One of the dangers of being limited to the English-language press is that important aspects of major news stories can readily be reported in an awfully one-sided manner. The object lesson today is the latest US sanctions against Russia, which passed the House today by a 419-3 margin. The hot button for Europeans that the bill targets the NordStream2 pipeline that would deliver gas from Russia to Germany. They also single out a large range of players, including Russian banks, energy exporters and projects, and arms merchants. Moreover, unlike past sanctions, they cannot be reversed by the President but require Congressional approval for any rollbacks.
Unlike past sanctions against Russia, which European governments have backed, albeit with some grumbling, since some countries, particularly Germany and the Netherlands, have commercial ties with Russia, the EU is opposed to the latest US campaign. From the Financial Times:
Brussels has stepped up its diplomatic offensive against the US moves, warning that several oil and gas projects involving Shell, Eni and BP are at risk. On Tuesday, officials said Brussels was “activating all diplomatic channels” in an effort to persuade lawmakers to dilute the bill’s impact on European companies and the continent’s energy security.
EU officials are concerned that the sanctions could damage multibillion-euro pipeline and infrastructure projects straddling Russian territory and beyond in areas as far apart as the Baltic and Black seas.
A list prepared for EU commissioners shows that projects at risk include the proposed Baltic liquefied natural gas plant on the Gulf of Finland of the Baltic Sea, in which the Anglo-Dutch group Shell has a stake alongside Russia’s Gazprom. The list also includes Blue Stream, the gas export pipeline linking Russia with Turkey in which Eni of Italy has a 50 per cent. The threat to this pipeline centres on penalties against the maintenance and repair of pipelines on Russian land or waters.
Documents seen by the Financial Times also state that BP “would not be able to engage” in its activities with Rosneft if the US penalties hit operations by European companies to maintain, repair or expand pipelines in Russia.
The list also includes the CPC pipeline in which European groups such as BG Overseas Holdings, Shell and Eni work with Russia to carry Kazakh oil to the Black Sea via Russia. Both the existing pipeline and its proposed expansion could be hit by the sanctions. As a result, European officials believe the impact of the new sanctions would go far beyond the contentious Nord Stream 2 project that Gazprom is building between Russia and Germany and the existing Nord Stream 1 pipeline.
New Europe (hat tip Micael) states that Brussels plans to retaliate against the US if the sanctions are imposed, although it may not be able to deliver on its threat:
It is unclear whether EU member states such as the UK, the Baltic States, Poland, or Hungary are willing to sign off retaliatory measures towards Washington.
I hope German language readers can help flesh out the input from a regular reader of the German press. He said that the German businessmen and politicians see the latest round of sanctions have as a major objective foisting US gas on Europe and that they don’t like being stuffees. SPD party leader and foreign minister Sigmar Gabriel apparently made a speech on this topic in the last few days. This would be consistent with his earlier statements, as reported by WSWS last week:
Germany’s Foreign Ministry published a sharply-worded press release Thursday from Foreign Minister Sigmar Gabriel (Social Democrats, SPD) and Austrian Chancellor Christian Kern (Social Democrats, SPÖ) denouncing the United States’ foreign and economic policies.
Republicans and Democrats agreed almost unanimously, by 97 votes to 2, to impose new sanctions on Russia in the Senate on Wednesday…
Gabriel and Kern brusquely rejected the US Senate’s measure. The bill was really about “the sale of American liquefied gas and the sidelining of Russian gas supplies in the European market,” according to the two social democratic politicians. That emerges from the text “particularly explicitly.” The goal was “to secure jobs in the American oil and gas industries.”
The US and Europe had since 2014 “side by side and in close joint consultation answered Russia’s annexation of Crimea, which is illegal under international law, and its actions in eastern Ukraine. … But the threat to impose extraterritorial sanctions which violate international law on European companies participating in the expansion of European energy supplies” could not be tolerated. Europe’s energy provision was “a European affair, and not one for the United States of America!”
Gabriel and Kern went on to warn,
“Instruments of political sanctions should not be connected with economic interests.”
Threatening European companies “in US markets with punishments” if they participate in or finance projects like the Nord Stream II oil pipeline with Russia would introduce “an entirely new and extremely negative quality to European-American relations.”
German Chancellor Angela Merkel explicitly backed her Foreign Minister on Friday. There was “very strong agreement in terms of content with Gabriel’s statement,” stated government spokesman Stefan Seibert.
“It is, to put it mildly, an unconventional action by the US Senate.”
It was troubling that European businesses were being targeted by sanctions to punish Russian behaviour.
“That cannot be allowed,” added Seibert…
Following the G7 summit three weeks ago, Merkel, in a speech delivered in a Munich beer tent, called into question the alliance with the United States, which formed the basis of Germany’s foreign policy in the post-war era.
“The times in which we could completely depend upon others are long past,” she stated and advanced on this basis the demand, “We Europeans really have to take our fate into our own hands” and “fight for our own future.”
OilPrice today confirmed that US shale gas is in a glut in Why U.S. Shale Drillers Can’t Sell Their Gas:
Natural gas output from the U.S. shale formations is at a record high. So are recoverable gas reserves, according to the Potential Gas Committee. This sounds like good news for everyone except producers: there just are not enough pipelines to transport the gas, which is already uncomfortably cheap because of the abundant supply.
As natural gas prices recovered from the lows they hit last year on oversupply, shale producers became bolder and started ramping up, just like oil drillers did. As a result, according to Bloomberg data from June, output in the Marcellus shale and the Permian has hit a record. In the Marcellus shale, daily output is close to 20 billion cu ft, while associated gas in the Permian is creeping closer to 10 billion cu ft daily.
As of last week, the Energy Information Administration calculated gas output in Marcellus at 19.55 billion cu ft daily. Output in the Permian was 8.49 billion cu ft. Utica produced 4.45 billion cu ft of natural gas. Haynesville and Eagle Ford both yielded more than 6 billion cu ft of gas. Next month, the EIA projects shale gas production to continue rising across the board, reaching a total 52.858 billion cu ft daily, from this month’s estimated 52.021 billion cu ft…
The situation is pretty simple: the pipeline shortage is making it difficult for everyone from producer to consumer to make the best of the current abundance of natural gas supplies.
Mind you, pipelines are also the preferred way to deliver shale gas to LNG transport facilities, but you get the overall picture.
And the Administration clear that he sees US energy exports as a major foreign policy tool. As Energy Secretary Rick Parry stated earlier this month:
An energy dominant America means self-reliant. It means a secure nation, free from the geopolitical turmoil of other nations who seek to use energy as an economic weapon.
An energy dominant America will export to markets around the world, increasing our global leadership and our influence.
Trump re-branded efforts to export liquefied natural gas (LNG) to markets in Eastern Europe and Asia that had been set in motion during the previous presidential administration.
I hope Europe-based readers will pipe up in comments, particularly as to whether they think Germany can get the rest of the EU behind opposing the US. I understand that one impediment is that some countries like Poland have invested in LNG facilities and thus aren’t on the same page as the Germans.
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My fast answer is YES. And not only that, it is a pulse. The congress wants to check if they can impose their politics even with the vituperated Trump as president. It is old-style imperialism.
Although I have read that EU retaliation has low probability, I thing this will somehow back-fire. Brexit will help germans.
The position of Spain will be the “neutral”: we get our gas from Algeria and Spain is disconnected from the european gas network. Mr. do-nothing Rajoy will remain silent.
I disagree, whilst correct for most parts, the statement in the post “Moreover, unlike past sanctions, they cannot be reversed by the President but require Congressional approval” don´t pertain to the sections most relevant to german energy security(i.e. Northstream II) amongst others (“SEC. 232. Sanctions with respect to the development of pipelines in the Russian Federation.
(a) In general.—The President, in coordination with allies of the United States, may impose 5 or more of the sanctions described in section 235…)
The german government is strangely silent whilst german industy and the european commission are complaining loudly.
Lobbying efforts must have been successfull…
If everybody is producing natural gas, but nobody is buying, where does it physically end up? I’m sure the gas companies are doing their utmost to control leakage. Good thing CH4 isn’t a greenhouse gas.
Every day, drillers in the Bakken burn off about 350 million cubic feet of natural gas. That comes to more than $100 million worth of gas lost each month
With all that cheap energy lying around, are there no energy-intensive industries setting up shop in those states? No large server farms from Amazon/Google/NSA…?
I was thinking the smart money with our aging population is ND-based (or any shale resource play locale) crematoriums.
kimyo,
An update to your fine post: North Dakota really did force producers of natural gas to reduce flaring, and the amount was down to 10% by June 2016. Still too much, I’d say, but you described the the reasons for the flaring very well and they still apply.
I dont think there any problem at all for Europe as a whole against this. For one, US LNG will be a lot more expensive, although if it keeps getting subsidized by the Fed and Wall street(?), and volumes will never get close to meeting current demand. After all US “traditional”(nonfracked) cheap ng has depleted to half its volume of 10 years ago. https://energy.gov/sites/prod/files/2015/09/f26/QER_AppendixB_NaturalGas.pdf (Figure B-2, pg 6)
And of course we’re going to cut all that ng use right? The natural gas “transition era” claimed for two decades by some of America’s leading environmental groups is long over and really should have never been.
But you’re right, it fits right into Trumpian Era hype.
My understanding is that there has been a roll back in LNG investments (specifically, LNG importing terminals) in Europe – its just too expensive an energy source and there is, quite simply, no big shortage of gas supplies in the world. Gas prices have stayed significantly lower than the industry expected. Just last month Shell sold off its deep offshore Corrib gas field in Ireland for well over $1 billion loss to a Canadian pension firm. Offshore gas exploration has ground to a halt because of low prices. Since plenty of industry insiders are questioning whether current very low prices wills stay in the US, pressing for LNG exports to Europe looks economically marginal at best.
However, that doesn’t mean the US industry isn’t pushing hard for it. There is a bit of desperation now for investors to get some sort of return from all the investments, so with capital cheap there has been huge investment in anything that gives a possibility of future profits. I suspect that this is a Hail Mary pass rather than a considered long term strategy for the industry.
Incidentally, the Polish situation is somewhat unique. For obvious historical reasons they are desperate not to be dependent for energy on either the Russians or Germans. They bet big on fracking, and thats been a dud – for unknown reasons, Polish geology isn’t co-operating with the technology. So I would not be surprised if they would be pushing for US imports, even if it made little economic sense.
Incidentally, fracking is more or less dead now in Europe, apart from the UK which has potentially very large reserves. Its been banned in France, Ireland, and several other countries, and in most others don’t have the reserves or the right geology.
The one wild card is of course middle east gas. Vast reserves in the Gulf, off Israel/Gaza/Cyprus and in Iran, etc. But thats a whole other ball game.
Aha, I wondered why the Poles had LNG transport. Does that include port facilities?
The part that still has me scratching my head is that from what I recall, the US still needed to build the corresponding LNG port facilities. Given that fracking output will start tailing off in IIRC 2020-2022, and start falling sharply late in the decade, investing in LNG facilities isn’t economical due to the short lives of the assets v. their costs. But if this is a Big Energy priority, they’ll probably find a way to get subsidies.
Googling a bit, it looks like Freeport (TX) and these three terminals are adding/creating liquefaction facilities: Dominion Cove Point LNG, Maryland terminal (under construction), Cheniere’s Corpus Christi terminal (under construction), Cameron LNG, Hackberry, Louisiana (under construction), the first of which should be coming online this year.
Regarding subsidies, they tried to push a “pipeline tax” in massachusetts. The state supreme court nixed it, thankfully. They had governor baker on board with it, too.
There’s been a pretty active anti-pipeline grassroots movement in eastern mass. They are clearly causing headaches for spectra and the governor and seem to have slowed down the projects.
Cove Point, Maryland’s LNG facility is supposed to start exporting LNG this year (2017).
Fracking output has been a moving target due to technological advancements with well drilling techniques and technology. As your article states, energy companies have been focusing their drilling for shale oil with the flared gas being a byproduct. If and when the pipeline infrastructure as well as the end market demands for the gas are in place supporting higher gas prices, more focused drilling for gas will be ramped up. Coal is stil a large portion of base load energy. It will take years for the coal plants in service to roll over. The question is to what. Will renewables be sufficiently reliable and cheap at that point, or will the nat gas bridge plan still be politically and economically viable at that time?
“Fracking output has been a moving target due to technological advancements with well drilling techniques and technology.” – That’s what the industry narrative is, but I’ve got doubts. Subprime was awesome because of creative financial products until the buyers stopped buying them and capital was cut off. Then it turned out subprime was a massive waste of capital, riddled with fraud at every turn.
When the junk bond and leveraged loan markets close up, we’ll see just how real this fracking ‘revolution’ really is. Today’s financial system is very good at misallocating capital for really long periods of time, and then correcting violently, as seen in 2008.
No doubt a good part of the oversupply was due to lose credit and financial incentives to keep drilling. However, it is also true that the break even costs per barrel are down from the mid $60’s to the mid $40’s. it’s unclear if this is just due to producers cherry picking prime production acreage now leaving more difficult sites alone but time will tell.
So far as I know, the Poles have just one LNG coastal site (quite a large one). There are quite a few planned in the Baltic, I suspect all are ‘political’ – i.e. intended as an alternative to Russian gas – they make no sense otherwise. But I think this applies to most European capacity – investment was driven by a desire to broaden out supply options, nobody wants to be too dependent on Russian supply, especially when it has to go through so many unstable countries.
Its no secret that existing LNG plants in Europe are under-utilised. The current price just can’t support them. There is one permitted plant in Ireland which actively promotes itself as being the closest plant on the European network to the US, but they can’t get funding to start construction, which I think says a lot.
My understanding is that there is a shortage of LNG manufacturing plants in the US, but there is a huge capacity in the pipeline, so to speak. In contrast, Europe has an excess capacity of receiving plant. But the problem for the US is that LNG is very fungible – i.e. the buyers can pick and choose from a wide selection of producers, and will pick the cheapest, which may not necessarily be US gas if a lot of producers are desperately searching for markets.
As to production, if you believe Arthur Berman (and he has an excellent record), then US production will peak soon and will drop off very rapidly as the best wells run down. But the industry seems to be betting on a longer production period as production costs are lowered. Industry pricing is so opaque I’m not sure anyone really knows.
I would add Qatar on the game. They have the liquefaction facilities ready and I wonder if this is one of the points of conflict with Saudies. For instance part of spanish imports is in the form of LNG mostly from Nigeria and lately some from Qatar (about 10% total imports).
Ntl gas markets are pure geopolitics games.
Oooooh … #JuicyTidbit
Which is hilarious because our national LNG price is so high in Oz…..
Because the govt allowed exporters to sign long-term contracts for massive quantities at pitifully low prices, leaving almost none for the domestic market. Recently it was cheaper to purchase LNG in Japan that had been exported from Oz and ship it back here than buy on the local market, not sure if that still holds.
That’s awesome! Because the wisdom of markets cannot be refuted!
“Because the wisdom of markets cannot be refuted!” …
Rube Goldberg would be in awe !
The market for Rubes seems to be endless: rubes, marks, mopes, citizens, deplorables.
MURICA can sanction who it wants, everybody next please, then it’ll have zero friends…just bitches.
mission complete.
New mission, destruction of murica.
It’s kind of hilarious that the neocon press core pushing Clinton’s BS #Russiagate narrative has put our German Poodles on the same side as Trump. I imagine that is quite upsetting to their snobby sensibilities. How savvy of the Big Oil party to realize that they could exploit the stupid democrat temper tantrum.
Are the Latest Russia Sanctions Really About Forcing US LNG on Europe?
Of course they are; and it’s so bloody transparent that nobody is fooled.
Please check the link below;
http://russia-insider.com/en/politics/eu-ready-retaliate-if-us-imposes-new-russia-sanctions/ri20467
The U.S. is waging full scale war against Russia; economic sanctions are war and Japan attacked Pearl Harbour for almost identical sanctions on oil and energy imports.
Vladimir Putin is the Cool Hand Luke of Russia; let hope the outcome is not like the movie.
The E.U. seems to have had a recent spinal transplant; let’s just see how it plays out…
I dare say, Russia is more self sufficient than the U.S. and almost every other country on the planet. Do the research; it’s very enlightening.
The U.S. is a very jealous hegemon and can’t bear this reality…
It’s also got half the population, and a far less diversified economy (fwtw), so it’s not exactly a apples to apples comparison.
Have you ever thought to question your comparitive references?
Most views of Russia are western-centric in the extreme.
Russia is not western or European in any sense of that reality; Russia is a very different culture/s and sees things drasitically different than the western-centric POV.
Just sayin…
The Western, eastern stuff is irrelevant. Russia isn’t the aggressor in the situation. Putin will enjoy a population much more willing to stand against U.S. aggression which is largely dependent on an ignorant U.S. population. Merkel will be under pressure as these sanctions are simply a tax on EU citizens and corporations to support American corporate profits without providing better products. Given the EU political structure and the lack of a “cool” President, I suspect the next Congressional delegation will be shocked to find they aren’t well received.
I’m confused. Who was it who brought up “Russia is more self-sufficient than the US and almost every other country on the planet? That implies that you feel self-sufficiency (with respect to certain metrics) is something that one should value. Let’s say other people do not share that meta value: does that then mean they are wrong?
I personally doubt that the Blob/US financial interests are ‘jealous’ of them — they just think that Russia, like other countries, should kowtow to them, and allow them to buy whatever part of the Russian society and economy and land they like.
I had thought of it the other way around: that the insistence on unprofitable fracking was to support America as a world power. Got to have some way to bribe Europe away from the Russians. Is there actually enough gas to do that? I know there’s quite a bit.
Yes indeed.
It’s looking like quite the little diplomatic spat between the EU and Capitol Hill.
Here’s the Russian envoy to the EU on talks to ban funding by EU banks for US business, if the US law is declared invalid in the EU :
http://tass.com/politics/957927
Note the bill bans not just business with Russians in Europe, but also Eurasia.
OBOR is clearly a target too.
So are the Chinese going to pipe up?
For this is nothing less than gloves – off imperialism….
Anyone know if it’s possible the German’s will act w/o the EU? In other words, unilaterally?
I’m asking because the article says EU may not be the “required” unanimous in responding to the U.S. sanctions & LNG so there may not be an official EU retaliation (though it seems there was much stronger opposition to the EU imposing Russian sanctions in 2014 in the first place but supposedly that was a “unanimous” decision).
Will Germany be a total puppet to the U.S.? Or might it start to move towards Russia which seems to be in Germany’s business interest?
Germany wants to ensure stable gas supply for as long as possible. A pipeline thas goes through the sea and does not depend on third countries that migth disconnect the pipeline (like Ukrania) allows for a durable contract. So the US is not only intefering with russian interests but with german ones. I don’t think Germany considers US shale LNG supply a robust enough alternative competitive in price and duration with russian gas. My guess is that in this case, Germany won’t be a total puppet.
Anti Schmoo put it very well “The E.U. seems to have had a recent spinal transplant”
EU has been following every global US initiative enthusiastically even though it only hurts Europeans: wars and invasions, TTIP, TiSA, CETA etc.
On top of being emasculated and spineless with regards to national and continental interests the current leaders of EU are neoliberals so they don’t care about a new ‘market solution’ for gas. Will subsidize the higher prices for companies while the citizens pay the price.
:) q.v. Frank Herbert’s very old novel The Dragon in the Sea (aka Under Pressure.) Being by Frank Herbert, it’s about psychology, but it’s also about petroleum pirating by submarine. Yeah, I guess the price per barrel must have been pretty high.
The pipelines that go under the sea have lower capacities. They work to reduce the impact of ukrainians et al blackmailing gas supplies. They do not eliminate the need to route gas overland.
Sadly, Sigmar Gabriel’s word means nothing.
He’s an opportunitist and may advocate something one day and oppose it the next day.
He is absolutely not trustworthy. A total pushover.
And I wouldn’t expect much from the rest of the german government, too.
The german media could pick it up and put pressure on politicians.
But due to the pathetic state the germain mainstream media are in (with exceptions),
I expect they’ll just stop bringing up this issue and let people forget about it.
Maybe other european countries will be more resistant, maybe…
Plus Japan — a big LNG importer historically as it has no conventional energy sources of its own — is going to lessen its LNG demand as the nuclear restart gathers pace. Whatever you might think of the safety aspects, Japan has 50+gW of embedded nuclear generating capacity with a residual economic life of 20+ years on average. It is simply inconceivable that this plant, much of which, unlike Fukushima which was end-of-life, is mid-life and has decades of viable reactor runtimes available, will be mothballed and decommissioned without generating another kW of power ever again.
The LNG glut will only continue and probably get noticeably worse once all, or at least the vast majority, of Japanese reactors are brought back on line, which will be 5 years from now at the outer limit. Cutting off Russian gas into Europe (and the rest of the world) will be a big plus for the US. LNG liquefaction plant is a massive capital outlay, has big fixed costs and is highly operationally geared, so even small reductions below peak output have a big hit on plant profitability. It is those “wheels” the US plant operators will want to keep turning. Conversely, the regasification plants (based in EU countries) don’t need to operate flat out, they’re designed to have peaks and troughs as LNG consignments come in and get processed, then sit around for a bit waiting for the next one. Which, again, is why the US is bothered about restricting Russian supply, the EU not so much.
there is no surplus US LNG to be forced on Europe, it’s a myth…we are still importing more natural gas from Canada than we are exporting to Mexico and liquifying for export…moreover, our own natural gas production has been falling year over year for 15 months straight…i wrote about exactly this situation two weeks ago:
http://www.economicpopulist.org/content/great-us-natural-gas-exports-myth-6112
all the data is included. you can repost it if you want.
we are contracting to sell US natural gas at below the cost of US production, and it’s gonna come back and bite US natgas users big time when a shortage develops here..
IS natgas users would be anyone who uses American electricity, right? Another ‘regressive’ tax on the way. Really, this is not New Cold War oriented, but Class War materiel.
Time for work.
there’s been a gradual shift back to coal for generating over the past half year or so…whether that’s because of price or because the utilities see what’s coming i couldn’t tell you..
See the comments above, the US is flaring a ton of gas now due to supposedly to lack of delivery mechanisms.
maybe i’m projecting too much, but i see us heading down the same path that Australia took…
How energy-rich Australia exported its way into an energy crisis - Australia exported 62% of its gas production last year, according to the BP Statistical Review of World Energy. Yet its policy makers didn’t ensure enough gas would remain at home. As exports increased from new LNG facilities in eastern Australia, some state governments let aging coal plants close and accelerated a push toward renewable energy for environmental concerns. That left the regions more reliant on gas for power, especially when intermittent sources such as wind and solar weren’t sufficient. Shortages drove domestic gas prices earlier this year in some markets in eastern Australia to as high as $17 per million British thermal units for smaller gas users such as manufacturers. On the spot market, gas prices have gone from below $1 in 2014 to roughly $7 today .. In March, Australia’s largest aluminum smelter cut production and laid off workers because it said it couldn’t secure enough cheap energy.
the problem is that we are are contracting to export natural gas at today’s low prices, which wont pay for tomorrow’s production..
Perhaps the most interesting and depressing thing is that 419 to 3 vote. Who were these heroes who dared to defy the Blob?
Clearly defeating Hillary was not enough. TPTB will have their war with Russia–cold or hot–or bust.
The U.S. much like Team Blue hid behind our “cool” President and 9/11 for so long, no one knows how to act. This is a trade war where we picked a fight with our most loyal vassals on behalf of one industry which needs to be replaced anyway. Do you remember Hollande? He joined with Obama against “OMG Russia.” Macron’s honey moon is over.
http://clerk.house.gov/evs/2017/roll413.xml
The 3 no voters were Justin Amash of Michigan, John Duncan of Tennessee, and Thomas Massie of Kentucky. All are Republicans.
Thanks.
One aspect of the US natgas pipeline situation —
Due to resignations early in the Trump administration, and refusal of the Senate to approve new FERC nominees, the FERC, whose approval is needed for building interstate energy transport infrastructure, now lacks a quorum (having only 1 of the minimum 3 members out of 5 total). A number of pipeline projects originating in marcellus were approved around end of 2016 prior to the resignations, and are due to come on line in 2018, but many dozens more are now awaiting permitting — both for domestic use and to transport to LNG export, as the piece above states.
The other interesting thing is that in the past, the explicit strategy of the US was to use domestic natgas domestically, but no longer, it seems.
Pipelines would raise prices at the wellhead and lower prices elsewhere in the country. If the lack of approval goes on for a few more years, it may have an impact on: the battle between natgas and wind for the medium-term dominance of newly added utility scale electric generation in the US, and the timing of how fast we can retire coal electric.
Lastly, besides Russia, Qatar is also a major natgas exporter to Europe, so they’ll get their gas either way, they’ll just pay more. A points of reference there — I belive Germany is currently using coal as its main domestic baseload electric fuel – as prices were relatively high until recently, they’re using NG for home heating only. Now everyone needs to retire coal for obvious reasons.
Jamming up FERC shouldn’t be underestimated. They’ve got a huge amount of discretionary authority to blast through state and local laws and regulations at will. It’s amazing how the oil/gas industry gets 1-stop shopping for all it’s regulatory requirements.
It’s sickening to see how much power the Petroleum companies have over Congress. Bribes work well in our country. We need a wholesale re-haul of CON gress.
Regarding possible EU development of a spine, a recent George Webb video from just about 3 days ago said he’s been told by some of his IC sources that Germany has been printing DMs on the quiet. I take this with a pinch of salt but it’s intriguing nonetheless. If true, Germany must also be looking at the IT issue as well.
EU is still threatening to cancel Poland voting rights for 1 year, even after the President vetoed the legislation regarding judiciary reform (which was to my understanding the main bone, albeit the country is keen on going full Adolph). Maybe it has something to do with this?
i thought the president signed the bill despite saying he would veto it?
thanks for this article, it’s really a remarkable powerplay. the stakes are so high that it’s unfathomable that it doesn’t backfire spectacularly. this looks like an exercise in hubris that future historians will be long discussing.
more than forcing the EU to use american LNG, it is an attempt to force the EU to back american efforts to replace assad in syria. remember, syria is what stands in the way between bahraini/saudi gas and oil pipelines to europe.
the US is already at war against russia, they just haven’t yet started shooting at each other. but also, any chinese silk road to europe will have to use russian assets and infrastructure, so this, potentially, affects them, too.
Trump Is Being Moved Aside So That Conflict with Russia Can Proceed
http://www.paulcraigroberts.org/2017/07/26/trump-moved-aside-conflict-russia-can-proceed/
All stupidity with the Russia hysteria aside this may be all the faster at forcing a move to renewables in the US. NG is the bounciest of all carbon based fuels WRT price. Once they start pumping US NG into more foreign markets the price will climb, which will squeeze utilities that have moved en mass into NG based generation and prove that renewables are even more cost effective. Petty politics may end up having a silver lining 5 years down the road, and at this point I am open to any route to renewables, even the sloppiest, unintentional ones.
Rosario,
If exporting US NG causes its price to rise domestically, utilities that had been using coal can shift back to it. That happened recently.
Sure, but the ball is in another (higher) cup as the cost graphs go. I suspect it is going to get increasingly difficult to transition back and forth with the lowering costs of renewables. Also, coal is not getting any cheaper to extract and it definitely hasn’t reduced its externalities. We’ll see, big utilities move in herds and it takes years to make a full transition. They may flood back to coal, and build new plants (I doubt it), but they will eventually get burnt and have to swing back again. In the absence of purposeful national level policy (what I prefer) this is the only way the market based approach will turn away from fossil fuels.
“Instruments of political sanctions should not be connected with economic interests”?
This echoes the rationalizations of Wall Street when they crashed the economy in ’08. Let’s not let politics interfere with the right to make money?
The sanctions against Russia were put in place in response to its annexation of Crimea and its support of insurrection in Eastern Ukraine. They have been extended, and expanded, in response to Russian meddling in the recent presidential election. To what extent their cyber warfare had an effect is debatable, but Trump’s stonewalling on the issue practically guaranteed the lopsided vote on the latest sanctions.
The LNG issue has some valid points, but it ignores an issue which I have not seen addressed on Naked Capitalism: Just how much is Trump- and those in his administration (infested with alumni of the vampire squid)- beholden to Putin and his fellow oligarchs?
Trump appears to be the Pied Piper of Putin Patsies. I can’t help but wonder why.
Crimea was not “annexed”. The US destabilized Ukraine. The government in Kiev came in as a result of a coup even thought elections were scheduled for a mere six weeks later and Yanukovich would clearly have been voted out. The new government tore up the current constitution and went through no legal process whatsoever to do that. That is not the behavior of a legitimate government.
Even though neo-Nazis are a very small percentage of the voters, they got 15% of government positions. The head of the defense department gave a speech in which he encouraged ethnic cleansing of Ukrainians of Russian origin, saying that any soldiers who removed them could keep their property.
Crimea petitioned to join Russia after a referendum that approved of that move by a large margin. The US used precisely the same mechanism with Kosovo. Are you about to call that an annexation?
We have repeatedly discussed how the idea that Russia has influence over Trump is nonsense.
Better trolls, please.
http://www.rollingstone.com/politics/features/taibbi-what-does-russiagate-look-like-to-russians-w493462# -Amazed, that you never linked this
I’m not omniscient and I’ve been unable to read for more than a week due to an eye injury, as Lambert told readers.
Did you suggest it at the time? The newsflow is a gusher right now. It’s simply not possible to give notice to everything. So do feel free to stifle your amazement.
Adding, it is a very good story (although I’m not a Russia hand). So readers may enjoy it even at this late date which was, I take it, the real point of your comment.
Plus the assertion of Russian “meddling” in the 2016 election was never proven–it was only asserted and repeated ad nauseum. Recent investigations have shown that in fact the DNC and Podesta emails were insider leaks, they were not outsider hacks. The technical analysis showed evidence that Russian “footprints” had been specifically inserted to cause Russia to be blamed.
In contrast the US has a well-established track record of meddling in other countries elections and setting up regime change in various ways. Ukraine is one example, as Yves described. There are many others, think of the US-sponsored coups in Latin America. They seem to be trying to pull off another coup in Venezuela since their 2002 attempt didn’t work out. And Obama didn’t hesitate to publicly endorse Macron just a couple days before the French election.
Thank You, Thank You
> the Pied Piper
Highly unfortunate, then, that the Clinton campaign maneuvered to have Trump as their opponent, using just that phrase (“Pied Piper”)….
“the latest US sanctions against Russia, which passed the House today by a 419-3 margin“.
and
“Republicans and Democrats agreed almost unanimously, by 97 votes to 2, to impose new sanctions on Russia in the Senate on Wednesday”
I have been a member of many organizations, and do not recall seeing this kind of “unanimity” when voting on significant and controversial resolutions. Clearly, a majority of US Americans want peace, particularly with Russia (a Christian democracy). How and why did the People’s Representatives/Senators find the “courage” to vote against the People’s wishes??? Hmmmmmmmm?
To put the vote into a context, 77 years ago; on
“…..July 14–15, 1940 – Rigged elections held in Latvia and the other Baltic states. Only one pre-approved list of candidates was allowed for elections for the “People’s Parliament”. The ballots held following instructions: “Only the list of the Latvian Working People’s Bloc must be deposited in the ballot box. The ballot must be deposited without any changes.” The alleged voter activity index was 97.6%. Most notably, the complete election results were published in Moscow 12 hours before the election closed. Soviet electoral documents found later substantiated that the results were completely fabricated. Tribunals were set up to punish “traitors to the people.” those who had fallen short of the “political duty” of voting Latvia into the USSR. Those who failed to have their passports stamped for so voting were allowed to be shot in the back of the head.
July 21, 1940 – The fraudulently installed Saeima meets for the first time. It has only one piece of business—a petition to join the Soviet Union. (The consideration of such an action was denied throughout the election.) The petition carried unanimously.…..”
https://en.wikipedia.org/wiki/Soviet_occupation_of_Latvia_in_1940
Is the Neo-NKVD whipping the Senate and USA House members into voting in the “correct” way?
It is the nearly 100% vote that bothers me- Not what I would expect in a free and open minded democracy.
So the US congress voted almost unanimously to impose sanctions because they were worried that otherwise, they would be shot in the back of the head?
Makes perfect sense to me!
Read Petrodollar Warfare and The Hidden Hand of American Hegemony for a start and a lot of this will become more clear. The Iraq war, the U.S. instigated coup in Ukraine, U.S. backed attempt at regime change in Syria and the demonization of Russia all concern oil supplies and who will be allowed to supply what to whom, and more importantly in what currency such sales will be denominated. All of this stuff is about trying to maintain the dollar’s reserve currency status. Isn’t this becoming clear by now. Americans are still trying to understand why they invaded Iraq. Was it WMDs, Al Qaeda, to bring freedom and democracy to the towel heads? Hussein decided in 2000 that Iraqi oil sales would be denominated in Euros, three years later he was conveniently dead.
While I agree that the US has hegemonic aspirations, the petrodollar thesis is all wet.
Since the 1600s at least, countries have pursued mercantilist policies. That means first of all that they like running trade surpluses. That allows them to have more jobs than their own economies would support, keeping their citizens happy. They can also be net savers without having a drag on the domestic economy.
But who will be the chump that exports jobs and has crappy growth to accommodate the mercantlists? The US has signed up for that role, in large measure because the US cares more about the 1%, the 0.1%, and the interest of US multinationals than its citizens.
As long as everyone else wants to run trade surpluses and we are the only big player willing to run sustained trade deficits, the dollar will remain the reserve currency. China has absolutely zero interest in running trade deficits despite pining after the cachet of having the reserve currency. The Eurozone maybe could have been a contender, but not with Germany being fiercely mercantlist and Germany’s insistence on not rebalancing within the Eurozone creating perceived breakup risk.
@Yves
In order to answer your question to German language readers in the article.
There are several differences this time compared to previous instances of perhaps controversial US-policy in Europe.
First of all the official positions of the German and Austrian government as well as the EU-Commission are in harsh opposition to the bill while previously only opposition politicians or fringe business interests voiced negative opinions.
Secondly the issue has been spread around in the relevant German business press a great deal, yesterday alone about a dozen news agency reports were published, all with pretty much the same tone and content. It has also been picked up by the op-ed pages in the papers today. This is in stark contrast to previous instances like a leader from Die Linke blaming the refugee crisis on US wars in 2015, Nato expansion to the east and troop build up in the Baltic or the planned upgrade of US nuclear weapons stationed in Germany. All three topics are out of mainstream discussion and anyone bringing up a negative opinion, like the mentioned politician from Die Linke, is ridiculed.
Thirdly while the EU needs the approval of all members to establish sanctions it could do a great deal to prosecute a trade war via executive decisions by the EU-Commission alone. While there has been no official indication how the threatened retaliation is going to look like several simple measures come to mind. For instance the EU could suspend the EU-US privacy shield agreement thereby increasing the cost of doing business in the EU for US companies by a significant amount, it would also be likely that cartell/market dominance investigations might result in harsher fines for US companies and more restricted mergers, something which has been brought up by EU officials sometime ago is to require all foreign or only US banking and maybe other financial institutions to be seperate concerns with full capitalisation and no dependencies on the US-holdings.
To summarise: it looks like a significant amount of the German “business community” is not amused and views the bill as a direct attack on its interests and tries to use their influence with the goverment against it. This raises the likelihood of something more than mere talk to above 0%. In any case the image of the US has taken another hit, this time with a group of people with mostly very positive opinions about close US-German relations.
This is VERY helpful. Thanks so much!
Of course, the gas suppliers won’t necessarily be in US – others plan to benefit from the Russian sanctions :
http://m.dw.com/en/eu-to-cut-gas-dependency-on-russia-with-israel-pipeline/a-38269274
What do people think the Syria carve – up is really about?