Russia/Germany Pipeline Really A Security Threat for US?

[Rodent + 1,424]

fear mongering or legitimate concern?

https://uk.reuters.com/article/uk-usa-germany-russia-pipeline/russia-germany-gas-pipeline-raises-intelligence-concerns-u-s-official-idUKKCN1II0V7

[Tomasz + 1,608]

Its between Russia and Germany. A couple of thousands kilometers from nearest US border. Really not US bussiness.

[Guillaume Albasini + 851]

Russians don't need a pipeline project to place listening devices in the Baltic Sea. They have enough military submarines to do that easily.

It sounds more like an economic competition between Russia and the US for the european gas market.

Edited May 17, 2018 by Guillaume Albasini

[Tomasz + 1,608]

They need it because Ukraine is really not a reliable partner in transporting gas through this country. I would point out that they have 2 street revolution in 10 year's time and the second was rather a armed coup d'état  than peaceful revolution.

Edited May 17, 2018 by Tomasz

[Tomasz + 1,608]

From russia www.1prime.ru bussiness portal

sorry for translating by google translator but I think its quite good translation of long text

MOSCOW, May 17 - Prime Anna Podlinova . US clearly threaten the economic security of Germany: US President Donald Trump insists that the country refused to support the construction of an export pipeline "Nord Stream - 2" from Russia to Germany. In this case, the US is ready to negotiate a new trade agreement with the EU. Otherwise, the US leader promises Europe transatlantic trade war, particularly against the German automotive industry. 

US uses an extremely painful method for Germany, one of the key industries will be under threat if the Americans to impose restrictive measures against him, analysts surveyed by "Prime". However, if the Germans would agree with these demands, maintain the status quo in the automotive industry and will give up "Nord Stream-2", dropping to its market for more expensive LNG from the United States, as urged Americans suffer German industrialists, who would be forced to spread for gas is much more funds. This will entail a rise in the cost of products manufactured in Germany.

Nevertheless, the potential failure of the German "Nord Stream-2" does not guarantee the EU's successful negotiations with the US on trade agreement, the experts note. 

Beat on a patient

The US car market is the largest in the world, second only to China, reminds partner agency "AUTOSTAT" Igor Morzharetto. "For many German companies the US market is the most important It is the second largest after China, in the past year more than 17 million cars were sold there." - he recalls, adding that BMW and Mercedes had its major assembly plants. 

US led a trade agreement with the EU's rejection of the "Nord Stream-2"

 

The expert notes that imports of German machinery to America many times higher than imports of American cars to Europe. Thus, a potential solution Trump introduce restrictive measures against the German car industry will hurt this area. "While this may be reflected in the sales of American cars, it is still a serious threat to Germany Especially because of the Trump can expect anything.", - he says.

Opportunities for some strong response in Germany no, says analyst "Opening Broker" Andrei Kochetkov. "The trade balance with the United States puts Germany in reliance on exports. That is Germany delivers more goods to the US than purchases. On the other hand, the American president policy is already beginning to seriously trouble the Europeans, since it undermines the foundations of long-term system of mutual concessions, which were formed in the framework of long-term negotiations ", - he says.

According to him, sharp movements in the framework of policy Trump give rise to new contradictions and imbalances that could enhance the desire of Europe itself to reduce political dependence on Washington. "The welfare gains on the Eurasian continent will allow Germany, and across Europe to reduce its dependence on the US market, which will inevitably reduce and political dependence on Washington in defining its economic priorities", - he says, adding that in order to reduce US dominance in the financial sector required persistence on the part of Europeans.

Term is more beneficial to Russia

In general, trade relations between the two countries have never been simple: Germany traditionally uses Russian resources for economically justified advantages to promote their exports, said Kochetkov. "Russian gas provides the energy and chemical industry in Germany available raw materials, which allows you to save the trade surplus and the budget for several years," - he recalls. At the same time in the United States are interested in the export of LNG deliveries to Europe, which will be obviously more expensive than Russian supplies through the pipeline. 

He stressed that Germany has not yet occurred in any doubt about the reliability of Russian exports and the issue price under the existing volumes coming to the fore. "The German industrialist, is not ready to lay out for American gas and a half times more than in Russia Such expenditure is only possible in the exercise of political pressure." - he said, adding that in the case of US success at blocking the "Nord Stream - 2", the German industry begin to lose their price advantage. 

According to the deputy director of investment analysis "Zerich Capital Management" Andrei Vernikova, from the standpoint of long-term interests of Germany, a new gas pipeline "Nord Stream - 2" is more important. "Nobody knows what will be the outcome of future negotiations, Germany and the United States on a new trade agreement with Iran And history shows that the US is easy to give up the previously signed agreements.", - he says.

US interests are clear - to increase exports of expensive liquefied natural gas to Europe, part of the terminal which has been built for the reception. "The German economy is the largest in Europe, and to buy expensive gas - then raise the cost of produced machines and vehicles, which is disadvantageous for Germany," - he says, adding that it is obviously better than a trade dispute with the United States. "Transatlantic trade war is easy to start and hard to turn", - the expert warns.

For Germany, a very important industrial and economic cooperation with the major supplier of hydrocarbon resources and a huge market of industrial product sales as Russia, says Professor of Economics named after GV industry REU Plekhanov Andrey Bystrov. "However, the obligations to the United States do not allow Germany to ignore the pressure of the American partners on its trade cooperation with Russia", - he said, noting that in this context the question of how to behave in Germany will continue to support the "Nord Stream - 2" or there is an open question.

According to him, the economic leaders of Europe will be able to find a balance relations with both Russia and the United States to ensure effective economic development of Europe, without getting involved in a prolonged non-constructive opposition. "On the European market is a great need of hydrocarbon raw materials, therefore, most likely, plenty of space and the" Nord Stream-2 ", and LNG from the United States," - he concludes.

 

[jose chalhoub + 388]

Germany has always bee very close to Russia and heavily dependent on russian gas imports. Nord Stream 1 and 2 are proof of this, Schroeder was named member of the Nord Stream consoritum, and per the U.S. trying to be a competition to Russia gas, it still is not in a position to displace Russia. 

[TomTom + 183]

I wonder if Trump follows up on the ultimatum he's given to Merkel. Now that the ball is in Merkel's court, how will she respond? 

[Marina Schwarz + 1,576]

20 hours ago, Guillaume Albasini said:

Russians don't need a pipeline project to place listening devices in the Baltic Sea. They have enough military submarines to do that easily.

It sounds more like an economic competition between Russia and the US for the european gas market.

And they already have a pipeline there, which many seem to forget, if they should feel like putting any listening devices in the Baltic. 

 

Edited May 18, 2018 by Marina Schwarz

[Tomasz + 1,608]

LNG is still not really cost compepetive with russian or norwegian pipe gas especially in Europe because of high cost of trasportation/regasification - about 4 $ per mbbtu at least .

Secondly lowest cost of gas production has Iran (less than 1 $/mbbtu) Russia (about 1 $). US shale gas has cost of production about 2,5 $ per mbbtu - on some fields a little bit lower  but on some of them about 3 $ per mbbtu or even higher.

 

It means for Cheniere:

gas price on Henry Hub - lets say 3 $ in nearest future

typical additional fee for Cheniere for exporting gas - 15 % of that - 0,5 $

Cost of delivering gas to Europe/gasification/regasification - average 4 $ - some say closer to 3,5 $ other than to 4,5 $

Cost of delivering gas from fields to port + transport in Europe - let's say 0,5 $

 

It means that final minimal price of US LNG in Europe with some long term profit for Cheniere is about 8 $ per mbbtu - 288 $/1000 m3

 

Cost of russian gas to Europe according to World Bank 2017 5,65 $, 2018 6,50 $ 2019 6,50 $

 

Because of this I mean LNG is for the time being not cost compepetive to Russian gas.

Im sorry for fans of US LNG to Europe instead of norwegian or russian pipe gas -  one thing is politics or attitude to Russia behaviour second is simple economy of LNG. LNG is and probably in foreseeble future will be more expensive than pipe gas. 

I

Edited May 18, 2018 by Tomasz

[ronwagn + 6,290]

America has spent trillions of dollars defending Germany and lost many thousands of lives. Europe has never repaid all the support we have given them. They are foolishly remaining dependent on Russia for winter heating and turning their back on us. We need to realize what is happening. 

All of Europe should have been fracking for years but have been foolish enough to let left wing greenies stop them. At least Britain is now going to frack. 

The future of Europe is in the hands of left wing aristocrats that care more about short term economic gain than the future of their own people.

[Tom Kirkman + 8,860]

I've commented numerous times on this topic in the last few months on LinkedIn (before I joined Oil Price forum).  Here's one of my rants on LinkedIn a month ago, verbatim:

Why American LNG is no substitute for Russian gas in Europe

This Russian article about energy supply to the EU totally misses the point, and it does so deliberately.

Yes, LNG from the USA is more expensive than Natural Gas piped from Russia.  No argument.

What is needed for EU energy security is *diversity* of energy supply.

If Putin throws another temper tantrum and restricts supply of natural gas to the EU next winter, a supply of LNG from the USA and other countries would resolve the energy security issue, rather than have the bulk of the EU freeze their butts off during the winter.

The USA should stop trying to fight Nord Stream 2.  And Russia should stop trying to stop USA LNG from entering EU markets.  

Monopolies suck.  Supply diversity is good for energy consumers.

In much the same way that I support both the PetroYuan and the PetroDollar (rather than just a PetroDollar monopoly) I support both piped Natural Gas from Russia and also LNG imports for the EU.  

Competition.

Diversity, not monopoly.  Choice, not force.

[Tom Kirkman + 8,860]

As long as I'm at it, how about another one of my rants on this topic, posted on LinkedIn a couple months ago.  You might notice that my response a month later in April (see my comment directly above) is a bit more nuanced than my earlier rant here from March:

US Threatens Sanctions For European Firms Participating In Russian Gas Pipeline Project

The U.S. should butt out of EU energy policy.

The U.S. has no business threatening sanctions on EU companies that participate in the construction of a gas pipeline destined for distribution to the EU.

I'm a very strong supporter of oil & gas & LNG, and I fully support developing infrastructure and pipelines that support the hydrocarbon industry.

The U.S. is dead wrong in trying to impose its vested interests in selling its exported higher priced LNG to the EU by trying to block a new Russian gas pipeline.

Russia's Nord Stream 2 project is good for long term energy infrastructure for natural gas distribrution to the EU.

If EU countries want to diversify their energy supply by buying LNG at a higher price than piped natural gas from Russia, fine, no issue. Their choice.

But the U.S. has no business trying to stop another natural gas pipeline to the EU from being built - that is just stupid, counter-productive and arrogant.

Russia is *not* the enemy, regardless of how MSM screams hysterically about RUSSIA RUSSIA RUSSIA ! ! !  ELEVENTY !

[Marina Schwarz + 1,576]

On 5/21/2018 at 6:02 AM, ronwagn said:

All of Europe should have been fracking for years but have been foolish enough to let left wing greenies stop them. At least Britain is now going to frack. 

No, it shouldn't. Europe lacks the vast, open spaces necessary for fracking, it's as simple as that. Even Poland gave up. Also, the Netherlands is now shutting down production at its biggest gas field because of increased seismic activity. And we're talking about conventional gas. No one in their right mind would risk the quakes linked to the wastewater reservoirs of frack wells. Again, there is simply not enough space to contain this kind of oil/gas extraction.

[Lorenzo Nannetti + 4]

European law is different from US law too. In the US, if you own a piece of land, drill it and find oil, gas or water, it's yours and you can sell the rights and so on. This allowed the surge in drilling and exploitation. In several EU countries, like Italy for example, if you own a piece of land, drill it and find oil o gas, that is owned by the state. You may get some compensation, but it will be minimal. This doesn't encourage the same kind of activity.

[Tom Kirkman + 8,860]

46 minutes ago, Lorenzo Nannetti said:

European law is different from US law too. In the US, if you own a piece of land, drill it and find oil, gas or water, it's yours and you can sell the rights and so on. This allowed the surge in drilling and exploitation. In several EU countries, like Italy for example, if you own a piece of land, drill it and find oil o gas, that is owned by the state. You may get some compensation, but it will be minimal. This doesn't encourage the same kind of activity.

Bingo.  Very much correct.

[ronwagn + 6,290]

England is going to frack big time. This will be a great example for the rest of Europe. European energy prices are twice to three times as high as in the United States. Russia has financed anti-fracking campaigns worldwide. Glad to finally see a breakthrough after all the hysterical propaganda. Please watch how this goes for England and if it teaches Europe a big lesson. Natural gas is the best answer for the future of affordable and clean energy. https://www.theguardian.com/environment/2017/dec/25/fracking-start-2018-shale-gas-uk-industry-protests

[Tomasz + 1,608]

On ‎2018‎-‎05‎-‎21 at 5:02 AM, ronwagn said:

America has spent trillions of dollars defending Germany and lost many thousands of lives. Europe has never repaid all the support we have given them. They are foolishly remaining dependent on Russia for winter heating and turning their back on us. We need to realize what is happening. 

All of Europe should have been fracking for years but have been foolish enough to let left wing greenies stop them. At least Britain is now going to frack. 

The future of Europe is in the hands of left wing aristocrats that care more about short term economic gain than the future of their own people.

Well can you show me at least 1 US soldier that die defending Germany?

I can speak about several thousands US soldiers in WW I and a lot more which died in WW  II but well they didnt die defending Germany for sure :D.

Im not sure whether Germans from historical perspective should be really very happy because of US military involvement in Europe in XXth century.

Edited May 25, 2018 by Tomasz

[ronwagn + 6,290]

You obviously don't know much about the cold war. General Patton did die and was reportedly assassinated by the Communists in a planned "accident". I spent 26 months in Germany. Not to just defend the USA but to keep Russia from controlling all of Europe. Study some history. Plenty of soldiers died in the Cold War. Mostly during training. I personally discovered a dead American soldier who had possibly been drugged after visiting a gasthaus during the winter. He was found on a hilly trail halfway back to our Kaserne. The attitude of many Germans today is despicable. 

Study up on the Berlin Blockade and East Germany under Russian occupation. Compare it to the way West Germans were treated.