White House Readies Unilateral Sanctions On Russia As US Utilities Scramble For Russian Coal

Tyler Durden's picture

"It's not clear to us that breaking commercial ties with the Russia partners, consumers gets anyone to where they want to be," warns one political think tank as AP reports, The White House is considering imposing unilateral sanctions on Russia over its threatening moves in Ukraine - a move reflecting frustration at Europe's reluctance to bit off its nose to spite its face. Until now, the U.S. has insisted on hitting Russia with penalties in concert with Europe in order to maximize the impact, but, as Putin warned, those same economic ties have made Europe fearful that tougher penalties against Russia could boomerang and hurt their own economies. Obam has faced criticism over a lack of action, as Bob Corker blasted "sometimes I'm embarrassed for you, as you constantly talk about sanctions and yet, candidly, we never see them put in place," but the European 'concerns' are just as valid in America as Utilities in the U.S. are scrambling for coal, on pace to increase imports 26% this year.

 

As AP reports,

The United States is considering imposing unilateral sanctions on Russia over its threatening moves in Ukraine, a shift in strategy that reflects the Obama administration's frustration with Europe's reluctance to take tougher action against Moscow, according to U.S. and European officials.

 

Until now, the U.S. has insisted on hitting Russia with penalties in concert with Europe in order to maximize the impact and present a united Western front. The European Union has a far stronger economic relationship with Russia, making the 28-nation bloc's participation key to ensuring sanctions packages have enough teeth to deter Russia.

 

But those same economic ties have made Europe fearful that tougher penalties against Russia could boomerang and hurt their own economies. After weeks of inaction, the officials say the U.S. is now prepared to move forward alone if EU officials fail to enact strong sanctions during a meeting Wednesday in Brussels.

 

...

 

The White House's willingness to punish Russia without European backing comes as the Obama administration faces criticism that its repeated warnings about tougher sanctions are little more than empty threats.

 

"Sometimes I'm embarrassed for you, as you constantly talk about sanctions and yet, candidly, we never see them put in place," Sen. Bob Corker, a Republican, said during a Senate hearing on Ukraine with administration officials last week.

 

...

 

Heather Conley, director of the Europe program at the Center for Strategic and International Studies, said the West's failure to follow through on its threat of sector sanctions has raised a "credibility question" for the Obama administration.

 

If Obama moves forward with unilateral sanctions, he'll face opposition from the private sector. U.S. businesses have been pressing the administration to hold off on sanctions that could put them at a disadvantage in the global economy.

 

"It's not clear to us that breaking commercial ties with the Russia partners, consumers gets anyone to where they want to be," said Gary Litman, vice president for international strategic initiatives at the U.S. Chamber of Commerce.

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And indeed, as Bloomberg reports, US power plants are 'desperately' turning to Russia for their coal...

Utilities in the U.S. are scrambling for coal, on pace to increase imports 26 percent this year, as railroad bottlenecks slow deliveries and electricity demand climbs with an improving economy. Russia, the world’s third-largest exporter of the fuel, will boost shipments 3.9 percent to 106 million metric tons this year, IHS Energy forecasts, part of President Vladimir Putin’s plan to expand Russia’s role in the global coal market.

“Everyone’s aware that a number of plants have low stockpiles, so you hear Russian coal and they say, ‘Oh wow, people must really be desperate,’” James Stevenson, Houston-based director of North American coal at IHS, said in a July 8 telephone interview.

The Russian fuel appeals to power producers because it emits less sulfur than other coals, making it easier to comply with environmental rules, and has a high heat content, meaning it can produce more power per measure of fuel, Stevenson said.

“If you are on the Atlantic Coast, you have a chance to buy imported coal,” Stevenson said. “If you’re a utility you have to act now and throughout the second half of the year in case there’s a colder winter than last year.”

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Boomerang indeed... Be careful what you wish for President Obama. As Putin warned before...

Putin was asked why the US can do whatever it wants and no one punishes them, while attempts are being made to punish Russia.

“The US is certainly one of the world’s leaders. At some point it
seemed that it was the only leader and a uni-polar system was in place.
Today it appears that is not the case. Everything in the world is
interdependent and once you try to punish someone, in the end you will
cut off your nose to spite your face,
he said.