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Page added on August 13, 2014
Can Europe Survive Without Russian Gas?
The western world has placed many sanctions on Russia and its economy. However, Russia holds major leverage over Europe; it has oil and Europe needs it (and may just do a ‘deal’).
Tensions rise in Eastern Europe, as the western world hits Russia with new sanctions. Late last month, President Obama and the European Union imposed sanctions in hopes of deterring President Putin from further aggression and putting an end to his support of Ukrainian separatists.
The aim of previous sanctions was to focus on specific individuals and businesses, while the newest ones are aimed at major pillars of the Russian economy. The oil industry is a major target, as Russia has become the world’s largest oil producer and it accounts for a large portion of the Russian economy.
However, the sanctions against Russia do not target the country’s natural gas sector or its state-owned Gazprom, as about one-third of Europe’s gas supplies come from Russia. Last year, Gazprom exported 162 billion cubic meters of gas to Europe.
The escalations in oil sanctions have the potential for major price hikes for Europe, especially since the winter season approaches, which is the peak gas consumption period. If Russia cuts off gas to Europe, then many nations will be scrambling to find alternative gas suppliers and it will inevitably drive up prices.
Also, President Putin signed a $20 billion oil deal with Iran to mitigate western oil sanctions. The deal will see the two nations cooperate on the production and sale of oil, and Russia will help develop Iran’s energy infrastructure and equipment.
38 Comments on "Can Europe Survive Without Russian Gas?"
penury on Wed, 13th Aug 2014 8:56 am
The quick answer to the question=NO nuy, the Eu is about to discover they can survive without U.S.
Davy on Wed, 13th Aug 2014 9:12 am
No P, we are all going to discover we can’t survive without each other without our global economy coming apart.
ghung on Wed, 13th Aug 2014 9:25 am
Define “survive”. A comatose patient survives.
Makati1 on Wed, 13th Aug 2014 10:03 am
Survival is relative, as ghung said.
The EU has to choose between recession/depression, if they hang with Washington, or less financial pain and a warmer winter if they back away from sanctions and move East.
Russia is just buying their meat, fruit and veggies from China, Brazil, etc. Ditto for electronics once bought from the West. Putin visiting Egypt moves that country closer to Russia. Ditto for Iran, Iraq, Syria, etc.
At this point, Putin is still several moves ahead of the West and I think the Black Queen is in trouble. Stay tuned.
JuanP on Wed, 13th Aug 2014 10:51 am
The Europeans are meeting tomorrow, Thursday, in Brussels to discuss the Russian food import ban. I wonder what will happen next. The US government is also pissed with the Russia-Iran deal and will retaliate, IMO. I expect further escalation on the Russian front.
I have heard from two different people I personally know that the Russians are buying every pound of beef, chicken, pork, grains, fruits, and veggies they can get their hands on in Uruguay and outbidding other buyers at auctions. They have also bought all the powdered milk and are planning on buying other dairy products on a large scale.
I also heard from someone who markets South American open range grass fed organic Aberdeen Angus on a global scale that they sold out to the Russians at market prices. It looks like the Russians are raiding South America for food commodities.
noobtube on Wed, 13th Aug 2014 10:53 am
B-B-But I thought the “West” was so rich. The media and politicians are always yelling that the “West” is so advanced.
They said the “West” was so developed.
They said the “West” was so affluent.
They said the “West” was FIRST world.
And… they said the Third World (i.e. everyone else) was so poor, so far behind, so primitive, so needy, so overpopulated, so inferior.
Yet, the “West” can’t afford to heat their own homes, one winter, without the help of Russia and everyone else (the Third World).
Does that mean the “West” has been lying all along and only has the prosperity it has enjoyed by living off and stealing from the rest of the world?
That can’t be! The “West” is supposed to be so superior to everyone and entitled to more by virtue of their sheer awesomeness and superiority.
Why can’t the “West” just live off that and stay in their own areas?
If the “West” cannot support themselves without begging/murdering/destroying the rest of the world, what does sheer awesomeness, exceptionalism, superiority, and entitlement really get you?
I just don’t know what to believe anymore.
Arthur on Wed, 13th Aug 2014 11:20 am
JuanP, Russia is doing what Germany did in the thirties, when they were boycotted: do business with South-America and circumvent the boycot imposed by US/UK. And it worked.
Davy on Wed, 13th Aug 2014 11:23 am
Juan, it is the same thing that happens with other global commodity and trade wars. We will see more trade and distribution distortions further stressing an already fragil system. The system was operating efficiently before this crisis so tell me these Russian actions are a more efficient system. It is surely not for a variety of reasons from the administration changes to the increased distribution distances. Now the products the Russians have purchased will cause normal buyers to look elsewhere. We are talking added costs anyway we look at it for the Russians and the rest of the global trading system. Trade wars are a downward spiral that lead to everyone less well off. I say bring it on because I want BAU in crisis if we can survive the crisis this may force attitude and lifestyle changes globally.
Arthur on Wed, 13th Aug 2014 11:29 am
Europe gets its fuel from Russia and the ME. The supply security from the ME gets more shaky with every passing day, but the EU nevertheless continues to throw in the windows of the only reliable gas station she has, just because her pimp tells her to do so. I haven’t been so disgusted with Europe in my entire life.
JuanP on Wed, 13th Aug 2014 11:39 am
Davy, All these steps are backwards, IMO. How can it make sense for Russia to import from halfway across the world instead of buying from their neighbors? Think of the additional shipping costs, most of this stuff will travel halfway around the world in refrigerated containers. Not to get started on the supply disruptions that have their own costs. And the Russians are paying top dollar for these products, in dollars, instead of the better negotiated price agreements they had in the EU before in Euros.
This is good news for farmers back home, though. They are very happy. As Art pointed out South America benefitted from WW1 and WW2 enormously. Those times are called “The times of the fat cows” back home, because selling beef, wool, and other agro products was incredibly profitable for Uruguay and surrounding countries during and after the world wars.
Energy Investor on Wed, 13th Aug 2014 4:12 pm
Of course the sanctions could destroy New Zealand.
Australia is on the sanctions list and NZ has plenty of dairy products but with the sanctions on Europe, the European farmers will flood the Asian markets that NZ sells into.
Yet NZ will not break the sanctions on neighbours to supply Russia.
Hmmm, something is screwy here 🙂
Northwest Resident on Wed, 13th Aug 2014 5:11 pm
I read an analysis yesterday (can’t remember where) which made the point that Russia would benefit from this latest round of sanctions by forcing Russian farmers and food processors to get off their vodka-drinking butts and start making their own food for a change instead of importing it all from European countries.
Having lived in Russia for a couple of years off and on, I can testify that the local markets are all fully stocked with potatoes, eggs, cheese, sausages and other products “made in Russia” — and that is what the majority of people subsist on. But there is a lot of imported food products also, and a LOT of imported booze, all from European countries, and Russians buy that stuff up.
Who knows? Maybe one of the goals of these sanctions is to force Russia to become more self-sustaining in their food supply?
JuanP on Wed, 13th Aug 2014 6:10 pm
NWR, Increasing Russia’s food systems resiliency must have been a serious consideration in considering this food import ban. A luxury car import ban could be a good sanction against EU in the future, if things continue deteriorating in the Russian front, as I expect. Or declaring bottled water a national security issue in Russia and kicking Coke, Pepsi, Nestle, and other multinationals out of that market. Or stop enforcing TRIPS in Russia, screwing the software, drugs, and entertainment industries at the same time. Blocking Titanium sales. All these measures of course come with corresponding countermeasures from the other side. Where will this madness stop?
Kenz300 on Wed, 13th Aug 2014 6:47 pm
‘It is time to speed up the transition to safer, cleaner and cheaper alternative energy sources.
Europe needs to diversify types of energy resources and energy providers. It is always best to have choices and options. The more competition the better.
———————
Global Renewable Energy Status Uncovered
http://www.renewableenergyworld.com/rea/news/article/2014/08/global-renewable-energy-status-uncovered?page=all
dissident on Wed, 13th Aug 2014 10:15 pm
Retarded little cartoons for the lemmings.
Don’t forget, you EU morons, that you are getting the Russian gas for less than Norway sells it. Now that the regime in Kiev is demanding the EU change the terms of the contracts with Gazprom for gas transiting through its territory, Russia should take the opportunity to jack up the rates to be higher than those of Norway. The EU can go eat mythical US LNG if it ain’t happy.
clueless on Wed, 13th Aug 2014 10:50 pm
Very well said NOOBTUBE !!!
Richard Ralph Roehl on Wed, 13th Aug 2014 11:53 pm
It’s going to be a long cold winter for Europeans.
Northwest Resident on Thu, 14th Aug 2014 12:15 am
JuanP said: Where will this madness stop?
If you ask me, the madness is just beginning. It is a sobering thought to realize that economic growth as most of us have known it during our lifetimes is most likely kaput — gone and done. From here on out, the pressure only builds. More shortages, more people demanding their share of a shrinking pile of goodies. True madness is on the horizon. I’m sure we haven’t seen anything yet.
MKohnen on Thu, 14th Aug 2014 12:56 am
NWR,
Couldn’t agree more. Name me one trade war, which the US/EU/Russia are certainly engaged in, that was ever amicably set aside. I don’t know about the Russian’s history with trade wars, but I am quite familiar with the US’. And the US fights trade wars to win – always! I’ve never seen them back off of one. I guess people could say they backed off recently with regards to Iran. I say that was all smoke and mirrors. I think the Chinese informed the US that they were going to increase fuel purchases from Iran; the US could spin however they wanted, but China needed the fuel. So to continue projecting total control over the situation, the US suddenly came to “agreements” with Iran that just happened to match the amount that the Chinese increased their purchasing by.
So, yeah, I think you’re right on the money when you say “True madness is on the horizon.” But the horizon remains the same distance away no matter how you approach it. The madness you speak of, unfortunately, is rapidly descending upon us.
Arthur on Thu, 14th Aug 2014 1:55 am
Richard Ralph Roehl
“It’s going to be a long cold winter for Europeans.”
That would be very uncomfortable in the short term, but could be very beneficial in the long term. It would provide a huge shock that will drive home the message that we have a serious energy problem. It would crush any last remaining resistance from professional protesters who complain against the noise wind turbines produces, against the poor bats that are hit by rotor lades, about ‘ruining the landscape’, etc. We need a rush into renewable energy, while there is still some fuel left. Finally, it will call into question the value of being a (subservient) member of the western alliance. Notably Germany is “on the fence”, as Davy likes to put it.
Arthur on Thu, 14th Aug 2014 2:24 am
A short look on the map shows that it makes perfect sense for Iran to sell it’s oil northwards to Russia. The US navy may controle the sea lanes, including the Strait of Hormus, but it does not control Mackinder’s Heartland. Russia is the Heartland:
en. wikipedia.org/wiki/The_Geographical_Pivot_of_History
Russia ownes a vast Eurasian pipeline system, by which customers everywhere in Eurasia can be serviced, provided they behave, of course. And Europe does not. Not at the moment.
When Europe will finally make the geopolitical U-turn, as I expect it will, towards Paris-Berlin-Moscow, the first thing that will happen is that Spain will finally kick the British from Gibraltar, with full backing of Europe and Europe from then on will control access to the Meditarrenean, radically changing the entire geopolitical picture. All oil & gas from the ‘strategic ellipse’ (74% of the worlds oil and 70% of the worlds gas reserves) can be distributed over land, instead of over seas.
deepresource.files.wordpress.com/2012/01/strategicellipse.png
This is exactly the scenario Brezinshy is warning against in his book The Great Chessboard.
Verstuurd vanaf mijn iPad
Makati1 on Thu, 14th Aug 2014 4:07 am
NWR, I think you are correct. The madness is just starting. What a difference 20 years makes! To a young person, 20 years may seem like a long time, but to me, who has seen 3 1/2 times that many, it was almost yesterday. Perhaps it is just that we have instant access to anywhere in the world today, but the madness seems to be multiples of what it was in the 90s and ramping up into that hockey stick graph we see so often.
I have a large laminated wall map of the world that I mark hot spots in red. There are so many that I am considering just coloring in the areas NOT in some
sort of trouble leading to the SHTF. If it is not wars, then it is financial bankruptcy, or severe drought, or deadly disease. The Four Horsemen are already riding…
Arthur on Thu, 14th Aug 2014 5:51 am
“I have a large laminated wall map of the world that I mark hot spots in red”
The peak oil doomer command & control center 🙂
Davy on Thu, 14th Aug 2014 6:56 am
Was it not trade wars that were part of the run up to WWI? Here is a WIKI reason for WWI :
“The underlying causes of World War I, which began in the Balkans in late July 1914, are several. Among these causes were political, territorial and economic conflicts among the great European powers in the four decades leading up to the war. Additional causes were militarism, a complex web of alliances, imperialism, and nationalism.”
The world is of course different now but the science of conflicts are not. The many and varies causes of WWI are similar to today. The difference today is I seriously doubt we will have direct confrontations of the great powers. It is just too expensive and unwinnable. Sure the great battle might be won but the war will not. At this point in time the systematic risks are such that any great battle will destroy our current economic system. With that said proxy wars and polarizing cold wars are in the making. In fact the whole world is simmering. This is precisely what we see within countries as carrying capacity is breached and populations must face social and economic decline. When the pie shrinks the glue of contentment and happiness melts away leaving instability. We are now at the point globally with so many areas feeling the pinch of a shrinking pie with multiple predicament that we are seeing a global social, political, and economic instability. The short Pax Americana period of free”ish” markets, “quasi” democracy, and global trade/political institutions only work properly in a time of growth and increasing wealth. These structures by nature do not function properly in descent. We are in a de facto descent albeit hidden by repressed financial system with corruption and rigged markets. The descent is in the political and social realm with wealth transfer, non-representative democracy of oligarchs, legalized mafia’s, de facto dictators, and a global multinational corporate money machines directing political economics. These structures were for a short time multipolar and united in the pursuit of growth and increasing prosperity. It was preached that globalism would raise everyone’s standard of living so it was embraced with vigor. As growth has plateau and currently in a bumpy decline theses structure are polarizing and conflicting. Folks this spells the end of BAU which is the complex global interconnected economic system we live in where our local support has been delocalized and now is reliant on a global system of just in time production, energy intensive distribution, and brittle global trade and exchange mechanisms. When this system bifurcates the level of productions of the vitals like food, energy, and all matter of equipment needed to run a complex society will collapse. The profound question, since this has never occurred globally, is how far and how long will this descent last. Where/when will the reboot be and at what economic level. How much physical and intellectual infrastructure will be lost? We are engage now in the last of an age. All of us are right now at the cusp of a great descent that will be earth shattering. It will be the greatest moment in human history because of the size of the population and the inclusiveness of our global co-dependence. It will never happen again. It is truly a fantastic time we are in. Unfortunately a deadly and painful time but with pain and death comes rebirth let us hope, at least in the past that is what happened. This could be the end or extinction.
Makati1 on Thu, 14th Aug 2014 8:28 am
Arthur, when you are retired, I hope you too have hours to do what you like. My new hobby is current events around the world and I hope to pursue it as long as possible. I did my 50 years of slavery to the banksters and raised a nice self-supporting, educated family. Been there, done that. Now I am in Asia enjoying new challenges and experiences while the world unravels.
JuanP on Thu, 14th Aug 2014 8:30 am
Mak, I must have thought of buying a world map for my wall a million times. I had a globe as a child and I spent endless hours looking at it and memorizing all their countries and capitals, some of that knowledge is gone from my accessible memories now. I keep this shit that’s going on in my mental world map and it is driving me crazy with information overload. I also limit my reading, I do it because I am compulsive about it and would read all day if I allowed myself. Outdoors activities help me try to keep my life in balance.Your idea of focusing on the cold spots sounds good, too. Let’s talk New Zealand.
JuanP on Thu, 14th Aug 2014 8:45 am
Davy, great comment. It’s for the comments that I come here. Almost always read them before the article. We don’t agree on everything, but we see many things in similar ways, and our outlook for the future is one of them. My experience with a nation’s cowardice and fear during times of abuse and repression taught me some lessons that I will never forget. It’s like being at war for all civilians from morning till night for years, always worried if everyone would make it home for dinner that night or maybe your father or your sister disappeared and was never heard from again, you get used to it, humans are creatures of habit, but it was exhausting for an opinionated freak like me. Some people have no idea how hard things can get when things get tough, not all will be cooperation.
Davy on Thu, 14th Aug 2014 9:01 am
Juan, I have been through the school of hard knocks personally. I would say unfortunately for me more than many. Yet, it was always in the context of a stable family and society. What you experienced is amazing and puts you a step ahead with a martial law environment which we may be heading towards. Looks like I underestimated the STL crisis and I may be closer than I realize to the iron hand of a militarized government disguised as a pluralistic democratic society.
Arthur on Thu, 14th Aug 2014 9:41 am
“Arthur, when you are retired”
As a freelancer I maybe work 3-6 months per year. So, my part-time retirement started directly after I left university. I will continue this life style until I drop dead.Since all my debts including mortgage are paid for a long time ago, I can always do what I want.
Northwest Resident on Thu, 14th Aug 2014 9:44 am
Gazprom To Europe: We Own You (At Least Until 2016)
On topic with this posted article, you might find the above-titled article also very interesting.
The point being made in this article — what strikes me as the main point — is that Europe is indeed totally dependent on Russia/Gazprom for their energy. Attempts to start up fracking operations in order to become more self-sufficient with energy needs have been frustrated and delayed and probably rendered “no-go” due to the fact that European citizenry will not tolerate the poisoning of their water, the noise, the landscape destruction and all those environmental downsides that come with fracking. BUT!!! As it turns out, some of the most potentially viable fracking sites in all of Europe just happen to be in Ukraine — a place where the poor, destitute and desperate Ukrainian people will be in no position to protest against fracking in their neighborhoods. If true, then wouldn’t that finally begin to explain the REAL reasons behind this manufactured Ukrainian conflict and the diplomatic wars surrounding it? Goal: Frack the shit out of Ukraine to provide NG for European consumption. Method: Create chaos, war and unendurable hardship for the Ukrainians, then give them a chance for “peace” — but that “peace offering” will come with strings attached, namely, you get peace but we get to ravage your landscape and use your water and squeeze the gas out of the rocks that lie under your homeland. Deal, or no deal?
Northwest Resident on Thu, 14th Aug 2014 9:45 am
And, here is that link which I forgot to post in the above rant:
zerohedge dot com/news/2014-08-14/gazprom-europe-we-own-you-least-until-2016
Davy on Thu, 14th Aug 2014 9:56 am
Art you and I are 1’ers in this respect. What pisses me off is now that my rough life finally settled into a dream come true or a serendipity the whole friggen game is about over. Oh well se la vi or something.
N/R, Gasprom owns Europe untill it pulls the plug then no one will own much because a failed Europe is a failed Russia is a failed BAU. In this respect the DC/Wall Street mafia sowed its own destruction through a meddling where they did not belong. I would say they deserve this if it were not for the fact the the rest of our asses are on the line too. Bastards!
JuanP on Thu, 14th Aug 2014 12:20 pm
Davy, I only became aware here yesterday of the STL crisis, but I read some global MSM today, for the first time in a while, and it was the first or second story on the front page of all the papers I read. I am impressed by how militarized the police has become in the USA. Those cops are better armed and equiped than the army’s special forces back in Uruguay.
Northwest Resident on Thu, 14th Aug 2014 12:54 pm
Militarization of the police forces in America has been subtly ongoing for quite a while now. It is not just happening because police around the country think how cool it would be to have military style weaponry, or how cool and fun it would be to deploy military style take-downs. The militarization of police forces across America is a planned and coordinated effort to prepare for what we all know is coming — talking global economic collapse, end of BAU, severe hardships (for some more so than others), martial law, security lockdown like we’ve never had it here in America. And hey, just wait until those Afghan warriors start returning to America, fresh from their battles. Don’t think the plan is to just disband that mighty fighting force — nooo — these guys will be integrated into police forces around the country and the ones who remain in the military will be strategically located to handle the riots, rebellions and other acts of violent chaos that Obama authorized U.S. Military to “deal with” in executive orders issued in 2012. Get ready folks, it is going to all come down, sooner than you expect.
Northwest Resident on Thu, 14th Aug 2014 1:36 pm
Davy — You and I agree on just about everything, or so it seems to me from reading your posts and opinions for quite a while now. But I think we disagree on what is happening in Ukraine/Russia. You seem to believe that Putin is hell bent on establishing dominion over geographical areas via military power, and/or he is using Russia’s fossil fuel bounty to gain advantage over Europe and America. I on the other hand believe that Putin is in league with American and European political/intelligence leaders, and he knows that some games must be played in order to rearrange the deck chairs prior to the good ship BAU sinking into Davy Jones’ locker. I believe the Ukraine fiasco is manufactured, and that there is a strategic outcome that Putin and his fellow European/American political actors are trying to achieve. In Russia they have a saying — “malinki heetrost” — it means “a little trickery”. From my point of view, the Ukraine crisis is a little trickery, a little bit of planned chaos, intended to produce a broad outcome which includes changing the attitudes of a lot of people in the region. Toward what exact end, I’m not sure, but I’ll bet $100 that it has a lot to do with oil/NG, and that broad regional acceptance of Crimea being part of Russia is another one of the goals.
Davy on Thu, 14th Aug 2014 1:38 pm
Juan, that’s what happens when there are more guns than people and many of the people with guns are idiots. I am no gun lover but I am well armed.
Davy on Thu, 14th Aug 2014 1:41 pm
NR, I will never say never to your ideas. I guess we will have to wait and see.
Northwest Resident on Thu, 14th Aug 2014 1:56 pm
Davy — And I don’t claim to be correct in my beliefs. I do tend to believe that there are very smart and powerful centers of consensus in this world who have the means and the will to make big things happen. I may have mentioned (ten or twenty times) on this forum that I got my degree in Public Relations from one of the top universities in that field of study. I see the Ukraine crisis as a major world class PR Event. Like all PR Events, this one is designed to shape attitudes, to achieve well-defined and measurable outcomes. Like any really good PR Event, there are no doubt multiple goals — short term, medium term and long term — all on a list somewhere. And like so many PR Events, the stated and apparent goal of the event is often a subterfuge, with the real goals unstated and unpublicized. Yes, we will have to wait and see. But I really believe that given the rapidly approaching end of oil age and all the chaos/violence that comes with it, TPTB are making attempts to get things arranged to try to mitigate the damage. Think of all the classical art and rich history of Europe — it is our Western heritage, precious beyond any price. TPTB will most certainly do whatever they can to preserve that heritage as it is precious to them also, and they no doubt see themselves as the protectors of our cultural and human heritage. Big mistakes have been made, millions all piled up, greed allowed to rampage unrestrained, all kinds of evils and wrongs perpetrated. But in the end, a lot of those TPTB Club members must have a social conscience and must fear judgment of some kind when they leave this life, as most of us do. I’m not entirely cynical, but very realistic. And I suspect that the Ukraine crisis is part of “the plan”. We will have to wait and see.