Petro-Politics: US LNG vs. Gazprom
The US has also been fighting an energy war that involves controlling energy reserves, the pipelines and strategic corridors that energy is transported through. US involvement, commitments, and concerns in the Balkans, the Caucasus, Central Asia, Iraq, the Levant, the Persian Gulf, and Ukraine have all been part of this energy war.
Shale gas and hydraulic fracturing of gas is part of this equation too. Fracking is transforming the US, which has the fourth largest shale gas reserves in the world, into a natural gas exporter. Washington plans to begin exporting gas from North America in 2015 and 2016.
At the same time, the US has been using North American integration to strengthening its hold on Canadian energy resources. Canada is one of the largest producers of natural gas, largest possessors of proven oil reserves, largest producers of crude oil, and possesses the largest shale gas reserves , and, on the whole, one of the top energy producers in the world.
In the context of US energy exports, Washington wants to compete against and even sideline Russia in the natural gas market. For that reason the US has been lobbying the EU and Turkey to stop buying gas from Russia’s energy giant Gazprom and, instead, to begin importing it from the US. The objective of pushing Russia out of energy markets has been part of a long-term US strategy that has been heavily discussed in the Washington Beltway before the US even invaded Iraq in 2003.
American gas, however, is much more expensive than the Russian since it has to be fracked, liquefied, and transported at much higher costs. The American liquefied natural gas (LNG) does not have any chance of competing against Russian gas exports to Europe under fair circumstances and in a genuinely free market.
The so-called free market, however, is not-so-free. There has always been political manipulation taking place to give an advantage to the corporations and conglomerates that certain governments wait on.
Instead of competing fairly in the EU energy market, the US has been working hard to eliminate Russia as a competitor by getting Brussels to simply cut its energy ties with Gazprom and the Russian energy sector. This is precisely why the US has pushed the EU member states to impose sanctions against Russia and this way put legal restrictions and barriers to buying Russian gas.
Energy war and Ukraine: The Empire of ‘frack’ and shale gas
In context of the energy war, a Polish LNG terminal has been setup in the Baltic port of Swinoujscie with plans to receive its first deliveries of natural gas from North America by the end of June 2015.
Poland and Ukraine are both seen as important possessions for the US in its quest to dominate the gas trade. The two countries that have the second and fourth largest shale gas deposits—if you exclude Russia, their respective reserves are the first and second largest in Europe. The US has plans to control the large untapped shale gas reserves in both countries.
Major US oil companies Chevron, ConocoPhillips, ExxonMobil, and Marathon Oil—which operate in Iraqi Kurdistan and is a shareholder of post-Jamahiriya Libya’s Waha Oil Company—have all got huge stakes in exploring and developing Polish shale gas.
Ukraine President Viktor Yanukovich’s government had signed a deal with the Anglo-Dutch energy giant Royal Dutch Shell to explore and drill for natural gas in East Ukraine in January 2013 with zero taxes. Another agreement was signed in November 2013 between Yanukovich’s government and Chevron to also explore and develop the energy reserves in West Ukraine. Just a year earlier, in 2012, Kiev also awarded a gas contract off the Crimean coast to a consortium led by ExxonMobil and Royal Dutch Shell to develop the Skifska gas field.
The Skifska gas field is not the only field off the Crimean coast that US oil and gas corporations were interested in. Next to it Skifska are located the Foroska, Prykerchenska, and Tavriya fields. While Prykerchenska field was awarded to the US offshore company Vanco Prykerchenska Ltd. and Foroska was under the management of Chornomornaftogaz, the Foroska and Tarivya fields were both the subjects of continuing discussions.
In part, US hostilities towards the rebels in East Ukraine are tied to protecting the shale gas concessions that American energy corporations have received from Kiev. Andrey Purgin, the Deputy Prime Minister of the self-proclaimed Donetsk People’s Republic, has even stated that the same US tactics that were used in Iraq, which include the calculated destruction of civilian infrastructure, are being applied in Eastern Ukraine. These US operations are run via proxy “soldiers of fortune” or mercenaries and “hired guns.” According to a May 2014 report by Germany’s Bild am Sonntag newspaper, the ill-famed US private security firm Academi, which had renamed itself from Blackwater and Xe Services owing to its awful record in Iraq, was unleashed on Donetsk and Lugansk.