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Coalition Strikes Destroy Islamic State Boats Fleeing From East Mosul

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In three days of operations that began Jan. 18, coalition forces struck 90 watercraft and three barges on the Tigris River in Mosul, Iraq, U.S. Central Command officials reported Saturday.

Many of these watercraft were being used to ferry Islamic State of Iraq and the Levant fighters and equipment across the river from East Mosul to West Mosul in an attempt to escape the Iraqi security forces as they continued to clear the remaining portions of East Mosul, officials said.

Iraqi security forces secured the Eastern bank of all five bridges across the Tigris River in Mosul during the past week of clearing operations, they added, making it difficult for ISIL fighters to flee.

ISIL Fighters Desperate

“We believe this was a desperate attempt to retrograde ISIL fighters now that the Iraqi security forces own the eastern bank of every bridge in Mosul,” said Air Force Col. John L. Dorrian, spokesman for Combined Joint Task Force Operation Inherent Resolve. “This is one more example of how the coalition is supporting the military defeat of ISIL by launching airstrikes while Iraqi military complete the clearance of eastern Mosul.”

Since the operation to liberate Mosul began Oct. 17, the coalition has destroyed at least 112 watercraft on the Tigris River in Mosul, officials said, with several more damaged or destroyed outside of the city.


Oregon Senators Urge Feds To Reconsider Deregulating Genetically Engineered Plant

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US Senators Ron Wyden and Jeff Merkley wrote to federal officials this week to express concerns about the deregulation of a genetically engineered plant that threatens Oregon’s agriculture, recreation and grass seed industry.

The senators’ letter to Acting Agriculture Department Secretary Michael Scuse follows the announcement this week from the department’s Animal and Plant Health Inspection Service that it would deregulate Scotts Company’s and Monsanto Company’s ASR368 Creeping Bentgrass.

“It is surprising and concerning that the government would recommend deregulation of an invasive, genetically engineered plant when eradication measures have failed and there are significant economic and ecological concerns,” Wyden and Merkley wrote, citing concerns raised both by the Oregon Department of Agriculture and scientists at Oregon State University.

Contaminated grasses have been collected near the Crooked River National Grassland in Jefferson County. And more than 80,000 acres of farmland in Malheur County continues to be inspected for ASR368. Deregulation would shift the responsibility for mitigation on the local weed control board or even individual farmers in a county working to improve its economy.

Also at risk if Oregon’s grass seed crops are genetically contaminated by ASR368 is the state’s grass seed industry centered in Linn County, according to the senators. According to the Oregon Seed Council, grass seed production brings in $300 million and drives more than $1 billion in economic activity in Oregon.

Saudi Arabia: Two Terrorists Killed, Another Two Arrested In Jeddah

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By Muhammed Al-Sulami

Two dangerous terrorists were killed and another two arrested in dramatic security operations in Jeddah on Saturday.

After a pre-emptive operation by security forces two terrorists in Al-Harazat District, in south east Jeddah, were killed after they blew themselves up after refusing to surrender to police calls, the Interior Minisry’s spokesperson said.

He added that the authorities arrested another two, a husband and his wife, in the Naseem District.

Security sources told Arab News that the security authorities got information on the presence of a group of terrorists at a house in Al-Harazat District. After an investigation, the residents of the house turned out to have a link to another terrorist living in Naseem District, who used to come to the house together with his wife.

The person also turned out to be a former terrorist who was imprisoned for eight years but released after less than two years. He was the one who rented the house in Al-Harazat at least two months ago, to be used as a hideout for the terrorist cell; he used his wife in an attempt to avoid the landlord and neighbors becoming suspicious.

The security forces cordoned off the two hideouts and arrested the first person, a Saudi citizen with his Pakistani wife, 19, in their apartment in Naseem District. After searching the house, the security forces found a ready-to-use explosive belt, a locally-made bomb, together with a machine gun with live ammunition.

The security forces also cordoned off a house located in Al-Harazat before Al-Fajr prayer time early Saturday. The security forces asked the terrorists to surrender but they rejected the order and initiated a shootout with the security men, who immediately responded.

When the security men of the special emergency forces tried to storm the house, the terrorists detonated the explosive belts they were wearing; thanks to the vigilance of the security men, the terrorists were killed while no others injured from the citizens. The explosion led to extensive damage to the house but no injuries occurred among the security men or citizens.

Eyewitness told Arab News that the security forces cordoned off the district during Fajr prayer time, and banned citizens from approaching the location for their own safety. They said the shootout with the security men continued for a long period of time, until the big explosion that shook neighboring houses.

After the incident, the security men were greeted with an enormous welcome and applause from the citizens of the district, the eyewitnesses said.

The security spokesman of the Ministry of Interior, Maj-Gen. Mansour Al-Turki, said the hideout at Al-Harazat was used as a lab for making explosive belts and bombs.

He said the man arrested at the second hideout, in Naseem District, was linked to those in the Al-Harazat property. His name is Husam bin Salic bin Samran Al-Juhani, a Saudi citizen, and claimed the Pakistani women, Fatma Ramadan Balushi Ali Marada, was his wife. In the apartment, the security men found a machine gun, a bag primed with explosives and other items.

Security authorities are still collecting evidence from the two locations and conducting investigations with the arrested persons. All details and identities of the terrorists will be announced later, Al-Turki said.

Modi Has Big Hand In Obama’s Success On India Front – Analysis

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Silencing both critics and skeptics, Modi had categorically stated that “relations between the two countries cannot be determined or be even remotely influenced by incidents related to individuals.”

By Harsh V. Pant

Prime Minister Narendra Modi was one of the few foreign leaders whom the outgoing US President Barack Obama called up ahead of Donald Trump’s inauguration as the President of the United States. While the two reviewed “all round progress” in bilateral relations, Modi reportedly thanked Obama for strengthening the strategic partnership between the two countries. As he leaves office, the outgoing US ambassador Richard Verma has described the period since the Modi government came to power as “the two best years we’ve ever had.” There is indeed a new momentum in bilateral ties and strong US-India relations is one the few successes of Obama whose performance otherwise has been quite lacklustre on the foreign policy front. But when he had started eight years back, this was not the Obama that India had encountered.

The Indo-US relationship saw unprecedented progress during the Presidency of George W. Bush. When George W. Bush repealed the Anti-Ballistic Missile Treaty, India supported America’s missile defence plans. It even offered military bases to Washington for waging the ‘war against terror’ in Afghanistan. The Indian Navy escorted American ships in the Indian Ocean relieving the US Navy from its constabulary services in the region. After the fall of Saddam Hussein, India considered sending Indian troops to Iraq: not under the United Nations but alongside the US. Both nations agreed on a new framework for defence cooperation in 2004, signed a maritime cooperation agreement in 2005 and by 2007, India had started purchasing major defence equipment such as amphibious ships, maritime reconnaissance aircraft and heavy transport aircrafts from the US. This process culminated in the landmark Indo-US civilian nuclear energy pact, helping India to achieve a major strategic goal: a de facto acceptance of India’s status as a nuclear weapon state.

Compared to the Bush era, the India-US strategic partnership lost some of its momentum in the early years of the Obama administration. There were indications of trouble even as Obama was on his way to the White House. As a senator, Obama had opposed the civilian nuclear agreement. He also, in formulating his Afghanistan policy, tried to rehyphenize India and Pakistan into one single bracket bringing Kashmir back in the agenda, which drew a lot of criticism from New Delhi. And most importantly, the idea of a Sino-US condominium to manage regional affairs (referred to as the G-2) which Obama took very seriously in his early years was contested heavily in New Delhi. In fact, in 2009 the US officials were indicating to their Indian counterparts their reluctance to pursue any balance of power politics in the region. In India, this was seen in strong contrast to the more muscular China policy of George W. Bush and the growing bonhomie between the two countries brought back the nostalgia of the first term of the Clinton Presidency when India had become a joint target of both US and China. Even when a course correction occurred with the announcement of a ‘pivot’ to Asia, the perception of New Delhi’s vulnerability in the face of a US-China condominium had gained traction in the minds of Indian decision-makers.

Strategic uncertainty and the perception of American decline also allowed the Congress party’s residual anti-Americanism and nostalgia for non-alignment to surface once again. Many in the Congress were not in tune with Manmohan Singh’s efforts to realign India with the US. During negotiations for the nuclear deal, Manmohan Singh put his foot down and the Congress Party had no other option but to rally behind the Prime Minister. In his second term, however, Singh’s position had weakened a lot, both due to the seemingly never ending corruption cases against his government but also due to increased interference from Congress the high command. The signals sent out by Obama administration in its first two years of power and the weak leadership of Manmohan Singh in his second term resulted in a drawdown in Indo-US relationship and their divergence in concretely responding to the strategy of pivot.

The election of Modi to India’s Prime Ministership was the decisive jolt that the Indo-US relationship needed. Within three months of assuming office, he had his first summit level meeting with Obama. Contrary to popular belief that Modi would not be able to leave behind the past of his rather uncomfortable relationship with the US on denial of visa, he has been diplomatically adept at engaging the US. Silencing both critics and skeptics, Modi had categorically stated that “relations between the two countries cannot be determined or be even remotely influenced by incidents related to individuals.” He considers Indo-US relationship as one between natural allies.

Like his predecessor Manmohan Singh, Modi’s reading of Asian strategic environment is also underlined by a feeling of strategic uncertainty. However, according to him, this should translate into more responsibility for countries like India. This emphasis on responsibility has been quite different from that of the previous government. Also, while he wants to improve relations with Beijing, Modi has been forthright in expressing India’s concerns. On his visit to Japan, taking a shot at China’s policies in the East and South China Seas, he said that some states still follow the 19th century mindset of expansionism. He also emphasized the freedom of navigation in those seas during his speech at the UN general assembly. However, his deliberations with Barack Obama have sent the strongest signals in this regard.

The joint statement issued by the two leaders underscored that peace and security in the Asia-Pacific and China’s increasing assertiveness in the region figured prominently in the dialogue. The joint statement expressed concerns over the “rising territorial disputes” and threats to freedom of navigation and maritime security. Taking aim at China, the two leaders also ‘called upon all parties to avoid the use, or threat of use, of force in advancing their claims’. To achieve these objectives, the need for complementing each other’s Asia-Pacific strategies was also underlined: ‘Noting India’s “Act East” policy and the United States’ rebalance to Asia, the leaders committed to work more closely with other Asia Pacific countries through consultations, dialogues, and joint exercises’.

This was a break from the UPA era, when India remained obsessively shy of any engagement with the US on its ‘pivot’ to Asia. The India-US defense relationship also received a major push. The two leaders agreed to renew the 2005 Defence Framework Agreement for another ten years and the joint statement called upon both parties “to treat each other at the same level as their closest partners.” Unlike under the UPA when military diplomacy with US had fallen off the grid, Modi’s visit helped resuscitate struggling mechanisms such as the Pol-Mil dialogue and more importantly the DTTI initiative. India expanded its maritime cooperation with the US evident in the commitment to upgrade the Malabar series of exercises. In his very first visit to the US, Modi clearly filled many of the gaps left by the UPA in Indo-US relations in general and New Delhi’s commitment to strategic rebalancing in particular.

In a significant gesture signaling US recognition of India’s rising power, President Obama visited New Delhi as the chief guest of the Republic Day parade on January 26 earlier this year. The visit helped in resolving the logjam over civilian nuclear cooperation by settling the controversial nuclear liability issue between the two countries. The two states also decided to start co-development and joint production of military equipment under the Defence Trade and Technology Initiative (DTTI). Four pilot projects have been identified: Raven mini UAVs, mobile hybrid power source, chemical/bio protection gear, roll on-roll off intelligence and surveillance modules for C-130J aircraft. By the end of Obama’s term, the US had designated India as a ‘Major Defence Partner’ – a status that puts India on a par with America’s closest allies.

Beyond bilateral issues, the two states are now much more in sync on larger regional issues. The “US-India Joint Strategic Vision for Asia-Pacific and the Indian Ocean” articulated by Obama and Modi in 2015 is the first comprehensive enunciation of a collaborative approach to regional security issues. The statement underlined the fact that cooperation between the two largest democracies in the region is “indispensable to promoting peace, prosperity and stability”. That the concurrent tensions in the South China Sea found an emphatic resonance in the document indicates that a convergence of interests and strategies to manage China’s increasing assertiveness in the region is now in the offing. In a veiled warning to China, the document clearly stated that “regional prosperity depends on security. We (India and US) affirm the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea.” The two countries also indicated their preferences for negotiated solutions of territorial and maritime disputes in the region calling upon all stakeholders to “void the threat or use of force and pursue resolution of territorial and maritime disputes through all peaceful means, in accordance with universally recognized principles of international law, including the United Nations Convention on the Law of the Sea.” Being the first instance of India and the US issuing joint vision on the Indo-Pacific, it underscored that the concerns of the region have attained special relevance in Indo-US bilateral relationship.

Obama can certainly look back with a sense of satisfaction at his accomplishment on the India front. But it is also a warning to many Indians that the start of a new US Presidency is hardly is not likely to reveal much about how it might end.

This article was first published in swarajyamag 

Why Baboon Males Resort To Domestic Violence

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“Desperate times lead to desperate measures,” so the saying goes, and a new study finds male baboons are no exception.

Some baboon males vying for a chance to father their own offspring expedite matters in a gruesome way — they kill infants sired by other males and attack pregnant females, causing them to miscarry, researchers report.

The behavior reduces their waiting time to breed with pregnant and nursing females, who otherwise wouldn’t become sexually available again for up to a year.

The perpetrators are more prone to commit domestic violence when forced to move into a group with few fertile females, said first author Matthew Zipple, a graduate student in professor Susan Albert’s lab at Duke University.

Researchers studying a baboon population around Amboseli National Park in southern Kenya found that immigrant males were responsible for roughly 2 percent of infant deaths and 6 percent of miscarriages between 1978 and 2015. But when cycling females were few, the death rates more than tripled.

“In situations where males have few opportunities, they resort to violence to achieve what’s necessary to survive and reproduce,” Zipple said. “When reproductive opportunities abound, this behavior is less frequent.”

The findings, appearing online Jan. 18 in Proceedings of the Royal Society B, come from a long-term study of wild baboons monitored on a near-daily basis since 1971 at Amboseli.

At any given time, a troop of baboons typically contains one or two newly arrived males that have left the group where they were born in search of opportunities to reproduce and pass on their genes elsewhere.

While combing through decades of baboon census records, the researchers noticed a mysterious spike in infant deaths and lost pregnancies in the two weeks after a new male arrives in a troop.

One and 2-year-olds weren’t affected, suggesting the males weren’t engaging in random acts of cruelty, but were targeting pregnant females and nursing infants in particular.

Other studies of animals including baboons, lions, dolphins and rodents have documented infanticide, but rarely feticide, said Alberts, chair of evolutionary anthropology at Duke.

Amboseli researchers witnessed two killing sprees of infants and unborn babies at the hands of separate males in the 1980s, but they were presumed to be isolated incidents until now.

Over the years researchers have proposed several possible reasons why males might kill infants of their own species. One long-standing hypothesis argues that the behavior makes females fertile again faster.

Killing fetuses reduces a male’s waiting time too, the researchers said.

A baboon male would normally have to wait at least a year for a pregnant or lactating female to finish gestating and nursing her infant and resume cycling for a chance to sire her next offspring. But with no baby to gestate or feed anymore, females that suffered a miscarriage or the death of an infant were ready to conceive again within 41 days.

Most killer males went on to mate with the mothers of their victims, the researchers found.

A minority of male immigrants were to blame for the killings. The most common culprits were those who quickly rose to one of the top three spots in the male pecking order.

Time is of the essence to go-getter males. Those who bite and bully their way to the top get to monopolize most of the mating, but only so long as they maintain their high rank.

To take advantage of the perks of his position a newly dominant male has to move quickly, Alberts said. Even the most competitive males only manage to reign for 12 months on average before they’re overthrown and lose their edge in the mating market.

“They’ve got a pretty short window,” Alberts said.

Shortages of fertile females were particularly common in times of food scarcity, when baboon troops distance themselves from each other and females take 15 percent longer between successive births — which means males who don’t kill have even longer to wait.

“It’s not just who they are, it’s the circumstances they find themselves in that makes the difference,” Zipple said.

France: Le Pen Predicts Domino Effect After Brexit

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French far-right presidential candidate Marine Le Pen said on Saturday, January 21 that Britain’s vote to leave the European Union would have a domino effect across the bloc, Reuters reports.

Le Pen, head of the anti-EU, anti-immigrant National Front (FN) and seen by pollsters as highly likely to make a two-person runoff vote in May, has marked out Europe as a major plank in her programme with broadsides at the EU and the euro currency.

“We are experiencing the end of one world and the birth of another,” she told a gathering of far-right leaders from Germany, France, Italy and the Netherlands in the German city of Koblenz one day after U.S. President Donald Trump took office.

“I don’t say every country has to leave the euro… But we have to leave the possibility if a country wants to leave,” she said to laud applause, adding that the election of Trump was a “bigger embarrassment” to neo-liberals.

Russian Efforts To Force Muslim Minorities To Assimilate Leading Many To Become Radicals – OpEd

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The pressures Moscow is now applying to Tatars and other Muslim minorities to learn Russian and assimilate is having an unintended and unwelcome consequence, Damir Iskhakov warns. By cutting these peoples loose from their traditional cultural moorings, Moscow is opening the way for many to become Islamist radicals.

Speaking at recent meeting of the Third Capital Club in the Tatarstan capital reported today on the Russkaya liniya portal, the Kazan historian said that “the assimilation of the Tatars not only linguistically but with the loss of ethnic self-consciousness frequently leads Tatars to become Wahhabis” (ruskline.ru/news_rl/2017/01/21/tatary_i_ideologiya_russkogo_mira/).

As some do not appear to understand, “a health ethnic self-consciousness permits the Tatars to defend against the influence of Wahhabism;” and thus Moscow’s assimilationist policy is having exactly the opposite effect on national unity and stability than the one its authors routinely claim.

The Kazan historian said he grew up in a mixed Russian-Tatar village and thus understands how both Russians and Tatars feel about language and identity. And he argued that if one examines how Russians have organized their relations with the Volga Tatars, one can see how they want to do so with other ethnic communities.

“The Tatars,” Iskhakov said, “are in terms of religion part of Islamic civilization, but at the same time they are also part of Russian civilization, although not completely so.” And he stressed that “Muslims will not be able to cooperate with other peoples” if the latter view them as subordinate. Relations must be based on equality.

According to the Kazan historian, “Russians want to see Russia as an ethnic Russian nation state.” As a Tatar nationalist, he continued, he “sees the present policy in the country as an effort to form a civic Russian nation with one state language” as a move toward “the assimilation of the non-Russian peoples.”

In the course of his remarks, Iskhakov, who was a member of the nationalist Tatar Social Center from 1988 to 1882 before breaking with it and becoming a leader of the World Congress of Tatars, recalled that in the early 1990s, there were discussions in Kazan about “dividing Tatarstan into two parts, a Russian and a Tatar,” in order to preserve the Tatar language and avoid angering Russians.

Although something similar was tried in Bashkortostan, these discussions did not lead anywhere in Tatarstan, although Tatars occasionally recall them and view the idea as one like the arrangements in Belgium where the Flemmish and Walloons live in separate cultural and linguistic areas but within a single state.

As a result of the failure to move in that direction, Iskhakov said, “today as at the start of the 1990s, the cultural-linguistic space of Tatarstan remains Russian-speaking.” But that does not mean Tatar instruction should be cut back but rather the reverse, so that Russians will be more competitive and so Tatars won’t be radicalized.

At present, however, the trend is going in the other direction, something that means that while “the Tatars are well acquainted with the Russian world, the Russians know much worse the Tatar world” in which they find themselves.

The Life Of The Party: Seven Truths For Democrats – OpEd

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The ongoing contest between the Hillary Clinton and Bernie Sanders wings of the Democratic Party continues to divide Democrats. It’s urgent Democrats stop squabbling and recognize seven basic truths:

The Party is on life support. Democrats are in the minority in both the House and Senate, with no end in sight. Since the start of the Obama Administration they’ve lost 1,034 state and federal seats. They hold only governorships, and face 32 state legislatures fully under GOP control. No one speaks for the party as a whole. The Party’s top leaders are aging, and the back bench is thin.

The future is bleak unless the Party radically reforms itself. If Republicans do well in the 2018 midterms, they’ll control Congress and the Supreme Court for years. If they continue to hold most statehouses, they could entrench themselves for a generation.

We are now in a populist era. The strongest and most powerful force in American politics is a rejection of the status quo, a repudiation of politics as usual, and a deep and profound distrust of elites, including the current power structure of America.

That force propelled Donald Trump into the White House. He represents the authoritarian side of populism. Bernie Sanders’s primary campaign represented the progressive side.

The question hovering over America’s future is which form of populism will ultimately prevail. At some point, hopefully, Trump voters will discover they’ve been hoodwinked. Even in its purist form, authoritarian populism doesn’t work because it destroys democracy. Democrats must offer the alternative.

The economy is not working for most Americans. The economic data show lower unemployment and higher wages than eight years ago, but the typical family is still poorer today than it was in 2000, adjusted for inflation; median weekly earning are no higher than in 2000; a large number of working-age people – mostly men – have dropped out of the labor force altogether; and job insecurity is endemic.

Inequality is wider and its consequences more savage in America than in any other advanced nation.

The Party’s moneyed establishment – big donors, major lobbyists, retired members of congress who have become bundlers and lobbyists – are part of the problem. Even though many consider themselves “liberal” and don’t recoil from an active government, their preferred remedies spare corporations and the wealthiest from making any sacrifices.

The moneyed interests in the Party allowed the deregulation of Wall Street and then encouraged the bailout of the Street. They’re barely concerned about the growth of tax havens, inside trading, increasing market power in major industries (pharmaceuticals, telecom, airlines, private health insurers, food processors, finance, even high tech), and widening inequality.

Meanwhile, they’ve allowed labor unions to shrink to near irrelevance. Unionized workers used to be the ground troops of the Democratic Party. In the 1950s, more than a third of all private-sector workers were unionized; today, fewer than 7 percent are.

It’s not enough for Democrats to be “against Trump,” and defend the status quo. Democrats have to fight like hell against regressive policies Trump wants to put in place, but Democrats also need to fight for a bold vision of what the nation must achieve – like expanding Social Security, and financing the expansion by raising the cap on income subject to Social Security taxes; Medicare for all; and world-class free public education for all.

And Democrats must diligently seek to establish countervailing power – stronger trade unions, community banks, more incentives for employee ownership and small businesses, and electoral reforms that get big money out of politics and expand the right to vote.

The life of the Party – its enthusiasm, passion, youth, principles, and ideals – was elicited by Bernie Sanders’s campaign. This isn’t to denigrate what Hillary Clinton accomplished – she did, after all, win the popular vote in the presidential election by almost 3 million people. It’s only to recognize what all of us witnessed: the huge outpouring of excitement that Bernie’s campaign inspired, especially from the young. This is the future of the Democratic Party.

The Party must change from being a giant fundraising machine to a movement. It needs to unite the poor, working class, and middle class, black and white – who haven’t had a raise in 30 years, and who feel angry, powerless, and disenfranchised.

If the Party doesn’t understand these seven truths and fails to do what’s needed, a third party will emerge to fill the void.

Third parties usually fail because they tend to draw votes away from the dominant party closest to them, ideologically. But if the Democratic Party creates a large enough void, a third party won’t draw away votes. It will pull people into politics.

And drawing more people into politics is the only hope going forward.


US Dollar Reigns Supreme For Developing World, But Not For Long – Analysis

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The developing world fails to enact structural reforms, cannot borrow in their currencies, and depends on the US dollar.

By Will Hickey*

In Biblical terms, original sin denotes the fall of man after Adam eats forbidden fruit from the tree of knowledge in the Garden of Eden. In economics, the metaphor refers to the developing world’s inability to borrow in their own currencies, as described by Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza. Developing nations overleverage their economies to external foreign debt, most often, the US dollar, due to an optimistic perception of global monetary stability and low, long-term interest rates.

With dollar interest rates near zero for the past eight years, dollar indebtedness has soared in many developing countries, and the piper will soon call.

Many developing countries confront too many protectionist regulations and export fixated mindsets that prevent not only foreign investment formation but also preclude the development of real endogenous growth initiatives, including entrepreneurial innovation and domestic small business growth.

Hot money inflows with a low interest-rate dollar since 2007 and the global debt crisis have allowed developing nations to avoid undertaking economic reforms to structural and systemic problems. These structural issues encompass: too many people working for government in redundant jobs, a plethora of inefficient state-owned companies, backward-looking education policies, and layers of stifling regulations on small businesses at all levels.

Countries are undertaking many desperate headline-grabbing measures to avoid restructuring their current systems, lest political support be lost. Consider a few fiscal gimmicks:

  • Quantitative easing or printing more money, as tried by most developing countries, including Turkey and Vietnam, to cheapen labor and exports.
  • Tax amnesties, recently Indonesia and Argentina to bring back money held abroad.
  • Issuances of dollar bonds, as in Zimbabwe, to shore up deficient foreign exchange holdings.
  • Oil production cuts among OPEC members to re-boost petrodollar receipts as oil and other commodities are priced in dollars – pre-war Iraq used euros, and Iran, while under sanctions and now, tries using other currencies, but most sellers demand conversion into dollars.
  • Meanwhile, India’s chaotic demonetization of 500 and 1000 rupee notes is a step towards economic change.

Such mechanisms, intended to restore money in legitimate economic systems, are not a panacea in lieu of much needed structural reforms. Put simply, a currency devaluation or any of its proxies are a method for balancing budgetary deficits due to a nation’s failure to enact deep structural reforms and expect sacrifices of citizens. All currency devaluations underway today are against the dollar only. Some countries, such as Ecuador and Zimbabwe have “dollarized” their economies, either via outright dollarization – that is, legal use of the dollar in all transactions – or via pegs, like Hong Kong. Both scenarios present an expensive economic straightjacket by importing US monetary policy that they can ill afford.

If any devaluation is ultimately recompensed against a baseline dollar value, then a zero sum game ensues in an atomized world of unfettered communication with instant market adjustments. In other words, devaluations are quickly observed by all, not just bankers and businessmen, as in the pre-internet era.

Devaluations can be both implicit and direct. Nigeria and Venezuela used implicit devaluations with official and black market exchange rates. Egypt and Argentina tried direct,  telegraphing devaluations well in advance. All people seek to maintain a baseline value of their wealth against depreciation, and the dollar serves this function supremely. For example, in Indonesia, a lack of domestic dollarized investment vehicles hindered the repatriation of assets abroad returning freely as part of their recent tax amnesty.

Simply, few in the developing world trust their own currencies. The wealthy want dollars, and these nations have created de-facto dollarized economies.

The Chinese currency is pegged to the dollar, but on a sliding scale that has recently trended downward with what bankers have called “stealth devaluation.” Nonetheless the Chinese are not fooled and are so desperate to get their money out of China that property bubbles have emerged in cities like Vancouver or London where prices have increased by almost 50 percent since 2011. Another tactic is “smurfing,” or using another person’s bank account to evade government limits on transfers.

The communist response has been to clamp down harder on capital outflows while talking about eventually revamping the export economy in general terms, floating more government loans to non-performing state-owned enterprises. China’s priority is political stability at all costs, not the currency.

Choking: A rising dollar reduces foreign sales and makes US exports less affordable (Data: S&P Dow Jones Indices, S&P Global Market Intelligence, as of June 2016)

Choking: A rising dollar reduces foreign sales and makes US exports less affordable (Data: S&P Dow Jones Indices, S&P Global Market Intelligence, as of June 2016)

Effectively, a gigantic confidence game is forming, and the 2016 International Monetary Fund Special Drawing Rights reweighting only reaffirmed this trend with dollar preeminence barely unchanged at a plurality of 42 percent while the euro took the brunt of reweighting to make room for the Chinese renminbi as a new reserve currency. The move was political on the part of the IMF, deigned to fete Chinese nationalism, as the renminbi does not meet all conditions of a ‘reserve currency’.

Any reserve currency pegged to another currency, or basket of currencies via political “reweightings,” serves only to consolidate dollarization status quo, not minimize it. The dollar still serves as majority value.

Nonetheless, most nations are now levered to the US dollar, a currency with significant flaws in its own underpinnings, namely a $20 trillion national debt, expected to grow further with the Trump presidency and his infrastructure spending plans, not to mention a US Federal Reserve that seeks to raise interest rates beset in a world of zero and even negative rates. No other nation could survive economically with such compromised policies.

No one knows exactly how a dollarized world against a low-interest rate environment will eventually play out. Additionally, there are only so many physical dollars in circulation. A run on the world’s dollar supply by all countries in tandem could see a sudden unwelcome surge in the currency’s value, ruining many private and government investors who originally issued dollar debts but receive payments in local currency, ergo the concept of “original sin.” The currency gurus of Eichengreen, Rogoff, and Hanke each have their macroeconomic theories of what might happen. In truth, surprising consequences could be in store in 2017.

For example, a soaring dollar combined with a glut of global manufacturing capability in developing countries could quickly magnify events, as it could turn foreign export markets savagely competitive during a time of nascent economic recovery.

Dollar hegemony is here to stay, a form of neocolonialism, tethering the developing world, and increasingly the middle-income world, to US economic policy. Economies like those of Venezuela, Iran, Nigeria, Turkey and Indonesia are based on dollars for energy, infrastructure, trade and finance. The countries have little choice but to continue using a “too big to fail” foreign currency. The trends are being magnified by quantitative easing in the developed world as the euro reaches parity with the dollar, while the pound and yen slump. Countries seek to improve their economic lot against the dollar’s goalposts, and it is not in the interest of many – those pegged to the dollar, their elites or exporters – to weaken it.

The statement made by US Treasury Secretary John Connally in 1971 to other finance ministers – “The dollar may be our currency, but it’s your problem” – holds true today.

*Will Hickey is the author of Energy and Human Resource Development in Developing Countries: Towards Effective Localization, Macmillan, 2017. 

Children With Asthma Could Be At Higher Obesity Risk

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Children with asthma may be more likely to become obese later in childhood or in adolescence, according to new research published online ahead of print in the American Thoracic Society’s American Journal of Respiratory and Critical Care Medicine.

In “Effects of Childhood Asthma on the Development of Obesity among School-Aged Children,” researchers report that young children with asthma were 51 percent more likely to become obese over the next decade as children who did not have asthma. The researchers also found that the use of asthma rescue medications reduced the risk of becoming obese by 43 percent.

“Asthma and obesity often occur together in children, but it is unclear whether children with asthma are at higher risk for onset of obesity or whether obese children develop asthma, or both, said Zhanghua Chen, PhD, lead study author and a postdoctoral research associate of preventive medicine at the Keck School of Medicine at the University of Southern California. “Our findings add to the literature that early-life asthma history may lead to increased risk of childhood obesity.”

In their prospective study, Dr. Chen and her colleagues analyzed the records of 2,171 kindergarteners and first graders who were not obese at the time they enrolled in the Southern California Children’s Health Study (CHS). At enrollment, 13.5 percent of the children had asthma. The children were followed for up to 10 years (average: 6.9 years). During that time, 15.8 percent of all the children enrolled in the study developed obesity. Researchers confirmed study results in a different group of children, recruited in the 4th grade to participate in the CHS.

The researchers accounted for a number of factors that might have biased results, including whether the children had health insurance or were overweight at enrollment, ethnicity, family income, smoking exposure at home and physical activity.

These confounding factors also did not explain the finding that the use of rescue asthma medications appeared to reduce the risk of developing obesity.

Frank D. Gilliland, MD, PhD, senior study author and Hastings Professor of Preventive Medicine at the university, said the fact that rescue, but not controller, asthma medications reduced obesity was a surprise and warranted further study. He added, however, that overall study findings reinforce the importance of early diagnosis and treatment of asthma, which may short circuit “the vicious cycle of asthma increasing the development of obesity and obesity causing increased asthma symptoms.”

Study limitations include relying on parents to report asthma diagnosis, limited information about exercise and no information about diet. Still, study findings, the authors said, suggest commonsense strategies for children with asthma that can improve their overall health while reducing the risk of obesity. Among those strategies, they said, are eating a healthy diet, increasing physical activity and achieving asthma control through medication and better understanding of symptom triggers.

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About the American Journal of Respiratory and Critical Care Medicine (AJRCCM):

The AJRCCM is a peer-reviewed journal published by the American Thoracic Society. The Journal takes pride in publishing the most innovative science and the highest quality reviews, practice guidelines and statements in pulmonary, critical care and sleep medicine. With an impact factor of 12.996, it is the highest ranked journal in pulmonology. Editor: Jadwiga Wedzicha, MD, professor of respiratory medicine at the National Heart and Lung Institute (Royal Brompton Campus), Imperial College London, UK.

About the American Thoracic Society:

Founded in 1905, the American Thoracic Society is the world’s leading medical association dedicated to advancing pulmonary, critical care and sleep medicine. The Society’s 15,000 members prevent and fight respiratory disease around the globe through research, education, patient care and advocacy. The ATS publishes three journals, the American Journal of Respiratory and Critical Care Medicine, the American Journal of Respiratory Cell and Molecular Biology and the Annals of the American Thoracic Society.

The ATS will hold its 2017 International Conference, May 19-24, in Washington, DC, where world-renowned experts will share the latest scientific research and clinical advances in pulmonary, critical care and sleep medicine.

Disclaimer: AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert system.

Managing Relations With The World’s Majority – Analysis

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By Robert J. Berg*

THE CHALLENGE: Being a superpower is not easy. One is expected to be a true global actor, addressing the issues of almost every country in ways that give recognition of individual needs and opportunities, and that allows for the development of mutual gains. President Obama is leaving important and constructive legacies with the majority of the world: the 120 countries that are neither rich nor very poor.

In the wake of the 2016 campaign for U.S. president, a lot of questions about America’s relations with Middle Income Countries were left unanswered. Do Americans really want to wall off Latin America? Is the U.S. helping Africa and Asia because of intrinsic interests in these areas, or as a reaction to China? Does the U.S. culturally understand that “those people” over there are now qualitatively different than their grandparents: their countries have a lot of high-quality leadership; the worst poverty in most of their countries is on the way to elimination; and there are greater opportunities for mutual gain?

Most fundamentally, does the U.S. recognize that the world is now mainly a middle class and emerging middle class world, and is our foreign policy attuned to this unprecedented situation? Most of the 120 or so countries in the middle would answer “No.” Latin America feels neglected by the U.S. while Africa and Asia wonder if the United States has the willingness and ability to follow-through.

THE CONTEXT: Donald Trump cannot afford a foreign policy in his first year that neglects the hot spots, big power relations, or the deterioration of European unity. But since the Middle Income Countries are our largest potential markets, the majority at the U.N., and in almost all cases actually want closer relations with the United States, he cannot afford to neglect them either — particularly when these countries see themselves as progressing while our closest allies stagnate.

Fortunately, the U.S. foreign policy infrastructure provides a strong base, so a well-run National Security Council managing larger vision and orchestrating departments (as opposed to its more recent proclivity to micro-manage, a strategy that guarantees only being able to focus on a limited number of countries at one time) can in the first 100 days set the stage for more meaningful relations throughout Latin America, Africa, and Asia.

The countries in the middle have been progressing for the past two decades in nearly all areas of importance, but this has not been well appreciated in U.S. policy. It is like parents not noticing when their kids become adults. The old ways of dealing with these countries — aid, Peace Corps, cultural missions — badly need updating. In many countries these old-style programs are looked upon as remnants of the Cold War. One reason China has made so much progress in these countries is that they are seen as engaging not in aid but in advancing mutual interests.

In fact, USAID, for example, has done many things of a progressive nature recently, such as fostering innovation and promoting local social entrepreneurship.

Aid in the future surely can continue to advance sectors of traditional concern — education, health, agricultural development — public policies that foster enterprise. But the stress will increasingly be to move to areas that more openly address mutual interests, that do not substitute for local organizations and local governance, and that can be clearly perceived as steps up from old aid. Aid that draws upon the strengths of U.S. universities, corporations and NGOs is preferable to aid that draws upon high-cost consulting companies. The end point should be longer lasting collaborations, not longer lasting contracts.

New development collaboration needs to address some key problems that have long been neglected, such as making good use of the largest generation of youth in history, of joint discovery of ways to foster broad-based employment, of finding environmental stability and of helping countries towards more equity, all true global problems in which we have large mutual interests.

Mature relations demand trade that is open and clearly seen to be in the mutual interests of the U.S. and these countries. Political leadership inside the U.S. to foster more open trading systems will be deeply appreciated in these countries.

U.S. policymakers need to more frequently ask ‘what do these countries have to offer us’ instead of thinking only what the U.S. has to offer them. The U.S. needs to foster cultural ambassadors from these countries to come to the United States. The United States also needs to build out the most successful inter-cultural program ever, the Peace Corps, so that citizens of talent in those countries can serve in deserving settings in the U.S.

At the same time as more mature socio-economic programs are pursued, the U.S. must remain true to its values regarding governance. There is little appetite to being lectured to about democracy and good governance, but there remain serious obstacles to sound and fair governance in a great many countries. Democracy is on the decline. Civil society is being repressed on all continents. There are increasingly serious conflicts due to climate, over-population and inequality. The U.S. has voiced concern about these matters, but has been too quiet about framing these as threats to political progress and human rights.

At stake in an increasing number of countries is security and stability itself, which surely should raise the interest of our business and other internationally attuned communities. It also should lead to far more widespread application of the lessons of conflict resolution and conflict prevention, as many of these countries are beginning to fray around the edges. Enhancing cultures of non-violence and mature reconciliation could be one of the most important U.S. contributions to security and progress in the decade ahead.

Of foremost importance, political leaders in these countries — while knowing that their country may have only the population of a major U.S. county or state — want political face time with U.S. leadership. They want to be treated with dignity and case-specific attention.

PRAGMATIC STEPS: The U.S. must become far better at managing relevant and mature relations with the Middle Income Countries, including giving leaders of these countries important face time.

In the first 100 or so days of the next administration, the White House should announce a set of sub-regional consultations with President Trump. The White House also should announce a team of high-level emissaries to meet with these countries. These can include former presidents and other highly respected citizens who can speak for the administration in learning exercises to help form new policy.

The National Security Council should launch a learning of the best lessons from bilateral commissions and other oversight processes to hone less labor intensive and more productive consultations. The revised federal budget should resource the State Department so that it can manage more high-level relationships concurrently (outgoing regional assistant secretaries now talk openly about the cut backs — not advances — in getting adequate staff even for old style relations, let alone what is now required).

Overall, many more Middle Income Countries can become best partners and best supporters in achieving trade and other international agreements. Fostering fuller asset values of these countries for the U.S. is doable and can be a lasting hallmark of the next administration.

About the author:
*Robert J. Berg
is a Distinguished Fellow at the Stimson Center.

Source:
This article was published by the Stimson Center.

South Korea Energy Profile: Heavily Dependent On Imports – Analysis

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South Korea was the world’s ninth-largest energy consumer in 2015, according to estimates from the BP Statistical Review of World Energy 2016.1 Because South Korea lacks domestic energy reserves, it is one of the top energy importers in the world and relies on imports for about 98% of its fossil fuel consumption. South Korea ranks among the world’s top five importers of liquefied natural gas, coal, crude oil, and refined products.2 South Korea has no international oil or natural gas pipelines and relies exclusively on tanker shipments of LNG and crude oil.

Despite its lack of domestic energy resources, South Korea is home to some of the largest and most advanced oil refineries in the world. In an effort to improve the nation’s energy security, oil and natural gas companies are aggressively seeking overseas exploration and production opportunities.

Source: U.S. Department of State

South Korea. Source: U.S. Department of State

South Korea’s highly developed economy drives its energy consumption, and economic growth is fueled by exports, most notably exports of electronics and semiconductors. The country also comprises one of the world’s top shipbuilding industries. Real gross domestic product (GDP) grew to 3.3% in 2014, up from 2.9% in 2013. However, GDP growth dropped to 2.6% in 2015 as demand in the country’s export markets weakened.3

South Korea’s economic growth following the 2008 global financial crisis was relatively resilient compared to weaker growth of the economies in other developed countries. However, South Korea’s economy is heavily dependent on export markets, particularly within Asia, which have experienced a slowdown in the past few years. Also, the country’s aging population is expected to dampen domestic demand for energy and the overall economic landscape.4

Although petroleum and other liquids, including biofuels, accounted for the largest portion (41%) of South Korea’s primary energy consumption in 2015, its share has been declining since the mid-1990s, when it reached a peak of 66%.5 This trend is attributed to the steady increase in natural gas, coal, and nuclear energy consumption, which has reduced oil use in the power sector and the industrial sector. Higher vehicle efficiencies have also reduced oil consumption (Figure 2).

Following Japan’s Fukushima disaster and South Korea’s problems with false safety certifications of nuclear parts in late 2012, the government scaled back its long-term reliance on nuclear power in the electricity portfolio from its first plan in 2008 to the most recent plan unveiled in early 2014.6 South Korea is attempting to balance its fuel portfolio to meet higher energy consumption, to moderate its nuclear power generation, to reduce greenhouse gas emissions, and to offset some fossil fuel imports. As part of this effort, the government is also promoting greater demand-side management, energy efficiency measures, and use of renewable energy.

Petroleum and other liquids

South Korea has a large oil refining sector, but the country relies almost entirely on crude oil imports to supply its refineries.

Overview

South Korea consumed 2.4 million barrels per day (b/d) of petroleum and other liquids in 2015, making it the 8th largest consumer in the world (Figure 3). Preliminary data shows that South Korean oil demand rose by nearly 160,000 b/d in 2016 as a result of support from lower oil prices in the transportation sector and greater use of liquefied petroleum gas and naphtha in the petrochemical sector. According to the Korea National Oil Company (KNOC), South Korea has a small amount of domestic oil reserves, but the country relies almost entirely on crude oil imports to meet its demand. Most of South Korea’s total petroleum and other liquids production of 79,000 b/d is from refinery processing gains, non-conventional liquids, and biofuels production.

According to the Oil & Gas Journal (OGJ), 3 of the 10 largest crude oil refineries in the world are located in South Korea, making it one of Asia’s largest petroleum product exporters.7 According to Facts Global Energy (FGE), South Korea exported about 1.3 million b/d of refined oil products in 2015, mostly in the form of middle distillates such as gasoil, gasoline, and jet fuel. Oil product imports, about 0.9 million b/d in 2015, were primarily naphtha and LPG.8 Because of increased demand in Asia during the past decade, South Korea’s exports of refined products have grown rapidly. The future growth rate of oil product exports will depend on demand from regional trading partners, which has been weak over the past few years, and on rising competition from new Asian and Middle Eastern refineries.

South Korea’s oil consumption level has fluctuated with its economic growth, oil prices, and the status of its export markets. Oil consumption grew at a rapid pace with economic growth in the 1990s, but then it fell following the Asian Financial Crisis of 1997. Oil consumption then rose steadily until 2007, but it dipped during the global economic downturn in 2008. Oil demand gradually rose from 2008 to 2015, and reports indicate that fuel oil demand is up some months in 2016 because of a hotter-than-normal summer and a temporary closure of some nuclear facilities in September.9

Naphtha, which is used for the country’s sizeable petrochemical and industrial sectors, accounts for about 42% of total oil product demand and is a primary driver of domestic demand growth.10 South Korea also uses liquefied petroleum gas (LPG) for its petrochemical industry. LPG demand, which accounted for 10% of petroleum product demand in 2015, is projected to increase in the next few years following the addition of two large propane dehydrogenation (PDH) plants in 2015 and 2016.11

Lower oil prices in 2015 and 2016 have spurred growth in transportation fuels, but South Korea’s oil demand growth outside of the petrochemical sector is limited in the long term because of the country’s declining population growth and aging demographics, greater energy efficiency measures, and competition from other fuels such as natural gas, coal, and nuclear power.

In 2015, South Korea imported nearly 2.8 million b/d of crude oil and condensate, making it the fifth-largest importer in the world. South Korea is highly dependent on the Middle East for its oil supply, and the region accounted for more than 83% of South Korea’s 2015 crude oil imports. Saudi Arabia was the leading supplier and the source of 30% of South Korea’s imports, followed by Kuwait at 14% of total crude oil imports (Figure 4).12

South Korea reduced its share of crude oil imports from Iran from 10% in 2011 to 4% by 2015 to comply with sanctions imposed by the United States and Europe. The sanctions that resulted from Iran’s disputed nuclear program severely limited Iran’s sale of crude oil and condensate on the international market. Russia and other Middle Eastern suppliers, such as Iraq, Qatar, and the United Arab Emirates, made up for South Korea’s lost imports from Iran through 2015. When Western sanctions were lifted on Iranian oil exports and its financial sector in January 2016, South Korea began increasing shipments of crude oil and condensate from Iran.13 According to estimated data, the amount of Iranian crude oil and condensate entering South Korea during the first 11 months of 2016 was more than double the volumes in the same period of 2015.14

Sector organization

The Korea National Oil Corporation (KNOC) is a state-owned oil company and the largest entity in South Korea’s upstream oil and natural gas sector. Through acquisitions of overseas companies and investments with major international and national oil companies, KNOC produced 137,000 b/d of oil and about 190 billion cubic feet of natural gas in 2015 in its overseas operations.15

Korea’s downstream sector includes several large international oil companies including SK Energy, the nation’s largest international oil company (IOC). SK Energy is the largest marketer of petroleum products, followed by GS Caltex, S-Oil, and Hyundai Oilbank. These companies have historically focused on refining, but some have put increasing emphasis on crude oil extraction projects in other countries. SK Energy also owns the largest stake in the Daehan Oil Pipeline Corporation (DOPCO), which exclusively owns and manages South Korea’s oil pipelines, although most of the country’s oil is distributed by tankers or trucks.

To compensate for the lack of domestic oil reserves and to secure more crude oil supplies, South Korea’s state-owned and private oil companies engage in many overseas exploration and production (E&P) projects. The Korea Petroleum Association (KPA) started the Korea-Oil Producing Nations Exchange (KOPEX) in 2006 to maintain good relations with oil-producing countries and to offer technology training to producing countries in the downstream sector. In addition, the South Korean government has provided financial support for the country’s upstream companies to win bids overseas on E&P projects through the Special Accounts for Energy and Resources (SAER), administered by KNOC.

To reduce South Korea’s dependency on foreign energy imports, the Ministry of Trade, Industry and Energy (MOTIE) set self-sufficiency targets for South Korean energy companies based on their domestic and overseas production levels each year since 2008. Almost none of South Korea’s overseas production has been shipped back to South Korea. South Korea received its first crude oil delivery of overseas production at the end of 2013. The NOC has accumulated massive debt in the past decade because it purchased several unprofitable assets in a high oil price environment, and the government reversed its energy policy.

Since early 2013, South Korea’s energy policy has moved away from self-sufficiency targets to reduce the debt-to-equity ratios (total debt to total assets) of the key energy companies such as KNOC, KOGAS, and KEPCO. KNOC’s debt-to-equity ratio has climbed sharply in recent years to 453% in 2015 from 168% in 2012. The government plans to divest some of KNOC’s global oil assets based on profitability and to set a debt-to-equity ratio of 177% by 2017.16

Exploration and production

Source: Korea National Oil Corporation

Source: Korea National Oil Corporation

South Korea has only one commercially producing field among its basins under exploration (Ulleung Basin, Yellow Basin, and Jeju Basin). Discovered in 1998, Donghae-1, Block 6-1, in the Ulleung Basin, has total proved reserves of 3.2 million barrels of ultra-light crude oil (condensates).17 Natural gas and associated condensate production from Donghae-1 began in 2004. On average, KNOC has produced less than 1,000 b/d of ultra-light crude oil (condensates) from the Donghae-1 natural gas field, representing a negligible portion of its 2.4 million b/d total petroleum consumption.18

Although new discoveries might improve domestic oil prospects, overseas exploration and production play an essential role in South Korea’s oil industry. The South Korean government has encouraged private E&P overseas through tax benefits and through the extension of credit lines to IOCs by the Korea Export-Import Bank. South Korea has also provided diplomatic aid in overseas negotiations. As of December 2015, KNOC has invested in 16 producing blocks and 8 fields under exploration in several countries.19

Source: Korea National Oil Corporation

Source: Korea National Oil Corporation

Downstream and refining

According to OGJ, South Korea had about 3 million b/d of crude oil distillation refining capacity at the end of 2016 and ranked sixth largest for refining capacity in the world (Table 1). The country’s three largest refineries are owned by SK Energy, GS Caltex, and S-Oil Corporation (partially owned by Saudi Aramco).

Table 1. South Korea’s oil refineries, as of December 2016
Owner Location Capacity
(barrels per day)
SK Innovation-Ulsan Ulsan 840,000
GS Caltex Corp. Yeosu 785,000
S-Oil Corp. Onsan 669,000
Hyundai Oil Refinery Co. Daesan 390,000
SK Innovation-Inchon Inchon 275,000
Total refining capacity 2,959,000
Source: Oil & Gas Journal

Korean refineries are increasingly producing light, clean oil products as a result of refinery upgrades in recent years. The high degree of sophistication of South Korean refineries results in high capacity utilization. As a result, South Korea is expected to remain a leading refiner in Asia, with significant exports to other Asian countries. Recently, South Korean refiners have faced the headwinds of slower demand in export markets in recent years, although lower oil prices boosted refining margins in 2015.

In 2014, several major South Korean refiners commissioned three condensate splitters, which are refinery units that convert condensate oil into naphtha for petrochemical use. Hyundai Oilbank and Lotte Chemical commissioned another 110,000 b/d splitter in September 2016, which brings South Korea’s total condensate splitting capacity to about 485,000 b/d.20 Most of the condensate imports are from Qatar. South Korea’s refiners have expressed interest in importing more condensate from the United States and Iran and have boosted imports from Iran in 2016.21

Petroleum and other liquids storage

To reduce volatility from oil supply disruptions and price fluctuations, South Korea holds strategic and commercial oil reserves. As part of the strategic reserves, KNOC held 94 million barrels of strategic crude oil and petroleum products inventories, plus international joint stockpiles, at nine storage facilities with 146 million barrels of capacity as of mid-2016. Other companies such as SK Energy, GS Caltex, S-Oil, and Hyundai Oilbank also hold stocks for industrial operations, according to the International Energy Agency.22

In response to South Korea’s diversification of its energy portfolio over the past few decades, oil companies not only upgraded refining facilities and increased upstream investment, but they also began investing in oil storage and alternative energy projects. As part of South Korea’s efforts to become a major liquids storage and trading hub in northeastern Asia, KNOC, through joint ventures with other firms, is building the country’s first three commercial oil storage facilities, which will hold a total capacity of 36.6 million barrels. The first facility, located in Yeosu in the southwestern region, came online in 2013, with 8.2 million barrels of capacity. The other two planned facilities will be built in Ulsan in the southeastern region of South Korea and will come online by 2025.23

Natural gas

South Korea is the second-largest importer of liquefied natural gas in the world behind Japan.

South Korea relies on imports to satisfy almost all of its natural gas demand, which has nearly doubled over the past decade. Domestic natural gas production is negligible and accounts for less than 1% of total consumption. South Korea does not have any international natural gas pipeline connections and must import all gas via LNG tankers. As a result, although South Korea is not among the top natural gas-consuming nations, it is the second-largest importer of LNG in the world after Japan.

Consumption

South Korea consumed an estimated 1.6 trillion cubic feet (Tcf) of dry natural gas in 2015, more than double the amount in 2000 (Figure 7). The city gas network, serving residential, commercial, and industrial consumers, accounted for about half of the natural gas sales in 2015, while power generation companies made up much of the remaining share. For the past decade, power generation has required a growing share of South Korea’s natural gas supply.24

Strong natural gas consumption growth between 2009 and 2013 was driven by electricity demand and economic growth. Natural gas consumption then fell by 17% between 2013 and 2015. Power generators turned to more coal and nuclear power starting in 2014. Nuclear facilities returned to service following a shutdown in 2012 because of safety problems, and global coal prices plummeted and became less expensive than imported natural gas. Industries chose to use less-expensive coal instead of natural gas. Despite recent lower demand, natural gas remains a key source of cleaner fossil energy for the country.

Sector organization

Korea Gas Corporation (KOGAS) dominates South Korea’s wholesale natural gas sector, and the company is the largest single LNG importer in the world. In spite of recent efforts by the government to liberalize the LNG import market and allow other local importers to resell their LNG cargoes, KOGAS maintains an effective monopoly over the purchase, import, and wholesale distribution of natural gas. Currently, other companies are allowed to import LNG only if they use the gas for their own purposes and if the price does not exceed KOGAS’ long-term contract prices. The government intends to deregulate this sector by 2025 and to allow private companies to import and resell LNG, and essentially compete with KOGAS.25 In addition to operating three of Korea’s five LNG receiving terminals, KOGAS owns and operates the national pipeline network.26

The South Korean central government is the largest KOGAS shareholder with 26.15% direct equity, a 20.47% share through the state-owned Korean Electric Power Company (KEPCO), and 7.94% from local governments. The remaining shares are privately owned.27 South Korea has more than 30 private distribution companies, and each company has monopoly control in its region. These local companies purchase wholesale natural gas from KOGAS at a government-approved price, and sell the gas to end-users.28

In the upstream sector, KOGAS has focused primarily on overseas LNG liquefaction projects, while the KNOC has handled most exploration and production-related activities. However, KOGAS seeks new opportunities for growth, and its focus on overseas upstream activities has increased. As part of the effort to develop into a global integrated energy company and to secure more LNG from its own supplies, KOGAS has participated in E&P projects around the world and has invested in foreign gas companies with LNG supply. As of mid-2016, KOGAS held investments in 26 projects, including exploration, production, LNG assets, and downstream facilities, in 13 countries.29

Recently, KNOC and KOGAS have announced intentions to divest certain assets as a result of mounting debt levels, cost overruns from several overseas projects, and pressure from the Korean government to reduce expenditures. The government has called for KOGAS to reduce its debt-to-equity ratio to 274% by 2017 from 322% in 2015. In response, KOGAS divested some of its oil and natural gas projects.30

Exploration and production

South Korea produced only 7 Bcf of natural gas in 2015, down from a high of 19 Bcf in 2010. This production was from the Donghae-1 natural gas field in the Ulleung Basin.31 KNOC plans to continue production operations of the field until 2019, when the project will be converted into an offshore storage facility. KNOC and Woodside Energy (Australia) are jointly exploring deepwater blocks of the offshore Ulleung Basin and began drilling in 2012.32

Liquefied natural gas

South Korea ranks as the second-largest global importer of LNG after Japan. In 2015, South Korea imported more than 1.6 Tcf of LNG, dropping from a high of nearly 2 Tcf in 2013.33 Preliminary data indicate that imports fell by nearly 3% in the first half of 2016 compared with the same period in 2015.34

South Korea currently has five LNG regasification facilities with a total capacity of 4.7 Tcf per year and an average estimated 34% utilization rate. KOGAS operates four of these facilities (Pyongtaek, Incheon, Tong-Yeong, and Samcheok), accounting for about 98% of current capacity. The Samcheok terminal, located on the northwest coast, is KOGAS’s smallest terminal and was added in 2014.

Pohang Iron and Steel Corporation (POSCO) and K-Power jointly own the only privately owned regasification facility in South Korea, located on the southern coast in Gwangyang. A second privately owned regasification facility at Boryeong, located in the northwestern region, is under construction by a joint venture between GS Energy Corporation and SK E&S Company. The facility is scheduled to begin commercial operations by the first quarter of 2017 and to add about 145 Bcf to capacity.35 Both of these private terminals have very small capacities compared with the capacity owned by KOGAS.

KOGAS purchases most of its LNG through long-term supply contracts, and the company uses spot cargos primarily to correct small market imbalances. Almost three-fourths of 2015 LNG imports came from Qatar, Indonesia, Malaysia, and Oman (Figure 8). Indonesia was South Korea’s first source of LNG and supplied more than half of South Korea’s LNG imports before 2000. As South Korea diversified its LNG imports to secure more sources of gas to meet its growing demand, Indonesia lost some market share to other countries including Qatar, Oman, Nigeria, and Russia.

Several South Korean firms own shares in liquefaction projects in the Middle East, Australia, Indonesia, and Canada and signed long-term purchase agreements for LNG coming online from new liquefaction projects in Australia, the United States, and Canada by 2022. KOGAS and SK Energy have flexible destination contracts with the Sabine Pass and Freeport liquefaction terminals in the Gulf Coast of the United States starting in 2017, which allows the companies to resell volumes in the open market.36 KOGAS also owns shares in upstream exploration and production assets in natural gas fields around the world including Canada, Iraq, and Southeast Asia.37

Coal

Rising coal consumption in South Korea and negligible domestic production resulted in the country having to rely heavily on coal imports over the past several years. In 2015, South Korea was the fourth-largest global coal importer.

South Korea produced an estimated 1.9 million short tons (MMst) of coal from its anthracite reserves, which was a fraction of its estimated primary coal consumption of 146 MMst in 2015 (Figure 9).38

Because of this wide supply and demand gap, South Korea is the fourth-largest importer of coal in the world, following China, India, and Japan. Imports have risen substantially in the past few years, from 131 MMst in 2010 to 149 MMst in 2015 as a result of the forced shutdowns of some nuclear plants in late 2012 because of safety issues.

Australia and Indonesia account for the majority of South Korea’s coal imports. Russia and Canada are other notable sources (Figure 10).39 Coal consumption in South Korea increased by 56% between 2005 and 2015, driven primarily by growing demand from the electric power sector. The electric power sector accounted for more than 60% of the country’s coal consumption, while the industrial sector (primarily steel and cement) contributed to most of the remaining coal demand in 2015, according to KEEI.40

Electricity

Fossil fuel sources account for nearly two-thirds of South Korea’s electricity generation, while the share of nuclear power is almost one-third.

South Korea generated more than 528 terawatthours (TWh) of gross electricity in 2015, according to KEEI estimates. South Korea’s power generation has increased by an average of 4% annually since 2005. Although in the past two years, generation growth rates have hovered around 1%, and in the first half of 2016, average electricity generation fell below the level in the same 2015 timeframe.41 This significant deceleration is attributed to weaker economic demand and export growth, more temperate weather, and demand side management.

In its latest power supply plan published in 2015, the South Korean government lowered its anticipated electricity demand growth to 2.2% annually to 2029. The government intends to cut its greenhouse gas emissions through energy conservation measures and through the use of cleaner energy from nuclear and renewable energy sources.42

Fossil fuels generated about 64% of South Korea’s electricity generation in 2015, while 31% came from nuclear power, and 5% came from renewable sources, including hydroelectricity (Figure 11).43 Coal-fired power, which is a baseload source, is the dominant fossil fuel used to generate electricity, and natural gas the second largest. Oil products generate very small amounts of power. Although fossil fuel-fired capacity is now dominant in South Korea, nuclear power is also a baseload power source, and South Korea plans to increase capacity from this fuel in the long term. In 2015, about 55% of electricity consumption was from industries, 25% from commercial and service enterprises, 13% from the residential sector, and 6% from other sectors such as transportation and agriculture, according to KEEI.44

Sector organization

The state-owned Korea Electric Power Corporation (KEPCO) controls all aspects of electricity generation, retail sales, transmission, and distribution. In 2001, KEPCO’s generation assets were spun off into six separate subsidiary power generation companies. Although the initial restructuring included plans to subsequently divest KEPCO of these generation companies (excluding the Korea Hydro & Nuclear Power Company), KEPCO still owns each of the subsidiaries. KEPCO also owns majority shares of KEPCO Engineering and Construction, Korea Nuclear Fuel, Korea Plant Service and Engineering, and Korea Electric Power Data Network. In 2016, the South Korean government proposed a partial privatization of KEPCO and plans to invite more competition from the private sector in power generation and distribution. The timeframe for the proposed restructuring has yet to be determined.45

The Korea Electric Power Exchange (KPX), also established in 2001 as part of the electricity sector reform efforts, serves as the system operator and coordinates the wholesale electric power market. KEPCO continues to act as the electricity retailer, and it controls transmission and distribution.

KPX regulates the cost-based bidding-pool market and determines prices sold between electricity generators and the KEPCO grid. An electricity tariff pricing system, designed to protect low-income residents and industrial consumers, historically has not reflected the true costs of generation and distribution, and the pricing system has not provided incentives to conserve electricity. MOTIE must approve all changes in end-use electricity prices. Retail consumer prices remain far below electricity prices in other economically developed countries, which has contributed to high overall electricity demand and power shortages during peak seasons over the past several years.46 Although, MOTIE has raised prices at various points over the past few years to reduce demand.47

According to KEEI, reserve ratios—the ratio of peak capacity to peak electricity demand—fell below 10% on an annual basis between 2007 and 2013, resulting in major blackouts in 2011.48 These low margins were the result of delays in installed capacity additions, low electricity prices, high peak demand during certain years as a result of weather, and insufficient investment in renewable energy and energy efficiency projects until recently. In 2014, the reserve ratio increased to more than 11% because power consumption eased, more natural gas-fired, coal-fired, and renewable plant capacity came online, and nuclear facilities affected by the safety problems in 2012 returned to service.

Generation structure

Most of South Korea’s installed generation capacity is fossil fuel-based, although nuclear power plays a significant role in the power sector. Baseload generation is primarily made up of coal and nuclear power, while peak demand is generally met by the country’s LNG imports. According to KEPCO, South Korea’s generating capacity at the end of 2015 was 98 gigawatts (GW), consisting primarily of natural gas (33%), coal (28%), and nuclear generation (22%).49 In 2015, capacity rose from 93 GW in 2014 as coal, combined-cycle, and nuclear plants were added. Oil, hydroelectricity, and other renewables made up smaller shares (Figure 11).50 South Korea intends to reduce its greenhouse gas emission levels by 37% from business-as-usual projected levels (projections of emission levels absent any carbon price scheme) by 2030.51 As part of this effort, the government is promoting more nuclear power plant development, cleaner burning coal-fired plants compared to the older and less efficient units, and greater development of renewable energy.52

Fossil fuels account for a majority of the country’s installed capacity, of which coal and natural gas power plants consisted of 60 GW in 2015, or about 61% of the total capacity, according to KEPCO.53 South Korea plans to close 10 older coal-fired power plants by 2025 and not incorporate any new builds in its next electricity plan, which is consistent with the country’s goal to incorporate cleaner sources of fuel into the generation portfolio. However, the previous power plan includes 20 new coal-fired power plants scheduled to enter service by 2022, Coal is likely to compete with LNG use in the power sector, despite the current low LNG prices.54 Natural gas-fired power plants are also expected to contribute more to electricity generation with at least 2 GW of capacity additions entering service by 2020.55 Currently, natural gas competes with less-expensive coal and nuclear sources of power. South Korea is weighing environmental, economic, and nuclear safety concerns and is trying to balance its power generation portfolio accordingly. The country’s future slate of fuel for power will depend on fuel costs, the government’s nuclear capacity designs, and the level of investment for clean energy technology.56

Nuclear generation accounts for nearly one-third of South Korea’s electricity generation and about 22% of installed generating capacity.57 As of late 2016, South Korea ranked sixth-highest for nuclear generation capacity in the world and was surpassed by China in the past year.58 The country’s first nuclear power plant was completed almost four decades ago, and since then, South Korea has directed significant resources towards developing its nuclear power industry. South Korea imports all of the uranium needed to fuel its nuclear power plants and does not reprocess or enrich uranium as a result of a 30-year nuclear cooperation agreement with the United States. The countries extended this agreement for 20 years in June 2015, although the new terms did not lift the restrictions on South Korea to produce its own nuclear fuel.59

Korea Hydro & Nuclear Power Company currently operates South Korea’s four nuclear power stations, which have 25 individual reactors with a power generation capacity of 23 GW. The latest reactor came online in early 2016, and the country has added 5.3 GW of capacity at new plants since 2010.60 Eleven additional reactors are scheduled for completion by 2029, and three reactors with 4 GW of capacity are already under construction and scheduled to come online by 2019. Meanwhile, four of the country’s oldest reactors are scheduled to close by 2025, unless the government extends their licenses.61

In late 2012, South Korea experienced several incidents of falsified certificates for components of some of its existing nuclear power plants, adding to the industry’s distress following neighboring Japan’s Fukushima nuclear disaster in 2011. The South Korean government shut down four reactors temporarily, and another six were offline for maintenance, which removed up to 40% of the nuclear capacity from service until the government inspected all reactors. Nuclear power generation fell by 10% from 155 TWh in 2011 to 139 TWh in 2013 before rebounding to 165 TWh in 2015.62 The country’s current long-term energy plan, released in 2014, lowered the share of nuclear capacity to 29% of total generating capacity by 2035, from the previous goal of 41% by 2030, in response to anti-nuclear sentiment following the Fukushima incident in 2011. However, South Korea still plans for nuclear power to play a significant role in the electricity sector over the next few decades.

Nuclear generation utilization rates in South Korea are typically greater than 90%, some of the highest in the world, and the fuel serves as a baseload source for power generation. In 2013 and 2014, capacity factors were below 90% because a few nuclear facilities were closed for safety reasons in late 2012.63

A renewable portfolio standard for South Korea replaced the previous feed-in tariff system in 2012 and require South Korea’s major electric utilities to gradually increase the renewable energy share in their power generation portfolios to an average of 10% by 2024.64 Renewable sources (primarily solar, wind, biomass, and waste) remain a small share of South Korea’s electricity generation (5% in 2015), although there is robust growth in generation from renewable energy, apart from hydropower.65

Notes:
Data presented in the text are the most recent available as of January 19, 2017.

Data are EIA estimates unless otherwise noted.

Endnotes:

1BP Statistical Review of World Energy 2016.
2EIA estimates, UN/Comtrade International Trade Center (accessed December 2016) via Korea Customs and Trade Development Institute, and IHS Energy.
3World Bank data: GDP growth (accessed December 2016); Voice of America, “TPP Adds to South Korean Economic Woes,” February 9, 2016.
4International Monetary Fund, “Staff Report for the 2015 Article IV Consultation,” April 23, 2015.
5BP Statistical Review of World Energy 2016 and EIA estimates.
6Reuters, “South Korea cuts future reliance on nuclear power, but new plants likely,” January 13, 2014.
7Oil & Gas Journal, 2017 Worldwide Refining Survey, December 5, 2016.
8FACTS Global Energy Services, Asia Pacific Databook 3: Spring 2016, page 54.
9Ship & Bunker, “South Korea Expecting Boost in Fuel Oil Demand“, September 22, 2016.
10FACTS Global Energy Services, Asia Pacific Databook 3: Spring 2016, page 54.
11FACTS Global Energy Services, Flash Alert: “South Korea: LPG Demand Growth Going Strong”, August 25, 2016.
12United Nations/World Trade Organization, International Trade Center website (accessed December 2016).
13Reuters, “South Korea plans to boost Iran oil imports, especially condensate“, March 2, 2016; Reuters, “South Korea’s condensate imports from Iran to soar in June“, June 9, 2016.
14Reuters, “UPDATE 1-S.Korea’s Nov Iran crude imports jump fourfold from last year“, December 15, 2016.
15KNOC, Investor Relations (website accessed September 2016).
16Platts McGraw Hill Financial, “Wild swings in South Korean energy policy raises concerns,” August 6, 2014; KEEI, Energy News, “State-run energy firms to sell off loss-making overseas assets”, June 29, 2016.
17KNOC, Operations (website accessed December 2016).
18KNOC, Investor Relations (website accessed December 2016); Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, page 36.
19KNOC Investor Relations, Overseas E&P and Operations, E&P Worldwide websites (accessed December 2016).
20Reuters, “UPDATE 1-Hyundai Chemical buys Aug Qatari condensate for new splitter -trade sources“, June 21, 2016; Reuters, “TABLE-Condensate splitter projects in Asia, Middle East“, June 22, 2016.
21Platts McGraw Hill Financial, “South Korea seeks to import more US condensate after testing route in 2014,” January 5, 2015; Reuters, “South Korea’s condensate imports from Iran to soar in June“, June 9, 2016.
22IEA, Monthly Oil Data Service (accessed December 2016); and IEA, Energy Supply Security 2014, South Korea, chapter 4, page 295; and KNOC, Investor Relations (accessed December 2016).
23Platts McGraw Hill Financial, “KNOC forms joint venture with Vopak, S-Oil to build oil storage terminal in South Korea’s Ulsan,” January 8, 2014; KNOC, Operations, Storage Tank Terminal Construction Project (accessed November 2016); Korea Times, “Korea seeks to become Northeast Asia Oil hub“, November 3, 2015.
24Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, page 56-57; IHS Energy, LNG Value Chain & Markets Service, South Korea LNG Market Profile, May 9, 2016, page 18.
25Newsbase, AsianOil, “South Korea plans LNG import liberalization in 2025”, June 22, 2016, page 11; S&P Global Platts, “S Korea to allow buyers to bypass Kogas, import LNG directly from 2025“, June 14, 2016; IHS Energy, LNG Market Profile: South Korea, December 2016, page 14.
26KOGAS, Investor Presentation, Results of 1H 2016, page 22.
27KOGAS, Investor Presentation, Results of 1H 2016, page 19.
28IEA Energy Supply Security 2014, South Korea, page 299.
29KOGAS, Investor Presentation, Results of 1H 2016, page 10.
30Platts McGraw Hill, “Wild swings in South Korean energy policy raises concerns,” August 6, 2014; and BusinessKorea, “Preparation for Exploration KOGAS Sharpens Overseas Competitiveness through Reorganization,” July 27, 2015; S&P Platts, “S Korean Kogas’ H1 LNG imports fall 2.8% on year to 16.07 mil mt“, August 10, 2016.
31International Energy Agency, Natural Gas Information 2016; KNOC, Investor Relations, Operating Statistics, Domestic E&P.
32IHS Energy, “South Korea LNG Market Profile,” May 9, 2016, page 17; KNOC Operations (website accessed August 2016); The Korea Times, “Donghae-1 natural gas field“, November 3, 2015.
33IHS Energy, Annual Bilateral LNG Trade, September 6, 2016.
34S&P Platts, “S Korean Kogas’ H1 LNG imports fall 2.8% on year to 16.07 mil mt“, August 10, 2016.
35International Gas Union, International Gas Union World LNG Report 2016 Edition, page 47; IHS Energy, “South Korea LNG Market Profile,” May 9, 2016.
36Platts McGraw Hill Financial, “South Korea’s SK Group to make big push into N. America shale gas development: source,” November 8, 2013; IHS Energy, LNG Sales Contracts Database, December 14, 2016.
37KOGAS website, Exploration & Production Projects (accessed December 2016).
38EIA estimates and Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, pages 61-64.
39United Nations/World Trade Organization, International Trade Center website (accessed December 2016).
40Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, pages 61-64.
41Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, page 67.
42World Nuclear Association, Nuclear Power in South Korea (updated December 2016).
43KEPCO Annual Report, 2016, page 62.
44Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, pages 71.
45Pulse News, “S. Korean gov’t to liberalize utility and pull out of overseas resources projects“, June 14, 2016.
46Bloomberg, “Some South Korean Households Are Paying More Than Factories For Power“, August 17, 2016.
47IHS Energy, LNG Market Profile: South Korea, December 2016, page 23.
48Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, page 67; Reuters, “S.Korea says to meet summer demand for power, avoid blackouts“, July 14, 2016.
49KEPCO Annual Report, 2016, page 56.
50Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, pages 68 and KEPCO Annual Report, 2016, page 56.
51World Nuclear Association, Nuclear Power in South Korea (updated December 2016).
52The Korea Herald, “Korea to build two new nuclear reactors by 2029,” June 8, 2015.
53KEPCO Annual Report, 2016, page 56.
54International Energy Agency, Medium-Term Gas Market Report 2016, page 26; Reuters, “S.Korea to shut 10 old coal-fired power plants by 2025“, July 5, 2016; FACTS Global Energy, LNG Market Report, Issue #84, July 28, 2016; IHS Energy, LNG Market Profile: South Korea, December 2016, page 5.
55FACTS Global Energy, Asia LNG Trade, South Korea, August 15, 2016, page 8.
56Platts McGraw Hill Financial, “Dismal outlook for LNG in S Korea’s power market as coal, nuclear gain favor: KPX,” March 20, 2015; FACTS Global Energy, LNG Market Report, “Hot Topics Surround Korea’s Gas Market: Fine Dust Emissions, Deregulation, and COP 21”, July 28, 2016.
57KEPCO Annual Report, 2016, page 56.
58International Atomic Energy Agency, Power Reactor Information System (accessed December 2016).
59World Nuclear Association, Nuclear Power in South Korea (updated December 2016).
60International Atomic Energy Agency, Power Reactor Information System (accessed December 2016).
61World Nuclear Association, Nuclear Power in South Korea (updated December 2016); International Atomic Energy Agency, Power Reactor Information System (accessed December 2016).
62Korea Energy Economics Institute, Monthly Energy Statistics, November 2016, page 69.
63KEPCO, Nuclear Power (website accessed December 2016); IHS Energy, “South Korea’s falling LNG imports exacerbate global oversupply,” September 3, 2015, page 2.
64International Energy Agency, IEA/IRENA Joint Policies and Measures Database, “Renewable Portfolio Standard: Korea,” updated 2016.
65KEPCO Annual Report, 2016, page 56.

Priorities For First 100 Days Of Trump Administration – OpEd

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The Trump administration’s crucial 100-day window to make its priority policy decisions starts tomorrow.

It is time to seize the opportunity American voters have just given conservatives — moving quickly to deregulate the economy, defend our freedoms and rebuild the military.

The following list of policies Heritage has formulated for years can set the process in motion.

Institute for Constitutional Government

Get a constitutionalist justice confirmed to the Supreme Court.

Identify and nominate qualified candidates for all current vacancies on federal Circuit Courts and District Courts, and institutionalize a process to fill future openings within 60 days of a vacancy.

Issue a new Executive Order on federalism (modeled after the Reagan Executive Order) requiring all federal agencies to take into account the impact on federalism interests of all proposed rules and agency guidance documents (this could build on the Reagan Administration’s federalism executive order).

Enforce federal immigration law and void all Obama rules, programs, and regulations that attempted to rewrite the law and waive its requirements.

Create a Presidential Commission to study the renewal of American civic culture.

Initiate a comprehensive review of all federal funding (grants, legal settlements, etc.) directed to non-profit organizations, including universities, to assess whether they pursue partisan goals or advance the common good.

Limit the use of “disparate impact” analysis in applying federal anti-discrimination law.

Institute for Family, Community, and Opportunity

Repeal Obamacare and stabilize insurance markets. We have no time to lose to fully repeal Obamacare, though it may take several steps, including administrative changes. The CBO rightly projects that full repeal would lead to a smoother transition with less disruption to coverage and cost. The administration must use all means possible to stabilize the insurance markets and allow for continuity in coverage.

Protect conscience rights.

The incoming administration and Congress should prepare to tackle various education-related issues in the coming year, and the following priorities should be at the top of the to-do list:

  • Support reauthorization and expansion of the D.C. Opportunity Scholarship Program
  • Create education savings accounts for children attending Bureau of Indian Education schools
  • Allow states to make their Title I dollars portable, following children to schools and education providers of choice
  • Allow K-12 expenses to be eligible for 529 college savings accounts
  • Enable states to fully opt-out of the programs that fall under the Every Student Succeeds Act (ESSA) through the A-PLUS (Academic Partnerships Lead Us to Success) proposal
  • Ease the cost of college by making space for private lending 

Institute for Economic Freedom

Reverse past executive overreach with regulatory reforms, using the REINS Act and Congressional Review Act, which allows Congress to repeal regulations and a quicker process to disapprove of an agency’s final rule.

Define “navigable waters” under the Clean Water Act.

Withdraw from United Nations Framework Convention on Climate Change (Paris Agreement).

Undo the Clean Power Plan and end the moratorium on coal leasing on federal lands.

Withdraw federal regulation on fracking.

See the completion of the Dakota Access and Keystone XL pipelines.

The Labor Department should issue regulations restoring the union transparency requirements the Obama administration rescinded.

The Labor Department should start using Bureau of Labor Statistics data to calculate Davis-Bacon wage rates.

Pass financial market regulations in the form of an updated Financial CHOICE Act – reining in the Consumer Financial Protection Bureau and their unaccountable position of power.

Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy

Center for National Defense: Present a compelling case to rebuild America’s military — both with the needed additions authorized in the 2017 NDAA and, most significantly, the additional investments needed to begin the reversal of the precipitous defense cuts in readiness, procurement and structure made during the Obama administration

Margaret Thatcher Center for Freedom: Instruct the U.S. Trade Representative and the White House National Trade Council to fast-track the pursuit of a US-UK trade pact by putting forward clear negotiating objectives pursuant to Congressional guidance that will advance the Special Relationship between the U.S. and the U.K.

Asian Studies Center: Announce plans to convene the Quadrilateral Security Dialogue (US, Japan, Australia, and India) at the Assistant Secretary level, reassign deputies’ roles at the Bureau of East Asian and Public Affairs to create more concerted focus on Taiwan, and relax contact policy and external guidance regarding interaction with Taiwan.

Homeland Security: Develop a budget request for the Department of Homeland Security that provides Customs and Border Patrol with funding for the infrastructure and the technology necessary to better patrol the border and secure ports of entry. Simplify TSA’s Screening Partnership Program (SPP) approval and contracting processes to make it easier for airports to apply and use the program. Meet with select countries that would be excellent additions to the Visa Waiver Program to discuss admission and include legislative proposal in DHS budget request to allow for judicious expansion of as well as improvement of information sharing occurring in the program.

Cyber Security: Ensure that DHS’ information sharing program is operating effectively and seek out additional areas for cooperation with the private sector. Increase international training and information sharing programs. Investigate the expansion of active cyber defense by private entities. Establish an Internet of Things national strategy based on the principles laid out in the 1997 Framework for Global Electronic Commerce.

Immigration: Immediately order DHS to cancel the anti-enforcement policy memoranda put in place under the Obama Administration and replace them as appropriate. Advance policies that strengthen enforcement efforts through appropriate use of executive authority and requests that Congress consider legislative changes to existing programs. Such policies include expanding DHS agreements with state and local governments through section 287(g) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996. Fully fund the Secure Fence Act.

The Middle East: Review current anti-ISIS strategy and formulate a more robust multilateral approach to accelerate the collapse of ISIS in Iraq/Syria, as well as undermine ISIS franchises in Egypt, Libya, Yemen, Afghanistan, and elsewhere. Use more U.S. special operations forces to target ISIS leaders and capabilities in Iraq/Syria and work closely with allies to escalate military, intelligence, law enforcement, cyber, and counterterrorism efforts against ISIS on as many fronts as possible.

Source:
This article was published by The Heritage Foundation

United States: Boon Or Bust After Trump – OpEd

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As a student of geopolitics in South Asia and MENA, I have repeatedly held the United States responsible for the turmoil in the region. I had even gone to the extent of saying that the United States is the biggest warmonger. The superpower loves to initiate a conflict that goes to the extent of anarchy and civil war.

This also invites other contenders to take part in proxy wars. While the sole purpose of United States is to sell its arms, it wants to keep others countries busy in fighting wars, rather than focusing on the welfare of their people. This also gives it a chance to keep the countries dependent on the World Bank and the IMF.

After having gone through what has been happening in the United States, with Donald Trump taking the oath as new President, I am obliged to say that until recently the United States has been fanning hatred in the world, but now it is facing the same.

The demonstrations on the inaugural day and subsequent events clearly shows the ‘Emergence of anarchy in the United States’. There are growing fears within the United States that these demonstrations may turn violent.

Over the years the United States has been breading militants and using them in various countries to promote its agenda of keeping the countries in constant state of war. The worst examples are Syria, Iraq and Afghanistan. Blood-thirsty mercenaries from around the world have landed in these countries. It may also be said that these militants have been moved from one country to another only to promote sale of arms.

One often wonders how the rebel groups get money. Even a cursory look at Afghanistan and MENA shows that poppy and petrodollars are used for purchasing arms. Various oil fields have been taken over by rebels, who are selling oil to the developed nations. The drug center has shifted from golden triangle to Afghanistan.

The spy agencies of the United States have been alleging that Russia rigged their election. This on one the hand proves the failure of these agencies, and on the other suggests the breakout of anarchy in the country that has been creating turmoil around the world.

Over the years, the United States has been ringing the alarm of nuclear assets going into the control of militants in various countries. One may ask the same question, will the nuclear assets of United States be in safe hands, if the present demonstrations turn violent?

In Defense Of Israel From The Crazies – OpEd

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Anyone who has any shred of common decency realizes and recognizes that the State of Israel has every right to exist and prosper.

And also that the Jews of the world have every right to have a homeland, and a place on earth to call their own, with complete and total sovereignty, borders, right to defend itself, and the right to live in peace.

But what happens when leaders or other outside factors, with different and selfish agendas, co-opt and use the Israeli leadership to support and engage in behavior, actions, and methods which tend to overwhelmingly delegitimize, undermine, or defame the Israeli State and its people?

Even the Israeli Intelligence Services, the foreign agency Mossad and domestic Shin Bet agencies have come out in clear support and favor of the Iran Nuclear Deal Agreement, ie, the Iran Nuclear Deal Framework (Joint Comprehensive Plan of Action [“JCPOA”]) which was a preliminary framework agreement reached in 2015 between the Islamic Republic of Iran and a group of world powers, ie, the P5+1 (the permanent members of the United Nations Security Council—the United States, the United Kingdom, Russia, France, and China—plus Germany) and the European Union.

Even choice leadership of the Israeli Military have vociferously supported this deal.

The Israeli intelligence services and security establishment, past and present, charged with the ultimate safeguarding and territorial integrity/security of the Jewish state above anything else, as well its leaders, have come out in full force and support of this agreement, stating that Iran has fully complied with its obligations under said contract, and to either void it or disrupt or repeal it would be foolhardy, stupid, and would ultimately undermine and harm Israel’s security interests.

So why is it that Israeli Leader Benjamin Netanyahu, who is simply a political leader, is so vociferously against it?

Why does he continue to try and recruit U.S. and European (and world) leadership to derail, destroy, amend or repeal the Iran Nuclear Deal, in spite of the deep Israeli indigenous intelligence and military strategic information that overwhelmingly supports it for the sake of the long-term security and survival of Israel?

Could it be because Netanyahu is not at all loyal to his own people of the State of Israel, that he instead takes his marching and policy orders from outside Israel’s borders, say for example, from wealthy and powerful Oligarch/Plutocratic institutions located in the City of London or in the Deep State Neo-Con/Neo-Liberal/Hawkish halls of power within the United States of America?

That perhaps Benjamin Netanyahu does not owe fealty and allegiance to his own people, but rather to overseas and foreign crazies who are hell-bent on stoking and provoking a major world war between militant Islam and extremist Zionism, bad for both sides?

US political leadership such as in the form of Mitt Romney keep pushing and encouraging the Israeli leadership to engage in open and horrible acts of violence, ethnic cleansing, police misconduct, human rights violations, war crimes, apartheid, random acts of violence against the beleaguered Palestinians, jailing/incarcerating children as young as 7 within Israels horrific jails and other evil and criminal acts in their isolation of the Palestinian people behind cages in Gaza, never to venture out again for even water, food or medical care, let alone jobs, or the right to migrate, which are enshrined as basic human rights in every culture in the world.

Could the answer be found in the Freemasonic Lodge that both Mitt Romney and Benjamin Netanyahu were recruited by in Boston when they were both kids working in the financial company, Bain Capital, back in the 1960s?

Could it be that these 2 leaders for example owe an allegiance to an invisible, clandestine, hidden power and force which forces them to abide by their edicts, in direct contravention to both common sense and the intelligence and military sections of the Israeli National Security State, if not the vast majority of humanity?

Albert Pike, a 33rd Degree Freemason, penned a famous book entitled “Morals and Dogma,” wherein he predicted (if not wrote the blue prints for) all 3 World Wars, with the last installment being World War 3, and describing it as a war between Militant Islam and Militant Zionism.

This last war would result in a horrible and catastrophic “end of days” where the vast majority of the people of earth would be consumed by hellfire, death and destruction.

Is this their final wish and goal?

To clear the earth of its “useless eaters” as Henry Kissinger once famously described in his National Security Memorandum 200, to establish a capitol and homeland for the Luciferian Freemasonic/Illuminati elements within the world’s political and wealth power structures and international Deep State, and to depopulate the planet to the tune of 500 million from its current and present 8 billion, according to the insidious George Guidestones found in Atlanta Georgia?

What else could support this insane reasoning in order to keep Israel engaged in overtly outlandish and criminal wanton acts of violence against the indigenous people of Palestine, in the face of the overwhelming protests of the rest of the people of the world?

Could these insane leaders simply be using the good and innocent men and women of the Israeli Defense Forces and Military Police to ethnically cleanse and “settle” this land in preparation for their future New World Order government, with the People of Israel themselves to be finally and ultimately sacrificed in a cataclysmic war, destroying both Islam and Judaism in the process?

If one cares about the State of Israel and its long term survival, one must always encourage the de-escalation of conflict  which delegitimizes the State of Israel through the embarassing and random acts of violence and human rights violations being perpetrated on the orders of the crazy Israeli leadership, and its foreign and hitherto unknown, faceless and nameless foreign directors and their “hidden hands” on their open and described suicide mission.

It seems Israel (and consequently the United States) is being driven off a cliff at the behest of Luciferian people who don’t care about the State of Israel in the first place.

Perhaps this was why President Obama, in one of his final acts of true love and concern for the State of Israel as U.S. President, abstained from and essentially voted for United Nations Security Resolution 2334, which punished the Israeli leadership and its lunatic fringe by re-setting its boundaries back to 1967, formally outlawing the illegal settlements and incursions being built in the face of worldwide and international condemnation, the continuation of which kept adding more and more enmity and hatred for the Jewish State and its innocent people, fomenting and increasing anti-semitism all over the world.

Perhaps this act of “tough love” was necessary to blunt the insanity of Israel’s crazies and bring back the country from the brink and state of abyss it was finding itself unable to extricate itself from.

The views expressed are the author’s own.


German Inflation Anxiety Could Bring 2017 Election Shock – Analysis

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By Brendan Brown*

The ECB’s increasingly shrill mantra that it makes policy for the monetary union as a whole and not for its largest member (Germany) could well cause a black swan to appear — in the form of a German political shock this autumn. The Frankfurt-based officials have been ignoring the historical observation of Nobel Prize-winning economist Robert Mundell that central banks of federal unions are intuitively alert to symptoms of monetary instability in their dominant economic member — for example: Ontario in Canada and New South Wales in Australia. (California, at around 13% of the US economy does not qualify as “dominant.”)

The German economy is now emitting signals of serious euro-monetary disorder even though these become muffled in the various statistical averages across the euro-area as a whole which register on the dashboards of the Frankfurt monetary bureaucracies. Chancellor Merkel, the modern-day Metternich, fighting desperately to sustain the European status quo, apparently does not hear or see any of the alarm signals. These include a climbing inflation rate (already at 1.7% year-on-year in December — equivalent to 2.5% if as in the US imputed rents of owner-occupied dwellings were included — and widely forecast to be substantially higher in coming quarters). Also of note is a red hot market in residential real estate and a massive trade surplus (at around of 8% of GDP) fuelled by an ultra-cheap currency.

Sacrificing the German Consumer To Save the European Project

The German chancellor seeming insensitivity stems from her need for Mario Draghi to “do whatever it takes” to salvage the European project. And Draghi needs Merkel in his attempt to salvage Italian financial stability. German voters have the chance in the Bundestag elections this September or October to reject this unloving couple. Economic sources of discontent include savers experiencing deeply negative real rates (together with zero or negative nominal rates), would-be homeowners or renters anxious about affordability, and individuals struggling to provide for their old age. And who knows, a US-European trade war could erupt with the catalyst being the huge German trade surplus and the cheap manipulated euro. There would be a host of potential victims.

Even so, it will not be easy for these disaffected voters to topple the status quo immediately given the 7-party confrontation opening up this autumn. The best they can hope for is a stalemate. That could occur if there is sufficient backlash against the “elites” in Berlin and Frankfurt who promised their fellow citizens that they had fully protected them against economic danger in Europe after the Deutsche Mark’s decommission. Indeed it was the leading Bundesbanker (Professor Otmar Issing) that Berlin put into the ECB at the start who formulated a policy framework of permanent inflation (the 2% inflation target) and did not oppose a culture of political correctness where there would be no explicit focus by policymakers on monetary symptoms in the dominant member.

Many German citizens, especially the avid readers of Bild, impugn the worst motives to the ECB, suspecting that Mario Draghi has been mobilizing German savings at severely negative real interest rates toward salvaging Italy’s government and banks. Prominent professors from leading research institutes concur with the view that the ECB is pursuing a radical and ultimately inflationary policy so as to alleviate the debt crisis in Southern Europe

This is the nightmare that the German pioneers of the European Monetary Union, supported ultimately by a non-enthusiastic Bundesbank, said could never happen. And indeed the present Bundesbank chief came to the ECB ’s defense last year against attacks from German politicians (including Finance Minister Schaeuble) and the press regarding the vast transfer of German savings via the ECB into Southern Europe.

Both the ECB and Bundesbank chiefs seem to agree it is an essential condition of monetary union that sometimes Germany must accept inflation-like conditions for the greater good of union-wide stability. (They would deny that rising prices there are symptomatic of euro monetary inflation given their fixation on euro-area averages.) In particular, the argument is that German prices and wages should rise above trend for some time so as to reduce the extent of declines elsewhere as necessary for “re-balancing.”

Signs of Economic Danger — and a Possible Political Backlash

It does not take great vision to see that the signs of euro monetary inflation lie both in the European core (Germany) and more broadly. The latter includes the fantastically low sovereign credit spreads and the giant carry trades which have formed in currencies (out of negative rate euros into foreign currencies), credit (out of low risk credit into high risk), and term premiums (out of short-maturity government bonds into long-maturity).

Any general carry trade unwind amidst global asset market falls would make the German elite including the Christian Democratic Union, Social Democratic Party, and the Bundesbank vulnerable to intensified popular anger in the run-up to the elections. Without such an unwind there would be the alternative hazard of climbing inflation, also anathema to so many German voters, especially in the context of zero or negative nominal interest rates. The strongest vote against the elite is a vote for the anti-euro anti-immigration Alternative for Germany (AfD), or the Left Party. No doubt the mainstream parties will all try to trim their sails to the anti-ECB mood. But who would trust any such trimming given their long contrary record to date?

In considering the outcome of an anti-elite vote in Germany’s markets will probably take seriously the scenario of the Grand Coalition (CDU/Christian Social Union/SDP) losing its overall parliamentary majority; the SDP and AfD could well be in a dead heat for second place (15–20% each of the popular vote) and the Left in a 10–15% range. Then no workable government coalition might be possible, triggering early new elections.

The CDU/CSU, to winning back support from the AfD, could dump Angela Merkel and unite behind a new chancellor candidate who addressed Germans’ grievances regarding monetary union (and of course immigration). Big gains for the CDU/CSU in this second election could mean that it could form a government with partners (perhaps the FDP and the Greens) who would strike a coalition deal which would include seeking a review and clarification of the monetary clauses of the Maastricht Treaty. The aim would be to reverse the “constitutional erosion” of the EMU’s first two decades which have left Germany highly vulnerable to inflation and indirect fiscal transfers.

About the author:
*Brendan Brown
is the Head of Economic Research at Mitsubishi UFJ Securities International.

Source:
This article was published by the MISES Institute.

Venus Wave Could Be Solar System’s Largest

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Japanese spacecraft have observed a giant wave in the atmosphere of Venus, which may be the largest of its kind in our Solar System. The wave is thought to be generated in a broadly similar way to the surface ripples that form as water flows over rocks on a stream bed.

Known as a stationary gravity wave, the wave of hot air rises up from Venus’s surface and stretches across its entire diameter. It hovers about 65 kilometres (40 miles) above the surface in the shape of a flattened ‘V’, rippling through Venus’s sulphuric acid clouds that blow at a chaotic and constant 354 kph (220 mph). The anomaly lasts for up to three Earth days then mysteriously vanishes.

The gravity wave is impossible to see with human eyes but it could be described as looking like a series of ripples in clouds on Earth that stretches over 10 000 km all the way from the Arctic to the Antarctic. Luckily, the Japanese Venus-orbiting Akatsuki (Venus Climate Orbiter) spacecraft saw and photographed the wave for the first time in infrared light.

Now publishing their research after a year of analysing the data in the journal ‘Nature Geoscience’, the Japanese research team, based at Rikkyo University in Tokyo and the Japan Aerospace Exploration Agency (Jaxa) have described in much greater detail the uniqueness and oddities of Venus’s stationary gravity wave.

Curiously, the bright anomaly remained stationary at the altitude of Venus’s cloud tops, making it difficult to reconcile with what we know about Venus’s thick upper atmosphere, where clouds race past at 100 m per second. The clouds travel much faster than the slowly rotating planet below, where a day on Venus actually lasts longer than a Venusian year.

The Japanese team hypothesise that the phenomenon is the result of a gravity wave that is generated as the lower atmosphere passes over mountains and then propagates upwards through Venus’s thick atmosphere. Gravity waves ensue when a fluid is displaced from a position of equilibrium and are well known to meteorologists and atmospheric scientists here on Earth, who see them as ripples through clouds of water vapour and ice.

On Earth, gravity waves are pretty small due to the comfortably dense atmosphere. Venus, which even though like is Earth is a rocky planet with a persistent atmosphere, clouds and roughly 82 % the mass and 90 % the surface gravity of Earth, could easily be described as the worst place you could ever want to visit in our Solar System. On the surface, the air is nearly 97 % carbon dioxide (about 100 times thicker than on Earth) and a balmy 462 degrees Celsius, which is hot enough to melt even lead… and explains why a spacecraft can’t survive for more than a few hours on Venus.

The Akatsuki spacecraft is due to orbit Venus for another couple of years and it is hoped that it may yet again detect more of these waves, hopefully furthering deeper understanding of one of Earth’s closest neighbours.

Cordis Source: Based on media reports

Meditation And Music May Help Adults At Risk For Alzheimer’s Disease

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In a recent study of adults with early memory loss, a West Virginia University research team lead by Dr. Kim Innes found that practice of a simple meditation or music listening program may have multiple benefits for older adults with preclinical memory loss.

In this randomized controlled trial, 60 older adults with subjective cognitive decline (SCD), a condition that may represent a preclinical stage of Alzheimer’s disease, were assigned to either a beginner meditation (Kirtan Kriya) or music listening program and asked to practice 12 minutes/day for 12 weeks.

As detailed in a paper recently published by the Journal of Alzheimer’s Disease, both the meditation and music groups showed marked and significant improvements in subjective memory function and objective cognitive performance at 3 months. These included domains of cognitive functioning most likely to be affected in preclinical and early stages of dementia (e.g., attention, executive function, processing speed, and subjective memory function). The substantial gains observed in memory and cognition were maintained or further increased at 6 months (3 months post-intervention).

As explained in the research team’s previous paper (J Alzheimer’s Dis. 52 (4): 1277-1298), both intervention groups also showed improvements in sleep, mood, stress, well-being and quality of life, with gains that were that were particularly pronounced in the meditation group; again, all benefits were sustained or further enhanced at 3 months post-intervention.

The findings of this trial suggest that two simple mind-body practices, Kirtan Kriya meditation and music listening, may not only improve mood, sleep, and quality of life, but also boost cognition and help reverse perceived memory loss in older adults with SCD.

‘Anonymous’ Web Browsing History May Not Be Anonymous

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Raising further questions about privacy on the internet, researchers from Princeton and Stanford universities have released a study showing that a specific person’s online behavior can be identified by linking anonymous web browsing histories with social media profiles.

“We show that browsing histories can be linked to social media profiles such as Twitter, Facebook or Reddit accounts,” the researchers wrote in a paper scheduled for presentation at the 2017 World Wide Web Conference Perth, Australia, in April.

“It is already known that some companies, such as Google and Facebook, track users online and know their identities,” said Arvind Narayanan, an assistant professor of computer science at Princeton and one of the authors of the research article. But those companies, which consumers choose to create accounts with, disclose their tracking. The new research shows that anyone with access to browsing histories — a great number of companies and organizations –can identify many users by analyzing public information from social media accounts, Narayanan said.

“Users may assume they are anonymous when they are browsing a news or a health website, but our work adds to the list of ways in which tracking companies may be able to learn their identities,” said Narayanan, an affiliated faculty member at Princeton’s Center for Information Technology Policy.

Narayanan noted that the Federal Communications Commission recently adopted privacy rules for internet service providers that allow them to store and use consumer information only when it is “not reasonably linkable” to individual users.

“Our results suggest that pseudonymous browsing histories fail this test,” the researchers wrote.

In the article, the authors note that online advertising companies build browsing histories of users with tracking programs embedded on webpages. Some advertisers attach identities to these profiles, but most promise that the web browsing information is not linked to anyone’s identity. The researchers wanted to know if it were possible to de-anonymize web browsing and identify a user even if the web browsing history did not include identities.

They decided to limit themselves to publicly available information. Social media profiles, particularly those that include links to outside webpages, offered the strongest possibility. The researchers created an algorithm to compare anonymous web browsing histories with links appearing in people’s public social media accounts, called “feeds.”

“Each person’s browsing history is unique and contains tell-tale signs of their identity,” said Sharad Goel, an assistant professor at Stanford and an author of the study.

The programs were able to find patterns among the different groups of data and use those patterns to identify users. The researchers note that the method is not perfect, and it requires a social media feed that includes a number of links to outside sites. However, they said that “given a history with 30 links originating from Twitter, we can deduce the corresponding Twitter profile more than 50 percent of the time.”

The researchers had even greater success in an experiment they ran involving 374 volunteers who submitted web browsing information. The researchers were able to identify more than 70 percent of those users by comparing their web browsing data to hundreds of millions of public social media feeds. (The number of original participants in the study was higher, but some users were eliminated because of technical problems in processing their information.)

Yves-Alexandre de Montjoye, an assistant professor at Imperial College London, said the research shows how “easy it is to build a full-scale ‘de-anonymizationer’ that needs nothing more than what’s available to anyone who knows how to code.”

“All the evidence we have seen piling up over the years showing the strong limits of data anonymization, including this study, really emphasizes the need to rethink our approach to privacy and data protection in the age of big data,” said de Montjoye, who was not involved in the project.

Besides Narayanan, the researchers involved in the project included: Jessica Su, Ansh Shukla, and Sharad Goel of Stanford. Support for the project was provided in part by the National Science Foundation. The researchers thanked Twitter for supporting the project by providing access to the Gnip search API.

China’s Energy Security Strategies – Analysis

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China invested 103 billion dollars in renewable energies in 2015, becoming the first country in the world which invested the most in this type of energy. China has several reasons for becoming greener and promoting this kind of resources, but in relation to this article’s nature, the most important motivation may be the diversification in the sources of energy supply.

China’s new Law of National Security states in the articles 28 and 30 that the protection of the channels through from which China obtains its energy sources are strategic for the country’s security and therefore they must be protected. Energy resources are a very important priority for China, determining Beijing’s foreign policy and investments.

This article addresses a general view of the different energy security strategies China is developing, including crucial issues regarding this topic like the Spratly Islands and the Malacca Dilemma, the New Silk Route and the recent importance of renewable energies.

1. China’s main energy security threat: South China Sea, the Malacca Dilemma and the Spratly Islands

Until China fulfills most part of its energy needs with renewable energies, Beijing continues being dependent hugely on the hydrocarbons imported from abroad. The hydrocarbons arrive to China through land and sea routes, being these last ones the most important. Beijing has several disputes with its neighbors in the Yellow Sea, the East China Sea and, especially, in the South China Sea.

The Strait of Malacca connects the Pacific Ocean to the east with the Indian Ocean to the west. Source: DoD, Wikipedia Commons.

The Strait of Malacca connects the Pacific Ocean to the east with the Indian Ocean to the west. Source: DoD, Wikipedia Commons.

In the South China Sea, the first problem for the Asian giant is the Strait of Malacca. The Strait of Malacca, between the Malay Peninsula and the Sumatra Island, is the main oil supply route to China. Beijing’s dependency on the oil’s imports causes what the President Hu Jintao in 2003 named as “The Malacca Dilemma”.

For the vessels coming from the Gulf, from where the majority of the oil imports come from, to arrive to China, they must all pass through the strait, which is near Singapore, Indonesia, Malaysia, all of them allies of the US. Then, the ships must navigate near the Philippines, another US ally, and finally, near Vietnam, which is progressively getting closer to the Americans due to China’s aggressiveness in the South China Sea.

Once the ships have passed through the strait, they must navigate near the Spratly Islands, China’s second problem in the South China Sea. The Spratly Islands are a group of 200 tiny islands and corals whose importance is their strategic character. By controlling the Spratly Islands, China could have the right to exploit economically their water resources, obtaining possibly part of the gas and oil that China is actually importing from abroad. However, the most crucial factor to take into account is not the islands’ resources but their position in the map. The Spratly Islands surrounding waters are close to China, Taiwan, Philippines, Malaysia, Brunei and Vietnam, which are fighting over their sovereignty. China demands the sovereignty of all the islands with a clear objective: ensuring its energy security and, therefore, its national security.

Furthermore, the Spratly Islands are one of the geostrategic points in the so called “String of Pearls”. The “String of Pearls” is a concept created by the American consultating firm Booz Allen Hamilton, which assured that China would try to expand its naval presence through the construction of different infrastructures in countries throughout the Indian Ocean, from the South China Sea until those areas from where China imports the biggest part of its natural resources, mostly Africa and the Middle East.

For this reason, Beijing’s main objective is becoming the hegemonic power in this sea, increasing its military presence in the South China Sea to assure the navigation of the vessels which provide goods and hydrocarbons to the country. In the case that there was any naval blockade which impeded the oil and gas arrival, the Chinese economy would risk to become paralyzed, increasing the unemployment rate which in turn would probably lead to a huge civil disorder and instability, threatening directly the communist government leadership.

Trump’s election as the new US president could worsen even more the existing tensions in this place of the world. China is currently building some artificial islands in the South China Sea and asking for legitimacy to control the waters surrounding them. Trump has warned that the US should block China’s access to these islands. The elected president’s intentions of starting a commercial war with China and the possible rapprochement between the US and Taiwan are some of the policies that could provoke an even more aggressive Chinese answer in the South China Sea. In face of the bigger instability’s risk in the region, the Southeast Asian countries are strengthening their alliances with Washington, increasing the security dilemma in which all parties feel more threatened.

2. The New Silk Route

While Beijing is trying to ensure its naval power in the South China Sea, it is also pursuing different projects and investments to reduce its energetic dependence on the Strait of Malacca, from where it obtains the 80% of its oil imports. One of these projects is “The New Silk Route”.

With an approximated cost of 890 billion dollars and present in 60 countries, the New Silk Route is a governmental policy which is based on the development strategy “One Belt, One Road” designed by the Chinese President Xi Jinping, whose main objective is recreating a modern version of the most ancient commercial routes which connected China, Europe and Africa. According to the Chinese government, the strategy’s main objective is promoting the free market.

Pakistan's Gwadar Port. Photo by Paranda, Wikipedia Commons.

Pakistan’s Gwadar Port. Photo by Paranda, Wikipedia Commons.

While this may be true, a determinant factor which China’s takes into account are the different possibilities of importing hydrocarbons without having to navigate through the Strait of Malacca. There are many examples of the several infrastructures that China is financing to reduce its energy dependency from the South China Sea like the Irkutsk pipeline, which connects East Siberia with the Pacific Ocean, the Beyneu pipeline in Kazakhstan, and maybe more strategic, the Gwadar port in Pakistan and the pipelines in Myanmar. Both of them have been financed entirely by China and are crucial to transport hydrocarbons to China from the Gulf countries without navigating through the South China Sea.

In the case of Gwadar port, it gives China the direct access to the Indian Ocean, thus being the shortest route to reach the Middle East, Africa and Europe. Besides Gwadar port, China is also investing in deep water ports in the surrounding countries like Bangladesh, Myanmar and Sri Lanka. These deep water ports could be also essential in case Chinese military vessels needed to visit them.

3. The Nicaraguan Canal

Nicaragua Canal Proposals. Source: Wikimedia Commons.

Nicaragua Canal Proposals. Source: Wikimedia Commons.

Just as the US dominates two seas, the Atlantic and the Pacific Oceans, China wants to become a naval power with dominion over two oceans: the Indian and the Pacific. To ensure its energy security and strengthen its presence in the Pacific, China has designed a monumental project in Nicaragua: The Nicaraguan Canal.

China imports oil from Venezuela, the country with the biggest oil reserves in the world. However, the vessels with oil coming from Venezuela have to navigate through the Panama Canal, which despite being considered international waters are patrolled by Panamanians and Americans. This could be a big problem for China in case its relations with Washington got worst.

Therefore, the Nicaraguan Canal was born out of the need of having to ensure its energy resources. The Nicaraguan Canal is one of the most ambitious projects in the world. It is financed by the Chinese Hong Kong Nicaragua Canal Development Group and would have an approximated cost of 50 billion dollars.

The canal’s construction has not started yet and experts doubt about its feasibility, due to the need of reallocating around 27,000 people, who firmly oppose this project. But in case the canal is finally built, it would be longer than the Panama Canal, with 259.4 kilometers, and much deeper, allowing the navigation of bigger vessels, including Chinese military ships if China needed it. With the new canal, Beijing’s fears of a possible naval blockade in the Panamanian Canal would no longer exist.

4. Renewable Energies

After so many years sacrificing its environment on behalf of its economic growth, China invested 103 billion dollars last year in renewable energies, becoming the top investor country in green energies in this year.

Moreover, the Chinese government announced last week a massive 361 billion dollars investment until 2020 in wind, hydro, solar and nuclear projects in the country, which means 72 billion dollars per year only in China. As the investment in nuclear energy shows, China’s sudden shift towards alternative sources of energy is not motivated by the willingness to fight the climate change, joining in that way the international community, but there are other crucial explanations.

Firstly, there is the drop in the price of the machinery needed for producing renewable energies. China became the world’s top solar generator last year as the cost of building large-scale solar plants dropped by as much as 40 percent since 2010. Also in the solar sector, Chinese owners control five of the world’s six largest solar manufacturing companies.

Secondly, there is the huge pollution in the main Chinese industrial cities which normally have to face a weeks-long bout of smog. The pollution has become a very important topic in the country’s politics. The contamination is such that the Chinese people, quite angry, are organizing frequent protests demanding the government immediate measures to fight this problem which is causing 1 million premature deaths per year.

Thirdly, there is China’s determination to reduce its dependence on hydrocarbons. A country like China, being the second biggest economy in the world, must assure constantly the energetic resources flow which allows its dynamic economy to keep working. China is the biggest oil importing country in the world, with a percentage of 16,3 % in the global market. Beijing is forced to import gas, oil and coal from very remote countries, both by sea and land routes which, often, are in areas with a huge political instability, such as Pakistan and Venezuela, which could make the imports being threatened.

The investment is going to be also an opportunity for employment creation, with an estimation of 13 new million employments in the renewable sector by 2020. China is promoting the clean technologies development as the main economy’s engine. It seems Beijing is designing a strategy which connects its energy security with the environmental protection and the economic evolution towards high tech sectors.

However, this type of energy sources will only account for the 15% of the total energy needs by 2020, meaning that China still depends highly on hydrocarbon sources. Therefore, while China continues its policies towards cleaner energies, it will also continue increasing its military presence in the South China Sea and developing new infrastructures which ensure its presence in the Indian and the Pacific Ocean.

* Montosa Ródenas, IIRR graduate

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