Foreign Policy: the U.S. can lose the gas war with Russia

Foreign Policy: the U.S. can lose the gas war with Russia

The situation on the international market has changed significantly and still does not meet rosy projections of the United States. Now they are not only competitive in Asia, but you risk getting unexpected results in Europe.

MOSCOW, 24 Jan –. Gas exports from the U.S., which should begin in February-March, may result in different consequences, which was expected by the Americans, and to strengthen Russia’s position in the European market, writes the magazine Foreign Policy.

Within a few years since, as the United States decided to enter the international gas market, the situation has changed radically, the newspaper notes. In particular, “optimistic predictions about the insatiable American demand for gas in Asia came to naught”.

The gas price fell significantly after the price of oil and no longer covers the cost of liquefaction and transportation halfway around the world. In addition, Asian demand for gas has not been growing. Japan, needing the energy source after the Fukushima accident, decided their problems, and the Chinese economy shows slower growth. In addition, China has a variety of options to meet their needs in Gaza, including through new contracts with Russia.

The third blow to the American plans in Asia was the launch of natural gas projects in Australia. Green continent close to the market, while natural gas terminals in the U.S. is far in the Gulf of Mexico.

In these circumstances, the only alternative for American companies will be Europe, but there is not so simple, writes FP. The publication notes that terminals for receiving liquefied gas exists only in Western Europe and Eastern Europe, which seems to be the main consumer, have to run to the West new pipelines.

“A new flow of gas from the United States could have a paradoxical result and strengthen and not to reduce Europe’s dependence on Russia. Relatively cheap Russian gas is so attractive that has caused the schism in Europe; for example, Germany seeks to build new pipelines and more relies on Russian gas for commercial reasons, despite the cries of Brussels on the need to find alternative suppliers,” the article says.

If “Gazprom” will continue to adapt, reduce rates and change the manner of conducting business in Europe, it can maintain its leading position for many decades, and this is exactly what Brussels was trying to avoid for so many years, I’m sure the author of the article.

“Politically, such a strategy is necessary to the Kremlin, since it retains the position of Russia as an energy partner for Europe and provides political influence,” leads FP in conclusion, the words of the fellow at the Oxford Institute for energy studies James Henderson.