Sunday, February 24, 2019

JOHN CHUCKMAN COMMENT: EUROPE'S BALTIC GAS WAR - WHAT AMERICA IS REALLY TRYING TO DO IS STOP A FUTURE (INEVITABLE) GERMAN-RUSSIAN ALLIANCE - WHAT LIQUIFIED NATURAL GAS (LNG) IS AND WHY IT IS NOT COMPETITIVE WHERE PIPELINE GAS IS AVAILABLE - IRRELEVANCE OF UKRAINE

John Chuckman


COMMENT POSTED TO AN ARTICLE IN RUSSIA INSIDER



“In the Gas War, Ukraine Is the Loser No Matter Who Wins

“Russia wants to pipe gas under the Baltic, the US wants to sell LNG [Liquified Natural Gas] from tankers via Baltic terminals. Where in this is the Ukraine?” 



I worked for the Canadian oil industry, and I remember an energy conference in the United States during the Reagan era where it became clear that already Washington was working hard against Europe's using Russian gas.

A guy from the State Department was there - the scion of two American business-baron families, bearing a hyphenated last name denoting beer and electric organs - busily trying to make his points. I actually had a little discussion with him, and my unideological point of view caused him to say something to me along the lines of, "We would have thought someone from your company (looking at my name badge) would be on-side with us here."

That was over 30 years ago

So, trying to block Russian gas sales into Europe is not a new project, and anything in it concerning Ukraine is strictly coincidental. America cares nothing for Ukraine anyway, except for hoping to keep it as a thorn in Russia's side.

Washington fears, more than anything else in Europe, the emergence of a close German-Russian relationship, a rapprochement leading to something more intimate.

Such a relationship is “a natural" if you look at a map. Russia's vast resources and German heavy industry. And the idea has popped up again and again in one form or another for a couple of centuries. Napoleon. The Kaiser in WWI. Hitler.

And there have long been Germans, engineers and other specialists, who migrated to Russia to work on various projects. There are little leftover German communities in Russia, as I understand. Of course, Catherine the Great was actually a German Princess.

Any serious change in the German-Russian relationship changes the geopolitical map, makes NATO look more asininely outdated than it already is, and would favorably affect the long-term economics of both countries, each of them having very large markets. That last means more growth to compete with America, which really wants no competition that it can possibly avoid.

It's a "marriage made in heaven," as they say, and I think it will happen one day.

But Washington, in the meantime, will do everything it can to slow or cripple developments. Opposing German purchases of additional Russian gas is just one avenue of attack.

American proposals for LNG as an alternative to Russian gas are almost humorous. LNG is great for regions with no access to pipeline gas, but it is positively stupid anywhere that is within reasonable reach of pipeline gas.

LNG is more costly per unit of energy than pipeline gas, a fact which renders its users less competitive.

After all, you must first liquify it (cooling it to –260 degrees F) in a special plant. Then load and ship it in expensive, special-built ships which keep it at that temperature. And finally unload it into special-built storage facilities.

You would only do that in a location which has access to pipeline gas if you were seriously concerned with strategic/security issues. However, such concerns can be paranoid as well as genuine, and that is just the case here. After all, even under the Soviets, Russian gas was faithfully delivered to any of its customers, and today’s Russia is simply a country eager to do business with the world.

Or you might displace pipeline gas with LNG if you were full of old resentments and hatreds, such as we find clearly expressed in Poland or the Baltic states, resentments making you willing to pay a premium for energy. The economic irony is that these are not well-off countries to start with, so they are really hurting themselves over old grudges while enriching American LNG operators with sales they could not reasonably have hoped for.

Washington is only too willing to encourage them in this because it is so focused on trying to regain unquestioned superiority and influence in the world, something resembling its heyday back in the 1950s, an easy superiority which has been lost thanks to the natural growth and development of many countries in the decades after WWII.

The additional sales to American producers, of course, are regarded as a good thing, but that is not what primarily drives Washington in this matter.

Like all quests and crusades, this American one eventually will prove hopeless. The United States will be seen as Don Quixote, only this Don Quixote’s motivating dreams are about influence over others, not naïve ideals of good and evil and saving damsels in distress.