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Does Russia Need To Sell Gas More Than The EU Needs To Buy It?

Tyler Durden's picture


Submitted by Nick Cunningham via,

The Russian occupation of Crimea has raised concerns about the European Union’s dependence on its eastern neighbor for natural gas. The EU gets about 34% of its natural gas imports from Russia, a large portion of which transits Ukraine through a web of pipelines. For Eastern Europe, that dependence is much greater. In the brutally cold winter of 2009 Russia cut off gas supplies to Europe allegedly over a pricing dispute with Ukraine. However, it was also a lesson to Western Europe on its dependence on Russia for energy.


Russia has a track record of using its natural gas supplies as a political weapon. The latest incursion into Ukraine has no doubt revived worries among European policymakers that saw what happened back in 2009. Thankfully, Vladimir Putin eased tensions on March 4, indicating that he wasn’t seeking a military conflict. This allowed natural gas prices to fall back a bit after spiking by 10% the day before.

But how vulnerable is Europe to the political machinations of the Kremlin? It appears that this time around the EU is in better shape. A mild winter and stagnant demand have left Europe with higher levels of inventory than in past years. According to a spokeswoman at the European Commission, the EU has 40 billion cubic meters of natural gas on hand in storage, which accounts for 10% of annual demand for the entire European Union.  Those figures vary by country (Czech Republic and Slovakia have 90 days of supplies; Hungary two months; Austria six months), but as a bloc, the EU has 20% greater supplies at its disposal than it did last year.

And it’s not just seasonal patterns that have put the EU in a better spot. Europe has been reducing its reliance on Russian gas for a while now – in 2003 the EU imported 45% of its natural gas from Russia. It’s now down to around one-third.

Europe has been the beneficiary of the shale gas boom in the United States, even though the U.S. hasn’t even really begun to export LNG. The surge in domestic production allowed LNG from other parts of the world – Qatar, for example – to be rerouted to Europe. (Several U.S. members of Congress have tried to exploit the Ukrainian crisis, arguing for the Obama administration to issue a blanket approval for LNG exports in order to isolate Russia. Over the short-term, that is nonsense – it will take years to build the terminals, so issuing licenses for exports won’t do anything to help out Europe. Over the longer-term, that may be a different story). Europe has also undergone a big effort at implementing greater energy efficiency and renewable energy. Moreover, the U.S. has exported more coal to the EU in recent years, which competes with high priced natural gas there.

Thus Europe is more secure than many believe. Moreover, the EU and Russia are so interdependent that it is unlikely Russia will proactively cut off gas supplies to Europe. In fact, Russia is arguably more dependent on the EU than the other way around. Europe has other options. Russia, on the other hand, is heavily dependent on oil and gas, which account for half of the country’s total budget revenues. For Putin, cutting off gas exports to Europe would be akin to him cutting off his nose to spite his face.

“It would be highly counterproductive for Russian interests at a time when Europe is considering how to respond to Russian actions in Crimea, to take steps that would have a major and negative direct impact on Europe,” said Laurent Ruseckas, a senior associate at IHS CERA, as reported by Politico.

The economic damage of energy supply disruptions cuts both ways. Putin likes to play the role of bully, but Russia is not exactly in a strong position in terms of using energy as a political weapon. Whether or not the Ukraine crisis deepens, it is unlikely that Moscow would intentionally turn off the taps for any prolonged period of time.


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Sun, 03/09/2014 - 17:17 | 4528395 johny2
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Sun, 03/09/2014 - 19:01 | 4528435 cossack55
cossack55's picture

If NATO gets in the game the Euroboyz might get all the gas they want for free.  Of course, it won't be natural.  

Sun, 03/09/2014 - 17:38 | 4528460 Wolferl
Wolferl's picture

Right. The moment the EU stops buying Russian oil and gas they are insolvent. True, the eastern Europeans will have SOME problems, but winter is over early this year.

Sun, 03/09/2014 - 18:42 | 4528615 CrashisOptimistic
CrashisOptimistic's picture

Tyler please, just stop dealing with  They are worthless.

Item 1, the numbers for "Europe" don't delineate.  They throw England's access to LNG into the mix and that drags down the number to 34% and they then celebrate, but it ignores how many countries are over or nearly 50% reliant.  Germany.  Austria.  Bulgaria.  Poland.  Hungary.  Greece.  What's the point of celebrating "Europe" if all those folks can't get gas.

Item 2.  As for seasonal, yeah, natgas is for heat.  But it also makes electricity.  The green folks hate coal.  They WANT nat gas electricity.  So does Gazprom.

Item 3. And the height of this worthlessness is the issue of what hurts whom.  Who says Russia optimally cuts off Europe?  Optimally, they restrict.  They slow flow.  They cut amounts down maybe 15-20%, which is not enough to fund LNG transport from elsewhere.  Then prices rise and GDP falls as factories have to ration electricity.

And with higher prices, the restricted flow reduces Russia's revenue by NOTHING.  5 units at $20 is $100.  4 units at $25 is $100.

BTW the North Sea is dying.  Oil output and gas output falling.  Norway's supply to Germany, ditto.

And also btw, 6 weeks ago I saw a Russia to Europe export figure of 4-5 million bpd of crude.  Then 1 week ago, when the narrative needed support, it was "less than 2 mbpd".  Russia exports what, 7 million bpd?  Germany gets over 700K bpd.  The Dutch 550K bpd and they are right next to the North Sea.  Poland 450K.  Finland, Spain, France, Italy, UK, Sweden, Hungary . . . all well over 100K bpd.  This doesn't even count Belarus and countries that are part of Europe but in the Russian sphere.

Those numbers are from the EIA.  It is way over 2 mbpd.





Sun, 03/09/2014 - 19:22 | 4528779 Wolferl
Wolferl's picture

What we are talking about is a conflict of a few months. Europe, the EU has gas in storage for about 3 -6 months. And there are enough coal and nuclear powerplants who don´t produce much now, that can replace that natgas powerplants. And you can bring in more natgas via serveral existing LNG hubs all around Europe. Europe is much less dependant on Russian energy than most think. 

Sun, 03/09/2014 - 20:13 | 4528916 Robinhood
Robinhood's picture


almost double the price? duh, really maks sense to me?

Sun, 03/09/2014 - 21:19 | 4529110 Wolferl
Wolferl's picture

Those are the prices in the US. They have nothing to do with the EU.  Natgas is much more expensive here than in North America, LNG somewhat cheaper.

Sun, 03/09/2014 - 22:04 | 4529215 Robinhood
Robinhood's picture

Then the EU must be able to defy the laws of thermodynamics. LNG is manufartured from natgas through the use of energy to cool it to its liquid state. The cooling process is not free. Good luck with your cheeper than natgas LNG!

Sun, 03/09/2014 - 23:11 | 4529399 Flakmeister
Flakmeister's picture

People confuse LPG, CNG and LNG all the time...

US LNG exports are a non-factor in this and will be going forward...

Mon, 03/10/2014 - 06:06 | 4529734 Wolferl
Wolferl's picture

Just read what i write. If you are able to read. Didn´t write a word that LNG is cheaper than natgas. But the actual price of LNG and Natgas in Europe has nothing to do with the actual price in the US. Just like the price of crude oil is different in Europe and the US.

Sun, 03/09/2014 - 22:03 | 4529230 Tall Tom
Tall Tom's picture

If it goes to a Hot War I am hoping that the Ukranians BLOW UP THE GOD DAMNED PIPELINES.


Both the EU and the Russians can go fuck themselves.


You want to support EVIL? Well. PUKIN IS AN EVIL BASTARD. (So is OBAMA.) If you want to support EVIL then you need to reap EVIL.


Enjoy your little war. The USA needs to stay out and tell all of you to go fuck yourselves.

Sun, 03/09/2014 - 20:20 | 4528940 downwiththebanks
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The US had plenty of oil in 1973.  When the headlines blow up, so do prices.  Image matters now, not reality.

And, as s poster above noted, the reality here isn't too pretty for Europe either, when you get past the math gymnastics the site uses.

Sun, 03/09/2014 - 23:20 | 4529424 Flakmeister
Flakmeister's picture


       you are absolutely correct in your long term assessment. However, few see any outages longer than current levels of storage...

You also leave the Netherlands out of your equation: significant exports, production from Groningen is steady for many years. a sign of being well managed (pun intended)....

The problem is that 80% Russian oil comes to market via pipeline. They have no say about how the split is made at the other end, e.g.  there would be no shortage of willing brokers, Chinese or otherwise...

Mon, 03/10/2014 - 04:05 | 4529663 trader1
trader1's picture

i've posted before, and i'll post again.

see page 10 of

Germany consumes < 40% of Russian NG, accounting for < 9% of primary energy.  


Mon, 03/10/2014 - 10:31 | 4530200 Flakmeister
Flakmeister's picture

Good link...

Mon, 03/10/2014 - 07:34 | 4529781 123dobryden
123dobryden's picture

very funny

"And with higher prices, the restricted flow reduces Russia's revenue by NOTHING. 5 units at $20 is $100. 4 units at $25 is $100."


FYI although actual price may fluctuate like you said, the price  of gas depends not on current price but on the price on the contract. That i can assure you that at least as is the case with my country, bordering with ukraine, the price is set for long period and actual price and contract price can fluctuate 20-30%

moreover, Gazprom was sued by several sompanies, including RWE and have to pay back 1.5 bilion EUR for setting the price too high

you obviously know very little about this issue

Sun, 03/09/2014 - 19:36 | 4528810 Urban Redneck
Urban Redneck's picture

The City of Lights would be romantic by firelight (particularly if you're into raping, pillaging, and plundering in an FSA Zombie Apocalypse sort of way).

The EU needs oil and gas BTUs more than Russia needs foreign fiat currency. The Russians can play it profitably, or they can go M.A.D. -- either way they have the strong hand to play.

Sun, 03/09/2014 - 22:12 | 4529248 Tall Tom
Tall Tom's picture

Then let them play it. You really need not care. Ukraine needs to blow up them God Damned Pipelines. Then Europe does not get the BTU's and Russia does not get FIFTY PERCENT OF ITS REVENUES. (That ought to put a lot of austerity on the Russian Population.)


And since Russia's Ruble is not the Reserve Currency they cannot just print. (That will solve any argument.)



Fuck Obama.

Fuck the EU

And fuck Yellin (Little Bernanke)

Sun, 03/09/2014 - 20:17 | 4528933 zigizigi
zigizigi's picture

Russian central bank keeps the interest rate around 8% while ECB - around zero. And that was historically higher. That means that any big Russian business is forced to borrow money in European banks. If they go bankrupt they won't be paying off their debts any longer. Who's in trouble now? That's right, EU banks. And it doesn't matter that Russian factories and mines are collateralized. In case of real economic war Putin will just nationalize them.

Any sanctions against Russia from the EU will backfire. So the only winning party in EU vs Russia economic war is US.

Sun, 03/09/2014 - 23:58 | 4529501 angel_of_joy
angel_of_joy's picture

US might not be such a great winner after all, not when it comes to oil & gas anyway. The numbers for the shale oil & gas resources in US seem to be vastly overstated, in real terms. There will be no Happy Hour this week...


Mon, 03/10/2014 - 00:10 | 4529519 Flakmeister
Flakmeister's picture

Berman is always a good read....

The reserves are indeed overstated, in 5 years time people not in the loop will be questioning the wisdom of LNG exports...

Mon, 03/10/2014 - 07:37 | 4529787 123dobryden
123dobryden's picture

i agree, yet Russia is very weak and vulnerable, dont let yourself be fooled by properly trained KGB agent...

coutry has one of the highest wealth distribution inequality with 1% owning 35% of houshold wealth


Sun, 03/09/2014 - 20:26 | 4528961 whatsinaname
whatsinaname's picture

bunkum.. US NG inventories hit a 10 year low for this time of year. The winter has been pulling a lot of NG demand forward and normalising inventories to historical levels. This ought to be good for some of the coal companies that have been hurting last year or so.

Sun, 03/09/2014 - 20:43 | 4529008 Nassim
Nassim's picture

When the Ukrainians would not pay and grabbed gas destined for Europe - that was some sort of "Russia cutting off gas". They are doing the same thing right now, not paying bills and dipping into their huge stores of Russian-owned gas.

This article is pure propaganda!

Sun, 03/09/2014 - 17:17 | 4528398 cossack55
cossack55's picture

End game says screw the Eurotrash.

Sun, 03/09/2014 - 17:31 | 4528441 agent default
agent default's picture

There seems to be a misunderstanding here.  If the EU gets too irritating, nat.gas is the last thing they need to worry about.  Russia will escalate militarily to the point the EU will cry mommy.

Sun, 03/09/2014 - 19:01 | 4528716 css1971
css1971's picture

Seriously. Russia have no interest in military escalation and neither does Europe. They want to sell gas to Europe for as much as they can get away with, War is a losing proposition for everyone involved.

Sun, 03/09/2014 - 19:59 | 4528873 KickIce
KickIce's picture

Well, except the banks.  But I wonder if even they are avoiding war this time around because it would mean the end to their fiat gravy train.

Sun, 03/09/2014 - 17:21 | 4528411 Dewey Cheatum Howe
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The Asian market is well underserved and underdeveloped... The westward expansion has hardly begun as of yet.

Sun, 03/09/2014 - 17:23 | 4528416 angel_of_joy
angel_of_joy's picture

If everything is so hunky-dory, I wonder what stops EU from boycotting the Russian gas right now ?!

P.S. The whole LNG bedtime story will become beyond silly, first time an LNG tanker (or storage facility) blows up in the middle of a very populated European harbor. Hint: it would make Fukushima look almost tolerable...

Sun, 03/09/2014 - 18:49 | 4528675 css1971
css1971's picture

Nah, the gas cloud would find an ignition source long before it reached the populated areas. Big boom and roaring fire though.


Here's one the Chinese made earlier:

Sun, 03/09/2014 - 19:51 | 4528850 0b1knob
0b1knob's picture

Natural gas is lighter than air, so it goes straight up into the atmosphere.   A leak (ignited or not) doesn't spead out.

Now propane, thats a very different (and heavier than air) gas.  Just look at the way the feds go crazy every time a propane tank truck goes missing.

Mon, 03/10/2014 - 00:15 | 4529517 angel_of_joy
angel_of_joy's picture

LNG stands for Liquefied Natural Gas, as in liquid not gaseous. This is how it is transported AND stored in tanks.

When it warms up and re-becomes gaseous, it only needs a concentration in the air of 5-15% to become flammable.

Now, you saw the explosion in the link above (in China) caused by a tanker truck. Imagine a tanker ship, thousaunds of times bigger, getiing into trouble in a port like Rotterdam...

Sun, 03/09/2014 - 22:47 | 4529343 CrashisOptimistic
CrashisOptimistic's picture

Germany has no LNG port.

Sun, 03/09/2014 - 17:26 | 4528418 JaKst3r
JaKst3r's picture

Hmm, what would be the outcome of leaving the Gaz on, but dumping $200bn in UST?

Sun, 03/09/2014 - 17:26 | 4528425 hookah
hookah's picture

And who will buy those worthless bonds if you dump that much?

Sun, 03/09/2014 - 17:27 | 4528427 JaKst3r
JaKst3r's picture

Im guessing it wouldnt be China or India...

Sun, 03/09/2014 - 17:45 | 4528477 Keyser
Keyser's picture

They don't need a buyer. The very act of dumping them on the market would cause UST's to crash. 

Sun, 03/09/2014 - 18:21 | 4528587 indygo55
indygo55's picture

"And who will buy those worthless bonds if you dump that much?"

The FED of course. They will buy Russian and Chinese as well. Eventually the dollar will have ZERO confidence and NO ONE will want the dollar. THEN its game over for the dollar.

Sun, 03/09/2014 - 18:45 | 4528664 CrashisOptimistic
CrashisOptimistic's picture

USTs are not in the equation at all.  Russia can't sell.  Neither can China.

There is no other financial instrument large enough for that amount of money.  It is in USTs because it has to be.  You don't think they would like to be out?  They can't be out.  Nothing has changed in this.

There is nowhere else to put that money -- other than spend it on things of value, like food and oil production.

Sun, 03/09/2014 - 19:39 | 4528821 Urban Redneck
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Excess Reserves can easily absorb the sale. Go back to the Great Depression, and look at the opportunities for those had currency, as opposed to debt.

Sun, 03/09/2014 - 19:44 | 4528830 Schmuck Raker
Schmuck Raker's picture

"Russia can't sell." Uhmm... no, they can, they have.

Sun, 03/09/2014 - 22:57 | 4529363 Tall Tom
Tall Tom's picture

Hell China dumped a bunch last December and sold 'em to Brussels.


CrashIsOptimistic knows this.


Look at the article...




Exactly.  This obsession with monetary ebbs and flows, looking for evidence of the Big Smash, is wasted time.

MONEY is not going to cause the upheaval.  Money can be changed and created by decree.  It didn't exist in the garden of eden and it doesn't have to mean anything you don't decree it to mean.

Money is not going to be the source of devastation.  Oil is.


CrashIsOptimistic is just trolling misinformation. It is evidential that he knows otherwise.




Anyone who is spewing Propaganda will be tried and convicted of Treason after the oncoming Collapse. We have the internet and a record thereof. IPs will not be too hard to track after the seizure of the NSA Database.


We did try and convict Tokyo Rose and Berlin Betty after the Second World War. There is legal precedent.

Mon, 03/10/2014 - 00:17 | 4529527 CrashisOptimistic
CrashisOptimistic's picture

Selling some is not the same as selling all.

I guess I'm going to Tall Tom jail.  How's the food there?

Wed, 03/12/2014 - 01:38 | 4537476 Schmuck Raker
Schmuck Raker's picture

@Crash IsO, Right, so let us ignore Tom's convictions.....

In ONE month Russia was able to dipose of ten percent of their TSY holdings. It would take them TEN months to dispose of all. I don't think the FED would have a problem keeping up.

Your assertion was :"It is in USTs because it has to be.  You don't think they would like to be out?  They can't be out."

That is false.

I'm no economist.... but that is wrong, near as I can tell.


[BTW: via Tom quoting you: "Money is not going to be the source of devastation.  Oil is."

I ask; Doesn't it really boil down to which of the two are more fungible at the moment?]

Sun, 03/09/2014 - 21:57 | 4528913 KickIce
KickIce's picture

Who knows, but I would think a vote of "no confidence" from the world's second largest economy and whatever Russia is would rattle most heroin, er QE dependent investors.

Mon, 03/10/2014 - 00:17 | 4529524 angel_of_joy
angel_of_joy's picture

There is nowhere else to put that money

Gold ?



Sun, 03/09/2014 - 17:27 | 4528429 cossack55
cossack55's picture

You forgot to demand payment in gold or Rubles

Sun, 03/09/2014 - 17:29 | 4528436 JaKst3r
JaKst3r's picture

or BTC? lolz

Sun, 03/09/2014 - 18:47 | 4528670 CrashisOptimistic
CrashisOptimistic's picture

Gold has no value to Russian civilization.

Fighter aircraft might.  They could demand payment thus, but only in aircraft already built and in the opponent's inventory.

Sun, 03/09/2014 - 19:05 | 4528733 cossack55
cossack55's picture

Well, I'm pretty sure China or JPM will be more than happy to purchase in any currency they wish, plus premium.

Sun, 03/09/2014 - 19:44 | 4528828 Winston Churchill
Winston Churchill's picture

China appears to disagree with you as to golds value. Methinks they may have already

checked with Russia about their attitude to it also.

Sun, 03/09/2014 - 17:32 | 4528446 silvermail
silvermail's picture

Shale gas - a myth. It is a gas whose production requires constant subsidies from the governments to the United States and the inflow of new money from the Ponzi scheme in the form of new shareholders.

Sun, 03/09/2014 - 17:47 | 4528481 Keyser
Keyser's picture

Please provide a link to a single subsidy for the shale gas / oil industry. You can't, because they don't exist. 

Sun, 03/09/2014 - 20:15 | 4528923 silvermail
silvermail's picture

Oil Subsidies & Natural Gas Subsidies — Subsidies For The Big Boys (Not For Society)

Sun, 03/09/2014 - 23:22 | 4529427 Flakmeister
Flakmeister's picture

You clearly know sweet fuck all about how the tax code works for oil and gas....

Mon, 03/10/2014 - 03:01 | 4529637 silvermail
silvermail's picture

You can call things as you like. But it does not change the economic nature of the subsidy in shale gas production.

Mon, 03/10/2014 - 10:33 | 4530212 Flakmeister
Flakmeister's picture

Are you aware that my reply was to Keyser?


Sun, 03/09/2014 - 18:12 | 4528564 Whoa Dammit
Whoa Dammit's picture

Very good article.  Thanks!

Sun, 03/09/2014 - 20:23 | 4528949 downwiththebanks
downwiththebanks's picture

Or all those Fannie Mae bonds they hold.  How long will the housing "recovery" last when this happens?

Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds ...

And that's without touching Treasuries!

Sun, 03/09/2014 - 17:35 | 4528456 goldhedge
goldhedge's picture

How much did u get paid Nick Cunningham?


Sun, 03/09/2014 - 17:59 | 4528524 ThirdWorldDude
ThirdWorldDude's picture

I second that

Cuntingham lost me at occupation...

Sun, 03/09/2014 - 17:39 | 4528458 earleflorida
earleflorida's picture

Whoa..."the russians have a track record of using its gas/oil for political gain?"

the ussa has a track record of toppling sovereigns and entire continents. speaking frankly ,with the threat of war (war is the modus operanti with shell, chevron, mobil, etel... using mic's-- a best of both worlds?) drums always on the horizon.

so what is it about political gain, and just threatening unilaterally by obliterating any/or every opponent opposing rational `exuberance, detente?

perhaps a new cold war is the best thing that's ever happened in the 21st century? china and russia together pose a viable threat to an aggressive us foreign policy that has been running roughshod over the entire world for nearly a quarter century. perhaps it is time!!!



Sun, 03/09/2014 - 17:50 | 4528491 Keyser
Keyser's picture

It is well past time for someone or some country to call the US on their hypocritical bullshit. Putin is just the character to do it. 


Sun, 03/09/2014 - 20:26 | 4528962 downwiththebanks
downwiththebanks's picture

Remind me:  who called the annihilation of Iraq 




Sun, 03/09/2014 - 17:39 | 4528463 Azwethinkweiz
Azwethinkweiz's picture

They don't have to cut off the gas but they can demand another method of payment [gold] for the gas.

Sun, 03/09/2014 - 17:58 | 4528520 css1971
css1971's picture

All they have to do is slow not even stop the extraction next year.

Price spikes. Huge recession in Europe. Capitulation. Job done.

Sun, 03/09/2014 - 18:04 | 4528539 ThirdWorldDude
ThirdWorldDude's picture

"Price spikes. Huge recession in Germany. Capitulation..."

Fixed it for you css. The rest of EZ is already dumpster-diving.

Sun, 03/09/2014 - 17:39 | 4528464 Stuck on Zero
Stuck on Zero's picture

Europe is sitting on vast shale gas resources.  Their Greens, with the support of Gazprom, have been resisting Europe exploiting its own resources. 


Sun, 03/09/2014 - 17:44 | 4528476 Volkodav
Volkodav's picture

You mean like Poland?

Sun, 03/09/2014 - 18:49 | 4528676 CrashisOptimistic
CrashisOptimistic's picture

Exactly.  Five years ago Poland was the poster child of shale gas in Europe.

Last year Exxon and ENI pulled out and stopped bothering to drill.  There's nothing there.

Sun, 03/09/2014 - 17:43 | 4528470 Blazed
Blazed's picture

"Putin likes to play the role of bully".

Was someone called bad names back in elementary school?

Sun, 03/09/2014 - 23:19 | 4529423 Tall Tom
Tall Tom's picture

Yeah...Someone was. Me. Not only that but as a Disabled Kid I was also pretty beat up.


But now I am much older, much meaner, and I can make BOMBS to fuck you up.


I am also teaching CHILDREN how to do that. ABUSED CHILDREN.


Want to play?

Sun, 03/09/2014 - 17:54 | 4528499 dimitar
dimitar's picture

This game is diferent and it is beyong gas, energy talk is just a distraction aKa propaganda tool of the west. Russia we like it or not is guarantor of our freedom! 

Sun, 03/09/2014 - 18:04 | 4528541 Idi_ocracy
Idi_ocracy's picture

What is it with all the people on this website that seem to be deluding themselves that Russia are the good guys? I sincerley hope that no one is going to be naive enough to think that there is such a thing as good guys anymore.

Sun, 03/09/2014 - 18:14 | 4528570 dimitar
dimitar's picture

I dont speak about good and bad, I speak about freedom to make a decisions.

Sun, 03/09/2014 - 19:02 | 4528717 Idi_ocracy
Idi_ocracy's picture

Russia will not guarantee anyones freedom, the Russian government is just as bad as the American government

Sun, 03/09/2014 - 18:43 | 4528655 RaceToTheBottom
RaceToTheBottom's picture

Hope has been proven to have been misplaced, both before and now.

Sun, 03/09/2014 - 20:28 | 4528971 downwiththebanks
downwiththebanks's picture

I oppose color coups that put goose-stepping brownshirts and cannibals into power.

On this, right now, the Russian government and I are in accord.

Mon, 03/10/2014 - 06:19 | 4529740 BigJim
BigJim's picture

Yes, it's weird, isn't it? Some people can't escape a Manichean mindset... The US / ZOG is evil, therefore anyone who is opposing them must be good.

Sun, 03/09/2014 - 17:54 | 4528504 q99x2
q99x2's picture

Why doesn't somebody make a chart so that when people talk about the US or Russia or the Kremlin or Washington D.C. we know who we are talking about. Like which oligarchs are actually the ones that we are talking about when we talk about Washington D.C. or the Kremlin.

I don't know about the Kremlin but Washington D.C. certainly doesn't represent the population of the US and only represents a handful of people so instead of saying the US or the EU or Britten Say the Rothschilds or the Bushes or Bill Gates so we know what the hell the words in the articles refer to.

Sun, 03/09/2014 - 18:25 | 4528599 negative rates
negative rates's picture

Yea we read all the books, but we can't find the answers.

Sun, 03/09/2014 - 17:54 | 4528506 css1971
css1971's picture

As someone who lives in Berlin and depends on (Russian) gas central heating to heat his dwelling, the answer is a resounding NO.

Sun, 03/09/2014 - 18:01 | 4528531 carbonmutant
carbonmutant's picture


Sun, 03/09/2014 - 18:04 | 4528543 Joe A
Joe A's picture

China and India don't support Russia for no reason. They both need oil and gas. If Russia blocks it to Europe or if Europe diversifies its energy sources then the C and I in BRICS will want it.

Sun, 03/09/2014 - 23:37 | 4529455 Flakmeister
Flakmeister's picture

The trick is getting it there...

Remember that any country that a pipeline goes through had better be pacified......

Sun, 03/09/2014 - 18:06 | 4528545 Karl von Bahnhof
Karl von Bahnhof's picture

I am sure you know. There is no russian occupation of Crimea. There is local government, legal.

These is US fascistic occupation of Ukraine. And EU as well.

Sun, 03/09/2014 - 19:50 | 4528845 Winston Churchill
Winston Churchill's picture

Interesting article.Leaves out a lot detail about how the US could practically abandon the

petro dollar without defaulting on its debt, and the decades of chaos that would result.

Apart from that minor omission its fine work./s.

Sun, 03/09/2014 - 18:08 | 4528556 northerngirl
northerngirl's picture

Wonder what Putin has next on the menu?

Sun, 03/09/2014 - 18:25 | 4528600 Rising Sun
Rising Sun's picture

import from Africa

Sun, 03/09/2014 - 19:07 | 4528737 shinobi-7
shinobi-7's picture

I agree, the article is worthless. The point is not who is dependant on who but who can do what "now". Gas, unlike oil is very difficult to trade. It requires huge investments in pipelines or liquefaction plants which take years to put into place. Russia in the short term is in a strong position. It can reduce supply and immediately prices will rise. In the long term it is even worse as the country is vast and has an abundance of the natural resources Europe needs. The side it moves towards, East or West will determine who rise and fall. Europe has a lot to lose in siding with the US. This said for other reasons, the fate of the continent is probably already sealed.

Sun, 03/09/2014 - 23:26 | 4529436 Flakmeister
Flakmeister's picture

You are assuming that Russia is not being run as it always has been run, by oligarchs more interested in acquiring wealth as opposed to power...

Ironically, the one Russian leader with real international aspirations was Stalin, a man hardly interested in displays of wealth....

Russia has always looked West, they fear the Chinese in very different way than the West...

Mon, 03/10/2014 - 00:01 | 4529506 TheFourthStooge-ing
TheFourthStooge-ing's picture


Ironically, the one Russian leader with real international aspirations was Stalin, a man hardly interested in displays of wealth....

Ummmm, you probably know this already but, for those who don't, Stalin was a Soviet leader. He wasn't even Russian, he was Georgian.

Just pointing it out for the sake of accuracy. It may be a minor difference to Westerners, but it does matter to some people.

Mon, 03/10/2014 - 00:19 | 4529531 Flakmeister
Flakmeister's picture

Yes, Stalin was a Georgian...

I don't care if it is a scion of Gengis Khan, who ever governs from the Kremlin is the de facto leader of Russia. And you are well aware that Stalin was revered by a lot of ethnic Russians...

The observation still stands vis a vis international ambitions. And be damn grateful that Putin is no Stalin diplomatically...

Sun, 03/09/2014 - 19:31 | 4528799 Debugas
Debugas's picture

the US plan (Chevron) is to supply gas to EU by fracking Ukraine

Sun, 03/09/2014 - 19:45 | 4528831 Peter Pan
Peter Pan's picture

Did you mean to say "fucking" instead of "fracking." ?

Sun, 03/09/2014 - 19:33 | 4528806 MollyHacker
MollyHacker's picture

Russia has a leveraged position of 'has and has not' similarly to the borrower is servant to the lender. Will Russia shut off gas to the EU in the event of escalating hostilities? Probibly not because Russians are business minded and a little war certainly can be considered acceptable.

Sun, 03/09/2014 - 19:43 | 4528827 Peter Pan
Peter Pan's picture

Putin needs to use some of those US bonds to start making sizeable purchases of gold and silver. The spike in the gold and silver price will undo some of the bets JP Morgan et al have been making. It might start something on financial markets that the rest of the world won't be able to cope with.

Sun, 03/09/2014 - 20:31 | 4528981 downwiththebanks
downwiththebanks's picture

Nah--keep the Treasuries for the next time Uncle Sam gets lippy.  Teach him a lesson this time around by dumping Freddie & Fannie bonds.

Sun, 03/09/2014 - 20:20 | 4528942 401-Kulak
401-Kulak's picture

Jawbone the Saudis to open the tap for 3 qtrs and drop the price to $70

Crush Putin like the little bitch he is.

Sun, 03/09/2014 - 20:32 | 4528987 downwiththebanks
downwiththebanks's picture

In addition to knowing nothing of geopolticis, you don't know the difference between oil and gas.  

Sun, 03/09/2014 - 23:29 | 4529441 Flakmeister
Flakmeister's picture

No can do....

What spare capacity that does exist is limited by political considerations, maybe 800 kbpd in Libya and maybe 600 kbpd in Iran...

Sun, 03/09/2014 - 20:56 | 4529041 luckylogger
luckylogger's picture

Here is my thoughts on the deal. Obummer and Putin trade jabs and act like they care, then Russia get Crimera and qatar get syria and a gas line to Europe. Check bak in a year and see how it plays out......

Sun, 03/09/2014 - 21:47 | 4529193 nah
nah's picture

Russian does not need NATO bitchez

Sun, 03/09/2014 - 22:06 | 4529238 tempo
tempo's picture

Frac gas production is peaking in US, with 30% per year decline rates for most wells. Massive reserves in US but most uneconomical. 5 years from now frac gas will be viewed as a media hyped bubble. Most in the industry know the best plays are already being drilled. Eagle Ford is already in decline. Large conventional gas production also on decline with few new opportunities available. Prices this winter soared and that's just the beginning as policy increases demand while total US gas production is flat and will start declining. Washington we have a problem!!

Sun, 03/09/2014 - 22:14 | 4529254 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

For people who still don't think Ukraine is about Nabucco we look foward first then backwards.

The EU’s long standing energy white elephant, the gas pipeline called Nabucco that was supposed to route gas directly from the Caspian Sea to the EU avoiding Russia looks finally to be put to the sword at some time today by Azerbaijan.

It seems an alternative pipeline named Tap will get the nod to supply gas to the EU avoiding Russia instead – with a 10 bcm annual capacity.

Naturally Nabucco, Tap or the Russian South Stream pipeline all avoid Ukraine so it is a matter of which does less damage – or alternatively, given the recent Ukrainian importation of Russian gas via the EU at far cheaper prices than those agreed by Tymoshenko that come direct from Russia, the question to be asked is will/can Tap further de-leverage Ukraine from Russian gas dependency.


The competition of who will deliver Azerbaijan’s gas to Europe is over. The EU’s Nabucco gas pipeline consortium has lost out. The winner is Russia.

The Nabucco project, established nearly a decade ago, was at the heart of Europe’s grand strategy to diversify its energy sources and reduce its dependence on Russia, which supplies a quarter of Europe’s energy needs.

Now that the EU has lost out, it is time for Brussels to speed ahead in connecting Eastern Europe to the electricity and other energy grids of Western Europe. There is no time to lose if Europe wants Russia’s political interference in its energy and domestic politics to end, once and for all.

The idea behind Nabucco was that the 1,326-kilometer (824-mile) pipeline would tap into gas from the Caspian Sea, which is bounded by Iran and Azerbaijan, among others. Originally, it was hoped that the gas would come from Iran. But Western sanctions on Tehran forced the Nabucco consortium to opt for Azerbaijan. From there, gas would be sent through Turkey and then up to Central Europe, ending in Austria.

But last week, that plan collapsed when Azerbaijan chose instead to send its gas into the Trans Adriatic Pipeline consortium. The shareholders of that pipeline are Switzerland’s Axpo (42.5 percent), Norway’s Statoil (42.5 percent), and Germany’s E.ON (15 percent).

Through new pipelines and connectors, Azeri gas will now run through Greece and Albania to Italy, serving primarily Europe’s southern markets. This is a blow for Bulgaria and Hungary: Nabucco gas would have alleviated their heavy dependence on Gazprom, Russia’s powerful state-owned energy company.


As we know the only other major route into Nabucco was through the south from Syria since Turkey is blocked by the Kurds on all sides including access through Iran and Iraq except for a small sliver on land in Syria that borders Turkey.


Sun, 03/09/2014 - 22:20 | 4529273 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Now we look backwards to 2009 from the horse's mouth itself.

Original article

Translated to english

Turkmenistan and Kazakhstan are out for Nabucco so back to Ukraine


Although this project is to bypass Ukraine and, nevertheless, our country still has the opportunity to participate in it for profit. The newspaper "Economic News" wrote: "At the suggestion of management consortium Nabucco Gas Pipeline International, Ukraine could become a member of the project NABUCCO only on condition that" Naftogaz Ukraine "contracted volumes of gas for transportation by pipeline to Europe, including - in Ukraine (on the replacement scheme). " Such participation in Kiev fundamentally important project dramatically changed the role of Ukraine as a transit country and would diversify the sources of gas supply. Positive political results of the proposal Nabucco Gas Pipeline International in Ukraine are quite obvious. This is well understood in Moscow, but in respect of Kiev is no such certainty.


It is the only Caucus region gas field left and pipeline infrastructure is already in place.

Sun, 03/09/2014 - 22:29 | 4529297 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Some more background on the EU Energy Security Policies though written by the German Institute for Security and Affairs and is not an official statement these think tanks tend to minic what official policy is and suck up to it so the general ideas and thoughts along with nonmenclature give a good idea of what is really going on.


Mon, 03/10/2014 - 00:58 | 4529563 Flakmeister
Flakmeister's picture

Getting Nabucco cancelled is in reality one of the few true sucesses that Putin can boast about, not that it was not a long shot in the first place...


Mon, 03/10/2014 - 01:27 | 4529590 David Wooten
David Wooten's picture

"Putin likes to play the role of bully"

Why is someone, who is producing and selling something, considered to be a 'bully' for asking to get paid?

Mon, 03/10/2014 - 06:47 | 4529752 BlackVoid
BlackVoid's picture

There is no alternative source of nat gas!

It may only be one third, but where to get it from if Russia cuts off???

The US is also net importer of natural gas and oil, they cannot help.



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