Trouble in the pipeline if Russia cuts Europe off

[webfact]

OVERDRIVE
Trouble in the pipeline if Russia cuts Europe off
Thanong Khanthong

BANGKOK: -- The temperature is particularly cold in Europe at this time of the year. So Russian President Vladimir Putin has timed it perfectly to strike back.

Putin has ordered Gazprom, Russia's largest natural gas producer, to cut supplies to Europe by 60 per cent. Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey will take the first hit before the impact reaches the heart of Europe, which takes more than a third of its energy from Russia. This marks Russia's first retaliation against Ukraine and against Europe, which has been waging economic and financial war against Russia since early last year, culminating in the attack on the ruble in December.

Putin's order to cut the gas supply to Europe follows talks in Moscow between Maros Sefcovic, European Commission vice president for Energy Union, and Gazprom chairman Alexey Miller, over energy cooperation between the EU and Russia. To the dismay of Europe, Russia has killed the South Stream project to supply natural gas to Europe via a pipeline through the Black Sea and Bulgaria. Instead, Russia is opting for the Turk Stream pipeline, which means Turkey will have a big say in the annual supply of 63 billion cubic metres of gas to Europe.

Since becoming embroiled in a conflict with Ukraine, Russia no longer wants to supply gas to Europe via its southwest neighbour, which has defected to the West. Russia has accused Ukraine, which is bankrupt, of siphoning off gas meant for Europe. At present, 40 per cent of Russia's gas supply to Europe goes through Ukraine. It is obvious that Ukraine is at risk of losing its gas from Russia and it will no longer serve as a conduit for supplies to Europe.

Sefcovic expressed his dismay at Russia's decision to bypass Ukraine, as the Turkish pipeline project does not fit with Europe's existing infrastructure.

The pipeline spat boils down to geopolitics. Amid deteriorating relations with the West, whose sanctions have helped push Russia to the brink of bankruptcy, Putin is beginning to hit back. And after cutting back Europe's gas supply, he can go ahead and completely switch it off if he chooses. Europe would then be plunged into an energy and economic crisis since it wouldn't be able to switch to another energy supply in time.

Second, Putin may also announce a freeze on repayment of Russia's $600-billion foreign currency debt by making the excuse that sanctions have made it impossible for Russian banks or companies to service it. European banks, which are already weak, will then see a big black hole in their balance sheets.

Third, Putin is dumping the dollar like crazy. He is buying back the ruble and getting rid of the greenback. Foreign analysts are sounding the alarm over the rapid drop in Russia's foreign reserves, which have plunged from $500 billion at the beginning of 2014 to a current level of $339 billion. But Russia is proving that it can survive on its own currency, the ruble, without the need of huge dollar reserves. Since Russia has entered into a currency swap agreement with China, it can use the ruble to purchase goods and services from China while China can use its yuan to buy energy and other goods from Russia. By doing so, both countries have bypassed the dollar. If Russia were to close its borders to Europe, it could survive by trading with China alone.

Meanwhile, Europe has been suffering badly from the economic downturn since 2009. The European Central Bank is pondering following in the footsteps of the US Federal Reserve by printing money to purchase sovereign bonds of financially troubled EU countries.

To its confrontation with Russia over the Ukraine crisis, Europe has added anti-Islamic sentiment following the massacre at the offices of French satirical newspaper Charlie Hebdo. This has prompted the French to respond by sending its aircraft carrier to the Gulf to prepare for a war against ISIS in Iraq. At the same time, in our own region, Japan is now boosting its defences for a face-off with both China and North Korea. We appear to be witnessing the danger of war loom on three fronts: in Europe, in the Middle East and in Asia. And the danger will loom larger for as long as the political ambitions of the West and the East, led by Russia and China, fail to find common ground.

Source: http://www.nationmultimedia.com/opinion/Trouble-in-the-pipeline-if-Russia-cuts-Europe-off-30252014.html


-- The Nation 2015-01-16

[Seastallion]

" If Russia were to close its borders to Europe, it could survive by trading with China alone."

Really? I'm not an economist, but I'm sceptical that Russia could survive on trade with China alone.

Nice that Russia will have yuan. Hope the Thai pork exporters insist on being paid in yuan.

[NeverSure]

How did Europe ever let itself become dependent on Russia for anything important?

How can Putin afford to cut off supplies when he needs the money? It's a crazy world.

It will fall upon the US, Canada and Australia to supply Europe with LNG. The supplies are there but is there enough shipping capacity, and how does it get moved from the coast inland to all of the countries?

[Credo]

Countries are often dependent on trade with countries with whom they disagree. Oil has largely been a curse for the nations that have it. Abundant natural resources often goes hand in hand with political repression. The development of strong public institutions is overshadowed by the desire to control the riches which are concentrated in one or two substances. In this case, it is oil and gas.

[zydeco]

Another screwy rant from this guy, who publishes one pro-Putin, anti-West article after another. I do hope Europe and the West get a hint and put him on the no-fly list.

[mania]

How did Europe ever let itself become dependent on Russia for anything important?

How can Putin afford to cut off supplies when he needs the money? It's a crazy world.

It will fall upon the US, Canada and Australia to supply Europe with LNG. The supplies are there but is there enough shipping capacity, and how does it get moved from the coast inland to all of the countries?

How did Europe? Same way US became dependent on the ME

How can Putin afford it? He has not lost it he just changed the middle men & will still get paid but probably be requesting being paid not in USD

Russia is opting for the Turk Stream pipeline, which means Turkey will have a big say in the annual supply of 63 billion cubic metres of gas to Europe.

It will fall on US,Canada & Australia?

First off it should fall squarely on the US since the US required their vassal states in the EU to take part in this forcing Russia into an economic corner

that behooved the US & put all the vassals at risk. So let the US now rescue their vassals. How does it get moved? Matters not as it cannot be moved

in nearly enough time even if they had the quantities requiring replacement

This is a similar reason France recently wanted out of the sanctions against Russia

They realize it was never their fight & it will hurt them economically

Edited January 16, 2015 by mania

[wonder6281]

There are bigger players here than Government's. 'New World Order' conspiracy theorists will be cranking up their websites over this!

Aluminati - Rothchilds - Anti-Christ; they are the ones pulling the strings here!

[zydeco]

There are bigger players here than Government's. 'New World Order' conspiracy theorists will be cranking up their websites over this!

Aluminati - Rothchilds - Anti-Christ; they are the ones pulling the strings here!

Mr. mania. Meet Mr. wonder6281.

[NeverSure]

There are bigger players here than Government's. 'New World Order' conspiracy theorists will be cranking up their websites over this!

Aluminati - Rothchilds - Anti-Christ; they are the ones pulling the strings here!

Mr. mania. Meet Mr. wonder6281.

Pees Peas in a pod.

[LALes]

I was expecting this. Actually, I'm surprised it took Putin this long to turn off the taps.

You start to see things in a different light when you're freezing in your home.

[Ulic]

Is this story even true, I have not seen it anywhere that Putin has ordered Gazprom to cut gas shipments by 60%

to some southern European Countries with the rest of Europe to follow. Maybe not a big enough story yet.

[ColdSingha]

well that's one spin on it, the other side is that Ukraine has been siphoning off gas in transit for months, was warned, ignored warnings and now gazprom have had enough. they advised europe that gas would be delivered through turkey up to the greek border. europe can take it or leave it there

source: zerohedge

http://www.zerohedge.com/news/2015-01-14/russia-cuts-ukraine-gas-supply-6-european-countries

[NeverSure]

How did Europe ever let itself become dependent on Russia for anything important?

How can Putin afford to cut off supplies when he needs the money? It's a crazy world.

It will fall upon the US, Canada and Australia to supply Europe with LNG. The supplies are there but is there enough shipping capacity, and how does it get moved from the coast inland to all of the countries?

How did Europe? Same way US became dependent on the ME

How can Putin afford it? He has not lost it he just changed the middle men & will still get paid but probably be requesting being paid not in USD

Russia is opting for the Turk Stream pipeline, which means Turkey will have a big say in the annual supply of 63 billion cubic metres of gas to Europe.

It will fall on US,Canada & Australia?

First off it should fall squarely on the US since the US required their vassal states in the EU to take part in this forcing Russia into an economic corner

that behooved the US & put all the vassals at risk. So let the US now rescue their vassals. How does it get moved? Matters not as it cannot be moved

in nearly enough time even if they had the quantities requiring replacement

This is a similar reason France recently wanted out of the sanctions against Russia

They realize it was never their fight & it will hurt them economically

I'm so glad that all of W. Europe is comprised of "US Vassal States."

Don't they have any balls of their own? (Rhetorical question.)

[IAMHERE]

Russia supplies 1/3rd and they are going to reduce that by 60%. So that would leave Europe with 4/5ths of energy that they would normally have. It is going to have to be a real cold winter for Europe not to get by on 80% . Next year they can get natural gas from the USA to replace the Russian gas.

[zydeco]

Starting to look like a win/win for both the US and Saudi Arabia and an even bigger loss for Russia. Now, Russia will lose even more money from ng shipments to Europe. And the US, whose ng was slumping with the Saudi oil glut can maintain the integrity of its fracking/shale oil costs by selling it to Europe. Looks like Vladimir Putin has outsmarted himself again.

[judgedredd]

This may not be an accurate news story. Why isn't it being carried on CNN, BBC, etc.?

It only appears in the "alternate media", as well as in an undated DailyMail online news story.

If you go to CNN and search - - There is no current story, only older stories - -

http://edition.cnn.com/SEARCH/?text=gazprom+russia+cuts+off - - there you will find the old 31-DEC-2008 news story which pre-dated the actual 2009 cut-off of Gazprom natural gas to Europe - - http://edition.cnn.com/2008/WORLD/europe/12/31/russia.ukraine.gas/index.html

The Russian media does allege that there was a recent meeting between Putin and his energy advisors and the Gazprom chief.

The rest of the "nationmultimedia" news story may be just speculation, as well as an amalgam of bits and pieces reprinted from older or similar news stories.

Note that this real news story from Bloomberg notes that Russia "plans to shift", regarding some pipeline plan, which may take years to complete - -

http://www.bloomberg.com/news/2015-01-14/russia-to-shift-ukraine-gas-transit-to-turkey-as-eu-cries-foul.html

The recent disinformation seems to have spread from here - -

http://beforeitsnews.com/survival/2015/01/putin-strikes-back-russia-cuts-off-european-gas-supplies-starts-selling-dollars-the-decision-has-been-made-2555318.html

and that disinformation began here - -

http://www.zerohedge.com/news/2015-01-14/russia-cuts-ukraine-gas-supply-6-european-countries

The "current" Daily mail article has no date under the byline - - (use a proxy for access from Thailand)

http://www.dailymail.co.uk/news/article-1106382/Europe-plunged-energy-crisis-Russia-cuts-gas-supply-Ukraine.html

Same song, previous verse in Georgian war - -

http://www.dailymail.co.uk/news/article-1043185/The-Pipeline-War-Russian-bear-goes-Wests-jugular.html

From "The Guardian" in 2009 - -

http://www.theguardian.com/world/2009/jan/02/russia-ukraine-gas-war-eu

[mania]

I'm so glad that all of W. Europe is comprised of "US Vassal States."

Never said all were vassals did I?

What are you some kind of tin foil hatter

[ColdSingha]

Russia supplies 1/3rd and they are going to reduce that by 60%. So that would leave Europe with 4/5ths of energy that they would normally have. It is going to have to be a real cold winter for Europe not to get by on 80% . Next year they can get natural gas from the USA to replace the Russian gas.

not for a while..

source: http://www.nytimes.com/2014/04/08/business/energy-environment/us-gas-tantalizes-europe-but-its-not-a-quick-fix.html?_r=0

HOUSTON — As congressional pressure builds on the Obama administration to quicken gas exports to Europe to reduce its dependence on Russia, it may be tempting to gaze upon a marshy, alligator-infested Louisiana inlet of the Gulf of Mexico.

There 3,000 workers are installing a huge set of turbines, pipelines and refrigeration units, building a terminal that will send American natural gas around the world by the end of next year. By 2017, the facility built by Houston-based Cheniere Energy could handle roughly a sixth the amount of gas that flows from Russia to Europe every day.

Edited January 17, 2015 by Scott
Edited for fair use

[mania]

Starting to look like a win/win for both the US and Saudi Arabia and an even bigger loss for Russia. Now, Russia will lose even more money from ng shipments to Europe. And the US, whose ng was slumping with the Saudi oil glut can maintain the integrity of its fracking/shale oil costs by selling it to Europe. Looks like Vladimir Putin has outsmarted himself again.

ummm read the OP again...shipments continue but to a different distributor.

Perhaps that distributor still sells to those who use to distribute perhaps not.

Oh yes the US right around the corner there...yes go to that store

Must be nice to have such a simple life/outlook

[Gulfsailor]

Tip for the author of the above; don't rely on Zerohedge for your information.

Yes Russia will opt for the Turkey pipeline over the Ukraine one. But Europe will have until 2018 to build the infrastructure on is side.

40% of Gazprom revenue is from gas delivered to Europe. Russia needs European money desperately.

The whole article above is a creative spin to the current situation in which Russia is in dire straits.

[CrummyJuggler]

"Putin is dumping the dollar like crazy...buying back the ruble and getting rid of the greenback. "

Laughable statements. He plunders the reserves and still the ruble trades at 65 to the dollar. Stop pretending that Putin is in control and this is all part of HIS plan.

"Russia no longer wants to supply gas to Europe via its southwest neighbour, which has defected to the West. "

So Ukraine "defected" to the west? Is that what you call it? Look, if Russia offered a better system of wealth creation, these nations wouldn't be running to the west.

And all you who think Russia can prosper by only trading with China make me laugh. China doesn't want to make deals in a currency that loses 50% value in 6 months due to the imperialist "New Russia" whims of one man.

Russia has an economy based on production of natural resources. To produce materials profitably at market prices you need the best technology which it does not have. So feel free to fly around in your Russian planes, and drive your Russian cars, and talk on your Russian cellphones and watch your Russian television sets. You don't need foreign technology. You can just do it yourself. Oh wait, you tried it last century and how did that turn out?

[Choctastic]

This may not be an accurate news story. Why isn't it being carried on CNN, BBC, etc.?

I had the same question, so decided to wait for the MMS to run it.

Some alternative sites are news aggregators, which, means not all stories are vetted. They can be picked up and spread around quickly.

[Pakboong]

Interestingly, one link to this information was blocked by the Thai, ministry of information. Tried it again today and it is still blocked.

[sead]

And to all that said only Russia will suffer by the sanctions. You still have no idea that all Europe will have to pay for sanctions more than Russia.

[frimu]

Interestingly, one link to this information was blocked by the Thai, ministry of information. Tried it again today and it is still blocked.

Treat yourself to a VPN then. :-)

[Publicus]

MSM is slow to pick up on the decision by Putin to end natural gas transit thru Ukraine and ship it to Turkey because all of this takes effect in 2017, in March two years from now.

Announcement of Putin's decision is not a surprise nor is it the pressing issue the OP presents, nor is Turkey on the supposed list of countries the OP says are being targeted by Putin. Turkey is in fact the recipient of the new shipments beginning in spring 2017.

Nothing about the Gazprom decision dictated by Putin is surprising or immediate. Russia is still groveling and it will continue to grovel.

The overblown presentation in the OP of Putin making a supposed decisive December action to end the South Stream pipeline was in fact a Putin decision made because the key country, Bulgaria, froze Russian construction of the pipeline in Bulgaria. The closing of the South Stream pipeline project leaves Russia with $4.3 billion of abandoned infrastructure that will remain half completed, never to be used.

The OP is full of shit.

The only effective isolation Putin is creating is that of adding to Russia's isolation by and from the West. Regime change in Moscow remains the unstated purpose and goal of the Nato allies as the existing sanctions and more of 'em are in play through 2017.

The oil and gas deals with China won't come online for at least a couple of years and we'll see what the world looks like then.

Edited January 16, 2015 by Publicus

[Gentmartin]

Full of the writers fantasy. Wasted my time reading it. He actually gets paid to write ??

[wonder6281]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

There are bigger players here than Government's. 'New World Order' conspiracy theorists will be cranking up their websites over this!

Aluminati - Rothchilds - Anti-Christ; they are the ones pulling the strings here!

Mr. mania. Meet Mr. wonder6281.

Mushroom!

[wonder6281]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

There are bigger players here than Government's. 'New World Order' conspiracy theorists will be cranking up their websites over this!

Aluminati - Rothchilds - Anti-Christ; they are the ones pulling the strings here!

Mr. mania. Meet Mr. wonder6281.

Pees Peas in a pod.

Mushroom2

[mania]

Mr. mania. Meet Mr. wonder6281.

Pees Peas in a pod.

555 Mr.zydeco meet Mr. Neversure....Beware any invites up to Brokeback mountain