ESADEgeo Daily Digest, 06/11/2018

Pipeline, Pipe, Gas, Industry, Oil, Fuel, Technology

Politico – Anca Gurzu / The Franco-Spanish ghost gas pipeline

  • Despite enthusiasm in Brussels to try for a second time to build the pipeline, opposition to the €3.1 billion project known as MidCat is mounting. The main problem? According to French regulator CRE, most of the costs will be borne by France but the bulk of the benefits will go to Spain.
  • Project promoters say the pipeline is needed to boost regional energy security and help the EU better integrate its gas market. Opponents argue it’s a waste of money in an area already well-supplied with gas and ill-suited to the EU’s efforts to cut greenhouse gas emissions.
  • MidCat was initially pitched as part of the broader EU effort to reduce the bloc’s dependence on Russian energy imports by shipping more gas from the Iberian peninsula to the rest of Europe, but Russian gas would also flow from France down to Spain. The full project would approximately double the amount of gas that can flow between the two countries.
  • Teresa Ribera, Spain’s minister for ecological transition, said she tends to be “extraordinarily cautious” about new gas investments until Spain figures out how much it can rely on gas in the long run, since it is a transition fuel to a greener energy future.

Financial Times / What the midterms will mean for US policy: three scenarios

  • If Democrats take the House and Republicans keep the Senate: the path to congressional approval of the USMCA trade deal with Mexico and Canada would become more complicated, there might be an opportunity to pass a bill to protect Dreamers, further tax reform may be difficult, and Democrats would push for more probes into President Trump’s relations with Russia.
  • If Republicans keep the House and Senate: USMCA would pass Congress with little trouble in 2019, there might be further rounds of US tariffs against China, Trump would cajole his party to take up some of his hardline immigration proposals, the GOP would seek to extend the lifespan of its tax reductions and potentially add fresh cuts to its existing reforms, and Trump would feel emboldened in his hawkish and militaristic approach to foreign policy.
  • If Democrats take the House and Senate: Trump could have a major stand-off with Congress over USMCA, the border wall will not be built, there would be talks on a comprehensive immigration bill, Trump’s foreign alliances would be questioned, and climate change and overseas aid could rise back up the agenda.

Brookings – Suzanne Maloney / “Sanctions are coming”— but Trump has no achievable end game for Iran

  • Even as Iranians crow that the Trump administration has failed in its bid to drive its oil exports to zero, Iran’s economy has taken a huge hit since the US withdrawal from the Iran nuclear deal. The inference for the rest of the world is clear: American financial unilateralism works, at least for now.
  • However, today the Islamic Republic benefits from more meaningful international support than at any other point in the past 40 years: a burgeoning if mutually suspicious strategic partnership with Russia, the economic and strategic opportunism of Beijing, and full-throated (if still operationally impeded) assistance from Europe.
  • If Trump wants to bring Tehran back to the table, his officials will have to outline a more realistic platform for negotiations than the wish list of wholesale surrender that the administration has been advertising to date. While the president himself has consistently touted the prospect of a new negotiating process, National Security Advisor John Bolton and Secretary of State Mike Pompeo have a long history of infatuation with the concept of regime change, which is not a reasonable near-term bet in Iran.
  • A high-stakes game of chicken between two unpredictable leaderships leaves a profoundly risky environment for oil markets and for American interests in the broader Middle East.
  • Al-Monitor / Iran to fight US sanctions but will leave door open for talks

Foreign Policy – Aaron Stein / US-Turkish ties may be cut for good in Syria

  • Last week, the US and Turkey started joint military patrols in the Syrian town of Manbij. The patrols are part of the so-called “Manbij Roadmap”, agreed by both countries last June. But the roadmap hasn’t really worked, and what happens in the city could further undermine an already strained US-Turkish relationship.
  • President Erdogan has made clear that he views Manbij as a stepping stone for clearing all YPG (People’s Protection Units) presence from eastern Syria. To underscore the point, Turkey has recently bombarded YPG positions near Manbij and elsewhere along the Syrian-Turkish border with artillery fire.
  • The US, despite having had ample public warning from the Turkish government, appears to have been caught off guard by the recent uptick in shelling, and it is struggling to respond. The Turkish attacks challenge a central assumption about the direction of the Syrian civil war: that the various front lines have hardened and that the combatants’ existing positions can be used as the basis for negotiations to end the conflict.
  • If only to prevent the Islamic State from regaining a foothold in disputed territory, it is in the US’s interest to get the Turks and Kurds to cooperate, which will require clarity about US intentions and a commitment to tackling the vexing issue of Turkish-Kurdish relations.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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