US to Start Exporting LNG to Germany in 4 Years Tops

[Marina Schwarz + 1,576]

"Deputy U.S. Energy Secretary Dan Brouillette told Bild that LNG deliveries from U.S. companies would challenge Russia, which now accounts for 60 percent of German gas imports. “U.S. liquefied natural gas is coming to Germany. The question is not if, but when,” Brouillette told the mass circulation daily Bild in an interview published on Monday. Responding to the report, German government spokeswoman Martina Fietz told reporters in Berlin: “The German gas market is basically open to all market participants.”

I'd call that a shrug and an eyeroll.

[Jan van Eck + 7,558]

53 minutes ago, Marina Schwarz said:

 

I'd call that a shrug and an eyeroll.

Not really. The German government is terrified of angering the Russians, as Germany has allowed itself to become dependent on Russia, in the blind belief that by inviting the Russians in to the European markets, the Russians would mellow out and not be militarily aggressive towards their neighbors.  

Ask the people in Ukraine what they think of that idea. 

[NickW + 2,714]

20 minutes ago, Jan van Eck said:

Not really. The German government is terrified of angering the Russians, as Germany has allowed itself to become dependent on Russia, in the blind belief that by inviting the Russians in to the European markets, the Russians would mellow out and not be militarily aggressive towards their neighbors.  

Ask the people in Ukraine what they think of that idea. 

And if not relying on US (and to a lesser extent UK) military 'welfare' support

[Marina Schwarz + 1,576]

1 hour ago, Jan van Eck said:

Not really. The German government is terrified of angering the Russians, as Germany has allowed itself to become dependent on Russia, in the blind belief that by inviting the Russians in to the European markets, the Russians would mellow out and not be militarily aggressive towards their neighbors.  

Ask the people in Ukraine what they think of that idea. 

Which particular people in Ukraine? There are millions.

[smachclarke + 1]

On 9/17/2018 at 8:28 AM, Marina Schwarz said:

"Deputy U.S. Energy Secretary Dan Brouillette told Bild that LNG deliveries from U.S. companies would challenge Russia, which now accounts for 60 percent of German gas imports. “U.S. liquefied natural gas is coming to Germany. The question is not if, but when,” Brouillette told the mass circulation daily Bild in an interview published on Monday. Responding to the report, German government spokeswoman Martina Fietz told reporters in Berlin: “The German gas market is basically open to all market participants.”

I'd call that a shrug and an eyeroll.

I'd be surprised if LNG could ever come close to matching the volumes of Nord Streams 1+2, but zee Germans are taking active steps to secure cargos - example, one of their largest utilities is basically backstopping the construction and development of an LNG export terminal in eastern Canada (Pieridae/ Goldboro LNG). 

[Refman + 207]

LNG delivered by ship is a heck of a lot more expensive than NG delivered by pipe.

 

[wa601 + 18]

Who the heck in Germany will by the LNG from US?

It will be much more expensive to transport LNG over the sea and re-gasify it compared to pipeline gas.

By the way, why cant Germany use the LNG termina in Poland?

[Refman + 207]

2 minutes ago, wa601 said:

Who the heck in Germany will by the LNG from US?

It will be much more expensive to transport LNG over the sea and re-gasify it compared to pipeline gas.

By the way, why cant Germany use the LNG termina in Poland?

Well the alternative LNG supply does help keep a lid on the NG suppliers gouging the Europeans

[wa601 + 18]

Yes, you are right.

Small volume from US could be sold at low price. But big volumes?

Guess, the volume from Russia will not decrease. Actually, it may inrease if a small amount of US LNG helps to push the price of pipeline gas down.

Who will invest in this terminal?  Until now only politicians had been forced by the american friends to provide the verbal commitment.

[Jan van Eck + 7,558]

On 9/17/2018 at 9:45 AM, NickW said:

And if not relying on US (and to a lesser extent UK) military 'welfare' support

And let's remember the fundamentals:  The US has excess gas production, to the extent that gas is being flared off at the wellhead.  Pipe is being laid to capture this gas, and it will find its way to export terminals.  Domestic consumption is satisfied, except for spot winter shortages, particularly in the New England area, where LNG gets imported (at least, it was last winter).  What to do with all that gas?  Go sell it!  Even at crumbs, even at $2, it is better than flaring.  So that gas will  find its way to European markets, for two reasons:  (1) because the market is there; and (2) to take market share away from the US arch-enemy, Russia. 

At this point there is substantial new tonnage being constructed for LNG transport.  These are large gas carriers, big-money ships.  They will be able to transport considerable quantities. For political reasons, they will off-load in Poland, which really wants to be out from underneath Russia. Apparently at this point Poland no longer buys from Russia, but I am not totally certain of that. If they are not (yet), the Poles would certainly like to be.  And that is a decent-sized market. 

If Russia is between $9 and $16 for their gas, and US gas starts at $2 and the shipping cost is $6, then it still undercuts current Russian pricing.  More important, the US gas to Poland is always going to flow, and not become some pawn in geopolitics the way Russian gas is.  

For European security, the more logical place for re-gasification unloading points would be in France on the Atlantic coast, as then the gas would be in transit for less days and each ship would have faster transits, thus able to haul more gas per year.  Whether or not that develops is likely a function of US-Europe relations, unfortunately at this time in the cellar.  But that will improve...  😊

Gas export will be a shining triumph of US-Europe  export and diplomacy.  I view that as inevitable. 

[Guillaume Albasini + 851]

Poland gas market is not so huge... They overwhelmingly rely on domestic coal for power generation.

And Poland and some other east European country aside, I'm not sure Europe really wants US LNG. The current US administration pressure over Europe on the Iran sanctions is not helping to promote US energy exports. Reducing energy dependence from Russia is not a bad idea but increasing energy dependence from the US could be a bad idea.

I'm not sure you understand that in the US but today, from a European point of view, Trump is more threatening than Putin.

Trump is threatening Europe with tariffs and sanctions, trying to undermine the EU by supporting populists and meddling in European politics telling the Germans what they should do with their energy or migration policy...

Contrary to what many Americans believe, a Russian military invasion of Europe is not seen as a major threat by the Europeans. Europeans are more afraid by climate change than by Putin. And on climate change Trump is more an enemy than an ally.

 

[Jan van Eck + 7,558]

21 minutes ago, Guillaume Albasini said:

Poland gas market is not so huge... They overwhelmingly rely on domestic coal for power generation.

I'm not sure you understand that in the US but today, from a European point of view, Trump is more threatening than Putin.

Trump is threatening Europe with tariffs and sanctions, trying to undermine the EU by supporting populists and meddling in European politics telling the Germans what they should do with their energy or migration policy...

Contrary to what many Americans believe, a Russian military invasion of Europe is not seen as a major threat by the Europeans. Europeans are more afraid by climate change than by Putin. And on climate change Trump is more an enemy than an ally.

 

A  few rejoinders:     My reference to gas in Poland was for heating fuel and cooking, not electricity. 

Trump is viewed by Europeans as a short-term aberration.  Nobody there expects Trump to finish out his term.  And if he does, he is not expected to be re-elected.  So for the Europeans, it is a matter of waiting out the next two years.  They can do that. Trump did impose some tariffs, but remember, the European mills were dumping steel for decades into the US market.  The US put up with it, in the past, so the dumping became habitual.  Everybody know that that game was going to end some day.  Now it has. 

Although it is not anticipated that Russia will invade Western Europe, the risks to Eastern Europe are huge.  Russia has already invaded Ukraine twice - once in Crimea, then  again in Luhansk.  The pretext is to protect Russian-speaking minorities.  Well, right now today the Russian-speakers in free Ukraine are dumping Russian and speaking (or learning) only Ukrainian.  The perverse result of the invasions is that the Russian minorities are abandoning Russia and Russian as a language.  Now that the reality of Russian domination has sunk in, nobody wants anything to do with it.

Is an invasion by Russia into Russian-ethnic enclaves possible?  You bet it is.  Lithuania and Latvia are both vulnerable targets.  So is the entire Ukraine.  Right now Russia has massed multiple divisions right on the Border next to Kharkov.  Ready to launch any time. 

The other problem is the reality of Russian aggression in economic spheres was driven home by Russian shut-off of gas in the middle of a bitter winter cold-snap some years back.  That lesson is not lost on the consumers, although it would seem some politicians have forgotten.  Don't think for a minute that Russia will not use gas supply as a political weapon. They will. 

Edited September 27, 2018 by Jan van Eck

[Dan Warnick + 6,100]

The map kind of says it all, don't you think?

[Guillaume Albasini + 851]

5 minutes ago, Jan van Eck said:

A  few rejoinders:     My reference to gas in Poland was for heating fuel and cooking, not electricity. 

Trump is viewed by Europeans as a short-term aberration.  Nobody there expects Trump to finish out his term.  And if he does, he is not expected to be re-elected.  So for the Europeans, it is a matter of waiting out the next two years.  They can do that. Trump did impose some tariffs, but remember, the European mills were dumping steel for decades into the US market.  The US put up with it, in the past, so the dumping became habitual.  Everybody know that that game was going to end some day.  Now it has. 

Although it is not anticipated that Russia will invade Western Europe, the risks to Eastern Europe are huge.  Russia has already invaded Ukraine twice - once in Crimea, then  again in Luhansk.  The pretext is to protect Russian-speaking minorities.  Well, right now today the Russian-speakers in free Ukraine are dumping Russian and speaking (or learning) only Ukrainian.  The perverse result of the invasions is that the Russian minorities are abandoning Russia and Russian ans a language.  Now that the reality of Russian domination has sunk in, nobody wants anything to do with it.

Is an invasion by Russia into Russian-ethnic enclaves possible?  You bet it is.  Lithuania and Latvia are both vulnerable targets.  So is the entire Ukraine.  Right now Russia has massed multiple divisions right on the Border next to Kharkov.  Ready to launch any time. 

The other problem is the reality of Russian aggression in economic spheres was driven home by Russian shut-off of gas in the middle of a bitter winter cold-snap some years back.  That lesson is not lost on the consumers, although it would seem some politicians have forgotten.  Don't think for a minute that Russia will not use gas supply as a political weapon. They will. 

The shut-off of gas in the middle of a winter in 2006-2009 was related to a Russia-Ukraine gas dispute over the price of gas. Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation,but later Naftogaz admitted that natural gas intended for other European countries was retained and used for domestic needs.

Ukraine was getting Russian gas at a low price since the soviet era but when Russia rose the price to the market price Ukraine refused to pay at the new price. So Russia shut the gas sold to Ukraine but not the gas transiting to the EU markets. Ukraine then diverted the gas in transit to use it for domestic consumption creating shortages in Europe. At several occasions Russia cut entirely the gas transiting to Ukraine for some days.

Since this crisis Russia decided to reduce gas transit to Europe through Ukraine and use others ways to ship the gas to the EU customers using for instance the Nord Stream gas pipeline connecting Russia directly to Germany through the Baltic Sea. A pipeline they plan now to expand by laying two additional lines.

So it's true the gas supply has been use as a political weapon against Ukraine but it has never been used against the EU.

 

I don't see Russia risking a war with the EU over Lithuania or Latvia. I think the fear of a Russian invasion of the Baltic States is emphasized mainly by the US to try to sell more weapons to the east European countries.

 

 

 

 

 

[Jan van Eck + 7,558]

31 minutes ago, Guillaume Albasini said:

The shut-off of gas in the middle of a winter in 2006-2009 was related to a Russia-Ukraine gas dispute over the price of gas. Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines.

I don't see Russia risking a war with the EU over Lithuania or Latvia. I think the fear of a Russian invasion of the Baltic States is emphasized mainly by the US to try to sell more weapons to the east European countries.

Well, that is the "official version," and it has a certain scripted plausibility to it.  However, the reality is that Russia had used the excuse of a dispute with Ukraine to jack up the price to Germany (the West).  It was also intended to be a big lesson for other buyers of Russian gas:  toe the line, or we shut you off.  And that was the real lesson. 

After the dispute, Russia simply shut off ALL gas to everybody, and Europe shivered. Then Russia demanded $16 for the gas, and received it.  So to say that it was other than a power-play is a bit silly.  Remember also that Russia has a Judgment against it for many billions from the Court of Arbitration for non-payment to Ukraine for various fees, I think the current balance is well over two billion dollars.  There is a lot of blood in the water when it comes to Russia and gas. 

Russia knows perfectly well that it risks no war with Europe or the EU over Lithuania and Latvia.  Russia can go in there with impunity and simply take the territory, and Europe will do nothing. Western Europe is, as a practical matter, totally pacifist.  Indeed, it is this reality that is pushing the Baltics, Finland and Poland to re-arm and form alliances with the USA and Canada.  The Canadians now have a brigade of armor inside Lithuania specifically for that purpose: to deter Putin, and inform him that an attempted coup will be resisted by Canadian troops and tanks.  Equally, a US brigade is moved into Poland, and the Poles are offering to build the US Army a new military base. The US will accept, and move more troops and tanks into Poland. 

[Jan van Eck + 7,558]

1 hour ago, Dan Warnick said:

The map kind of says it all, don't you think?

 

Yes, I agree.  Remember that after the last joint military exercises, Russia left several divisions inside Belarus; they are parked right near the border opposite Vilnius, which is just a few miles away.  Now the excuse that Russia uses is that it need to "protect" the Russian-speaking people living in the border area.  After Stalin simply seized the Baltics, he moved Russians into the border region and forcibly re-settled them there, in order to start the process of Russification.  The next generations are there now.  

The use of these ethnic peoples for excuses for invasion has an eerie ring to it; it was what Hitler used to invade the Sudetenland. Nobody resisted that one, either. 

[Dan Warnick + 6,100]

11 minutes ago, Jan van Eck said:

The use of these ethnic peoples for excuses for invasion has an eerie ring to it; it was what Hitler used to invade the Sudetenland. Nobody resisted that one, either.

Learned something new today.  Thanks, Jan.

[Jan van Eck + 7,558]

12 minutes ago, Dan Warnick said:

Learned something new today.  Thanks, Jan.

It has an interesting history.  Read up on Neville Chamberlain, the PM of England at the time, and his "paper" with Hitler's signature on it....

[Dan Warnick + 6,100]

12 minutes ago, Jan van Eck said:

It has an interesting history.  Read up on Neville Chamberlain, the PM of England at the time, and his "paper" with Hitler's signature on it....

https://www.history.com/news/chamberlain-declares-peace-for-our-time-75-years-ago

I remembered something about that "agreement", but this brings it back into focus.  Thanks again.

Edited September 27, 2018 by Dan Warnick

[Dan Warnick + 6,100]

30 minutes ago, Jan van Eck said:

It has an interesting history.  Read up on Neville Chamberlain, the PM of England at the time, and his "paper" with Hitler's signature on it....

History.com had another story at the bottom of that page.  It was about Mussolini, which then led me to Google photos of his death.  Let's just say the citizens were not kind to his head......

Another bit of history that I was aware of but did not know the details about until now.  The internet certainly allows us all to learn from history.  The question is: will we choose to do so, or will we choose to delude ourselves into believing those kinds of things can not happen again?

[Guillaume Albasini + 851]

1 hour ago, Dan Warnick said:

History.com had another story at the bottom of that page.  It was about Mussolini, which then led me to Google photos of his death.  Let's just say the citizens were not kind to his head......

Another bit of history that I was aware of but did not know the details about until now.  The internet certainly allows us all to learn from history.  The question is: will we choose to do so, or will we choose to delude ourselves into believing those kinds of things can not happen again?

Worth remembering now, when some are actively trying to dismantle two institutions created after WWII to prevent future conflicts : the UN and the EU.

[Jan van Eck + 7,558]

1 minute ago, Guillaume Albasini said:

Worth remembering now, when some are actively trying to dismantle two institutions created after WWII to prevent future conflicts : the UN and the EU.

And let us not forget NATO!

NATO, aside from its political significance, has also created a vast "common army," with standardized ammunition, training, communications, and shared armor, artillery, aircraft design, and leadership.  Those factors require an aggressor to ponder the wisdom of doing invasions....

[John Foote + 1,135]

Russia is even struggling with the Ukraine mess. Russia is an oil and gas giant, but their financial and military power is overrated. It is so much easier to win a battle than win a country. If winning battles was it, the US easily wins Vietnam and there is peace in the Iraq. The old U.S.S.R. went full on brutal in Afghanistan, so don't think the US holding back is the issue. There has been a perhaps test firefight between Russians and Americans in Syria, maybe it wasn't a test. Russians were slaughtered without American direct loses. Russian ability to blow up things in Syria is poor measure of effectiveness. Even the Turks can shoot them down. US is the only military super power, but I fear that draws us into battles we win, wars we lose, indirectly if not directly. 

The link is an interesting perspective. 

http://www.atlanticcouncil.org/blogs/ukrainealert/the-geopolitical-divorce-of-the-century-why-putin-cannot-afford-to-let-ukraine-go

[Tomasz + 1,608]

On 9/17/2018 at 3:24 PM, Jan van Eck said:

Not really. The German government is terrified of angering the Russians, as Germany has allowed itself to become dependent on Russia, in the blind belief that by inviting the Russians in to the European markets, the Russians would mellow out and not be militarily aggressive towards their neighbors.  

Ask the people in Ukraine what they think of that idea. 

Civil war in Ukraine is natural consequence of western support for Maidan. It was many times clearly  said its a red line for Russia so western support for Maidan was a provocation which led us to war. No russian leader can allow this to happen. Its like Cuban crisis and red line. 

  I hope some of you were in Ukraine = its a country of 3 parts= western Ukraine central Ukraine and eastern Ukraine - imho this country is so politically and ethically divided going back to XVII century that people discussed Ukraine disintegration from the beginning and being neutral like Finland  its still the only way for such divided society.

I would like to remind you that western leaders assured Gorbachev that there will be no NATO expansion on the east. This expansion and broken agreement not Russia  is  the single biggest risk for peace in Europe in last 25 years.

This is a very good article about it

https://www.bloomberg.com/view/articles/2017-12-13/the-story-behind-putin-s-mistrust-of-the-west

 

 

Edited September 27, 2018 by Tomasz

[John Foote + 1,135]

On 9/27/2018 at 3:49 PM, Tomasz said:

I would like to remind you that western leaders assured Gorbachev that there will be no NATO expansion on the east. This expansion and broken agreement not Russia

And history repeats itself. Churchill and FDR agreed to allow eastern Europe to be a vassal states of a sort, and the U.S.S.R. was disarming at an impressive state. FDR died, Churchill got Truman's ear in the late 40s, the A-bomb was in play, and initially only with the US, and the assertive posturing served as a catalyst for the hard line iron curtain. Since Peter the Great Russia views the Ukraine as critical. 

For a short while the US had the "Power Doctrine". Why go to war, DON"T. If absolutely positively required there better be a true global buy-in (Gulf War 1), or an attack on the US. The Powell Doctrine was the product of a Vietnam vet in charge, knowing the folly of asymmetric war., working under a vet as the president, Bush41. Clintons, Bush43, Obama, and now Trump with OMG Bolton, coupled with a no draft military where most people have no concept or stake in the game, the price of war is again forgotten. And the fact the war is mostly a lose-lose proposition. 

By the way, I happen to believe there is no nobler profession than the military, loved my time, and nothing asks so much of you, but that is on the soldier level. Too often militaries are political tools, or a key part of politics, or both.