Washington’s Victory in the Fight for the Russian Future

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A stimulus is a stick used to herd a donkey. Rather, even a thin bar, because the livestock must be herded so that it feels discomfort and, without stubbornness, moves forward, but at the same time one must be careful that its bones do not break. Stimulus is a very useful and technological thing.

Nothing at all is done in our lives without stimulus. And the stimulus always causes some discomfort. For if it is very nice, why strain oneself? A person, a state, a transnational corporation, or a small company starts to strain only when it is no longer possible to work in the old way.

We should be eternally grateful to the Americans, who decided to push Gazprom out of the European market. And a little more grateful to Ukrainians and Poles for the fact that they decided to play along with the Americans. After all, how beautiful it was. Gas went to Europe, and money went into Gazprom’s accounts and to the Russian budget. The EU regularly increased consumption and Gazprom’s income.

If the Americans had not insisted on telling Europeans that dependence on one supplier is bad, it is unlikely that anyone in Russia would have started to reflect on the fact that Gazprom is not the only gas supplier in the EU (the largest, with an ever-growing share, but not the only one). But the EU was actually Gazprom’s only serious gas buyer.

Back then there was not even a “Blue Stream” to Turkey. Supplies to the Caucasus, Belarus, and Moldova were relatively small. 60 billion cubic meters per year was purchased by Ukraine, but it paid carelessly, constantly with scandals, and most importantly, as its own industrial production was eliminated, it reduced purchases. Already in the naughties Ukraine lacked 40 billion cubic meters of Gazprom supplies, and now Kiev needs to get 30 billion cubic meters of gas from external sources. In general, the EU, with its ever-growing purchases (from 110 billion cubic meters in 1990 to 180 billion cubes in 2016), has gradually become a non-alternative buyer for Gazprom.

At the same time, Washington, Kiev, and Warsaw did not hide not only their intention to limit the possibilities of uninterrupted transit of Gazprom gas to the EU, undermining the reputation of the Russian company as the most reliable supplier, but also their desire to cut off Gazprom’s market share of about 70 billion cubes (40%, so they simply don’t have gas anymore) in favour of American liquified natural gas. After the decision of the Stockholm Arbitration that Gazprom should pay Naftogaz $3 billion not because it is stipulated by the contract, but because Kiev needs money; Danish tricks with the issuance of permission to lay “Nord Stream-2“; Bulgaria’s refusal (they later repented) to participate in “South Stream”; Polish complaints about Gazprom’s use of the OPAL gas pipeline; and other minor dirty tricks, it became clear that the European direction was becoming unreliable. Germany does not mind continuing to buy Russian gas, but it does not always have the political will not only to oppose the United States, but even to straighten Poland out in time. In general, one day an exclusive buyer may refuse a significant portion of the gas purchased. Losses for Gazprom, losses for the Russian budget, undermining the developing economic cooperation between Russia and the EU. All in all, a whole bouquet of trouble.

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Back in the late 1990s, when it became clear that problems with Ukrainian transit were systemic, and the EU was then dancing to the American tune, two solutions were offered as insurance:

• Construction of bypass gas pipelines (today they operate in the form of two “Northern” and “Turkish” streams);

• Gazprom’s entry into southeast Asian markets (primarily Japan and China).

Ukrainian, European, and American “experts” supported by some of Russia’s “foreign agents” [fifth column – ed] have argued for years that this is impossible. Then they swore that the money would be embezzled, and there would be no gas pipelines. Then they fought against the construction of gas pipelines with the last of their strength. But now we have to accept the existence of “streams”. I don’t know why they didn’t pay attention to “Power of Siberia“. Whether they fell into a comatose state after it became clear that “Nord Stream-2” could not be stopped, or, because of the habit of Eurocentrism, they were not at all interested in what was happening beyond the Urals. But the launch of “Power of Siberia” is a nail in the lid of the coffin of fighters against Russian gas on the European market, longer and stronger than even “Nord Stream-2”.

“Power of Siberia” allows to supply China with only 38 billion cubic meters of gas per year. But given the existing infrastructure (including gas processing plants at seaports) and the plans to start direct deliveries of Russian gas (possibly pipeline gas) to Japan, I would not be surprised if in ten years 4 branches of “Power of Siberia” with a total capacity of up to 150 billion cubic meters will be in operation. Let me remind you that “Nord Stream” was built in 2010-12 (total designed capacity of 55 billion cubes per year, peak capacity – more than 60 billion cubes). And in 2020 the similar “Nord Stream-2” will reach its designed capacity. The combined designed capacity of the two “streams” is 110 billion cubes per year (120 billion cubes peak), which is quite comparable in terms of both time and volume with my assumptions about the prospects of “Power of Siberia”.

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But already now in the eastern direction Russia’s capabilities are not limited by this gas pipeline launched on December 2nd. The total capacity of the current largest Russian underground gas storage today is the equivalent of 35-40 billion cubic meters of pipeline gas per year. And gas carriers can transport gas though to Europe, though to Australia, though to China and Japan. I.e., already in 2020 Russia will be able to ensure the introduction of about 70-80 billion cubic meters of gas into the Asian market. At the same time, in the next two years the capacity of Russian underground gas storages should double, and in the next five years it should triple. I.e., the country will have about 100-120 billion cubic meters of liquefied gas alone (if we consider the equivalent of pipeline gas) suitable for manoeuvre in any direction. Accordingly, even if no additional branch of “Power of Siberia” is laid during this time, Russia will be able to send about 150-160 billion cubic meters of gas to Asian markets during the year. If at least one additional branch is laid, it could already be 200 billion cubic meters (which could turn into 300 billion cubic meters by 2030 under favourable conditions).

Thus, in the very least the Asian direction balances the European one, and at most this market can absorb one and a half times more gas. Gazprom is leaving the curse of the sole buyer. The European direction ceases to be unopposed. The potential for American pressure on the Russian company is declining dramatically. If Russia actually comes to supply 300 billion cubes of gas a year to Asia, then in the event of another trick with arbitration, Moscow will have a real (currently absent due to the European non-alternative) opportunity to listen to the offer of citizens who like to act rashly [emotional Russian “patriots” – ed] and stop supplying gas to the EU completely until it comes to its senses (sees who will feel worse).

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In addition, all these gas pipelines and gas processing plants, oil pipelines and refineries, railways and highways, which are currently being built throughout Siberia, are infrastructure that ensures the development of local industry, the creation of tens (and in the future hundreds) of thousands of attractive jobs. I.e., ensuring the return of the population to the region, balancing Russia not only in political, but also in economic and demographic terms.

Again, if it wasn’t for the Washington stimulus, all of this wouldn’t have happened. We would continue to send gas to Europe through gas pipelines built under the USSR, modernise them (as proposed in 2004 to Ukraine within the framework of a three-party consortium), and build new branches (like how we wanted to build the “Yamal-Europe-2” gas pipeline, but the project was blocked by Poland “in the interests of Ukraine”). And we would remain dependent on the only buyer, and at the same time we would think about how to lure the population to Siberia and what to offer them besides the Far Eastern hectare.

In general it turned out like after the end the Great Patriotic War. Our allies, doing everything to weaken the USSR, have made it a superpower. Even now, the United States, in an attempt to weaken Russia, has forced it into an asymmetric response that has only improved Russia’s economic position. And we haven’t even mentioned the growing domestic oil and gas processing, which allows to develop a large part of raw materials within Russia, sending abroad products with high added value. Stimulus is a great thing.

Rostislav Ishchenko

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from https://www.stalkerzone.org/washingtons-victory-in-the-fight-for-the-russian-future/

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