Monthly Archives: June 2017

Spreading the War Bug

Foreign Policy reported recently that key officials within the Trump administration are “pushing to broaden the war in Syria, viewing it as an opportunity to confront Iran and its proxy forces on the ground there”. The strategy was being advocated over objections from the Pentagon, but it doesn’t seem to be deterring the White House.  As the Washington Post made clear just a few days ago, Iranian and US forces have already been directly clashing in the region, and officials are busy planning the “next stage” of the Syria war once Isis is defeated – a plan that centers around directly attacking the Iranians….

Just this weekend, Politico quoted key Republican senator Tom Cotton saying: “The policy of the United States should be regime change in Iran.” The CIA has already expanded its Iranian covert operations, while the main White House liaison to intelligence agencies, Ezra Cohen-Watnick, has reportedly“told other administration officials that he wants to use American spies to help oust the Iranian government”. And US secretary of state Rex Tillerson, in little noticed comments to Congress last week, called for “regime change” in Iran as well (albeit a “peaceful” one – whatever that means)…

The Trump administration’s plans may not stop in Syria either. Some officials have allegedly also been pushing for the Pentagon to step up its support of Saudi Arabia’s appalling war in Yemen, which has left 20 million people on the verge of starvation – all to go after Iranian-backed forces in the region as well.

All this comes as the Trump administration ramps up war across the Middle East. They are conducting drone strikes at a rate almost four times that of the Obama administration; civilian deaths from US forces in Syria have skyrocketed; special operations in Somalia have been ramping up; and the Pentagon is sending thousands of more troops to Afghanistan.

Excerpt from: Trevor Timm, Trump administration Donald Trump’s bloodlust for war in the Middle East risks chaos, Guardian, June 27, 2017

The Kangaroo Infiltration

On June 22nd 2017, WikiLeaks published documents from the Brutal Kangaroo project of the CIA. Brutal Kangaroo is a tool suite for Microsoft Windows that targets closed networks by air gap jumping using thumbdrives…

The documents describe how a CIA operation can infiltrate a closed network (or a single air-gapped computer) within an organization or enterprise without direct access. It first infects a Internet-connected computer within the organization (referred to as “primary host”) and installs the BrutalKangaroo malware on it. When a user is using the primary host and inserts a USB stick into it, the thumbdrive itself is infected with a separate malware. If this thumbdrive is used to copy data between the closed network and the LAN/WAN, the user will sooner or later plug the USB disk into a computer on the closed network. By browsing the USB drive with Windows Explorer on such a protected computer, it also gets infected with exfiltration/survey malware. If multiple computers on the closed network are under CIA control, they form a covert network to coordinate tasks and data exchange. Although not explicitly stated in the documents, this method of compromising closed networks is very similar to how Stuxnet worked.

Excerpts from Brutal Kangaroo Press Release Wikileaks, June 22, 2017

Firing Back with Vengeance: the NSA Weapons

from you tube.

The strike on IDT, a conglomerate,… was similar to WannaCry in one way: Hackers locked up IDT data and demanded a ransom to unlock it.  But the ransom demand was just a smoke screen for a far more invasive attack that stole employee credentials. With those credentials in hand, hackers could have run free through the company’s computer network, taking confidential information or destroying machines….Were it not for a digital black box that recorded everything on IDT’s network, …the attack might have gone unnoticed.

Scans for the two hacking tools used against IDT indicate that the company is not alone. In fact, tens of thousands of computer systems all over the world have been “backdoored” by the same N.S.A. weapons. Mr. Ben-Oni and other security researchers worry that many of those other infected computers are connected to transportation networks, hospitals, water treatment plants and other utilities…

Both WannaCry and the IDT attack used a hacking tool the agency had code-named EternalBlue. The tool took advantage of unpatched Microsoft servers to automatically spread malware from one server to another, so that within 24 hours… hackers had spread their ransomware to more than 200,000 servers around the globe. The attack on IDT went a step further with another stolen N.S.A. cyberweapon, called DoublePulsar. The N.S.A. used DoublePulsar to penetrate computer systems without tripping security alarms. It allowed N.S.A. spies to inject their tools into the nerve center of a target’s computer system, called the kernel, which manages communications between a computer’s hardware and its software.

In the pecking order of a computer system, the kernel is at the very top, allowing anyone with secret access to it to take full control of a machine. It is also a dangerous blind spot for most security software, allowing attackers to do what they want and go unnoticed. In IDT’s case, attackers used DoublePulsar to steal an IDT contractor’s credentials. Then they deployed ransomware in what appears to be a cover for their real motive: broader access to IDT’s businesses…

But the attack struck Mr. Ben-Oni as unique. For one thing, it was timed perfectly to the Sabbath. Attackers entered IDT’s network at 6 p.m. on Saturday on the dot, two and a half hours before the Sabbath would end and when most of IDT’s employees — 40 percent of whom identify as Orthodox Jews — would be off the clock. For another, the attackers compromised the contractor’s computer through her home modem — strange.

The black box of sorts, a network recording device made by the Israeli security company Secdo, shows that the ransomware was installed after the attackers had made off with the contractor’s credentials. And they managed to bypass every major security detection mechanism along the way. Finally, before they left, they encrypted her computer with ransomware, demanding $130 to unlock it, to cover up the more invasive attack on her computer.

A month earlier, Microsoft had issued a software patch to defend against the N.S.A. hacking tools — suggesting that the agency tipped the company off to what was coming. Microsoft regularly credits those who point out vulnerabilities in its products, but in this case the company made no mention of the tipster. Later, when the WannaCry attack hit hundreds of thousands of Microsoft customers, Microsoft’s president, Brad Smith, slammed the government in a blog post for hoarding and stockpiling security vulnerabilities.  For his part, Mr. Ben-Oni said he had rolled out Microsoft’s patches as soon as they became available, but attackers still managed to get in through the IDT contractor’s home modem.

There are now YouTube videos showing criminals how to attack systems using the very same N.S.A. tools used against IDT, and Metasploit, an automated hacking tool, now allows anyone to carry out these attacks with the click of a button….

“Once DoublePulsar is on the machine, there’s nothing stopping anyone else from coming along and using the back door,” Mr. Dillon said.More distressing, Mr. Dillon tested all the major antivirus products against the DoublePulsar infection and a demoralizing 99 percent failed to detect it.  “We’ve seen the same computers infected with DoublePulsar for two months and there is no telling how much malware is on those systems,” Mr. Dillon said. “Right now we have no idea what’s gotten into these organizations.”..

Could that attack be coming? The Shadow Brokers resurfaced last month, promising a fresh load of N.S.A. attack tools, even offering to supply them for monthly paying subscribers — like a wine-of-the-month club for cyberweapon enthusiasts.

Excerpts from NICOLE PERLROTHJUNE, A Cyberattack ‘the World Isn’t Ready For’,  New York Times, June 20, 2017

Rising Transformation: low to high level nuclear waste disposal facilities

U.S. District Judge Sue L. Robinson of Delaware on June 21,2017 sided with the federal government in blocking a $367 million merger between EnergySolutions and the radioactive site’s parent company. Waste Control Specialists calls the deal essential for its long-term viability.The details of Robinson’s opinion were sealed.

The U.S. Department of Justice sued in November 2017 to block the merger of rival companies, arguing it would essentially create a monopoly on radioactive waste disposal.  “Substantial evidence showed that head-to-head competition between EnergySolutions and Waste Control Specialists led to better disposal services at lower prices,” Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division said in a statement. “Today’s decision protects competition in an industry that is incredibly difficult to enter.”…

Waste Control Specialists, which currently stores low-level radioactive waste in Andrews County*** has a pending application with the U.S. Nuclear Regulatory Commission to store tens of thousands of metric tons of spent nuclear fuel currently filling up reactor sites across the country. The company has pitched the massive expansion as a solution to a problem that has bedeviled policymakers for decades….

“The WCS site is not a safe place to store deadly high-level radioactive waste,” Karen Hadden, executive director of the Sustainable Energy and Economic Development Coalition, said in a statement. “Texans and those along transport routes shouldn’t have to suffer the health, safety, security, financial and environmental risks that transport and storage of the nation’s most dangerous radioactive waste would bring.”

Critics allege that millions in donations by Harold Simmons, owner of Waste Control Specialists, to Texas Governor Rick Perry and other politicians influenced political support for the controversial project…..Critics also cite WCS’ safety record. One 22-ton shipment of low-level radioactive material from a diffusion plant in Illinois failed to arrive at the WCS Andrews facility in late July 2001. Lost for almost a month, the material turned up dumped on a cattle ranch north of Dallas.

Excerpts from  JIM MALEWITZ ,Amid Texas nuclear waste site’s financial woes, judge blocks merger,  The Texas Tribune, June 21, 2017 + Wikipedia

***The plant is located 5 miles east of Eunice, New Mexico, and 35 miles west of Andrews. The surrounding area on both sides of the state border, “nuclear alley”, also includes:

the National Enrichment Facility (owned and operated by the Urenco Group) in Eunice
the deep geological repository Waste Isolation Pilot Plant (WIPP; managed by the United States Department of Energy), and
the proposed first commercial uranium de-conversion facility in the United States, a project of International Isotopes, Inc.

Taking it to Pieces: Nuclear Power

nuclear plant South Korea

South Korea, one of the world’s largest nuclear electricity producers, will scrap plans to add nuclear power plants, its president said on June 19, 2017, signaling a shift in decades of reliance on nuclear energy.  President Moon Jae-in said South Korea will move away from nuclear energy and will not seek to extend the life of existing plants.  He also vowed to cut South Korea’s reliance on coal. South Korea will shut 10 old coal power plants and stop building more coal power plants.

“So far South Korea’s energy policy pursued cheap prices and efficiency. Cheap production prices were considered the priority while the public’s life and safety took a backseat,” Moon said at a ceremony marking the shutdown of the country’s oldest power plant, Kori 1, in Busan, home to South Korea’s largest cluster of nuclear power plants. “But it’s time for a change.”

The speech was Moon’s followup on his presidential campaigns to cut coal and nuclear power. Greenpeace and other environmental groups welcomed Moon’s announcement.

Since the Kori 1 reactor went online in 1978, the resource poor-country added 24 nuclear power plants to meet rising demand for electricity from rapid industrialization and economic development. In 2016, a third of electricity in South Korea was produced from nuclear power plants. Its nuclear power production from 25 nuclear plants in 2016 was the fifth-largest in the world, according to the World Nuclear Association.

South Korea is also one of the few countries that have exported its nuclear reactor technology… building a nuclear reactor in United Arab Emirates.

But South Koreans’ enthusiasm for nuclear energy quickly waned following the 2011 Fukushima meltdowns in its neighbor Japan. In the following year, fake parts scandals prompted an investigation and spread fear over nuclear plants’ safety. Recent earthquakes in southeastern South Korea also dented public support in the country that was long believed to be safe from earthquakes. South Korea is also searching for answers on how and where to store spent nuclear fuels permanently.

To decommission the Kori 1 reactor, South Korea plans to invest developing its own decommissioning technology and experts in the area. The decommissioning will take at least 15 years and cost 643.7 billion won ($569 million or 64 billion yen), the energy ministry said.

Engineering Revolutions

Five doses of LSD, often called a "five strip". Image from wikipedia

There’s the extremely odd tale of how the CIA imported significant amounts of LSD from its Swiss manufacturer in hopes that it could used for successful mind control. Instead, by dosing thousands of young volunteers including Ken Kesey, Whitey Bulger, and Grateful Dead lyricist Robert Hunter, the Agency accidentally helped popularize acid and generate the 1960s counter-culture of psychedelia.

During the Vietnam War, the U.S. allied with anti-communist forces in Laos that leveraged our support to become some of the largest suppliers of opium on earth. Air America, a CIA front, flew supplies for the guerrillas into Laos and then flew drugs out, all with the knowledge and protection of U.S. operatives.  The same dynamic developed in the 1980s as the Reagan administration tried to overthrow the Sandinista government in Nicaragua. The planes that secretly brought arms to the contras turned around and brought cocaine back to America, again shielded from U.S. law enforcement by the CIA.

Most recently, there’s our 16-year-long war in Afghanistan. While less has been uncovered about the CIA’s machinations here, it’s hard not to notice that we installed Hamid Karzai as president while his brother apparently was on the CIA payroll and, simultaneously, one of the country’s biggest opium dealers. Afghanistan now supplies about 90 percent of the world’s heroin.

The documentary ‘America’s War on Drugs’ on the History Channel makes clear that this is not part of a secret government plot to turn Americans into drug addicts. But, as Moran puts it, “When the CIA is focused on a mission, on a particular end, they’re not going to sit down and pontificate about ‘What are the long-term, global consequences of our actions going to be?’” Winning their secret wars will always be their top priority, and if that requires cooperation with drug cartels which are flooding the U.S. with their product, so be it. “A lot of these patterns that have their origins in the 1960s become cyclical,” Moran adds. “Those relationships develop again and again throughout the war on drugs.”

Excerpt from Jon Schwarz, THE HISTORY CHANNEL IS FINALLY TELLING THE STUNNING SECRET STORY OF THE WAR ON DRUGS,  the Intercept, June 18, 2017

The 2020 Deadline

image from wikipedia

Circle January 2020 on your calendar for what could be a major disruption to the energy market and a jolt to the global economy.The origin of the problem isn’t some oil cartel’s machinations, a looming war or even a technological shift — it is a bureaucratic body that few people have heard of: the International Maritime Organization. Just 30 months from now the cargo vessels that are the lifeblood of global trade will be required to cut the sulfur content in their fuel from 3.5% to 0.5%.

Ships move more than 10 billion tons of cargo a year and do it far more efficiently than road or rail, but it comes at a high cost in terms of overall pollution because ships use fuel oil, which is just about the cheapest, dirtiest stuff to come out of refineries. About 9% of all sulfur dioxide emitted globally comes from ships, contributing to acid rain and many premature deaths annually. Even the new cap is 500 times the sulfur content of most road diesel.

Even with significant investment, refiners may not be ready and ships may have to burn more expensive marine diesel.”Marine diesel affects land diesel which affects jet fuel which affects gasoline,” explains Mr. Tallett. That could cause the prices of those fuels to go up by 10% to 20%.

The only solution may be to simply refine more oil, which means increasing overall demand, to get enough low-sulfur fuel out of the world’s refineries. The International Energy Agency worried about the impact in a February 2017 report, yet it assumes many ships will install marine scrubbers to clean the dirty fuel and that refiners will add units to reduce sulfur content — both expensive propositions.

Excerpts from High Seas are to Deliver a Shock to Energy Sector, Wall Street Journal, June 7, 2017

Seaborne Gas

One day in March 2017, he Rioja Knutsen tanker, filled with liquefied natural gas, was traveling from the U.S. to Portugal. Suddenly, Mexico’s power company lobbed in a higher bid for its cargo. At the Bahamas, the ship abruptly made a starboard turn and headed south.  How natural gas is bought and sold in the world’s scattered regional markets for the fuel is changing rapidly. Ships such as the Rioja Knutsen are stitching those regions together and a single global market is emerging.  This is already how nearly every other hydrocarbon, from crude oil to obscure petrochemicals, is sold. As gas joins the club, the effects will ripple through energy prices, company profits, the environment and geopolitics.

Behind the evolution is improving technology for moving gas as a liquid, which means it can go to many more places rather than simply where a pipeline runs. …The share of gas moving by sea reached 40% of total trades in 2015, and the International Energy Agency forecasts that seaborne gas will account for a bigger share of trading than pipelines by 2040.

Thirty-nine countries now import LNG, up from 17 a decade ago, according to data and analytics firm IHS Markit. Several more, among them Uruguay, Bahrain and Bangladesh, are expected to lift the total to 46 in the next couple of years.

In one sign of how gas is going global, the U.S. and China are working on a trade deal that could send vast quantities of gas pumped in Texas and Pennsylvania to factories in Shanghai and Guangdong. Improved access for U.S. exporters to China’s giant energy markets could boost overall global shipments…

As LNG import terminals open in more locations, gas pricing and trading mechanisms are developing as well. Some investors are increasingly using the gas price at a pipeline intersection in Louisiana, called the Henry Hub, as a global benchmark.  Trading in the New York Mercantile Exchange’s Henry Hub gas futures contract is becoming more global, said Peter Keavey, global head of energy at Nymex owner CME Group . In May, Standard & Poor’s and the Intercontinental Exchange launched the first futures contract based on LNG produced in the U.S.

Seaborne gas is reducing some countries’ historic dependence on pipelines that run through potentially unfriendly territory. Poland, for instance, opened its first import terminal a year ago, lessening its reliance on gas piped from Russia.

When global trade in LNG began in the 1960s, the cost of liquefying gas was so high it was a niche product, affordable only by developed countries such as Japan.  As the technology proved reliable, trade in LNG became more common, but contracts to deliver the fuel by ship were decades long and had ironclad destination clauses. Gas contracted for Tokyo couldn’t be rerouted to Seoul. Traders called gas tankers “pipelines at sea.Now, contracts are getting shorter and starting to allow gas to be diverted to where demand is greatest. Earlier this year, three large LNG buyers in Japan, China and South Korea agreed to work together to push sellers for more contract flexibility and fewer onerous restrictions.

At any given time, there are about 170 tankers filled with LNG on the world’s oceans,… At the heart of the changes is supply. Huge new discoveries in the U.S., Middle East, East Africa and Australia, along with recovery techniques such as fracking, have expanded the amount of gas available for export….One pioneer is Houston-based Cheniere Energy Inc. FBy next year, Sabine Pass and other LNG terminals are expected to turn the U.S. into a net gas exporter….In a quest for customers, Cheniere has invested in a Chilean project to build a power plant, LNG terminal, storage facility and pipeline.   Oil titans Total SA and Royal Dutch Shell PLC also are offering to build facilities to burn gas. The two and their partners are building an import terminal and pipeline for an estimated $200 million in Ivory Coast, which will feed a power plant in the West African country’s economic hub of Abidjan. Qatar, the longtime LNG leader, recently lifted a self-imposed moratorium on the development of its North Field, the single largest gas reservoir in the world. So far there is little indication Qatar’s diplomatic spat with Arab neighbors will affect the gas market.

Helping make gas more accessible is a relatively new technology—floating LNG facilities. ..The first floating terminal was christened in 2005. Today there are 25….Excelerate Energy, a Houston company that developed this technology, is working on new floating terminals in Namibia, Bangladesh, Pakistan and elsewhere. The equipment to liquefy gas can also now be put on a large vessel that can be anchored offshore.

Excerpts from Long Promised, the Global Market for Natural Gas Has Finally Arrived, Wall Street Journal, June 7, 2017

The Power of Giving Love

Russia’s sale of one-fifth of its state-owned oil company to Qatar and commodities giant Glencore PLC last year had an unusual provision: Moscow and Doha agreed Russia would buy a stake back, people familiar with the matter said.  Russian President Vladimir Putin hailed the $11.5 billion sale of the Rosneft stake in December 2016 as a sign of investor confidence in his country. But the people with knowledge of the deal say it functioned as an emergency loan to help Moscow through a budget squeeze.

Moscow agreed with Qatar that Russia would buy back at least a portion of the stake from the rich Persian Gulf emirate, the people said. The Qatar Investment Authority and Glencore, the Swiss-based commodities giant, formed a partnership to buy the 19.5% stake in Russia’s energy jewel at a time when Mr. Putin’s government needed cash. The people with knowledge of the deal say the buyback arrangement was negotiated with involvement from Mr. Putin and the emir of Qatar, Sheikh Tamim bin Hamad Al Thani. Russia and Qatar saw it as an opportunity to build a bridge between countries that had taken up opposite sides in the Syrian civil war, the people said. One of the people said the buyback would happen in the next 10 years…

Rosneft, the world’s largest listed oil producer, is traded publicly in Moscow, but it isn’t easy to buy and sell large pieces of the company because it remains majority-owned by the Russian state and is an instrument of economic power for Mr. Putin.  The people familiar with the deal said a time-limited structure and a buyback agreement for the deal worked for both Qatar and Russia.

Qatar wanted its Rosneft stake to be temporary, the people said. The emirate believes it will profit from selling the shares back to Russia at a later date, the people said, betting that oil prices will rise and push up Rosneft’s share price. Qatar saw the political benefits of giving Russia access to quick cash as a sort of loan to address a budget deficit that had widened due to lower oil prices, the people said.  After the deal, a range of talks opened between Russian and Qatari businesses on a scale not seen before, Russian news agencies have reported….The deal was called the largest-ever foreign investment in a Russian company.

In an unusual arrangement, the rest of the financing was provided by Russian banks, which contributed EUR2.2 billion, and Italian bank Intesa Sanpaolo SpA, which lent EUR5.2 billion to the Glencore-Qatar consortium, according to a Dec. 10, 2016 new release issued by Glencore. The financing is “non-recourse,” Glencore said in the release, meaning the lenders couldn’t pursue Glencore and the Qatar Investment Authority if they weren’t repaid….Under the deal, the Rosneft shares aren’t held directly by Glencore and Qatar but by a U.K. limited liability partnership, according to British corporate records….

After the deal was announced, Mr. Putin awarded one of Russia’s top honors for foreigners — the Order of Friendship — to Qatar Investment Authority’s chief executive, Sheikh Abdullah bin Mohammed bin Saud Al-Thani, Intesa’s chief executive, Carlo Messina, and Glencore’s chief executive, Ivan Glasenberg.

Excepts from Russia’s Rosneft Stake Sale Had a Twist , Wall Street Journal, June 8, 2017

 

 

 

The World of Ones and Onlys

Burundi Currency

Fuel shortages have paralysed the small central African nation of Burundi, threatening further damage to an economy already moribund after years of political violence and raising questions about the role of the country’s only oil importer….

The shortages, which forced government to introduce rationing on May 16, have paralysed commerce and caused food prices to jump, raising the prospect of economic migration. More than 400,000 people have already fled Burundi into the volatile central African region.  Anti-corruption campaigners said fuel shortages became severe after Burundian company Interpetrol Trading Ltd. received the lions’ share of dollars allocated by the central bank to import fuel.

“The oil sector is undermined by favouritism and lack of transparency, because the rare hard currency available in the central bank reserves is given to one oil importer,”   The central bank declined to answer Reuters’ questions….

Interpetrol is now the sole oil importer and runs all fuel storage tanks in the country, said an industry source.  Banzubaze said there was “no link” between Interpetrol’s shareholders and any member of government.

A 2011 US State Department report described attempts by senior government officials to pressurise judges into dropping a corruption case against the company, owned by brothers Munir and Tariq Bashir. …Government officials blame dollar shortages on aid cuts donors imposed after President Pierre Nkurunziza ran for a third term in 2015, triggering a wave of political violence.

“These days, fuel importers don’t get enough dollars to bring in petroleum products,” said Daniel Mpitabakana, government’s director of fuel management….The street exchange rate is 2,600 francs to the dollar, although it is just over 1,700 to the dollar at the central bank. Only the central bank can receive dollar deposits and allocate dollars to businesses…

Burundi has also been battered by drought and almost two years of political instability. Hundreds of people were killed and hundreds of thousands were forced to flee during political violence, which sometimes still erupts in low-level clashes.

Burundi paralysed by fuel shortages, Reuters, Wednesday, 31 May 2017