully reduce carbon emissions.

Even the Paris climate agreement is flimsy at best. In the US, and California in particular, renewables have succeeded solely as a result of heavy government subsidization. When renewable energy production becomes cost competitive, both consumers and energy suppliers will embrace the production methods, and production will increase without forced consumption. If California wants to stop its exodus of people and jobs then rethinking its renewable mandate, and high energy costs are some of the best places for decision-makers to begin making better policy choices to foster middle-class growth.

Ironically, despite the promise of green technologies, renewables actually negatively impact the environment. While wind and solar may offer an unlimited power supply, both production methods are land-use intensive and must be backed-up by fossil fuel generators. In addition solar energy requires inordinate amounts of water to clean panels for optimal energy production, which could further burden water-impoverished nations, and drought-stricken California. Some states are even unplugging their renewable mandates.

While western nations will likely continue implementation of renewable energy technologies, it cannot be expected that these trends will become popular globally.
The International Energy Agency has said large-scale government intervention will be necessary for transitioning to a low-carbon economy, create a market for renewables, fund gaps in research and development, pay for the transition from fossil fuels, and encourage international collaboration. There still isn’t a substitute for oil and natural gas.

California energy markets are complex and factors such as production, regulations, consumption and consumer behavior have to be assumed developing modeling projections. Yet a behavioral characteristic of nation-states, and California’s economy is that large, give representations towards specific outcomes.

Projecting energy markets are subject to randomness and uncertainty, but can be foreseen through the prism of behavioral economics using geopolitical threat analysis assumptions. In today’s uncertain markets, more has to be understood than financial modeling, budgets and good accounting practices. Otherwise California could be caught in a downward spiral the way they were in this latest unforeseen oil and natural gas crash.

Link: http://www.foxandhoundsdaily.com/2016/07/california-energy-plans-must-consider-geopolitics/

 

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