Thursday 23 March 2023

Xi highlights Putin's pipeline predicament

Russia's massive oil, & particularly gas exports have always mostly been via pipeline: ice-bound sea ports speak to that.  There's some LNG - with liquefaction courtesy of western technology, but pipelines are the big game.  So when Europe stops buying, and Putin has only a small outlet direct to China, the income largely stops.  And if, as he's been using every opportunity to signal, he's in for the very long haul vs Ukraine, there it rests - and it's gotta hurt, economically - until a big new pipe to China, "Power of Siberia 2", can be built.  

And Li'l Volodya was hoping to confirm that deal during this week's Xi visitation.  Even then, his exports to China could only reach around half what he's been selling to Europe, by, errrr, 2030.  Maybe.

But.  In keeping with all the body language showing clearly who's boss in that rather functional and one-sided relationship, Xi wasn't playing.  The best announcement Russia felt able to make on PS2 was minimal and pitiful.  We know the score.  Xi is gonna drive a Very Hard Bargain Indeed, from which Russia won't be getting anything close to half the revenues it once enjoyed from Europe, even if they manage half the volume.  Yes, China has brutal form on this one.  Nice to know who your best friends are, eh, Vova?

So, living off scraps it'll have to be.  We all know Russians can do this, and suffer long.  They can't be 'defeated', as such.  But it's not much of a strategic argument, is it?  You can't defeat me, so you'd just better give me everything I want.  Hmmm.  Maybe even the new 'multi-polar world order' doesn't work quite like that.



dearieme said...

Oh well, I suppose The Greens must be keen supporters of the war, the sanctions, and so on.

E-K said...

China gets cheap gas.

Way to go, Biden.

E-K said...
This comment has been removed by the author.
E-K said...

Aren't we missing the big picture here ?

This isn't a proxy war between Russia and the West over Ukraine - it is a proxy war between America and China over Russia.

Putin's gas business may be getting hit but so are we. Chez Electro our gas bill has risen 300% since the war started.

I think this is what Xi meant when he mentioned changes which haven't happened in 100 years.

Even if Dishy gets inflation down to 2% the standard of living has been lost for good. That's 2% on top of the inflation that's already happened.

E-K said...


it is a proxy war between America and China over EUROPE !

Anonymous said...

ND is remarkably gung-ho about the disaster our sanctions have been for the UK and European economies - I'm pretty sure Russia was meant to be on her economic knees by now, as well as having run out of ammunition in April 2022 and men in August 2022. Maybe he's whistling past the churchyard.

Meanwhile the small boats are still arriving at Dover, and we can apparently do nothing about it but put the passengers up in hotels until they take it upon themselves to disappear into the thriving shisha-lounge economy. We may as well hand over not only our tanks and planes, but our ships too. Maybe HMS Queen Elizabeth could force the Bosphorous in a Dardanelles echo?

I can't remember, but I think I quoted Eamonn Fingleton's jeremaiad on Western economies a day or two ago. His basic thesis is that we are doomed, that their economic system is superior to ours.

Note that there’s one noticeable difference between Western and Far Eastern economies. For the last 70-odd years at minimum, and arguably for a lot longer (see Irish canal navvies), the Western solution to any perceived economic problem has been “import more cheap labour”. From slave workers imported into WW2 Germany, past Health Secretary Enoch Powell importing nurses from the Caribbean, and the Brits importing Pakistanis and Sikhs to man the cloth looms of Bradford and the foundries of the Black Country (both almost non-existent now – but the people are still there and have multiplied), to Blair’s Polish inundation, the pattern is consistent.

This means that China, Japan, Korea are far more ethnically homogenous than the West - which is definitely an advantage when you are making arguments to businessmen based on 'the national interest.

andrew said...

The chinese think differently.

I think you may have the chinese buying a "long term" lease on a large amount of land, possibly around Petropavlovsk, Shakalin.
Or maybe a chunk of Siberia.

Sobers said...

I think I'd put money on Russia still being there well after the West has disintegrated due to its financial and immigration/cultural fault lines.

I see the West personified as a person living in a house owned by a bank, spending money they haven't really earned on a fabulous 'lifestyle', Russia as a peasant living in a shack, with a pig, some chickens and a veg patch out the back. One looks great but is built on sand, and the smallest external shock can bring the whole lot crashing down, the other is a pretty sh*tty existence, but capable of continuing in that vein pretty much regardless of what gets thrown at it.

Anonymous said...

"Several sources close to the matter told Reuters that talks between Riyadh and Damascus gathered momentum in the weeks after Saudi Arabia and Iran agreed to reestablish diplomatic ties and reopen mutual embassies in a deal brokered by China."

The good ship "USS Hegemony" is leaking at every seam.

How long before the US and Guardian discover that Saudi Arabia needs regime change pronto?

dearieme said...

"capable of continuing in that vein pretty much regardless of what gets thrown at it." Except the Golden Horde, obvs.

Anonymous said...

A latter-day Golden Horde would be awfully conspicuous out there on the treeless steppe, it would be like the massacre of all those poor iraqi tank guys.

Fascinating (from a safe distance, which our decision to send DU weapons may shortly render not so safe) to see (through a fog of misinformation) the evolution of drone warfare in real time - when consumer units like (Chinese) DJI's are actually being used on the battlefield. Remember when Turkish Bayraktars were all the rage, this time last year?

I imagine the backroom boys on both sides are working flat out on electronic countermeasures and then anti-countermeasures.

That's where Chinese production capability could be useful. I never cease to be amazed at what they can do - these walkie talkie prices are insane. I think with postage it's about £11.50 or just over a gallon of diesel, or a portion of fish and chips (another thing sanctions have sent through the roof)

Elby the Beserk said...

"Anonymous said...
ND is remarkably gung-ho about the disaster our sanctions have been for the UK and European economies"

The government is now engaged in a triple assault on we the people. One maybe over, but you bet they'd do it again at the drop of a hat, so much fun did they have whilst we were incarcerated ("lockdown" a nasty euphemism)

1. NetZero. An act of the most extraordinary self harm which will make NO difference to global temperature (actually nothing will as CO2 no close max absorption).

2. Lockdown. An act of the most extraordinary self harm. See Sweden, both deaths with Covid AND excess mortality

3. Sanctions. As noted here, have made no difference to Russia but here a total disaster

This has to be deliberate. No? WEF must be laughing their heads off as their little puppets go forth and attack us.

Anonymous said...

Elby - I have no idea on CO2 but I think a precautionary principle is wise, simply because the implications are quite dire. The fate of the vanished Martian atmosphere is ever before me (I know it has less gravity/mass).

You'd think a UK government that actually cared would make it a priority to bring into line the food production capacity of the UK and the population of the UK.

Instead they've gone for population increase way above food productivity increases, when we already import around half our calories.

Labour and the Tories are just as bad as each other when it comes to importing people and exporting jobs.

If nothing else, they should b realistic and consider our future as a tourist attraction for the Chinese. Who wants to go to an England with few English, or a Wales with no Welsh?

Consider Paris. Who wants to run the gauntlet of Gare du Nord these days? For a century it was probably #1 "take the girl for a weekend" destination. Now? Budapest every time.

It's still got Hungarians in it!

Bill Quango MP said...

Even The King doesn’t fancy a weekend break in Paris anymore.

Clive said...

Well, the usual round of “your country (or some other country, often as not the US) is rubbish” and/or “this other country (often as not China, Russia or some other anti-western stalwart) is great and has the future in the palm of its hand” responses here.

In terms of the first, I, being a child of the 70’s, have gone through all my adult life of the U.K. being one sort of rubbish or another. The late 70’s were really rubbish, the 80’s was Thatcherism, so a mixed bag, the 90’s was Blair doing his worst, the naugties doing not much apart from preparing for the great financial crisis. Yet, here we all are. Lots of online whining, but few actually emigrate to supposedly better things elsewhere.

As for the second, it’s not only unfalsifiable (no-one knows what the future has in store for any country) it’s also difficult to gauge because the countries concerned don’t exactly encourage their citizens to post online accurate summaries of how life really is for them there. Perfect fodder for narrative creation, then. Which is why we seem to get so much of this style of commentary online. And, to add, I lived through the whole “Japan will dominate the world thanks to [reasons]” thing in the 1980’s. Turned out, of course, Japan has some strengths but, there as elsewhere, some weaknesses too. There’s no country which holds all the cards.

To return to the topic of the post — and to be a contrarian to the notions of most round here — may I present the current electricity market for your delectation. The takeaway? Renewables are rocking da house. And negative prices! So, while hydrocarbons will linger around for a while yet, they’re obviously not indispensable and are, arguably, definitely in run off

Anonymous said...

But Clive... renewables may 'rock da house' when the wind blows and the sun shines - fantastic in March/April.

But... what do we do, say, on an icy, still December night? da house will be da(mn) cold house

Anonymous said...

and Clive, Japan has YUGE strengths - carbon fibre, microscopic bearings for tiny motors, ultra-pure silicon for the latest-generation of chips. No use having the German lenses and Dutch etching machines (and I wonder who makes the motors?) with nowt to put in them.

In my industrial days I remember visiting a carbon fibre plant outside Rochdale. Much to my amazement and pleasure they are still there, but Toray, who provide fibre plastics to half the world's air fleets and half the windmill blades, they are not - though they do supply Airbus and motor manufacturers.

When I try and think of world-leading UK manufacturers, I hope I'm showing my ignorance when I say I can only think of McLaren a couple of years ago.

Rolls Royce are at the top, BAe are still thereabouts (though Filton seems ever smaller), I hope our submarines don't have too many bolts glued in place. Help me people, there must be more out there?

Clive said...

@ Anonymous 4:55

Assuming 6-8GW of nuclear and, from a 40GW installed capacity of wind (i.e. the position in 5-10 years’ time) you still get 10% turnout even on a still day, that gives 10-12GW total, plus a few GW from pumped storage. Easily enough for domestic demand and light commercial heating loads.

The question then becomes what to do about industrial demand. In short, it’s priced off the grid. Of course, there’ll be all sorts of complaining about that. But as, right back from the dawn of the electricity age a century ago, the cost of electricity in the peak is determined by the marginal cost of the capital to cover the generation and the cost of fuel at the time, what industrial users of electricity who are insisting on having their demand covered in such a scenario as you paint are requiring is their loads are satisfied at the same price as in times of excess supply (when it’s windy or sunny in other words) but subsidised by the rest of the users — domestic consumers, that is.

So, these industrial users are welfare queens demanding socialism from domestic consumers but capitalism for themselves. They have no shortage of fellow travellers aiding and abetting their howls of protest, for reasons of their own (the old Fear, Uncertainty and Doubt, which are very effective in advancing the talking points of interest groups and, ah-hem, big hydrocarbon exporters). But, as far as I’m concerned, they can bugger off. If they want continuity of supply, and sod all other considerations, they can jolly well pay for it themselves (e.g. get their own damned energy storage systems).

Clive said...

@ Anonymous 6:04

Oh, no, please let’s not have “they’ll close all your factories” again. Didn’t we have enough of that with Brexit?

They even tried using that one on Germany, of all places, for having the temerity to not buy Russian gas. I do so wish commentators could find some alternatives to the old combination of the hierarchy of needs ( and fear of loss. Yes, I know it’s a very effective persuasive technique but really, it’s become the internet below the line equivalent of Hallmark Tatty Bear greetings cards — the cuteness rather devalued through over-familiarity.

Sure, some industry may move. But they’ll find soon enough that, if they set up shop in, say, China, while they may well be offered cheap-sounding energy, they’ll end up paying in so many other ways…

Anonymous said...

Interesting points being raised by @Clive on negative electricity prices due to generation imbalance.

Perhaps another thread on suggestions on how to use up all the surplus power when its available e.g. pumped storage. You could flood Wales then draw down the power when needed.

Nick Drew said...

I'll stick up a piece on UK electricity shortly

E-K said...

BQ said: Even The King doesn’t fancy a weekend break in Paris anymore.

Not quite. The King would go but Micron has told him that he's cancelled because his country is in such a state of revolution that a State banquet would bring out the guillotines.

Only, you won't hear this mentioned by Remainers nor the BBC... not at all. Curious, that !

It isn't Brexit Britain in flames, it's the EU's second most powerful nation.

Don Cox said...

"It isn't Brexit Britain in flames, it's the EU's second most powerful nation."

The French have a tradition of protests and demonstrations. So do we, but ours are much tamer (remember the Aldermaston marches ?)

I think they are nostalgic for their big Revolution, whereas most English people have never heard of the Gordon riots or the Chartist demonstrations.


Anonymous said...

The French had a revolution, or let's say a revolt, every ten years through the 1800s. Some of the famous scenes "on the barricades" that we know from C19 from paintings, have nothing to do with 1789, or even the Paris Commune.

Bill Quango MP said...

There was a Guardian piece that said Britain has not had a revolution because of the policy of Transportation. That removed political revolutionary activists without martyrdom.

It’s a pretty thin argument. Toynbee the Elder was keen on it.

It’s difficult to know why the ‘revolutions’ failed. Charles 1 would argue they didn’t. But Charles 3 is King today. Henry VIII changed the entire fabric of the nation in a timespan of a few years.

. The unemployment at the end of the Napoleonic wars. The corn laws and famine. Chartism. That’s the point I believe a French is style bloodletting and massacre came closest. Not close at all, really. Just closest. The Guardian types are sure it was the introduction of local constabulary that prevented a revolution in 1839ish.
More likely it was just enough was done by the elites to prevent liberty or death being the only option for the downtrodden starving masses.

The Marxists point to 1920. They are deluded. Carried away with dreams of 1917.
And 2017. The High-water mark of the hard left dreamers in the post industrial age.

( that election wasn’t as straightforward as the popular remembering suggests. Corbyn was far from power, even with his result. May was still leader of the ruling party that was in government. The conservatives had actually increased their share of the vote to their own 1983 stratospheric levels. Just in the wrong places. The Johnson people didn’t make that mistake.)

A lot of Uk revolutionary history is like that. Not enough people are compelled to choose the civil war option. Those doing better, than worse, shade the numbers.

Which is why Macron is an idiot for his pension policy. That affects everyone in the nation. Gives everyone a reason to oppose. The elder the person, the more likely to oppose.
The baby boom issue will plague us all for another twenty years.

( one of the thankfully wrong predictions about Covid lockdowns, was a post lockdown baby boom. Contraception and being locked in with partners, rather than separated, and the evaluation of living space for family needs, and the general trend of a slow decline in childbirth at all, stopped that.)

E-K said...

Don - It's not my point.

EU France is in flames and Brexit Britain is not. France is clearly a very unhappy place and long has been.

You won't hear the BBC nor James O'Brien mention it.