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US and EU on collision course over Russia pipeline sanctions

July 25, 2017

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By Paul Homewood

 

 

This has to be the most hilarious piece of news today!

 

 

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A raft of top European companies will be forced to pull out of the Nord Stream 2 gas pipeline project with Russia or face crippling sanctions under draconian legislation racing through the US Congress.

Berlin and Brussels have threatened retaliation if Washington presses ahead with penalties on anything like the suggested terms, marking a dramatic escalation in the simmering trans-Atlantic showdown over America’s extra-territorial police powers.

A consortium of Shell, Engie, Wintershall, Uniper, and Austria’s OMV is providing half the €9.5bn (£8.5bn) funding for the 760-mile pipeline through the Baltic Sea to Germany. “This is a spectacular interference in internal European affairs,” said Isabelle Kocher, the director-general of Engie in France.

The wording of the US legislation is so broad that it could sweep up dozens of firms in different ways. “The measures could impact a potentially large number of European companies doing legitimate business,” said the European Commission.

An internal note by the Commission said the EU should “stand ready to act within days” if US imposes sanctions unilaterally without securing some degree of consent from the European side.

Hubertus Heil, general-secretary of Germany’s Social Democrats (SPD), called the bill a naked attempt by ‘America-first’ forces to seize market share for coming deliveries of US liquefied natural gas. “It is an attack on the basic principle of free trade. Europe must give a strong united answer to this,” he said.

The House and Senate in Congress reached a deal on the Russian sanctions over the weekend with slight changes to the text. The White House has signaled that President Donald Trump will not veto the bill even though it locks in a hostile relationship with Russia for years to come.

http://www.telegraph.co.uk/business/2017/07/24/us-eu-collision-course-russia-pipeline-sanctions/

 

Merkel and co have been at the forefront of condemning Trump for exiting Paris.

But they’re still happy to buy Russian gas!

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25 Comments
  1. Geoff Sherrington permalink
    July 25, 2017 10:07 am

    You will cry if you are old enough to remember the post-WWII era when something like a free market was allowed to operate in much international commerce. Then, the acts and regs of various countries appeared to increase, they became more onerous, until now nobody bothers to measure the effect of new rules against the primary standard of the free market. Special pleading is rife. I am wrong to read this USA move as something of a return to free market conditions?

    • Tom O permalink
      July 25, 2017 12:58 pm

      You are wrong if you consider any move that attempts to lock out competition for the European gas needs as “free market.” Not only that, but there aren’t enough LNG ships for crossing the Atlantic to be able to replace the pipeline from Russia. And finally, the US – and I live here – is downright stupid tobe exporting natural gas when it calculates that it has something on the order of a 200 year supply. If that was a 10,000 year supply, I would say okay, but when you start exporting a product that is essential and not unlimited, you are selling your future for pennies today. Just like exporting coal or petroleum. A government taking care of its people and their future would be more inclined towards stopping the selling of the future for corporate profits today.

  2. Jack Broughton permalink
    July 25, 2017 10:11 am

    It is unbelievable that the McArthyist forces still dominate the USA. They remain obsessive about the long-dead military threat from Russia. Of course they lose little through this mad legislation apart from allowing the Masters of War to continue to demand billions for new weapons to protect them against Russia: the madness has already cost Europe billions in lost trade.

    If the CIA, with their massive investment, could not prevent a few hackers from accessing their election their management should be decimated (literally). Someday they will realise that the threat now comes from further East.

    What will happen to the UK gas prices if Russian gas stops feeding the German demand???
    Will we need to invade Norway to ensure UK supplies??

    • Tom O permalink
      July 25, 2017 1:06 pm

      McCarthy was right, so these are NOT McCarthy like operations. This is “the Salem Witch Hunt” revisited.

      My suggestion to Europe is Europe needs to look after itself and not be concerned with what Washington says or does. However, if they want to continue to have the American tax payer foot costs that they should support themselves, then they have to put up with the Yankee interference. It would be in the best interest of Europeans to “float their own boat,” and in that way they captain their own destiny without US interference. Sanctions only work when people go against their own best interests to support them. So if the sanctions are going to damage European business, then Europe needs to disregard them and any others that are causing distress t home.

      • RAH permalink
        July 25, 2017 1:38 pm

        Last two times they did that there were World Wars. The first one cost Britain a generation. The second one cost Britain the remains of their empire and it took better than a decade for their economy to recover despite forgiving the vast majority of the lend lease debt. And then there was a massive US funded program commonly called the “Marshal Plan” to rebuild Europe.

        Based on the actions of the EU it seems to me that in the most important ways, little has changed. Every year the EU looks more and more like a new monarchy lording over a conglomeration of states.

      • Tom O permalink
        July 25, 2017 9:48 pm

        Reply for RAH –

        That is Europe’s problem. You seem to imply that somehow having Europe make a decision for itself costs Europe and requires a US bailout. Let Europe do what Europe needs to do, and the US stay out of it, and whatever is left is left. WW2’s destruction came more as a result of US intervention anyway, so let Europe do for Europe what Europe needs. As for the US, we don’t need to follow Europe because our roots were there. Like slavery, roots only go back to those that experienced it. Though many immigrants have come from Europe since the nation was formed, it does not tie us to Europe as our roots. Nearly all Americans “should by now” have their “roots” in the US. Remember, neither “world war” had to spread to the US. The US government chased the opportunity to get into them.

    • July 25, 2017 5:37 pm

      Didn’t ‘the long-dead military threat from Russia’ take over the Crimea recently?

      • Jack Broughton permalink
        July 25, 2017 5:51 pm

        It was not a military take-over: a roll-over to escape the corrupt Ukrainian Government more like. Do not believe the US / UK media!

    • Richard Roney permalink
      July 25, 2017 5:53 pm

      We should frack and thus avoid any problems of supply.

  3. Green Sand permalink
    July 25, 2017 10:12 am

    I do trust we are cracking on with our fracking? Its getting down to very slim margins. IIRC Rough was about 70% of our storage capacity?

    ‘Cessation of Storage Operations at Rough’

    https://www.centrica.com/news/cessation-storage-operations-rough

  4. Keitho permalink
    July 25, 2017 10:41 am

    Is this just being done to punish Trump for being President? He should veto it but then he will be villified because Russia. If it goes through Trump will be blamed by Europe.

    Chapeau Swamp, well played.

    • Tom O permalink
      July 25, 2017 1:19 pm

      This is more to make normalizing relations with Russia impossible, true. The bill will go to him with a “guaranteed to override a veto” vote, but I agree, he needs to VETO it and ask the American public to pressure Congress to not override. The problem in the US is that it is difficult to not believe lies when you are fed them constantly by nearly every outlet that black is white. Or that everything wrong in the world is the fault of “the white man,” whoever to hell that is supposed to be. But I have yet to see anyone, anywhere post anything that can be shown as “proof” that the elections were hacked. And if I was the US government and its security branch, the LAST thing I would want anyone in the world to know was that someone hacked the elections. When it comes to the DNC “hack,” what has always amazed me is the uproar is about the “hack,” and not about the information leaked that was never, truly denied. It is mindblowing to me that what was in those emails had so little impact on anything or anyone’s way of thinking.

  5. Joe Public permalink
    July 25, 2017 11:39 am

    ‘Sanctions’ is but a smoke screen.

    It’s protectionism for the US shale-gas-inspired LNG market.

    https://www.platts.com/IM.Platts.Content/insightanalysis/industrysolutionpapers/sr-us-lng-pipeline-gas-european-market-share.pdf

    http://www.zerohedge.com/news/2017-04-09/how-us-lng-transformed-market

  6. CheshireRed permalink
    July 25, 2017 12:12 pm

    That the West is reduced to buying Russian gas shows how important it is to start fracking for our own gas supplies. Energy security was a BIG deal when ‘renewables’ were being touted several years ago before they got the nod and just as then, so too now. The importance couldn’t be clearer.

    • Tom O permalink
      July 25, 2017 1:23 pm

      What’s so special about “the West” beyond the obvious degeneracy? First, you have to have “frackable” gas before you can get your own. I don’t recall Europe as ever being a great natural gas source, so it is unlikely that there is much that can be fracked. As for buying from the Russians, I believe Ben Franklin was in favor of trade with everyone, no special agreements with anyone. Perhaps Europe should consider that advice. I wish the US would.

      • Athelstan permalink
        July 25, 2017 2:50 pm

        Underground resource:

        https://www.energyandcapital.com/articles/uk-bowland-shale-potential/3311

        Indeed, the Bowland basin’s shale is roughly three times as thick as the Marcellus Shale over here in the U.S.—we’re talking 790 meters to the Marcellus’ 270 meters. This means horizontal wells in the Bowland can simply be stacked on top of each other, thus drastically reducing the number of wells that need to be drilled top-side.

        BTW Tomo,

        Britain needs to be independent of the nutters across the channel, the problem is also of our own making, we have resources aplenty but the political we call it the ‘establishment’ stage is dominated by the loonies of green and somehow the idiots [our very own Parliament – think Congress] who deny reality run the play.

        Those are the problems of Britain, what Mr. DJ. Trump does is play the EU at their own game and imho that’s all to the good, talk about the houses of Congress – that’s way out of my attention span, sufficed to say both houses are full of cultural Marxists playing to Corporate America/DC’s limo liberals/ Hollywood’s tune, I’m sure America is listening or, maybe not.

        Lookee how much have we got?

        http://www.dailymail.co.uk/news/article-2593032/Coal-fuel-UK-centuries-Vast-deposits-totalling-23trillion-tonnes-North-Sea.html

        http://www.walesonline.co.uk/news/wales-news/now-king-coal-set-rule-6923421

        P.S. we acknowledge your blowing your own trumpet, good to know y’all.

      • CheshireRed permalink
        July 25, 2017 3:09 pm

        You trolling Tom O? Seem to have a view on everyone’s post today. Do we have a supply of gas? Yes. Is it long term? By all accounts, decades worth. Should we get it? Yep, because regardless of ‘climate change’ concerns even the National Grid accepts we’ll be using gas for several decades, so the only question is do we import or use our own? I’m going for energy security, balance of trade & payments boost and UK jobs. Hard to see a downside unless someone’s a member of the raging Green Blob, in which case they’re unreachable.

      • Athelstan permalink
        July 25, 2017 4:22 pm

        I think that, you and me, are on the same page CheshireRed and insofar as my opinion’s go, on your comments CR, in quite few years, I’ve never thought differently.

  7. July 25, 2017 12:15 pm

    “draconian legislation racing through the US Congress.” WAAAAAH!!

    Europe has had a hay-day eating our lunch for decades. One of the reasons we elected Donald Trump was for that snacking to stop.

    The German nitwit whined about the “America-first forces.” The United States is a sovereign nation. As such, our President according to the US Constitution, promises to protect and abide by that document–something Mr. Obama refused to do and should have been impeached over it. It is ludicrous to see the messes that are Germany and France having the colossal gall to come after us for standing up for ourselves. And they come after Poland for not falling into the pit with them. It appears they cannot stand that we have not joined the “kings new clothes” scenario that plagues them.

    I would also point out that Russia was basically holding Europe hostage with the natural gas issue. If Europe had any sense, but I chase after the impossible, they would be grateful for an alternative.

    • Tom O permalink
      July 25, 2017 1:25 pm

      Can’t disagree with you more if I tried. You speak for corporate America, you don’t speak for Americans. Grow up. Growing older doesn’t guarantee growing up, obviously.

    • July 25, 2017 1:55 pm

      But the bill before congress is not about standing up for America. It is about using America’s dominance of the machinery of the world’s financial system to break any European company from doing business in their own country with a competitor of America.

      Even if America had readily available processing capacity to supply Europe with its natural gas which it does not, even if America had readily available shipping resources to transport the liquid form of natural gas to Europe which it does not, even if Europe had readily available processing facilities to inject ship borne natural gas into their distribution system which it does not, American natural gas would still be much more expensive than the local alternative. Not only that but the massive dislocation of the current natural gas distribution system would be so great that every natural gas consumer in the world, including America would face higher prices.

      It isn’t Russia that has held Europe hostage over natural gas, it is the Ukraine because so much of the current Russian natural gas transit pipelines run through that country. Ukraine’s physical control allows them to disrupt the flow every now and then to extract concessions from Russia and make themselves strategically important to Europe in the process. The whole point of the new pipelines is to maintain continuity of flow to Europe by routing away from the Ukraine. .

      To draw the analogy so that you understand, imagine this. Europe controls the international finance system and uses that control to try and break Microsoft and Apple because they are providing the control system for the XL pipeline from Canada to the refineries in the U.S. South. And while doing so they lecture America about how they are entitled to tell America who it could do business with and who it could not no matter what impact it had on America’s economy and its citizens. The only difference between the two scenarios is the much larger damage to the lives of Europeans that America’s actions are intended to cause.

  8. July 25, 2017 5:26 pm

    MSM Narrative : ‘Trump is Russia’s puppy, …he’s nasty !’
    So when EU do biz Russia … and it’s Trump that tries to stop it
    we hear “wah, wah, wah !”… from the EU

  9. Jack Broughton permalink
    July 25, 2017 6:01 pm

    Foreign policy and the USA are totally incompatible concepts. Trump is right to get their focus back to internal affairs: wish that he could keep it there. But the Masters of War cannot stomach that……. they crave power and influence and are not accountable.

    This must be the most political page evah on Paul’s site!

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