July 2022 Vol 2 No 23
In the beginning, you have a situation where the West is facing an acute energy crisis followed by an urgent need for energy alternatives other than being heavily dependant on Russia; then Israel comes forward to be the alternative but the gas deposits it has are in a maritime area contested by Lebanon; then you have Israel military leaders warning Lebanon of a future war that will be massive and devastating in consequences; and the result of all these developments to your Editor, Jamari Mohtar, is that war and invasion of Lebanon by Israel may just be in the offing in the near future.
- When you use sanctions as a weapon against your enemy, it is indeed foolhardy to target your enemy’s product that you are heavily dependant on for sanction.
- This is what the EU is doing on the instigation of the US when it sanctioned Russian oil. It does not sanction Russian gas on which it is heavily dependant but with an arrogance that borders on stupidity, it went on to announce of the bloc’s intent to reduce the import of Russian gas by two-thirds by the end of the year.
- You are still heavily dependant on Russian gas and you have the temerity to announce this reckless bravado! The West must take a leaf from Sun Tzu’s Art of War that when you want to incur a fatal blow to your enemy, you must do it quietly even while you’re in a position of strength, lest your enemy knows of your move and makes a countermove behind your back that will leave you bleeding profusely.
- To the credit of Russia, it held to a moral high ground by not cutting off its gas supply completely and immediately to the West despite this bold, arrogant but naïve bravado from the West.
- Instead, it made a beautiful countermove by making it mandatory for the West to pay in roubles the gas that it has supplied, failing which the gas supply will cease.
- And thus Poland, Bulgaria, Finland, Denmark and the Netherlands have had their Russian gas deliveries suspended after they refused a demand to pay in Russian roubles, beginning in May.
- On June 17, Russian energy giant, Gazprom said gas flows through the undersea pipeline from Russia to Germany which also served France were cut by as much as 60%, and by half to Italy and Slovakia and completely to France due to technical issues arising from Western sanctions against Moscow.
- Leaders in Germany and Italy called the reductions a political move and it has escalated the energy tensions in Europe. Some EU leaders have accused Russia of “blackmailing” the bloc with its oil and gas exports, and have blamed Moscow for soaring energy prices.
- Meanwhile, Ukrainian President Volodymyr Zelenskyy said the reductions are “blackmail (against) both individual countries and Europe as a whole.”
- The Kremlin has rejected the claims, laying the blame on EU policies. According to Gazprom, German equipment supplier Siemens Energy failed to return gas pumping units to a compressor station on time.
- The repaired turbines for North Stream are currently stuck at a maintenance facility in Canada, due to Ottawa’s sanctions on Russia. Siemens has said Germany and Canada are seeking a solution.
- Kremlin spokesperson Dmitry Peskov in commenting on the reduction of gas supplies to the EU said Russia remains “the most reliable supplier,” but the restrictions have made delivery technically impossible.
- “From the technological point of view, the mechanical infrastructure of the pipeline is suffering because of the sanctions imposed by the EU. The pumping facilities, namely the turbines, have to undergo maintenance. But the turbines cannot be returned, that is, the Europeans are not returning them,” Peskov said.
- As a result, Russia’s Gazprom cut off the natural gas supply to Germany via the Nord Stream pipeline by 60%, citing the failure by Siemens Energy to return a piece of equipment to a compressor station “in due time” after it was sent to Canada for repairs.
- Siemens Energy said it was unable to deliver the part due to Canadian sanctions on Russia. Berlin called Gazprom’s decision “political.”
- “There is simply nothing to pump with,” Peskov explained. “This is a man-made crisis created by the EU. We have gas, it’s ready to be delivered, but the Europeans have to give back the hardware. And repair the hardware in line with their commitments.”
- The EU has used imported liquid gas from the US to start making up for the gap but an explosion and fire at a key US export facility in Freeport, Texas took one-fifth of the country’s gas export capacity offline and underlined concerns about the fragility of Europe’s gas supplies.
- With regard to the sanction on Russian oil, Europe has increased the amount of crude oil it is importing from Russia last week. That’s despite the sanction agreed less than a month ago, making a mockery of the embargo on Russian oil.
- Oil refineries on the continent purchased 1.84 million barrels a day of Russian crude last week, Bloomberg reported, citing tanker tracking data, adding that it was the third consecutive weekly increase and the highest level that Europe, including Turkey, received in almost two months.
- The increases have been attributed to Litasco SA, the trading arm of Russia’s Lukoil, transporting the barrels to its refineries in Italy, Romania, and Bulgaria, and purchases by Turkey.
- The EU approved a partial ban on Russian oil last month, pledging to block 90% of all imports by next year. The bloc-wide ban targets crude that arrives by sea but leaves some exemptions for pipeline imports.
- According to Bloomberg, some companies and countries have already stepped back, leaving the market to others who are happy to continue to buy Russian crude that is being offered at huge discounts.
- Economist reported that the supply of Russian oil to the EU rose by 14% between January and April, despite the continent’s pledge to wind down imports.
- Back to natural gas, its short-term prices remained elevated on June 17 at 126 euros per megawatt for month-ahead gas futures. That is up some 50% from June 13.
- Gas prices normally fell with the end of the winter heating season, offering some relief to European utilities scrambling to refill underground storage to have enough to get through next winter.
- But having enough for the coming winter is the key problem now for Europe because of the hefty cut in the Russian supplies of gas.
- The cut has hampered the EU’s attempts to refill its gas storage facilities, now about 55% full, according to Reuters, to meet a bloc-wide target of 90% by November, a level that would enable the region to get through winter if Russian supplies were cut further.
- The nail in the coffin for Europe as far as preparing for winter is concerned is when Russia announced Gazprom’s Nord Stream 1 gas pipeline will not deliver natural gas to Germany for 10 days in mid-July as it undergoes annual maintenance.
- It was confirmed early last month that the work would take place from July 11 to July 21. Germany is concerned over the shutdown, fearing that the flow of gas will not be turned back on.
- In recent years, the maintenance-related shortfall in supplies via Nord Stream was compensated by increased flows through Ukraine or Poland.
- However, various officials and industry representatives feared Russia may not do that this time, leaving the continent to face gas shortages.
- The German government on June 23 declared the second “alarm” level of its three-level gas emergency plan.
- According to the Federal Network Agency, the situation with gas supply is currently stable but if Russian supplies via the Nord Stream 1 pipeline remain at the current low level Germany will struggle to fill its storage to 90% by December without additional measures.
- The impact of this shortage in gas is reverberating in the economy. German chemicals major BASF may be forced to halt production at the world’s biggest chemicals plant in Ludwigshafen, the Wall Street Journal reported on June 27, citing shortages of cheap and abundant Russian gas.
- According to the report, BASF has used Russian natural gas for years to generate power and as feedstock for products that make it into toothpaste, medicine, and cars. However, dwindling Russian gas supplies are proving a threat to the company’s vast manufacturing hub, it says.
- “Cutting down production at this site will be a huge task,” said BASF senior economist Peter Westerheide, as quoted by the WSJ. “We’ve never seen situations like this before. It’s hard to imagine.”
- Meanwhile Dutch Climate and Energy Minister Rob Jetten warned on June 28 that a gas crisis in any one EU country would provoke a domino effect and quickly spread throughout the bloc.
- “It’s good if some member states can fill their gas storages by November 1, but if other countries fail to reach 80% – particularly big countries like Germany – then you have to be aware that this will be a domino effect for the whole of Europe,” Jetten told Politico magazine.
- Last week, the nation lifted all restrictions on coal-fired power stations to reduce natural gas consumption, while making an “urgent appeal” to businesses to save as much energy as possible ahead of the winter season.
- Jetten plans to present a proposal this week on building two nuclear power plants in the country.
- Besides the Netherlands, a number of EU countries have launched emergency plans aimed to lower and ration the use of natural gas and resurrect coal-fired power production, Business Insider reported on June 28.
- This week, Germany, Austria, and the Netherlands announced coal-generated power could help them cope with an energy crisis in the coming winter. German Vice Chancellor and Economy Minister Robert Habeck said the country made a “bitter” decision to restart coal power plants.
- “But if we don’t do it, then we run the risk the storage facilities will not be full enough at the end of the year towards the winter season. And then we are blackmailable on a political level,” he stated, as cited by Reuters.
- Austria also announced that it would be converting a gas-fired power plant to run on coal in case of emergencies. Reports also indicate that Italy’s coal-fired power plants have been stocking up on coal over the last few months.
- The Netherlands and Denmark on June 27 also announced emergency plans that imply gas rationing in case of supply shortages.
- Italy is also mulling over declaring a state of alert on energy, Reuters reported, citing sources, which means the country could also start rationing gas to industrial users. Germany and Austria have already launched emergency plans of a similar nature.
- The shift from EU’s coal-free ‘green energy’ aspirations to the ‘dirty fuel’ came after the bloc’s major gas supplier, Russia’s Gazprom, slashed deliveries by 60% last week through the Nord Stream pipeline.
- This has made it more imperative for Europe to find alternative sources of gas, and in this, here comes Israel to the rescue.
- In March, the media reported a Turkey-Israel gas pipeline was being discussed behind the scenes as one of Europe’s alternatives to Russian energy.
- The idea, first conceived years ago, is to build a subsea pipeline from Turkey to Israel’s largest offshore natural gas field, Leviathan.
- Gas would flow to Turkey and on to southern Europe looking to diversify away from Russia.
- Industry officials, however, have warned of production restraints and geopolitical factors that could leave the plan dead in the water.
- Lebanon has claimed that the gas field extends into its waters.
- With this option out, on May 16 a Turkish newspaper Yeni Şafak reported deliveries of Israeli natural gas via Turkey by sea instead of undersea pipeline to Europe are being mooted as an alternative to Russian energy supply.
- “Israeli gas is considered as an option, its route is planned via Turkey, through the Eastern Mediterranean,” the paper reported, adding that, in case of such an agreement, “it is expected that the Turkish ship will be on duty during transmission periods.”
- The report also highlighted “focusing on deep-water drilling for the extraction of oil and natural gas from the seas, Turkey has included a fourth drilling vessel in its fleet.”
- With this encouragement from Turkey, Israel’s interest in providing gas to Europe was first piqued on May 30 when Israel began the process of launching a fourth exploration for natural gas in its territorial waters.
- According to The Jerusalem Post, Energy Minister Karin Elharrar said the decision has reportedly come in response to a growing energy crisis in Europe as the continent attempts to cut its dependence on Russia.
- The decision also comes despite earlier plans to halt all searches for natural gas in Israel during 2022, in order to focus on renewable energies, as announced by Elharrar in December.
- “The State of Israel is pitching in and helping Europe diversify its energy sources,” the minister said at a press conference, as quoted by the Post.
- “The global energy crisis provides an opportunity for the State of Israel to export natural gas, along with the honest and real concern for what is going on in Europe.”
- Elharrar explained that the ministry aims “to ensure Israel’s energy security, the diversity of our energy sources and investment in renewable energies, and the Israeli economy’s gas reserves for the coming decades.”
- A battle over Mediterranean waters rich in natural gas deposits bubbled up on June 5 with the scheduled arrival of a floating production storage and offloading (FPSO) vessel on the maritime border between Israel and Lebanon.
- The arrival of the Israeli-contracted Energean Power vessel has brought a long-running maritime dispute between the two countries to the surface, precipitating new tensions in the region.
- The London-based upstream firm Energean plans to start pumping gas from the Karish field under contract with the Israeli government later this year.
- Karish is located about 90km west of Haifa, close to the much larger gas fields of Leviathan and Tamar, and it holds reserves estimated at more than 300 million barrels of oil equivalent. Energean signed a contract in March to sell output from Karish to Israel Electric Co., the largest Israeli gas buyer.
- The arrival of the vessel was met with anger in Lebanon, with both Lebanese politicians and citizens denouncing the move and threatening any activity in the area would be considered a “provocation” and an “act of aggression.”
- Lebanese President Michel Aoun warned Israel trying to tap the offshore riches without first resolving a territorial dispute would be seen as a “provocation.” “Any action or activity in the disputed area represents a provocation and an aggressive action,” Aoun said in a statement.
- Aoun also said negotiations to resolve the issue are continuing, and both countries have filed disputes with the UN regarding their overlapping maritime claims.
- West Jerusalem has claimed that Karish is located in Israel’s exclusive economic zone, as recognized by the UN, and isn’t subject to the country’s territorial dispute with Lebanon.
- Lebanon’s Hezbollah militant group has threatened to take action if Israel extracts fossil fuels in the disputed area without resolving the territorial impasse.
- The Israeli military is readying for a possible attack by Hezbollah on the Energean gas rig off Israel’s Mediterranean coast, Hebrew media reported.
- According to Kan public broadcaster, Israeli navy vessels will help secure the drilling platform, which entered a disputed maritime zone between Israel and Lebanon.
- Israel denied the allegation it is encroaching on a disputed Mediterranean natural gas field, and played down any prospect of conflict over the dispute.
- Meanwhile Aoun agreed to invite US envoy Amos Hochstein to Beirut to continue deadlocked negotiations over the demarcation of its southern maritime border with Israel.
- Israel says the field in question is within its exclusive economic zone, not in disputed waters. A naval version of Israel’s Iron Dome missile defense systems, along with submarines, will reportedly protect the rig.
- Also in a very aggressive mode, Israel Defense Forces (IDF) Chief of Staff Aviv Kochavi on June 12 warned overwhelming force would be used in Lebanon during the next potential war with Hezbollah.
- “We will deal very big strikes in the war, but we will warn the residents and allow them to leave the areas. I say to the residents of Lebanon: I advise you to leave, not only at the beginning of the war, but from the beginning of tension and before the first shot is fired. I advise you to leave those areas because the attack force will be unimaginable like nothing you have witnessed before,” Kochavi said.
- He said that the military would target rocket launchers inside homes and buildings, and would target buildings used as enemy headquarters.
- “Every target associated with missiles and rockets will be targeted in the next war,” the military leader said.
- “A house in which a missile is located or located near a missile, an activist who deals with a missile, a command headquarters that deals with a missile, or electricity connected to a group of missiles – all of this network will be hit on the day of the war.”
- He said that the IDF has pinpointed thousands of targets in Lebanon to destroy in the event of a war, including Hezbollah headquarters, rocket-propelled grenades, and launchers.
Russia again cuts natural gas exports to European countries
Europe told to prepare for Russia turning off gas
Russia hits back at accusations over gas supplies
EU buying more Russian oil – Bloomberg
Nord Stream pipeline to be switched off for 10 days
Europe looks to Israel for natural gas – media
Israel aims to fill Europe’s energy void
Israel, Egypt and EU sign gas export deal – media
Analysis | Neither Lebanon nor Israel Want to Go to War Over Gas-drilling Rig. Or Do They?
Why enemies Lebanon and Israel are talking now
Lebanon issues warning to Israel
Lebanon warns against any Israeli “aggression” in disputed waters
- Lembah Pantai MP, Fahmi Fadzil seems to go berserk on Prime Minister Datuk Seri Ismail Sabri Yaakob’s attire.
- It is as if he sees as very important that one of his roles as an MP is to monitor what kind of clothing the PM wears.
- One can also see a kind of jealousy on his part in making such a frivolous comment on people’s clothing. Could it be that this jealousy arises because he can’t afford to own a branded shirt?
- Luckily, we don’t see this obsession on what shirt the PM wears among the poor segment of the community because this could lead to jealousy between the haves and have-nots, which in the long run will destroy the social fabric of the country.
- As long as Fahmi cannot offer any proof that the expensive shirt is bought with taxpayer monies or is a gift from others in lieu of “special assistances”, he should keep his mouth shut.
- Doesn’t he know the adage that one is suppose to spend according to his means? Or is he ignorant of the difference between equity and equality?
- Equity in dressing is a practice allowed in Islam and any democratic country while equality in dressing is well known only in a communist country. Even then communist China now no longer practise this.
- What if the expensive shirt Ismail wore is a gift from his son-in-law, a well-known and successful fashion designer? Isn’t that laudable and a form of filial piety?
- For all we know, his son-in-law earns more than Fahmi, and so it is within his means to buy an expensive shirt for his father-in-law.
- Being a Muslim, without any evidence to the contrary, Fahmi should practise khusnul dzann (always think good of others).
- Instead of imposing his personal view on the PM with regards to what the latter should wear, he should instead focus more on the non-frivolous aspect of being an MP such as giving solutions on how to tackle the high inflation rate, or the problems caused by climate change, or how to raise the economic profile of the B40, etc.
- He is elected as an MP not to be a guardian angel of what shirt the PM must wear but on whether the PM plays his role in taking care of the interest and welfare of the rakyat.
When you use sanctions as a weapon against your enemy, it is indeed foolhardy to target your enemy’s product you are heavily dependant on.
Early last month, The Economist reported that the supply of Russian oil to the EU rose by 14% between January and April, despite the continent’s pledge to wind down imports.
“It’s good if some member states can fill their gas storages by November 1, but if other countries fail to reach 80% – particularly big countries like Germany – then you have to be aware that this will be a domino effect for the whole of Europe,” Jetten told Politico magazine.
The London-based upstream firm Energean plans to start pumping gas from the Karish field under contract with the Israeli government later this year.
- Vol 2 No 18: Why Shireen Abu Akleh was killed in cold-blood? [PDF]
- Vol 2 No 19: The government is not in a panic mode, as it is handling well the chicken shortage issue [PDF]
- Vol 2 No 20: Will the Russia-Ukraine war be over in another one or two month’s time? [PDF]
- Vol 2 No 21: Let’s cut to the chase please, hold a snap Umno election instead [PDF]
- Vol 2 No 22: Proponent of abolishment of death penalty conveniently forget justice and rights for victim’s family [PDF]
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