Trump Hopes To Quietly Steal Putin’s Natgas Business In Europe
ZeroHedge, July 3, 2017
None other than Donald Trump has been hoping to «steal» Russia’s European natgas relationships and clients, in hopes of making the US become the dominant supplier of LNG to Europe. According to Reuters, Trump «will use fast-growing supplies of U.S. natural gas as a political tool when he meets in Warsaw on Thursday with leaders of a dozen countries that are captive to Russia for their energy needs.»
Exports from the United States would help reduce dependence on Russia. Trump will tell the group of European nations that Washington wants to help allies by making it as easy as possible for U.S. companies to ship more liquefied natural gas (LNG) to central and eastern Europe. Trump will attend the «Three Seas» summit — so named because several of its members surround the Adriatic, Baltic and Black Seas — before the Group of 20 leading economies meet in Germany, where he is slated to meet Russian President Vladimir Putin for the first time.
Among the aims of the Three Seas project is to expand regional energy infrastructure, including LNG import terminals and gas pipelines: in other words to replace Gazprom as the dominant supplier of European nat gas with US suppliers. Members of the initiative include Poland, Austria, Hungary and Russia’s neighbors Latvia and Estonia.
The plan will, if successful, infuriate Putin and the Russian energy establishment.
Many Republican lawmakers, many of whom want to see Trump take a hard line on Russia because of the crises in Ukraine and Syria, support using gas exports for political leverage. The Kremlin relies on oil and gas revenue to finance the state budget, so taking market share would hurt Moscow.
«In many ways, the LNG exports by the U.S. is the most threatening U.S. policy to Russia,» said Michal Baranowski, director of the Warsaw office of think-tank the German Marshall Fund. He is absolutely correct.
To be sure, taking over Russia’s nat gas trade ties with European nations would be a slam dunk for the US, which is expected to become the world’s third-largest exporter of LNG in 2020, just four years after starting up its first export terminal. U.S. exporters have sold most of that gas in long-term contracts, but there are still some volumes on offer, and more export projects on the drawing board.
And if there is one thing US LNG exporters want more than anything, it is a virtually unlimited export market. Such as Europe.
There are problems as well: a global glut in supply may, however, limit U.S. LNG export growth, regardless of Trump’s support. The glut has depressed prices and made it difficult for LNG exporters to turn a profit. Russia has the advantage in Europe due to its proximity and pipeline connections, however it is only a matter of time before technological advances make US LNG production price competitive: just ask OPEC.
For now, Europeans will be watching to see whether Trump clarifies his administration’s position on a new notorious pipeline to pump Russian gas to Germany, known as Nord Stream 2. The U.S. Senate passed a package of sanctions on Russia, including provisions to penalize Western firms involved in the pipeline. This prompted a furious response from close European allies such as Germany, France and Austria. However, should Trump assure Europe that American nat gas is competitive with Russia’s, we expect European leaders would quickly change their mind,
Once again, it should come as no surprise that the U.S. State Department has already lobbied against the Nord Stream 2 pipeline.
Meanwhile, the threat of sanctions adds to tensions between Washington and Berlin. Germany’s government supports the pipeline, and Trump’s position on it is a concern for European diplomats.
While it is soon to say if Trump will be successful in stealing Russia’s European LNG business, the mere attempt will be seen by the Kremlin as an unmistakable aggression against it. And the fact that this takes place on the same day when China’s patience with Trump finally ended, and Xi warned that Trump’s actions have resulted in «negative factors» for the US-China relationship, will certainly have drastic consequences for the global balance of power and status quo. Russia and China are drawn even closer politically.
Здешние политиканы, «эксперты», подконтрольные ЦРУ СМ»И» нахваливают псевдодемократическую, якобы процветающую Америку.
Те, кто любит «наших американских (государственных) партнеров», «забывают» о грязных, злых уродах США. О таких, как коварный и крайне опасный мошенник, расист, лжец, неофашист и убийца Дональд Трамп. И о таких, как порочный Конгресс, кровавые милитаристы США, нацистские ФБР — ЦРУ, лживые американские СМ”И”…
Арнольд Локшин, политэмигрант из США