Wednesday, March 21, 2018

"Germany’s Pivot From Russian Gas Will Be Costly"

This is what the Poles have been trying to tell the EU for at least the last half-decade.
Poland has an understanding of their neighbor to the east that Brussels (and even Berlin) seems to lack. As noted in the introduction to January's "Poland's Plan to Dominate Europe, Continued", the Poles built their LNG terminal knowing full well the cost of various sources:
Following the December series of posts* on Poland I had intended something on a gas pipeline or two or geopolitics or the Baltic-to-Black Sea (and Greece) Via Carpathia Highway or the new (security-at-a-cost) LNG terminal but....but...Bambi !!
Some things you can't measure in zlotys alone.
(or rubles or euros or krone or...)

From OilPrice, March 20:
More problems are mounting for Russia’s oil and gas sector. This time it’s coming from Germany, which until recently usually gave Russia’s energy sector more lead way than the U.S. or other allies.
But now it seems that German Chancellor Angela Merkel has also had enough. On Monday, Bloomberg reported that Merkel’s government is seeking to build a liquefied natural gas (LNG) industry in Germany basically from scratch to reduce the nation’s dependence on supplies arriving by pipeline from Russia and Norway.

Merkel backs “all initiatives supporting further diversification of gas supply -- whether from different regions or means of transporting gas,” said German Economy and Energy Ministry spokeswoman Beate Baron.

The move comes as natural gas resources from the UK and the Netherlands are depleting, and Germany is forced to rely more on Russian gas. Merkel’s newly formed coalition has a “coalition contract” that among other policies sets out energy agenda including LNG for the next four years, the Bloomberg reported added.

Germany, for its part, is Europe’s largest gas consumer.  In 2015, the country consumed 7.2 billion cubic feet per day (Bcf/d) of natural gas, according to U.S. Energy Information Administration (EIA) data. According to the German energy research group, AG Energiebilanzen, imports account for about 90 percent of Germany’s total natural gas supply, while most imports come from three countries: Russia (40 percent of total imports in 2015), Norway (21 percent) and the Netherlands (29 percent).

Moreover, German companies are participating in Russia’s controversial Nord Stream 2 pipeline, an expansion of an existing route for gas to flow from Russia to Europe under the Baltic Sea. The U.S., Poland and others have recently condemned the pipeline as a threat to European security.
As Russia becomes increasingly aggressive, even wreckless geopolitically, the security threat to not only the EU but to Germany is apparent, causing the country of some 83 million people to do an abrupt energy policy about face.

Germany’s LNG pivot also comes as a geopolitical storm between the U.K. and Russia intensifies over an alleged Moscow-orchestrated nerve-agent attack on British soil against what the BBC called a double spy and his daughter.

British Prime Minister Theresa May retaliated last week by expelling Russian diplomats and seeking alternatives to Russian gas, including LNG produced at its new Arctic plant, the Yamal LNG export project. Addressing the UN Security Council last week, the U.K.’s deputy UN ambassador, Jonathan Allen, accused Russia of breaking its obligations under the Convention on the Prohibition of Chemical Weapons.

The U.S. for its part also condemned the nerve agent attack. U.S. ambassador Nikki Haley said that Washington stood in "absolute solidarity" with Britain, citing the "special relationship" between the two countries and saying that Washington would "always be there" for the UK.

Germany’s abrupt LNG pivot...
...MORE

Related at Bloomberg, March 18:
Russia Says Its Gas Is Best Deal for Europe Amid U.K. Spat
Previously:

Oil/Gas and Geopolitics: Keeping the Politicians Warm Edition
"Europe’s Energy Geopolitics is Getting Dicey"
Natural Gas: "Polish PM: Nord Stream II Would Make Russia Free to act Against Ukraine, So Must Not be Built"
"U.S., Poland Oppose Gas Pipeline Linking Russia And Germany"
The Nord Stream 2 Natural Gas Pipeline Is A Game Changer For Gazprom

Germany May Be Trying to Destabalize Poland But No Worries
New Russian Pipeline In Baltic Sea Could 'Collapse' Ukraine


See also:
"Berlin, Moscow Negotiate New Trade Accord".
-Reading Eagle
Feb. 12, 1940