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United States
February 25, 2023 An independent analysis by Texas A & M University of Environmental Protection Agency data, released yesterday, found nine air pollutants at levels that could raise long-term health concerns in and around East Palestine, apparently contradicting statements by state and federal regulators that the air there is safe. A class-action suit filed on behalf of hundreds of residents alleges that Norfolk Southern went rogue when it decided to blow up the cargo in five train cars containing deadly vinyl chloride three days after the derailment, effectively poisoning the town and nearby region. About 1.1 million pounds of toxic vinyl chloride were spilled and later burned, sending thick, black plumes of smoke into the air and contaminating soil and water sources, the suit claims. A spokesman for Norfolk Southern told that the company consulted experts including Gov. DeWine after discovering, two days after the crash, that the pressure relief devices in one train car had stopped working. He also said it had to take action in the form of a controlled burn to avoid what the company called a potential “catastrophic failure of the cars.” The National Safety Transportation Board report backs up Norfolk Southern’s description of the rising temperature in the one train car and why the company decided to explode the chemicals over East Palestine. But there are many who wonder if there was a better way. “The company’s decision was very suspicious,” Rocha of the Morgan & Morgan law firm and one of the lead attorneys on the class-action case told. “Norfolk Southern discharged more vinyl chloride into a small area in eastern Ohio in a day than the entire industries combined of America discharge in a year.” Lester, a Harvard-trained toxicologist at the Center for Health, Environment and Justice with 40 years of experience, said the hot zone at East Palestine was among the most concerning he has ever seen - and stressed the dangers of the chemical dioxin that was released during the controlled burn and that will be embedded in the soil and water. “Until the government takes this seriously there are going to be real problems,” Lester said. “It’s criminal that the EPA didn’t come forward with information about dioxin and start testing for it.” The creeks that dot the town still ripple with the telltale rainbow color of contamination if you throw a rock in them. East Palestine residents’ shock illnesses after derailment. Evacuation orders were lifted on February 8, but many locals say they got unexplained rashes and sore throats when they returned home. Locals are frustrated and furious over what they say has been a lack of real information and help from both local officials and the Biden Administration. Last week, East Palestine Mayor Conaway ripped President Biden for heading to Ukraine for a surprise visit instead of the scene of the toxic train derailment, calling it “the biggest slap in the face.” (Source: TheNewYorkPost)
NATO
Feb. 25, 2023 Back in 1991, President Bush viewed Ukraine’s desire for freedom as a dangerous nuisance. That year, just months before the Soviet Union’s collapse, he delivered to the Ukrainian parliament his infamous “Chicken Kiev” speech, urging Ukrainians to abandon “suicidal nationalism” and permanently remain under the Kremlin’s rule. Ukraine, Mr. Obama said in an interview with the Atlantic in 2016, “is going to be vulnerable to military domination by Russia no matter what we do.” All the evidence of the past 50 years, he added, suggested that Russian (and Chinese) decision-making wouldn’t be influenced by “talking tough or engaging in some military action.” Two days before the Russian invasion of his country, on Feb. 22, 2022, Ukrainian Foreign Minister Kuleba was welcomed to the White House. As he greeted President Biden and senior administration officials, Mr. Kuleba later recalled, he felt like a patient surrounded by doctors presenting him with a diagnosis of stage-four cancer. On the first morning of the war, Mr. Putin alluded to nuclear weapons to deter the West from helping Ukraine. “Whoever attempts to meddle, and even more so to create threats for our country, for our people, must know that Russia’s response will be immediate, and will cause you such consequences that you have never encountered in your history. We are ready for any turn of events. All required decisions have already been made,' Mr. Putin said. Since the war’s first days, Mr. Zelensky has taken advantage of his skills as an actor and communicator to speak directly to a variety of audiences worldwide. He has addressed university commencements, music festivals and sports tournaments in an effort to make Ukraine’s fight for freedom into a moral and emotional issue rather than yet another foreign-policy problem. His approach has clearly paid off. In the first several months after the Russian invasion, the Biden administration took a gradualist approach that White House officials have described as 'boiling the frog.' Javelin antitank missiles were among the first weapons the U.S. sent to aid Ukraine after the Russian invasion last February. Stinger portable air defense systems were also among the weapons the U.S. sent in the early weeks of the invasion. M777 howitzers arrived from the U.S. in the spring. The U.K., Poland, Germany, France and the Netherlands have also contributed large arsenals of comparable weapons, such as the French-made Caesar self-propelled howitzers - starting in May - and German-made Panzerhaubitze self-propelled guns. U.S.-made Himars (High Mobility Artillery Rocket Systems) were sent to Ukraine during the summer. These supplies allowed Ukrainian forces to stop Russian advances in the Donbas region over the summer and to push back with offensives in the Kharkiv and Kherson regions during the fall. Over the past 12 months, the cumulative effect of these new weapons has transformed the balance of power on the battlefield. 'We have been slow in delivering certain capabilities,'said ret. Lt. Gen. Hodges, a former commander of the U.S. Army in Europe. 'It has taken the Pentagon a long time to come to the realization that Ukraine can win, and will win, especially if we give them what they need'. The U.S. announced last month that it will send 90 Stryker armored fighting vehicles to Ukraine. The U.S. and Germany are both providing U.S.-made Patriot surface-to-air missile systems to Kyiv. Now, Patriot air-defense batteries, Abrams and German-made Leopard 2 tanks, Bradley and Stryker fighting vehicles are on the way, 'aiming to enable Ukraine to regain more ground in another offensive this spring'. Some NATO allies, such as the Netherlands, are already pushing to provide Ukraine with a fleet of F-16 jet fighters. The initial reluctance of the U.S. and its allies to help Kyiv fight Russia has turned into a massive program of military assistance, which carries risks of its own. “The West is also the frog that is boiling itself. With each incremental increase in assistance, qualitative or quantitative, we become accustomed to that being normal, and the next one doesn’t seem so extreme. There is a dynamic here where we become desensitized to what is going on. We are in a bit of a slow-moving spiral that shows no signs of letting up,” Charap, a senior political scientist at Rand Corp. who has urged caution on arming Ukraine, said. Ukraine’s own military industries have been shattered by Russian missile strikes, and its reserves of Soviet-vintage weapons are running out. By now, Kyiv can keep fighting only as long as Western assistance continues apace. U.S. defense contractors’ inability to quickly replenish weaponry such as missiles and munitions for Ukraine has led Pentagon officials to argue that industry consolidation has gone too far and raised questions about how prepared America is for conflict. Ukraine is the west’s war now. 'True, no American or NATO soldiers are fighting and dying on Ukrainian soil'. But the U.S., its European allies and Canada have now sent some $120 billion in weapons and other aid to Ukraine, with new, more advanced military supplies on the way. "If this monumental effort fails to thwart President Putin’s ambitions, the setback would not only undermine American credibility on the world stage but also raise difficult questions about the future of the Western alliance'. In Asia, the Middle East and elsewhere, the West’s geopolitical adversaries are calculating whether the U.S. and its allies have the stamina and cohesion to defend the 'rules-based international order' that has benefited the West for decades. "What is happening in Europe today can happen in Asia tomorrow,” NATO Secretary-General Stoltenberg warned the Munich Security Conference this month. “If Putin wins in Ukraine, the message to him and other authoritarian leaders will be that they can use force to get what they want. This will make the world more dangerous and us more vulnerable." The Munich conference capped several weeks in which the U.S. and its allies have dramatically expanded the scope of their military aid, an indication that Mr. Putin’s expectation that the West will eventually tire of helping Ukraine hasn’t materialized just yet. 'In fact, they will deliver more weapons to Ukraine in the next few months than they did in the whole of 2022'. There is no guarantee that the mood won’t shift in the future, especially if there is a serious economic downturn. The war in Ukraine isn’t likely to end anytime soon. Both sides believe they can win on the battlefield, and little room exists for peace negotiations. 'Ukraine is preparing offensives to regain the roughly 18% of its territory still occupied by Moscow, including the Crimea peninsula and parts of the eastern Donbas region that Mr. Putin seized in 2014'. Russia has declared four Ukrainian regions, none of which it fully controls, to be its own sovereign territory and seeks, at the very least, to conquer those lands. “The next months will be very critical. If, say, another Ukrainian offensive fails, if it becomes the public narrative that it’s going to be a stalemate, support in the West might drop - perhaps not substantially, but some of the politicians will see the writing on the wall,” cautioned Gady, a senior fellow at the International Institute of Strategic Studies in London. Mr. Putin, in a speech on February 21, indicated that his aspirations remain much broader, referring to Russia’s “historical territories that are now called Ukraine.” (Source: TheWallStreetJournal)
February 22, 2023 Since Russia annexed Crimea in 2014, NATO has supported Ukraine through the 2016 Comprehensive Assistance Package for Ukraine - which included nonlethal equipment, training, capacity building, cyber defense, logistics and interoperability with NATO forces - and the provision of training and defensive equipment by NATO allies. This package was strengthened at the June Madrid summit in two ways. First, with around $100 million of further nonlethal military assistance - such as fuel, medical supplies, anti-drone systems and counter-mine equipment. Second, to include longer-term support for postwar reconstruction and reform of Ukraine's defense and security institutions - such as helping Ukraine transition from Soviet-era equipment to modern NATO weapon systems. NATO also extended its support to help Ukraine rebuild its electrical infrastructure and cope with power shortages. NATO made several commitments in Madrid to strengthen conventional deterrence against armed attack, including more forward deployed combat formations, a much larger high readiness force, prepositioned equipment, and preassigned national forces. Eight months on, Madrid implementation looks mixed. Some progress has been made standing up new battlegroups and preassigning NATO response forces. An important Madrid pledge was to scale up the eight existing multinational battlegroups (around 1,000 personnel) to “brigade-size units where and when required” (up to 5,000 personnel). Yet none have yet been upgraded - even if Germany has deployed a 100-strong Brigade headquarters to Lithuania and the United Kingdom will surge one to Estonia in support of Exercise Spring Storm in May. In Romania, the French battlegroup appears at half strength given additional forces from other nations “are not integrated into the NATO battlegroup.” Meanwhile, minilateral formations like the Joint Expeditionary Force may offer a more flexible way of moving allied forces into areas of concern. One headline-grabbing commitment made by NATO in Madrid was to increase its response force of high readiness units from 40,000 to over 300,000 personnel through a new force model. There are few signs the ambition is on track to meet its goal of being completed this year. For example the scale of forces required by Germany will be difficult to generate given that “since 2014, Germany has been unable to provide NATO with a single brigade . . . providing two more brigades in the brief period remaining will require a superhuman effort.” Today’s NATO planners have now enshrined the Madrid level of ambition in the first step of the alliance’s four-year-long defense planning process. Deterring hybrid threats has seen progress with a new NATO-EU resilience taskforce and NATO Critical Undersea Infrastructure Coordination Cell. NATO defense ministers agreed to step up vital support to 'other partners at risk, including Bosnia and Herzegovina, Georgia and Moldova' as they experience escalating pressure from Moscow. The largest space project in NATO’s history will use a virtual constellation of national and commercial space assets to provide Alliance Persistent Surveillance from Space. The NATO secretary general’s visit to South Korea and Japan demonstrates the concept’s increased focus on the Indo-Pacific. The alliance must implement the targets it set one year ago in Madrid by the Vilnius summit in July. NATO allies have provided around $150 billion in military and financial assistance and levied massive sanctions on the Russian economy. The main forum is the U.S.-led Ukraine Defence Contact Group of over 50 nations that met last week for the ninth time since the war began and has committed nearly $50 billion - or “more than eight combat brigades” worth - in military aid to Ukraine, including air defense systems, heavy artillery, modern main battle tanks, and now training for Ukrainian fighter jet pilots. 'Matériel is not getting there fast enough'. The second problem is the impact of weapons transfers on NATO’s own stockpiles of equipment and ammunition. This is compounded by allies’ limited industrial capacity to quickly produce more. According to Secretary General Stoltenberg, Ukraine is using up ammunition much faster than its allies can produce it. Equipment or munitions shortages may result in NATO strengthening Ukraine’s deterrence at the expense of its own. Eight nations joined the Multinational Ammunition Warehousing Initiative to store the very munition stockpiles that are fast disappearing. (Source: CSIS)
February 22, 2023 US President Biden today held talks with leaders from the Bucharest Nine, NATO's easternmost members, before departing Poland. The Bucharest Nine grouping came together in response to the 2014 Russian annexation of Crimea from Ukraine. "Hungarian Prime Minister Viktor Orbán, who has pledged to maintain ties with Russia, did not attend today's B9 meeting. Hungarian President Novák attended the summit instead'. 'The nine countries, who joined NATO after being dominated by Moscow during the Cold War, have had heightened fears that Russian President Putin would take military action against them in light of Moscow's invasion of Ukraine'. 'The nine countries have been staunch supporters of military aid to Ukraine, and have called for additional assistance to the war-torn country such as air defense systems'. (Source: DW)
Globalization
February 24, 2023 Global shipping is braced for accidents as vintage vessels join the fast-growing dark fleet, trading under the radar with worrying safety concerns. Seafarers have died in the cross-fire around the Black Sea, many more have been pressed into service on the ground in Ukraine. As an industry, shipping had learned to be more flexible and collaborative during the covid pandemic, useful lessons that carried through in the wake of war. “When the war in Ukraine began, it was these qualities that meant our industry could mobilise quickly to tackle the challenges the industry faced. This included ensuring that seafarers impacted could be paid, ensuring that any sanctions did not inappropriately target shipowners and engaging at the highest levels to support the development of the grain corridor,” commented Platten, the secretary-general of the International Chamber of Shipping. For Dr Stopford, the world’s most famous maritime economist, the author of Maritime Economics, the war has not been a game changer per se for shipping. “It’s been more of an addition to the many disruptions caused by the pandemic and its aftermath,” said Stopford. Ships continue to deliver their cargoes, often much further away than before. The inefficiency is pushing rates up for many sectors including LNG, crude and product tankers. Tankers and LNG carriers have enjoyed very solid returns since war began. In January 2022, just before the war started, crude earnings had plunged to $5,000 a day. But once the war got started, they surged, with strong spikes in the second and fourth quarters of 2022, with earnings averaging over $40,000 a day over the past 12 months. “This has been almost exclusively a tanker market story,” commented Adland, shipping professor at the Norwegian School of Economics, a protégé of Stopford’s from their days together at Clarksons Research. “The past 12 months have highlighted once again how disruption is good from the viewpoint of shipowners. If you mess with an extremely efficient market by introducing constraints – either self-imposed or political sanctions – then the resulting supply-side inefficiencies and freight rate hikes can be substantial,” Adland added. Prices for tankers to keep Russian exports moving beyond the sanctions raining in have leaped. Clarkson Research’s secondhand tanker price index has recorded its sharpest-ever upwards movement over the last year, rising by 52% to the highest level since 2008. “Russian crude oil production and seaborne exports have proved very resilient,” said Kilen, head of research at Norwegian broker Fearnleys. An average 3.21m barrels per day was loaded over the past 12 months, versus an average 3.06m barrels per day during the previous 12-month period, according to data from Fearnleys. This excludes Kazak Kebco and CPC grades loaded at Novorossiysk. Volumes to Europe started to decline shortly after the war broke out and were already limited by the time of the December 5 price cap. The vast majority of ton-mile changes relating to Russian seaborne crude oil flows were therefore witnessed last year. The biggest shift was in volumes heading to Asia, where an average 1.93m barrels per day has ended up over the past 12 months versus 1.04m barrels per day in the previous 12-month period, Fearnleys data shows. Excluding Russia Far East originating volumes to Asia would show 985,000 barrels per day in the past 12 months versus 102,000 in the previous period, hence around 880,000 barrels per day of Baltic and Black Sea volumes have been boosting the average distance tankers travel. Volumes of clean oil products, predominantly diesel/gasoil and naphtha, have also been resilient at around 1.6m barrels per day, with it reaching as high as 1.9m barrels per day over the past two months, leading up to the February 5 price cap on oil products. An average 266,000 barrels per day has been loaded for European destinations after the February 5 price cap, versus an average 908,000 barrels per day during the period from when the war broke out until the price cap came to effect. Europe has shifted much of its sourcing from Russia to suppliers east of Suez, while Russian clean products now seek new homes in Asia and Africa predominantly. India has been the most eager buyer, accounting for 829,000 barrels per day of what has been loaded of Russian crude oil over the past year, compared with only 31,000 barrels per day during the 12-month period before the war broke out. China has taken a fair bit more with the past year showing 994,000 barrels per day versus 700,000 loaded in Russian ports a year earlier. For dirty oil products, fuel oil predominantly, volumes have been around 870,000 barrels per day the past 12 months versus 1.1m barrels per day during the previous 12-month period. 31% of the past 12 month loadings has been for Europe while 4% has been for the US, versus 49% and 30% respectively during the previous 12-month period until the war broke out. While only 12% was shipped to Asia and 4.6% shipped to the Middle East during the previous 12-month period, this has changed to 42% and 15.4% respectively for the past 12-month period, according to Fearnleys. In gas, as Europe lost pipeline volumes from Russia, down 55% year-on-year, LNG had to cover what increased North Sea piped volumes were unable to compensate for to Europe. LNG flows to Europe grew 70% year-on-year, according to Fearnleys. It was primarily US LNG that came to Europe, as around 61% of the US LNG cargoes ended in Europe, up from around 25% of the cargoes originating in the US to Europe in 2021. A similar trend was seen for Yamal LNG cargoes during the Northern Sea Route season. “Weaker Chinese and Asian demand sort of saved Europe, one could say,” commented Kilen from Fearnleys, adding: “With China reopening, Europe short of even more piped gas this year, and new liquefaction capacity being limited for a third year in a row, it could be another tight autumn on LNG availability as European buyers will have to compete more with Asian buyers, although a restart of Freeport LNG should help.” For the ammonia trades, the loss of Ukrainian exports marked a significant shift in the global seaborne map. The port of Yuzhny in Ukraine was prior to the war one of the top suppliers of ammonia to the world market, accounting for around 11% of seaborne traded volumes in 2021. No shipments have been done after the war broke out, resulting in higher fertilizer prices and fear of food shortages. Much of the shortfall has however been covered by other suppliers, with seaborne traded volumes of ammonia declining just a moderate -2.1% in 2022 versus 2021. The top producer Trinidad & Tobago also produced less last year. This was more than compensated for through higher exports from other leading suppliers, such as Saudi Arabia, Indonesia and Algeria. For dry bulk, coal and grain were the headline changes in the 12 months of war. Ukraine’s dry bulk exports have plunged 77.8% during the first year of war with Russia, data from BIMCO shows. Prior to the war, more than one tenth of the world’s wheat and maize shipments came from Ukraine. As Europe banned Russian originated coal, imports from Australia and South Africa reached the highest level in at least 10 years last year. There was also a significant increase in imports from Colombia and the US on 2021 levels. Minor increases were seen from Indonesia and Mozambique. The Russian volumes that previously went to Europe were sold in increasing quantities to China, India, South Korea, and Turkey. Due to longer sailing distances along with the second highest annual shipment volumes ever, coal ton-time reached all-time highs last year, according to Fearnleys. On the grains side, Ukraine’s usual buyers had to source from other countries. However, this was and is almost impossible, which meant there was no significant shift in trade flows apart from volumes being lost. “The lower than previously expected growth in 2022 and following years will therefore have a lasting impact also on growth in shipping markets,” Rasmussen, chief shipping analyst at BIMCO predicted, adding: “In addition, the war again elevated energy supply to a matter of national security, particularly in the EU. It has led to a renewed commitment to accelerate decarbonisation which will have a lasting impact on coal and oil shipments.” (Source: Splash247)
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