AEP does optimism again, below. Taster: Little by little, collective global action is plugging the Russia gap. Once we get over the hump of panic buying there is no longer a fundamental mismatch of global supply and demand.
Cosas de Spain/Galiza
Lenox goes to a couple of festivals, with his horses.
Corruption: I often tell my visitors from the UK that Spain is far more corrupt than they perceive it to be. Unlike, say, Greece and Italy, it gets something of a free pass in Northern Europe: The evidence?:-
1. A local paper: It doesn’t look like the strategies adopted so far have had much success. It’s clear the laws aren’t sufficient, and neither are the organs of control.
2. The 2022 Eurobarometer: Corruption remains a serious concern for EU citizens. 68%EU/89% Spain believe that corruption is still widespread in their country. Moreover, 41% of Europeans/ 48% of Spaniards believe corruption has increased in the last 3 years, while 43%/42% Spain believe it has remained the same, Only 9%/6% in Spain believe it has decreased. National public institutions are considered the most corrupt, since 74%/Spain 85% of respondents believe corruption is increasingly widespread, followed by political parties – 58% of Europeans/83% of Spaniards – and local, regional and national politicians – 55% of European/67% of Spaniards. Thus, 24% of European respondents consider that corruption affects their daily lives, while in Spain this figure almost doubles to 46%.
From Fascinating Spain:-
– The wonderful Ciest islands here in Galicia
And a tour down in in Castilla La Mancha
One of our 30+ drug clans is Las Rositas, 4 members of which were arrested this week in Tenerife. They’d ‘set off alarms by flying back and forth from Santiago de Compostela and Vigo with a kilo of more of farina/harina each time. Not very bright then. But possibly quite rich,
Essential local knowledge – most tattoos in Galicia are on a maritime theme.
Some advice here on how you might take on your energy company.
On a more serious matter . . . These are the 7 cities pitching for the next Eurovision final, really the Ukraine’s:- Birmingham, Glasgow, Leeds, Liverpool, Manchester, Newcastle and Sheffield. I can’t see it going to Scotland. Liverpool is clearly the best bet.
Russia might lose the war in Ukraine before we reach winter. Geneal Ben Hodges, ex-commander of US forces in Europe, says there are already signs of “an impending collapse of Russian forces”. The Pentagon thinks Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going. Hodges says the Russians are no longer able to secure ammo dumps, airfields and communications. “Russia’s logistics system is exhausted. This could be over by the end of the year,” he said. Maybe.
There was a Persian empire – under Cyrus the Great – almost 600 years before the birth of Christ. Many folk will know it was a real pain in the (Eastern) arse of both the Greek and Roman empires. But some of its greatest successes came more than 500 years after the birth of Christ, when the Persians went West, under their king Kavad, and invaded the Eastern Roman Empire(Byzantium). Kavad was an adherent of a Zaroastrian prophet, Mazdak, whose followers – The Adherents of Justice – issued what some consider to be the world’s first Communist manifesto. Well, he was until he had Mazdak used as target practice for his archers, having previously shown him many of his followers buried upside down in Kavad’s lovely royal gardens. Kavad was a ruler of the Sasanian empire, which lasted for more than 4 centuries -from 224BC to 651AD making it the longest-lived Persian imperial dynasty. It established the Persians as a major power in late antiquity alongside its neighbouring arch-rival, the Roman Empire (after 395 the Byzantine Empire). But it all came crashing down when the Arabs invaded Persia in 651.
Wiki. The period of Sasanian rule is considered to be a high point in Iranian history and in many ways was the peak of ancient Iranian culture before the conquest by Arab Muslims and subsequent Islamisation of Iran. The Sasanians tolerated the varied faiths and cultures of their subjects, developed a complex and centralised government bureaucracy and revitalised Zoroastrianism as a legitimising and unifying force of their rule. They also built grand monuments, public works, and patronized cultural and educational institutions. The empire’s cultural influence extended far beyond its territorial borders—including Western Europe, Africa, China, and India—and helped shape European and Asian medieval art. Persian culture became the basis for much of Islamic culture, influencing art, architecture, music, literature, and philosophy throughout the Muslim world.
El placemaking: Says Wiki: Placemaking is a multi-faceted approach to the planning, design and management of public spaces. It capitalises on a local community’s assets, inspiration, and potential, with the intention of creating public spaces that promote people’s health, happiness, and well-being. At the end of September Pv city – having made a global reputation for itself – will host Placemaking Week, with experts from all over. Should be fun.
To amuse . . .
For new readers: If you’ve landed here looking for info on Galicia or Pontevedra, try here. If you’re passing through Pontevedra on the Camino, you’ll find a guide to the city there.
The next PM should not be bounced into stupid energy policies by this mood of near hysteria. There must be emergency subsidies but they should be targeted only on the nation’s less-affluent half:Ambrose Evans-Pritchard. The Telegraph
Before we whip the whole nation into demented agitation over energy costs, let us remember that the shock forecasts for this winter may never happen. Whether or not the UK’s energy price cap rises to vertiginous peaks next April depends on global gas prices, and that in turn depends on the evolution of the war in Ukraine, the calculations of Russia’s ruling oligarchy, the state of the world economy, China’s next construction bubble and the intensity of Asian gas purchases. It depends on drought in Norway, which usually acts as Europe’s hydro-battery. It depends on whether there is a third La Nina this year and how much that forces South America to import liquefied natural gas (LNG) to replace lost hydro. If you can juggle these variables and come up with a prediction of £4,426 in April, or £5,038 according to Auxilione, you ought to be running a hedge fund.
What energy analysts such as Cornwall Insight have done is a legitimate exercise. But they are essentially calculating costs based on futures contracts months ahead, which currently reflect extreme fear and a global scramble to secure supply. Time-lags in LNG shipments guarantee that October will be bad. Our fate in January and April is anything but foreordained.
The market has already priced in a total cut-off of Russian gas, and added a big uncertainty premium. With a little imagination you can discern a scenario where prices fall. Russia may lose the war in Ukraine before we reach winter. Gen Ben Hodges, ex-commander of US forces in Europe, says there are already signs of “an impending collapse of Russian forces”.
The Pentagon thinks Vladimir Putin has lost 80,000 troops. He is having to reactivate armoured troop carriers from the 1950s. Aeroflot jets are being cannibalised for parts. Russian troops are scavenging fridges and washing machines for semiconductor chips to keep the war machine going. Gen Hodges said the Russians are no longer able to secure ammo dumps, airfields and communications. “Russia’s logistics system is exhausted. This could be over by the end of the year,” he said.
Let us assume that this proves too optimistic, that the war freezes along today’s battlefield lines, and that Putin cuts off the remaining gas in October to try to force a settlement on his terms. Will the price of gas spiral into the stratosphere? No, it will not.
The world will lose a further 1% of total global supply (4,100bcm). This loss can be absorbed in the same way that it has already absorbed larger losses hitherto, by spreading the hit far and wide through the fungible market for liquefied natural gas.
Spot LNG prices in Asia have risen in near lockstep with European prices of $53 per MMBtu – eight times normal levels – as China, Japan and Korea rush to lock up cargoes and fill winter storage. This price signal has led to coal-switching in power plants across Asia, wherever viable; and to demand destruction, where not. Pakistan has been facing 10-hour blackouts. Chinese provinces have been restricting power since early August as part of an “orderly” energy strategy, otherwise known as rationing.
Once countries have reached “safe” storage levels, this frantic competition will abate. Berenberg Bank says EU gas storage is currently above seasonal levels and on track to exceed its 80pc target by late October. Germany may come close to 95pc, as the lights go out at night on the Reichstag and heating drops two degrees in swimming pools.
Japan’s Fumio Kishida is firing up nine nuclear reactors in time for winter. That will cover 10pc of Japan’s electricity, freeing up 4bcm of gas supply.
Little by little, collective global action is plugging the Russia gap. Once we get over the hump of panic buying there is no longer a fundamental mismatch of global supply and demand. Furthermore, the International Monetary Fund expects a severe global downturn, a killer for commodities.
At the risk of sticking my neck out, gas prices might well be significantly lower in January than today, whatever Putin does. Obviously, we still need to reopen the Rough storage site and secure future deliveries of LNG before others beat us to it, but this is being done belatedly to varying degrees. The problem with the worst-case forecasts now dominating Britain’s political debate is that they encourage a bidding war of extreme proposals. Agitators with an agenda are trying to bounce the next prime minister into rushed action and statist remedies. Fears are fuelling labour conflict. They are feeding the Kulturkampf.
The Liberal Democrats’ Sir Ed Davey has launched a scapegoat campaign against “energy bosses”, more or less inviting people to join the Don’t Pay UK campaign. He wants an even “tougher windfall tax” on energy companies – another one – to help fund the total cancellation of October’s energy price rise. This implies that rich families in large houses will enjoy a subsidy so they can continue wasting energy, paid for by a raid on productive companies and a regressive cross-transfer from poorer families with a lower energy footprint. The plan is destructive on multiple levels. We need Shell and BP to ensure a domestic supply of gas from North Sea fields, which have a better CO2 and methane profile than imported LNG. It is not easy to attract investment to these high-cost fields.
There was already a corporation tax surcharge for drillers before the Russia crisis. They have since been hit by a further 25% levy under Rishi Sunak, but with relief if they rotate profits into new projects. The Liberal Democrat policy would amount to confiscatory taxation. It would tell the world that the UK is uninvestable.
The plan targets 2 of the companies spearheading the UK’s ambitions for hydrogen, energy storage, carbon capture, and renewables, and which have the engineering skills to pull it off.
Gordon Brown is wiser, but goes a step further in one respect, proposing temporary nationalisation of energy companies along the lines of the bank bailout during the global financial crisis. Now, Brown did a sterling job at the G20 in March 2009, corralling the world into a giant rescue for the disintegrating financial system. He (and Barack Obama) did in fact “save the world”. But the energy system is not disintegrating. He is certainly right that time and tide waits for no one, and that crises do not hang fire politely to suit the convenience of Tory balloting. The Government has been slow to wake up to the energy threat. It should have grasped the nettle months ago, arguably purchasing gas futures contracts as an option on winter deliveries.
Liz Truss needs to be more alert to the pre-insurrectional mood. She must be careful not to let her idée fixe on tax cuts obscure the blindingly obvious need for direct action to alleviate energy poverty. There must be subsidies and they should be borne by the state as a war-time emergency measure, not by facile stunts. They should be targeted only on the nation’s less-affluent half. But nor should Truss be rushed into ill-advised policies by media noise, self-appointed prophets, or political foes with itchy statist reflexes. There is at least a 50:50 chance that the nightmare will not happen after all.