Skip to comments.Angela Merkel declares G8 defunct; Europe scrambles to replace Russian gas
Posted on 03/20/2014 7:18:07 PM PDT by SeekAndFind
German Chancellor Angela Merkel has declared the G8 to be dead, thanks to Russia’s take over of the Crimea:
German Chancellor Angela Merkel declared the Group of Eight leading nations defunct given the current crisis in Ukraine, in a clear message to Russia that the world’s seven other major industrialized countries consider its actions in Ukraine unacceptable. “As long as there is no political environment for such an important political format as the G-8, the G-8 doesn’t exist anymore, not the summit nor the format,” said Ms. Merkel, in Germany’s parliament, the Bundestag. “Russia is widely isolated in all international organizations,” the chancellor said.
Ah, yes, the old “isolated in all international organizations” gambit. And what have all the “international organizations” done in reaction to Russia’s Crimean takeover? About what they did when Russia pushed into Georgia. A whole lot of nothing. It is one thing to have international organizations that have teeth and are willing to do something in reaction to such a blatant act. But when they mostly issue statements condeming the action and void the Netflix accounts of certain Russian officals, being isolated from those organizations isn’t such a big deal. All it does is make further diplomatic efforts more difficult, not that it is clear that Russia is open to diplomatic overtures.
Another thing that is happening is Europe is discovering it has managed to put itself in an energy situation that isn’t at all to its advantage. 30% of Europe’s natural gas flows through Russian pipelines (Germany gets 40% of its natural gas supplies from Russia).
So the scramble is purportedly on to change that situation.
European leaders will seek ways to cut their multi-billion-dollar dependence on Russian gas at talks in Brussels on Thursday and Friday, while stopping short of severing energy ties with Moscow for now. EU officials said the current Ukraine crisis had convinced many in Europe that Russia was no longer reliable and the political will to end its supply dominance had never been greater. Everyone recognises a major change of pace is needed on the part of the European Union, one EU official said on condition of anonymity. As alternatives to imported gas, the Brussels talks will debate the European Unions indigenous supplies, which include renewable energy and shale gas.
Now, one would think that such a situation would call for drastic and speedy action. Anyone want to bet how long they dither and, should they decide to exploit their “indigenous supplies”, how onerous the rules and regulations will be?
When leaders of the European Union’s member states meet today and tomorrow (20-21 March) in Brussels, they hope to reach consensus on the EU’s long-term climate goals. But agreement appears unlikely because of deep divisions between east and west. Ahead of the summit, ministers from 13 member states signed a declaration supporting a European Commission proposal for an EU commitment to reduce carbon dioxide emissions by 40% from 1990 levels by 2030 up from a 20% target set for 2020. This green growth group’ includes France, Germany, Italy and the UK. But Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia are wary of the target and the timeline, and are resisting any such commitment.
The latter group will most likely be all for moving ahead as speedily as possible to exploit “indigenous supplies”. They’ll meet some pretty stiff headwinds, apparently, from the Western EU nations. You can almost see this train wreck coming.
Meanwhile in the pursuit of “green energy”, Europe is apparently ready to toss in the towel:
Governments across Europe, regretting the over-generous deals doled out to the renewable energy sector, have begun reneging on them. To slow ruinous power bills hikes, governments are unilaterally rewriting contracts and clawing back unseemly profits.
You have to laugh. ”Unseemly profits”? They’re subsidies, sir. Not profit.
It’ll be interesting to see if the EU has the will to sort this all out in the next couple of days. If one is a betting person, you’d have to guess that the odds for success are long, given the EU’s recent history.
IIRC, Germany was so spooked by Fukushima that they voluntarily chose to dismantle their entire nuclear energy program.
I wonder if maybe, just maybe, it’s beginning to dawn on them that cutting off their own energy supply and instead becoming dependent upon an unfriendly nation was not necessarily the smartest move they could have made.
It’s been about 5 years and you still can’t get a pipeline built from Canada. Good luck getting one across the Atlantic to supply all of Europe.
We don't have the facilites to liquify it or the LNG tankers to ship it. At the other end Europe doesn't have enough refineries to process the LNG imports sufficient to replace Russian gas. Any alternative to Russian supplies is years away.
I know, we could’ve started years ago but for the current occupant of the White House.
Any other president would have been psychic? Up until a month ago there wasn't any reason for Europe to be considering alternative sources for their natural gas. No company is going to invest the billions in an LNG processing plant without a guaranteed customer.
No company in its sane mind would construct a LNG plant under these circumstances. (Although I hear one company is trying, in Texas).
There’s an analysis on the internet that I don’t entirely agree with, in part, because of the magnitude of the prediction. The author predicts the price of oil will fall into the $20 range. I wouldn’t be surprised to see a move below $60 to $80/bbl due to our energy independence.
In the recent past the US has consumed 50% of the world’s oil production. We’ve produced half of that domestically. That means 25% of the world’s oil will be left on the table, so to speak, when we achieve full energy independence. Of course the growth of the world’s demand will take part of it.
That much oil overhanging the market limits the ability of traders to exploit incidents to drive pricing. As the glut undercuts the world oil price, those nations requiring money to support domestic programs such as Russia and Iran will have to pump more oil to maintain their income levels. It may not be a race to the bottom but it will destroy OPEC’s ability to price fix as oil exporting nations undercut each other.
Natural gas is slowly cutting into gasoline’s share of the market for vehicle fuel. As an example West Virginia is pursuing a state fleet powered by natural gas. Fueling stations are being built now with some already in operation.
What is happening is a perfect storm that will drastically reduce oil and gas pricing. Russia may be able to avoid some of that by locking in long term contracts. It will still dramatically reduce the 50% contribution to the Russian federal budget.
As a side note, Putin knows he’s in trouble. One of his recent moves was to tell the oligarchs they’ll have to pay more taxes. His only hope is that Obama doesn’t unleash capitalism in the form of natural gas exports on his ass.
While Putin may try to sell oil in South America he’ll be competing with Venezuelan oil we no longer buy. He’ll also be competing against against Brazil who has long been an oil importer but will soon be one of the world’s biggest exporters.
Sooner, or later, Putin is kaputin.
“Angela Merkel declared the Group of Eight leading nations defunct”
Are they all dead?
“Angela Merkel declared the Group of Eight leading nations defunct”
Are they all dead?
How many is it sitting on currently?
Very widely indeed; with ONLY two allies "left": India and China, and two oceans and four seas at its disposal. Boo-hoo-hoo, such "isolation"
Russia, for all its “non-isolation,” does appear to have a severe case of geopolitical penis envy.
Putin Prepares To Announce “Holy Grail” Gas Deal With China
State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world’s largest producer of conventional gas to the largest consumer.
“May is in our plans,” a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: “It would be logical to expect the deal during Putin’s visit to China.”
India is an ally of Russia? When did that happen?
Call it an uneasy alliance.
OK so it’s not that the DOE is preventing any LNG processing centers from being built, it’s sitting on export applications from countries who do not have free trade agreements with us. So the simple solution would be for those countries to drop their trade barriers and we can export LNG to them since, as the story mentions, export approval to countries with free trade agreements is automatic.