Tag Archives: Energy

EE UU v. Alemania: Sanciones y el oleoducto ruso Nord Stream 2 | Fui invitado en “El Fundo” de DW TV

capture.-dw-ns2-15aug20aAquí abajo se puedan ver la grabación de la tortulia del 15 de agosto entre dos expertos y yo en el programa “El Fondo” de la red alemana de Deutschewelle (DE.de TV) sobre “la lucha entre aliados” de los EE. UU. y Alemania en la que Washington ha amenazado con fuertes sanciones contra su aliado de la OTAN, Berlín, por su participación en el proyecto del gasoducto ¨Nord Stream 2¨ con Rusia.  Gracias a DW y su moderadora venezolana Silvia Cabrera.

El video: https://www.dw.com/embed/640/av-54570546 |  Descargar MP4 |  Enlace permanente https://p.dw.com/p/3gyI6

Tenga en cuenta que estas no son sanciones del presidente Trump, sino sanciones impuestas por el Congreso en contra de los deseos de Trump y con el amplio apoyo de ambos partidos. Hay mucha ira en el Congreso contra Rusia por sus malas actividades en Europa en materia de suministro de gas natural al continente por parte de Moscú de forma geoestratégica, pero también por su invasión de Ucrania en 2014, y sus extensas actividades contra las democracias del Oeste.

Para Estados Unidos, este proyecto es una peligrosa colaboración de Alemania con Rusia contra los intereses y la independencia energética de la UE y especialmente de Ucrania, un país con partes de su territorio ocupadas por Rusia desde 2014.

De la propaganda del programa El Fondo de DW.de:

“¡Extorsión!” “¡Guerra comercial!” que traería gas de Rusia a Alemania. ¿Se dañará la relación entre Alemania y Estados Unidos? ¿Definirá Estados Unidos la política energética alemana?

Decoding the Oil Price War 1: Moscow seized COVID crisis to hit US shale, force sanctions relief

This slideshow requires JavaScript.

The “Oil Price War of 2020” was launched at the worst possible time.  The COVID-19 pandemic was spreading to the world beyond China, promising to kill tens-of-thousands, and bring a global economic collapse.

However, this war was not preordained. Things could have gone otherwise from the start.  It was a decision, a sort of Pearl-Harbor-esque surprise attack, announced by Russian minister of energy, Alexander Novak, upon his arriving late to the OPEC-plus summit hall in Vienna on March 6.

If Moscow now abandons its all-out war on US shale, it will be because Putin has miscalculated.  He was willing to increase the pain for everyone else by exploiting the COVID-19 energy crisis in a half-baked attempt to get out from under the US sanctions.  However, the unanticipated repercussions might get too hot for Moscow.

The facts about why Putin decided to launch this oil price war are important to decode.  A key aspect to understand is that Moscow’s game plan was to blame the Saudis; and it soon began a disinformation campaign saying the Saudis launched the war.

We shall see, below and in future posts, how this blame-shifting is a stratagem designed to manipulate a section of US politicians and especially independent US oil producers, who traditionally hold strong, anti-Saudi sentiments (to be clear: they have good reasons to hold these anti-Saudi views), to preferentially sympathize with Russia against the Saudis and to lobby Trump and Congress to give Moscow relief from US sanctions.

Whether this Oil War strategy of Moscow can, at least in part, succeed in freeing Russia from US sanctions is not clear.  But, Moscow’s is highly motivated to succeed due to the significant constraints these sanctions are imposing on Russia.  They include sanctions in retaliation for its war against Ukraine, since 2014, which have undermined expansion of Russia’s domestic oil and gas sector; sanctions which have stalled Russian-German plans to finish the Nord Stream 2 pipeline; and sanctions on Rosneft’s efforts to sustain the Maduro dictatorship in Venezuela.

Today, as explained below, I would say the odds are against Moscow’s success, with the plan bordering on adventurism.  The Saudi’s initial response, in so far as it specifically targets Russia’s oil business, is rational; however, by de facto joining the Russian oil price war on US shale,  the Saudis will also provoke a backlash from powerful US oil-business and political interests, which is likely precisely what Putin and Igor Sechin hoped to bait the Saudis’ Prince MbS into doing.

Considering the pain the world is already suffering, Putin and Sechin’s callous game to exploit the COVID-19 oil-market crisis must be seen for what it is.  Most especially, one should not acquiesce to Moscow’s disinformation campaign to shift the blame elsewhere.

In Vienna: Who started the price war?

For weeks, Riyadh had aggressively lobbied the 10 OPEC and 11 non-OPEC members of the OPEC-plus alliance to agree to a major production cut.  This alliance had been born in 2016, of a newfound, market-dictated, yet grudging, Russian-Saudi mutual recognition of the reality that only such a large-scale collective effort could begin to get control of a market in long-term oversupply.  By December 2019, their OPEC-plus group had Continue reading

Europe’s Gas Crunch:  The Pending Crisis Around Nordstream 2 & Ukraine Transit

My public talk in Washington, 12 June:

pic_my_12jun_kennan_talk_european_gas_crisis

Despite Berlin and Moscow’s rush to make the Nordstream 2 (NS2) pipeline construction through the Baltic Sea a fait accompli, opposition from several EU states has stalled its completion. Meanwhile, Gazprom’s transit contract with Ukraine will expire in January and Moscow has put unacceptable preconditions on negotiating a new one. Once again, Europe must brace itself for a Russian gas-supply crisis. Professor Thomas O’Donnell will discuss European states’ various interests and heightened energy anxieties, the prospects for the NS2 pipeline, and Russia’s strategy.

Speaker:  Thomas O’Donnell, 

Instructor, Hertie School of Governance, Berlin;  Title VIII Short-term Scholar, Kennan Institute — Scholar’s Research-Project Page at Kennan

RSVP Now

Wednesday, June 12, 2019
2:00pm-3:00pm  –   5th Floor Conference Room

Directions

Wilson Center
Ronald Reagan Building and
International Trade Center
One Woodrow Wilson Plaza
1300 Pennsylvania, Ave., NW
Washington, D.C. 20004   Phone: 202.691.4000    kennan@wilsoncenter.org

Washington interviews: Energy Relations of Russia, Germany, Poland & Ukraine (Kennan Fellow)

g7-trump-merkel-round-9jun18-jezco_denzel_ger_gov_photo.jpgWhat are US experts’ and officials’ views on the increasingly conflictive energy and geostrategic relations between Russia, Germany, Poland and Ukraine? 

Greetings. I’m in Washington as a “Title VIII” fellow of the Kennan Institute in the Woodrow Wilson Center, interviewing people in think tanks and government (legislative and executive) on these topics. I’ll also give a public talk on this at Wilson on 12 June, at 2 PM (more info soon). putin_wink-round-hnewkremlinstooge-wordpress

I’m interested to hear anything readers think should be asked and of whom.  Don’t hesitate to write me at twod(at)umich.edu or my (temp) Wilson email: thomas.odonnell(at) wilsoncenter.org

A central issue: why is Germany so adamantly for Nordstream 2 despite the negative security consequences for Ukraine and despite the tremendous hit this project is causing to German soft-power not only with Poland, but with most Central and Eastern European (CEE) and Nordic states?  (Here’s my own analysis.)  How do US experts see this? Continue reading

Germany backs small-scale LNG import terminals despite opposition [my King’s College/EUCERS paper]

Here is my detailed analysis of the decision by Angela Merkel’s government to begin “small-scale” Liquid Natural Gas (LNG) imports to address greenhouse gas emissions and competitiveness issues in Germany’s heavy-road transport and maritime-shipping sectors.  Read it below (via Scribid) or go directly to EUCERS.  [This peer-reviewed paper appears in the King’s College-London, Newsletter of the European Centre for Energy and Resource Security (EUCERS), Issue 77, July 2018.] – Tom O’D.

Germany’s Real LNG Policy [My BPJ analysis]

bpj_erdgas_statt_diesel_c-reuters_28jun18

“Natural gas instead of Diesel” © REUTERS/Hannibal Hanschke

My latest at: Berlin Policy Journal (German Council on Foreign Relations), June 28, 2018:

Germany’s Real LNG Policy
Germany’s government has endorsed imports of liquid natural gas for the first time—but not because of Russia and Nord Stream 2. 

The German federal government has decided in favor of building liquid natural gas (LNG) import terminals and infrastructure. In March, Chancellor Angela Merkel’s CDU/CSU-SPD government, in its “coalition contract,” pledged to “Make Germany the site for LNG infrastructure.” This is a notable policy change, because in Germany the opposition to LNG imports and use has been so much stronger than anywhere else in Europe.

The aim of this new endorsement is to reduce maritime and roadway heavy-transport emissions. However, many in Germany argue that using “small-scale” LNG in this way, as a “bridging” fossil fuel, is “wasted investment”. They contend that Energiewende-mandated electric vehicles can and will rapidly de-carbonize heavy transport. Still others oppose LNG imports on the grounds that they would unnecessarily diversify Germany’s gas suppliers with the aim of offsetting increasing reliance on Russian pipeline gas. They insist that Russian pipeline gas has been “historically reliable” and is cheaper for Germany than building large-scale import terminals for LNG.
Continue reading

Putin’s OPEC tactics: Iran sanctions and the Saudis [IBD cites me]

dc-Cover-p9fbkcs8ccuhvnnnubuhqc2fn7-20161201210531.Medi

June 2018 OPEC meeting’s key players (AP)

Last week, Gillian Rich at Investor’s Business Daily (Washington), asked me (Berlin) and others about the OPEC’s 20-21 June meeting. Below here, I give my views in more detail, including the tie-in to the Trump project to isolate Iran and my comment about Putin likely betraying the Iranians again.  The IBD piece is here: Trump Could Make OPEC’s Next Meeting As Dysfunctional As G-7 Summit. 15 June ’18.

We spoke about market and geopolitical aspects. On the latter, I emphasized both the Trump Administration’s evolving plan to sanction and isolate Iran, and Russia’s new role as a central player with OPEC ever since the 2016 joint Russian-OPEC decision to raise production.

That’s when Putin played a new role for any Russian leader. Not only did he coordinate Russian oil policy with OPEC’s, he got personally involved in heated discussions, getting on the phone late in the last night with Iranian and Saudi leaders to get the deal sealed. Continue reading

“Neue Neue Ostpolitik” My BPJ piece on German fury at Senate NS2 sanctions

putin_gabriel_schroeder_dinner with an old acquaintance-der_spiegel_07jun17_U637TtLQ

The US Senate’s decision to expand sanctions against Russia triggered indignation in Berlin, throwing Germany’s geopolitical ambitions over the Nord Stream 2 project into sharp relief.  Read below or get the App.   My other articles at Berlin Policy Journal  

“Neue Neue Ostpolitik”  

Berlin – July 21, 2017    By: Thomas O’Donnell —  On June 15, the US Senate approved an act to sharply expand sanctions imposed on Russia in retaliation for its intervention in eastern Ukraine and annexation of Crimea in 2014. The broadly bi-partisan move that enshrined Barack Obama’s earlier executive orders – intended as a response to Moscow’s alleged cyber interference in US elections – was a stunning rebuke to US President Donald Trump’s Russia policy, essentially taking a broad swath of foreign policy out of his hands. Continue reading

Trump’s promise to “stay totally independent” of OPEC is populist hype [My IBD interview]

eia_apr15_us_oil_prod-importsContrary to his campaign hype (see article below), Trump-as-president will not do anything to interfere with the free flow of oil or gas to or from the USA.  As I pointed out in the Investors Business Daily interview (Gillian Rich’s story is below), people central to Trump’s administration – such as Rex Tillerson, his designated secretary of state and former CEO of Exxon, and Harold Hamm, Trump’s fracking billionaire friend he wanted for secretary of energy – are global-market-oriented businessmen who would never agree to disconnect the USA from global energy markets.

The free flow of petroleum through the unified global market traded in US dollars – what I call the “Global Barrel” – is central to the business model of every private as well as every national oil company.  Today there is essentially one, global oil price. If you break up the global market by limiting imports or exports, you get national markets with national prices.  Then what?

If the US price went higher than the global price due to keeping out cheap foreign oil, Trump’s popular approval would dive. And, if the U.S. price went lower due to a domestic production glut of fracked oil, then his support among business would tank.

Moreover, the unified global market serves as the key element in the world’s collective energy-security system by guaranteeing equal access and prices to all suppliers and consumers.   Continue reading

Pipe Dream? Polish ruling complicates Nord Stream 2 pipeline for Gazprom & EU partners [My Berlin Policy Journal piece]

bpj_online_odonnell_nordstream2_cutHere’s my latest analysis in Berlin Policy Journal (German Council on Foreign Relations -DGAP).Pipe Dream? The Nord Stream 2 pipeline project is in danger of being derailed.
THOMAS W. O’DONNELL , SEPTEMBER 22, 2016 

A pipeline project to double Gazprom’s export capacity to Europe has always been controversial. A recent ruling by Poland’s competition authority could seriously undercut the support it has accrued, leaving its European backers at odds.

The proposed Nord Stream 2 pipeline project has bitterly pitted European states that back the project, including Germany, the Netherlands, Austria, and France, against project opponents, including Ukraine, Poland, and other former Soviet-bloc states. The project aims to double the capacity of the existing huge, 55-billion-cubic-meter-per-year Nord Stream 1 pipeline, running in parallel to it under the Baltic Sea from near St. Petersburg in Russia directly to Greifswald in Germany.

This dispute has exposed two very different views of Gazprom, Russia’s state-owned gas-export monopoly, and of Vladimir Putin’s Russia itself – one side sees it as a “necessary” and “reliable” energy supplier, the other a dangerous and manipulative adversary. This dispute is but one more collision inflicting lasting harm on the European Project.

Polish competition authority rejects project

The latest row involves a ruling in late July by the Polish Office of Competition and Consumer Protection (Urzed Ochrony Konkurencji i Konsumentow, or UOKiK) rejecting an application by five private western European energy firms proposing to partner with Gazprom to build and operate Nord Stream 2. The firms are Germany’s E.ON (soon to be Uniper) and Wintershall, Austria’s OMV, Anglo-Dutch Shell, and France’s Engie.

Shortly before the Polish announcement, the five companies agreed to withdraw their association proposal to avoid UOKiK initiating a legal process against them. The commission’s president, Marek Niechcial, declared categorically on August 12 that the Polish rejection was definitive, asserting “This will stop the [Nord Stream 2] deal.” The five firms have nevertheless made it clear they are seeking a strategy to work around the decision, and expect to proceed as planned. Gazprom has said the same.

So why go through this proceeding in the first place? To understand these events better, I spoke with several experts and diplomats working on these matters in Moscow, Berlin, Washington, Paris, and Warsaw.

Commercial Arguments

An often-heard line of argument is that at least some of the five companies might actually have little commercial interest in the project, but need to preserve their relationships in Russia where they have large investments in energy projects. After all, the Kremlin has a track record of taking over projects from foreign partners with whom it has fallen out. A further theme in this vein is that Nord Stream 2 is not really needed in northwestern Europe, even though the Groningen field in the Netherlands and Norway’s reserves in the North Sea are declining, because future demand in northwestern Europe is overestimated and Liquefied Natural Gas (LNG) will be available from the United States. This view led to press speculation that the five firms likely welcomed the Polish decision, allowing them a graceful exit.

However, virtually all the experts I spoke with had no doubt Nord Stream 2 would be a lucrative commercial enterprise over the long run, and that the five firms seem genuinely enthusiastic. Continue reading