A Rather Gassy Business.

I am no fan of Boston Globe, the rag which gives a tribune to such shitheads as Scott Gilmore, certainly, can not even pretend to be any reputable publication. Here they come again, spewing a lot of hot gas on the issue of Russian gas, which America bought and is going to eventually resell as its own gas, to Europe which is in dire need for gas, and is ready to accept Russian gas, through gas-pipes of both Turkish Stream and Nord Stream, but enough about gas. 

  

Arrival of Russian gas stirs Ukrainian community

After that a lot of smug self-righteous Bullshit is written in this editorial piece, which is expected from most American so called "journalists", but here is an interesting phrase:

Policy makers have imposed a double standard, rejecting domestic gas over solvable concerns while accepting, with apparently no questions asked, the need for foreign LNG shipments with troubling environmental and human rights implications.

If one discounts a traditional fake concern for "human rights", what is highlighted in yellow is actually a very correct statement. Here we have to abandon loony ignoramuses at Boston Globe and concentrate on the opinions of professionals in the field of hydrocarbons. I am no professional in that but I know a thing or two about SLOCs and its reliability and, what RIA (in Russian) Dmitri Lekukh calls a "transport shoulder". It is a very good piece which, unlike Boston Globe's sappy sentimental crap, should be attentively read and taken into account. The piece has a symptomatic headline: To Rob Europe: Why Second Tanker With Russian LNG Is Allowed Into the USA. Indeed, why? Here is a spread, which is even more interesting against the background of my two-weeks old piece on Russo-Chinese Alliance and Northern Sea Route (NSR), and, of course, China issuing, a week later, her White Book precisely on a huge significance of NSR for China.  

1. As Russia's Energy Minister Alexander Novak (BTW, the guy who actually worked a lot in real industries, such as metallurgy) points out: he is absolutely not "euphoric" about Russian gas arriving to the US. Since Novatek really doesn't care where  the gas goes as long as Novatek is paid. As he astutely noted: once the gas is sold and resold, the gas molecules remain "Russian" but gas does not. 

2. The issue, however, is in the fact of Russia's brand new immense LNG facility in Yamal changes the picture completely and, no matter how emotional some people in the US become about this fact--Russian LNG is competitive with the US domestically produced gas inside the US. Now we are going to Sabetta and this "transport shoulder". See the maps:

#1. European "shoulder" (for some reason "above" Novaya Zemlya).

#2 Asian "shoulder".

Is it getting "warmer"? Here Lekukh makes a very interesting conclusion: If Russian LNG is competitive inside US on a huge, trans-Atlantic, transport shoulder, what is it going to do to European LNG port facilities which are literally, in a global sense, positioned next to Sabetta. Remember American plans to sell American LNG to Europe? Well, good luck competing with Novatek.  Lekukh, however, goes further and states, and I think he is right, that Americans are no dummies--they know all that. The trick is in globalization of the LNG trade which will make price for American LNG competitive, but also will make already very high energy cost component in European goods, extremely high thus giving US goods an advantage over European ones. 

Here, the factor of Russian gas pipe-lines begins to weight heavily and Europeans know it damn well. It is not enough that French Total SA holds 16% of Novatek shares but even SovComFlot's first ice-class LNG supertanker bears the name of late Total's CEO, tragically killed in the air crash, Christophe de Margerie.  She even carries de Margerie's mustache on her bow. 

In fact, they know it so well, that Germany already issued permissions for Nord Stream-2 pipeline to be laid in her territorial waters. And then we have to take a look at those "European" LNG ports in.... sure--in Eastern Europe, that is in Poland, Lithuania and other US lap dogs of no economic weight or significance but who completely bought into this "diversification" scheme without doing even simplest arithmetic. One has to imagine the faces of their leaders when hearing and seeing the news of Russian LNG being shipped to the United States? Hey, Russian LNG is so competitive that who knows (and somebody knows, I am sure, wink-wink) that Poland and Baltic States eventually will have to buy Russian gas molecules as... an American LNG. Twice the price, of course. As they say "freedom is not free". The smell of failure is really in the air.

The situation is utterly comical and two main geopolitical questions today, especially after massive Russian intelligence delegation meeting with their counterparts in D.C., are this: 

1. Will Russia "play" with the US to allow US enter global LNG Trade and thus giving at least partial competitive edge which may help US to partially re-industrialize her economy. 

2. Will Russia, in the same time, back Europe to a degree needed to not let it lose to the US (and China), which, granted pathetic intellectual level and cowardice of European "elites" is entirely possible. 

These are no bad problems to be faced with. I wrote two weeks ago about Russia's strategic fork. This is one of them. Now imagine this factoring into the larger game with China which has her own 9% stake in Novatek and wants NSR really-really bad. Once these factors are considered one can totally understand why Massachusetts Ukrainian community is so worried and is full of... gas, as they should. In 2019 Ukraine becomes irrelevant in the larger scheme of things and if Trump releases... I am running ahead of myself here, let's just wait and see.    

......

 

Boston Globe Is Right On The Money.

I write constantly about the parallel universe in which US main-stream media live when dealing with, well, just about anything and, especially so, Russia, but some of the brain farts produced by a bunch of hacks working for US media machine do deserve to be singled out. Here is a today's pearl from Boston Globe:

Putin’s Russia is a poor, drunk soccer hooligan 

Granted, mind you, that it is Scott Gilmore's "opinion", which usually implies that a rag which publishes "opinion" may or may not endorse it. All of it--mostly smoke and mirrors. I would have skipped the review of usual mental excrement of aggression and outright lies by another ignorant hack with degree in nothing and having no applicable skills to benefit society but one phrase caught my eyes. 

"According to the International Monetary Fund’s most recent data, the Russian economy is approximately the same size as Australia and slightly smaller than South Korea. As an exporter, it is now less important than Belgium, Mexico, and Singapore."  

It is only natural for a graduate of such madras as London School Of Economics (that is the "school" which barely touches reality in any meaningful way) to refer to IMF, an organization directly culpable in creating number of economic crises globally, as a reliable source of info on Russia. Indeed, what can one expect from the organization which excludes Russia from the list of advanced economies but includes there Lithuania.  

So, let's catch our "opinionated" boy economist and diplomat on pure lies. For that we will go to... IMF. Here is the the IMF data on Australian and Russian economies and, as Mr. Gilmore suggests showing Russian economy to be, and I quote:"the Russian economy is approximately the same size as Australia"(c).

 Here is Australian IMF data 2015-2016:

  

And here is Russia's for the same time period:

Anyone with a common sense, forget good understanding of the economics, which is not really a science, knows that absolute GDP measured in constant dollars is a misleading number. That is why anyone with the brain--from serious economists who abhorre all those BS monetarist, detached from real life, theories to serious intelligence and analytical organizations, use much more (still inaccurate) accurate metric--GDP based on PPP (Purchasing Power Parity) which does reflect what is, so to speak, real depth of the economy. Even a brief look at PPP comparisons between Russia's and Australia's economies show a peculiar number which tells us that, rephrasing our "specialist" and "diplomat" (a diplomatic tour in Indonesia surely makes one competent on Russia, wink-wink) "the Russian economy is approximately three times the size as Australia", in reality--much larger. Well, if we also concentrate on the last underlined row at the very bottom of the both tables we will see that shares of Global GDP based on PPP also relate to each-other as approximately 3.1 to 1 in Russia's favor. 

But all these numbers, which clearly show Mr. Gilmore to be what he really is--a frustrated BSer and a liar with no clue on the issues of real economies and power--do not reflect what real economy IS from which REAL both economic and military power derive. I wrote about this many times, I will repeat it again--Number of Enclosed Technological Cycles. This metric puts most of current monetarists out of their misery and suggest to them to go and do something really useful and contributing to society--such as tending cows on farms or working 5-axis CNC at some manufacturing plant. Let them try their pathetic "theories" in real life.  Now that we understand that this piece of "opinion" in Boston Globe is pure propaganda and that Mr. Gilmore is as qualified to speak on Russia as I am qualified to perform open heart surgery, we may concentrate on the issue at hand and here are some news that even Bloomberg people begin to take note. 

Russia Retools After Crash as Post-Oil Economy Takes Shape 

While Russian economy's recovery from both internal issues (and there are plenty of those, to be sure) and sanctions takes time and effort, retooling is ongoing and to a certain degree it influences global processes. As could be seen, while such "industries" as finances were contracting in 2015, the actual manufacturing was and is still growing. 

Most remarkable is the growth in machine-building sector which continues to grow at a very respectable 5+ % and it is there, together with broadly defined chemical industry and some other fields, where real power is manufactured. 

I like Ozzies--mostly simple folks, hard working, generally decent people, obviously suffering from the same malaise which afflicted whole of Anglo-sphere, but still--the guys and gals I would like to get together for a beer and talk about life, I did it before. So, I do not want any Ozzie who reads this blog to take anything personally. But here are the facts. There is no denial that Australia is a highly developed nation with extremely high standard of living but even the brief look at the Australia's GDP structure betrays what can only be described as total deindustrialization--only 21% of Australia's economy is industry. Compare this with 36.3% of Russia's share of industry in her GDP, with agriculture it rises to 40.3%. That is, in purely percentage expression Russia produces almost twice more than Australia. In absolute numbers? I would go on a limb here and will say that Russia's industrial (that is manufacturing) sector is much larger than Australia's whole GDP in whatever iteration it is going to be looked at. Consider these simple facts: 

Russia produces civilian jets from R&D stage to full production (including avionics, composites, aggregates what have you), Australia does not. Russia produces a variety of space vehicles, from parts of the International Space Station to different rockets. Australia does not. Russia produces own microprocessors. Does Australia? Never heard of it. Russia is a manufacturer and operator of only other truly global position system--GLONASS. And the list goes on and on, and on. Russia produces railway rolling stock, both on her own and in cooperation, such as with Siemens, including some cutting edge heavy pullers. Both Russia and Australia export crude, steel and other low processed products, but here where commonality ends. As it should when one compares a nation with 150 million population to one of barely 23 million people. 

And then comes this sensitive issue of Russia maintaining the second most powerful military of the world. This is where all those "economic" comparisons and indices break down completely. Russia can produce and does produce state-of-the-art submarines, fighter-jets, air defense complexes and other extremely hi-tech things. Obviously, graduates of London School Of Economics together with their professors, whose world view of hi-tech is limited by the latest model of iPhone produced in China, have no clue what goes into all that but I do. Research & Development, Design, then manufacturing and procurement of such weapon systems as S-400 or fighter-jet of SU-35 type, as an example, require academic, scientific, industrial and other resources which are beyond the reach of overwhelming majority of nations, can not be merely expressed in some economic numbers. A single state-of-the-art SSGN of Severodvinsk-class, project 885 (Graney-class) requires a cutting edge industry to be designed and produced: from advanced materials, advanced radio-electronics industry, scientific and academic school, research institutes,  shipbuilding industry with highly trained personnel to a modern machine building complex capable to build everything from radar and sonar to combat information control systems (combat computers), to nuclear reactors to...the list is colossal and currently there are only two nations in the world capable to completely on their own do so, and you may have guessed it already--these are Unites States and Russia. The rest of the world is not even in the same league when dealing with quality and quantity of these kind of systems.  Moreover, working in these industries requires a constant inflow of specialists with extremely high level of STEM education. These people are taught at top national colleges and universities and those are, believe me, world-class and tough to graduate from. And then, there is national military educational system. Guess where Russian system of military education is in terms of reputation and quality? Granted, of course, that one should discard all kinds of propaganda crap.

Lack of knowledge, however, doesn't prevent Mr. Gilmore from sharing his "insights" on military issues by stating:

"According to data compiled by the Stockholm International Peace Institute, Russia’s defense budget is still less than China, and Saudi Arabia. It is roughly on par with India, France, and the United Kingdom. And it is nine times smaller than the Pentagon’s budget. The fact is, if it wasn’t for Syria, the Crimea, and some ageing warheads, Russia would get as much global attention as Slovakia or perhaps Wales" (c).

I already elaborated on the issue of military budget's size but the pearl about "aging warheads" is really something. Obviously, yet again, they don't teach anything of related to the reality in London School Of Economics but last time I checked, Russia possesses the most advanced nuclear arsenal in the world which ranges from the latest SLBMs Bulava carried by the state-of-the-art newest SSBN of Borei-class (3 hulls completed, 4 are being built) to a whole range of other both conventional and nuclear deterrents ranging from brand new RS-28 Sarmat ICBM, railroad complexes Barguzin to newest long-range cruise missiles of Kalibr and X-101 (102) class. One has to ask then, why Boston Globe gives a word to a guy who obviously is driven by feverish Russo-phobia and is utterly incompetent in just about any field he mentions in his drivel passed as an "opinion". It is an "opinion", alright, and it carries the same weight as my opinion on the issue of proctology or gynecology. The only difference between me and Mr.Gilmore--I do not speak on the subjects I have no clue about. I, as well as many other normal people, consider this to be uncultured and arrogant. But Gilmore is not alone here--he is a typical representative of North American so called "intellectual elite", which is neither intellectual nor elite but whose "opinions" are pushed on unsuspecting public as a noteworthy analysis. 

Make no mistake, Russia is no angel here either, Russia has her own share of "specialists" and "intellectuals" who do exercise their freedom of speech in all kinds of media outlets. But what is also true, and it is especially true for Russia's establishment media, Russians are on the order of magnitude more aware and knowledgeable about US (and Canada) than it is the other way around. Sure, one may see an opinion piece on the US which will be less than flattering (and often deservedly so) but it will not be filled with hatred towards American people, let alone with open bullshit and outright lies presented as a fact. In this sense, visceral hatred of North American "educated" class towards Russia and Russians is unique and borders on a paranoia and a very popular liberal delusion that thoughts may create a reality. But as old Oriental proverb goes: it will not get sweeter in the mouth by repeating the word sugar one hundred times. Russia is not going to collapse from depicting her as what she is not. Russophrenia is a cruel illness.

We all know that US "journalism" is dead. Hence the rise of the alternative media. Today this US "journalism" field is populated by ego-maniac hacks who decided that they are the ones who have the right to manipulate rather than inform and they seem totally content with the fact that most of them are human and professional failures in any human field which requires talent, knowledge and dedication--activities which lead human to what we all live for in the end--the pursuit of the truth since there is no happiness without it. Moreover, they get paid, often very handsomely, for spreading the lies and BS and in this case Boston Globe is right on the money--it delivered what it was paid to do: an opinion of a plumber on gynecology. I, meanwhile, am off to Russia, which, as we all know, is about to collapse and is crude drunk hooligan. Hey, that's partially true, Russians suck at football but, boy, they sure as hell know how to put up a fight.         

Parts Of Moscow. Sure Looks Like A Third World City;-))