https://sputnikglobe.com/20220225/ukraine-crisis-us-throws-europe-under-bus-by-squeezing-russia-from-eu-energy-market-analysts-say-1093364766.html
Ukraine Crisis: US Throws Europe Under Bus by Squeezing Russia From EU Energy Market, Analysts Say
Ukraine Crisis: US Throws Europe Under Bus by Squeezing Russia From EU Energy Market, Analysts Say
Sputnik International
As tensions were rising between the US, the EU, and Russia over Ukraine in December 2021, the Energy Information Administration (EIA) projected that America... 25.02.2022, Sputnik International
2022-02-25T11:28+0000
2022-02-25T11:28+0000
2023-02-09T11:44+0000
russia
europe
ukraine
natural gas
barack obama
liquified gas
lng
joe biden
nord stream ag
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"There are many factors that went into this standoff over Ukraine, which Russia is now accelerating towards an end-game state. Liquefied natural gas exports from the US are certainly one of them, but I think the bigger issues concern the future of NATO, the security architecture of Europe, and who controls it. I see this as much as a fight between the US/UK and the EU over security as much as it is about the US' long-standing antipathy to Russian energy exports. These issues are, of course, all intertwined", says Tom Luongo, a geopolitical analyst and publisher of the Gold Goats 'n Guns Newsletter.Following the 2014 February coup in Ukraine and Crimea's reunification with Russia, the Barack Obama administration called upon EU member states to cut their reliance on Russian gas, citing "security" reasons.Washington has long sought to become the leader in the energy market. In 2021 the United States exported 71.96 million tonnes of LNG compared with 77.83 million tonnes for Qatar and 81.8 million tonnes for Australia. However, by the end of 2022 the United States is projected to overtake Qatar and Australia, according to the EIA.Total US LNG output for 2022 is forecast to reach 11.4 bcf per day, which is roughly 115 billion cubic metres (bcm) per year, or around the capacities of Nord Stream 1 and 2 combined (110 bcm), according to Tom Luongo.German Chancellor Scholz froze certification of the Nord Stream 2 project on 22 February after Russia recognised the Donetsk and Lugansk People's Republics. According to Axios, the decision was made after "overnight consultations" between the German government and the Biden administration. On 23 February, Washington slapped sanctions on the company operating the Nord Stream 2 pipeline. Even though it seems like an opportunity for the US to jump in and fill the gap, it cannot substitute Nord Stream 2, according to Luongo.Meanwhile, "even without Nord Stream 2, Russia already has a strong grip on the EU's gas market in that it has more than a 40% share of the market", according to Dr Mamdouh G. Salameh, an international oil economist and one of the world's leading experts on oil. Moreover, Europe has a limited LNG import capacity, he adds.In a word, it's not about the money in the end, according to Luongo: "The demand for LNG in Europe is so high that US and Russian suppliers both have massive market opportunities there".How US Geopolitical Gambit Will Backfire on EuropeThe attempts to squeeze Russia from the European energy market are part of Washington's plan to reshape the EU security landscape in accordance with its own geopolitical goals, according to Luongo. While the European Union is looking for ways to assert its independence from Washington, the "Russian scare" is being used by the US to upend the European bloc's goal, according to the analyst.For its part, the UK "is pushing everyone into conflict for its own selfish and historical reasons, clinging to outdated political theories about controlling the 'World Island' and driving a wedge between Russia and China, which is achieving the exact opposite result", according to him.Washington's objective is to force Europe to contain and roll back Russia, at the expense of the Old World's own economic and political interests, according to the expert: "The US would like to torpedo any cooperation between the EU and Russia and this is why they are opposed to any new security architecture", Thomann stresses.America's geopolitical game comes at cost for Europe, warns Luongo. Natural gas in Europe has already jumped as much as 70%, according to the Financial Times, following Thursday's announcement of the new batch of anti-Russian sanctions targeting energy, finance, and other sectors of its economy. The sanctions came in response to Russia's special military operation to protect the Donbass region.Dmitry Medvedev, deputy chairman of the Security Council of Russia and former Russian president, did not rule out European gas prices more than doubling after German Chancellor Scholz suspended Nord Stream 2's certification on Tuesday.As for Russia, it's unlikely to be hurt that much, according to the analyst: Russia''s economy is clean, with low debt, high reserves, a trade and current account surplus, and plenty of policy room for its central bank to respond to sanctions, Luongo says.
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europe, ukraine, natural gas, barack obama, liquified gas, lng, joe biden, nord stream ag, us, nord stream 2, european union (eu)
europe, ukraine, natural gas, barack obama, liquified gas, lng, joe biden, nord stream ag, us, nord stream 2, european union (eu)
Ukraine Crisis: US Throws Europe Under Bus by Squeezing Russia From EU Energy Market, Analysts Say
11:28 GMT 25.02.2022 (Updated: 11:44 GMT 09.02.2023) As tensions were rising between the US, the EU, and Russia over Ukraine in December 2021, the Energy Information Administration (EIA) projected that America would become the world's largest LNG exporter by the end of 2022. Was the Ukraine crisis part of Washington's plan to take over the EU energy market? It's not that simple, observers say.
"There are many factors that went into this standoff over Ukraine, which Russia is now accelerating towards an end-game state. Liquefied natural gas exports from the US are certainly one of them, but I think the bigger issues concern the future of NATO, the security architecture of Europe, and who controls it. I see this as much as a fight between the US/UK and the EU over security as much as it is about the US' long-standing antipathy to Russian energy exports. These issues are, of course, all intertwined", says Tom Luongo, a geopolitical analyst and publisher of the Gold Goats 'n Guns Newsletter.
Following the 2014 February coup in Ukraine and Crimea's reunification with Russia, the Barack Obama administration
called upon EU member states to cut their reliance on Russian gas, citing "security" reasons.
"Once we have a trade agreement in place, export licenses for projects for liquefied natural gas destined to Europe would be much easier, something that is obviously relevant in today's geopolitical environment", Obama stated in March 2014 in response to then-European Commission President Jose Manuel Barroso's appeal to step up US gas exports.
Washington has long sought to become the leader in the energy market. In 2021 the United States exported 71.96 million tonnes of LNG compared with 77.83 million tonnes for Qatar and 81.8 million tonnes for Australia. However, by the end of 2022 the United States is projected to overtake Qatar and Australia, according to the EIA.
"By the end of 2022, US nominal capacity is expected to increase to 11.4 [billion cubic feet per day] Bcf/d, and peak capacity will increase to 13.9 Bcf/d", reads the EIA's December 2021 report. "In 2024, when construction on Golden Pass LNG – the eighth US LNG export facility – is completed and the facility begins operations, US LNG peak export capacity will further increase to an estimated 16.3 Bcf/d".
Total US LNG output for 2022 is forecast to reach 11.4 bcf per day, which is roughly 115 billion cubic metres (bcm) per year, or around the capacities of Nord Stream 1 and 2 combined (110 bcm), according to Tom Luongo.
German Chancellor Scholz
froze certification of the Nord Stream 2 project on 22 February after Russia recognised the Donetsk and Lugansk People's Republics. According to
Axios, the decision was made after "overnight consultations" between the German government and the Biden administration. On 23 February, Washington slapped sanctions on the company operating the Nord Stream 2 pipeline. Even though it seems like an opportunity for the US to jump in and fill the gap, it cannot substitute Nord Stream 2, according to Luongo.
"Is there 55 bcm of spare capacity (the size of Nord Stream 2) in the US system to feed a new market in Europe?", the analyst asks. "No, not with demand rising at more than 6% annually and accelerating as the world comes out of COVID-19 lockdowns…Moreover, US LNG is far more expensive than Russian piped gas. This is simply a fact".
Meanwhile, "even without Nord Stream 2, Russia already has a strong grip on the EU's gas market in that it has more than a 40% share of the market", according to Dr Mamdouh G. Salameh, an international oil economist and one of the world's leading experts on oil. Moreover, Europe has a limited LNG import capacity, he adds.
"The entire LNG exports from the United States, Qatar, and Australia could hardly replace the almost 200 billion cubic metres per annum (bcm/y) piped by Russia to the EU in addition to an estimated 15-16 million tonnes a year (mt/y) of LNG", Salameh says. "Only Russia can satisfy the EU's gas demand. However, Russia isn't going to ship additional gas supplies to the EU until the Nord Stream 2 gas pipeline is certified".
In a word, it's not about the money in the end, according to Luongo: "The demand for LNG in Europe is so high that US and Russian suppliers both have massive market opportunities there".
How US Geopolitical Gambit Will Backfire on Europe
The attempts to squeeze Russia from the European energy market are part of Washington's plan to reshape the EU security landscape in accordance with its own geopolitical goals, according to Luongo. While the European Union is looking for ways to assert its independence from Washington, the "Russian scare" is being used by the US to upend the European bloc's goal, according to the analyst.
"Russia is being used as a bogeyman to advance internal European and 'Anglo' political agendas having more to do with shifts in foreign policy focus than just the 'follow the money' angle here", he says.
For its part, the UK "is pushing everyone into conflict for its own selfish and historical reasons, clinging to outdated political theories about controlling the 'World Island' and driving a wedge between Russia and China, which is achieving the exact opposite result", according to him.
"Above all the US wants to maintain its supremacy in the world and in Europe and wants Russia to be the enemy of Europeans", echoes Dr Pierre-Emmanuel Thomann, a geopolitical expert. "This is why it is using Ukraine to create an anti-Russian state as a proxy and hope in the long term to expand NATO".
Washington's objective is to force Europe to contain and roll back Russia, at the expense of the Old World's own economic and political interests, according to the expert: "The US would like to torpedo any cooperation between the EU and Russia and this is why they are opposed to any new security architecture", Thomann stresses.
America's geopolitical game comes at cost for Europe, warns Luongo. Natural gas in Europe has already jumped as much as 70%,
according to the
Financial Times, following Thursday's announcement of the new batch of anti-Russian sanctions targeting energy, finance, and other sectors of its economy. The sanctions came in response to
Russia's special military operation to protect the Donbass region.
Dmitry Medvedev, deputy chairman of the Security Council of Russia and former Russian president, did not rule out European gas prices more than doubling after German Chancellor Scholz suspended Nord Stream 2's certification on Tuesday.
"In the long run, high energy prices for Europe are simply a drain on potential growth, or in Europe's case, recovery", says Luongo. "Absent a massive spending blitz by the EU, which it will never agree on in any reasonable time frame, Europe's energy future without Nord Stream 2 and the now cancelled East Med pipeline from Israel, is bleak. The set up now is for a complete collapse of European capital markets as the Fed moves to raise interest rates in March, further putting stress on the euro and Europe's ability to pay for its import needs".
As for Russia, it's unlikely to be hurt that much, according to the analyst: Russia''s economy is clean, with low debt, high reserves, a trade and current account surplus, and plenty of policy room for its central bank to respond to sanctions, Luongo says.
