The inflow continues

Although – or so we are told – the wave of immigrants from the EU's central and eastern European members to the UK has slowed, there has been no slackening off in the rate of migrants from third world countries into other EU member states.

Reported by AFP, nearly 900 such immigrants have arrived on Italian shores in the last two days. The coastguard rescued some 480 people on Friday after they were spotted near the island of Lampedusa, a speck of land 100 nautical miles from Tunisia and 200 miles from Libya, the embarkation point for most of the boat people.

Another 42 arrived on their own, the day after 355 Eritreans disembarked on the Mediterranean island, the southernmost piece of Italian territory. Nearly 1,600 people are now crowded into Lampedusa's processing centre, built to accommodate 850 people.

Arrivals have topped 15,000 in the first seven months of the year, nearly double the figure for the same period in 2007. Most risk their lives in rickety, overcrowded boats in the hope of finding a better life in Europe.

Unsurprisingly, the Italians have had enough. Berlusconi's government is planning to double the number of reception centres for immigrants across Italy from ten to twenty. But it is also renaming them, calling them "centres for identification and expulsion." The big question though, is to where will they be expelled?

Does our welfare system beckon once more?

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In a fantasy world of his own

Two events yesterday, each in their own way, struck chill in the hearts of ordinary mortals – as opposed to the increasingly vapid chattering classes whose detachment from reality seems to grow with each passing day.

The first was more immediate and recognisable - if long expected – the price hike in gas and electricity from another two utilities, following up from British Gas and EDF. Most consumers are now resigned to increases in their energy costs of up to 35 percent, and not a few are seriously asking how they are going to afford to heat their homes.

It is perhaps small wonder that retail outlets are seeing soaring sales of thermal underwear, winter coats and warm knitwear, demonstrating that the public at least have a firmer grip of reality than the chatterati.

The second of the events was the offering by Mr Nick Clegg, leader of the well-named Lib Dims, of an "energy policy" of such fatuity that, had we been able to boast of a media where the combined headcount divided by the sum of their individual IQs gave a number less than one, they would have laughed it out of court.

According to this cretinously stupid man – who, against enormous competition, is obviously bidding for life-time tenure of the post of Westminster village idiot – there is "no evidence" of a "terrible energy gap" with the lights going to go out in the middle of the next decade.

Considering how, clearly, the lights went out in Mr Clegg's dim little brain some time ago, it is a moot point as to how or whether he would notice the difference but, that notwithstanding, his "analysis" of the problem is that our energy mix "is not green enough and we're over-dependent on oil and gas from parts of the world that aren't very reliable."

With thus less than half a watt of residual luminosity, the prescription a la Clegg is to increase greatly production of wave, wind and solar power, buoyed by a staggeringly banal expectation that, with this "magic mix", we could become net exporters of renewable energy by 2050. And how, precisely he plans to increase generating capacity to the 120 GW which we are expected to need by 2020, he does not even begin to say.

Back in the real world, however – the one currently uninhabited by any politician – the situation daily begins to look more and more bleak. This probably explains why so many politicians prefer the comfort zones of their own backsides (or each other's as the case may be).

From the other side of the world comes news via Bloomberg that in Asia liquefied natural gas prices may climb about 80 percent this year "as new projects get delayed and countries from Indonesia to Egypt curb exports."

Apparently, production at plants in Russia, Yemen and Indonesia, with a combined capacity of about 24 million metric tons, will be delayed until next year instead of starting in the second half. Supplies will be limited "just as South Korea increases imports 3.5 percent and Japan boosts purchases after an earthquake shut down its largest nuclear plant."

Thus, while the dismal Clegg is soaring into his fantasy of a bright new 2050 - by which time his nascent Alzheimer's will be fully established – Andy Flowers, a former executive at BP's LNG business is telling us that this winter "can be very tight," adding that, "There's not going to be much supply available."

This is borne out by other reports. For instance, the Indonesian LNG plant at Bontang is lagging behind its contracted volume, with the authorities deciding to divert some production to fertiliser manufacture. So tight is production here that Pertamina, Indonesia's state oil company, is planning to cut supplies to a group in Japan by 75 percent after its contract expires in 2010.

Yet Japan's imports rose 6.2 percent to 34.67 million tons in the first six months, according to data compiled by the Finance Ministry. The country, which imports almost all its gas, bought 66.8 million tons of LNG in 2007.

Furthermore, Japan, already the world's biggest LNG user, is taking an even bigger volume. It grew in July by 7.4 percent to 1.75 million tons from a year earlier. Now, in the shape of the Tokyo Electric Power Company, it wants still more, having increased its consumption by about 18 percent to 19.9 million tons in the year ended 31 March after an earthquake last July shut its Kashiwazaki Kariwa nuclear plant.

The Korea Gas Corp., which imports about 95 percent of South Korea's needs, is also on the look-out for more LNG and plans to increase its purchases to 26.4 million tons this year, leaving commentators to observe that Japan and South Korea "will pay whatever it takes to get the fuel." They do not have access to pipeline gas and the alternative is oil-based fuel.

This is just one tiny snapshot of a deteriorating global energy supply situation which comes to a head this winter just as the UK will be forced to acquire additional stocks on the spot market, at a price which is likely to make the current inflated prices look like a fond memory.

Yet, imbued with an ego that exceeds his intelligence quotient by many magnitudes, the sorry apology for a human being that is the leader of the Lib-Dims is so far from the land of the living that he has not the first idea of the nature of the crisis screaming down on us like a steam engine on fire. One can, therefore, only indulge in one's own fantasies, usually based on imaginative things to do with the wind farms that Clegg would wish to foist upon us all.

These fantasies may not keep us warm, or even make us feel better, but the prospect of causing that much pain at least affords us some small compensation, the only regret being that it will not be real.

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An institutional breakdown

If we came away with nothing else out of the constitutional Lisbon treaty, it was an appreciation of how much the "colleagues" value their institutions, this being their preoccupation during this – and previous – treaty negotiations.

It is quite remarkable, therefore, that the rabidly Europhile Euractive can apparently view with equanimity what amounts to a complete breakdown of the established institutional order of the European Union, over relations with Russia.

In the natural order of things, EU external relations should be handled by the presidency, currently in the "safe" hands of M. Sarkozy, aided and abetted by the High Representative, Javier Solana, the baton handed on through successive presidencies until the matter is resolved (or not).

What Euractiv is embracing, however, is the growing view that German chancellor Angela Merkel should "step up and take the lead within the EU to resolve tensions over Georgia and reshape the West's relations with Moscow".

In one way, this is a completely logical view. By any account, Sarkozy has spectacularly failed to manage the Georgia crisis and, with clearly a better rapport existing between Merkel and president Medvedev (pictured) – to say nothing of shared geopolitical interests – it makes sense for the chancellor to front negotiations.

The point is, though, that Merkel is an interested party, with a very keen interest, not least, in maintaining the flow of gas, oil and coal from Russia. With Germany closing down its nuclear industry and its coal mines, without the active support of Russia, Germany no longer has an economy.

Yet, the whole ethos of the EU institutional system is that it should be "above politics", managed by disinterested "Platonic guardians" who are looking after the interests of the Union as a whole, without deference to the needs or ambitions of any one or group of member states. Whatever Merkel's merits, no one can accuse her of being disinterested.

On a more practical level, the very last person (or country) we want representing our interest is Germany. Having mismanaged our own energy policy, we too are reliant on Russian gas and are likely to become more so – and have also an unhealthy reliance on Russian coal. Merkel, therefore – in a very real sense – is hardly a "partner" but a serious competitor in the race to secure increasingly scarce and expensive energy resources.

Any idea that Merkel will, in representing the EU in its relations with Russia, will look after our interest lies strictly in the land of the fairies.

In this, history offers a very poor precedent when, in the post Yom Kippur oil crisis, individual member states broke away from the community interest and sought their own salvations. At the time, Jean Monnet and his integrationalist colleagues deplored this exhibition of national self-interest, calling for the rapid development of still more institutional structures to remove this undesirable trait.

Some 35 years later, the institutional structures are still not in place and, rather that pursue them with more vigour – not that they would be of any use – the "colleagues" seem quite content to abandon them altogether in their search for answers.

The significance of this cannot be overstated. Effectively, it represents a loss of faith in the drivers of European integration, with politics reverting to the classic model of Great Powers resolving issues between them, while the lesser powers pick the crumbs from the table after the pie has been shared out.

What is different now, though, is that the UK has absented itself from the game, yet we are still bound by the institutional ethos of the Union when it is clearly no longer functioning. This is the worst of all possible worlds.

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Those Olympic Games

Some of our readers might think that we are failing in our duty to comment on the world by ignoring (well, almost) the big event of the summer - the Olympic Games in Beijing. Well, perish the thought. Not only has my colleague written on the effects the Games have been having on the people of China outside the Olympic village but I have put up a posting on the BrugesGroupBlog about the EU and Olympics.

A couple of things need to be added. One is about China. Many of the factories that are now idle were closed down in the weeks before the Games started in order to cut down on pollution. Whether it worked we shall find out when the sports folk come back home and find their lungs functioning rather less well than before.

Secondly, I should like to pass on an idea suggested by one of our readers: Russia is not doing terribly well in the medals' table. Those of us who recall the old struggle between the Soviet Union and the United States for top position find this new multipolar Olympic table rather weird.

Well, suggested said reader, is that not the real reason for Russia deciding to reconquer its old empire? To restore her position in the Olympic table next time (that would be 2012 in London)? As I recall, the Ukrainians used to do quite well in track events. No wonder Russia is looking to that country now.

A religion without borders

They were banned in the European Union in 2005 and now it is the turn of California to do the deadly deed.

We are referring to lead weights used for balancing car wheels and, according to the LA Times, they are to be phased out in California by end of 2009.

Such is the grip of the greenies that it is going further even than the arch-sponsor of scares, the EPA. Since it is not actually banning them - instead, the agency is sponsoring a "voluntary" initiative to reduce their use – the Oakland-based Center for Environmental Health took a law suit against Chrysler and the three largest makers of lead wheel weights for the US market.

In settlement, the makers agreed to a phase out, after the group had contended that discarded weights threatened drinking water. "Wheel weights have been identified as the largest new route of lead releases into the environment," says Michael Green, executive director of the Center for Environmental Health. "By moving the industry away from leaded wheel weights, we are helping to keep the lead out of our kids' drinking water."

To add to this legend, the paper helpfully tells us that, "lead is a highly toxic metal that can cause brain damage and other nervous-system disorders, especially in young children."

It has been used to make wheel weights for decades because it is cheap and heavy, allowing mechanics to use relatively small weights when balancing tyres – to say nothing of being malleable and soft, making it easy to trim and fit – but such is of no consequence to the greenies.

As in the EU, they will enforce weights made of steel or zinc alloy, which are larger and cost 20-30 percent more. But, since they are cheap enough, no-one is really that concerned and the greenies get their way yet again.

What is terrifying though is the way that what starts in the EU ends up in the USA – and vice versa - from whence the contagion spreads across the globe. It truly is a religion without borders.

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That loathsome media

Readers might have noticed that we are not particularly impressed with the fourth estate – although there are a few journalists worthy of their hire.

However, the very worst of the breed is exemplified by the political correspondent, one such being Jo Coburn who works for the equally repulsive Beeb.

She recently accompanied the prime minister on his trip to Afghanistan and then filed a report on her experiences on the BBC website.

Despite having an opportunity that most of us would welcome – for the chance to get information directly from the "horses' mouths" on the Afghan campaign, which looks to be entering a worrying phase – no such trivial issues detained Mz Coburn or her colleagues for very long.

Having been driven to Kabul and the presidential palace under "incredibly tight" security, a press conference was then arranged for these loathsome creatures.

But, writes la Coburn, "if Gordon Brown had thought he would be asked about the future cooperation between the two countries then he was sorely disappointed." She drools on:

All of us wanted to press him on the future of his leadership. Did he accept his strategy up until now had been wrong? What were his relations like with his foreign secretary, David Miliband, amid tales of political plotting?

There is something particularly despicable about these shrivelled, etiolated creatures that render them beyond contempt. That the likes of Coburn cannot even see that she is wrong to the extent that she quite happily parades her foul trade on the net really says all you need to know about her and her ilk.

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Harvest blues

After the wash-out summer – where hardly a day seems to have passed without rain – harvest-watchers will be unsurprised to learn that wheat futures for December delivery on the Chicago exchange are up to $8.99 a bushel (although still down from the February peak of $13.50).

However, the issue is not quantity, per se, after record global plantings, but quality, the late harvests – delayed by the weather – reducing the amount of milling quality wheat. This is affecting some producers in the United States, but is also getting to be a major problem in the UK and affects even Black Sea producers.

More recently in the UK, Northern Irish farmers have suffered extensive flooding (pictured) in what is slated as the wettest August for a hundred years, although even Devon farmers are complaining as their wheat starts to sprout in the fields. One farmer even lamented that he was depressed than he was during foot-and-mouth.

Throughout the country, farmers are facing a race against time as waterlogged fields prevent them getting the combine harvesters into action and, although the situation is not irretrievable, some are warning that it is getting that way.

Unless we have some prolonged dry spells in the next two weeks, many farmers are in trouble – and so are we, with the price of bread reckoned to soar as much as 30 percent as shortages bite.

But just to show that, sometimes, Mother Nature is the least of our problems, a Bloomberg report tells us that Russia is enjoying its best wheat and barley harvest for 15 years – and is rapidly running out of storage, putting much of the crop at risk and limiting exports.

Apparently, Russia has about 95 million metric tons silo capacity, against a forecast grain harvest of at least 85 million tons – although some estimates put it at 97 million tons.

Of course, that is only part of the picture. By no means all the silos are in the right place. More are needed in the southern and central parts of the country, where most grain is produced and exported.

Building 100,000 tons of silo capacity in Russia costs about $50 million, including costs for rail, road and power connections and, while Russia seems to be able to find the money to finance its mad adventures in Georgia, it has been reluctant to invest in infrastructure.

This does not only extend to bulk storage. The country has only 12,500 specialist rail trucks needed to transport grain, more than a third fewer than are needed. For exports, Russia's total port capacity for exports stands at about 15 million to 18 million tons a year, only just enough to meet demand if there are no problems. The government is forecasting grain exports of about 15 million tons this season.

Russia, therefore, is in a position not so very different from less developed economies like Egypt and Afghanistan, where it needs to develop infrastructure in order to exploit its production potential.

By contrast, the US has about three times more silo capacity than it can produce in a single harvest, and can easily cope with fluctuations in supply and demand. But then, this is a free-enterprise system, whereas, even now, much of the Russian trading system is in State hands.

If we are going to suffer food shortages, therefore, this is going to be as much due to inadequate governance as it will be Mother Nature, although bad weather and bad government is a formidable combination.

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The dark side

Behind the razzmatazz of the Peking Olympics, there is a darker picture, redolent of the 1980 Moscow Olympics, where the country was starved of food, fuel and power simply to keep the Games going.

This was covered by Christopher Booker in his seminal book called the Games War, to which he referred in one of his recent columns, pointing out the uncanny parallels between then and now.

So it is that The Daily Telegraph (business section) is reporting that China's industrial heartland is facing crippling power shortages, with more than a dozen provinces already rationing electricity. The country is suffering from its biggest power crisis since 2004, when a 40-gigawatt shortfall left three quarters of China in the dark.

The proximate cause is a shortage of coal – an issue we rehearsed extensively in February - then noting how Chinese pressure on the global market was driving up prices to record levels. More to the point, the actual cause is a highly regulated internal market which caps the prices of coal and electricity, making it difficult for companies to invest in new capacity – on top of a creaking infrastructure, leaving a shortage of rail transport to deliver coal where it is needed.

Anyhow, so serious has the situation become in China now that, in order to keep the lights burning in Peking, and the television cameras rolling, that other areas are being starved of power.

In the northern province of Shanxi - produces nearly one tenth of China's aluminium and a fifth of its steel - the population of almost 34m people is having to contend with regular blackouts and metal producers are having to curb production. The local administration has forecast a five gigawatt shortage this summer and put its industry on strict rations.

In Shandong province, the government has moved stockpiles of coal to Peking to ensure power supplies in the capital. As a result, the amount of power available to businesses in Shandong has fallen by around a third in August, leading some factories to run assembly lines at night or to shut parts of their plants.

Nor can this be dismissed as a little local difficulty. The Chinese government has responded by imposing a tariff on coal exports which, according to the Indian Financial Express is driving up prices and putting even more pressure on global supplies.

The metal industries are going to be particularly hard hit as China exports nearly half of the world's metallurgical coke. Furthermore, it China has set an export quota of 12.01 million tons this year, and had already exported 8.3 million tons in the first seven months of 2008. Export prices are thus expected to hit $1,000 a ton, up from $700 currently.

As to coal supplies generally, India will be a key factor in the increasing global competition for energy supplies. The Indian coal industry is the fourth largest in terms of coal reserves and third largest in terms of coal production in the world. The country, however, faces huge deficit of coal. Coal requirement electricity generation is expected to grow ten percent this year and demand for both thermal and coking coal may rise to 1.87 billion tonne a year by 2026.

As supplies from China tighten, India can be expected to look elsewhere for its supplies and, as we pointed out earlier, it is bidding against the UK (and Germany) for South African coal, on which we are currently dependent for much of our electricity generation.

Nor can we rely on cheap gas to make up our shortfall. Today's news of a leak in a North Sea pipeline, in the Norwegian gas field, has triggered a 15 percent hike in UK wholesale gas prices, pointing up the fragility in supply, a situation made worse by Russia's adventures in Georgia.

On this, The Times quotes David Hunter, an analyst from McKinnon & Clarke, the energy consultancy. He says, "Gas available to export from Norway to countries including the UK will be cut significantly and, without adequate storage, the UK will be left to negotiate with Russia and the Far East for supplies or risk running low on energy."

That brings us back full circle. With supply difficulties in China, and India sucking in imports, there are going to be no easy options for the UK, which is going to have to pay through the nose to ensure continuity of its own supplies.

For this who are watching and marvelling at the performance of the athletes, therefore, the message is to enjoy it while you can. The reckoning, as always, will come later … we are heading in the same direction as the divers.

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Last year was different

Last year I wrote about the anniversary of the Soviet invasion of Czechoslovakia under the title "Then again, some things have changed". The Russian military were blustering but it looked like they could do nothing about an actual invasion of any East European country and might, therefore, be too smart to try.

This year, the fortieth anniversary was marked early, thanks to our friends in the Russian military who have decided to take their August holiday in Georgia, an independent democracy on their border. Have things changed back to their normal Russian/Soviet state of affairs?

In some ways yes. Unable to control its neighbours, Russia like a schoolyard bully, prefers to hit out, particularly if that neighbour is smaller and weaker. But is it in a position to sustain a lengthy military occupation and extend it to the other recalcitrant neighbours? That I think is more questionable. Russia is relying on the supineness of the West that will simply acknowledge an updated version of the "Brezhnev doctrine," now called the Putin doctrine. But the underpinning of strength is not there. This is Russia's tragedy far more than anybody else's even if at the moment it is hard to feel sympathetic.

Charge of the Light Brigade

Canadian researcher David Long writes for Embassy – Canada's foreign policy newsletter – this month, on the vexed question of "The EU in Afghanistan". This is particularly topical, given the recent attack on French troops.

The Afghanistan mission, he says, combines military intervention, state building, and democratisation in a narco-state at war with itself - one that has historically been a graveyard of empires. In this troubled environment, the states of the European Union have proceeded in a manner resembling the blunders commemorated at another time in Lord Tennyson's poem, The Charge of the Light Brigade.

He continues:

The European nations' involvement is shaped by their participation in the NATO-led International Security Assistance Force operation. Though 25 of 27 European Union nations are engaged in the mission, the reality is that only a few European states have significant numbers of troops in Afghanistan and even fewer (two to be exact, the United Kingdom and the Netherlands) are in the main combat zone in the south, even after the much heralded French deployment into the east of the country. No wonder some laugh that ISAF actually stands for I Saw Americans Fight.

European engagement is circumscribed by caveats and conditions on the location and role of deployments. These are meant to placate restive domestic audiences who fail to see the value of the mission. But the caveats are not simply the result of cowardice or craven caving to populist pacifism. They are the product of strategic and diplomatic calculation. Hesitations over NATO's first combat mission outside Europe highlight the fact that the vision of global NATO has never been a unanimous position of the member states.

Only the member states who share the American vision of NATO as a global security actor have deployed to fight the Taliban-led insurgency in the south. Both the so-called Old and New Europe have doubts about the global agenda.

Old Europe is largely happy to reserve NATO as the guarantor of European security through the provision of territorial defence.

Meanwhile, New Europe, not long liberated from Soviet clutches, still fears Russian interference and prefers NATO's anti-Russian focus be maintained. Given recent developments in Georgia, who can blame them?

All the while, as Afghanistan has increasingly negative connotations among European publics comparing it to the fighting in Iraq, for European leaders a major distraction has been Kosovo, a simmering crisis seen as in the EU's backyard rather than far from home.

European policy is plagued by jurisdictional jealousies: some prefer more EU and less NATO, others the member states rather than an EU mission, and still others the Big Four leading policy. Even the EU's collective intervention is shaped by its internal schisms.

While the Commission allocates billions of euros to a variety of development, humanitarian and other rebuilding projects, its mandate in the provision of non-military aspects of security assistance overlaps with the role of the Council's High Representative for Common Foreign and Security Policy. The EU's special representative in Afghanistan is supposed to bring cohesion to all this and in effect provide "one-stop shopping" regarding EU policies.

This is a tall order for recently appointed, Ettore Francesco Sequi, an Italian diplomat. The failed EU Constitution and its successor, the Reform Treaty, were supposed to rationalize the EU's foreign policy instruments and decision-making.

Don't hold your breath.

Where bold moves have indeed been taken by the Europeans, such as attempts to bring warring factions together, they have been rebuffed by the Afghan government (and EU diplomats expelled from the country) or have run afoul of contradictory policies preferred by the United States, for instance, over whether to legalize or destroy local poppy cultivation. The steady — a cynic might say glacial — development of the European security and defence policy has been given a fillip with EUPOL as it trains Afghan police as part of its civilian crisis management dimension.

But this project depends on the preservation of a security environment and an uncorrupted culture of governance in which these police and justice officials can go about their business.

But the ultimate conundrum in Afghanistan is the mismatch of the intervention with its goal. The European engagement is a charge of the Lite Brigade because it follows the pattern outlined in Michael Ignatieff's polemic Empire Lite.

Unlike military engagements and imperial conquests of the past, today's interventions are conducted in the long shadow of mass democracy. This means that deployments need to be justified at home, defended before a domestic audience. It also means that the "host" or target state is to be rendered democratic in some way, despite the fact that this is achieved paradoxically through the instrument of alien military force. The EU's involvement maps on to Ignatieff's critique of post-cold war peacekeeping and peace enforcement as imperial ventures in disguise, as was the case in the trusteeship over Kosovo.

Today's interventions are not about conquest as an end in itself, but as a means to another end (democracy) through short-term, low-level military engagement.

As a consequence, what is at stake is not military victory or defeat. To neutralise Afghanistan as a potential future threat to the West is to stabilise it by irreversibly changing it. This is a politico-strategic outcome rather than a military one, achievable only over the course of generations. The EU's Light Brigade intervention can only be minuscule and temporary by comparison.

So where was the strategic calculation regarding the EU's intervention in Afghanistan? And what sort of government bleats to its allies that it needs help in a region that it deliberately chose to engage in?

The marked lack of strategic wisdom is a result of hubris and an interventionist culture that is prevalent across the Western world. In essence, interventionism is the unexamined belief that some action on our part is better than none, even in affairs we don't understand, in regions where we don't have reach and our interests are unclear, and in conflicts that any realistic assessment would indicate are unlikely to be remedied given the resources available for an international military intervention.

This is an interesting perspective. There is a lot I would disagree with, but I really can't improve the last paragraph.

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