The bleak future for Nigerian oil, why the US doesn't want Ukraine to attack Russian refineries, Putin's pensioner problem & the central heating revolution.
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The bleak future for Nigerian oil
For decades Nigeria has been Africa’s biggest oil exporter. Yet production has slumped by nearly 50% from its peak in 2005 because of insecurity onshore and higher costs offshore. It will face further troubles when the green transition reduces global demand for oil. Despite efforts to diversify Nigeria’s economy, oil still accounts for over 80% of exports and roughly 50% of the government budget. What happens if, in the coming decades, that crutch is removed? In theory, getting a barrel of Nigerian oil out of the ground should cost about $15 on average, according to Rystad Energy, a consultancy. But that is not the case. Insecurity in the Delta has driven up costs and pushed investment into offshore waters, where production costs are higher. As a result, it costs $25-40 to pump a barrel of oil in Nigeria. That will make it hard to keep up with producers such as Saudi Arabia, where costs are below $5 a barrel … The pace of Nigeria’s decline will depend partly on how rapidly the world moves away from oil. If it does so quickly with the aim of limiting global warming to 1.9°C, Nigeria’s oil production could fall by a further 70% by 2040
Source: Economist
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USA to Ukraine: “Please don’t mess with the price of gas. Remember who is lurking in the wings!”
The US has urged Ukraine to halt attacks on Russia’s energy infrastructure, warning that the drone strikes risk driving up global oil prices and provoking retaliation, according to three people familiar with the discussions. The repeated warnings from Washington were delivered to senior officials at Ukraine’s state security service, the SBU, and its military intelligence directorate … One person said that the White House had grown increasingly frustrated by brazen Ukrainian drone attacks that have struck oil refineries, terminals, depots and storage facilities across western Russia, hurting its oil production capacity. Russia remains one of the world’s most important energy exporters despite western sanctions on its oil and gas sector. Oil prices have risen about 15 per cent this year, to $85 a barrel, pushing up fuel costs just as US President Joe Biden begins his campaign for re-election. Washington is also concerned that if Ukraine keeps hitting Russian facilities … Russia could retaliate by lashing out at energy infrastructure relied on by the west. This includes the CPC pipeline carrying oil from Kazakhstan through Russia to the global market. Western companies including ExxonMobil and Chevron use the pipeline, which Moscow briefly shut in 2022. Ukraine had shown it could strike most of the oil export infrastructure in western Russia, putting about 60 per cent of the country’s exports at risk. The US objections come as Biden faces a tough re-election battle this year with petrol prices on the rise, increasing almost 15 per cent this year to around $3.50 a gallon. “Nothing terrifies a sitting American president more than a surge in pump prices during an election year,” said Bob McNally, president of consultancy Rapidan Energy and a former White House energy adviser. …. Ukrainian officials claim to have developed drones with a range in excess of 1,000km and payloads capable of inflicting severe damage. Kyiv launched two of its largest and most widespread drone attacks last week, with operations by both the GUR and SBU successfully targeting seven Russian energy facilities in consecutive days. The air campaign is also seen by some officials as a means to spur Washington into approving the $60bn military assistance package held up in Congress that is critical for Ukraine’s defence.
Presumably, Biden’s team are reminding Kyiv of who will be President, if it is not Biden.
Source: FT
Putin’s pensioner problem
From 2009, while the global economy began to recover from the financial crisis, Russia’s economy started to worsen. Growth slowed from an annual average rate of more than 7% during the 2000-2007 period, social spending levels stagnated, and the development of public services such as education and health care was hampered. In response to all these issues, Russia began to reverse many of the reforms it had previously promoted, with the pension issue becoming one of the most prominent and painful problems. On the one hand, Russia inherited an extremely low retirement age from the Soviet era. On the other hand, the pension system was riddled with long-term funding shortage. To solve the issue of the funding gap, Putin initially adopted the “three-pillar” model proposed by the World Bank in the 1990s, in an attempt to partially privatize the pension system to maintain its smooth operation. The pension reform was initiated in 2009, but was stalled and eventually abandoned. The Stabilization Fund, Russia’s sovereign wealth fund, which had been designated as a reserve for the pension system, was exhausted by 2017. As Russia and the Western bloc became increasingly antagonistic after 2014, the resources and attention for economic reforms and public welfare projects gradually dwindled. In June 2018, at the start of Putin’s fourth presidential term, then Prime Minister Medvedev announced a pension reform to raise the retirement age. This was a highly controversial topic that touched a nerve with everyone in Russia. Putin had promised in 2005 that the retirement age will not be raised as long as he was the president. However, this promise was broken four years after the annexation of Crimea. Due to the need to fund the development of Crimea and the fighting in eastern Ukraine, Russia announced in 2014 the halt of all newly added pension payments. By New Year’s Day in 2018, Russia’s sovereign National Welfare Fund was depleted, and the diversion continued — since the annexation of Crimea in 2014, not a single ruble of private pension contributions had entered the national pension fund. Although the second round of pension reform was justified as a means to reduce the government’s financial burden, pensions in many regions were below the local minimum standard. The pension predicament also reflected the past decade’s trend of Russia’s social spending being increasingly squeezed and diverted. Meanwhile, the government’s control over the economy intensified, with more resources flowing toward the military and defense industries. The controversy over pension reform also led to the most significant dip in Putin’s approval ratings since 2014. By July 2018, this figure had fallen to 63%, equal to the level before the annexation of Crimea in 2014; by May 2020, his approval rating had further dropped to 59%. During this period, Russia witnessed countless protests by pensioners nationwide.
Fascinating report this by Lu Chen of Caixin Global
Hippolyte Flandrin Ambroise Thomas (1834)
If Jacob Zuma’s new MK party survives a court challenge from the incumbent ANC, it could transform the South African political landscape by forcing the ANC into a coalition.
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Hippolyte Flandrin Polites, Son of Priam, Watching the Greek Movements (1833-1834)
Gaza and Israel’s reputation in ruins
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The revolution of central heating
… over the past 100 years, the most significant influence on the design and use of our homes has arguably been something … mundane: our heating systems. In the era of the fireplace, heat did not reliably extend to the whole of a room. Since central heating became commonplace in the UK in the late 1970s, we have become accustomed to the idea that every part of our house should be at a comfortable temperature. When it comes to the way homes look and feel, this was nothing short of revolutionary. In 1918, the Tudor Walters report laid out expectations for good-quality homes that would be “fit for heroes” returning from the first world war. In these homes it was expected that the living room would be the space in which “the family assembles and carries out the greater part of its indoor life”. Living in one room was not a compromise, it was the norm. Over the following decades, as technology and levels of comfort changed, our expectations rose. In his research into 20th-century council housing, the historian Matt Watson has documented how, from the 1920s to the 1970s, “heating spread from one living room throughout the home, and from predominantly evening time to morning, daytime and night-time”. In 1961, the government-commissioned Parker Morris Committee published its first report into the ideal standards for state-funded housebuilding. This report set out an ambitious new agenda for how the British population should be housed. It recommended that in outdoor temperatures as low as -1C, houses should be able to maintain temperatures of 18C in living areas, and 13C in the kitchen and circulation space. This was a radical proposal, which aimed to make more of the home usable for longer — bedrooms, for instance, were too cold for much of the year and were used for little else than sleeping in. The Parker Morris Committee proposed that there should be space “in every home for activities demanding privacy and quiet”. “Gas central heating, although offering only insipid warmth in its early days, ‘opened up’ the house and encouraged the use of upstairs spaces beyond the basic routine of washing, dressing and sleeping,” says Kathy Davies, a researcher on Just Heat, an international project that investigates historical heating transitions, at Sheffield Hallam University. “It gave individuals the opportunity for privacy and more choice in where they spent their time.” Bedrooms, previously cold and damp, became comfortable areas in which to hang out — arguably heralding the rise of teenage spaces … Starting in the late 1960s, government funding in the form of “home improvement grants” also helped with bringing toilets indoors, installing hot water and, in more extreme cases of disrepair, refitting entire properties. Our appetite for heat kept growing: in 1970, the average internal temperature in Britain was 12C, according to UK government statistics; by 2010, it had reached 16.9C. This was more than a change in temperature — it was a wholesale redesign of the cultural and social life of the interior. Central heating, alongside insulation and double glazing, made it more practical to knock through walls and create open living areas. It made the kitchen the main social space …
In 1967, the same year that the female contraceptive pill became available to unmarried women, the nationwide transition to natural gas began in Britain. With the availability of whole-home heating, it became possible to enjoy a different kind of intimacy. In one mid-1960s ad, a man in pyjamas brings his wife breakfast in bed. She wears a short-sleeved, lace-edged nightie and leans towards him suggestively. They are poised to kiss. In the corner of the room a radiator looks on surreptitiously, almost winking at the camera. … The architectural historian and critic Reyner Banham, in the 1984 edition of his influential book The Architecture of the Well-Tempered Environment, argues that architects have too often viewed the atmosphere as disconnected from the design of buildings. He comments that environmental controls including heating and cooling are “obviously and spectacularly important, both as a manifestation of changed expectations and as an irrevocable modification of the ancient primacy of structure; yet they are the least studied”. Today the twin crises of cost of living and climate breakdown have drawn fresh attention to the domestic atmosphere. … One in five properties in the UK was built before 1919, and in 2022, the Office for National Statistics said that age was the biggest factor in predicting energy efficiency — with 17 per cent of UK carbon emissions coming from domestic energy, there is a clear and urgent need to retrofit our homes. Source: Sam Johnson-Schlee in the FT
lamentation of Christ Hippolyte Flandrin 1842
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