<http://www.truth-out.org/news/item/18293-what-the-us-and-russia-are-really-quarreling-over-pipelines>
What The US and Russia Are Really Quarreling Over: Pipelines
Tuesday, 20 August 2013 10:18
By Steve Horn, Mint Press News | News Analysis
Nearly two months ago, former National Security Agency (NSA)
contractor-turned-whistleblower Edward Snowden handed smoking-gun
documents on the international surveillance apparatus to The
Guardian andThe Washington Post in what's become one of the most
captivating stories in recent memory.
Snowden now lives in Russia after a Hollywood-like nearly
six-week-long stint in a Moscow airport waiting for a country to
grant him asylum.
NSA leaker Edward Snowden leaves Sheremetyevo airport outside Moscow
on Thursday, Aug. 1, 2013, after being granted asylum in Russia for
one year. (AP/Russia24 via Associated Press Television)
Journalists and pundits have spent countless articles and news
segments conveying the intrigue and intensity of the standoff that
eventually resulted in Russia granting Snowden one year of asylum.
Attention now has shifted to his father, Lon Snowden, and his
announced visit of Edward in Russia.
Lost in the excitement of this "White Bronco Moment," many have
missed the elephant in the room: the "Great Game"-style geopolitical
standoff between the U.S. and Russia underlying it all, and which may
have served as the impetus for Russia to grant Snowden asylum to
begin with. What's at stake? Natural gas.
Russia, of course, has its own surveillance state and has been
described by The Guardian's Luke Harding as a "Mafia State" due to
the deep corruption that reportedly thrives under Putin's watch.
It all comes as the U.S. competes with Russian gas production thanks
in part to the controversial drilling process known as hydraulic
fracturing - "fracking" - transforming the United States into what
President Barack Obama has hailed as the "Saudi Arabia of gas."
Russia produced 653 billion cubic meters of gas in 2012, while the
U.S. produced 651 billion cubic meters, making them the top two
producers in the world.
Creating a "Gas OPEC"
Illustrating this elephant in the room is the fact that when, on July
1, Russian President Vladimir Putin first addressed whether he would
grant Snowden asylum, he did so at the annual meeting of the Gas
Exporting Countries Forum (GECF) in Moscow, which unfolded July 1-2.
"If he wants to stay here, there is one condition: he must stop his
work aimed at harming our American partners, as strange as that
sounds coming from my lips," Putin stated at GECF's annual summit.
Paralleling the Organization of Petroleum Exporting Countries (OPEC)
- The New York Times calls it a "gas OPEC" - GECF is a bloc of
countries whose mission is to fend off U.S. and Western power
dominance of the global gas trade. The 13 member countries
include Russia, Iran, Bolivia, Venezuela, Libya, Algeria and several
others.
GECF has held informal meetings since 2001, becoming an official
chartered organization in 2008 and dominated in the main by
Russia. GECF Secretary General Leonid Bokhanovskiy is also the former
VP of Stroytransgaz, a subsidiary of Russian oil and gas giant
Gazprom.
Depicting the close proximity between Putin's regime and GECF's
leadership is the fact that Gennady Timchenko - a member of "Putin's
inner circle," according to The Bureau of Investigative Journalism
- owns an 80-percent stake in Stroytransgaz.
A 21st-century "gas Cold War" has arisen between the U.S. and Russia,
with Edward Snowden serving as the illustrative protagonist.
President Obama, upset over Russia's asylum offer to
Snowden, recently cancelled a summit with President Putin.
With access to the free flow of oil and gas resources a central tenet
of U.S. national security policy under theCarter Doctrine, there's no
guarantee this new Cold War will end well.
Fracked gas exports fend off Russia, but for how long?
Fracking is in the process of transforming the U.S. from a net
importer of gas to a net exporter, with threeliquefied natural gas
(LNG) export terminals on the Gulf Coast already rubber-stamped for
approval by the U.S. Department of Energy.
Industry cheerleaders as well as President Obama and other
like-minded politicians say there are "100 years of natural gas"
under the United States, a geopolitical game-changer to say the very
least.
But independent petroleum geologists and investors alike see it
differently, concluding perhaps 15-20 years of gas exist at
current diminishing, "exploration treadmill" rates of return.
"More and more wells must be drilled and operated to maintain
production as the average productivity per well is declining," David
Hughes, a Fellow at the Post Carbon Institute explains in his report
"Drill Baby, Drill." "Since 1990, the number of operating gas wells
in the United States has increased by 90 percent while the average
productivity per well has declined by 38 percent."
This means there likely won't be enough gas to fend off GECF and
Russian dominance of the global gas market in the long term,
particularly because Russia relies on easier-to-obtain conventional
gas, as opposed to tough-to-obtain unconventional shale gas.
Despite the reality of the "exploration treadmill," myriad
politicians have backed the notion of the U.S. serving as a global
supplier of gas via LNG exports. Congress has already introduced two
bills in 2013 - the Expedite our Economy Act of 2013 and
the Expedited LNG for American Allies Act of 2013 - calling for
expedited approval of the remaining LNG export terminal proposals.
"[T]he timeline for considering these applications may jeopardize our
ability to retain a competitive position against other natural gas
exporting nations who are also working diligently to export LNG," a
bipartisan cadre of 34 U.S. Senators wrote in a July 9 letter to U.S.
Department of Energy head Ernest Moniz urging the DOE for to speedily
approve LNG export terminal applications. "There is a global race for
market share underway," the letter continued. "American competitors
have been at a disadvantage for the past year and a half because the
Department of Energy has delayed action on pending applications."
Sometimes politicians are vague when it comes to the rationale for
expedited LNG exports, using phrases like the ability to maintain a
"competitive position" against "other natural gas exporting nations"
but not calling out those nations by name.
Others, however, take off the kid gloves and name names. "Our bill
will also promote the energy security of key U.S. allies by helping
reduce their dependence on oil and gas from countries, such as Russia
and Iran," said Sen. John Barrasso (R-Wyo.), co-sponsor of the
Expedited LNG for American Allies Act of 2013, of the rational behind
the bill's January 2013 introduction.
Months later, Rep. Ted Poe (R-Texas) wrote similarly in a June 2013
Houston Chronicle op-ed piece. "Aside from unquestionable economic
benefits, there are also geopolitical considerations that make
exporting LNG to our friends and allies a no-brainer," Poe wrote.
"The risk of high reliance on Russian gas has been a principal driver
of European energy policy in recent decades From the U.S.
perspective, cheap but reliable natural gas would reduce Moscow's
clout while shoring up goodwill amongst our allies."
Faced with diminishing returns on shale gas basins nationwide, U.S.
strategic planners haven't put all of their eggs in one basket, and
have a backup plan in mind to fend off Russia and GECF.
Enter U.S. gas "anchor," Azerbaijan
The LNG for NATO Act was another key bill introduced in December 2012
by now-retired U.S. Sen. Dick Lugar (R-Ind.). That legislation's
introduction came alongside the release of a key Senate Foreign
Relations Committee report titled, "Energy and Security from the
Caspian to Europe."
First discussed at a press event hosted by the influential Atlantic
Council - then headed by current Secretary of Defense Chuck Hagel -
the premise of the report was simple: many NATO member states rely on
Russia for gas imports.
Russian President Vladimir Putin, right, gestures to Azerbaijan's
President Ilham Aliyev as they walk along an embankment in Baku,
Azerbaijan on Tuesday, Aug. 13, 2013. (AP/RIA Novosti Kremlin/Mikhail
Klimentyev/Presidential Press Service)
And Russia is the main power player alongside China overseeing the
Shanghai Cooperation Organization, which effectively operates as
NATO's foil. Thus, the report concludes, NATO must find a way to wean
itself off of Russian gas.
"This strategic U.S. initiative would advance U.S. interests by
alleviating Russian gas-fueled pressure against NATO allies,
bolstering bilateral relations in the Caspian Sea region, and further
isolating Iran," Lugar wrote in introducing the report.
One of the report's solutions calls for undermining the DOE's LNG
export approval process for fracked gas exports to NATO allies due to
the U.S. having - wait for it - a "100-year supply" of gas.
"As a first step, we should allow exports of U.S. natural gas, now
abundant thanks to shale gas, to all our NATO allies," Lugar wrote in
an op-ed summarizing the report's conclusions. "At current
consumption rates, we have an estimated 100-year supply, and prices
have fallen so low that new drilling activity is drying up. We easily
could export some of this surplus as LNG without causing consumer gas
prices to spike here at home."
Perhaps knowing the "100-year supply" is more fiction than fact, the
report does point to something "even more important": Azerbaijan's
robust supply of conventional gas.
Azerbaijan, ruled by a human-rights-violating authoritarian
regime and bordered by the Caspian Sea to the east and Iran to the
south, has the 24th highest proven reserves of natural gas in the
world and maintains friendly relations with the U.S. and NATO
countries.
The Senate Foreign Relations Committee report refers to Azerbaijan as
an "anchor" gas supplier for NATO countries, a key source of imported
gas in particular for European Union countries seeking to fend off
reliance on Russian gas.
Given Azerbaijan's strategic importance, the report calls for
expedited building of the Trans-Adriatic Pipeline, set to pipe Azeri
gas from the Shah Deniz gas field in the Caspian to Turkey and
eventually into EU member states.
"TAP will transport natural gas from Shah Deniz in Azerbaijan,
via Greece and Albania, and across the Adriatic Sea to Southern
Italy, and further to Western Europe," the TAP website explains. "TAP
offers the shortest and most direct link from the Caspian region to
the most attractive European markets."
The importance of Azerbaijan as an "anchor" and TAP is explained
bluntly in the Senate Foreign Relations Committee report and
was recently praised in a State Department press release.
"Fully committed to energy trade with the West, Azerbaijan is [a]
pivotal supplier," the report explains. "For the past two decades,
Azerbaijan's leadership has made the strategic calculation to use
[TAP] to forge closer ties with the West, a decision that was by no
means inevitable given the substantial cost of vast new pipeline
infrastructure and geopolitical pressures from neighboring Iran and
Russia. However, Azerbaijan's main alternative to westward trade
would be with Russia, which is not an attractive prospect."
The report closes bythe Overseas Private Investment Corporation, the
U.S. Trade and Development Agency, the European Bank for
Reconstruction and Development and the European Investment Bank to
finance construction of LNG import terminals for NATO countries. It
also recommends the creation of a full-time U.S. Envoy for Eurasian
Energy Security position.
Contextualizing the Recent Big Azerbaijan Junket
One of the recommendations the Senate Foreign Relations Committee
report offers in its report is maintaining closer ties with SOCAR -
the State Oil Company of Azerbaijan Republic - "to minimize future
miscommunications."
This lends an explanation as to why many former Obama upper-level
staffers, along with Stratfor founder George Friedman, state
politicians from across the U.S., Vice President Joe Biden's
wife Jill and former World Bank head and Deputy Secretary of Defense
Paul Wolfowitz all attended a key gathering in Azerbaijan in late
May, officially titled, "USA-Azerbaijan: Vision for the Future."
Ted Poe, who weeks after returning from the event wrote the Houston
Chronicle op-ed praising fracked gas exports, was also among the
attendees.
SOCAR sponsored the event. So too did BP, KBR, ConocoPhillips, and
Chevron, all companies deeply invested in fracking in the U.S.
"No doubt this was among the biggest concentrations of American
political star power ever seen in the Caucasus - 317 delegates from
42 states, including 11 sitting members of Congress and 75 state
representatives," a Washington Diplomat reporter who got inside the
conference explained of the nature of the event.
Russia Excluded from State Dept. Fracking "Missionary Force"
In August 2010, President Obama's first-term State Department
established the Global Shale Gas Initiative (GSGI), now referred to
as the Unconventional Gas Technical Engagement Program.
Its purpose: creating a so-called "missionary force," showing other
countries fracking's "best practices" based on the U.S. experience.
"The GSGI uses government-to-government policy engagement to bring
federal and state governments' technical expertise, regulatory
experience in ensuring the safety of water supplies and air quality,
and diplomatic capabilities to bear in helping selected countries
understand their shale gas potential and the responsibilities of
governments," the State Department explains on its website.
State Department officials have spent time
instructing Ukraine, Poland, China and Indiahow to do fracking
"safely and economically." This tutelage agenda is yet another way to
wean NATO countries off of Russian gas in an attempt to further
isolate it economically.
Noteworthy is the fact that though Russia possesses a shale gas prize
of its own - the massive western Siberian Bazhenov Shale field - the
State Department has not included the country under its Global Shale
Gas Initiative/Unconventional Gas Technical Engagement Program
umbrella.
Snowden Standoff Part of Gas "Race for What's Left"
The lion's share of media coverage surrounding Edward Snowden has
focused on both the intrigue of his asylum standoff and the
pervasiveness of the global surveillance apparatus alone.
Missed in the discussion is what Hampshire College professor Michael
Klare refers to as "Rising Powers, Shrinking Planet" in his book
titled precisely that, on full display in the Snowden asylum standoff
milieu.
That is, a relentless battle royale ensuing between the global powers
for the world's quickly diminishing, increasingly difficult-to-obtain
and ecologically hazardous forms of "extreme energy," like shale gas
fracking.
"Make no mistake: Rising powers/shrinking planet is a dangerous
formula. Addressing the interlocking challenges of resource
competition, energy shortages, and climate change will be among the
most difficult problems facing the human community," he writes in the
book's conclusion.
"If we continue to extract and consume the planet's vital resources
in the same [...] fashion as in the past, we will, sooner rather than
later, transform the earth into a barely habitable scene of
desolation."
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