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What’s Behind the US-Saudi Nuclear Mega-Deal?

Saudi-Russian Agreements Result with Two Nuclear Reactors in 2018

What’s Behind the US-Saudi Nuclear Mega-Deal?

Up to 16 nuclear power plants for civilian purposes? Really?

By Leonard Hyman and Bill Tilles for WOLF STREET:

Last week, the NY Times ran a front-page story on Saudi Arabia’s efforts to purchase nuclear fuel enrichment capabilities and as many as 16 nuclear power generating plants from the US. The principal concern expressed here was the Saudi’s insistence on ownership of nuclear fuel-enrichment technologies.

Typically, when the US has exported its reactor technology, it is accompanied by a fuel purchase agreement. We sell the fuel more or less as finished product. In the past, reluctance to export fuel-processing technology stemmed from concerns regarding proliferation of nuclear weapons. Saudi Arabia does have domestic sources of uranium they could mine but they have also expressed the need to respond to a potential nuclear arms rivalry with Iran.

But this article omitted the most important point. The key question is what are the Saudi’s motives regarding construction of a vast number of nuclear power plants for supposedly civilian purposes? The answer is obvious. There is no earthly commercial or economic reason for them to produce those quantities of electricity in the proposed nuclear fashion.

We should also point out that the seemingly large number cited for these nuclear power plants, $80 billion, is understated by a factor of almost five. Sixteen Westinghouse-designed nuclear stations with two reactors apiece would cost roughly $30 billion apiece! And 16 such plants would cost $480 billion – not $80 billion.

This sounds to us more like a bribe. Sell us nuclear fuel-processing technology (which it appears they really want), and we promise to purchase a large number of extremely expensive power plants from the US (the need for which is presently unclear).

Major nuclear construction projects currently underway in the West, V.C. Summer in South Carolina, Plant Vogtle in Georgia, Hinkley Point in the UK, Flamanville in France and lastly Olkiluoto in Finland all have two things in common: They are all vastly over-budget as well as years behind schedule.

  • The V.C. Summer project in South Carolina was recently canceled in mid-construction due to its lack of economic viability (used the Westinghouse reactor design under discussion in the article).
  • The Plant Vogtle in Georgia (also using the Westinghouse reactor design under discussion in the article) has turned into an economic albatross for Southern Company’s Georgia Power subsidiary.
  • Hinkley Point in the UK has required huge government subsidies to continue and if completed will produce overly expensive power for decades.
  • The Moorside nuclear project in the UK was recently abandoned by its developer after incurring almost a half a billion dollars in costs.
  • The UK government is also negotiating a major subsidy-disguised-as-investment in the Wylfa nuclear plant to keep that project afloat.

There are cheaper and cleaner ways to produce electricity other than from nuclear energy. The sun shines and the wind blows even in oil-rich Saudi Arabia, does it not? The Times’ story states that nuclear arms competition with Iran is a Saudi concern. As a result, they are eager to also obtain nuclear fuel enrichment technology.

This article leaves us with two possibilities:

Either, that the electricity-needy Saudi kingdom is truly embarking on a nearly half-trillion-dollar endeavor to bring reliable, carbon free energy to its people and perhaps the region as well.

Or, that this is merely a cynical ploy to dangle an enormous contract in front of gullible Americans in order to obtain nuclear fuel enrichment technology. And we would bet that following the technology transfer currently under discussion, the actual number of US reactors eventually purchased will total one or two at most, not 16. Not that we’re cynical or anything.

In March of last year, Westinghouse’s corporate parent Toshiba filed Westinghouse into bankruptcy in the US. Westinghouse is now a subsidiary of Toronto-based Brookfield Asset Management who, as corporate strategy, has been a purchaser of distressed utility and infrastructure properties. Perhaps the AP1000 reactor design will be a winner for them.

Although Westinghouse still retains a presence in Cranberry Township, PA, we wonder what President Trump will say when he learns Westinghouse is now owned by a Canadian company? By Leonard Hyman and Bill Tilles for WOLF STREET

For investors there is little clarity through the smoke and haze. Read…  Will PG&E Have to File for Bankruptcy Protection? 

The Saudi/US/Israeli War To Steal Lebanon’s Natural Gas Bonanza

The Lebanese/Israeli “Line In the Sand” Is Drawn In the Water

Int’l Expert: Lebanon’s Offshore Gas Reserves Larger than in “Israel”

Israel Planning “Gas Piracy” Over Lebanon’s Offshore Natural Gas Bonanza?

US Pushes Surrender To Israel of Token Slice of Lebanon +Undersea Rights To Gas and Oil

Trump “Green-Lighting” Saudi Plans For Lebanon’s Destruction?

Gas: The solution to Lebanon’s electricity crisis

In Lebanon, the Mediterranean country devastated by war, gas could solve key economic issues and help the country keep its lights on

Lebanon has 10 offshore blocks that have yet to be explored
Lebanon has 10 offshore blocks that have yet to be explored

 

Lebanon has been defined by instability for decades, but one thing remains constant. Every day, without fail, the electricity cuts. In the country’s capital city, Beirut, the electricity cuts for around three hours a day, but in other areas, residents face more than 12 hours of power outages per day.

To cope, the average Lebanese household relies on a personal diesel-fuelled generator at a cost of around $1,300 per year, or 15% of income per capita, according to a 2017 report by the World Bank. But the cuts also affect business— in 2008, the World Bank estimated that power outages cost Lebanese industries close to $400mn in sales losses.

The reasons for the outages are varied—the 15-year Lebanese Civil War, which ended in 1990, ravaged the country’s infrastructure, power plants are ageing, but above all else, Lebanon has no gas.

When asked about the gas shortage in a phone call, Wissam Chbat, a board member and head of geology and geophysics at the state’s Lebanese Petroleum Administration (LPA), interrupts: “No, it’s not a shortage,” he says. “There is no gas. None.”

As a result, state-run electricity company Electricité du Liban (EDL) borrowed around $1.4bn from the country treasury to purchase fuel in 2018, according to the country’s budget.

As such, while its Gulf counterparts might be celebrating a moderate rise in oil prices, higher prices are bad news for this small, Mediterranean country.

“The average production cost for every [kilowatt hour (KwH)] is 14-15 cents, depending on the fuel price, and we sell it for 9 cents to the consumer,” Chbat says. The country’s seven thermal power plants use heavy fuel oil, and its gas turbines run on diesel oil instead of gas.

The situation is cyclical: the government cannot justify increased tariffs unless generation capacity is increased, and cannot increase capacity without more investment into the sector. Projects to build more power plants have been continually made and shelved.

This situation has made EDL, which says it controls 90% of the country’s electricity sector, a huge deficit centre for the government.

The International Monetary Fund (IMF) wrote in a February 2018 report that “the electricity sector has not only been widely identified as Lebanon’s most pressing bottleneck, but it also remains a significant drain on the budget,” pinpointing the electricity sector as a key issue for economic reform. In the report, the IMF warned that the country’s debt-to-GDP ratio could shoot up to 180% by 2023 if reforms are not undertaken.

Chbat estimates that EDL has, over the years, accounted for around $30bn of Lebanon’s total debt. The Ministry of Finance estimates that gross public debt was at $82.9bn by the end of Q2 2018 (160% of GDP in 2017), up $1bn from the previous quarter.

“If we look at the state, it is estimated that if we switch the current existing capacity for electricity, around 60% or 65% of it, which is realistic, to fired gas, we are saving around $1bn dollars a year,” Chbat says.

There have been attempts to remedy this situation with no substantial success. Gas was imported from Egypt for a few months in 2009 through the Arab Gas Pipeline to the North Lebanon Beddawi plant, but this project stopped due to gas shortages in Egypt and escalating turmoil in the country, followed by the war in Syria.

But Lebanon could soon have its own network of pipelines along the country’s coast, interconnecting major power plants. As part of this plan, a contract is up for tender for the development and operation of three liquid natural gas (LNG) floating storage and re-gasification units (FSRUs) and associated pipelines, which will be awarded early next year.

“If the tender goes smoothly and things work as planned we might have our gas from these FSRUs in 2021 or 2022,” Chbat says. It is the fastest potential fix to the problem, and might save the country some money on fuel purchases, but still requires imported LNG.

When gas was first discovered in the Levant Basin in the eastern Mediterranean in 2009, it must have seemed like a saving grace to the Lebanese government. But licensing was delayed because of recurring political issues.

Since then, Lebanon has surveyed the acreage for its 10 blocks, and in early 2018 awarded exploration licenses for blocks four and nine to a consortium led by Total, Eni and Novatek.

Chbat says each round has its own objectives. For the first licensing round, a main concern was striking a commercial discovery—Chbat believes they achieved this goal by awarding block four, which, based on studies, has the highest chance of commercial success of the blocks that were open in the first licensing round.

He notes that the LPA ranks blocks based on ‘attractiveness,’ in line with the goals for that licensing round, and that finding companies with shared goals is a key concern for them. Now, the LPA is working on its second licensing round, which will launch by the end of the year.

For the second licensing round, the LPA aims to accelerate exploration activity while diversifying the play types in which they award blocks. One strategy: learn from the successes of neighbouring countries, like Cyprus, which he admits is “three or four years ahead of [Lebanon]” in its oil and gas activities. After studying successful blocks in Cyprus, the LPA might consider opening blocks with similar geological systems to attract companies to bid.

Prequalification for the second licensing round is expected to open in January 2019, and Chbat says that by April 2019, they should be prepared to announce the prequalified companies and open the six-month bidding period, which will close towards the end of 2019. The LPA plans to award contracts every two years.

Since signing its first exploration license with Total, Eni and Novatek, LPA has approved exploration plans for the next three years.

“The consortium has started to scan the Lebanese coast to see which location is best to launch operations from,” Chbat says. “Also, the preparation for environmental studies and the sampling of water and samples on the drilling site are going to start.”

The consortium has also committed to hiring 80% Lebanese employees. Given that Lebanon’s oil and gas sector is virtually non-existent, Chbat concedes that this will have to be gradually achieved. Early next year, the consortium will tender sub-contractors, who will also be held to this rule.

Exploration is still in its early days, and there is no guarantee that development will yield the results that Lebanon needs. But part of the LPA’s job is to plan for development even if it is not certain.

“The Lebanese market would require, in the first estimate, 0.2 trillion cubic feet [of gas] to fire the power plants on gas and to use it for some industries,” Chbat says, noting that it is a small market.

In such a small market, the effect of gas production would be substantial. The cost of electricity generation would drop to 11-12 cents per KwH, Chbat estimates, still higher than the 9 cents per KwH that the government charges residents.

But reducing fuel expenditure could give the government more breathing room to update power plants and work to increase capacity—Chbat says the state would need to “move to above 20 hours [of electricity] a day to be able to justify an increase in tariffs.”

The hope is that improved service from EDL will motivate residents to rely solely on EDL’s supply, instead of using black market generators, which are not metered and weigh down EDL’s supply and performance.

If gas discoveries are more than enough to saturate the market, Lebanon has a few options: send gas to Egypt through existing pipelines to be liquefied and exported by ship, or build a Lebanese pipeline under 250km transporting gas from offshore Lebanon and Syria to Turkey, where it could connect to the Eurasian pipeline network.

Depending on discoveries in Cyprus, where in early October Eni, Total and Exxon were invited to bid for its offshore Block 7, Lebanon could have another option. If Cyprus has large amounts of recoverable gas, it is expected to invest in LNG infrastructure, which Lebanon could use to liquefy its gas for export.

But the potential for Lebanon’s energy sector could be even bigger. “Initially, we were under the impression that it was purely gas,” Chbat says. “Now, the oil story is coming in more vigor for offshore Lebanon, with the possibility of having a mixture of oil and gas.”

Lebanon’s entrance into the regional oil and gas sector could mark a turn in its economy, providing new job opportunities, a new revenue stream for the country and cutting national debt. But issues persist. The IMF in February 2018 pointed out corruption as a key obstacle to economic reform.

Oil and gas production might not cause immediate, sweeping change, resolving deep-rooted issues like corruption, political strife or neighbouring conflicts. But it could keep the lights on for a change.

Kurdish Website Documents First Illegal US Observation Post On “Occupied Syrian” Territory

Kurdistan 24 captures completion of first US observation post on Syria-Turkey border


Kurdistan 24 captures completion of first US observation post on Syria-Turkey border

The building of the first US observation post is shown as completed and being supplied by military supplies in east of Tal Abyad town in north Syria on border with Turkey, November 27, 2018. (Photo: Kurdistan 24)

TAL ABYAD (Kurdistan 24) – The US-led coalition forces on Tuesday have established the first observation post east of Tal Abyad town in northern Syria on the border with Turkey.

“There will be three posts in Tal Abyad and two in Kobani,” local security sources told Kurdistan 24.

It has already been supplied with military and communication equipment, the sources added.

Last week, US Defense Secretary Jim Mattis said the US-led coalition had decided to set up observation posts in northern Syria along parts of the border with Turkey.

Mattis further explained that recent Turkish attacks on Kurdish areas of Syria had delayed efforts of the US-led coalition to defeat the Islamic State (IS) in the war-torn country.

Recent Turkish attacks on towns have killed or wounded dozens of people, including civilians in the districts of Kobani and Tal Abyad (also known as Grespin in Kurdish).

The observation posts are aimed at ensuring that Turkey and the US-backed, Kurdish-led Syrian Democratic Forces (SDF) remain focused on clearing the remnants of IS.

Additionally, the US army has been patrolling the region since early 2017 after Turkey bombed YPG military headquarters and even threatened to strike American troops.

However, Turkish Defense Minister Hulusi Akar recently told his country’s state media that Turkey had rejected US plans to set up the observation posts.

“We have stated that the observation points to be established by US troops on the Syrian border will have a very negative impact,” he said over the weekend.

The Kurdish-led SDF are America’s main partner in the fight against IS in Syria. Turkey considers the Kurdish component—the People’s Protection Units (YPG)—to be the Syrian branch of the Kurdistan Workers’ Party (PKK), which both Turkey and the US, as well as the European Union, consider a terrorist organization.

Editing by Nadia Riva

(The video was taken in Tal Abyad by Kurdistan 24 correspondent Redwan Bezar)

In Syria’s Tangled Conflict, a Kind of Regional War Has Already Begun

In Syria’s Tangled Conflict, a Kind of Regional War Has Already Begun

 

HATAY, TURKEY – FEBRUARY 14: A photo taken from Turkey’s Hatay province shows military vehicles are being transported to border units as artillery units of Turkish Armed Forces continue to hit PYD/PKK terror group targets across Turkey’s Reyhanli, Kirikhan and Hassa districts, within the ‘Operation Olive Branch’ launched in Syria’s Afrin, on February 14, 2018. Eren Bozkurt/Anadolu Agency/Getty Images

OVER THE COURSE of three days, four intervening countries in Syria lost aircraft during operational missions. The many overlapping battles in Syria saw Russia, Iran, Turkey and now Israel for the first time lose aircraft at different moments and in different battles.

The dizzying implications of these intersecting battles – Turkey invading Afrin, Russia enforcing de-escalation zones, Iran sending drones into Israel and Israel attacking Syrian military installations – suggest that the possibility for escalation and wider regional conflict is always imminent.

But if this week’s reports are true that Israel’s involvement in Syria has been much more serious and widespread than originally thought and that Iran has been acquiring intelligence information about sites in Israel, then war is not imminent but rather it has already started.

Intersecting Conflicts

This is not to be dramatic but to state the obvious; Syria’s intersecting conflicts are not isolated from each other, and a general state of war exists between antagonistic, intervening states, even if it remains undeclared and unacknowledged.

Virtually every intervening state pursues its objectives in spite of the presence –- or threat – of the other intervening states. The established red lines determine what is and is not possible for intervening states to do in Syria.

Russia has clearly tolerated the decimation of Syrian air defences by the Israeli air force, even as it shores up the Syrian government’s territorial control. Similarly, Turkey has invaded Afrin against the objections of the United States and others and has essentially been given a green light to do so by the Syrian government and its regional allies.

As the conflict has become more regionalised and neighbouring states intervene directly rather than through proxies, the entanglements of the conflict have grown ever deeper.

This new order has not been upset – or even threatened – by the downing of the Israeli F-16 jet. At the same time, the downing of the plane should not be seen as some serious victory for the Syrian government, Iran, and Hezbollah given the provocations of almost daily Israelis raids into Syrian territory.

The successful targeting of one plane does not shift the battlefield in any meaningful way.

Nor should it shift the calculations of the many actors, including Israel, intervening in Syria. We should not forget that Israel has been targeting military installations in Syria since very early on in the conflict and has been quite successful in doing so.

Neither the empty threats of retaliation from the Syrian government nor the downing of a single aircraft should change Israeli calculations in this regard. It seems to be a small price to pay given the military effectiveness of the on-going attacks in Syria.

Red lines defined

The question becomes what this may mean for the various entanglements of the conflict and whether they can be unravelled or will escalate in the coming months. To date, each country’s red lines have been more or less clearly defined and enforced in various ways.

Yes, the battlefield has shifted dramatically and new sub-conflicts – Turkey’s invasion of Afrin, the Syrian government’s campaign in Idlib – emerge, but these are all subsumed and sustained within the larger jockeying and red lines established by the regional states.

Herein lies the dilemma facing all of the intervening states and the reason behind the new regional military stalemate in Syria. Any attempt to renegotiate the red lines would certainly be met by rejection and force and would thus require a serious escalation.

Despite Israeli hubris and belligerent insistence that it will not tolerate any Iranian presence in Syria, there are few military options beyond its existing strategies through which it can make this happen.

And it is unlikely that all of the other intervening states in Syria would see to it that the battlefield should shift so decisively in Israel’s favour. The stalemate will continue. Intervening states will define and redefine their strategic goals accordingly as a political process with no hope of creating regional consensus putters on.

Russia may hold the keys to Syria’s political future but it has proven remarkably content to allow other countries, especially Israel and Turkey, to freely and recklessly pursue their own strategic goals. This is not a recipe for de-escalation but for continued stalemate.

Intervention scenarios

Regional war is thus not imminent, it is here. It is not on the horizon but right in front of us. What forms the war takes and under what conditions will it escalate or de-escalate should inform the questions we ask about the conflict today.

To date, the forms of intervention by regional states have been palatable to all of the other intervening parties. Turkish intervention, Israeli raids and Russian bombardment have all co-existed in an ecosystem of violence that somehow sustains such entanglements while also preventing their outbreak into direct state-to-state conflict.

It is one thing for states to marshal proxies in their wars against one another, but it is an entirely different thing when they are in direct conflict with one another. This seems to be the red line that no state is yet willing to cross.

Until direct state-to-state conflict in Syria breaks out, we can expect that dizzying news cycles like the one witnessed this last week when four intervening countries’ planes were downed, to be the norm and not the exception.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Syria Deeply.

This article was originally published by Middle East Eye and is reprinted here with permission.

Saudi Arabia in talks with SDF to form new force in northern Syria

Saudi Arabia in talks with SDF to form new force in northern Syria

Weeks after President Trump suggested that the US forces should pull out of Syria and be replaced with an Arab army, Saudi Arabian military officials met with an Arab faction of the YPG-dominated SDF for talks regarding a new force.

Saudi Arabia started its talks with one of the Arab militias of the SDF, otherwise dominated by the YPG terror organisation.
Saudi Arabia started its talks with one of the Arab militias of the SDF, otherwise dominated by the YPG terror organisation. (Reuters)

Saudi military consultants met with the SDF at the US base in Harab Isk in the northern Syrian town of Kobani for coalition talks with the group, weeks after Washington said it was seeking to replace US troops in Syria with an Arab force.

Anadolu Agency (AA) reported that the Saudi military consultants met with the Al Sanadid Forces, an Arab militia under the SDF, an umbrella group established and dominated by the YPG/PKK terrorist organisation.

Saudi officials had set up communication checkpoints in Hasakeh and Qamishli to recruit fighters, and were promising $200 to new recruits to the force, which is to be a part of the YPG-held, unilaterally declared, “Democratic Federation of Northern Syria.”

The Al Sanadid Forces is a militia formed by the Arab Shammar tribe, which is known to have an anti-Wahhabi position that seeks the breakup of Saudi Arabia, where it is the dominant sect.

Although US President Donald Trump has proposed immediate withdrawal of the reported 2,000 US troops from Syria, the Pentagon has underlined the US desire to remain.

Meanwhile, Saudi officials have been signalling their readiness to send troops to Syria in the case of such a demand, and have stated that the US should remain in the country for “at least the mid-term, if not the long-term.”

“We are in discussion with the US and have been since the beginning of the Syrian crisis about sending forces into Syria,” Saudi Foreign Minister Adel al Jubeir said after reports of the possible Arab Force emerged in April.

“There are discussions regarding … what kind of force needs to remain in eastern Syria and where that force would come from, and those discussions are ongoing.”

Anadolu Agency also reported that the YPG/PKK sent encouraging messages to Saudi Arabia on their social media accounts.

Saudi attempts to maintain foothold in the region

This is not the first time Saudi Arabia has interacted with the SDF. There have been reports of Saudi Arabia sending truckloads of aid to the YPG/PKK via Iraq, including last month.

In October 2017, after the YPG took control of Raqqa, Saudi Minister for Gulf Affairs Thamer al Sabhan visited the city to discuss its reconstruction with US officials and SDF members.

And in 2016, it said it could send ground troops for the US-led anti-Daesh coalition. “The kingdom is ready to participate in any ground operations that the coalition may agree to carry out in Syria,” military spokesman Brigadier General Ahmed al Asiri said at the time. Most recently, Crown Prince Muhammad bin Salman also said Saudi Arabia could participate in the military response declared by Trump following the April 2018 chemical attack by the Syrian regime.

Longtime allies the US and Saudi Arabia have drawn closer in the face of the growing influence of their mutual foe Iran in the Middle East.

Saudi Arabia’s most recent steps in Syria could be one way that it is attempting to maintain a hold on its waning influence in the region, a high-ranking Turkish diplomatic official told TRT World, referring to Saudi Arabia’s failed efforts in Yemen, Lebanon, Iraq and Syria.

Since the start of the Syrian war, Saudi Arabia has been providing material and monetary support to various opposition groups, and, until recently, rejected the idea of a Syria with Assad.

However, opposition groups have steadily lost ground to Assad and his Iranian and Russian backers, and even with Saudi efforts at bringing together various opposition groups in Riyadh for representation in Geneva, did not bear much fruit.

The only other area that has maintained captured territory is the US-backed SDF in northern Syria. While the regime tacitly allowed the SDF to hold territory in the north, particularly in the fight against Daesh, it has maintained that it wants to regain control of the whole of Syria.

On Thursday, Syria’s Bashar al Assad said the regime had started now “opening doors for negotiations” with the SDF, and that the US should leave Syria.

“This is the first option. If not, we’re going to resort to … liberating those areas by force. We don’t have any other options, with the Americans or without the Americans,” he said.

“The Americans should leave, somehow they’re going to leave,” he continued.

“Russia-gate” Is Nothing Compared To “Saudi-gate”

[Saudi Arabia and UAE Have the Dirt On Trump and They Are Not Afraid To Use It]

Arab Paper: S. Arabia, UAE Threatening Trump over Khashoggi’s Case

Arab Paper: S. Arabia, UAE Threatening Trump over Khashoggi's Case

TEHRAN (FNA)- Saudi Arabia and the UAE have threatened to disclose the details of US President Donald Trump’s questionable contracts and financial transactions with the two countries if he takes any action against the ruling Bin Salman family in the Khashoggi’s case, a leading Arab paper reported on Saturday.

The Arabic-language Khaleej Online quoted a senior Saudi prince as saying that Saudi Crown Prince Mohammed bin Salman has threatened Trump that if he helps a coup against him after the scandal over the murder of prominent Saudi journalist Jamal Khashoggi, he will release documents and details of the deals which will trouble Trump and his administration.

According to the source, similar threats have also been posed by Abu Dhabi Crown Prince Mohammed bin Zayed who has declared since the first moments of revelations about Khashoggi’s case that he would stand beside bin Salman.

The source added that bin Salman has also threatened Trump that he would cancel the major arms deals between the two countries and would withdraw financial support for tens of billions of dollars of financial investment in the US.

The report came after Trump said the CIA did not conclude that bin Salman ordered the murder of Khashoggi.

Khashoggi was killed on 2 October in the Saudi consulate in Istanbul.

The US officials have reportedly said that such an operation would have needed the prince’s approval. But Saudi Arabia maintains it was a “rogue operation”.

“They didn’t conclude,” Trump said when asked about the CIA’s reported evaluation by reporters in Florida.

Also, the Crown Prince of Abu Dhabi, Mohammed bin Zayed, tweeted to say the UAE “will always be a loving and supportive home for our brothers in Saudi Arabia”.