Looks to me Biden is doing his part to embolden the filth of the world--
Putin's Russia and Iran.
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White House’s Pausing Of U.S.’s Giant LNG Export Projects Is Just What Russia Wants
Simon Watkins
Jan 31, 2024
Perhaps the single most important factor in NATO’s united stand against
Russia’s invasion of Ukraine was the quick substitution of the cheap
and plentiful Russian gas that had fuelled economic expansion in Germany
for decades with emergency liquefied natural gas (LNG) supplies from the
U.S. and Qatar. Without these new supplies, there is little doubt that
Germany, the de facto leader of the European Union (E.U.), would have
led continental Europe into doing nothing meaningful to sanction Russia,
just as it had done when Russia invaded Ukraine in 2014 and then annexed
Crimea, as analysed in full in my new book on the new global oil market
order. Doing nothing again this time would likely be seen by Russia as
reason enough to press on with President Vladimir Putin’s ambition
to reconstitute the European Empire of the U.S.S.R., which stretched
in the West from the Baltic States of Estonia, Latvia, and Lithuania,
down through Poland, Czechia, Slovakia, Hungary, Croatia, and Serbia, and
winding up through Moldova, Romania, and Bulgaria. It is little wonder,
then, that the ‘pausing’ of key LNG export permits announced at
the end of last week by the White House – including for the U.S.’s
flagship new LNG export project, the 20 million metric tonnes a year
(mtpy) Venture Global CP2 – have caused consternation among those who
understand how fragile this anti-Russian NATO stance really is.
From the moment in April 2005 when President Putin lamented the collapse
of the U.S.S.R., it was clear to many that he would seek to restore as
much of its empire as he could get away with without provoking a direct
military response from NATO, as also analysed in full in my new book
on the new global oil market order. More specifically, he said: “The
collapse of the Soviet Union was the biggest geopolitical catastrophe
of the century. For the Russian people, it became a real drama. Tens
of millions of our citizens and countrymen found themselves outside
Russian territory. The epidemic of disintegration also spread to Russia
itself.” It was from then as well that plans began to be put into
place to test the will of NATO to stand up to Russian military forays
into countries that had left the U.S.S.R. and were looking to E.U. and
NATO membership at some point. These plans culminated in the 8 August
2008 Russian invasion of the European sovereign country of Georgia. This
had followed the Russian-backed creation of two self-proclaimed republics
in Georgia (of South Ossetia, and Abkhazia), which Russia then supported
militarily based on unsubstantiated claims by Russia that the government
of Georgia was persecuting the Russian-aligned inhabitants of the two
breakaway republics as part of a wider ‘genocide’ being committed
upon them. As with Russia’s first invasion of Ukraine just six years
later, no significant repercussions befell it from either the U.S. or E.U.
The key reason was that Germany’s huge economic growth from 1999 was
in large part predicated on plentiful supplies of cheap gas from Russia,
which brought its manufacturing costs down. The other key element of
Germany’s economic success over those two decades especially was due to
the effective devaluation of its currency – from the mighty deutschmark
to the much less mighty euro – which made those manufactured exports
even cheaper. Given this economic power, Germany was also the de facto
political leader of the continental part of the E.U. over those years
(the U.K. had long been a reluctant leading member), so the U.S. wanted
to keep it on side both for trade purposes and for the continuation of
the NATO security alliance. So, in the immediate aftermath of Russia’s
2022 invasion of Ukraine, Germany’s principal concern was ensuring that
Russia did not stop supplying it, or other E.U. states, with either oil
or gas, due to their not being able to pay in the way Moscow preferred,
as also detailed in my new book on the new global oil market order. This
followed the 31 March decree signed by President Vladimir Putin that
required E.U. buyers to pay in roubles for Russian gas via a new currency
conversion mechanism or risk having supplies suspended. The official
guidance document sent out to all 27 E.U. member states on 21 April by
its executive branch, the European Commission (EC), of which Germany is
a key member, simply stated: “It appears possible [to pay for Russian
gas after the adoption of the new decree without being in conflict with
EU law],… EU companies can ask their Russian counterparts to fulfil
their contractual obligations in the same manner as before the adoption
of the decree, i.e. by depositing the due amount in euros or dollars.”
Crucially at this point, though, the U.S., U.K., and other ‘Five Eyes’
security alliance members Canada, Australia, and New Zealand, plus
several NATO members that were Former Soviet Union states, determined
that a line must be drawn in Ukraine against Russia’s plans for
further westwards expansion. To accomplish this, it was vital to provide
Germany with substitute gas from somewhere other than Russia before the
approaching winter of 2022, otherwise, any political resolve the E.U. had
to implement meaningful energy sanctions against Russia was liable to
break. Other European countries were heavily reliant on Russian gas
for their overall energy supplies. As at the end of 2021, according to
International Energy Agency figures, the E.U. imported an average of over
380 million cubic metres (mcm) per day of gas by pipeline from Russia,
or around 140 billion cubic metres (bcm) for the year. Additionally,
around 15 bcm was delivered in LNG form. The total 155 bcm imported from
Russia accounted for around 45 percent of the E.U.’s gas imports in
2021 and almost 40 percent of its total gas consumption. Germany itself
was reliant on Russian gas for around 30-40 percent of its own commercial
and domestic gas needs, depending on the time of year.
May 2022, then, saw Middle East LNG powerhouse Qatar sign a declaration
of intent on energy cooperation with Germany aimed at becoming its
key supplier of LNG. These new supplies of LNG from Qatar would come
into Germany through existing importation routes augmented by new
infrastructure approved by the German Bundestag on 19 May. This would
include the deployment of four floating LNG import facilities on its
northern coast, and two permanent onshore terminals, which were under
development. These plans would run in parallel with, but were likely
to be finished significantly sooner than, the plans for Qatar to also
make available to Germany sizeable supplies of LNG from the Golden Pass
terminal on the Gulf Coast of Texas, as also analysed in my new book on
the new global oil market order. QatarEnergy holds a 70 percent stake
in the project, with the U.S.’s ExxonMobil holding the remainder. The
Golden Pass terminal’s estimated send-out capacity is projected to be
around 18 million mtpy of LNG.
Underpinning all of this was the U.S.’s growing importance as a global
LNG supplier itself, which acted as a backstop reassurance for emergency
LNG supplies for the E.U. going forward. From zero LNG exports before
2016, the U.S. is now the world’s biggest exporter, with around 86
million metric tonnes of LNG shipped in 2022. Around two-thirds of all
the U.S.’s LNG exports since Russia invaded Ukraine on 24 February 2022
have gone to Europe. “There is no doubt that the U.S. has been the
key factor in ensuring cohesion in the E.U.’s approach to punishing
Russia for its invasion of Ukraine, both in terms of brokering deals
with other suppliers such as Qatar, and in providing LNG itself,” a
senior figure in the E.U.’s energy security complex exclusively told
OilPrice.com last week. “The big fear here is not just that these
pauses in permits for the big U.S. LNG projects will take months and
maybe longer but also that some of them may not be allowed to go ahead
at all,” he added. “Both of them raise questions about the U.S.’s
entire commitment to the LNG sector now, and with that there is a very
great danger of this [E.U.] cohesion [in its approach to punishing Russia
for the invasion of Ukraine] being seriously undermined,” he concluded.
The ‘pausing’ of key LNG export permits announced at the end of last week by the White House have caused consternation among those who understand how fragile this anti-Russian NATO stance really is.
oilprice.com
www.ctvnews.ca
