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Exxon is looking for a big oil dealer in the shale patch in the US. It is considering the acquisition of shale company Pioneer Natural Resources with a market cap of $49 billion. Exxon wants to make use of its windfall profits of the last year to good use. An acquisition of Dallas based Pioneer would give Exxon a dominant position in the West Permian basin of Texas and New Mexico. Exxon made windfall profits of $56 billion in 2022 after the jump in oil prices following the Russian invasion of Ukraine. Based in Irving, Texas, it is heavily invested in fossil fuel assets and its thinking is that fossil fuels are here for a long time as it has not made a significant shift to renewable energy. During the cutoff of Russian oil supplies Europe has depended on LNG supplies from the US and Qatar, and on Norway for increased oil and gas supplies. President Biden included drilling concessions in some of the legislation passed in Congress and Conoco plans to drill in Alaska. The transitional period has gained support in places like the US and Norway following the need to support the European Union and Germany in the crisis. This gives oil companies some time to sort out their future plans for renewable investments. ...

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This France24 report looks at the question of whether the policies of four term German chancellor Angela Merkel emboldened Russia under president Putin to launch the invasion of Ukraine. FR24's interview with the vice president of the German Marshall Fund and head of its Berlin office, Thomas Kleine-Brockhoff, shows there are many reasons why Merkel's policies were serious errors that ignored caution from past experience and from other western leaders in the US and Eastern Europe. Kleine-Brockhoff says that "Europe did not go wrong, Germany and France did. France and Germany tend to speak for the rest of Europe. Bit these mis-assessments were made in Paris and Berlin, not elsewhere. Eastern Europe didn't go wrong. Northern Europe did'nt go wrong."  Kleine-Brockhoff says the war in Ukraine calls for an urgent re-assessment of the German and French policy towards Russia. "Not only is the post Cold-War order crumbling before our eyes, so are the strategies employed by Germany and France." Under particular scrutiny comes Merkel's policy, and policy supported by Steinmeier of the SPD, that took German dependence on Russian energy supplies from 36% during the annexation of Crimea to 55% in March 2022 with the invasion of Ukraine. Germany's conservative Die Welt has this to say- "What Germany and Europe have experienced over the last days is nothing short of the reversal of the Merkel policies of guaranteeing peace and freedom through treaties with despots," describing Merkel's policies as "an error." About France Kleine-Brockhoff says there were lofty ambitions under Sarkozy and Macron of European strategic autonomy, which did not correspond to reality, to fantasies of European armies when there was nothing but NATO. It is not dialogue with Putin and Russia that was a problem, says Laure Delcour, international relations expert at the Sorbonne Nouvelle in Paris. Some form of dialogue is necessary she says, but the dialogue has to have clear objectives. We must not confuse cause with consequence, she says. We know  that NATO enlargement had a big impact on Russia's perceptions, but the real problem is how Russia responded to enlargement. "In this case the problem is the consequence."  ...

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Russia invades Ukraine on multiple fronts, across Belarus, across its western border with Ukraine, on the pre dawn hours of February 24, 2022. Russian foreign minister Lavrov says "tense and detailed discussions" with US and NATO are still taking place. In talks with the US, president Putin of Russia had demanded that Ukraine commit to not joining NATO. The US insisted that this was upto Ukraine and that the territorial integrity of Ukraine had to be respected. Interventions by Macron of France and other leaders failed to bring the two sides closer. The US and Europe with a reluctant Germany looked at sanctions as a deterrent. This proved to be wrong. Mr. Putin has a passionate view of Ukraine and Kviv's historical role in the formation of the Russian state, evident in his televised address only 48 hours before the actual invasion. Ukraine has shifted between Poland and the Baltic states, Germany on one side and Russia on the other in its thousand year old history. The shift away from Bolsheviks and Communists under the Soviet Union after 1990 changed the relationship of Ukraine with its neighbors once again as Ukraine became closer to Poland and the Baltics, and Germany. Germany remains reluctant to revert to the relationship with Russia that led to 2 World Wars. During the leadership of Willy Brandt and successive German SPD leaders, as well as with Konrad Adenauer and CDU leaders, the goal was to build a good relationship with Russia. Merkel of the CDU went as far as accepting dependence on Russia for 40% of its gas supplies, after shifted out of nuclear energy and supporting a new Nordstream undersea pipeline for gas supplies.  The early reaction on DW.com and German television was one of shock as no one really expected that this would lead to a full scale invasion. Scholz of the SPD the new chancellor in 2022 was not active in forging anew consensus allowing NATO's Stoltenberg who is a former Norwegian prime minister 2005-2013 to frame the response of Europe. Norway's role in European security was marginal for most of the twentieth century. Other events had detracted from bringing active German and American participation in coming up with a framework of dialogue to address concerns of both sides and still build a common ground for peace- Afghanistan, the pandemic in its third year, China's deteriorating one sided trade relationship with America that hurt American workers and manufacturing. As a result China and Germany were essentially absent in building the framework for peace. Afghanistan hasty withdrawal made it harder for president Biden to come up with new approaches to build a common framework. President Macron made some faltering efforts on the fringes even as president Putin focused on the US response and its intentions with NATO on European soil, and declared that it was directly US Russia negotiations that needed to work. With this the whole framework of relations since the presidency of Reagan and the relations with Russia and China come to a close. And a new framework needs to be constructed that draws in India already or soon to be the most populous nation in the world, in an effort to build an enduring new framework. The voices of Eastern Europe need to be heard, yet balanced with the voices from India, China, Germany, Russia, and other countries in Asia, Latin America and Africa that are affected by world events. ...

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In EU elections the German coalition parties of SPD, Greens and FDP barely get the vote percentage of the CDU/CSU of 30%. The SPD 13.9%, Greens 11.9% and FDP 5.2%. This is the lowest showing of the SPD. Much of the problems come from the SPD socialist democratic party that seeks to bring more social democracy by building infrastructure, public services as Biden is doing in the US, yet is prevented from doing this with the presence of the FDP which is against spending and seeks budget discipline as the charter of its party. The Finance minister Lindner is from the FDP. As a result the SPD and Greens are not able to do what they prmised in the last election to invest in infrastructure and public services. A visit to Germany shows this with the Deutsche Bahn, the rail stations with a dilapidated look as if built in the last century, trains late with old technology and less investment in maintenance. Not much construction is seen and public transport looks haggard and old. Germany's constitution makes investment difficult and court decisions limit spending or finding other sources for investment, the FDP acting as a brake on spending. The far right AfD vote was upto to15%. Without investment and offering a new vision of a modern Germany even after managing the energy crisis of which some of the fault lay with the way Merkel allowed over dependence on Russian supplies of oil and gas, even then the CDU is getting more of the vote. Another reason is the CDU under Leyen taking a strong stand on Ukraine with the SPD's history of maintaining better relations with Russia limiting its role in this crisis. As a result Germany under Scholz labors on with no solution to current problems requiring spending and investment. The next parliament election is in 2025. ...

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A 1000 mile windswept coastline and 300 days of sunshine make the southern African nation of Namibia an attractive location for green hydrogen projects. Green hydrogen is produced using wind and solar energy. There is a 50 fold increase in green hydrogen projects in just the last 12 months globally. The costly technology needs many projects to get to lower costs through technological advances. Germany is doing a pilot project in Luderitz, Namibia. Luderitz will need a deep water project to ship the fuel out.   Renewable wind and solar energy is used to distil the hydrogen atoms in water, as opposed to the currently used method to maky hydrogen from fossil fuels, known as gray hydrogen, or blue hydrogen if the emissions from fossil fuels are captured. Namibia is chosen as its natural advantages could bring the costs down faster. Other locations being adopted are Morocco, Australia, and Chile. The two sites in Namibia had bids from Africa's Sasol, Australia's Fortescu, Germany's Enertrag and Hyphen Hydrogen.  Hyphen Hydrogen won the bid for the two sites. It says the $9.4 billion project is targeting 300,000 metric tons of green hydrogen production a year from 5 gigawatts of renewable energy generation capacity by 2030. "Now all of a sudden the desert has become valuable," says Namibia's finance minister Mr. Shiimi. Additional asset for Namibia is that it ranks highest after Cape Verde in Africa for transparency, creating ease of doing business. It is ranked 57 in Transparency International rank of transparency for countries in 2020. China is 78, India 86 in rank. Namibia is putting up $45 million for the feasibility study on the project with the sesert scrub land an hour from Luderitz, once a diamond mining town on a rocky Atlantic coastline in 1900. Two sites are located in the area each 675 square miles. South Africa is severely short of energy supplies and a pipeline is being considered to take the Namibian hydrogen to South Africa. The African region is expanding in renewable energy. Lake Turkana Wind Power Project in Kenya provides 17% of installed electricity capacity in Kenya with 365 wind turbines.     ...

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See the important link to Keith Johnson, 7/9/2007, WSJ, on the economics of wind energy, suppliers, and the industry in the US and Europe, and the shortage of turbines because of some 800 parts that go into the turbines and blades making it a complicated supplier issue to get more turbines. We can make only more turbines as fast as we can access the last of some 8000 components says a Vestas executive. Windmill generated electricity was only 0.4% of the electricity generated in the US compared to 0.1% for solar and 0.4% for geothermal but of the new energy added in the US in 2007 it was 30% of the new energy generating capacity added. So it has a disproportionate share of the increase in generating capacity starting from an insignificant base. Its a new industry but with many companies the largest being Vestas of Denmark, GE Energy, Nordex of Germany and Accoiona of Spain. Germany, the US, Spain India, and China are countries at the forefron of the wind energy business. Because the business is relatively new manufacturers were not providing the installation and maintenance required in emerging market countries in 1995 when Suzlon which had powered its yarn business in Surat, Gujarat with 2 wind energy turbines from Vestas entered the business seeing an opportunity. Mr Tanti of Rajkot, Gujarat, Suzlon's founder saw the opportunity and used European firms to design his turbines and blades and provided energy to Bajaj Auto and large Indian companies that have an erratic supply of electricity because of chronic electricity shortages. Starting with a tax break which allowed Suzlon to deduct windmill costs against its sales tax bill enacted in 1999 and retracted in 2002 Suzlon took advantage of lower manufacturing costs in India. Its main plant is in Pondicherry, India. By 2002 sales had increased to $131 million in India from $32 million in 2000. The company entered the US market in 2003 and in 2004 with the boomin stock market in India Citigroup took a 9% stake in Suzlon for $22 million. By 2005 Suzlon because of lower manufacturing costs had margns of20% compared to 8% for European companies and Suzlon raised $340 million in an IPO. With loans from Barclays and Deutsche Bank Suzlon bought European parts makers Hansen Transmission in 2006 and set up a factory in Tianjin, India. Early on in the 1990's it had set up an R&D center using engineers in Germany of a supplier company in wind energy Sudwind that had exited the business, this R&D center now designed its largest turbine for US and European markets of 2.1 megawatts and blades 50 yards in length. Today Tanti and Suzlon are faced with problems accessing the world class technology of the western companies as its technology has not kept up with the technological advances especially in addressing the needs of western markets. It has about 8% of the US market and about $1.8 billion in global sales. Its pricing to Edison Energy in 2006 for 1.2 megawatt turbines was 20% below European and American manufacturers. Its latest designs have flaws because Edison Energy of Irvine , California, has seen cracks in the blades at 3 windmill sites in the midwest USA and Suzlon has withdrawn 1251 blades, the majority of the ones sold in the US. Deere and Company another customer has experienced the same problem. And even though it has moved to acquire technology by taking over 33.6% of REpower which has advanced technology and makes 5 megawatt turbines. its mired in its efforts to get the blueprints of advanced designs from REpower because German law considers minority shareholders like Suzlon as competitors, other shareholders Areva of France and Martifer of Portugal have to be bought out and minority shareholders also bought out before Suzlon can access the designs. Speed, funding, tax breaks, and timing to attract capital, and most of all insight and courage to see a growing opportunity from its own experience of using two 2.1 megawatt turbines from Denmark's Vestas, and looking deeper into problems with maintenance and support in Asia and lack of technology for homegrown development that hamstrung development of energy alternatives in dire and chronic electricity short Indian companies, this has helped bring windpower to India and a new company in a new industry from scratch. ...

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Germany is building the new pipeline that connects the Wilhelmshaven LNG Terminal to its natural gas storage tank in record time in the midst of an energy crisis in Europe. The new 26 kilometer pipeline for  the LNG Terminal is being built in a few months when it would have otherwise taken 8 years. See Rani Bhandari, Managing Director of Open Grid Europe talk about the project in this video from DW.com to get a sense of how Germany is moving quickly to address natural gas needs for the winter. Click on Original article to see it.

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Most of the reporting on Ukraine follows the war. Questions are asked how will this conflict end? This report in Der Spiegel is one of the rare reports that looks at the Ukrainian economy with images and reporting from the ground that answer that question. If the Ukrainian economy is surviving in 2023 then Ukraine will continue long after a peace settlement is reached. It shows for instance that supermarket shelves are well stocked. It shows energy from half a million generators keeps the lights on and companies working in Ukraine. The steel industry is mostly destroyed yet the software industry continues to grow. Unemployment is 30% even after hundreds of thousands of younger Ukrainians are at the war front. Of about $62 billion promised by US and European countries about $31 billion has actually been transferred to Ukraine. The IMF has created an exception for aid to Ukraine with offices in Kviv and Brussels. All defense needs are covered from the Ukraine budget. Before the invasion in Feb 2021 defense took up 9% of the budget, now it takes up 42% of the budget. Another 16% for public security. For social benefits 16%, and another 26% for other expenditures. By having an economy that is functioning and life even in light from generators and solar energy, with supermarkets well stocked and providing office space for workers, with aid mechanisms working. Ukraine has already emerged as part of Europe, tried, tested and come through adversity of the worst sort. It is supposed to join the European Union, yet Der Spiegel says it is already tightly integrated into the EU. Its power grid was integrated with the EU power grid before the war, and nuclear power was sent to the EU from Ukraine before Russian attacks on the nuclear plant. Then transmission lines brought energy to Ukraine from the EU. The EU takes in 80% of Ukraine agricultural exports compared to 20% before the war. Even at the risk of lower prices and hurting farmers in Poland, the Polish government has allowed large imports of agricultural products into Poland. The close links with countries of the EU that share a border with Russia have increased. The problems now are that Ukraine after this war will have severe shortage of manpower. Already with the fall of the Soviet Union Ukraine lost about 8 million people and population was 44 million before the war. About 8 million people moved to Ukraine in the one year following Russian invasion. Of this 1.5 million stayed in Poland, the rest went on to other countries in the EU or returned. The countries such as Germany, Finland, Czech Republic have labor shortages of their own and encourage refugees to stay. Rebuilding is estimated to cost $131 billion. Yet as is evident in Poland after most of the damage from the second world war in Poland it was rebuilt using modern technology. Ukraine survives, its life goes on, is the message from Der Spiegel. In this way the war's outcome is already evident. Much of it comes from the European Union having sensed that attacks made with impunity would endanger all of the European countries when made by any dominant power. This is also what Cambridge historian Brendan Simms has shown about European history for the past 500 years in History of Europe- The struggle for Supremacy 1452 to the present. No one country says Simms was able to act with impunity and pose athreat to its neighbors as all other countries in Europe rallied to prevent this. This war is no exception.   ...

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WSJ's reporters Meichtry, L, Pokharel, and Soon look at the extraordinary rise of Gautam Adani through his efforts to develop reclaimed land at Mundra port in the state of Gujarat. Adani who started with a small family owned plastics maker in Ahmedabad developed Mundra port around 2001 with the help of the Modi administration. Modi saw the electricity shortages in Gujarat as an opportunity to tackle India's chronic electricity shortages. Adani's early development of a deep water port at Mundra offered both Modi and Adani the opportunity to tackle the electricity shortages by bringing coal in large ships to Mundra in the way that China was already doing by 2005 in its own efforts at industrialization. So deeply immersed was India under the Congress Raj of licenses and closed economy that India's established business failed to see what China was doing to break into the ranks of industrialized nations. India's first prime minister Nehru had build a command economy where not much happened without government licenses and approval often riddled unwittingly with corruption. Modi needed someone outside the established companies operating under the Congress Raj command economy and with a vision of an India with abundant electricity to take the risks Chinese companies were taking to build an entirely new economy. By 2005 Guangzhou was importing coal with large ships from Indonesia and Australia. State owned companies moved slowly and would take years to develop the port capacity. Using China's example Modi pushed ahead with Adani on a rapid time delivery making Mundra a Special economic Zone and helping to connect Indian Railways to the port of Mundra for coal deliveries. Adani Enterprises built the thermal power plants near Mundra and build electricity transmission lines on a rapid mission mode giving Gujarat abundant electricity supplies and giving Gujarat state in northwestern India a great leap forward in the way China was already doing right in front of everyone's eyes by 2005 with world class ports built at Guangzhou, Shanghai, Shenzen, Hong Kong and logistics connections set with the help of Maersk.  Maersk is now doing the same for modern logistics in India in collaboration with the Modi administration.  Modi and the younger generation of aspirational youth in India see a New India that can break into the ranks of the largest industrialized nations with world class infrastructure in the way China has done, and use new technologies with innovation that will speed up the process in a way that the world has never seen. A quick look at Mundra Port in Wikipedia shows the timeline, It starts in 1998 when Adani Port Ltd was setup and Mundra port work began, 2002 the port integrated with Indian Railways, 2003 when it was made a Special Economic Zone by the Modi government in Gujarat, 2007 when IPO of 40 million shares at price band of around Rs 400 was done.  The Biden administration and the Trump administration support India's efforts to build a new modern economy with a rapid shift to renewable energy. As India is building the ports and logistics with the help of Maersk and other companies in the European Union, president Biden is working with prime minister Modi to build a new supply chain that removes the overconcentration of manufacturing and supply chain logistics in China. This means new ports with the latest technologies in India to handle shipment to the US and the EU. Jake Sullivan set out the goals for president Biden to accomplish this task in meetings with his Indian counterpart Ajit Doval this week on iCERT. President Biden and Republicans, Germany and the EU, see India as a critical part of the Initiative on Critical and Emerging Technologies, and the new supply chain. For the Adani Group the IPO pause offers an opportunity to do what Nirmala Sitharman has done in the Indian Budget this week- build a stable growth path ahead for the long term in line with India's Amrit Kal the next 25 years to centenary of freedom in 2047. Nirmala Sitharaman set a goal of rapid capital spending and investment increasing capital spending in 2023 by 33% in 2023 over 2022, yet maintaining a stable fiscal path by keeping the deficit below 6%. ...

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Important year end reveiw of the oil price forecasting work of so many anlaysts and where they failed . The IEA and the US Enery Dpt forecast have year after year underestimated this pirce by over 20%. Analysts change the price forecasts within a couple of weeks based on changing information and assumptions. Of all this the Saudi Arabian forecasts have ben within 12 % of what has actually ocurred according to a study by Ronald Berger Strategy Consultants of Muich, Germany. And whats their forecast for 2008. By extrapolating from the Saudi budget and the assumptions, used such as giving a wide margin to avoid a deficit in the budget if oil prices undershot by a wide margin, one gets $75 for US benchmark crude. Forecast by experts are in the neighborhood of $80 average for the whole year 2008. Goldman recently revised theirs upwards from $85 average for 2008 to $95 within a 4 week period. How good is the Goldman forecast. No one really knows. Lehman has a forecast of $84 average for 2008 and bases it on the opacity of the market because no one knows what OPEC will do with supply and China does not provide good information on demand. So basically anlysts are adding an uncertainty premium to the price of oil. And this is especially so because as the Chief Economist at IEA says global space capacity is so thin and any event can influence price. Last year the rhetoric about Irans nuclear intentions was enough to stir up the price, as were other smaller events disrupting supplies. But the Iranian situation has since cooled down and diplomatic solutions are in the works. So what to expect in 2008 in the way of political uncertainty. Iraq, Iran, Palestine, Lebanon have all seen a cool off in the ast couple of years and the Bush administration rhetoric has become outmoded as has other rhetoric from Iran so that does'nt look like it will stir up oil prices in 2008. Still there will be some uncertainty premium about supply from OPEC and demand from China and India. And demand from the Middle Eastern oil producing countries themselves as well as the increasing demand in India and China will mean that lower demand in the US because of a recession will still mean an increase in global demand over 2007 of 1.5 million barrrels a day over 2007's 85 million barrels a day. What will change the dynamics of this situation is the government mandated fuel economy for all vehicles on the road with Europe more aggressive in this area under the pressures of global warming. If this impacts India, China and Russia as these fuel saving technologies are transferrred there overall consumption should see an impact. Europe's targets are only 4 years away for 2012. And the environment may cause China to bring in newer technologies that both contribute to improving environment and conserving energy. Because China's environmental record is almost catastrophic one could see some of this happen much sooner than expected after the Olympics in 2008. All that might change the way the world looks at oil and its use, and all energy sources and their use. ...

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To meet the budget deficit Russia plans to issue $50 billion worth of ruble denominated bonds and privatize $10 billion in state assets every year until 2014. Russia is also changing its policy to attract foreign investment. For the first time since the 1998 financial crisis Russia will turn to international banks and pension funds in the US and Europe to maintain financing for a whole range of activities- from modernizing the military to paying high public sector wages. Russia is planning the sale of a stake in state bank VTB. And shares in oil companies, hydroelectric dams and shipping lines are also expected to go on the market.

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Cook and Olson look at how U.S. shale oil firms have handled the slump in oil prices. Their report in WSJ says the shale firms have weathered the oil slump well, with production declines in 2016 of only 535,000 barrels a day compared to 2015. The Saudi decision to not cut production and let oil prices drop has affected mostly higher cost less flexible production for mega projects such as deep water projects and oil sands in Canada. Oil shale firms are expected to snap back, according to experts, as demand increases. U.S. production is expected to increase by about 700,000 barrels a day by end of of 2017, say experts.

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As Japanese prime minister Noda prepares to restart the Oi nuclear plant in June 2012, former prime minister Naoto Kan, who was premier during the Fukushima nuclear disaster, answers questions in a parliamentary inquiry. He says he realized how dangerous nuclear power can be when it got to the point where the evalcuation of Tokyo was being considered, Japan was then on "the verge of national collapse." His fears were that a number of meltdowns could together " release into the air and sea many times, no, many dozens of times, many hundreds of times the radiation released by Chernobyl." The Japanese public has focussed on the parliamentary hearings because the previous inquiry is thought to have been perfunctory, and not really examined in depth all the issues the Fukushima disaster had raised, and the general feeling is that a proper public dialogue had not taken place. In contrast in Germany the issues had been discussed openly, and the Angela Merkel government which had been receptive to nuclear power reversed its stand on nuclear power. Germany is phasing out dependence on nuclear energy. Kan pointed out that the "nuclear village," the network of nuclear power companies, bureaucrats, and researchers, had hijacked national nuclear policy and was putting Japan back on the same path. He went so far as to compare it with the situation facing Gorbachev in Russia after Chernobyl: "Gorbachev said in his memoirs that the Chernobyl accident exposed the sickness of the Soviet system. The Fukushima accident did the same for Japan." In his assessment of what happened Kan said: "It is impossible to ensure safety sufficiently to prevent the risk of a national collapse. Experiencing the accident convinced me that the best way to make nuclear plants safe is not to rely on them, but rather to get rid of them."...

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Germany's chancellor Merkel draws attention to Russia's human rights record in a meeting with Russian president Putin in Moscow, Nov. 16, 2012. The German chancellor tells Putin not to be so sensitive to criticism from the opposition, saying before the meeting: "I ask that not every bit of criticism is seen as destructive. Open a German paper and read what is written there. If I were always getting offended, I would not last even three days in my job." Germany's special envoy to Russia, Mr. Schockenhoff, has been especially critical of Russian suppression of dissent and opposition groups. Russia's response is that it will talk to other countries as trading partners but not about its domestic affairs. The Russian government sees the two way trade of $120 billion between Germany and Russia as "an air bag" to prevent any significant deterioration in relations. Siemens signed a contract for 675 locomotives with Russian Railways during the Merkel visit.

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Russian president, Vladimir Putin, tells academics and journalists at an event called the Valdai Discussion Club, he had reservations about expanding the state sector by approving the deal for Rosneft to acquire TNK-BP assets. His motivation for doing this was the endless shareholder conflict between the Russian partners and BP. Putin says he warned British prime minister Tony Blair that a 50%-50% ownership venture would not work as nobody was in control, and described this as so bad that "sometimes they were fighting each other with their bare hands." The injection of private ownership into Rosneft with the 20% stake for BP would provide stability for the company and was the bright side to this. Foreign academics and journalists participate in three days of discussions with Russian academics and journalists in this event. Putin has no new vision for this third term beyond consolidating and protecting the achievements of the last decade. He cited as his achievements- growth of the economy, expansion of the foreign exchange reserves, and the increase in the birthrate....

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The Center for Strategic Studies in Moscow was prescient in predicting problems of declining support for Mr. Putin before the December 2011 parliamentary elections. Work with 32 focus groups by the Center in May 2012 shows a continuing erosion of support for Putin as efforts to open the political system have faded. The discontent focusses on the delivery of basic services such as healthcare, education, law enforcement, infrastructure.

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Wages in emerging markets such as Indonesia, Thailand and Malaysia are rising following an increase in wages in China. Malaysia's government announced a minimum wage for the first time. China increased its minimum wage by 8.6% to 1260 yuan ($199) in January 2012. Shenzen region minimum wage was raised 14% to 1500 yuan, and Tianjin region's by 13% to 1310 yuan, according to Xinhua news agency. Rise in minimum wage has ranged from 40% in Thailand to 20% in Indonesia. The new minimum wage proposed by Malaysia's government is about 900 ringgit ($264-$297). In Thailand the new minimum wage is set at 300 baht ($9.78) a day, an increase of about 40%.

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Shipping and freight statistics show an increase of shipments from Mexico. Trains and truck shipments from Mexico to the U.S. increased by 8.7% by weight in the first 11 months of 2011 compared to the prior year. By comparison shipping containers entering the ports of Los Angeles and Long Beach went down by 0.2% in 2011. Mexico stands to benefit from the shift in dynamics as manufacturing costs in China increase with labor constraints, higher wages, higher commercial land prices and recent Asian supply chain issues making firms wary of unanticipated problems. This is expected to benefit the U.S. with the return of some manufacturig jobs and a serious rethink of outsourcing. Because of highly automated factories and advanced technologies the manufacturing process requires fewer and more skilled operators, reducing the labor component of costs. Carlisle Companies CEO, David Roberts says he is expanding tire manufacturing plants in Tennessee. He says he can make tires as cheaply or cheaper in the U.S than in China. This has serious implications as the U.S. gets down to rebuilding and renewal of its manufacturing industry....

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Analysts fear an oil shock in 2012 similiar to that in 2008. There is similiarity in the situation now and in 2008- as in 2008, the surge in oil prices comes at a time of higher tensions with Iran and shrinking spare capacity. Spare capacity is at 2.5 million barrels a day on average for January and February 2012, according to the Energy Information Administration. This compares with 3.7 millon barrels a day for the same period in 2011. Part of the reason is that global oil demand is increasing in 2012 by 1 million barrels a day, to 89 million barrels a day. Technical and political problems have shutdown another 750,000 barrels a day. The problems begin to kick in during the second half of 2012. The U.S. ban on dealing with the Iranian central bank for oil trades starts in June 2012. According to the International Energy Agency, the EU embargo and U.S. sanctions will take 1 million barrels a day of Iranian crude out of the market. The result will be that demand exceeds supply by the third quarter by 1.1 million barrels a day, according to the U.S. Energy Information Administration. Use of existing reserves in Europe, the U.S. and other countries will make up the gap. The effect will be to put pressure on oil prices. May Brent crude on the ICE Futures Europe exchange was up to $125.81 a barrel, on March 16, 2012, and prices for April delivery were at $107.06 a barrel on the New York Mercantile Exchange....

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During 2012 and 2013 the U.S. put pressure on China and India to cut oil imports from Iran to increase the effectiveness of sanctions. As negotiations eased the sanctions, China increased oil imports in 2014 by 30% in 2014 over the prior year. China's Foreign Ministry sees a "win-win spirit" in the nuclear deal that opens up economic relations with Iran. Analysts say China has setup three new storage facilities on its eastern coast with about 45 million barrels of new capacity, which could be filled with new supplies as its growth slows and demand decreases. China's imports were about 7 million barrels a day in June 2015.

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The International Energy Agency lowers its global oil demand forecasts on Dec. 11, 2014, leading to further drop in the price of oil with oil futures in electronic trading for WTI at $58.89 on New York Mercantile Exchange, and Brent crude at $62.83 on ICE in London, for January 2015. The price of WTI U.S. oil dropped to $59.95 on Dec. 11, 2014.