March 28, 2014 – Vol.18 No.52
 

Stifle Putin by Squeezing His Economy.
by Bruce Mulliken, Green Energy News

 

Short in stature. Shorter in vision.

That sums up Vladimir Putin.

He may yearn for the glory days of the Soviet Union – and see it as his life's calling to rebuild the failed, closed state – the five foot five Russian President hasn't apparently noticed that his nation has moved on from its anti-capitalist Communist state to become part of the global market economy. Like every other nation on Earth, Russia needs to interact. It needs imported goods. It needs the cash of exports, particularly its oil and gas, to economically survive.

But, if the world sees that it can do without Russian gas and oil, Putin's economy will quickly fall apart and he will disappear. Right now it looks like that would be for the better.

Sanctions may help stifle Mr. Putin. There's also a movement afoot to slowly starve Russia of its cash cow of exported natural gas. If successful, Russians won't like that much and remove him from leadership ASAP.

The US is flush with natural gas right now and selling some to Europe might be a low cost way (heck even a profitable way) to help keep Putin in check.

Knight Kiplinger in the weekly Kiplinger Letter writes: "A big push for natural gas exports is on tap . The economic gains are already attractive ... set to increase GDP by some $20 billion by 2020. Now, geopolitics boosts the case for exports . The idea: Cut Europe’s heavy reliance on Russian gas and crimp the Kremlin’s ability to bully its neighbors. The U.S. has plenty of gas to sell ...reserves now accessible via modern drilling methods tally a century’s worth of supply by some estimates. So Uncle Sam will OK a slew of export sites in coming months, adding to the half-dozen facilities already approved to ship liquefied natural gas (LNG) to markets such as Europe, where prices are higher. Most will cluster along the Gulf Coast, already a hub for shipping and processing both natural gas and oil."

And Sean Cockerham, of the McClatchy Washington Bureau says in McClatchy DC, "Some members of Congress claim natural gas exports would weaken Russia. The argument has holes, but the Ukrainian crisis is nevertheless increasing the political momentum for exports.

"The Jordan Cove facility in Coos Bay, Oregon, is the seventh terminal so far to receive conditional approval from the Department of Energy to export liquefied natural gas. Sen. Mary Landrieu, D-Louisiana., said that approval of the Oregon project helps “solidify the U.S. as an energy superpower.”

“A quick and efficient approval process to responsibly export natural gas from our shores will also reduce the stronghold that countries, like Russia, currently exercise over their neighbors,” said Landrieu, the new chairwoman of the Senate Energy and Natural Resources Committee.

"Europe relies on Russia for nearly a third of its natural gas, a fact that Russian President Vladimir Putin uses to his political advantage. But it is questionable how much increased American exports could hurt Putin, since most are destined for Asia, not Europe, and are years from reality."

"The global consulting firm IHS Energy said in a new report that U.S. exports of liquefied natural gas, known as LNG, “can have no real” impact on the Ukrainian crisis, a conclusion that echoes other analysts.

“Much attention has been focused in recent weeks on the potential for U.S. exports of LNG to help Europe offset its dependence on Russian gas,” the report said. “Although the United States is currently on track to become one of the world’s three major LNG exporters by 2020–22, IHS Energy expects the ultimate impact on European gas supply to be limited.”

Europe could also sharply increase its renewable energy capacity to offset imported natural gas consumption.

A modern nation is more than the extent of its boundaries or the abundance of its resources. A nation is now about its people combined with the success of its economy.

Eventually things went badly for another diminutive warrior who fought to expand his reach in the Continent. Instead of battle, it could be economic tensions at home that become Putin's Waterloo. The US – by selling natural gas to Europe – could hasten Putin's exit by reducing and eventually eliminating Europe's need for Russian natural gas, and thus cutting off a significant flow of cash into Russia.

 

Kiplinger Letter

McClatchy DC

 

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