Washington Does Not Have a Natural Gas Weapon Against Moscow

By Rory Johnston, a Master of Global Affairs student at the University of Toronto’s Munk School of Global Affairs where he focuses primarily on the intersection of geopolitics and energy markets. He has worked as a consultant in the Ontario electricity sector and is currently an Adjunct Junior Fellow at the American Security Project in Washington, D.C.. Originally published at OilPrice

After Russia’s invasion of Ukraine and its occupation of Crimea, many in the West wondered what could be done to oppose Moscow. Complicating matters, Europe depends on Russia for over thirty percent of its natural gas supply, and Moscow has used this leverage before to extract political concessions. Even now, Gazprom, the Russian gas behemoth, has threatened to cut exports to Ukraine should it fail to pay its gas debt. To many, the answer to the specter of Russian natural gas dominance is clear: unleash America’s natural gas abundance and displace Moscow.

This sentiment was crystalized in an op-ed penned by John Boehner in the Wall Street Journal last week, which called on President Obama and the Department of Energy to accelerate LNG export terminal approvals and open up America’s vast natural gas supplies to export. Boehner claimed that not only can the United States match Russia in the European energy marketplace—it has an obligation to do so. The question is whether or not this would work. Would American natural gas exports help shift the European balance of power?

In short: no.

While there is an argument to be made that crude oil exports or even coal exports could immediately dampen Moscow’s regional clout, natural gas exports cannot tip the geopolitical energy scales in Washington’s favour anytime soon.

Most of the natural gas that could potentially head for Europe is already committed in long-term supply contracts. The reasons for this are financial. Building an LNG export facility is a multi-billion dollar endeavour, and financiers want to be sure that future revenue is guaranteed, at least until the debts are paid off. This necessitates long-term contracts between LNG exporters and LNG import facilities at the other end. This means that even once American LNG exports are booming, little of that gas could be rerouted in a surge to offset Russian supply.

Furthermore, most of those contracts are in Asia, where natural gas prices are higher than in Europe. The United States does not sell natural gas, nor does Europe buy it; commercial entities do, and these companies are not going to voluntarily lose money in order to advance American interests. As Michael Levi explains, the U.S. government “can create a framework in which commercial entities can sell gas, but after that, it’s up to those businesses to decide where the gas goes.”

Moreover, those businesses will likely sell the gas where they will get the greatest return. Landed LNG prices in Europe range between $10 and $11 per MMBtu, while the price in Asia is $15 or higher. Also consider that the liquefaction process adds between $4 and $6 to the price of natural gas, and that the Henry Hub spot price, the benchmark for American natural gas, spiked to over $7 per MMBtu in the beginning of March on the back of an abnormally cold winter. At these prices, it would be hard for American producers to compete with European prices even if they wanted to.

Washington cannot wield natural gas as a tool of statecraft in the same way Moscow can. The private companies that make the United States so dynamic also make it far more beholden to prevailing market realities, and the reality is that when American companies begin exporting natural gas, very little of it will be destined for Europe.

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63 comments

  1. no more banksters

    “The detection of new huge deposits of oil and natural gas in the US territory, allow banksters to abandon war fields and avoid the corresponding complex implications, like the wars in Iraq or Afghanistan. The dollars distributed by the Americans in Iraq after the war may have been printed easily, but the public opinion generally does not approve the invasion and the bloodbath in other countries, especially after the WikiLeaks revelations and the shocking videos of American soldiers shooting journalists and civilians from the helicopter as if they were playing a video game.”

    http://failedevolution.blogspot.gr/2014/03/the-closed-system-of-biggest-black.html

  2. mmckinl

    Here’s the low down on nat gas and oil … It is not about “long term contracts” or “private ownership” as this article implies at all …

    “Ukraine, Russia and the nonexistent U.S. oil and natural gas “weapon””

    “Commentators were falling all over themselves last week to announce that far from being impotent in the Ukraine crisis, the United States had a very important weapon: growing oil and natural gas production which could compete on the world market and challenge Russian dominance over Ukrainian and European energy supplies–if only the U.S. government would change the laws and allow this bounty to be exported.

    But, there’s one very big problem with this view. The United States is still a net importer of both oil and natural gas.”

    http://www.resilience.org/stories/2014-03-09/ukraine-russia-and-the-nonexistent-u-s-oil-and-natural-gas-weapon

    Read the article and understand how the public has been duped …

  3. sadness

    ….sorry but i can’t get past his first 10 words….so i’ll never know what the bottom line is, thankfully

      1. Anon y Mouse

        First ten words: “After Russia’s invasion of Ukraine and its occupation of Crimea”

        1. Cocomaan

          I don’t get it either. “Invasion” implies that Russia and its military wasn’t already in Crimea.

          1. Vatch

            No, Russia’s military was already on a base that was established by treaty. In violation of the treaty, many of the soldiers have left the base to occupy other parts of Crimea. If the U.S. troops at the base in Guantanamo Bay, Cuba, left the base and seized control of government offices and transportation centers elsewhere in Cuba, they would be doing what the Russian military is doing in Crimea. It would be an invasion.

            1. fajensen

              I am pretty certain that there will be Obama-only words defined for this eventuality, so it will NOT be an invasion. ;-p

              Like when the NSA claims that information is not “collected” unless someone “reads” it … and I will bet a good bottle of single-malt that the NSA have e unique definition of “read” too, should Congress ask the NSA over to lie to their face again.

          2. Yves Smith Post author

            Yes, it was debatable as to whether what Russia was doing a week ago could be called an invasion. The more its troops make their presence known off the naval base, the less this can be claimed to be permissible under the treaty.

            Of course, after Grenada, Iraq, flying into all sorts of other countries’ airspace, drone murder, the US is hardly in a position to cast aspersions.

    1. PaulW

      I tripped over the same ten words! However I’ve gotten so used to media coverage with the assumption our governments are the good guys that such openings just roll right off me now. I especially loved the assumption of how irresponsible Gazprom is for threatening to cut Ukraine’s gas supply. Like it’s normal business practice for a customer to pay next to nothing, even when getting generous discounts, and run up a ridiculous debt, yet the supplier must continue to throw away its product into that black hole.

      Considering the criminal class that now runs the West, I have no trouble standing with the Russians, Chinese and Iranians.

      1. Jim Haygood

        Beyond the first ten words, there are more embedded premises, such as this one:

        ‘Commercial entities … are not going to voluntarily lose money in order to advance American interests.’

        Who says they would be ‘advancing American interests’?

        One word, Rory: BAFFLEGAB.

      2. Cynthia

        The criminal class that now runs the West will stop at nothing in order to achieve their geopolitical goals of Russia’s encirclement: colored revolutions, soft power, unconventional warfare, rigged elections, blackmail, military putsches, post modern coups, and finally direct military intervention like Iraq, Afghanistan Serbia, Libya, if everything else fails. This has been their game throughout the Cold War period, with B-52’s armed with thermonuclear weapons, flying missions 24/7, within 2 hour strike capability of Soviet targets, and spying planes (U-2’s and later on the SR-71 “Black Bird”) flying over Soviet air space, while ICBM’s were placed close to Russian borders, from Turkey, to Greece, to Germany, to England. Compulsive liars, will distort the truth and blame anyone else for their aggression. Meanwhile, using the Orwellian doublethink will justify their horrific actions as Godsend gifts to humanity, for example after 20 years of Iraqi enslavement, and thousands killed and millions displaced, they call their actions “Operation Iraqi Freedom”.

    2. Doug Terpstra

      Did you forget your solemn pledge? Remedial lesson in geopolitics: Russia, evil; US, noble and benevolent, “one nation under God, with liberty and justice for all.”

      You didn’t miss much. The author is basically saying the sanctity of contracts and “free” market supply and demand render the Wall Street-MIC incapable of waging economic warfare. Can’t be done. It’s not as if we can just print money…

      1. susan the other

        But Wait! Just today the head of the Joint Chiefs announced that the US was ready to supply Ukraine (and parts of EU?) with oil. Yes oil. From the strategic reserve; some 5 bn barrels is to be sent to that region if necessary and will be sold as a “test sale.” (Zero Hedge). So we’re apparently not talking about natural gas at all. We are bluffing and conflating oil and gas – maybe planning to appropriate Ukraine’s natgas and say it was about nat gas all along. Also another article, I think via PaulCraigRoberts, talks about a US plan beginning with the bombing of the former Yugoslavia in the mid 90s in order to draw an East/West line sort of from the Baltics down thru the Caspian area. This can only be to protect our long-standing interests in the Middle East – since the 30s and FDR’s alliance with the Saudis; our subsequent development efforts, and protection of both the Saudis and their oil. We are trying to hang on to what we have and use it for us and our allies in the EU while pushing Russia away and into the arms of China (my guess). Or what we think we have. But even the Saudis have called us out on our absurd claims to have a huge national surplus of oil and gas. Not. Or maybe a relative surplus because oil tankers are docked all around the world but not a drop is selling. Are we creating a new cold war to keep energy prices high, all the while pretending to sell our gas and oil cheaper? Wouldn’t surprise me.

        1. Doug Terpstra

          I read that too, but I think it said 5 million, not billion, which wouldn’t even be a test, just a joker’s jest. That would cover only a few hours consumption in the US, probably less in Europe. It’s pointless.

          http://www.zerohedge.com/news/2014-03-12/take-putin-us-release-5-million-barrels-strategic-petroleum-reserve-test

          Anyway, according to Wikipedia, the SPR had less than 800 million barrels, not even 50 days US consumption. It’s an idle threat and a lousy bluff.. These neocons are proving to be dangerous buffoons, treating Putin like a tin-pot dictator.

      2. Vatch

        I appreciate your humor, but a little correction is in order:

        U.S. government: evil
        Russian government: evil
        Chinese government: evil
        Ukrainian government: evil
        …..
        giant corporation A: evil
        giant corporation B: evil
        …..

      3. Cynthia

        The defenders of President Obama are blind as bats because he has committed a huge political blunder by treating Russia like Libya and Putin like Gaddafi. Well, Russia is not Libya and Putin is not Gaddafi. Who in the White House has the guts to tell Mr. Obama and Mr. Kerry these facts?

        1. Doug Terpstra

          Blunder indeed. I suspect Ukraine was in part stupid, impotent payback for Syria. Might this finally be Obama’s Waterloo? Let’s hope.

  4. ToivoS

    I rarely comment here though I do lurk. However this is something that I understand fairly well. There is no way that the US can supply natural gas to Europe that could substitute those supplies from Russia. When I first heard that we could help Ukraine by supplying our own natural gas production to supply Europe it was clear that American propaganda had gone bat sh** crazy.

    1. 1 Kings

      It’s pretty simple to me. If they send the gas ‘overseas’, means less here, hence jacked-up price. Another bend-over for us American-types outside the 1%.

      1. Working Class Nero

        And we have to remember that fracking has been sold to Americans as a way of gaining “energy independence” which is a key “national security” goal. The implication being that gas fracked in America would be consumed by Americans. Naturally the people actually controlling and selling that “American” natural gas want to sell to the highest bidder and are not about to offer it at a discount to their fellow citizens. So this crisis in Ukraine can be used as an excuse for Big Frack to build new LNG terminals for export while still maintaining a “pro-American” sheen. So the gas will ultimately go to the highest bidders and not to American chumps who will only suffer the consequences of fracking.

        1. JerseyJeffersonian

          Excellent insight. Wrap the whole boondoggle in the flag, and then later use the flag as a cumrag when they’re through rogering the citizenry. Genius.

      2. Yves Smith Post author

        We can’t send remotely enough on LNG carriers to make up for what Gazprom supplies.

  5. fajensen

    Equally, “many in the west” are actually quite happy with Moscow opposing the US – since our own governments are not standing up for anything any more, we have to make do (and even like) with whatever situation we have.

    This shows up in the total lack of public support for anything that NATO might attempt to drag us into. And the deep suspicion on who the “interim government” in Ukraine is (most people think they are some colour of neo-nazis) and people speculate why “we” (rather “who”, because “we” don’t) desire to have yet another corrupt, poor, multicultural, “associate country” – A.K.A. another place from where everyone will leave as soon as possible for the EU and a significant fraction of the remaining population will be criminals, nutjobs and extremists to a high enough degree to be always bothering everybody else – who will require More Police State to control them (and us).

    Ukraine should go ahead and default on their loans too, the European banks needs to be culled – since we can’t do it legally, then “unforeseen events” will have to do. Many Europeans are also not entirely unhappy about reading about the industrial farmers and the IT-outsourcing industry getting stuck in the mess. They asked for 3’rd world conditions and they got them, why are they now whining!?

    1. Daize

      “Ukraine should go ahead and default on their loans too”
      I comepletely agree on that point!

    2. Synopticist

      Amen to that Fajensen.
      No-one I’ve ever talked to about it wants Ukraine in the EU, and there’s a huge amount of cynicism about the makeup of the new government. The very last thing the entire continent needs is another massive way of immigrants lowering wages and competing for scarce public resources, along with a significant criminal element.

      And most people have finally sussed out that offering “financial aid” means bailing out the banks who made idiot loans at usurous rates, and now get protection for their own greed and stupidity.

  6. Daize

    I do generally agree with the comments made here, as well as the article. I would just like to point out that if a serious was ever breaks out (agreed only a very slight possibility), it would be a case of “force majeure” and all contracts and the current situation could be up for revision by the Gov’t (ie appropriated/nationalized).

      1. docg

        I don’t see war as a “slight possibility” at all. Anyone who sees “economic sanctions” as a peaceful means of “punishing” Russia doesn’t understand the meaning of the word “escalation.” This is the sort of thing that got the world into war 100 years ago. War doesn’t just happen. It’s the result of a process and so-called “peaceful” sanctions can very well become a part of such a process.

        Ironically, the ones most likely to become trapped in this game of economic one upmanship are the NATO allies. All Russia has to do is cut the gas pump to the West and half of Europe, including Ukraine, will be in serious trouble. Obama and his cohorts may then see the only alternative as some sort of “limited” war in Crimea, or at the very least, the threat of same. And when Putin responds with “make my day,” then all out war may be very difficult to avoid.

        The fact is that there is now no “legitimate” government in either Kiev or Crimea. So the idea that a Crimean referendum is illegal or unconstitutional is simply wrong. What is unconstitutional is the manner in which the democratically elected government was overthrown. Regardless of how well intentioned the revolutionaries were, and how corrupt the former government was, Ukraine was a democracy and a new and better government could have been voted in at the next election.

        Regardless of whether or not Putin’s actions were justified, our whole hearted support of this new and as yet unknown and untested regime is certainly unjustified. To take steps at this point in a direction that might well lead to all out war is, very simply, irresponsible, regardless of who might eventually turn out to have been right or wrong.

        1. PaulW

          Depends on the West. Do the European leaders follow the US and launch an economic war against Russia? If they do then this is a war that will bring down the global economy. Will America’s leaders be good losers or will they up the ante and turn it into a hot war? If the economy is collapsing isn’t it time to start a real war to distract blame? What’s really scary is that US leadership in the 21st century came to realize that it’s giant military was no great asset unless it was used. Will these same ruling elites, who put little value on human life, now take the same view regarding America’s extensive nuclear arsenal? Will the Russians – like the German view of Russiian mobilization in 1914 – feel they must strike first to avoid being overwhelmed?

        2. Banger

          I don’t see war as much of a possibility here. This is all about posturing, testing boundaries and power-relations. Personally I see this as a “strategy of tension” the idea is to create a more tense atmosphere to enable those forces in Washington who favor imperial expansion to get a slight advantage over the realists. Also, this will limit Russia’s influence in international trouble spots like Syria–certainly will buy more time for the rebels, I should think. Finally we have the fact that tension always finds a way into the Defense budget and there many hungry mouths to feed in Washington.

          The Euopeans, as far as I can see, are just happy to follow Washington wherever it chooses to go; from what I can see from a distance, it seems they have given up their sovereignty

          1. susan the other

            Europe is unable to do anything about the sovereignty of its member states because if their sovereignty trumps the EU the EU fails, or their banks fail, or the Euro crashes (that would actually be good). So the ECB et.al. blather about “sovereign debt” (which the EU underwrites so it can directly subsidize all the big banksters) is an oxymoron at best. Their whole contract is weird. But who cares? For sure nobody wants anything approaching war between the US and Russia. For sure Russia doesn’t want anything to do with the Ukrainian Nazis (if they are even real). It looks like a skirmish designed to achieve pre-agreed-upon ends and both Russia and the US are in the entertainment business.

          2. Synopticist

            The “strategy of tension” idea seems about right to me. (I was just thinking that last night in fact). It’s almost a holding position while they figure out whether an Asia pivot is possible, and in the mean time weaken Russia and remind Europe who’s daddy.

            The crucial thing is, when the big boys get angry, the little boys have to keep their heads down. The fact is, Europe has no armed forces worth a damn, even we Brits have hardly anything these days. So that limits European power while military options are in the air, rather than discussing this in a calmer, cooler atmosphere where economic interests would dominate.

  7. Dan B

    “After Russia’s invasion of Ukraine and its occupation of Crimea, many in the West wondered what could be done to oppose Moscow.” What invasion and occupation?

  8. harry

    There is no gas weapon.

    But there is a finance weapon. I see strategist s are talking about downgrading Russia to “Frontier” status. This will force further institutional selling. Do you want to bet oligarch stock is not leveraged? Where do they get cash when they are margin called.?

    And why wouldn’t the us use is finance weapon? Cos they are to nice?

    I would advise the Russians to go “mad” so s&p feels the pain too.

  9. pdlane

    The article does not mention the paucity of LPG tankers, port facilities and pipelines… both in the U.S. and Europe…

  10. Working Class Nero

    I assume John Boehner is smart enough to realize that building new LNG terminals wouldn’t actually change the balance of natural gas power in Europe. But he was hardly going to miss the opportunity of the crisis in Ukraine to push through the approvals of these terminals for national security reasons. Because in the end this is it is these LNG terminal approvals that his patrons want and the ultimate geopolitical impact of these terminals concerns them much less that the eventual profits they will pocket from these facilities.

    1. pdlane

      Further, it will take years to design and construct the necessary port facilities and build the tankers along with the pipelines to transport the LNG gas to and from the ports.

    2. Brooklin Bridge

      This construction of ports and ships will now be able to proceed with minimal red tape and massive government subsidies. Anyone complains can take it up with the Congressional Committee of Un-American Affairs.

      1. Brooklin Bridge

        Their country ’tis of thee,
        fracking for industry,
        in utter stealth;
        Land where fresh water died,
        Land of thier toxic pride,
        To every kleptocrat provide,
        our countries’ wealth!

  11. pdlane

    The article, nor did Mr Boehner and the WSJ, mention the paucity of LNG tankers and port facilities in the U.S. and Europe.

  12. Dino Reno

    In case you were wondering, fracking is now super patriotic because natural gas is deemed a strategic weapon resource that can be deployed like an ICBM to strike at the heart of this nation’s enemies. Anyone against fracking—we know who you are–is now pretty much a traitor a la Snowden. My guess is that Obama’s economic sanctions denying visas to Russians traveling here will be extended to anyone, including Americans, who fail to support the new Ukraine government. For the record, I like that unelected puppet government because it is run by a technocrat with ties to Western finance. I hope you are as successful as me in acing your loyalty test.

  13. washunate

    The author lost me at, “After Russia’s invasion of Ukraine…”

    Anyone seriously interested in the intersection of geopolitics and energy markets would know that calling out one government without context of the other players demonstrates quite clearly one’s bias (or ignorance) about what is happening.

    Aside from that, US actors like John Boehner and Barack Obama don’t support developing fossil fuel resources for some patriotic or freedom-loving purpose of saving Europe from the Soviets. They do it because it’s big money in the US. It supports the authoritarian, top-down, centralized structure that is their preferred vision of organizing resources in American society.

    This is what the federal budget is primarily spent on – centralized corporate welfare – from the national security state to bankster bailouts to agribusiness subsidies.

  14. E.L. Beck

    This misses the point: The Ukraine pot was stirred so that the U.S. power brokers could legitimize the removal of export caps on natural gas. Whether these exports can counter Russian supplies is secondary. There are always other buyers waiting in the wings if the EU package doesn’t completely unfold. By the time the exports are flowing, the whole Ukraine thing will have done its job and the headlines will have moved on.

    Few in D.C. actually care about the Ukraine situation. “Spreading democracy” is code for “pushing U.S. energy agenda.”

  15. TarheelDem

    Sounds like the fracking crowd is trying to create a stampede to overcome environmentalist, local, and property-owner opposition. If you oppose fracking, you are just helping Putin. Thanks for debunking this before it starts, Yves.

  16. Generalfeldmarschall von Hindenburg

    I guess the Ukrainian people will have to discover that they’ve exchanged the whips of local corruption and authoritarian mismanagement for the scorpions of EU / IMF Austerity. Because there’s no way the Germans are going to subsidize Ukraine like Russia very generously has.

    1. Cynthia

      I wonder which oligarch will make the decision to cut everyone’s pensions in half, so that Ukraine’s creditors can be paid off at the expense of its poor?

      In the West, we cynically believe sometimes that it’s the rich who run our countries, but now this situation is a matter of fact in Ukraine. It’s somewhat naive to think that these people will pay much attention to anything other than protecting their own wealth and status.

      1. Synopticist

        I read surely the most desperate PR line in some MSM the other day, about oligarchs getting appointed as regional governors in the new Ukraine.
        Maybe it will work out, as they’re already rich, so they won’t be tempted to loot any more…

        Yeah, that’s gonna work.

  17. TomDority

    As stateted by comments above. The issue of time seperates the current crisis and the use of gas as some sort of buffer in the current situation. Ask the question….how the hell is the current crisis going to be offset by production and shipping of LNG that is years into the future…..LNG is not like electronic information where a thought is immediatly transfered from one location to another. LNG needs to be tapped, bottled and shipped with all the infrustructure in place…something that ain’t going to happen for a decade if ever. The Pacific, Atlantic and Arctic oceans are a steep hurdle to overcome. So all those politicians and pundits who claim that gas could be used for this immediate crisis as a weapon are all full of gas.

    We might look at the crisis through the neo-economic perspective where the passive part of production has been completely evisorated…land/resources/economic rent.
    Today, the most effective weapon is economics. This weapon has been been developed into a magical thinking via the deliberate ommission of land as the passive component in all production.

  18. Lafayette

    A WINDOW OF OPPORTUNITY

    RJ: Europe depends on Russia for over thirty percent of its natural gas supply, and Moscow has used this leverage before to extract political concessions.

    Indeed it does and so much so that one might add that Russia has the EU by the short ‘n curlies.

    Which is why, when the Ukraine Show is over, the EU is going to look emasculated. Putin is an arch-ideologue trying to restore Russia’s 18/19th century glory, or perhaps even that of the Soviet Union. But, taking a big chunk of land out of Georgia (the nation-state) and pulling back Crimea into the Russian orbit is hardly “glorious”. In fact, comparatively, it is nitpicking.

    Why are we then making a BigStink about it? Why, indeed.

    Because a few weeks ago, when it all started, there had been no indication that Crimea was not just a stepping stone to obtain the russophile eastern Ukraine. So, NATO panicked at the thought – and since most of the EU is also a member of Nato, the gears of politicking began to turn seriously.

    What does Putin want most? He took advantage of what we call a “window of opportunity”, which opened just after the Olympics ended and will close (once again in Sochi) with the G8.

    This guy is anything but brash. He plots everything. So, he probably knows full well that getting thrown out of the G8, which is a prize membership for a country nobody particularly gives a damn about (except Syria), was a colossal political NO-NO even in Russia.

    The job’s done. The Crimeans will vote on Sunday to join Russia. The EU will cry foul but accept it. Ditto the Ukraine. Likewise the US. (Kerry will pride himself on having avoided a disaster.)

    The show’s over. Everybody can go home …

    1. Cynthia

      Putin may be the only moderating force in this whole mess. The EU and US think they are allied via NATO, but the US has unleashed and supported both Neo-Nazis in Ukraine and jihadists in Syria, much to the chagrin of the EU. Putin also has influence in both Syria and Iran, which may be helpful if the US tries once again to bomb Syria. There is a rumor this is in the works.

  19. allcoppedout

    Strangely, LPG (liquid petroleum gas) has less to do with all this than LLP, a British accounting trick brought in by Labour before hullabaloo from Cameron and Osbourne about bringing offshore banking to its knees. LLP means limited liability partnership and millions have been flowing out of Ukraine in these through Latvian and Austrian banks since 2011. Various centres of corporate excellence owning a palm tree and deckchair, including Ireland, are involved, though LLPs have that British quality kite mark.

    The looting is standard in form. Over-expensive oil rig contracts, roads not built and loans being repaid by ordinary people with the cash strangely deposited in the British Virgin Islands.

    The Russian pipelines do run through areas where transit could be stopped. Much of the history of “oil” has been about keeping the price up by restricting supply. Making continental northern Europe pay more for energy would suit Britain, the USA and energy companies. It was all about keeping the price of kerosene for lamps high in simpler days.

  20. Binky Bear

    The gas weapon is the program to encourage fracking in the coal lands of the eastern margin of Europe along the routes of existing gas delivery lines from Russia. Spark a Bakken style boom in Poland and Ukraine and you stick it to Putin’s backers in the hydrocarbon biz.
    http://rt.com/business/poland-shale-taxes-russia-346/
    http://www.reuters.com/article/2013/06/21/poland-shale-idUSL5N0EX0XY20130621
    http://en.wikipedia.org/wiki/Hydraulic_fracturing_by_country
    http://n4sa.com/arkiv/164654

    1. Synopticist

      IIRC the Polish fracking thing died a sad death at the hands of geo-physical realty-there were no hydro-carbons in the promising looking plays, only water

  21. John

    This isn’t the Berlin Air Lift era.
    This is 55 years later and running-out-of-fossil-fuel time.
    There’s none to waste on idiocy like this.

  22. Jackrabbit

    1) Some (above) believe that there is little possibility of war. But even if war is avoided, what has developed is a serious conflict with repercussions that will be felt for years to come.

    Any trust that may have previously existed has all but vanished:
    – Snowden, Syria, and much more had all frayed the relationship between the US/West and Russia even before Ukraine’s revolution
    – It appears that Putin went into Crimea with overwhelming force. He did not expect to be able to talk his way into staying or that he would be offered Crimea if he would accept the new Ukrainian government.
    – The US/UK have not backed down. They haven’t offered face-saving gestures or toned down the rhetoric. Today, Kerry canceled a future meeting with the Russian FM, and at his meeting with Yats, Obama talked about securing the territorial integrity of Ukraine. And the attempts to con get Putin to implicitly recognize the new government by engaging in direct talks continues (talk with Ukraine or else!).
    – Both sides are engaging in blatant and extensive propaganda

    Even a simple analysis leads to concerns about the outcome.
    Putin/Russia: can not accept the loss of Crimea and Eastern Ukraine
    US/West: can not accept loss of face:
    – they don’t want to be seen as the bad guys (history is written by the victors)
    – public discontent/distrust of govt is already high
    – they worry about their reputation with other current or potential client states
    – they worry about ‘looking weak’ to China (mostly) and regional powers
    Ukraine: the nationalist forces that have gained power are uncompromising and unforgiving

    2) Some believe that the conflict will benefit the oligarchs of both sides. But I see little evidence that both sides are playing for, or planning to obtain, a compromise that accomodates each in such a way. I think the US was highly pissed that Snowden was not returned and surprised at the strength of Russian resistance to their bombing of Syria. There was little benefit to Obama/US/West in these cases. In fact, it is the unwillingness of Putin/Russia to be compromised / “play ball” / ‘go along to get along’ that made/makes a gambit like Ukraine attractive. The neocons NWO is uni-polar.

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