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Energy, Military Might, and the Reserve Currency . . .
WASHINGTON — The crisis in Crimea is heralding the rise of a new era of American energy diplomacy, as the Obama administration tries to deploy the vast new supply of natural gas in the United States as a weapon to undercut the influence of the Russian president, Vladimir V. Putin, over Ukraine and Europe.
The crisis has escalated a State Department initiative to use a new boom in American natural gas supplies as a lever against Russia, which supplies 60 percent of Ukraine’s natural gas and has a history of cutting off the supply during conflicts. This week, Gazprom, Russia’s state-run natural gas company, said it would no longer provide gas at a discount rate to Ukraine, a move reminiscent of more serious Russian cutoffs of natural gas to Ukraine and elsewhere in Europe in 2006, 2008 and 2009.
The administration’s strategy is to move aggressively to deploy the advantages of its new resources to undercut Russian natural gas sales to Ukraine and Europe, weakening such moves by Mr. Putin in future years. Although Russia is still the world’s biggest exporter of natural gas, the United States recently surpassed it to become the world’s largest natural gas producer, largely because of breakthroughs in hydraulic fracturing technology, known as fracking.
“We’re engaging from a different position because we’re a much larger energy producer,” said Jason Bordoff, a former senior director for energy and climate change on the White House’s National Security Council.
Over the past week, Congressional Republicans have joined major oil and gas producers like ExxonMobil in urging the administration to speed up oil and natural gas exports. Although environmentalists, some Democrats and American manufacturing companies that depend on the competitive advantage of cheap domestic natural gas oppose the effort, they have fallen to the sidelines in the rush.
For Russia, energy supplies are as important to keeping a hold on Ukraine and the other former countries of the Soviet Union as is the Russian Army itself. Ukraine would freeze without Russian gas, and its flow has been a considerable source of wealth and corruption in both countries. But Russia is also obligated by contract to provide natural gas to Western Europe, and Moscow remains highly dependent on Ukrainian pipelines to get it there.
David Dalton, the editor of the Economist Intelligence Unit, said: “Russia has always used gas as an instrument of influence. The more you owe Gazprom, the more they think they can turn the screws.”
But this time, there is a major difference. As recently as 2007, American natural gas supplies were believed to be dwindling, and the George W. Bush administration was considering importing natural gas from Russia. Since then, fracking, which environmentalists say could contaminate America’s water supplies, has transformed the strategic landscape.
The United States does not yet export its natural gas. But the Energy Department has begun to issue permits to American companies to export natural gas starting in 2015. American companies have submitted 21 applications to build port facilities in the United States to export liquefied natural gas by tanker. The agency has approved six of the applications.
Gas Pipelines
About 80 percent of Russian gas exports to Europe pass through Ukraine. Europe, in turn, depends on Russia for 40 percent of its imported fuel. According to Mikhail Korchemkin, head of East European Gas Analysis, a consulting firm in Pennsylvania, the most important pipelines that run through Ukraine are the ones leading to Slovakia. They will eventually take gas to Germany, Austria and Italy.
the above makes the fracking mania more understandable, with its geopolitical underpinnings. one of the questions - will fracking have played out by the time the needed LNG infrastructure, at both ends of the line, are in place?
Meanwhile, the sheeple will be distracted/entertained by the RepubliCrats dog and pony show.
does anybody believe these bozos decide the geopolitical game plan for the US?
(speculation - did the recent Russian/Chinese agreement to cut out the dollar help trigger the Ukrainian Question?)
WASHINGTON — The crisis in Crimea is heralding the rise of a new era of American energy diplomacy, as the Obama administration tries to deploy the vast new supply of natural gas in the United States as a weapon to undercut the influence of the Russian president, Vladimir V. Putin, over Ukraine and Europe.
The crisis has escalated a State Department initiative to use a new boom in American natural gas supplies as a lever against Russia, which supplies 60 percent of Ukraine’s natural gas and has a history of cutting off the supply during conflicts. This week, Gazprom, Russia’s state-run natural gas company, said it would no longer provide gas at a discount rate to Ukraine, a move reminiscent of more serious Russian cutoffs of natural gas to Ukraine and elsewhere in Europe in 2006, 2008 and 2009.
The administration’s strategy is to move aggressively to deploy the advantages of its new resources to undercut Russian natural gas sales to Ukraine and Europe, weakening such moves by Mr. Putin in future years. Although Russia is still the world’s biggest exporter of natural gas, the United States recently surpassed it to become the world’s largest natural gas producer, largely because of breakthroughs in hydraulic fracturing technology, known as fracking.
“We’re engaging from a different position because we’re a much larger energy producer,” said Jason Bordoff, a former senior director for energy and climate change on the White House’s National Security Council.
Over the past week, Congressional Republicans have joined major oil and gas producers like ExxonMobil in urging the administration to speed up oil and natural gas exports. Although environmentalists, some Democrats and American manufacturing companies that depend on the competitive advantage of cheap domestic natural gas oppose the effort, they have fallen to the sidelines in the rush.
For Russia, energy supplies are as important to keeping a hold on Ukraine and the other former countries of the Soviet Union as is the Russian Army itself. Ukraine would freeze without Russian gas, and its flow has been a considerable source of wealth and corruption in both countries. But Russia is also obligated by contract to provide natural gas to Western Europe, and Moscow remains highly dependent on Ukrainian pipelines to get it there.
David Dalton, the editor of the Economist Intelligence Unit, said: “Russia has always used gas as an instrument of influence. The more you owe Gazprom, the more they think they can turn the screws.”
But this time, there is a major difference. As recently as 2007, American natural gas supplies were believed to be dwindling, and the George W. Bush administration was considering importing natural gas from Russia. Since then, fracking, which environmentalists say could contaminate America’s water supplies, has transformed the strategic landscape.
The United States does not yet export its natural gas. But the Energy Department has begun to issue permits to American companies to export natural gas starting in 2015. American companies have submitted 21 applications to build port facilities in the United States to export liquefied natural gas by tanker. The agency has approved six of the applications.
About 80 percent of Russian gas exports to Europe pass through Ukraine. Europe, in turn, depends on Russia for 40 percent of its imported fuel. According to Mikhail Korchemkin, head of East European Gas Analysis, a consulting firm in Pennsylvania, the most important pipelines that run through Ukraine are the ones leading to Slovakia. They will eventually take gas to Germany, Austria and Italy.
the above makes the fracking mania more understandable, with its geopolitical underpinnings. one of the questions - will fracking have played out by the time the needed LNG infrastructure, at both ends of the line, are in place?
Meanwhile, the sheeple will be distracted/entertained by the RepubliCrats dog and pony show.
does anybody believe these bozos decide the geopolitical game plan for the US?
(speculation - did the recent Russian/Chinese agreement to cut out the dollar help trigger the Ukrainian Question?)
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