Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

23 August 2019

The Geopolitical Implications of Future Oil Demand

Professor Paul Stevens
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The global energy economy is undergoing a rapid transition from ‘hydrocarbon molecules to electrons’: in other words, from fossil fuels to renewables and low-carbon electricity. Leading energy industry players and analysts – the energy-forecasting ‘establishment’ – are seriously underestimating the speed and depth of this transition. This in part reflects the vested interests that dominate that establishment. By contrast, the financial sector – which has little or no vested interest in fossil fuels –understands what is going on and is taking the transition on board.

The history of past energy transitions – including the US’s shift from wood to coal in the late 19th and early 20th centuries, and the French adoption of nuclear power on a wide scale in the 1980s –provides useful context for analysis of this trend. Such transitions have been triggered by factors ranging from market upheaval to technological change, with the technological element typically reinforcing the transition.

21 August 2019

Sanctions: The New Economic Battlefield

By David Uren

Economic warfare is being fought with an intensity not seen since the period leading up to World War II as countries deploy tariffs, embargoes and economic sanctions to force policy changes or punish their adversaries.

Free trade is coming off second best, and global trade has stalled. There’s been no growth in trade volumes since late 2017, contributing to a slowing world economy.

The World Trade Organization, as the upholder of global trading rules, looks increasingly impotent. Its resemblance to the League of Nations in the late 1930s will sharpen if, as is possible, the US withdraws in the lead-up to next year’s presidential election.

A rising tide of trade embargoes in the early 1940s was the catalyst for Japan’s bombing of Pearl Harbor and attacks in Southeast Asia to secure its supplies of rubber and oil.

While the escalation of tariffs between the US and China has been the greatest concern to economists and institutions like the International Monetary Fund, the use of economic sanctions is becoming increasingly aggressive and extends far beyond UN Security Council mandates.

20 August 2019

Fracking Has Less Impact On Groundwater Than Traditional Oil And Gas Production


Conventional oil and gas production methods can affect groundwater much more than fracking, according to hydrogeologists Jennifer McIntosh from the University of Arizona and Grant Ferguson from the University of Saskatchewan.

High-volume hydraulic fracturing, known as fracking, injects water, sand and chemicals under high pressure into petroleum-bearing rock formations to recover previously inaccessible oil and natural gas. This method led to the current shale gas boom that started about 15 years ago. 

Conventional methods of oil and natural gas production, which have been in use since the late 1800s, also inject water underground to aid in the recovery of oil and natural gas. 

“If we want to look at the environmental impacts of oil and gas production, we should look at the impacts of all oil and gas production activities, not just hydraulic fracturing,” said McIntosh, a University of Arizona professor of hydrology and atmospheric sciences. 

“The amount of water injected and produced for conventional oil and gas production exceeds that associated with fracking and unconventional oil and gas production by well over a factor of 10,” she said. 

Sanctions: The New Economic Battlefield

By David Uren

Economic warfare is being fought with an intensity not seen since the period leading up to World War II as countries deploy tariffs, embargoes and economic sanctions to force policy changes or punish their adversaries.

Free trade is coming off second best, and global trade has stalled. There’s been no growth in trade volumes since late 2017, contributing to a slowing world economy.

The World Trade Organization, as the upholder of global trading rules, looks increasingly impotent. Its resemblance to the League of Nations in the late 1930s will sharpen if, as is possible, the US withdraws in the lead-up to next year’s presidential election.

A rising tide of trade embargoes in the early 1940s was the catalyst for Japan’s bombing of Pearl Harbor and attacks in Southeast Asia to secure its supplies of rubber and oil.

While the escalation of tariffs between the US and China has been the greatest concern to economists and institutions like the International Monetary Fund, the use of economic sanctions is becoming increasingly aggressive and extends far beyond UN Security Council mandates.

19 August 2019

Slow and Steady Won't Win Russia's Economic Race


As a result of persistent Western sanctions and low global energy prices, Russia will continue its efforts to insulate its economy. The Kremlin has implemented an economic strategy that will enable it to prevent a major crisis in the short term — even if the United States continues to ratchet up sanctions pressure — but economic growth will likely continue to stagnate for the foreseeable future. In the longer term, such efforts will undermine Russia's economic growth, just as other downward pressures like demographic decline and migrant outflows will weigh more heavily on the Russian economy amid rising political uncertainty.

From the worldwide slowdown and the U.S.-China trade war to growing uncertainty over Brexit and a seven-month low for oil prices, the global economy is contending with its fair share of challenges. It's all of great concern to Russia, which is no stranger to economic worries, particularly since 2014 when the country faced twin economic shocks — a crash in global energy prices, as well as the West's implementation of sanctions following Moscow's intervention in Ukraine.

Trump’s One-Way Economy

JIM O'NEILL

But recently, the litany of unfortunate circumstances has gotten so long that the joke is hard to pull off. One now must also list the political crisis in Hong Kong, a burgeoning diplomatic and economic dispute between Japan and South Korea, the Indian government’s revocation of Jammu and Kashmir’s autonomy – and India-Pakistan tensions more generally – and growing turmoil within South Africa’s ruling African National Congress.

Making matters worse, this has been a particularly rough summer in terms of the weather: heat waves across Europe and the US have served as a forceful reminder of the growing effects of climate change on our everyday lives. Add to all this other persistent sources of global uncertainty – from the Middle East and Russia under President Vladimir Putin to social-media disruptions and antimicrobial resistance – and you have a recipe for despair.

17 August 2019

U.S. Drives Global Growth In Crude Oil Production

by Katharina Buchholz
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Crude oil production in the U.S. is rising and might set a new record in 2019. In April, daily production hit 12.2 million barrels, the first time the 12 million mark was surpassed according to the Department of State.

Comparing U.S. performance to global crude oil extraction worldwide, it becomes apparent that North America has been a large driver in the global increase in production. While the Middle East remains the biggest producer by a large margin, the U.S. has been growing its production significantly since 2011. Most of the oil is extracted from shale by a controversial method known as fracking.

The former Soviet Republics and Africa were also able to increased their production, but only by a small margin according to analyst Enerdata. The main users of oil around the world are United States and China, which together use about one third of the world’s supply. The biggest growth in oil demand can also be witnessed in the U.S and China as well as in India.

16 August 2019

Peak energy, peak oil, and the rise of renewables: An executive’s guide to the global energy system


Global energy demand is headed toward a plateau over the next ten to 20 years, as the world focuses on electrification, energy efficiency, and more service-driven economic growth.

Business Isn't Just a Numbers Game


With the launch of Stratfor Worldview Enterprise, business leaders from a variety of backgrounds share their opinions on geopolitical risks and business strategies.

In this blog post, Founder and CEO of Khorus Software, Joel Trammell, discusses the importance of leadership and mentoring as a path toward business development. Joel Trammell has spent decades as a startup launcher and CEO. He has focuses on working with current and future CEOs to maximize their performance.

When I started my first business over 25 years ago, I would've told you that business is a numbers game. As a degreed engineer whose father was a college professor, I was exposed to many mathematical concepts and analytical approaches. I thought all you had to do in business was gather the data, apply the math, and voila! There was the answer.

After 25 years of running companies, I will tell you that numbers are mostly just the result of a bunch of little actions people take every day in your company. Business is about people. And most business problems are people problems. Improving a business is therefore accomplished not by looking at numbers but by changing the behavior of people. And that is very hard. My wife moved the drawer where we keep the utensils in our kitchen over a year ago, and I still sometimes reach in the wrong drawer. No wonder it's such a difficult task to make large-scale changes across an entire organization.

Argentina’s Stock Market Decline Is Among the World’s Worst Since 1950


Argentina’s main stock market plummeted 48 percent in U.S. dollar terms on Monday. The S&P Merval’s fall was the second-largest drop of any major stock index tracked by Bloomberg since 1950.

Argentine President Mauricio Macri’s wider-than-expected margin of defeat in primary elections Sunday by his center-left rival, Alberto Fernández, sent shock waves through the Argentine stock market. The conservative Macri is known for championing austerity and freer markets as solutions to Argentina’s recession.

The country has a long history of fiscal crises. As seen in the chart below, two of the five worst stock market drops since 1950 occurred in Argentina.

Largest Stock Market Plunges Since 1950

15 August 2019

EMERGING TRENDS IN INDIA-U.S. OIL AND GAS ENGAGEMENT

by Sujata Ashwarya

Oil and gas trade is emerging as a new area of engagement between India and the United States against the backdrop of increasingly complementary interests. The emergence of the United States as the world’s top oil and gas producer in the last few years dovetails perfectly with India’s energy-deficient status and growing demand. With high rates of economic growth and over 17 percent of the world’s population, India’s energy consumption growth is largely fed by foreign imports of fossil fuels.

While the increasing supply and demand are the obvious drivers of this upward trend in trade, the contours of energy ties have been fleshed out in the India-US Strategic Energy Partnership (SEP) launched in April 2018. The trade component of the SEP envisages the sale of oil and gas to India from the burgeoning shale rigs in the United States.

According to BP Statistical Review (June 2019), “the U.S. achieved a unique double first last year [2018], recording the single largest-ever annual increases by any country in both oil and gas production.” The Energy Information Administration (EIA) projects that the United States will export more energy than it imports by 2020.

13 August 2019

UN Warns World Food Security Increasingly At Risk Due To ‘Unprecedented’ Climate Change Impact


More than 500 million people today live in areas affected by erosion linked to climate change, the UN warned on Thursday, before urging all countries to commit to sustainable land use to help limit greenhouse gas emissions before it is too late.

Speaking at the launch of a Special Report on Climate Change and Land by the UN Intergovernmental Panel on Climate Change (IPCC) in Geneva, experts highlighted how the rise in global temperatures, linked to increasing pressures on fertile soil, risked jeopardizing food security for the planet.

Humans affect more than 70 per cent of ice-free land and a quarter is already degraded, noted Valérie Masson-Delmotte, Co-Chair of one of three Working Groups that contributed to the bumper 1,200-page report.

“Today 500 million people live in areas that experience desertification,” she told journalists. “People living in already degraded or desertified areas are increasingly negatively affected by climate change.”

Plant-based food and fuels, key to climate change fight

Trump’s Deficit Economy

JOSEPH E. STIGLITZ

Economists have repeatedly tried to explain to Donald Trump that trade agreements may affect which countries the US buys from and sells to, but not the magnitude of the overall deficit. But, as usual, Trump believes what he wants to believes, leaving those who can least afford it to pay the price.

NEW YORK – In the new world wrought by US President Donald Trump, where one shock follows another, there is never time to think through fully the implications of the events with which we are bombarded. In late July, the Federal Reserve Board reversed its policy of returning interest rates to more normal levels, after a decade of ultra-low rates in the wake of the Great Recession. Then, the United States had another two mass gun killings in under 24 hours, bringing the total for the year to 255 – more than one a day. And a trade war with China, which Trump had tweeted would be “good, and easy to win,” entered a new, more dangerous phase, rattling markets and posing the threat of a new cold war.

11 August 2019

Weaponized Interdependence: How Global Economic Networks Shape State Coercion

Abraham L. Newman
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Increasingly, states are employing global economic networks to fulfill their strategic objectives. A structural explanation of this phenomenon argues that network topography produces enduring power imbalances among states. As asymmetric network structures centralize power in key nodes, some states are able to “weaponize interdependence” to gather valuable information or to deny network access to adversaries. The United States has leveraged its network advantage in the realms of counterterrorism and nonproliferation.

10 August 2019

Currency War With China Dooms Trade Talks

Keith Johnson

President Donald Trump’s trade war with China is turning into a currency war—dooming prospects for any sort of trade agreement between Washington and Beijing and ratcheting up the likelihood of a global recession.

This week, in response to Trump’s abrupt decision to hike up tariffs on $300 billion worth of Chinese goods, Beijing briefly let its currency weaken, a natural, market-driven response to a big exporter facing additional hurdles to selling goods overseas. But by allowing the Chinese currency, or renminbi, to fall below the psychological threshold of 7 yuan to the U.S. dollar, Beijing crossed another psychological threshold: Trump’s.

Late Monday, the U.S. Treasury Department officially designated China a “currency manipulator,” the first time the United States has made such a move in 25 years.

The latest U.S. moves all but ensure that catatonic trade talks with China will lapse into a coma, probably until after next year’s presidential elections.

9 August 2019

Sanctions: The New Economic Battlefield


Economic warfare is being fought with an intensity not seen since the period leading up to World War II as countries deploy tariffs, embargoes and economic sanctions to force policy changes or punish their adversaries.

Free trade is coming off second best, and global trade has stalled. There’s been no growth in trade volumes since late 2017, contributing to a slowing world economy.

The World Trade Organization, as the upholder of global trading rules, looks increasingly impotent. Its resemblance to the League of Nations in the late 1930s will sharpen if, as is possible, the U.S. withdraws in the lead-up to next year’s presidential election.

A rising tide of trade embargoes in the early 1940s was the catalyst for Japan’s bombing of Pearl Harbor and attacks in Southeast Asia to secure its supplies of rubber and oil.

While the escalation of tariffs between the U.S. and China has been the greatest concern to economists and institutions like the International Monetary Fund, the use of economic sanctions is becoming increasingly aggressive and extends far beyond UN Security Council mandates.

7 August 2019

Millions of barrels of Iranian crude are sitting in Chinese ports — and could disrupt oil markets


Estimates as to the volume of Iranian crude that’s made its way to China between last January and May vary from 12 million to 14 million barrels. China keeps the crude in “bonded storage,” which means the oil has not been cleared through Chinese customs and is not being used, therefore not yet violating U.S. sanctions Oil could fall by $5 to $7 a barrel if China were to draw down on these stored volumes, one expert told CNBC.

The Chinese port of Nantong in Jiangsu Province, China.
Xu Congjun | Visual China Group | Getty Images

Iranian oil tankers have been quietly offloading their supply into Chinese ports, according to ship tracking data, despite U.S. sanctions on crude from the Islamic Republic.

These flows, which experts say show no sign of stopping, could seriously disrupt U.S.-China trade talks as well as oil markets if Beijing decides to actually use them.

Will Trump’s Trade Wars Reshape the Global Economy?

A trade war between the United States and China that began last year appeared to be inching toward a conclusion recently, but only after bringing the world to the brink of a global trade crisis and damaging producers—particularly U.S. farmers. Trump launched the trade war over China’s perceived unfair trade practices, including forced technology transfers and the theft of intellectual property. Now negotiations have once again stalled, and Trump has returned to the threat of raising tariffs on a broad range of Chinese imports to the U.S.

That may be particularly concerning to European officials who are set to start their own trade negotiations with the U.S. Trump has already decried what he sees as unfair trade deficits with European Union countries, particularly Germany, and he imposed tariffs on steel and aluminum imports from some allies, without seeming to understand that the EU negotiates trade terms as a bloc. A U.S.-Europe trade war could do lasting damage to both sides.

Not Your Father’s Bots

By Sarah Kreps And Miles McCain 


Surveillance images from a U.N. sanctions report purportedly showing a North Korean vessel engaged in illegal trading United Nations Security Council / REUTERS

5 August 2019

Economic Growth and the US Presidential Election

SIMON JOHNSON

WASHINGTON, DC – Economic growth in the United States was just 2.5% in 2018 and, according to the latest “advance” estimate, may have slowed to only 2.1% in the second quarter of 2019. The economy is growing at roughly the same pace as it did during Barack Obama’s second term as president (GDP growth was 2.5% in 2014 and 2.9% in 2015, before slowing to 1.6% in 2016 – perhaps related to election-induced uncertainty).

With Boris Johnson’s improbable ascendance as Britain’s new prime minister, the absurdity of British politics in the age of Brexit has plumbed new depths.

In this special double issue of On Point, Edoardo Campanella seeks to uncover the deeper forces behind Johnson’s rise, and Nicholas Reed Langen anticipates the consequences of his victory.