Category Archives: Markets

From Nuclear Powerhouse to Nuclear Mafia: South Korea

South Korea, which is roughly the size of Indiana, eventually became the most reactor-dense country in the world, with 23 reactors providing about 30% of the country’s total electricity generation…. South Korea’s reactors…are mostly packed into a narrow strip along the densely populated southeastern coast. The density was a way of cutting costs on administration and land acquisition. But putting reactors close to one another—and to large cities—was risky. … 

In December 2009, the UAE had awarded a coalition led by Korea Electric Power Corporation (KEPCO) a $20 billion bid to build the first nuclear power plant in the UAE. Barakah was chosen as the site to build four APR-1400nuclear reactors successively.  In 2012 to Park Geunhye the newly elected president pledged to increase South Korea’s reactor fleet to 39 units by 2035 and making sales trips to potential client states such as the Czech Republic and Saudi Arabia bulding on prior success like the UAE deal mentioned above. …


Barakah under construction in UAE

But on September 21, 2012, officials at Korea Hydro & Nuclear Power (KHNP), a subsidiary of the Korea Electric Power Corporation (KEPCO),  received an outside tip about illegal activity among the company’s parts suppliers. Eventually, an internal probe had become a full-blown criminal investigation. Prosecutors discovered that thousands of counterfeit parts had made their way into nuclear reactors across the South Korea, backed up with forged safety documents. KHNP insisted the reactors were still safe, but the question remained: was corner-cutting the real reason they were so cheap?

Park Jong-woon, a former manager who worked on reactors at KEPCO and KHNP until the early 2000s, believed so. He had seen that taking shortcuts was precisely how South Korea’s headline reactor, the APR1400, had been built…After the Chernobyl disaster in 1986, most reactor builders had tacked on a slew of new safety features.KHNP followed suit but later realized that the astronomical cost of these features would make the APR1400 much too expensive to attract foreign clients.“They eventually removed most of them,” says Park, who now teaches nuclear engineering at Dongguk University. “Only about 10% to 20% of the original safety additions were kept.”  Most significant was the decision to abandon adding an extra wall in the reactor containment building—a feature designed to increase protection against radiation in the event of an accident. “They packaged the APR1400 as ‘new’ and safer, but the so-called optimization was essentially a regression to older standards,” says Park. “Because there were so few design changes compared to previous models, [KHNP] was able to build so many of them so quickly.”

Having shed most of the costly additional safety features, KEPCO was able to dramatically undercut its competition in the UAE bid, a strategy that hadn’t gone unnoticed. After losing Barakah to KEPCO, Areva CEO Anne Lauvergeon likened the Korean nuclear plant to a car without airbags and seat belts. At the time Lauvergeon’s comments were dismissed as sour words from a struggling rival.

By the time it was completed in 2014, the KHNP inquiry had escalated into a far-reaching investigation of graft, collusion, and warranty forgery; in total, 68 people were sentenced and the courts dispensed a cumulative 253 years of jail time. Guilty parties included KHNP president Kim Jong-shin, a Kepco lifer, and President Lee Myung-bak’s close aide Park Young-joon, whom Kim had bribed in exchange for “favorable treatment” from the government.

Several faulty parts had also found their way into the UAE plants, angering Emirati officials. “It’s still creating a problem to this day,” Neilson-Sewell, the Canadian advisor to Barakah, told me. “They lost complete faith in the Korean supply chain.”

Excerpts from Max S. Kim,  How greed and corruption blew up South Korea’s nuclear industry, MIT Technology Review, April 22, 2019

Killing Popcupines for their Bellies: endangered species

Porcupines  are been hunted for undigested plant material in their gut known as bezoars.


Varieties of porcupine bezoar

According to leading wildlife trafficking experts, the small, spiny rodents are at risk of becoming endangered across Southeast Asia.  Demand is predominantly driven by China, where some believe that bezoars, which accumulate in the digestive tract, have potent medicinal properties, including the ability to cure diabetes, dengue fever, and cancer. Bezoars are sold either raw or in powdered form and may be processed into capsules. A few ounces of the substance can command hundreds, even thousands, of dollars. Most sought after is the dark red “blood” bezoar, believed to be the most potent of the several varieties. Prices for bezoars have “increased exponentially during the past few years, following recent claims of their cancer-curing properties,” according to a 2015 report by the wildlife trade monitoring organization Traffic.

The Philippine porcupine, the Asiatic brush-tailed porcupine, and the Malayan porcupine, which live throughout Southeast Asia, are all flagged as threatened and declining in number by the International Union for Conservation of Nature, the body that sets the conservation status of wildlife species. None has yet been listed as endangered, which would bolster legal protection and international awareness.

Excerpts from Porcupines are being poached for their stomach content, National Geographic, Mar. 22, 2019

How to Strengthen the Immune System of Plants: biodiversity

n the past 150 years, the concentration of carbon dioxide in the atmosphere has risen from 280 parts per million (ppm) to 410 ppm. For farmers this is mixed news. Any change in familiar weather patterns caused by the atmospheric warming this rise is bringing is bound to be disruptive. But more carbon dioxide means more fuel for photosynthesis and therefore enhanced growth—sometimes by as much as 40%. And for those in temperate zones, rising temperatures may bring milder weather and a longer growing season. (In the tropics the effects are not so likely to be benign.) What is not clear, though, and not much investigated, is how rising CO2 levels will affect the relation between crops and the diseases that affect them…

Plant biology is altered substantially by a range of environmental factors. This makes it difficult to predict what effect a changing climate will have on particular bits of agriculture. Carbon dioxide is a case in point. It enhances growth of many plants but,  it also shifts the defences to favour some types of disease over others.

To make matters even more complicated, evidence is mounting that changes in temperature and water availability also shift plant immune responses. André Velásquez and Sheng Yang He, at Michigan State University, wrote an extensive review on the warfare between plants and diseases in Current Biology in 2018. They noted that though some valuable crops, such as potatoes and rice, experience less disease as moisture levels increase, this is not the case for most plants. High humidity, in general, favours the spread of botanical diseases. The same can be said for temperature—with some diseases, like papaya ringspot virus, thriving in rising temperatures while others, for example potato cyst, are weakened.

The problems are daunting, then, but there is a way to try to solve them… Genes which grant resistance to diseases that might become severe in the future need to be tracked down. Modern crops have been streamlined by artificial selection to be excellent at growing today. This means that they have the genes they need to flourish when faced with the challenges expected from current conditions, but nothing more. Such crops are thus vulnerable to changes in their environment.  One way to find genes that may alter this state of affairs is to look to crops’ wild relatives. Uncossetted by farmers, these plants must survive disease by themselves—and have been fitted out by evolution with genes to do so. Borrowing their dna makes sense. But that means collecting and cataloguing them. This is being done, but not fast enough. The International Centre for Tropical Agriculture, a charity which works in the area, reckons that about 30% of the wild relatives of modern crops are unrepresented in gene banks, and almost all of the rest are underrepresented….

[This is becuase] most countries are, rightly, protective of their genetic patrimony. If money is to be made by incorporating genes from their plants into crops, they want to have a share of it. It is therefore incumbent on rich countries to abide by rules that enable poor ones to participate in seed collecting without losing out financially. Poor, plant-rich countries are in any case those whose farmers are most likely to be hurt by global warming. It would be ironic if that were made worse because genes from those countries’ plants were unavailable to future-proof the world’s crops.

Excerpts from Blocking the Road to Rusty Death: Climate Change and Crop Disease, Economist,  Apr. 20, 2019

5,000 Eyes in the Sky: environmental monitoring

The most advanced satellite to ever launch from Africa will soon be patrolling South Africa’s coastal waters to crack down on oil spills and illegal dumping.  Data from another satellite, this one collecting images from the Texas portion of a sprawling oil and gas region known as the Permian Basin, recently delivered shocking news: Operators there are burning off nearly twice as much natural gas as they’ve been reporting to state officials.

With some 5,000 satellites now orbiting our planet on any given day…. They will help create a constantly innovating industry that will revolutionize environmental monitoring of our planet and hold polluters accountable…

A recent study by Environmental Defense Fund focused on natural gas flares from the wells in the Permian Basin, located in Western Texas and southeastern New Mexico. Our analysis proved that the region’s pollution problem was much larger than companies had revealed.  A second study about offshore gas flaring in the Gulf of Mexico, published by a group of scientists in the Geophysical Research Letters, showed that operators there burn off a whopping 40% of the natural gas they produce.

Soon a new satellite will be launching that is specifically designed not just to locate, but accurately measure methane emissions from human-made sources, starting with the global oil and gas industry.  MethaneSAT, a new EDF affiliate unveiled in 2018, will launch a future where sensors in space will find and measure pollution that today goes undetected. This compact orbital platform will map and quantify methane emissions from oil and gas operations almost anywhere on the planet at least weekly.

Excerpts from Mark Brownstein, These pollution-spotting satellites are just a taste of what’s to come, EDF, Apr. 4, 2019

Facebook Denizens Unite! the right to privacy and big tech

The European Union’s (EU) approach to regulating the big tech companies draws on its members’ cultures tend to protect individual privacy. The other uses the eu’s legal powers to boost competition.  The first leads to the assertion that you have sovereignty over data about you: you should have the right to access them, amend them and determine who can use them. This is the essence of the General Data Protection Regulation (GDPR), whose principles are already being copied by many countries across the world. The next step is to allow interoperability between services, so that users can easily switch between providers, shifting to firms that offer better financial terms or treat customers more ethically. (Imagine if you could move all your friends and posts to Acebook, a firm with higher privacy standards than Facebook and which gave you a cut of its advertising revenues.)

Europe’s second principle is that firms cannot lock out competition. That means equal treatment for rivals who use their platforms. The EU has blocked Google from competing unfairly with shopping sites that appear in its search results or with rival browsers that use its Android operating system. A German proposal says that a dominant firm must share bulk, anonymised data with competitors, so that the economy can function properly instead of being ruled by a few data-hoarding giants. (For example, all transport firms should have access to Uber’s information about traffic patterns.) Germany has changed its laws to stop tech giants buying up scores of startups that might one day pose a threat.

Ms Vestager has explained, popular services like Facebook use their customers as part of the “production machinery”. …The logical step beyond limiting the accrual of data is demanding their disbursement. If tech companies are dominant by virtue of their data troves, competition authorities working with privacy regulators may feel justified in demanding they share those data, either with the people who generate them or with other companies in the market. That could whittle away a big chunk of what makes big tech so valuable, both because Europe is a large market, and because regulators elsewhere may see Europe’s actions as a model to copy. It could also open up new paths to innovation.

In recent decades, American antitrust policy has been dominated by free-marketeers of the so-called Chicago School, deeply sceptical of the government’s role in any but the most egregious cases. Dominant firms are frequently left unmolested in the belief they will soon lose their perch anyway…By contrast, “Europe is philosophically more sceptical of firms that have market power.” ..

Tech lobbyists in Brussels worry that Ms Vestager agrees with those who believe that their data empires make Google and its like natural monopolies, in that no one else can replicate Google’s knowledge of what users have searched for, or Amazon’s of what they have bought. She sent shivers through the business in January when she compared such companies to water and electricity utilities, which because of their irreproducible networks of pipes and power lines are stringently regulated….

The idea is for consumers to be able to move data about their Google searches, Amazon purchasing history or Uber rides to a rival service. So, for example, social-media users could post messages to Facebook from other platforms with approaches to privacy that they prefer…

Excerpts from Why Big Tech Should Fear Europe, Economist, Mar. 3, 2019; The Power of Privacy, Economist, Mar. 3, 2019

An Affordable and Risk Free Way to Kill: Drones

Armed drones have become ubiquitous in the Middle East, say Aniseh Bassiri Tabrizi and Justin Bronk of the Royal United Services Institute, a British think-tank, in a recent report. America has jealously guarded the export of such aircraft for fear that they might fall out of government hands, be turned on protesters or used against Israel. America has also been constrained by the Missile Technology Control Regime, an arms-control agreement signed by 35 countries, including Russia, that restricts the transfer of particularly capable missiles and drones (both rely on the same underlying technology).

China…has sold missile-toting drones to Egypt, Jordan, Iraq, Saudi Arabia and the United Arab Emirates (UAE). All are American security partners…. Other countries, such as Israel, Turkey and Iran, have filled the gap with their own models.  America wants to muscle its way back into the market. In April 2018 the Trump administration began loosening export rules to let countries buy armed drones directly from defence companies rather than through official channels. Drones with “strike-enabling technology”, such as lasers to guide bombs to their targets, were reclassified as unarmed. American drones are costlier and require more paperwork than Chinese models, but are more capable. ..The flood of drones into the market is already making an impact—sometimes literally. Ms Tabrizi and Mr Bronk say some Middle Eastern customers see drones as an “affordable and risk-free” way to strike across borders… 

Drone Bayraktar made by Turkey

Non-state actors are unwilling to be left out of the party. The jihadists of Islamic State often used drones in Iraq and Syria. Hizbullah used drones when it hit 23 fighters linked to al-Qaeda in Syria in 2014. The Houthi drone that bombed Al-Anad looked a lot like an Iranian model. Last year the Houthis sent a similar one more than 100km (60 miles) into Saudi Arabia before it was shot down. ..

Excerpts from Predator Pricing: Weapon Sales, Economist,  Mar. 9, 2019

How to Make Broken Ships Disappear: pollution

How do you make a 10,000-tonne container ship disappear? At Alang, a small town in Gujarat, on the western coast of India  is the world’s biggest ship-breaking town. Almost a third of all retired vessels—at least 200 each year—are sent to be broken up here, at over 100 different yards stretching along 10km of sand. The industry employs some 20,000 people, almost all men who migrate from the poorer states of India’s northern Hindi-speaking belt. Taxes paid by breakers generate huge sums for the state government. Yet it is a dangerous industry for its workers and a filthy one in environmental terms.

Of 744 ships that were pulled apart worldwide last year, 518 were dismantled on beaches. Only 226 were processed “off the beach” at industrial sites designed for the purpose, according to the Shipbreaking Platform, an ngo which campaigns against beach-breaking. The majority of big shipping firms use beaches, except a tiny few such as Hapag Lloyd of Germany and Boskalis of the Netherlands.

A typical operation involves a ship being beached at low tide. Once her fittings and other resaleable parts are removed, hundreds of workers with gas blowtorches clamber over the vessel’s hull, cutting it into huge steel blocks. These are then dropped onto the beach, where they are cut up again before being sold, then rerolled for use in construction.

Apart from the danger of dropping tens of tonnes of steel from a great height, the method is immensely polluting. A review in 2015 by Litehauz, a Danish marine environmental consultancy, found that in the process of scrapping a 10,000-tonne ship at least 120 tonnes of steel becomes molten and is lost in the sea. Levels of mercury and lead, as well as oil, in Alang’s water are at least 100 times higher than at other beaches. Workers must handle asbestos and dangerous chemicals. Accidents are common. Last year 14 workers died at Alang.Alang is just one of many ship-breaking centres in South Asia. Among the others are beaches in Bangladesh (where workers reportedly include children) and Pakistan. Last year the subcontinent recycled around 90% of the world’s ships by tonnage.

Ship-breaking is concentrated in the region for three reasons. Prices for scrap steel are higher than elsewhere (90% of a ship is typically steel), thanks to demand for rerolled steel for construction. Labour costs are lower than at yards in Europe, America or Turkey (workers at Alang make up to 800 rupees, or $11, per day, and usually less) and safety and environmental regulations are much weaker. Most sellers scrap their ships in South Asia because they get better prices for them.

 Shipowners, in particular Maersk, a Danish company which is the world’s biggest shipper, are preparing to comply with them…At the Baijnath Melaram shipyard a huge crane barge sits in the water next to a stretch of “impermeable” concrete. “We used to have to winch the blocks up the beach,” says Siddharth Jain, the firm’s business manager. Now, the crane lifts blocks of steel down from the ships directly to the concrete, so that they need never touch the sand. In contrast to the yards nearby, where men in simple work clothes and no safety goggles operate blowtorches, the workers scuttling around Baijnath Melaram wear boiler suits, face masks and helmets.

Blocks of steel from recycled ships

The changes are largely down to Maersk… Around 70 more are upgrading in order to meet standards set by the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, an unratified treaty on ship recycling.  Maersk’s campaign is in response to new regulations in force since December 31st 2018 that require all European-flagged vessels to be recycled at shipyards approved by Brussels. Just over a third of the world’s ships fall in this category. Maersk, whose fleet is roughly 40% European-flagged, hopes that the best yards at Alang will be able to comply with the new rules. Two Indian yards have already been audited for the European certification; 11 more have applied. “If we sustain that momentum, in five, six or seven years all of Alang could be really responsible,” says John Kornerup Bang, Maersk’s sustainability chief.

But on January 30, 2019 the eu announced that the Indian yards audited will not make the list,… Ingvild Jenssen of the Shipbreaking Platform says that even Alang’s best yards are not clean enough. She argues that Maersk’s efforts merely “greenwash” a model that needs to change completely…. Not clean enough for Europe; but too expensive to compete with breakers in Bangladesh or Pakistan which have not changed at all. If that happens, the industry in Alang—and the jobs and revenue it generates—could disappear almost as quickly as the ships it dismantles.

Gadani, Pakistan

Excerpt from HIgh by the Beach: Ship Recycling, Economist, Mar. 9, 2019