Editor's thoughts…

From Yalta to Yalta... Crimea, the peninsula of desires...

”Homer described it as "symbolic, a place of beautiful, sheltered bays"; Chekhov described it as a paradise far above the French Côte d'Azur; and, not for nothing, the Crimea figured in the plans of Heinrich Himmler, the head of the Hitlerite Gestapo and no poet, as one of his favourite places to turn into the Garden of Eden—a sort of Emerita Augusta for future SS retirees."

  PEDRO GRIFOL

Quote of the day…

"Diamonds and nuclear fuels would be very easy to sanction."

  SPIEGEL

Most read…

Morgan Stanley ups 2023 oil demand growth estimate by 36%, flags Russia risk

"Mobility indicators for China, such as congestion, have been rising steadily," while "flight schedules have firmed-up the outlook for jet fuel demand," the bank said.

Reuters

"Russia Is Good at Cheating"

In an interview, Vladyslav Vlasyuk, sanctions adviser to the Ukrainian government, accuses Russia of fudging economic statistics and calls on the West to drastically lower the oil price cap.

  DER SPIEGEL: INTERVIEW CONDUCTED BY MARKUS BECKER

Analysis: Pain and gain for industry as EU carbon hits 100 euros

"If you think we're permanently going above 100 [euro carbon prices], then that's a very constructive environment for green hydrogen," Lewis said, though he added that CO2 prices could fall back below that level because of bearish factors.

  REUTERS BY KATE ABNETT AND SUSANNA TWIDALE

  CNBC.COM, ANMAR FRANGOUL

  PUBLISHED MON, JAN 23 

AES chief says we’ll need natural gas for next 20 years

From the United States to the European Union, major economies around the world are laying out plans to move away from fossil fuels in favor of low and zero-carbon technologies.

It’s a colossal task that will require massive sums of money, huge political will and technological innovation. As the planned transition takes shape, there’s been a lot of talk about the relationship between hydrogen and natural gas.

During a panel discussion moderated by CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland, the CEO of energy firm AES offered up his take on how the two could potentially dovetail with one another going forward.   

“I feel very confident in saying that, for the next 20 years, we need natural gas,” Andrés Gluski, who was speaking Wednesday, said. “Now, what we can start to do today is … start to blend it with green hydrogen,” he added.

“So we’re running tests that you can blend it up to, say 20%, in existing turbines, and new turbines are coming out that can burn … much higher percentages,” Gluski said.

“But it’s just difficult to see that you’re going to have enough green hydrogen to substitute it like, in the next 10 years.”

Change on the way, but scale is key

The planet’s green hydrogen sector may still be in a relatively early stage of development, but a number of major deals related to the technology have been struck in recent years.

In December 2022, for example, AES and Air Products said they planned to invest roughly $4 billion to develop a “mega-scale green hydrogen production facility” located in Texas.

According to the announcement, the project will incorporate around 1.4 gigawatts of wind and solar and be able to produce more than 200 metric tons of hydrogen every day.

Despite the significant amount of money and renewables involved in the project, AES chief Gluski was at pains to highlight how much work lay ahead when it came to scaling up the sector as a whole.

The facility being planned with Air Products, he explained, could only “supply point one percent of the U.S. long haul trucking fleet.” Work to be done, then.

Seaboard: pioneers in power generation in the country

Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

  SOURRCE BY MERCADO DOMINICAN REPUBLIC

  28 JUNE 2022

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

Armando Rodríguez, vice president and executive director of Seaboard, joins us for this Mercado Interview to talk about the company's contributions to the Dominican Republic's electricity sector. "Our plants have been strategically located by the authorities of the electricity sector to make it possible to reduce blackouts in Santo Domingo and save foreign currency for all Dominicans," he explains.

Cooperate with objective and ethical thinking…

Editor's thoughts…

From Yalta to Yalta... Crimea, the peninsula of desires...

” Homer described it as "symbolic, a place of beautiful, sheltered bays"; Chekhov described it as a paradise far above the French Côte d'Azur; and, not for nothing, the Crimea figured in the plans of Heinrich Himmler, the head of the Hitlerite Gestapo and no poet, as one of his favourite places to turn into the Garden of Eden—a sort of Emerita Augusta for future SS retirees."

"The Lady with the Dog..." was written by Anton Pavlovich Chekhov (Yalta, 29 January 1861–15 July 1904) and published for the first time in December 1899.

…”Every evening, the couple observes the sunset from the vantage point over Yalta at Oreanda and was charmed again by the "beautiful and majestic" sight....”

A forty-year-old male named Dmitri Gurov is charmed by a young woman walking along the seafront of Yalta with her small Pomeranian dog. Dmitri dislikes his shrewish and educated wife and, as a result, has various love connections. Although the protagonist disparages women and calls them "the lesser race," he secretly reveals that he is more comfortable in their company than in men's.

One day, "the lady with the dog" sits beside Dmitri to dine in the public gardens. The man pets her dog while trying to strike up a conversation. He learns that she is called Anna Sergeyevna.

The Lady with the Dog is one of Anton Chekhov's best-known and most beloved stories. This extraordinary tale, too, was made into a film in 1960 by the film director Iosif Yefimovich Kheifits (Belarusian, 17 December 1905–24 April 1995).

Anton Chekhov was born in Yalta, Crimea, in Taganrog, far south of Moscow, on the Sea of Azov. More Levantine than European (Turkey was 300 miles away), Taganrog was a hot, fly-infested port with a varied population: Russians, Greeks, Armenians, and Italians.

Crimea’s contentious and multi-ethnic history is a source of conflict.

Occupied, conquered, invaded, colonized... a thousand and one times over the centuries, Crimea, this small piece of luminous land, which seems to detach itself from the great continent to sail its way through the sea, is like an island cut out with coquettish coves enclosed in pine forests, which have been (or would like to be again) the favorite mooring places for oligarch yachts. Moreover, because of its privileged strategic position, it is a territory that has always been involved in wars, as if its karma had unique designs.

With World War II over, the rulers of the three Allied powers that formed the winning coalition, Churchill, Roosevelt, and Stalin, determined in 1945 to share the spoils and transform post-war Europe. They chose the fair city of Yalta, a place on the Crimean Peninsula on the benign Black Sea coast, and gathered in the Livadia Palace, the residence of Russia's last Tsar, Nicholas II. The exquisite Italian Renaissance-style home was rapidly completed in just 16 months. The Tsar was in a hurry to enjoy champagne and caviar by the sea as if he sensed that the ancient dominion of the Tsars would be destroyed by the Bolshevik arms just four summers later. Roosevelt and Stalin stayed there, while Churchill stayed in another palace, the no less pompous Voronstsov, as the chronicles say that the Americans and the Russians wanted to keep the Englishman away from their quarrels; Churchill complained in a London newspaper:

"I am caught between two monstrous animals: the American bison and the Russian bear."

After the so-called Yalta Conference, the Livadia Palace, throughout the Soviet period, became the resort for the ruling class of the communist party, and the whole area was filled with dachas (Russian for "pleasure villas"). Many years later, we may tour the beautiful mansion and learn about the life and sweat that went on the sunny walls, including a table with the invoices for the overheads of the Yalta Conference.

Crimea is an exceptional witness to international warfare

Undoubtedly, the most famous occurrence is the Battle of Balaklava, which took place during the Crimean War (1853–1856), when the famed Light Brigade of the British army, in its "riding to its death," succumbed to the intense fire of the Russian artillery. Similarly worthy of attention is the 349-day siege of Sevastopol by the Franco-British alliance on Sapun Hill in 1855, which concluded in a Russian victory. Sevastopol, a city of solid resonance, "the City of Glory" (from the Greek words sebas, glory, and polis), besides experiencing the war between the Franco-British coalition and the Romanov army in its stony flesh, was also bombed by the Germans in 1914 during World War I and came under siege again during the Second World War.

Crimea does not seem to want to be left in peace.

Contrary to Dostoyevsky's words: "There are corners in the world that are so beautiful that visiting them gives us a feeling of joy and we feel life in its fullness," this peninsula steeped in history may trigger or has already sparked a new Cold War, at least, not to call the nightmares of the visionary and acclaimed film director Andrei Arsenievich Tarkovsky (Ivanovo Oblast, April 4, 1932 - Paris, December 29, 1986 about a nuclear tragedy.

  SOURCE: SOME IDEAS FROM: WWW.REVISTAGQ.COM

Morgan Stanley ups 2023 oil demand growth estimate by 36%, flags Russia risk

"Mobility indicators for China, such as congestion, have been rising steadily," while "flight schedules have firmed-up the outlook for jet fuel demand," the bank said.

Feb 22, Reuters

Morgan Stanley has raised its global oil demand growth estimate for this year by about 36%, citing growing momentum in China's reopening and a recovery in aviation, but flagged higher supply from Russia as an offseting factor.

Global oil consumption is now expected to increase by about 1.9 million barrels per day (bpd), versus its previous 1.4 million bpd forecast, the bank said in a note dated Tuesday.

"Mobility indicators for China, such as congestion, have been rising steadily," while "flight schedules have firmed-up the outlook for jet fuel demand," the bank said.

But supply from Russia has been stronger than expected, leading to a slightly smaller than previously assumed deficit in the second half of the year, analysts at the bank wrote, trimming their Brent oil price forecast for that period to $90-100 a barrel from $100-110 previously.

"We previously estimated a ~1 mb/d year-on-year decline in 2023, which we moderate to 0.4 mb/d," the bank said, referring to its Russian output outlook in million barrels per day.

Earlier this month, Goldman Sachs cut its 2023 Brent price forecast and raised its global supply forecasts for 2023 and 2024, with Russia, Kazakhstan and the United States the most notable upward adjustments.

But Goldman also noted that a 1.1 million bpd rise in Chinese demand this year should push oil markets back into a deficit in June.

"Russia Is Good at Cheating"

In an interview, Vladyslav Vlasyuk, sanctions adviser to the Ukrainian government, accuses Russia of fudging economic statistics and calls on the West to drastically lower the oil price cap.

  DER SPIEGEL: INTERVIEW CONDUCTED BY MARKUS BECKER

DER SPIEGEL: Mr. Vlasiuk, are the West’s sanctions against Russia having a significant impact at all?

Vlasiuk: Of course they do.

DER SPIEGEL: The International Monetary Fund (IMF) seems to differ: According to a recent report, Russia’s economy will grow by 0.3 percent this year and by 2.1 percent in 2024. And on Monday, Russia’s statistics authority said that in 2022, the country’s economy has contracted by only 2.1 percent, far less than experts had expected.

Vladyslav Vlasiuk, born in February 1989, is an expert on international sanctions. In April 2022, he became an adviser to Andriy Yermak, head of the Office of the President of Ukraine. A lawyer by training, Vlasiuk is also a secretary of the Yermak-McFaul Group of international experts working on sanctions against Russia and Belarus.

Vlasiuk: Never believe a word of what Russian authorities are saying. They stopped publishing many statistics that were published before – for good reasons. Russia is struggling to get hold of fresh money and is running a record-high deficit. Lots of Russia’s assets are frozen, less and less technology is available. The European Union's ban on Russian oil products alone has cost the Russian economy a market of 30 to 40 billion euros. At the end of 2022, Russia was forced to impose an additional 600 billion rubles in new taxes on the biggest companies, including Gazprom. Russia now spends 20 percent less on drugs for hospitals. Expenditures for road construction were cut in half. They are losing whole industries – their car industry, for example. So, it would be absurd to assume that the sanctions don't have a significant impact. They do, only Russia is trying to hide it, by lying with their statistics.

DER SPIEGEL: Do you have an example of that?

Vlasiuk: Only this week, Russia introduced a bill which basically prescribes that they count taxes collected on oil exports based not on the real price, but on some theoretical price. It consists of the price for a barrel of Brent (crude), which is much more expensive than Urals, the Russian reference oil brand, minus some discount. This shows one thing: Russia is good at cheating.

DER SPIEGEL: Still, Russia is firing thousands of artillery shells per day and seems to be able to keep up production, whereas the West is struggling to resupply Ukraine with ammunition.

Vlasiuk: The sanctions’ direct impact on Russia’s military production is hard to gauge. We have some reports that there is such an impact. In the coming weeks, we will have a report ready with more definitive numbers.

DER SPIEGEL: The IMF also suggests that the price cap the G-7 and the EU have placed on Russian oil – $60 a barrel – is not enough to significantly curtail Russian revenues. How low would the cap have to be for that?

Vlasiuk: According to the International Working Group on Russia Sanctions, the price ceiling should be $30 to $35. From our point of view, this makes sense. At present, the potential of this instrument is not yet fully exploited.

"Now is the moment to discuss a lowering of the oil price cap."

DER SPIEGEL: The EU and the G-7 only managed to agree on a threshold of $60 after much wrangling, for fear of turbulence on the global markets. How realistic is it that they would lower the threshold to $30?

Vlasiuk: Of course, we understand why the West is wary of any risky moves. But now is the moment to discuss a lowering of the oil price cap. Perhaps not immediately to $30, but over time, that level should be reached. After all, the production cost for Russian oil is only $20 or even less.

DER SPIEGEL: A major part of the 10th sanctions package being discussed by the EU is to close loopholes in ways that make it more difficult to circumvent sanctions. Has the EU been too lax in this respect?

Vlasiuk: You cannot block any kind of exports to a country like Russia, especially exports by non-EU countries. But there are tools the EU has to stop goods from reaching Russia if it can be proven that sanctions are being violated. The EU could make more consistent use of these tools.

DER SPIEGEL: Secondary sanctions against countries who help Russia circumvent sanctions could be among those tools. Should they be used?

Vlasiuk: Ukraine is interested in effective sanctions. To ensure that, secondary sanctions are certainly an option.

DER SPIEGEL: Which countries would be likely targets?

Vlasiuk: Georgia is helping Russia to circumvent some sanctions; the same is true of Kazakhstan, Turkey and, of course, of China. Hitting them with sanctions would be very difficult for legal reasons and reasons of trade policy. But it is true that these countries could do more themselves in curtailing their help to Russia

"Diamonds and nuclear fuels would be very easy to sanction."

DER SPIEGEL: There is also disagreement among EU countries about whether to sanction certain products – like diamonds imported by Belgium or nuclear fuels, which are especially important for France's nuclear power plants. Is the EU still too soft on Russia?

Vlasiuk: From a Ukrainian viewpoint, diamonds and nuclear fuels would be very easy to sanction. Of course, some issues are difficult for some countries. But we hope that in the next packages, the European Council will agree on sanctions against companies like Russia’s nuclear agency Rosatom and diamond producer Alrosa.

DER SPIEGEL: So far, France has been strictly against curtailing civil nuclear imports. It is hard to imagine why Paris would just give in.

Vlasiuk: Perhaps. But one year ago, nobody could imagine that the EU would ban Russian energy imports almost completely, either. Now, it is doing exactly that.

Analysis: Pain and gain for industry as EU carbon hits 100 euros

"If you think we're permanently going above 100 [euro carbon prices], then that's a very constructive environment for green hydrogen," Lewis said, though he added that CO2 prices could fall back below that level because of bearish factors.

  BY KATE ABNETT AND SUSANNA TWIDALE

BRUSSELS/LONDON Feb 21 (Reuters) - Europe's carbon price hit a record 100 euros ($106) per tonne on Tuesday, a long-awaited milestone that boosts the economic case for some green technologies and hits industry with its largest bill yet for carbon dioxide emissions.

The European Union has pledged to cut its emissions by 55% by 2030 versus 1990 levels. One of its main tools to make that happen is its carbon market, which requires European industry and power plants to buy permits to cover their CO2 emissions.

Benchmark EU carbon permit prices hit 100 euros per tonne of CO2 on Tuesday, the highest since the scheme launched in 2005.

Incentivising green investments is the scheme's aim. If the carbon permit price is higher than the investment cost of a green technology, then companies will be motivated to choose the investment.

At current levels, CO2 prices provide a strong incentive to invest in green technologies to cut the use of fossil fuels, the price of which surged last year and remains relatively high, Mark Lewis, head of climate research at Andurand Capital, said.

Green hydrogen, produced using renewable energy is seen as important for decarbonising industries including steelmaking. Most hydrogen is currently produced using gas, which emits CO2 but is cheaper than the electricity-based method.

"If you think we're permanently going above 100 [euro carbon prices], then that's a very constructive environment for green hydrogen," Lewis said, though he added that CO2 prices could fall back below that level because of bearish factors.