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.

The Syrian conflict and gas pipeline routes

Is the revolt in Syria part of an age-old conflict between Sunni and Shiite Muslims?  Iran and Iraq have Shiite majorities, Hezbollah represents the Shiites in Lebanon and Syria’s government has long cultivated the Shiites.  The rebels in Syria are Salafi Sunni Muslims supported by the Sunni Muslims of Saudia Arabia, the Gulf oil sheikdoms and the Muslim Brotherhood.

But if it is part of an age-old conflict, why does this conflict lie dormant for generations and then suddenly flare up?  Pepe Escobar of Asia Times has an explanation.  He wrote that the religious conflict is being instigated to block plans by the governments Iran, Iraq and Syria to build a pipeline from the Mediterranean to the rich Persian Gulf natural gas field lying between Iran and Qatar.

Yellow lines show proposed pipeline routes.  Dark lines are existing pipelines.

The Iran-Iraq-Syria gas pipeline is an economic threat to Saudi Arabia and the Persian Gulf oil sheikdoms, who are the main financiers of the Syrian revolt.  It would enable Iran to export oil even if the Strait of Hormuz in the Persian Gulf were closed.

The proposed pipeline also is contrary to the economic interests of Turkey, whose government supports the Syrian revolt.  Turkey has access to the natural gas of Azerbaijan and Turkmenistan.  The Turkish government’s goal is to extend a pipeline to the heart of Europe and offer an alternative to Europe’s dependence on Russian natural gas.  The Nabucco pipeline could serve Iran, but the Turkish government for now has decided to deny access for now.

What is the national interest of the United States in this?  An Iran-Iraq-Syria pipeline would not necessarily compete with U.S. companies engaged in hydraulic fracturing for natural gas.  The gas would only be available to customers that could be reached by the pipeline.  But there would be no detriment that I could see to U.S. consumers.

The U.S. objection is that it would hamper the U.S. not-so-cold war against Iran, which is being waged largely in support of Israel and Saudi Arabia and partly in revenge for the U.S. national humiliation in the Iranian hostage crisis of 1979.  I don’t think economic warfare against Iran is in the interest of the American people.  I think the policy of the United States should be to wind down that war rather than extend it.