New Cold War: US, Russia Fight Over Europe’s Energy Future

coldAs the Obama administration escalates economic sanctions on Russia and weighs military support to Ukraine, it has revved up a less noticed but far broader campaign to wean Central and Eastern Europe off a deep reliance on Russian energy. It’s a Cold War reprise, but not for military supremacy, and the points on the map aren’t troop deployments, tank battalions and missile silos. Rather, pipelines, ports and power plants are the weapons of what could prove a generation-defining conflict between the U.S. and Russia over how Europe heats and electrifies its homes. –Bradley Klapper and Matthew Lee, Associated Press, 3 February 2015

A report by the US Environmental Policy Alliance has uncovered evidence that tens of millions of dollars are being chanelled to environmental groups opposing the fracking industry which is decimating the Russian economy. The funds appear to be part of a broader Russian foreign policy using money to leverage support from unwitting allies in Western nations. –Oliver Lane, Breitbart 28 January 2015

Russia and U.S. environmentalist groups have a common goal: They both want to see fracking shut down. Russia wants to stop it because it’s hurting that country’s oil and gas industry. The green groups oppose fracking simply because they loathe fossil fuels and the benefits they bring — though, apparently, not enough to stop taking Russian oil money, a fact that calls into question their integrity. This story of Russia funding anti-fracking groups is not the fruit of a mad fever dream. Last year NATO Secretary-General Anders Fogh Rasmussen, a former prime minister of Denmark, said that Russia was secretly funding the anti-fracking movement. Green groups keep losing credibility, and their image isn’t burnished a bit by teaming up with Putin. —Investor’s Business Daily, 27 January 2015

With less than two months before Ukraine’s Russian gas-supply agreement ends, analysts are warning of critically low storage that would threaten all of Europe. There’s been little progress on a new deal before the March 31 expiry, with Russia saying it will revert to a standard contract based on disputed prices that won’t be reviewed by international arbitrators until 2016. That raises the risk that Ukraine will need to use Russian gas destined for the European Union next winter, according to Energy Aspects, a London-based consultant. –Anna Shiryaevskaya, Bloomberg News, 3 February 2015

Chevron said on Friday that it would abandon efforts to find and produce natural gas from shale rock in Poland, in perhaps the biggest setback yet to fledgling efforts to start a European shale oil and gas industry that might help replace the region’s dwindling fuel resources. –Stanley Reed, —International New York Times, 31 January 2015

Today, Russia is waging another active-measures campaign. But this time Russia’s target is fracking. The facts are clear. Fracking, which is revolutionizing energy politics, offers a cheap, new source of global power. But that’s not all. In offering Europe independence from Russian energy exports, fracking poses a direct challenge to Russia. Facing the collapse of its energy-export market, the destruction of its energy-blackmail capabilities, and the depletion of its foreign-exchange reserves, Russia regards fracking as a critical national-security threat. And now more than ever, for President Putin, probably no option is off-limits. –Tom Rogan, National Review Online, 3 February 2015

Central bank president Elvira Nabiullina said Tuesday that if oil averages $45 this year, it would take an estimated $160 billion out of the government’s export revenue. “It is a rather large sum. Considering that Russia’s overall exports amount to about $500 billion, you can imagine the impact of declining crude oil prices on our balance of payments and economy,” Nabiullina told reporters in Moscow today. Russia based this year’s budget on oil prices averaging $100 a barrel. —Forbes, 3 February 2015