"We must be ready to dare all for our country. For history does not long entrust the care of freedom to the weak or the timid. We must acquire proficiency in defense and display stamina in purpose." - President Eisenhower, First Inaugural Address
He’s back! EagleOne is back in the studio to help us kick of summer with a Midrats early-summer melee! With most schools out, what you need right now is a good maritime hour to refocus the brain. For the full hour we’ll try to cover it all from the latest McCain kerfuffle to WESTPAC to NATO to the FFG(X) dropouts and more, we’ll cover the waterfront. As always, the phones and chatroom will be open if you want to join the show. See you Sunday!
Join us live if you can, but if you miss the show you can always listen to the archive at Spreaker.
If you use iTunes, you can add Midrats to your podcast list simply by clicking the iTunes button at the main showpage - or you can just click here.
China is reportedly putting purchases of U.S. soybeans on hold amid the growing trade war with the U.S., according to a report from Bloomberg News. As the world's largest soybean buyer, China's move could ramp up the economic pressure on American farmers. China doesn't plan to cancel orders it's already made, Bloomberg reported, citing people familiar with the situation. Even though China had agreed earlier this year to buy 10 million tons of U.S. soybeans, the purchases have halted, with about 7 million tons of soybeans yet to be delivered to China, Bloomberg noted.
It is expected that with an expanding population and improving living standards, the demand for soybeans in China will continue to grow in the next few years. As the domestic soybean yields can hardly be increased, over 80% soybean consumption will rely on imports. There are many uncertainties in the Sino-U.S. trade war. If China and the U.S. can reach a compromise on bilateral trade, in 2019, U.S. soybean imports to China may rebound rapidly; otherwise, the tariffs will remain at the current level or be increased, and there will be a surge in the prices and a plummet in the volume of U.S. soybeans imported to China. Even if Chinese importers turn their attention to countries such as Brazil, the soaring demand will push up the prices of soybeans from these countries and press Chinese importers in cost. Overall, the ongoing Sino-U.S. trade war will increase the cost of importing soybeans, which means that Chinese consumers will have to pay more for soybean oil, bean products, dairy products, pork, eggs, etc.
Our fleet for Asia and the Indian Ocean as it was during the Cold War when the Seventh Fleet was the "balance of power in the Far East" and "the most powerful single sea force in the world today."
UPDATE: ONI reports robbers boarded museum fishing ship Minicario at Lowestoft, but I am unable to track down any news reports of the incident. There is a museum ship at Lowesstoft, named Mincarlo, about which more here. No reports of robbers found.
By the way, if you missed it theaters yesterday, the documentary The Cold Blue, it will be on HBO soon. Don't miss it. My father flew 35 missions over Germany in B-17s as a member of the 8th Air Force and some of his story was not really comprehensible to his kids - not that he talked about it much - but this film helps set up the context.
The crew my dad flew with (he's front row, second from left):
Take some time this weekend to remember those who have died to preserve our freedom.
The latest issue of the Oil & Gas Journal offers up some analysis about the rise in oil prices, courtesy of Rystad Energy OIL PRICE RISKS RISE TO PRECARIOUS LEVELS:
Supply disruptions in the Middle East on top of an already tight crude market could send oil prices violently upward, according to Rystad Energy. Two Saudi Arabian oil tankers were reportedly attacked off the coast of the United Arab Emirates (UAE) this weekend, sending crude futures sharply up Monday morning. Commenting on the incident, Bjørnar Tonhaugen, Head of Oil Market Research at Rystad Energy, says: “In the short term, the perceived risk of supply disruptions from the area will only add to the premium of short-dated oil contracts compared to deferred contracts on the futures curve, which are already trading at a high premium.” The tightness in prompt supplies is caused by declines in production from Iran and Venezuela, along with ongoing OPEC cuts, outages in Russia owing to the Urals contamination, maintenance in Kazakhstan, plus planned maintenance in the North Sea during the summer months. “The oil market is reacting today not because the physical market suddenly has lost more oil supplies, but because of risks that the market may lose more oil in the coming weeks and months given the heightened risk of supply disruptions from the critical Persian Gulf region. Raising tensions even higher, news flows suggest the latest incident might be related to the conflict between Iran and the US, which puts the Strait of Hormuz in play,” Tonhaugen said.
Europe’s oil refineries stopped accepting piped deliveries of Urals crude from Russia this week after flows were found to be contaminated with abnormally high levels of organic chlorides that, when refined, become hydrochloric acid that can damage the plants. *** Russia’s government has blamed a private storage terminal in the center of the country for the problem. It will now take two weeks to ensure uncontaminated crude is flowing along the entire length of the pipeline. The millions of barrels tainted crude will need to blended with larger quantities of unblemished oil to get the impurities down to safe levels, a task that might some weeks or months. Organic chlorides are generally not present in crude oils, but are used to dissolve wax and during cleaning operations at production sites, pipelines or tanks.
While there is nearly 1 million tons of contaminated oil in Belarus, the overall amount of substandard Urals crude in pipelines across the country, Russia, Ukraine and Poland may have been as much as 5 million tons as of the end of April. Most of the tainted crude remains in the pipelines and is “eating away at them,” Belarus President Alexander Lukashenko said on Saturday. The nation and Russia are discussing what to do with the oil with no clear deadline for removing it.
With some contaminated cargoes of crude from the Urals headed to China and the Bahamas, the remaining oil cargoes are stranded in Europe while Asian buyers are sought
Trading companies Vitol and Unipec are sending around 700,000 tonnes (5.1 million barrels) of contaminated Russian oil to Asia in an attempt to place the barrels rejected by buyers in Europe, according to trading sources and ship tracking data. *** Vitol has sold its cargo to Chinese independent refiner Bora Group while Unipec is moving the oil to refineries in China owned by its parent company China Petroleum and Chemical Corp (Sinopec), the sources said. “We took the oil after evaluating that our refineries are able to process the crude,” one of the sources told Reuters, adding that the price was also attractive given that Middle East crude grades are trading at multi-year highs on tight supply.
On Thursday, Total declared force majeure on shipments of refined oil products from the Leuna refinery after the suspension of the oil flow via the Druzhba pipeline. Russian pipeline operator Transneft will compensate its customers for the losses they have sustained due to the contaminated crude oil, Russian Deputy Prime Minister Dmitry Kozak said on Thursday, noting that refiners must first prove their damage and loss in order to claim compensation.
And, it's all one more reason while oil prices go up.
... Trump believes that if present trends are not reversed, China could
in theory catch and surpass the US. And as an authoritarian, anti-democratic superpower, China's global dominance would not be analogous to the American-led postwar order, but would be one in which China follows one set of rules and imposes a quite different set on everyone else—perhaps one day similar to the system imposed on its own people within China. *** China does not honor patents and copyright laws. It still exports knock-off and counterfeit products. It steals research and development investment through a vast array of espionage rings. It manipulates its currency. Its government companies export goods at below the cost of production to grab market share. It requires foreign companies to hand over technology as a price of doing business in China. And, most importantly, it assumes, even demands, that Western nations do not emulate its own international roguery—or else. The result is a strange paradox in which the United States and Europe assume that China is an international commercial outlaw, but the remedy is deemed worse than the disease. So, many Western firms make enormous profits in China through joint projects, and so many academic institutions depend on China students, and so many financial institutions are invested in China, that to question its mercantilism is to be derided as a quaint nationalist, or a dangerous protectionist, or a veritable racist. China is an astute student of the Western science of victimology and always poses as a target of Western vindictiveness, racism, or puerile jealousy. *** Global naval dominance is not in the Chinese near future. Its naval strategy is more reminiscent of the German Kriegsmarine of 1939 to 1941, which sought to deny the vastly superior Royal Navy access at strategic points without matching its global reach. China is carving out areas where shore batteries and coastal fleets can send showers of missiles to take out a multibillion-dollar American carrier. And its leasing of 50 and more strategically located ports might serve in times of global tensions as transit foci for armed merchant ships. But for now they do not have the capabilities of the American carrier or submarine fleet or expeditionary Marine forces—so the point is to deny America reach, not to emulate its extent.
Thought-provoking and, in my humble view, spot on.
An outlaw nation that seeks to revive the idea that it is the "center" of civilization and that all other nations owe some sort of obeisance to it needs to get a better grip on how cooperative engagement works to make the world better for all of us.
Sadly, with Europe's apparent lack of interest in becoming anything more than an administrative, politically correct gaggle, once again the key player in calling out China's outrageous contact is the U.S.
. . .an effective coalition to manage China’s rise can no longer center on Asian security partnerships alone but must now include the world’s principal concentrations of economic power, technological progress, and liberal democratic values. Among these are many of the United States’ partners in the Indo-Pacific, such as Australia, India, and Japan. But the European Union and its major member states are also becoming increasingly critical U.S. counterparts in dealing with China. *** As next week’s EU-China summit approaches, Europe has begun to fundamentally rethink its China policies. The shift is so substantial than even seasoned Asia hands have described it as a “revolution.” Despite differences among the EU member states, the overall thrust of the change is in convergence with the new U.S. approach. As recently as three years ago, member states resisted even modest changes to strengthen EU trade defense instruments, despite the flood of Chinese steel imports. The notion of an EU-level mechanism to scrutinize Chinese investments was still anathema to most European leaders. If the United States in early 2016 had suggested closer coordination in restricting Chinese access to Western technologies, a common public front on China’s non-market practices, or cooperation on infrastructure financing as a counterbalance to China’s Belt and Road Initiative (BRI), European allies would have responded with a bemused rebuff. The same logic that has driven the U.S. policy shift, however, has led Europe to change its stance. In March, European heads of state debated a new European Commission strategy paper that describes China as an “economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance.” The proposals in the paper would change policies in areas ranging from procurement to data, antitrust rules to telecommunications, industrial strategy to artificial intelligence. *** What accounts for the shift in European thinking? No doubt political and security developments have played a role—from China’s deepening authoritarianism under President Xi Jinping to its efforts to extend political influence in Europe. The strongest drivers of the change, however, are economic. Europe has lost hope that China will reform its economy or allow greater access to its markets, and at the same time, China’s state-backed and state-subsidized actors have advanced in sectors that Europe considers critical to its economic future.
It's always about the money and it always seems to come very late.
In light of the excellent Midrats show Sal and Claude had with John Konrad, I am re-posting a piece on the size of the useful American shipping industry, which readers of Mahan know, and which the Chinese have followed, is key to international strength and a reason for a strong navy.
First, the episode:
My original post
As of 15 March 2019, the inventory of U.S. flagged merchant ships of "over 1000 gross tons that carry cargo from port to port" was 180 ships.
As noted in the above video, only 78 of these 180 ply international trade. This is down from nearly 200 in 1990, as seen in the chart below:
A partial explanation for the decrease in such international shipping is the increase in capacity of tankers and container ships. Another explanation is the higher cost of operating under U.S. law as opposed to operating under a foreign "flag of convenience."
Of the 180, 73 are tankers, many of which are not deemed "militarily useful."
Nine of the 180 ships have gross tonnage of under 2000 tons. Most of the latter are not considered as being "militarily useful." Gross tonnage (GT)\is a function of the volume of all of a ship's enclosed spaces (from keel to funnel) measured to the outside of the hull framing."
Here's the MARAD list of U.S. flagged privately owned ships most of which operate from U.S. port to U.S. port, subject to the Jones Act:
The National Defense Authorization Act of 2013 requires that the Secretary of Transportation, in consultation with the Secretary of Defense, to establish a fleet of active, commercially viable, militarily useful, privately-owned vessels to meet national defense and other security requirements. All Maritime Security Program operating agreements are currently filled by 60 ships. In the event that an operating agreement should become available, the Maritime Administration would publish a notice in the Federal Register requesting applicants. A copy of the Maritime Security Program application is listed below. Participating operators are required to make their ships and commercial transportation resources available upon request by the Secretary of Defense during times of war or national emergency.
Click on image to enlarge
You might note that MSP ships also appear on the MARAD list.
In addition to merchant shipping, the Military Sealift Command maintains an inventory of ships:
Some of these ships also appear in that MARAD merchant list. I note this to ensure the same ships are not counted twice or three times as assets available if needed.
Concerns? Suppose we need more ships to carry things needed for national security? We are short merchant mariners, as noted by the GAO here:
Stakeholders GAO spoke to identified two primary challenges in sustaining the internationally trading U.S.-flag fleet for national defense needs. • First, even with the annual MSP stipend, maintaining the financial viability of U.S.-flag vessels is a challenge. This challenge largely results from the higher costs of operating a U.S.-flag vessel. According to U.S. Maritime Administration (MARAD) officials, the additional cost of operating a U.S. flag vessel compared to a foreign-flag vessel has increased—from about $4.8 million annually in 2009 and 2010 to about $6.2 to $6.5 million currently— making it harder for such vessels to remain financially viable. In addition, government cargo volumes have fallen in recent years. In response to this challenge, Congress increased the MSP stipend from $3.5 million per vessel for fiscal year 2016 to $4.99 million per vessel for fiscal year 2017. MARAD officials said this increase has temporarily stabilized the financial situation of MSP vessel operators. However, MARAD officials stated trends in operating costs and government cargo suggest this will remain an ongoing challenge. • Second, a potential shortage of U.S.-citizen mariners available to crew the government-owned reserve fleet during a crisis is a challenge. DOD counts on mariners working on U.S.-flag vessels to crew this fleet when activated. A MARAD working group recently estimated a shortage of over 1,800 mariners in the case of a drawn-out military effort, although it also recommended data improvements to increase the accuracy of the count of available mariners.
What difference does it make? Mahan's view is that the purpose of a navy is that "Navies exist for the protection of commerce" - and what happens when the ships carrying your commerce are not of your own nation? You end up providing open lines of commerce for "free riders" who garner the benefit of free trade routes without incurring the costs of maintaining them. Under the U.S.'s post-WWII leadership, commerce among nations ballooned - China's resurgence has been, in large part, due to its embrace of international trade and its use of the trade routes protected by the United States Navy and its allies.
The first and most obvious light in which the sea presents itself from the political and social point of view is that of a great highway; or better, perhaps, of a wide common, over which men may pass in all directions, but on which some well-worn paths show that controlling reasons have led them to choose certain lines of travel rather than others. These lines of travel are called trade routes; and the reasons which have determined them are to be sought in the history of the world. Notwithstanding all the familiar and unfamiliar dangers of the sea, both travel and traffic by water have always been easier and cheaper than by land. The commercial greatness of Holland was due not only to her shipping at sea, but also to the numerous tranquil water-ways which gave such cheap and easy access to her own interior and to that of Germany. This advantage of carriage by water over that by land was yet more marked in a period when roads were few and very bad, wars frequent and society unsettled, as was the case two hundred years ago. Sea traffic then went in peril of robbers, but was nevertheless safer and quicker than that by land. A Dutch writer of that time, estimating the chances of his country in a war with England, notices among other things that the water-ways of England failed to penetrate the country sufficiently; therefore, the roads being bad, goods from one part of the kingdom to the other must go by sea, and be exposed to capture by the way. As regards purely internal trade, this danger has generally disappeared at the present day. In most civilized countries, now, the destruction or disappearance of the coasting trade would only be an inconvenience, although water transit is still the cheaper. Nevertheless, as late as the wars of the French Republic and the First Empire, those who are familiar with the history of the period, and the light naval literature that has grown up around it, know how constant is the mention of convoys stealing from point to point along the French coast, although the sea swarmed with English cruisers and there were good inland roads. Under modern conditions, however, home trade is but a part of the business of a country bordering on the sea. Foreign necessaries or luxuries must be brought to its ports, either in its own or in foreign ships, which will return, bearing in exchange the products of the country, whether they be the fruits of the earth or the works of men's hands; and it is the wish of every nation that this shipping business should be done by its own vessels. The ships that thus sail to and fro must have secure ports to which to return, and must, as far as possible, be followed by the protection of their country throughout the voyage. This protection in time of war must be extended by armed shipping. The necessity of a navy, in the restricted sense of the word, springs, therefore, from the existence of a peaceful shipping, and disappears with it, except in the case of a nation which has aggressive tendencies, and keeps up a navy merely as a branch of the military establishment. As the United States has at present no aggressive purposes, and as its merchant service has disappeared, the dwindling of the armed fleet and general lack of interest in it are strictly logical consequences. When for any reason sea trade is again found to pay, a large enough shipping interest will reappear to compel the revival of the war fleet. It is possible that when a canal route through the Central-American Isthmus is seen to be a near certainty, the aggressive impulse may be strong enough to lead to the same result. This is doubtful, however, because a peaceful, gain-loving nation is not far-sighted, and far-sightedness is needed for adequate military preparation, especially in these days.
We allowed our international merchant fleets to decline because it allowed for the lower cost import and export of goods on foreign hulls. It depended on the good faith participation of the entire sea-going world in maintaining good faith trade. Now, what happens if a great power develops a naval force that is not designed to allow for the continuation of these great trade routes but seeks to protect its own agenda in nearby waters - as in the South China Sea. What if that state, which engages in spirited trade with both the U.S. and the rest of the world decides to shut off the use of its state-owned "merchant ship" from that trade and attempts to create "no sail" zones for the merchant and/or naval vessels of other states. What if this power is used to coerce other states not to intervene in protection of allied states in its "sphere of influence?"
We need both a larger navy and an larger, well-manned merchant marine as a preventive measure against such blackmail efforts.
Special note at the beginning of the Worldwide Threat to Shipping is a warning about Iran:
MARAD U.S. MARITIME ADVISORY 2019-006: Threat Type: Threats to U.S. Interests from Iran Geographic Area: Persian Gulf, Strait of Hormuz, Gulf of Oman, Arabian Sea, Gulf of Aden, Bab-el-Mandeb, and Red Sea. Reference: U.S. Maritime Advisory 2019-004. Issue: Reporting indicates heightened Iranian readiness to conduct offensive operations against U.S. forces and interests. Since early May, there is an increased possibility that Iran and/or its regional proxies could take action against U.S. and partner interests, including oil production infrastructure, after recently threatening to close the Strait of Hormuz. Iran or its proxies could respond by targeting commercial vessels, including oil tankers, or U.S. military vessels in the Red Sea, Bab-el Mandeb Strait, or the Persian Gulf.
And another:
MARAD U.S. MARITIME ADVISORY 2019-005: Threat Type: GPS Interference. Geographic Area: Eastern Mediterranean and Red Seas. This revised Advisory cancels U.S. Maritime Advisory 2018-014. Reference: U.S. Maritime Alerts 2018-004A, 2018-004B, 2018-008A. Issue: Multiple instances of significant GPS interference continue to be reported by vessels and aircraft operating in the Eastern Mediterranean Sea. These reports have been concentrated near Port Said, Egypt, the Suez Canal, and in the vicinity of the Republic of Cyprus. Instances of similar interference were also reported between Hadera, Israel and Beirut, Lebanon and near Jeddah Port, Saudi Arabia. This interference is resulting in lost or otherwise altered GPS signals affecting bridge navigation, GPS-based timing and communications equipment.
Back from my adventure, at least for a little while but perhaps longer.
I was hiking a section of the Appalachian Trail and managed to strain my left Achilles tendon. My medical guide says to stop doing what you were doing that caused the injury so after plodding limping along for a couple of days, when I got to a good stopping place I called Enterprise to come pick me up, rented a car and drove home.
It was a tough call - I wanted to stay on the trail, but the reality of such an injury is that you can only make it worse by pushing on, so I let my head overcome my heart and left the Trail.
Don't know yet how long it will take to recover, I know I didn't rupture the tendon but will seek medical advice in the next few days. Meanwhile, it's rest, ice, compress and elevate for me.
The AT is great, the other hikers are great, but as so many learn, it only takes a slight misstep to cause an injury that sends you home.
I am off on adventures which means that posts on this site are going to become more irregular in timing and numbers. Please enjoy the older posts and visit some of excellent Navy and national security blogs and sites out there.
Not quite sure how long these adventures will last, but be assured that I am well in both body and spirit and having a great time!
There are periods of your life when everything opens up to allow you to fulfill a dream, and this is one of those moments for me.
When time and opportunity allow, I will be posting, but not daily.
Be of good cheer and when you find a dream to chase, go after it with all your heart and soul!
The Interregional Institute for Maritime Safety (ISMI) has deepened
the capacity of maritime officers to fight against piracy on the seas. Participants were brought together from Benin, Gabon, Ghana, Guinea Conakry, Liberia, Mauritania, Nigeria, Republic of Congo, Senegal, Sierra Leone, Togo, and Côte d'Ivoire. *** The Regional Coordinator of the Action of the State of the Sea, Guillaume de Beauregard, noted that the threat of piracy is still high and prevalent hence, the need to empower officers with the necessary ability to tackle the canker on sea. "From 2017 to 2018, 40% of the 180 to 201 attacks worldwide were in the Gulf of Guinea. All the kidnappings that took place in 2018 took place in the Gulf of Guinea,” he stated. According to him, the first figures for 2019 are rather encouraging, though all specialists agree that the Gulf of Guinea remains a hot spot for piracy in the world.
Interesting. The area needs a little less talk, though, and a lot more action.
Seems that Somali pirates are up to their old tricks, grabbing a dhow to use as a "mother ship" and sending skiffs out to attack. EU NAVFOR reports:
EU NAVFOR photo
On 21 April, fishing vessels FV Adria and FV Txori Argi were attacked by suspected pirates in the Indian Ocean, 280 NM off the coast of Somalia. The piracy attacks were thwarted, and the crew and vessels remained safe, thanks to the application of Best Management Practices (BMP) protection measures by the Masters, the crews and the private security teams embarked on both fishing vessels. EU NAVFOR Somalia Operation Atalanta confirms these attacks. It is likely that the attacks were facilitated by a mothership, which was reportedly seized by armed men on 19 April off the central Somali Coast. EU NAVFOR subsequently dispatched its Maritime Patrol and Reconnaissance Aircrafts to search the area. In addition, EU NAVFOR flagship ESPS Navarra left the port in Mombasa in order to proceed into the area. On 23 April, ESPS NAVARA successfully intercepted and boarded the dhow being used as a mothership. The operation is still ongoing, and more details will be provided upon completion. EU NAVFOR remains committed to deterring, preventing and suppressing piracy and emphasizes that the Maritime Industry must adhere to BMP measures in order to maximize the safety of the ship and their crews whilst transiting the high-risk area.
Hmmm. Looks like Perry-class frigate was useful in the operation, Spanish FFG Navarra. Too bad the US doesn't have something like them.
