Russia soon will be able to cut off Europe’s gas

Why is President Biden widening the economic war against Russia to include China? Why is he threatening to impose economic sanctions on countries who refuse to sanction Russia? Why is he raising the. stakes?

It may be because the United States is in a struggle for world power against not only Russia, but China, and that time is not on the side of the USA.

China’s Belt and Roads Initiative, also known as the New Silk Roads, is intended to bind together Russia, Iran and other nations in the interior of Eurasia by means of roads, railroads and oil and gas pipelines.

The result, if the Chinese can bring it off, would be a new entity that would be invulnerable to U.S. sea and power and that would be detached from the dollar-based world economy.

But that entity does not exist yet.  Specifically, there is a lack of sufficient gas pipelines to enable Russia to switch over the gas it is now selling to Europe and sell it to China instead.

Source: Seeking Alpha. (2020)

Source: S&P Global Commodity Insights (2019) Click to enlarge.

Source: Wood Mackenzie (2019) Click to enlarge.

Russia is rushing to build new pipelines that will connect its western and eastern Siberian gas fields and free it from the need to sell to European markets.   They’re scheduled to be completed in a few years, and then Russia will be in a position to cut off gas supplies to Europe.  

Pepe Escobar noted:

An absolutely key issue for Russia is how to make the transition to China as its key gas customer. It’s all about the Power of Siberia 2, a new 2600-km pipeline originating in the Russian Bovanenkovo and Kharasavey gas fields in Yamal, in northwest Siberia – which will reach full capacity only in 2024. And, first, the interconnector through Mongolia must be built – “we need 3 years to build this pipeline” – so everything will be in place only around 2025.

On the Yamal pipeline, “most of the gas goes to Asia. If the Europeans don’t buy anymore we can redirect.” And then there’s the Arctic LNG 2 project – which is even larger than Yamal: “the first phase should be finished soon, it’s 80 percent ready.” An extra problem may be posed by the Russian “Unfriendlies” in Asia: Japan and South Korea. LNG infrastructure produced in Russia still depends on foreign technologies.

It makes no economic sense for European nations, including Ukraine, to cut themselves off from Russian gas.  The U.S. plan is to substitute liquified natural gas (LNG) from the USA.  Ultimately the best solution would be to substitute renewable energy for gas heating.  But the physical infrastructure to do these things is not in place.

In fact, the ongoing mutually destructive economic warfare makes no sense for anyone, especially for the USA.  We the American people get no benefit from economic warfare against other nations.  We need to be rebuilding our own economy and preparing for the coming bad years.

LINKS

Sit back and watch Europe commit suicide by Pepe Escobar for The Cradle.

Gazprom Is Setting Up for Eurasian Gas Market Dominance by Zoltan Ban for Seeking Alpha (2020).

Russia is building a massive 50 billion cubic meter gas pipeline to China by Ameya Paleja for Interesting Engineering.

Russia said it’s pushing ahead with building a massive natural-gas pipeline to China by Grace Dean for Business Insider.

Russia, China agree on 30-year gas deal via new pipeline, to settle in euros, by Chen Aixhu for Reuters.

.

Tags: , , ,

7 Responses to “Russia soon will be able to cut off Europe’s gas”

  1. Bill Harvey Says:

    Phil,

    Thanks AGAIN. This is an excellent sum-up of where things appear to he headed, and Russian oil and gas to China and other Asian destinations is a key piece to the puzzle.

    And I’ll give a strong second to your concluding paragraph: What IS in all this for us, the American people?

    I don’t know that it’s a done deal that Russia will stop selling to Europe, tho.

    Meantime, the climate clock ticks.

    Cheers anyway,
    B

    Liked by 1 person

  2. Fred (Au Natural) Says:

    This war is entirely on Putin. He started it in 2014 under a bunch of invalid assumptions and hyper-escalated escalated it this year under another batch of amazingly bad assumptions.

    Russia can’t afford to stop selling to Europe any more than Europe can afford to stop buying. Wars are expensive and the Russian economy was already in the pits before this started. But Europe can shift away from Russian hydrocarbons much faster than Russian can shift to China. (The Greens see this as forcing Europe more into conservation and renewables and think it is beautiful. I agree with them.)

    The war will be functionally over before Russia can spool up new pipelines, especially with the loss of all the western corporations who were working on their existing projects. We’re talking a decade. I expect Ukraine will be decided in a year or two. Win or lose, Putin’s upcoming Donbas campaign may well be the last major offensive of the war.

    Trains can make up a little bit for limited pipelines but Russia has a rolling stock problem and the Trans-Siberian railroad is a bottleneck. Somebody has to build a bunch more tanker cars and locomotives so that China can buy trickles of heavily discounted gas and oil. Tankering it out of St. Petersburg (Maybe even Murmansk? Archangel? Black Sea Ports?) also possible with extreme limitations. The TurkStream pipeline is still running, but it goes through NATO. Not a secure bet.

    Not saying that Russia will collapse but things will get tough. Very tough. The old beans v. bullets problem. There’s a risk of them turning into a version of N. Korea.

    It is long but this is the best analysis on the topic I’ve seen.

    Liked by 1 person

    • philebersole Says:

      Interesting video, Fred. Thanks for sharing it. I appreciate that the speaker agrees with the point of this post, which is that switching over Russian oil and gas to Asian destinations is not something that can be accomplished overnight.

      I agree with the speaker that the Western alliance (NATO plus Australia, Japan, etc.) can accomplish the economic ruin of Russia, given the will to sacrifice Western living standards and Ukrainian lives.

      I am not as matter-of-fact about these sacrifices as he is. The U.S. economy is already under strain from climate-related catastrophe, the COVID pandemic and lack of an industrial policy. Food prices, gasoline prices and rent are going up, and wages are not.

      The speaker is probably on a level of society in which these things don’t matter. Millions aren’t. I’m not. No doubt our government can make the Russians suffer more than we Americans are, but how does that benefit us?

      We are supposedly going to war out of sympathy for the Ukrainians, but the speaker says it is important to keep the Ukrainians in the fight and not let them get discouraged, regardless. Which implies that the U.S. is not helping the Ukrainians to altruistically save them from the Russians, but keeping them in the fight to serve their own purposes.

      The speaker says Russia cannot thrive if it is cut off from the Western financial system. But China’s plan is to create an alternate financial system not controlled by the U.S. or the European Union. Driving Russia and other countries into the arms of China’s system does not benefit the United States.

      The speaker interprets Vladimir Putin’s aim to be the acquisition of the energy resources of Donbas, and points out that this would be pointless. He’s right. It would be.

      So maybe he has a different aim. Maybe his aim is the aim he’s been talking about for 20 years, which is to prevent the NATO alliance from getting itself into a position where it can militarily threaten Russia’s existence.

      The speaker asks what happens if Russia wins a military victory over the Ukrainians and Zelensky simply says, “No,” and keeps on fighting. An excellent question. What does the U.S. do if Putin says “No.”

      What if Zelensky, Putin and Biden all decide they can’t afford to admit defeat? How does it end? How do all sides back down from the mutually destructive conflict? I wish I knew.

      I don’t mean to belittle the speaker, though He knows his stuff and he presented interesting material.

      Liked by 2 people

      • Fred (Au Natural) Says:

        Maybe they just don’t? How long did we hang on in Afghanistan? How long in Vietnam? How long did the USSR, arguably more powerful than Russia today, stay in Afghanistan?

        At one time we had a half million troops in Vietnam and it still didn’t break the North. I don’t believe Putin has the resources for victory so he’ll move the goal posts.to where he is at and call it quits.

        I don’t know about altruism. I don’t see any way for it to exist in a pure state. Reciprocal altruism is a different thing.

        The real problem is that NATO sees the exact opposite situation from Putin. They fear he’ll move to take back the old Soviet satellites and republics. That’s a fight they don’t want to fight. NATO was sleep walking until all this happened assuming war was impossible because of the trade relations and the impossibility of challenging a nuclear power on its own soil.

        I’m not sure how he can be convinced that he can peacefully coexist with the west when he has this fantasy of NATO suddenly pouring into Russian turf. The west may be able to accept some degree of discomfort but it is not suicidal.

        I think Biden has some degree of altruism going on but it is tempered by the demands of state craft. He’s made a couple of off-the-cuff pronouncements that imply he’s feeling an emotional connection the Ukraine.

        Liked by 1 person

    • philebersole Says:

      I also agree with the speaker about having a Marshall Plan equivalent to help Ukraine rebuild.

      But I’d be surprised if this is done. The USA of the Marshall Plan is no more.

      Our leaders today boast of their ability to “inflict pain” on nations that displease us.

      Liked by 2 people

      • Fred (Au Natural) Says:

        Absolutely, Marshal Plan is the only way to actually “win” the war after the shooting dies down. We had no such plan for Iraq or Afghanistan, hence, eventually we lost.

        Do we have to will and moral clarity it requires? Biden might but I’m not too sure about the rest of Europe.

        Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.


%d bloggers like this: