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How Turk Stream is forcing Europe on its heels

Sisir Devkota

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Russia laid down two gas pipelines from its territory, one from the topmost northern hemisphere, famously named as “Nord Stream” and the most advanced, latest with all rights “Turk Stream”; that passes through Turkey, a nation that now finds pride in being able to connect Russia with the rest of Europe. In recent years, European nations have heavily relied on American natural gas supplies and new set of renewables; while sanctions over Russia in the past decade primarily stalled business on both sides, Europe has now changed its language on Russia’s desire to sell oil to the continent. On paper, Europe is openly welcoming a new source of energy supplies in the name of profitable competition, yet changesare only the tip of deep lying geopolitical stakes. Turkstream was launched in the beginning of January; and so, did a brand-new Russian policy take effect that could change foreign relations in the years to come. But, why is Europe changing course suddenly?

Geographically, between the two pipelines on the north and south is Ukraine sitting ignored by Russia’s willingness, more so; it is also a statement of available options at Putin’s hand. It is well noted that Russian aspirations are serious; investing on two different routes has been costly, but the oil rich nation has caught all eyes. While Turkey is flaunting a newfound friendship on the East, other nations in the region, including Ukraine, are assessing exact Russian interests; a major miss out on economic benefits would not be rational for a set of other rather neutral nations than Ukraine. Consider the politics of language, while Nord Stream is still very vague and could include Baltic and western Scandinavia, “Turk Stream” is a prize won in the eyes of a shared Mediterranean neighborhood. It is like saying that Turkey won the rights to sell Russian reserves to European clients, that also have inhibitions against historical Turkish aspirations in the EU. Still, other reasons are held higher.

Uncharacteristically, China is behind all the insecurities in Europe. There is no secret on whether Sino-Russian ties could yield a similar energy route between two nations, both infrastructural might and President Xi’s willingness to expand the Belt & Road projects could easily accommodate energy linkups. For European leaders have realized that such possibilities could most possibly deteriorate Europe’s energy as well as economic balance. By 2030, Chinese energy needs are going to double from what it is now; Europe does not desire a vociferous Chinese demand taking away Russian reserves to the East. Alarmingly, European nations also realize that soon, a proposition as such is highly likely, given how current competition has taken down prices. After a decade of disturbing sanctions testing Russian sanctions, it will be waiting patiently for an overhaul in the form of ceiling new rate of prices. For Europe, America still might not have been redundant, but the US-Ukraine soft spot, certainly has.

The European dilemma does not end yet, for Russia has played the cards on both sides; it will have to forge a face-saving approach with Turkey, given how it has treated Ankara over issues relating to EU membership. Like an astute capitalist, Moscow is promising to feed Europe, whilst also biting into its wounds, forcing to deal with problems that may allow Russia an affirmation to jump over Chinese demands. On the backdrop of a successful Brexit, Turkey will be teasing at the European sanctity, a group that has continuously reminded it of being unsuitable. For Europe’s dislike, Russian reserves now flow through Turkish territories and might successfully ruin newly established competitors in the energy market. Underestimation has cost Europe again while Russia has lastly taken afoot. It is only the beginning of a grand Russian policy.

Global Affairs Analyst based in Kathmandu, Nepal. Founder, Trainer & Researcher at "The Protocol" which facilitates analytical research on current affairs and workshops on Diplomacy and Leadership. Masters of Social Science in Democracy & Global Transformations from the University of Helsinki, Finland. Author for a book chapter titled as "Armed Conflicts in South Asia 2013".

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Gazprom and Europe

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Football in the 21st Century is not only a sport but a global brand in itself. Football allows others to feed and profit off of it as well. Global corporations have used this opportunity to leverage into newer markets and, or, improve their reputation in existing markets.

Gazprom; it is on players’ jerseys in Germany, in Russia, in Serbia, at games in England, and on side-lines in Italy. Gazprom is a Russian natural gas company. Teams make money offering jersey space to sponsors selling things like credit cards, cars, insurance companies and cell phones. But Gazprom is not like most sponsors: private companies with products football fans can buy. Instead, it is a company owned by the Russian government that makes money selling natural gas to foreign countries. It is everywhere in European football. So, if football fans cannot buy what they’re selling, why is Gazprom spending millions to sponsor games?

The answer is part of a larger story that’s changing the sport. Gazprom’s partnership with these clubs is mutually beneficial because they provide a crucial revenue stream to the football club while in turn gaining publicity and a foothold in key target markets in which they are hoping for an increasing profit margins they represent a successful confident company that yields significant power and influence.

It is a corporation that reflects the values and ambitions of the Russian state the company via a series of commercial partnerships and high-profile sponsorship deals is now firmly in the collective conscience of European football fans few are quite sure whatthe company stands for or what this foothold means and in any case they are largely apathetic which oddly mirrors the aims of Vladimir Putin and increased influence in Western culture becoming a major player in events without the stigma of political connections or ulterior motives. Foreign countries use companies they own to burnish their reputations abroad, and to understand why Russia is involved, one needs to closely observe a  map. Russia has the world’s largest natural gas reserves and most of the mare located in Arctic gas fields controlled by Gazprom. The company is led by Alexey Miller, a close ally of Vladimir Putin. Since 2005, the Russian government has owned a majority stake in Gazprom. Meaning company profits are under Putin’s control and gas sales, along with oil,account for around 40% of Russia’s annual budget.

Various maps showcase how European countries are on Russian gas and Eastern European countries are more dependent than countries further west. At the end of the 20th century, Germany represented the biggest opportunity for Gazprom. German Chancellor Gerhard Schroeder had announced plans to phase out coal and nuclear power, which meant Germany would need more natural gas to maintain their energy supply. Gazprom wanted to get it to them, but there was a problem. To get to Germany, Russia’s gas needed pass to through pipelines crossing countries charging Gazprom transport fees. And most of them went through Ukraine, a country that has a complicated relationship with Russia. Today, Ukraine still charges Russia $2-3 billion dollars every year to pump gas through to Europe. So, starting back in 2005, Russia began working on a strategy to bypass Ukraineand ship their gas directly to Western Europe.

This led to the birth of the Nord Stream pipeline,  a route through The Baltic Sea straight to Northern Germany.In late 2005, Gazprom was in the final stages of financing the project and Germany’s chancellor was preparing for an election. During his time in office, Gerhard Schroeder had become friendly with Putin and critics in Germany were increasingly concerned about the Russian leader’s growing influence.

Just a few weeks before the election, Schroeder met with Putinto sign an agreement officially approving the pipeline. Two months later, Schroeder lost his re-election but by March he had found a new job: overseeing Gazprom’s pipeline to Germany. It also came out that, before leaving office, Schroeder had approved a secret Gazprom loan that provided over a billion euros to finance the project. Soon, the story of Gazprom’s big project in Germany was becoming a story of scandal, corruption, and the creeping influence of Russia. But then the story changed.

In 2006, Gazprom signed a deal to sponsor the German team FC Schalke 04.At the time, Schalke’s finances were worrying team officials and Gazprom’s sponsorship provided money the team desperately needed. At a press conference announcing the deal, a Gazprom chairman said Schalke’s connections with the German energy sector were why they decided to become their sponsor. Schalke plays in Gelsenkirchen – a town in Germany’s Ruhr Valley, where much of the country’s energy industry is based. It’s also close to the town of Rehden, a hub for pipelines to the rest of Europe and home to Western Europe’s largest natural gas storage facilities.

Interestingly, Schalke was not Gazprom’s first deal. The year before, they had bought a controlling stake in a team on the other end of the Nord Stream route: the Russian team Zenit St. Petersburg. Gazprom’s investment made Zenit a major force in soccer. Two years after taking control, Zenit won their first-ever league championship. They’ve been able to sign expensive foreign stars, like Belgian midfielder Axel Witseland the Brazilian forward Hulk, and Gazrpom uses Zenit for marketing stunts: like having players scrimmage on the side of their offshore gas platform.

In 2006, as Gazprom logos were revealed around Schalke’s stadium, German headlines were hailing the Russian gas giant for pumping millions into the German team. To celebrate the deal, Schalke’s new jersey was unveiled in a ceremony before Schalke and Zenit played a friendly match in Russia. And, over the next few years, the Gazprom logo would become a team symbol displayed at Schalke games and printed on official merchandise. Schalke also won a championship in 2011 and by then, Nord Stream had been completed, and that year, Gerhard Schroeder, Angela Merkel and other European officials gathered to celebrate as it began pumping gas to Germany. There was also another struggling team whose jerseys started featuring Gazprom’s logo: The Serbian team Red Star Belgrade. Red Star was about 25 million dollars in debt when Gazprom signed to become their jersey sponsor.

And, again, there was also another pipeline: The South Stream would have bypassed Ukraine by going directly through Serbia to Southern Europe. That project closed in 2014, but Gazprom has continued increasing their access to Europe by building Nord Stream 2, a second pipeline doubling the amount of gas flowing from Russia to Germany. Gazprom has also expanded their empire to include energy partnerships with Chelsea Football Club[1], Champions League and the sport’s most famous tournament: the FIFA World Cup.

These sponsorships have made Gazprom’s logo familiar not just to fans in Europe, but across the world.“We light up the football. Gazprom. Official partner.”It’s in commercials before games, and on jerseys and sidelines once it starts. FC Schalke fans have also started to see Nord Stream 2 ads at home games. And, while climate activists like Greenpeace have staged protests to point out Gazprom’s threat to Arctic resources, Gazprom had no trouble renewing their sponsorships.

Now, Russia controls nearly half the gas consumed by Europe and other countries are learning from their example. Etihad, Emirates, and Qatar Airways all are owned by sovereign states in the Middle Eastwith interests that go beyond selling airline tickets. As the example of Gazprom shows, having a prominent footballing sponsorship offers a way around bad publicity by winning approval on the field. If you’re a fan, that can feel like a big opportunity: their money helps teams win major tournaments, but it’s starting to change the sport itself. Gazprom like so many others, is an opportunist who strives to be linked to sporting successes. Gazprom’s reasons for investing so heavily in sport could be compared to any global organization. It is a fascinating  means of advertising. It has become common to see a Serbian team sponsored by Russia’s gas company facing off against a French team sponsored by Dubai’s state-owned airline, it’s starting to seem like the field is hosting two competitions at once: A match between two teams, and a larger play for foreign influence that continues long after the final whistle.


[1] Owned byRoman Abramovich since 2012 seven years prior to this deal Abramovich sold his shares in Sibneft his oil-producing company to Gazprom for an estimated 10.4 Billion Euros.

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New oil pipeline in northern Thailand may worsen flooding

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A pipeline stretching from central to north-east Thailand promises to “promote Thailand as an energy hub in the region” and “increase energy security”, according to the Ministry of Energy. Construction began in mid-2019, despite local communities objecting that the largely Chinese-financed project could worsen flooding and contaminate water.

The 342km pipeline will run two metres underground and link Thailand’s north-eastern province of Khon Kaen to an existing pipeline in the central province of Saraburi. Energy Minister Sonthirat Sonthijirawong attended a ceremony on 5 February to lay the foundation of a 140 million litre oil tank in Khon Kaen’s Ban Phai district at the end of the pipeline.

Altogether, it will pass through 70 towns in five provinces including Lopburi, Nakhon Ratchasima and Chaiyaphum.

The route was agreed in August 2016, when the energy ministry signed a deal with the project investor, Thai Pipeline Network (TPN).

The ministry has promoted the pipeline as a more efficient means of transporting oil to the north-east, claiming it will lower oil prices and cut down on accidents involving road tankers.

TPN director Panu Seetisarn said the pipeline will avoid 88,000 road tanker journeys each year.

The THB9.2 billion (US$300 million) project is largely funded by a loan from the Chinese government, which stipulates that at least 35% of the equipment used must come from China. The precise details of the deal have not been made public. However, Panu revealed that TPN and undisclosed investors are investing about THB1 billion each.

The project has been progressing quickly since January last year when the government approved the environmental impact assessment (EIA) report.

In February, TPN – a subsidiary of Power Solution Technologies (PSTC) – signed a contract with China Petroleum Pipeline Engineering (CPP) to construct the pipeline within a 30-month period. And then works commenced in mid-2019.

Panu also revealed that the company wants to link the pipeline to the capital of Laos, Vientiane, and to southern China.

As well as the controversial north-eastern route, the first phase of another route, from central to north, is also under construction. The northern route is being developed with the ultimate aim of linking Tak province into Myanmar’s Kayin state at Myawaddy.

Flood risk

“This will lead to a big flood, bigger than the recent one,” said Ow, a local resident of Khon Kaen’s Ban Phai district, recalling flash flooding following tropical storm Podul that put homes under more than 1.5 metres of water for over a month last summer.

She fears the construction of an oil tank a few kilometres away will worsen flooding in future.

“Looking at its huge area and how high they have raised the land to level it for construction, [it] will definitely block all waterways,” she said, adding: “What will happen to us if there’s a big storm again?”

“After discussion with my neighbours, we [all] share the same concern and decided to file a complaint to the local authority but nothing happened,” said Ow.

The villagers’ concerns are justified, according to Jaroonpit Moonsarn, an environmental official at the Department of Environmental Quality Promotion (DEQP).

“There are two creeks, the Huay Bandoo and the Huay Khamrian, in the area that are natural waterways helping to drain waters in the district. The construction has blocked these significant waterways,” said Jaroonpit.

She believes another tropical storm in the area would create a bigger flood than the one last August.

Dust, pollution and public safety

Flooding is tomorrow’s fear, but dust is today’s suffering, said Ow, referring to air pollution caused by the construction of the oil tank that is affecting surrounding communities.

“We filed a complaint to the construction company, but they told us to complain and seek compensation from their subcontractors. It’s still unresolved. We don’t know who to talk to,” she said.

Jaroonpit also noted local concerns about the project once it’s finished, such as explosions, chemical contamination of local groundwater and heavy traffic. Road tankers will still be needed to distribute oil from the pipeline to nearby provinces, and additional tankers are expected to operate if the road to Laos is improved.

“Public safety should be seriously studied and discussed, including how to manage such risks and how to compensate,” she said.

“This involves the daily life of local people and they should have been informed clearly before the project’s construction approval, otherwise it leaves all the burden on them,” said Thawisan Lonanurak, former secretary general of the North-eastern Chamber of Commerce.

Apart from the risks to public safety, there are several basic questions about the project that need answering, according to Thawisan.

“Will oil prices in this area really be cheaper? How cheap? And most important, how transparent is the deal between the state and private investor?” Thawisan said.

“These questions should be answered at least during the EIA and hearing process, but it hasn’t happened,” he added.​

Witoon Kamonnarumet, senior advisor to the Khon Kaen Federation of Industry, said hearings for the EIA were conducted twice among a small group of people selected by the project owner and the company contracted to produce the EIA. They were not open to the general public.

“Even local businessmen in my network said they know very little about this project and are not clear on what it will really look like. We heard it would come two years ago and then there was a long silence and then construction started recently,” Witoon said.

“At the EIA hearing, most of the time was used for a company presentation focusing on what they had done in other areas,” said Paitoon Mahachuenjai, Nakhon Ratchasima’s Dan Khun Thod District head. They said that if there was “any problem during construction they would be ready to help,” he added.

Local activist Suwit Kularbwong, chairman of the Human Rights and Environment Association, said communities affected by the project have limited access to information about it.

“Where will the pipeline pass through exactly? How much area will be expropriated or compensated, and at what rate? They still don’t know. This goes against the [country’s] 2017 Constitution on public information and public participation for such a project,” Suwit said.

“This project has been initiated by the state and developed with a top-down approach, without sufficient consideration of its impacts, and with poor public participation. What will happen if more and more people along the pipeline know about the real impacts after construction and learn that they were not informed beforehand? Local opposition is foreseen. And government should be aware of this as it could affect the ongoing construction of the project,” he said.

Chinese investment and public discussion

Suwit said there is inadequate public awareness and discussion about projects and Chinese investment.

“The influence of Chinese investment in this region as well as the Mekong has been growing rapidly in recent years, without taking human rights violations and environmental impacts into account. And [it’s been] actively supported and facilitated by our Thai government.

“The key question is how ready are we for such massive investment from China? How ready is our government to protect its people’s interests from developments like this one where they are losing their land?” asked Suwit.

To address public concerns, Suwit suggested open public forums so that discussion could take place on the controversial oil pipeline and broader development plans for the north-eastern region.

“That which is missing from the past EIA process should be fixed there. At the forum, all basic project information should be available beforehand. It should be open to participation and discussion from all groups,” Suwit said.

Thawisan shared the same suggestion. “Local universities and academics should also play an important role to help digest technical and academic information for local people to understand the project properly,” he said.

From our partner chinadialogue.net

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How Kurdistan’s Oil Achievements Serve Peace in The Region?

Shahriar Sheikhlar

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Oil, the main element in establishing the country of Iraq during the division of the Ottoman Empire, is still the main economic factor that drives all politics in the country. Nationalizing the oil in 1972, made the state’s economy dependent upon oil revenues to fund Iraq’s budget. It also cemented the relationship of oil with the country’s economic growth. It paid for the cost of wars with the neighbors and strengthened the regimes. Now, at least Forty-five years since Iraq’s national oil company Establishment, we now see in 2017 that the oil net revenues as a percent of Gross Domestic Product of Iraq were about 37.78% and the share of oil revenue in federal annual budget stands at more than 88% in 2019!

After 2003, despite the fundamental changes to the Iraqi government, which included Democratic elections, and critical Republican Reform which have yet to be enacted, Oil may have regained its position as the hero, saving the government from a lack of economic muscle, specifically, industrial capacity, heavy and light Manufacturing infrastructure, as well as economic diversification. These factors and the devastation of several wars have created a weak economy. There has been a sharp rise of the public’s discontent recently as expectations of a growing economy, with prosperity for the citizens of Iraq have failed to materialize. These protests have shaken the elected government to its very foundation. Iraq’s reaction resulted in over 300 people having been killed.

Reasonably, the state’s oil production has received scrutiny and highest priority of the Iraqi federal government.

Recently, crude oil production has risen to 4.62 million barrels per day(bpd). The Kurdistan Regional Government (KRG) share of is about 450,000 bpd, equating to just less than 10% of total Crude Oil production.

The KRG started its own oil development plan in 2002, while Saddam Hussein was still ruling over Iraq.  Since the post-Saddam era, specifically in 2006, KRG, under authority granted under various provisions of the newly enacted Iraqi Federal Constitution, primarily articles of 111, 112, 114 & 115, established the necessary institutions to effectively manage oil production, distribution and sales, placed under the administration of the Ministry of Natural Resources (MNR), to follow up its ambitious plans for the region’s oil and gas sector. The regional Kurdistan Regional Government’s parliament approved the Ministry’s establishment in lawful accordance to the Constitution with the enactment of the Regional Oil and Gas Law in 2007. It is important to note the Federal Government at that time did not contest the actions of the KRG as it was under authority granted by the Newly enacted Constitution.

 International Oil Corporations(IOC’s) were invited to bid on the development of various oil blocks and the winning bidders were awarded contacts for oil exploration and Production. Hence, the KRG’s exclusive pipeline has been connected to the Turkey since 2014. This pipeline currently operates at a capacity of 700,000bpd. It is expected to be expanded and reached an increased capacity of one million bpd by 2021.

Control over Kurdistan’s oil and gas sector, most importantly, revenue from product sales is the primary point of contention between Baghdad and Erbil. The negotiations are over Kurdistan’s independent sale and export of crude oil that began in 2014, facilitated by completion of its major pipeline and the commencement of production, enabling KRG’s independent export.

Since 2014, Former Iraqi federal governments have tried multiple ways to deprived KRG from directing Kurdistan’s oil including curtailment of KRG’s share of the federal budget. Cash flows were cutoff even while KRG’s Peshmerga forces were engaged in the war against ISIS. Baghdad has used multiple methods to restrain the lawful sale and export of Crude oil that have included the following:

It filed formal complaints to federal and international courts; It threatened IOCs for working in Kurdistan; as well as making a claim in International Chamber of Commerce against Turkey for its cooperation with KRG to transport, storage and sale of Kurdistan’s oil in Turkey’s Port of Ceyhan.

While successes in Kurdistan’s oil industry grew, so too, did Baghdad challenges to that success.

Yet despite all the conflicts between Baghdad and Erbil, both followed their development plans seriously, to sufficiently empower themselves to assure their separate growth. Iraq created its target to reach 6million bpd, almost entirely dependent upon Basra and Kirkuk oil fields. The problem Baghdad faces is that while further development of the Basra oil fields require huge infrastructural development investments, Kirkuk’s fields, contain more than 9 billion barrels of oil, that can reach a record production of 1million bpd rapidly, if export solutions are found. Kirkuk oil fields and the historical and emblematic, Baba Gurgur. These oil fields were first developed in Iraq by Turkish Petroleum Company, directed mainly by Anglo-Persian Oil Company, British Petroleum’s(bp) predecessor. The development license of the Kirkuk oil fields was granted to bp by Iraqi Ministry of Oil, in 2009, despite Kirkuk being one of “the disputed areas” with a majority Kurdish Population, addressed in Article 140 of the Iraqi Federal Constitution “to [be] determine[by] their citizens will” to join Kurdistan Regional Government or to remain within Iraq.

However, bp operations in Kirkuk had to be suspended, after Iraqi forces withdrew in 2014 instead of fighting against ISIS forces’ threatens against this region, when Kurdish Peshmerga saved the area and came it under civilian control. But after October 16, 2017, when Iraqi forces prevailed Kirkuk as a response to Kurdistan’s Independence Referendum, bp immediately returned Kirkuk to continue her contract, ended permanently in January, 2020, after continuing the instability and lack of security in absence of Kurdish forces in Kirkuk, as well as in lack hopes to have robust solution for exporting the product, caused of weak relationship between bp and KRG, despite Kurdistan’s government welcomed to export some part of Kirkuk product through her export pipeline.

Yet, the 2018 elections in both of Iraq and KRG created new chances to bring the governments closer. The last Iraqi government, which would be replaced soon by cabinet of new designated P.M’s, KRG have come together to calm the situation since last year. It was effectively confirmed by the new KRG P.M, H.E “Masrour Barzani”, visiting Baghdad after he was designated by Kurdistan Parliament and wrote about his plans in the Washington Post, “I will also take steps to reset the relationship between Irbiland Baghdad, which has remained fraught for the past 16 years”…. and “It is time for a more constructive and stable partnership with Baghdad.” (Washington post, July 18, 2019)

However, Erbil continues to respect the spirit of cooperation with Baghdad, despite current demonstrations and unclear future of the central government.

KRG had determined that it would support Iraq’s oil production plan by exporting more than 100,000 bpd of Kirkuk’s oil via Kurdistan’s pipeline since last July. Also, Kurdistan’s government has taken further steps to foster good will with Baghdad to satisfy central government’s condition regarding Kurdistan’s share in the 2020 federal budget.

Kurdistan’s Oil infrastructure and production achievements, including its pipeline, were once fiercely objected to by previous Iraqi federal governments as illegal, and its own production capabilities, even to the point of being under the Iraqi central government’s control. Yet today Kurdistan’s pipeline infrastructure and oil production that did not even exist in the past are now used legitimately by Kurdistan government in order to bring more economical development and welfare to the Kurdistan’s citizens. With this recent symbiotic relations with Baghdad could possibly improve permanently, and with the cooperation of Baghdad the rights of the KRG would be observed and honored designated in the federal constitution.

 Yet we know that only a strong Kurdistan through the will of the people will truly secure Kurdistan’s rights, granted to KRG under the Iraqi federal Constitution and must be respected. Peace and security for Kurdistan will help improve stability and security for Iraq, and in the bigger scope for the region, hoped to be continued in the long run, especially by the future federal government of Iraq and parliament.

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