The reasons and risks behind Russia's big oil bet - We Are The Mighty
MIGHTY MONEY

The reasons and risks behind Russia’s big oil bet

For years now, Russia has been laser-focused on insulating itself from an external economic shock.


It may have just sparked one.

In an unexpected move on March 6, Russia rejected a call by OPEC countries to further cut oil production in order to help prop up prices amid sagging global demand for energy due to the coronavirus.

The decision broke three years of cooperation under an arrangement called OPEC+ and stunned participants at a meeting in Vienna, not to mention some of Russia’s own oil executives — one suggested the move was “irrational” — and governments from the Middle East to the West.

OPEC leader Saudi Arabia swiftly responded to the snub by announcing it is no longer obliged to hold back production, causing the largest single-day drop in the price of oil in nearly three decades and sending global stock markets and the ruble tumbling. Why?

One potential answer: President Vladimir Putin wanted to punish the United States by putting severe pressure on the U.S. shale-oil industry, which has sold millions of barrels of oil while Russian companies kept production down under the existing OPEC+ agreement.

“The Kremlin had decided that propping up prices as the coronavirus ravaged energy demand would be a gift to the U.S. shale industry,” Bloomberg News reported. The acerbic spokesman for Russian state oil giant Rosneft, Mikhail Leontyev, suggested that was at least one of the motives, telling the agency: “Let’s see how American shale exploration feels under these conditions.”

Rosneft CEO Igor Sechin, an old and close Putin ally, has long been said to be chafing under the existing OPEC+ production limits, and was widely seen as playing a role in the decision to reject further cuts.

Some analysts played down the idea that the Kremlin was out to get U.S. shale, however, saying that Russia’s coordination with OPEC+ was fragile to begin with and that Moscow and Riyadh had different views of the current volatility on the global oil market.

Whatever the reasons, it’s a risky move for Moscow at an uncertain time.

The oil price collapse stoked by Moscow’s move and concerns about the effects of the coronavirus on a slew of industrieswill hurt Russia’s economy in the short-term, and there is no guarantee that it can knock out U.S. shale in the long run, analysts said.

The reasons and risks behind Russia’s big oil bet

U.S. Benefits

The United States has been a beneficiary of the high prices maintained by the OPEC+ output cuts over the past few years, overtaking Saudi Arabia and Russia — now Number 3 — as the world’s largest oil producer.

As the coronavirus ravaged the Chinese economy and hit others around the world, slashing oil demand, Saudi Arabia lobbied for OPEC+ to cut another 1.5 million barrels at the March 6 meeting in Vienna. Russia recommended maintaining the existing cuts. OPEC+ — a 24-member group consisting of OPEC nations plus non-cartel members like Russia — first agreed to oil production cuts in 2017.

Saudi Arabia’s announcement that it would hike production sent the price of U.S. crude oil tumbling by 25 percent on March 9 to a low of a barrel. Prices gained back some of the losses on March 10 but were well under for U.S. and the global benchmark, Brent Crude.

Some U.S. shale producers have a break-even price of a barrel or above, putting them in a vulnerable position, said Chris Weafer, an energy specialist and founder of Moscow-based consultancy firm Macro-Advisory.

Oil producers in Saudi Arabia and Russia have lower production costs, enabling them to weather the price.

“There are three parties facing off against each other — Russia, Saudi, and U.S. shale — and it really is a case of who blinks first,” Weafer told RFE/RL.

Several analysts said that in the short-term, Russia is in the strongest position among those three players.

“The impact of this price crash on U.S. shale companies is going to be pretty devastating” in the short term and could result in a U.S. production decline in 2020, said Gregory Brew, a historian at Southern Methodist University in Texas focusing on energy politics and the Middle East.

Diamondback Energy, a Texas-based shale producer, announced March 9 it would immediately reduce investment following the price drop.

Russian oil companies have some insulation. They are profitable at a oil price, helped by a free-floating currency, and the budget is protected for years to come.

The Kremlin’s conservative fiscal policy over the past few years boosted foreign currency reserves to about 0 billion and driven down the price of a barrel of oil necessary to balance the budget from above 0 to below .

At the current ruble rate of nearly 75 to the dollar, the budget can balance at per barrel, said Elina Ribakova, deputy chief economist at the Institute of International Finance in Washington.

Saudi Arabia’s budget break-even oil price is closer to and its foreign currency reserves have been declining amid a massive state spending program.

Risky Bet

Riyadh not only faces budget pressure, but potentially investor pressure to cut production to keep the market stable, Sarah Ladislaw, a senior vice president at the Washington-based Center for Strategic and International Studies, said in a March 9 note.

Riyadh recently sold shares in state oil company Saudi Aramco, raising .6 billion in the world’s largest initial public offering. The shares are now below the price the investors paid for them.

But the U.S. shale industry has shown resilience in the past and is likely to do so again, analysts said. Low oil prices lead to consolidation, which should make companies more competitive in the longer term, Brew said — the opposite of what Moscow may be angling for.

Saudi Arabia failed to achieve the goal of shuttering the U.S. shale industry several years ago: The producers improved their efficiency in response to price pressure, driving down their own production costs.

Unlike large onshore or offshore oil fields that can take years to develop, shale fields can start producing in weeks, said Rauf Mammadov, an energy analyst at the Middle East Institute in Washington. And the biggest U.S. oil companies, which are less vulnerable than smaller outfits, are investing more into shale.

“It will not impact the shale industry in the long run,” Mammadov told RFE/RL.

Meanwhile, the impact of the oil price drop is being felt globally, including in Moscow.

The reasons and risks behind Russia’s big oil bet

‘Very Unexpected, Irrational’

Russia’s already slow-growing economy could potentially contract this year if oil prices stay low for the rest of the year, said Ribakova. She previously forecast growth of more than 2 percent in 2020.

Russia is losing 0 million to 0 million a day at an oil price of rather than , said Leonid Fedun, the billionaire vice president for strategic development at Lukoil, Russia’s second-largest oil producer, which is not state-owned.

Fedun called the collapse of the Russia and OPEC+ agreement “very unexpected, irrational.”

That’s not the view at Rosneft, though. Sechin was the driver behind the Kremlin’s decision not to agree to additional cuts, Weafer said.

In June, Sechin accused the United States of using sanctions against energy-producing nations to make room for U.S. domestic production.

The United States has angered the Kremlin by imposing sanctions on Russian Baltic Sea export gas pipeline Nord Stream 2, delaying its completion indefinitely, and by slapping penalties last month sanctioned a trading arm of Rosneft for doing business in Venezuela.

In 2019, the United States supplied oil to Russia’s western neighbor Ukraine for the first time — as Kyiv seeks to reduce reliance on Moscow amid a continuing war with Russia-backed separatists in its east — while Belarus has inquired about purchasing U.S. oil as it seeks alternatives to Russian crude.

Rosneft will increase production by 300,000 barrels a day following the exit from the agreement with OPEC+, Bloomberg reported, citing unidentified company officials.

Mammadov questioned the notion that Russia is targeting the U.S. shale industry.

The abundance of global supply, while largely driven by the United States, is also due to greater output from Canada, Brazil, and other non-OPEC countries, some of which have high-cost production and will be impacted, he said.

“This is more the outcome of the failure of the negotiation rather than a premeditated strategy or tactic” to crush U.S. production, Mammadov said. “There are too many global unknowns at the moment and that is the reason why Saudi Arabia and Russia could not agree on cuts.”

If the spread of the coronavirus retreats globally, leading to a pickup in economic activity and oil demand, the tensions between Russia and Saudi Arabia will ease as the question of greater cuts subsides, Mammadov said.

Another factor potentially limiting the depth of the price war is the Kremlin’s determination to maintain the political influence it has achieved in the Middle East in recent years, Weafer said.

That greater influence was on display in October 2017 when Saudi Arabia’s King Salman traveled to Moscow, the first-ever visit by the nation’s leader to Russia.

“The Kremlin will want to try to get back to the negotiating table because the political relations” with Saudi Arabia are “very important,” Weafer said.

This article originally appeared on Radio Free Europe/Radio Liberty. Follow @RFERL on Twitter.

Military Life

4 of the worst things about training in ‘Mojave Viper’

Mock IEDs attacks, fire and maneuvering drills, and scrambled medical evacuations are just a few exercises Marines and sailors run while training at Mojave Viper. “The Viper” takes place in Twentynine Palms, California, the largest training base of the U.S. Marine Corps.

Although each scenario the Marines encounter is played out under strict supervision, it’s considered the closest thing to war a young infantryman are exposed to before facing the real enemy. The training takes place in a desert landscape that closely resembles the environment troops will meet in Afghanistan — and it sucks.


It’s f*cking filthy

Infantry Marines and sailors from various bases show up to Camp Wilson, where their desert training will take place. 99.9 percent of the time, the Marines occupy the K-spans located on the grounds. Those K-spans are rarely cleaned before the incoming troops arrive, which causes problems.

Plus, since you’re training in an open-desert landscape, the wind will blow all types of viruses and bacteria about. This, in conjunction with already-dirty living conditions, causes troops to come down with all kinds of illness, like pink-eye and a variety of sniffles. Keep your mouth closed and your eyes covered whenever possible.

The reasons and risks behind Russia’s big oil bet

Cpl. Dwight Jackson, a working dog handler with 1st Law Enforcement Battalion, I Marine Expeditionary Force, cools off his dog, Hugo while training in Twentypalms, Calif.

The summer heat

If you’re unlucky, you’ll be sent to Mojave Viper during the late spring and early summer months. You better start getting ready for the heat.

Not only is it freakin’ hot in the direct sunlight, but the blazing heat is made even worse by training in your full PPE gear. Welcome to hell!

The reasons and risks behind Russia’s big oil bet

Lance Cpl. Charles Wohlers, 1st LE Gunner, Marine Wing Support Squadron 371, prepares his gear for the cold wear before the Motorized Fire and Movement Exercise exercise on range 114, at Marine Corps Air Ground Combat Center, Twentynine Palms, Calif.

(Photo by Pfc. William Chockey)

The cold nights

If you think the days are bad, just wait until the sun goes down and the temperatures drop. Hell has just frozen over.

The reasons and risks behind Russia’s big oil bet

Lance Cpl. Daniel Breneiser, right, gets vaccinated against smallpox by Hospital Corpsman Nathan Stallfus

(Photo by MC1 Nathanael Miller)

Showering in a pool of smallpox

While stationed in the camp, most troops receive a smallpox vaccination on their upper arm. This vaccination creates a small blister which takes a few weeks to heal and may leave a scar. However, during that healing period, troops still have to shower to maintain proper hygiene.

As you shower, water will run over the blister and onto the floor. When multiple troops shower at the same time, the plumbing usually gets backed up, essentially creating a nasty pool of smallpox-laden backflow. Great.

MIGHTY TACTICAL

Intimidation: Army crew names their howitzer ‘Coronavirus’

The U.S. military is famous for several things. The food in the DFACs, early morning PT and extreme grooming standards, just to name a few. One of the most underrated things about the military though is the sense of humor amongst troops in the field.


One gun crew from the 1st Armored Division certainly lived up to that legacy of laughs this week after a picture was posted on the division’s website showing that soldiers had named their M109A6 Paladin self-propelled howitzer “Coronavirus.”

ALWAYS VIGILANT! We’re taking preventative measures in the field as we continue to train and protect the safety of our Soldiers and Leaders. As a force we must stay alert as we train to be lethal in combat. #IronSoldiers #BulldogBrigade #COVIDー19 #IIICorpsCOVID19pic.twitter.com/V79CftGvf1

twitter.com

Yes, the virus currently circling its way around the globe and through the media has made its way into the psyche of a few soldiers.

But these 13Bs are hardly the first to christen their weapons with names. Earlier this year, an M1 Abrams belonging to the 3rd Infantry Division, was spotted sporting the name “Baby Yoda.” Other colorful names include “Change of Regime,” “Bull Dog II”, and “New Testament.”

The reasons and risks behind Russia’s big oil bet

The traditional isn’t limited to U.S. soldiers either.

In fact, soldiers have been naming their weapons since at least medieval times, when knights gave names to their trebuchets. And today, visitors to historic battlefields like Gettysburg can still make out the names etched on the back of a few artillery pieces.

As for the coronavirus, of COVID 19 as it is officially called, at press time, there are currently 11,500 cases in the U.S., according to a report from the Washington Post.

The U.S. military is on the frontlines of the country’s pandemic response. In addition to the thousands of National Guardsmen currently activated, President Donald Trump recently tasked the U.S. Navy to deploy both of its hospital ships to treat COVID 19 patients, reports Reuters.

The Navy operates two hospital ships, the U.S.N.S. Comfort and the U.S.N.S. Mercy. Although the ships belong to the Navy, the deck crew is usually manned by civilian members of Military Sealift Command, while the health care staff is comprised of military personnel.

The two ships, which were converted to floating hospitals from oil tankers in the 1970s, are the military’s only such vessels, with one covering the Atlantic and the other the Pacific.

This article originally appeared on Sandboxx. Follow Sandboxx on Facebook.

MIGHTY CULTURE

No, being a grunt won’t doom you after you get out

So, you’re nearing the end of your glorious time in the military, but you spent it all as a door-kicking, window-licking, crayon-eating grunt. Your command is breathing down your neck about your “plan” for when you get out. You realized two years ago that there aren’t any civilian jobs where you’re training to sling lead and reap souls all the while refining your elite janitorial skills. What are you going to do?

A lot of us grunts wondered this before getting out. But, the idea that you didn’t learn any real, valuable skills in the infantry is a huge misconception. You actually learned quite a bit that civilian employers might find extremely useful for their businesses. Aside from security, you can take a lot of what you learned as a grunt and use it to make yourself an asset in the civilian workforce.

Here is why you’re not doomed:


The reasons and risks behind Russia’s big oil bet

Put those leadership skills to good use.

(U.S. Army photo by Specialist Michelle C. Lawrence)

Your skill set is unique

If you’re getting out after just four years, you’re probably around the age of 22 or 23. At that age, you’ve already been in charge of at least four other people or even more in some cases. You have skills like leadership and communication that will place you above others in your age range.

Even if you’re not feeling like you have all the experience you need:

The reasons and risks behind Russia’s big oil bet

How it feels on that first day of using the G.I. Bill.

You can go back to school

That’s right. You earned your G.I. Bill with all those endless nights of sweat and CLP, cleaning your rifle at the armory because your company had nothing better to do. Why not use it? You don’t even need to use it on college necessarily, use it on trade school to get back out there faster.

The point is this: you have (mostly) free money that will allow you to earn a degree or certification to be able to add that extra line on your resume.

The reasons and risks behind Russia’s big oil bet

You’ve worked with people from all over the world in all sorts of scenarios. Use that experience.

(U.S. Marine Corps photo)

You have tons of experience

You do. You traveled the world in some capacity, right? Sure, Okinawa might not be a real deployment but what did you do? You were involved in foreign relations. You were an American ambassador. How many 22-year-olds can say that?

Aside from that, you learned how to plan, execute, and work with several different moving pieces of a unit to accomplish a single goal with success and you learned to lead other people. These are things that are extremely useful for the civilian workforce.

The reasons and risks behind Russia’s big oil bet

You have all the tools, maybe even more!

(U.S. Marine Corps photo by Cpl. Tia Dufour)

With all of these things in consideration, who says you can’t get a job when you get out? Well, there are plenty of people, but they’ll feel really dumb when they see you succeed.

MIGHTY TACTICAL

9 epic photos of riverine sailors preparing for combat

The U.S. Navy’s Coastal Riverine Squadron 1 is proving itself right now in preparation for mobilization, and its sailors have been showing off at tasks from convoy security to medical aid to speeding around in boats (a fun and major part of their mission) in complex tasks at Camp Pendleton, California.


So, it’s a bunch of badass sailors playing with machine guns and boats in Southern California. Wanna see some photos? Yeah, of course you do.

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

Engineman 2nd Class Christian McCain of Arlington, Texas engages opposing forces while dismounted with a M240 machine gun.

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The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

The reasons and risks behind Russia’s big oil bet

(U.S. Navy Hospital Corpsman 1st Class Kenji Shiroma)

MIGHTY HISTORY

How a truck driver helped solve one of WWII’s most enduring mysteries

The USS Eagle 56 was only five miles off the coast of Maine when it exploded.

The World War I-era patrol boat split in half, then slipped beneath the surface of the North Atlantic. The Eagle 56 had been carrying a crew of 62. Rescuers pulled 13 survivors from the water that day. It was April 23, 1945, just two weeks before the surrender of Nazi Germany.

The United States Navy classified the disaster as an accident, attributing the sinking to a blast in the boiler room. In 2001, that ruling was changed to reflect the sinking as a deliberate act of war, perpetuated by German submarine U-853, a u-boat belonging to Nazi Germany’s Kriegsmarine.


Still, despite the Navy’s effort to clarify the circumstances surrounding the sinking, the Eagle 56 lingered as a mystery. The ship had sunk relatively close to shore, but efforts to locate the wreck were futile for decades. No one could find the Eagle 56, a small patrol ship that had come so close to making it back home.

The reasons and risks behind Russia’s big oil bet

German submarine U-853 and crew.

Then, a group of friends and amateur divers decided to try to find the wreck in 2014. After years of fruitless dives and intensive research, New England-based Nomad Exploration Team successfully located the Eagle 56 in June 2018.

Business Insider spoke to two crew members — meat truck driver Jeff Goodreau and Massachusetts Department of Corrections officer Donald Ferrara — about their discovery.

Goodreau and Ferrara, along with their crewmates Ryan King, Danny Allan, Bob Foster, Nate Garrett, Josh Cummings, and Mark Bowers, are featured in “The Hunt for Eagle 56,” a Smithsonian Channel documentary series set to air at 9 p.m. on Sunday, Sept. 22, 2019.

Goodreau works as a meat truck driver in Massachusetts. But diving has been his passion since the age of 18, after his employer hosted a number of scuba excursions.

“I was hooked from the first dive,” Goodreau said. “It was really cool. I found out early shipwrecks are what I’m meant to do. I really believe that that’s what I was put here to do, to find shipwrecks.”

Ferrara said he was first sucked into the world of diving by watching famed oceanographer Jacques Cousteau on television, as a kid.

Sunken Navy warship found off Maine coast

www.youtube.com

Goodreau described becoming interested in pursuing “deeper and darker” dives as time went on; or, as Ferrara puts it, “crazier and stupider” underwater adventures. They became immersed in the world of technical diving, which National Association of Underwater Instructors defines as “a form of scuba diving that exceeds the typical recreational limits imposed on depth and immersion time (bottom time).”

King, Allan, and Goodreau first teamed up to find the Eagle 56 in 2014. The rest of the crew came together in the subsequent years. The Eagle 56 was an obvious choice for the for the Nomad team.

“I’m a shipwreck nerd, always have been,” Goodreau said. “The Eagle 56 was always the shipwreck to find. That was the great ghost of New England. A lot of people looked for it. Nobody could find it.”

But the Eagle 56 was never going to be an easy find. Goodreau described the ocean floor north of Cape Cod as a labyrinth of rocky mountains and canyons. The Eagle 56 was a “fairly small” boat. And, though the crew didn’t know this at the time, it was lodged in a trench.

“It’s kind of like the equivalent of dropping a soda can into canyon and putting on a blindfold and going and finding it, because you can’t just look down and see it,” Goodreau said. “Visibility’s 10 feet. It’s pitch black.”

Even worse, the crew’s expensive magnetometer ended up being somewhat of a bust, thanks to the undersea terrain.

“It turns out that the rocks off of Maine aren’t only big, they’re full of iron,” Goodreau said.

Again and again, the crew would finish out a summer diving season empty-handed. They spent the winters intensively reading up on the sinking, trying to pinpoint the ship’s coordinates. That research had an unintended side effect.

The reasons and risks behind Russia’s big oil bet


A plaque on the grounds of the Portland Head Light at Cape Elizabeth, Maine, describes the loss of USS Eagle-56.

“You kind of get to know these guys,” Goodreau said, of the Eagle 56 crew members.

Ferrara added that, as a Marine veteran, he feels an affinity for the crew members who died in the attack. He said that most of the men on board were quite young.

“They were lost for 73 years,” he said.

But the team stuck with the search and, ultimately, found the wreck in June 2018. Goodreau and Ferrara say that, as a result, they’ve gotten to know plenty of relatives of the lost crew members.

The Nomad team members were even invited to the July 2019 Purple Heart ceremony for Seaman 1st Class James Cunningham, who died in the Eagle 56 sinking. Cunningham was 21-years-old at the time of the sinking. Goodreau and Ferrara say that Cunningham came from a family of Tennessee sharecroppers, and that he enlisted in the Navy when he was 18. Cunningham sent them his Navy paychecks so that they could buy a house, a property which the family still owns today.

Sadly, one group that the Nomad team will never be able to share their discovery with are the 13 survivors of sinking. They have all died.

“Some of the survivors were engineers,” Goodreau said. “Some went to their graves feeling that people blamed them for the explosion.”

The Nomad diving team will now search for the torpedo that took down the Eagle 56. And, in the meantime, they will remain cautious when diving in the area where the ship sank.

“You don’t want to disturb them,” Ferrara said. “You want to be very respectful, when you’re there.”

This article originally appeared on Business Insider. Follow @BusinessInsider on Twitter.

MIGHTY CULTURE

Veterans everywhere agree: You can mourn Kobe Bryant

Only a few hours after the tragic news broke of famed basketball player Kobe Bryant’s helicopter crashing, killing all nine passengers (including Bryant’s 13-year-old daughter, Gianna), the social media debates started: Why are we so sad about a celebrity dying but when our service members are killed in the line of duty seemingly no one notices?

An article from 2005 began circulating again, reminding us all of another helicopter tragedy: the horrible Al-Anbar CH-53E crash that killed all 31 troops when it went down outside Ar-Rutbah in Iraq this same weekend, 15 years ago.

Veterans everywhere concur: you can, and should, be sad about both.


We’re all allowed to feel empathy at a wife losing her husband and daughter and three girls losing their dad and sister, not to mention the other families on board. You’re allowed to grieve someone who inspired thousands and thousands of kids and adults alike to pursue their dreams. At the same exact time, as Americans, we all should know the names of our service members dying for us every day.

And: That’s not why anyone signs up to serve.

Veterans took to the internet to express their sympathy as well as their own experiences with Kobe and his support for our military community.

The reasons and risks behind Russia’s big oil bet


The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet
The reasons and risks behind Russia’s big oil bet

Rest in Peace, Kobe.

MIGHTY HISTORY

The bloody story behind the bells the US returned to the Philippines

It was Sept. 27, 1901, and C Company of the 9th U.S. Infantry Regiment was stationed in the area Samar in the Philippines, specifically the town of Balnagiga. It was during the evening watch that the unit sentries noticed an unusual number of irregularly clothed women heading into the local church with baby-sized coffins. After a search revealed the coffins were carrying children killed by cholera, he let them pass on.

They should have checked closer.


The reasons and risks behind Russia’s big oil bet
Company C, 9th US Infantry Regiment with Valeriano Abanador (standing, sixth from right) taken in Balangiga. Abanador would later lead the surprise attack against them.

The United States had occupied the Philippines since it was wrested from Spanish control during the 1898 Spanish-American War. The people of the Philippines at first welcomed the Americans as liberators. As soon as they realized U.S. colonial ambitions, however, they turned on the Americans, launching an almost four-year long insurgency they would lose, becoming a U.S. possession until 1946.

Even after rebel leader Emilio Aguinaldo surrendered to the U.S. in April, 1901, the fight wore on in places like Samar. The Americans stationed there should have been ready for anything.

The reasons and risks behind Russia’s big oil bet

Filipino insurgency leader Emilio Aguinaldo reports aboard the USS Vicksburg as a prisoner of war.

(U.S. Army)

During that September night in 1901, the small coffins really were filled by children, presumably killed by a cholera epidemic that was sweeping the villages of the area. The inspecting sentry looked into one of the coffins, saw what was there, and even helped the woman nail the lid down again when he was finished. If he had looked underneath the corpse, he would have found cane-cutting blades hidden under the body.

All the coffins were filled with them.

The reasons and risks behind Russia’s big oil bet

James Mattis and Philippines Ambassador Jose Manuel G. Romualdez shake hands in front of the Bells of Balangiga display at F.E. Warren Air Force Base in Cheyenne, Nov. 14, 2018. The ceremony in Wyoming signaled the start of an effort to return the bells to the Philippines.

(Wyoming Army National Guard photo by Sgt. 1st Class Jimmy McGuire)

The next morning, the Americans went to breakfast as the local police chief sent his prisoners to work in the streets. As an American sentry, Adolph Gamlin walked by the Chief in the plaza, the Chief, Valeriano Abanador, grabbed Gamlin’s rifle, butt-stroked the private across the face and unloaded it into the men in the mess tent. The town church bells began to ring, signaling the attack on the surprised American company.

Two guards posted at the entrance to the local convent were killed by locals. The Filipinos then broke through, into the convent, and killed the unit’s officers. Simultaneously, the Bolo fighters began an assault on the local barracks. The locals had gotten the drop on the Americans, but the victims had one advantage — there weren’t enough attackers to get them all.

Some Americans in the mess tent and barracks escaped the initial surprise, regrouped, and retook the municipal hall where their arms were held. Now armed, the tide turned in favor of the Americans. Behind the Filipinos, Pvt. Adolph Gamlin (the sentry) regained consciousness as well as his rifle, and was wreaking havoc in the attackers’ rear. Gamlin had the whole plaza as a field of fire, and the attackers had no cover to hide behind.

Abanador was forced to pull his insurgents out.

The reasons and risks behind Russia’s big oil bet

The bells arrived in Wyoming sometime in 1904.

Company C collected their dead, 48 of 74 men were killed in action. A further 26 were wounded and eight of those men would die later of those wounds. Not able to hold the town with their reduced numbers, they escaped by sea. The Filipinos could not hold the town either. They returned to bury an estimated 26-36 of their dead and then faded away before the Americans could come in and punish them.

The 11th infantry arrived in Balagiga on Oct. 25, 1901, and found the buried Filipinos. They burned the town and took the church bells, sending two of them to Fort Russell, now F.E. Warren Air Force Base. A third bell ended up with the 9th Infantry at Camp Red Cloud in South Korea.

The reasons and risks behind Russia’s big oil bet

A solider poses with the third Bell of Balangiga at Camp Red Cloud, South Korea, ca. 2004.

The bells were ordered to be returned to the government of the Philippines by Secretary of Defense Jim Mattis. On Dec. 11, 2018, a U.S. Air Force C-130 landed in Manila, carrying the bells back to the people of the Philippines 117 years after they were taken as war booty by the U.S. Army.

MIGHTY TRENDING

US destroyer sails through Chinese-claimed territory

US Navy warships sailed through the Taiwan Strait Jan. Jan. 24, 2019, in an apparent challenge to Beijing.

The Areligh Burke-class guided-missile destroyer USS McCampbell and the Henry J. Kaiser-class fleet replenishment oiler USNS Walter S. Diehl conducted a Taiwan Strait transit, demonstrating “the US commitment to a free and open Indo-Pacific,” US Pacific Fleet spokesman Lt. Cmdr. Tim Gorman told CNN.

“The US Navy will continue to fly, sail and operate anywhere international law allows,” he added.


The rhetoric in his statement is consistent with that used for freedom-of-navigation operations (FONOPs) and bomber overflights in the South China Sea, actions that tend to agitate the Chinese government.

After the USS McCampbell conducted a FONOP earlier this month, Chinese media responded with a warning that its military had deployed DF-26 missiles capable of sinking enemy ships in the South China Sea.

The reasons and risks behind Russia’s big oil bet

The USS McCampbell.

(U.S. Navy photo by Mass Communication 1st Class Bobbie G. Attaway)

While Taiwan Strait transits by US warships occurred infrequently in the past, the US has made these maneuvers routine in the past year, which has been characterized by rising tension between Washington and Beijing.

The US Navy sent the destroyer USS Stockdale and the replenishment oiler USNS Pecos through the strait in November 2018, just a few weeks after the destroyer USS Curtis Wilbur and the cruiser USS Antietam did the same in October 2018.

The destroyers USS Mustin and USS Benfold sailed the strait between mainland China and Taiwan for the first time in July 2018.

The reasons and risks behind Russia’s big oil bet

The Chinese government views Taiwan, a self-ruled democratic territory, as a renegade province, and is deeply concerned about foreign interference, particularly US military support.

Beijing feels it may embolden pro-independence forces. In a recent speech, Chinese President Xi Jinping made it clear that forceful reunification remains on the table.

A new Defense Intelligence Agency assessment of China’s military might explains: “Beijing’s longstanding interest to eventually compel Taiwan’s reunification with the mainland and deter any attempt by Taiwan to declare independence has served as the primary driver for China’s military modernization.”

“Beijing’s anticipation that foreign forces would intervene in a Taiwan scenario led the [Chinese military] to develop a range of systems to deter and deny foreign regional force projection.”

In a recent meeting with Adm. John Richardson, chief of US naval operations, Chinese Gen. Li Zuocheng asserted, “If anyone wants to separate Taiwan from China, the Chinese military will safeguard the national unity at all costs so as to protect China’s sovereignty and territorial integrity,” according to the South China Morning Post.

Richardson said in Japan that the Taiwan Strait is an international waterway, and left the door open for the US to send an aircraft carrier through if necessary.

China sent military aircraft, specifically a Sukhoi Su-30 and a Shaanxi Y-8 transport plane, flying past Taiwan Jan. 22, 2019, causing the Taiwanese military to scramble aircraft and surveillance ships in response. China regularly conducts encirclement drills around Taiwan.

This article originally appeared on Business Insider. Follow @BusinessInsider on Twitter.

Articles

Gen. Stanley McChrystal has a plan for all young Americans to serve their country

It all started with a question.

In the summer of 2012, Gen. Stanley McChrystal was wrapping up an onstage conversation at the Aspen Ideas Festival conference.


He was asked if the US should reinstate the draft.

Yes, he replied, but not to grow the size of the armed forces.

He argued that since only 1% of Americans serve their country, America lacks in shared experience — there’s almost no common background between the upper class and the middle class, the educated and the uneducated, the rural and the urban.

The solution, then, wouldn’t be mandatory military service, but national service — programs like Teach for America and City Year, but made accessible to a full quarter of a yearly cohort rather than an elite few.

Since that conversation, McChrystal has campaigned for making a “service year” a part of young Americans’ trajectories. The goal is to “create 1 million civilian national service opportunities every year for Americans between the ages of 18 and 28 to get outside their comfort zones while serving side by side with people from different backgrounds.”

In an interview with Business Insider, McChrystal, who has held positions as head of US Joint Special Operations Command and as the top commander of US and international forces in Afghanistan, explained his plan for making that happen, and the effects national service could have on American society.

Business Insider: What does the word “citizenship” mean to you, and how does national service inform it?

Gen. Stanley McChrystal: When I think of citizenship, I think of a nation as a covenant. It’s an agreement between a bunch of people to form a compact that does such things as common defense, common welfare, whatnot. The United States is not a place; it’s an idea, and it’s basically a contract between us.

BI: So if a nation is an agreement, then citizenship is putting that agreement into action?

SM: That’s exactly what it is.

BI: What does citizenship have to do with having a common experience?

SM: We’ve become a nation that’s split 50 ways.

There are fewer ties to the community today than when you lived in a small town, and everybody had to get together to raise a barn. You knew your neighbors because you had to. Grandparents tended to live in the same town as parents, and kids grew up there. Nowadays, we don’t live that way.

BI: But service programs today are unreachable for most people, so how can they serve as a common link? Teach for America, the Peace Corps, AmeriCorps — these programs have acceptance rates comparable to Ivy League schools. How do you make service more accessible?

SM: What has happened is that many of our service practices have become almost elitist programs. They do it because they can, and also it protects their brand and their reputation so they can survive in tough times. But it’s not solving the problem because most of people who go do those kinds of things, I think they come out better citizens, but it’s too small a number — it’s less than 200,000 kids a year.

BI: There are a ton of social structures at work here. How do you make a change?

SM: We’ve got 4 million young people in every year cohort in America, so we think that in the next 10 years we’ve got to get to about a million kids every year to do a year of national service. That would be 25% of the year group.

Now, I can’t prove this, but our sense is that if we get to 25%, you probably get the critical mass, because what we’re trying to do is get this into the culture of America so that service is voluntary but it’s expected. Meaning if you go to interview for a job, you go to apply to a school, you go to run for congress, people are going to naturally ask, Where did you serve?

The reasons and risks behind Russia’s big oil bet

BI: OK, so how do you make that happen?

SM: Creating a big government agency isn’t the mechanism to do this.

We’re trying to take existing organizations like Teach for America and expand those. Then Cisco, the corporation, has donated money and helped to develop a digital platform that is going to give us a 21st-century ability to match opportunities and people looking for a service year opportunity.

I think we create a marketplace to do this that obviously starts slowly and then builds up momentum. And then once we get to the point where people really believe that service is not only a good thing to do — in an altruistic sense as citizen — but it also advantages them.

BI: There seems to be a lot of anxiety around doing “a gap year.” Are any programs already in place that take away that anxiety?

SM: There’s a program that Tufts University rolled out that’s called 1+4. And I was up there when they announced it. And what you do is, you apply for Tufts — I think there are 50 slots for the class that came in last September — but you do your first year doing national service, kind of like you’re red-shirted for football, and then you do your four years.

You’re already accepted, so the family doesn’t worry, Is Johnny going to go to college? If you’re on financial aid, Tufts pays for it. They pay for the national service. Tufts believe they get a more mature freshman. We’re pushing this in a lot of universities now because it’s a win-win for a university.

They do get a more mature person, and parents don’t worry about the vagaries of the gap year. There could be a lot of different permutations of that kind of thing, but those are the kinds of things that we see as practical steps.

BI: How will you know when the plan has succeeded?

SM: The key part of the ecosystem is the culture that demands national service. At some point, my goal is to get it so that nobody would run for Congress who hadn’t served, because they think they’d get pummeled for not having done a service year.

Also from Business Insider:

This article originally appeared at Business Insider Defense Copyright 2014. Follow BI Defense on Twitter.

MIGHTY MILSPOUSE

The US Navy is going to arm all of its destroyers with hypersonic missiles, a top Trump official says

The US Navy is going to eventually arm all of its destroyers with hypersonic missiles that are still being developed, White House national security advisor Robert O’Brien said Wednesday, according to Defense News.

“The Navy’s Conventional Prompt Strike (CPS) program will provide hypersonic missile capability to hold targets at risk from longer ranges,” O’Brien said at the Portsmouth Naval Shipyard.


“This capability,” he continued, “will be deployed first on our newer Virginia-class submarines and the Zumwalt-class destroyers. Eventually, all three flights of the Arleigh Burke-class destroyers will field this capability.”

Hypersonic missiles — high-speed weapons able to evade traditional missile-defense systems — are a key area of competition between the three great powers. Earlier this month, Russia test-fired its Tsirkon hypersonic anti-ship cruise missile from the frigate Admiral of the Fleet of the Soviet Union Gorshkov.

Given the ongoing hypersonic missile arms race, it is easy to see why the US Navy might want hypersonic missiles for its destroyers, something the Navy has previously discussed, but there are challenges.

The CPS missile is a combination of the developmental Common Hypersonic Glide Body (C-HGB) and a two-stage booster, according to the Navy’s fiscal year 2021 budget overview.

Newer Zumwalt-class destroyers have larger vertical launch system (VLS) cells that could accommodate a large diameter missile with a hypersonic warhead in a boost-glide vehicle configuration, but older Arleigh Burke-class destroyers have much smaller VLS cells that would need to be modified or replaced altogether.

“I think it’s a terrible idea to try to outfit these destroyers with hypersonic missiles,” Bryan Clark, a retired Navy officer and defense expert at the Hudson Institute told Insider. Retrofitting dozens of Navy Arleigh Burkes to carry new hypersonic missiles would be expensive, he said.

What the Russian military appears to be doing is developing a new hypersonic missile to fit existing warships. The US military would be going about this in reverse, refitting existing ships to suit a new missile, a weapon that could be quickly replaced by a smaller, cheaper alternative down the road given the rapid pace of technological development.

“If the Navy makes this massive investment in retrofitting only to find in five years that these smaller weapons are now emerging, that money will be largely wasted,” Clark said, adding that the plan “doesn’t make sense.”

In addition to the steep costs of retrofitting dozens of destroyers and arming them with expensive missiles, of which the Navy may only be able to afford limited numbers, other challenges include taking warships offline and tying up shipyards for extended periods of time, potentially hindering other repair work.

Changes risk making the 500-ship plan ‘unaffordable’

Defense News reported that O’Brien also pushed the Trump administration’s vision for a 500-ship Navy, a vision that Secretary of Defense Mark Esper unveiled earlier this month to counter China’s growing naval force.

The plan, known as “Battle Force 2045,” calls for a mixture of manned and unmanned vessels and is based on recommendations from the Hudson Institute, which presented what Clark said was an affordable path to a 500-ship Navy.

A major difference between the Pentagon’s plan and the Hudson Institute study is that the Pentagon wants to build a larger submarine force, which could drive up sustainment costs, making the vision impossible to realize from a cost perspective. Each Virginia-class attack submarine with a larger missile launcher is estimated to cost .2 billion.

Retrofitting destroyers to carry hypersonic missiles would pull away funding as well. “This missile launcher thing, the additional submarines, all the additional ornaments that the Navy is looking at hanging on this fleet are going to make it unaffordable,” Clark said.

He argued that the Navy should focus on arming Virginia-class submarines with hypersonic missiles and let the destroyers be. “You don’t have to rebuild the ship to do it,” Clark explained. “That makes more sense. The Navy should be pursuing that for its boost-glide weapons.”

“That would be sufficient to provide maritime launch capability to complement what the Air Force and the Army are doing,” he said. Both the Army and the Air Force have been pursuing hypersonic weapons for existing launch platforms, such as the AGM-183 ARRW for the B-52 Stratofortress bomber.

This article originally appeared on Business Insider. Follow @BusinessInsider on Twitter.

Articles

7 signs you’re a Blue Falcon

Everyone knows being a Blue Falcon is bad, but no one believes that they’re the blue falcon. Here are 7 indicators that maybe you should start shopping for nests.


1. When someone asks for volunteers, you immediately start thinking of who isn’t doing anything.

The reasons and risks behind Russia’s big oil bet

Look, it’s the platoon sergeant’s or the chief’s job to figure out who is doing what. If they don’t have a grip on their troop-to-task, that doesn’t make it O.K. for you to start naming who’s free for a tasking.

2. You find yourself saying, “Well, so-and-so did it earlier, first sergeant.”

The reasons and risks behind Russia’s big oil bet
Blue falcons have their own barracks.

Keep your mouth shut, snitch. First sergeant doesn’t need to know who snuck to the barracks first during those engrossing Powerpoint presentations battalion put together. Let him yell at you until he runs out of steam, then go back to the stupid briefings and suck it up.

3. You make the kind of mistakes that trigger company recalls.

The reasons and risks behind Russia’s big oil bet

Everyone screws up a few times a year, which is normal. Not everyone screws up so badly that the entire rest of their unit has to come in Saturday morning. Maybe keep your infractions a little more discreet in the future.

Or, make your mistakes epic enough that the unit will enjoy the recall just because they get to hear the story. “Wait, we’re here because Schmuckatelli crashed the general’s car with the installation command sergeant major’s daughter in the front seat? Can I make popcorn before you start, first sergeant?”

4. You frequently hear bus sounds or the words, “Caw! Caw!”

The reasons and risks behind Russia’s big oil bet

Yeah, your friends are trying to give you a hint, dude. You’re throwing people under the bus and then buddy f-cking them as they crawl out.

5. You take too much credit — especially for stuff you didn’t do with your own hands.

The reasons and risks behind Russia’s big oil bet

Always share credit. When you’re praised for rifle marksmanship, mention who helped you train. If you perform superbly at the board, mention the guys in your squad who quizzed you.

But, when you weren’t there, you shouldn’t take any credit. Say who actually did the work. Do not take the recognition, do not take the coin, do not tell stories about it later.

6. You’re always the guy that the team or squad leader has to pull aside.

The reasons and risks behind Russia’s big oil bet

Look, sucking at your job is a version of being the blue falcon. It’s not as malicious or direct as being a credit hog or a snitch, but not learning how to fulfill your position in the squad screws everyone else over. Read the manuals, practice the drills, watch the other guys in the squad. Learn your role.

7. Someone sent you this list or tagged you on Facebook in the comments.

Yeah, there’s a reason someone thought you, specifically, should read this list. Go back through it with a comb. Read each entry and keep a tally of which apply to you. Then, stop being a blue falcon. Caw caw.

NOW: The 7 biggest ‘Blue Falcons’ in US military history

MIGHTY MOVIES

A veteran comedian needs your help to be the host of the 2019 Oscars

Comedian Kevin Hart stepped down from hosting the coming Academy Awards Presentation, leaving the job empty for the time being. Enter Adam Keys: A veteran and triple amputee, Adam lost his limbs after suffering from an IED attack in Afghanistan that left him with a massive infection. 100 surgeries later, Keys has never lost his sense of humor.

Now, he wants to showcase that humor by stepping up to host this year’s Oscar ceremonies.


Using the hashtag #Adam4TheOscars, Keys needs the support of the veteran community to get the attention of the Academy of Motion Picture Arts and Sciences via social media – he’s even created the language and video, all we need to do is help by posting it (check out that information here). He’s also created a website, Adam4TheOscars.com, and an online petition for fans to sign and register their support.

Keys isn’t aiming for the Oscar job just because he wants to further his comedy career. As the video says, he wants to show that veterans aren’t broken and people with disabilities are as capable as anyone else. He wants to showcase that on Hollywood’s biggest night, with the whole world watching.

The reasons and risks behind Russia’s big oil bet

There’s not much Adam Keys can’t do, despite his disabilities. As the video states, he climbed Kilimanjaro and performs stand-up comedy in the DC area. Considering how he came to his injuries, his spirit and good humor are the stuff of legend. The blast broke the combat engineer’s jaw, left shoulder, humerus, and ankles. It killed three of his friends and nearly killed him, too. He wasn’t even able to speak for two months.

When he came to, he thought he was still in Afghanistan and needed to know where his rifle was. He was in a hospital in Bethesda – and the nurse had no idea what he meant. He was a wounded warrior, but now he’s ready to move past that. He says terms like “disabled veteran”and “wounded warrior” don’t apply to him.

Yes, I was wounded,” he says. “But now I’m not. I want to get rid of that title and move past it, move forward. Move us all forward.”
The reasons and risks behind Russia’s big oil bet

There’s literally nothing he can’t do.

The idea for hosting the Oscars in place of Hart came to him while watching TMZ, looking for material for his standup act. The thought occurred to him, why not? He’d be nervous, but he’s nervous before any show he does.

It will be a challenge for me,” Keys says. “I love challenging myself. And I get to help people and try to move us [veterans] all forward. I don’t know where it’ll take me, but anything is a step forward. I will hope I’ve done the right thing and made people proud of me, of us. Helping people is the added benefit.
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