Energy 120, US-Russia rivalry in oil-gas dominance

Russia's top exports are fossil fuels - oil gas, coal. Not steel or arms and bombs. These fuels constitute nearly 50% of total exports, $360 B in 2017. So Russia interest is to have a US President who is a softie if not implicit anti-fossil fuels to help "save the planet" like former US President Obama, so that it's main business won't be imperilled. During the campaign period in 2015-16, Trump was explicitly pro fossil fuels, promised to unlock huge US oil and gas reserves. This alone should make him a non-friend of Russia. HR Clinton should fit as a good friend of Russia if elected President as she's also a "planet saviour" like Mr. Obama. Now US President Trump is slowly or hastily limping Russia oil-gas interests.

https://www.telegraph.co.uk/business/2019/01/25/russia-saudi-alliance-reaches-truce-us-shale-oil-supply-crunch/

Some Russia exports data, 2017.

Top exports, $ billion	Top 10 export corps, $ Bill
1. Crude oil 93.3 2. Processed petroleum oils        58.2 3. Coal, solid fuels from coal        13.5 4. Iron/non-alloy steel products (semi-finished)                6 5. Wheat              5.8 6. Aluminum (unwrought)           5.5 7. Petroleum gases         4.7 8. Diamonds (unmounted/unset) 4.7      9. Sawn wood    4 10. Refined copper, unwrought alloys    3.6	1. Sberbank (regional bank): 470.9 2. Gazprom (oil, gas): 316.8 3. Rosneft (oil, gas): 214.2 4. LukOil (oil, gas): 92 5. Surgutneftegas (oil, gas): 74.5 6. Transneft (oil services, equipment): 50.5 7. Novatek (oil, gas): 18.9 8. Norilsk Nickel (diversified metals, mining): 16.6 9. Uralkali (specialized chemicals): 9 10. Magnitogorsk Iron & Steel (iron, steel): 7.9

http://www.worldstopexports.com/russias-top-10-exports/
http://www.worldstopexports.com/russias-top-import-partners/

And the NYT, Clinton News Network (CNN), Wapo, etc have successfully fooled many people of Russia-Russia drama why their dearly beloved HRC lost. From only 8.8 million barrels per day (mbpd) US oil output in end-2016 (Obama period), now it's 11.9 or almost 12 mbpd, Russia and OPEC are unhappy.

About 6 years from now, US oil output is projected to be 2x the current one, up to 24 mbpd. So world oil prices will stabilize at low levels -- exactly what Russia and OPEC hate, and exactly what Trump wants. https://oilprice.com/Energy/Crude-Oil/US-Set-To-Pump-More-Oil-Than-Russia-And-Saudis-Combined.html

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See also:

Energy 117, Cheap oil and Trump, November 23, 2018 

Energy 118, Climate lies to justify RE subsidies, December 04, 2018 

Energy 119, US oil output now almost 12 mbpd, January 20, 2019

BWorld 289, Growth by elections and FDIs by PSA liberalization

* This is my column in BusinessWorld last Tuesday, January 29, 2019.

At the UP School of Economics Alumni Association (UPSEAA) sponsored “Economic Briefing” on Jan. 25, the speakers were DBM Secretary Benjamin Diokno and NEDA Secretary Ernesto Pernia. My former teacher in undergrad and graduate economics, Sir Ben Diokno said in his presentation that with high GDP growth in 2017 and 2018, “Duterte hit the ground running.”

During the open forum, I said that with growth of 6.9%, 6.7% and 6.2% for 2016 to 2018 respectively, it should be called “Duterte hit the ground screeching and decelerating.” Compared to the ASEAN 6, our neighbors have flat lining or increasing growth, only the Philippines has a declining growth. Sir Ben said we should not include 2016 in the analysis because it was an election year and all election years have higher growth than the following years.

I checked the numbers and I found that he is partly right, and partly wrong because we should include those election years in our analysis. Below are growth rates for Philippine election years 2007, 2010, 2013, 2016, and the respective years after them (See Table 1).

The above numbers show that (1) In 2007, All 10 economies had higher growth than 2008 because the latter was the start of the global financial turmoil that started in the US; (2) In 2010, again all 10 economies had higher growth than 2011 because 2010 was a recovery year after the 2008-2009 economic turmoil; (3) In 2013, all 10 economies except Vietnam and S. Korea had higher growth than 2014; (4) In 2016, all 10 economies had lower growth than 2017, except the Philippines.

In short, since 2016 was a bad year in the region compared to 2017, Philippine growth should have retained if not surpassed the 6.9% growth, but the opposite happened.

I sustain my statement in my column last Friday, that Dutertenomics is lousy in its macroeconomic management. Rising taxes, rising inflation, rising interest rates, and declining growth.

One saving grace that Dutertenomics can do to help reverse this bad trend is to ensure legislation of investments liberalization, foreign direct investments (FDI) especially since these will bring in more foreign capital and technology to blend with local capital and technology in serving local market and labor force.

We have the lowest FDI inward stock among the important East Asian economies. We have low volume of air passengers (many of them, from domestic flights) and port container traffic, in TEU, 20-feet equivalent units (See Table 2).

We need to liberalize the entry of more foreign airlines and shipping lines because we are outside the Asian mainland and we are an archipelago with many detached islands.

There are bills in Congress now amending the Public Service Act (PSA, 1936). That 83-year- old law has many sectors listed as “public utilities” and the 1987 Constitution prohibits foreigners from owning more than 40% equity for these utilities.

In these congressional bills — HB 5828 (passed on Third Reading) and SB 1754 (still a Committee Report) — telecommunications and transportation will be lifted out of the list of “public utilities.” This means foreign investors can own perhaps up to 100% equity in telecoms, shipping lines, airlines, and possibly bus lines.

Last December, my family suddenly changed plans and decided to travel to Iloilo. By then airfares were 2x, up to 4x their regular rates. We need more competing airlines or more planes per existing airline to have more flights on peak travel season, more planes require more investments.

So I decided to drive the car via RORO ships again. The problem is waiting for many hours in the ports. We need more competing shipping lines or more boats per existing shipping company. More big boats require more investments.

If FDI and PSA liberalization are done by law before the term of the current Congress is finished, it will be a big boost for Dutertenomics and help pull the economy upwards in the next three years.

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See also: 

BWorld 286, Henry Sy, a hero of Philippine capitalism, January 24, 2019 

BWorld 287, Public transport mess and traffic congestion, January 26, 2019 

BWorld 288, Economic prospects 2019 and cement tariff, January 28, 2019

"Man-made" global warming hits the US

Horrible anthropogenic or "man-made" global warming is hitting the US this week. Some stories from sites that I follow.

1. Dangerous, Record-Breaking Cold to Invade Midwest, Chicago

January 24th, 2019 by Roy W. Spencer

http://www.drroyspencer.com/2019/01/dangerous-record-breaking-cold-to-invade-midwest-chicago/

2. 'Life-Threatening' Arctic Blast To Freeze Nearly 200 Million As Polar Vortex Slams Midwest

by Tyler Durden  Sun, 01/27/2019

https://www.zerohedge.com/news/2019-01-27/life-threatening-arctic-blast-freeze-nearly-200-million-polar-vortex-slams-midwest

3. ‘Polar Vortex’ Will Have Nearly 90 Percent Of US Below-Freezing

charles the moderator / January 29, 2019

01/28/2019 | Michael Bastasch | Energy Editor

https://wattsupwiththat.com/2019/01/29/polar-vortex-will-have-nearly-90-percent-of-us-below-freezing/

4. Record Cold/Snow caused by ‘global warming’?! Climate activists predict both outcomes — more snow, less snow — so they are never wrong – Book excerpt

By: Marc Morano   January 29, 2019

http://www.climatedepot.com/2019/01/29/record-cold-snow-caused-by-global-warming-climate-activists-predict-both-outcomes-more-snow-less-snow-so-they-are-never-wrong-book-excerpt/

5. Amidst Global Warming Hysteria, NASA Scientists Expect Global Cooling

by Tyler Durden  Tue, 01/29/2019

https://www.zerohedge.com/news/2019-01-29/amidst-global-warming-hysteria-nasa-scientists-expect-global-cooling

Just to show further how dishonest and corrupt the climate alarmism movement is, here are some old "scientific projections".

From the UK Independent, March 2000.

And from BBC, December 2007. That year, Al Gore and the UN IPCC headed by Pachauri, won the Nobel Peace Prize. (They won an award for being big time dishonest-scammers?)

See also: 

Global warming hits the US, February 3, 2011 

Global warming hits the Arctic, October 11, 2015 

Global warming hits Asia, Part 4, January 26, 2016

Trump forced more NATO responsibilities by EU members

Good job by US President Trump here. At the start of his term, he chided "delinquent" NATO member countries for not contributing enough for their own continental and national defense, the US was subsidizing their defense.

Yes, no such thing as cheap and highly subsidized defense of Europe. Now EU leaders have become more responsible with their own continental defense. Soon MidEast leaders will do this too. And Japan, S. Korea too?

Four stories here.

1. Trump Scores Major Victory As "Delinquent" NATO Members Boost Contributions By $100 Billion

by Tyler Durden    Mon, 01/28/2019

https://www.zerohedge.com/news/2019-01-28/trump-scores-major-victory-delinquent-nato-members-boost-contributions-100-billion

These charts were shown in the zero hedge article.

2. Nato members increase defence spending by $100 billion after Donald Trump called them 'delinquents'

Julie Allen   27 JANUARY 2019

https://www.telegraph.co.uk/news/2019/01/27/nato-members-increase-defence-spending-100-billion-donald-trump/

3. NATO chief: Allies heard Trump 'loud and clear,' will increase defense spending

By Ben Wolfgang - The Washington Times - Sunday, January 27, 2019

https://www.washingtontimes.com/news/2019/jan/27/jens-stoltenberg-says-nato-heard-donald-trump-loud/

4. 'Trump is having an impact': NATO head credits president's tough talk for $100B boost

William Cummings, USA TODAY Published 5:30 p.m. ET Jan. 27, 2019

https://www.usatoday.com/story/news/world/2019/01/27/nato-chief-credits-trump/2695799002/

BWorld 288, Economic prospects 2019 and cement tariff

* This is my article in BusinessWorld last Friday, January 25, 2019.

To be frank about it, Dutertenomics is lousy in macroeconomic management. Inability to sustain fast growth of 6.5% or higher, inability to control inflation rate below 3%, and inability to control interest rates below 5% for government bonds.

Compared to the ASEAN 6 (excluding Brunei, Cambodia, Laos, Myanmar because they have late and incomplete economic data, smaller economic size), the Philippines is the odd-man-out on three important indicators: reducing inflation rate, raising GDP growth, and reducing interest rates via reducing government borrowings and overspending.

In 2018, world oil prices were high until the first week of October. But ASEAN 6 economies have experienced stable and low, even declining inflation rate (Malaysia and Singapore) — except the Philippines because of the various tax hikes under the TRAIN law, particularly oil tax hike part 1.

Now world oil prices are rising again because of the OPEC + Russia deal of oil output cut by 1.2 million barrels a day from January to June 2019. And Dutertenomics has worsened it by imposing part 2 of oil tax hike this January, part 3 to be implemented in January 2020.

Meanwhile, the UP School of Economics (UPSE) Alumni Association will sponsor a talk on Economic Briefing on Friday, January 25, 6:30 p.m. at Astoria Hotel in Ortigas, Mandaluyong City. Speakers will be NEDA Secretary Ernesto Pernia and DBM Secretary Benjamin Diokno. Both are former UPSE faculty members. It is open to the public, just pay the buffet dinner fee on site.

The two speakers will likely be spewing pat-our-back numbers of good economic prospects. They will likely continue to deny that expensive energy policy via higher taxes is wrong.

And now another team member of Dutertenomics, the Department of Trade and Industry (DTI), has imposed a new inflation-pushing measure, the safeguard duty for imported cement, P8.40 per bag (40 kilos) of imported cement, starting February 8, 2019.

In a BusinessWorld report, “Gov’t imposes cement safeguard duty” (Jan. 18, 2019), it said “he (DTI Sec. Lopez) noted that imported cement surged to more than 3 million metric tons (MT) in 2017 from just 3,558 MT in 2013, while the share of imports by non-manufacturers or ‘pure’ traders increased to 15% from only 0.02% during the same four-year period, he noted.”

Let’s do simple math. This means that the share of local cement producers has increased from 3,558 MT (almost 100% share) in 2013 to 2.55 million MT (85% share of 3 million MT) in 2017. So local cement producers are already happy with bigger sales and revenues, why should DTI penalize the average cement consumers here with higher price?

I saw the position of the Subdivision and Housing Developers Association, Inc. (SHDA) signed by its Chairman Jeffrey Ng and President Raphael Felix. They argued that:

“Stable, consistent and reliable supply of cement is necessary. The imposition of cement safeguards or any uncompetitive non-tariff measure will create supply shortages and result in soaring cement prices, serving only to protect large multinational corporations and, worse, disregarding the general public who will bear the brunt of such actions.”

True. As this column tirelessly argues, consumer interest of cheaper, more reliable products and services (electricity, oil, food, cement,…) should be paramount over other business and bureaucratic interests of higher prices, higher taxes.

Dutertenomics is now known for “expensive is beautiful” policy. Cheap oil and energy is wrong so they made it expensive via higher taxes under TRAIN law. Cheaper cement via more imports (because demand is rising fast) is wrong so government must make it expensive via safeguard duty or tax. Lousy.

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See also: 

BWorld 285, Consumer interests and the Public Service Act, January 23, 2019 

BWorld 286, Henry Sy, a hero of Philippine capitalism, January 24, 2019 

BWorld 287, Public transport mess and traffic congestion, January 26, 2019

More photos, 1st PRPX Hawaii, May 2007

See the earlier photos that I posted during the 1st Pacific Rim Policy Exchange (PRPX), The 1st PRPX, May 2007 in Hawaii, Photos (May 04, 2015). The event was sponsored by the Americans for Tax Reforms (ATR), International Policy Network (IPN, London), Grassroot Institute Hawaii (GIH), and three other institutes.

With Masaru Uchiyama ("Mr. You"), Tracy Sharp of State Policy Network (SPN) and her two boys.

Forgot the man on the right... With Mr. You, Grover Norquist, President of ATR, and his wife.

With Ken Schooland of University of Hawaii, also author of the famous libertarian book, "The Adventures of Jonathan Gullible", and Xingyuan Feng of China Academy of Social Sciences (CASS).

My turn as one of the panel speakers, this was in Day 2 I think.

One of the after-dinner networking socials.

Thanks again Grover/ATR, PRA, IPN, GIH, SPN, other friends.

See also: Tax Cut 5: Tax Imperialism, Privatization (PRPX 2007 Hawaii), June 12, 2007

Foreign aid 19, I don't like Mondays... I don't like more Aid

In early July 2005, the G8 leaders (US, UK, France, Germany, Japan, Italy, Canada, Russia) met for their G8 Summit in Scotland, UK, and discussed more foreign aid, global warming, etc.

Front row, from left to right: George Bush, United States; Jacques Chirac, France; Tony Blair, United Kingdom (host); Vladimir Putin, Russian Federation; Gerhard Schroeder, Germany 

Back row, from left to right: Paul Martin, Canada; Junichiro Koizumi, Japan, Silvio Berlusconi, Italy; Jose Manuel Barroso, European Commission. July 6, 2005.

www.g8.utoronto.ca/photos/summits/summit_photos_2005.html

Bob Geldoff (Boomtown Rats band, photo on the right), Bono (U2) and other rock stars organized the "Live8" series of rock concerts in major cities of the said 8 countries. Their mission: pressure the G8 leaders to commit "more aid", "debt write-offs", to many (if not all) African countries.

The International Policy Network (IPN) in London organize the Global Development Summit (GDS), I was one of the panel speakers.

Before the program proper started in the morning, I and a few other panel speakers that day made a short "rock performance" on stage (100+ audience, including some members of British parliament, media, students, NGO leaders,...). Me on the electric guitar, them singing, in the revised lyrics of "I dont like Mondays" sang by Bob Geldoff himself, a famous song in the 80s. I made the lyrics revision the day before.

Here’s the original lyrics and my revision, June 2005.

I Don't Like Monday's The Boomtown Rats The silicon chip inside her head Gets switched to overload And nobody's gonna go to school today She's going to make them stay at home And daddy doesn't understand it He always said she was as good as gold And he can see no reason 'Cause there are no reasons What reason do you need to be sure Oh, oh, oh tell me why - I don't like Mondays Tell me why - I don't like Mondays Tell me why - I don't like Mondays I want to shoot The whole day down The Telex machine is kept so clean As it types to a waiting world And mother feels so shocked Father's world is rocked And their thoughts turn to their own little girl Sweet sixteen ain't that peachy keen Now, it ain't so neat to admit defeat They can see no reasons 'Cause there are no reasons What reason do you need oh, woah Tell me why - I don't like Mondays Tell me why - I don't like Mondays Tell me why - I don't like Mondays I want to shoo-ooooot The whole… day… down Ohh… ohhh… ohhh.

I don't like more Aid (Cords: C-G-F-G // Am-G, F-G_ The G8 leaders are planning more aid and that would mean, more tax-es and nobody's gonna go to shops today they're gonna slash your take home pay and Blair doesn't understand it he said he'd wipe out poverty and he can see no reasons cause there are no reasons what alibi you need to be shown oh-ho-ho-ho tell me why -- i dont like more aid tell me why -- i dont like debt relief tell me why -- i hate protectionism i wanna shoo-oooooot the monopolists! Africa's treasury is kept so clean and it begs to a debt write-off And Mugabe feels so shocked his work is rocked and their guns turn to their citizens sweet 18 ain't that cute and keen no, it aint so neat to admit you're poor and they can see no reasons cause there are no reasons what more aid do you need oh-woh-woh-woh tell me why -- i dont like more aid tell me why -- i dont like debt relief tell me why -- i hate protectionism i wanna shoo-oooooot the monopolists Ohh… ohhh… ohhh.

See also:
Foreign Aid 2: Circuitous and Leaky Process, November 3, 2005 
Foreign Aid 3: Bob Geldoff and More Aid, November 10, 2005 
Foreign Aid 18, Presentation in London in 2005, January 15, 2019

BWorld 287, Public transport mess and traffic congestion

* This is my column in BusinessWorld last January 22, 2019.

There are many factors to frequent heavy traffic congestion in Metro Manila and other big cities in the provinces. This short article will narrow it down to five factors.

1. INCONVENIENT AND SOMETIMES UNSAFE PUBLIC TRANSPORTATION

People who live in many villages in Quezon City, Las Piñas and other cities and going to the big commercial and business districts (CBDs) in Makati, Taguig/BGC or Mandaluyong/Ortigas, taking public transportation means multiple rides: (1) tricycle from house to main roads, (2) jeep or bus to train station, (3) MRT or LRT ride, and (4) jeep or long walk to office or meeting places. Going back home, up to eight rides and people are already very tired coming home.

Snatchers and other criminals, sexual molesters can occur in any of those rides or while walking between those six to eight rides. And it is worse during the rainy season.

The solution is to drive their cars or motorcycles. People would rather brave the heavy traffic plus expensive parking fees than endure those multiple rides. Or take transport network vehicle services (TNVS) like Grab or any of its nine competitors now, or a regular taxi.

Below are official data from the Land Transportation Office (LTO). The total registered vehicles include government, diplomatic and for hire vehicles (77,241; 2,837; and 970,427 respectively, in 2017).

There are so many motorcycles and tricycles, 6.2 million in 2017 and probably 7.4 million in 2018. But there are not too many buses, only 34.8 million in 2017.

There are many unregistered vehicles like the “colorum” jeepneys, taxi and buses, and unregistered motorcycles and tricycles like those used by many policemen who drive motorcycles with no plate.

Now there are many point-to-point (P2P) buses with more routes, true. But people still need to ride tricycles or TNVS, taxi, etc. from their house to the P2P bus stations, so some people would still prefer to drive their cars.

2. EXPENSIVE “JEEPNEY MODERNIZATION”

The noisy and often ugly tricycles and jeepneys will soon be replaced by e-trikes and e-jeeps. Silent, no direct pollution, cool. But their cost is high, up to P1.8 million for e-jeeps and P0.6 million for e-trikes. Charging stations are limited too. By November 2018, only about 1,000 e-jeepneys have rolled out, around 169,000 old jeepneys need to be replaced before the end of transition period in 2020. and

3. OLD MRT, UNUSED NEW TRAINS

In the first 40 days of 2018, the Department of Transportation (DoTr) recorded a total of 33 MRT3 glitches, with imperiled passengers having to walk on rail tracks to get off. In addition, only 8-9 trains were running per day in February vs the minimum target of 15 working trains per day. Then the Dalian trains, of which out of 48 unused trains in 2017, only two were deployed as of December 2018.

4. FAILED, DELAYED DOTR PROJECTS DUE TO POLICY CHANGES

The Commission on Audit (CoA) report for 2017 showed that DoTr was unable to fully implement P46.6 billion out of P58.9 billion of funded projects due to frequent policy changes by political leaders and economic managers. Affected were 153 out of 159 DoTr projects like the Cebu Bus Rapid Transit, LRT Line 2 east extension, and LRT Line 1 north extension common station.

5. BUREAUCRACIES IN TNVS

As this column has discussed in previous articles, there are lots of bureaucracies and requirements from the LTFRB before existing TNVS can expand, which reduces the supply of cars and drivers. And there are bureaucracies from the PCC before failing and losing TNVS and TNCs can exit the country. Even exiting from business can cost huge money, so potential big players from abroad would be hesitant to come and do business here.

The bigger the number of inconvenient public transportation like tricycles and jeepneys, the bigger the demand for private cars, which contributes to frequent traffic congestion. Even those “clean” e-trikes are still low-passenger tricycles. We need less of them, not more.

We need more modern public transportation like efficient MRT/LRT, aircon buses and vans, and reliable TNVS. These reduce the need for private car use. And these investments require less bureaucracy, permits and business taxes, not more.

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See also: 

BWorld 284, ‘WALANG’ forever: Universal charge in electricity and PSALM, January 22, 2019 

BWorld 285, Consumer interests and the Public Service Act, January 23, 2019 

BWorld 286, Henry Sy, a hero of Philippine capitalism, January 24, 2019