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Russia Laughing All The Way To The Bank!

June 2, 2021

By Paul Homewood





Climate activists who scored big wins against Western majors last week had some unlikely cheerleaders in the oil capitals of Saudi Arabia, Abu Dhabi and Russia.

Defeats in the courtroom and boardroom mean Royal Dutch Shell (RDSa.L), ExxonMobil (XOM.N) and Chevron (CVX.N) are all under pressure to cut carbon emissions faster. That’s good news for the likes of Saudi Arabia’s national oil company Saudi Aramco (2222.SE), Abu Dhabi National Oil Co, and Russia’s Gazprom (GAZP.MM) and Rosneft (ROSN.MM).

It means more business for them and the Saudi-led Organization of the Petroleum Exporting Countries (OPEC).

“Oil and gas demand is far from peaking and supplies will be needed, but international oil companies will not be allowed to invest in this environment, meaning national oil companies have to step in,” said Amrita Sen from consultancy Energy Aspects.






MOSCOW/BEIJING — Eyeing an opportunity to strengthen energy exports to China, Russia has launched new ventures and pipelines that will deliver coal, natural gas and petrochemicals to the world’s largest energy consumer.

One of these projects envisions doubling Russia’s coal exports to China — enough to replace imports from Australia, with which China’s relations have deteriorated. 

Chinese President Xi Jinping and Russian President Vladimir Putin agreed to pursue greater cooperation across a range of fields, including large-scale energy and industrial projects, in a phone call on Dec. 28…

Elgaugol, the company behind the Elga coal project in the Russian Far East, agreed on Dec. 15 to launch a joint venture with China’s Fujian Guohang Ocean Shipping (Group) that will export metallurgical coal to China. The Elga project is expected to ship 30 million tons of coal to China in 2023, which would almost double Russia’s total coal exports to China from about 33 million tons in 2019…

Russian petrochemical company Sibur Holding on Dec. 28 also announced a joint venture at the Amur Gas Chemical Complex with China Petroleum & Chemical Corp., or Sinopec. Construction of the plant is expected to begin in earnest now that the companies have received the relevant approvals, and is slated for completion in 2024. Sinopec will own 40% of the facility…

The trend extends to natural gas as well. State-backed Gazprom has kicked off an 800 km extension of the so-called Power of Siberia pipeline, which began transporting natural gas from Russia to China in December 2019. The extension will connect the pipeline to the Kovykta gas field in eastern Siberia by the end of 2022, in a step toward Gazprom’s goal of boosting flows through the pipeline to 38 billion cu. meters annually by 2025. Flows came to 3.8 billion cu. meters for the first year.

Gazprom, which holds a monopoly on the export of gas through pipelines, transported 200 billion cu. meters of gas to Europe and Turkey in 2019. But the company has been shifting its focus east, and last year began a feasibility study for another pipeline that would deliver 50 billion cu. meters of gas to China via Mongolia. 



European governments are drawing up plans to phase out coal, U.S. coal-fired power plants are being shuttered as prices of clean energy plummet, and new Asian projects are being scrapped as lenders back away from the dirtiest fossil fuel.
And Russia? President Vladimir Putin’s government is spending more than $10 billion on railroad upgrades that will help boost exports of the commodity. Authorities will use prisoners to help speed the work, reviving a reviled Soviet-era tradition.
The project to modernize and expand railroads that run to Russia’s Far Eastern ports is part of a broader push to make the nation among the
last standing in fossil fuel exports as other countries switch to greener alternatives. The government is betting that coal consumption will continue to rise in big Asian markets like China even as it dries up elsewhere.

Meanwhile Sleepy Joe does not seem to know what day it is!



Let me get this straight. Recently, Russian hackers shutdown North America’s largest pipeline for days, massively disrupting the supply chain on the eastern seaboard and leading to shortages and price spikes. Eventually Colonial, Inc, the line’s owner, paid a $5 million ransom to get it up and running again, a decision about which the Biden administration officially had no opinion. Of course, anyone with half a brain knows that’s a lie, that they must have been working both sides, pushing Colonial to towards a course of action (presumably the one they took) on the one hand, and engaging their Russian counterparts about it on the other.

Well, the cyberterrorists got what they asked for, and now the Putin regime have gotten their dearest wish as well: the Biden Administration will allow construction of the Nord 2 pipeline project which will enable Russia to satisfy Germany’s appetite for oil and gas (which has become more voracious since Germany embarked on its foolhardy Energiewende policy) without passing through Ukraine, a country where anti-Russian sentiment is rife. Moreover, Biden is waiving existing sanctions on the company building the pipeline and its president, Putin ally and former Stasi officer Matthias Warnig, to get the project done.

This is surprising, as Team Biden have been very open about their opposition to Nord Stream 2, fearing it would shift the balance of power in the region by getting Germany addicted to cheap Russian energy, boosting Russia’s economy, and further subordinating the smaller countries in the region to the larger. Just this February, Jen Psaki was uncompromising when she articulated the administration’s view on the matter:

Our position on Nord Stream 2 has been very clear, and it remains unchanged. President Biden has made clear that Nord Stream 2 is a bad deal. It’s a bad deal because it divides Europe, it exposes Ukraine and Central Europe to… Russian manipulation, and because it goes against Europe’s own stated energy and security goals.

And then suddenly Bidenettes backed down. Something strange is going on here. Foreign policy analyst Rebeccah Heinrichs tweeted sarcastically, "How absolutely wild is it that Russians attacked a US pipeline while gas prices were already high and like two days after the US company pays the relatively small ransom Biden lifts sanctions on Nord Stream 2." It’s definitely suspicious.

Then again, the two events might be unrelated. What is indisputable, however, is that this move looks  ridiculous in light of Biden’s anti-pipeline domestic policy. As Dan Foster put it, "Killing energy jobs in Oklahoma and creating them in St. Petersburg is so comically inept and villainous you could never even try it without the entire press in your back pocket."

  1. MrGrimNasty permalink
    June 2, 2021 8:12 pm

    Arctic exploitation too – Russia full steam ahead, whilst Biden just suspended oil and gas leases in Alaska (approved by the Trump administration).

  2. Mack permalink
    June 2, 2021 8:36 pm

    And, of course, Russian climate scientists haven’t been befuddled or corrupted by green activistism and have maintained a sensible grip on reality. That’s why their models track closer to observations than almost all Western examples. They know, full well, that the current warming period is temporary and will, inevitably, turn cooler. Hence why the Russian government is following energy policies that exploit the weaknesses of the West. An obvious clue to their direction of travel was obvious when, some years they decided to upgrade their nuclear ice breaking fleet just as western politicians, scientists and the useful idiots in the media were panicking about vanishing ice.

    • Julian Flood permalink
      June 3, 2021 5:04 am

      Not ‘Almost all’. All. When you look at the spaghetti graph of all the model ‘projections’, the one at the bottom is Russian, INM 4(? I’m away from, my computer) and it matches reality as measured by satellites and met balloons. It achieves this remarkable feat by using a climate sensitivity to CO2 warming that is half that used to panic the West.

      The STEM – illiterate governments in the UK, EU and USA blindly trust dubious science. If we want to survive in the modern world we need a scientifically and technologically adept political class supported by a civil service that is aware that a First in Greek or Roman history is no longer sufficient to run a modern economy.
      Let’s not think about our climate policy depending on the expertise of a graduate in the history of the theatre.

      Ye Gods.


      • Harry Passfield permalink
        June 3, 2021 9:50 am

        Julian, the cynic in me says, it’s not so much that the western govs, ‘blindly trust dubious science’, it’s that, in order to reach the goals they have they are happy to allow ‘the dubious’ science to play its part in allowing them to get there – wherever that is (the demise of western democracy?)

  3. Cheshire Red permalink
    June 2, 2021 9:16 pm

    My suspicion is China has the Biden’s in their pocket. Hunter’s laptop from hell is probably just the start. They’ll have evidence against him and The Big Man that’d send them both to jail.

    Yes this is speculation, but c’mon man, Biden is making decisions which defy all logic, even for nut-job left-wing liberals. The USA is being blackmailed.

    • MrGrimNasty permalink
      June 2, 2021 9:31 pm

      Biden isn’t making any decisions beyond which side of his mouth to dribble out of.

    • June 2, 2021 10:21 pm

      China has the Bidens in its pocket, but so does the Ukraine, since they know what work Hunter put in at Burisma. And so does Russia, since their secret service presumably knows the details of the 2 million dollar deal Hunter did with the widow of an ex-mayor of Moscow. And CNN, Facebook, and Twitter by censoring all discussion of Biden’s links to foreign “competitors,” are complicit in the pressures these foreign powers may be putting on the President. This nut-job left-winger is indeed very confused.

  4. Sobaken permalink
    June 2, 2021 9:28 pm

    For anyone interested in Russian energy policy, here’s the website of the Ministry of Energy’s official magazine

    • Sobaken permalink
      June 3, 2021 10:37 am

      And here’s the Energy Strategy for 2035

      Some key figures:
      Oil extraction remains at current levels of 555 MT
      Gas extraction increases from 730 Bm3 to 1000 Bm3
      Electricity generation increases from 400 TWh to 475 TWh
      Gas consumption increases from 490 Bm3 to 520 Bm3
      Coal consumption remains at current levels of 205 MT
      Petrol and diesel consumption increases from 35 and 38 MT to 37 and 46 MT respectively
      Coal exports increase from 210 MT to 392 MT, and share of global market increases from 14% to 25%
      Oil exports reduce from 260 MT to 252 MT
      Share of oil used for petrochemicals increases from 18% to 35%
      Increasing share of fossil fuel exports to Asia from 27% of total exports to 50%
      LNG exports increasing from 27 MT to 189 MT, thanks to new terminals in the Arctic
      Pipeline gas exports increasing from 240 to 405 Bm3, mostly due to new pipes to Asia
      2 million tons of hydrogen exports to Europe
      Electric grid losses reduce from 10% to 7%
      Methane used for transport increasing from 0.68 to 13 Bm3
      Buildings with gas connections increase from 69% to 83% of total
      Cogeneration increases from 30% to 40%
      Fuel demand for heat reduces by 6%
      Fuel demand for electricity generation reduces by 18%
      Associated gas flaring reduced from 15% to 5%

      • Jack Broughton permalink
        June 3, 2021 10:50 am

        Thanks for these links, very interesting indeed. Almost a real-world view of the future as opposed to the IEA’s fantasy world.

  5. June 2, 2021 10:42 pm

    “…national oil companies have to step in,” said Amrita Sen from consultancy Energy Aspects.

    “State-backed Gazprom has kicked off an 800 km extension of the so-called Power of Siberia pipeline…”

    “…President Vladimir Putin’s government is spending more than $10 billion on railroad upgrades that will help boost exports of the commodity.”

    Notice something there? In Russia and China, the State makes the big decisions. Its called socialism. In the US it’s a judge and the billionaire-controlled media. That’s not how capitalism or democracy are supposed to work.

    Team Biden have been very open about their opposition to Nord Stream 2, fearing it would shift the balance of power in the region by getting Germany addicted to cheap Russian energy…”

    Hang on. Isn’t being free to choose the cheapest provider one of the basic principles of liberal capitalism? Is the German crime here that, like the Russians and the Chinese, they’re being rational, favouring socialist or capitalist solutions depending on circumstances?

    • Mewswithaview permalink
      June 3, 2021 8:36 am

      Realpolitik, Merkels compromise balancing act between the middle class urban Greens and German industrialists mercantilism has backed German consumers into a corner regarding the source of their energy and both Putin & Gazprom know it. Germany continues to phase their nuclear plants out because of the scaremongering by the environmentalists aided by the media and pursued their energy transition program and subsidised random energy generation sources. This meant they had to bring coal back online and in order to phase out the coal plants while keeping their industrial base they need a reliable energy source, the only game in town is Gas. The subsidies are running out for random energy, just in time for the gas to come online.

  6. Velcro permalink
    June 3, 2021 12:09 am

    The Law of Unintended Consequences strikes back.

    Incidentally, there was a review on radio here yesterday of Hunter Biden’s book. It was very laudatory – said it was a terrific book, with raw honest writing about his life and various addictions. But hardly a word about Burisma, his business dealings in China, and no word on the revelations on his laptop

  7. Gerry, England permalink
    June 3, 2021 12:51 pm

    The comment about having the entire press in your back pocket should be expanded to include all media sources and is very telling.

  8. Jack Broughton permalink
    June 3, 2021 3:21 pm

    We keep hearing about the nasty Russian hackers (or is it Putin’s own lap-top really) infiltrating the poor old USA’s security systems. Surely, our western criminals are as good at cyber-crime as any Russians!!! Also, do not the USA spend more on national security than the rest of the world combined – looks like poor value for money to me when pipe lines can be so easily compromised and mobs can invade congress.

    It is interesting that very few UK companies have taken insurance for cyber-crime, while the rate of such blackmail is apparently rocketing, with little option but to pay for most companies.

  9. chriskshaw permalink
    June 4, 2021 2:56 pm

    Interesting article on how “green” EVs are… they take the life of the battery 130,000 miles to break even! Enjoy.

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