Tags: russia | gazprom | sanctions | germany | angela merkel

Why the New Russian Sanctions?

Image: Why the New Russian Sanctions?
A man looks at his mobilephone as he walks past the Russian Gazprom stand on July 11, 2017, during 22nd World Petroleum Congress in Istanbul. (Ozan Kose/AFP/Getty Images)

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Wednesday, 02 Aug 2017 10:06 AM Current | Bio | Archive

The answer is “gas.” Germany is the linchpin in the struggle of energy supply for Europe, presently dominated by Russia which supplies natural gas to central Europe via pipelines passing either through the Ukraine or via undersea pipes under the Baltic Sea to Warnemuende in Germany.

In order to eliminate the political problems and save the exorbitant transit fees imposed by the Ukraine, the Russian Gazprom company is now building a second, larger pipe, under the Baltic sea, the so-called Nordstream Route, with the acquiescence, if not support, of German Chancellor Merkel. Hence, the publicly expressed annoyance of President Trump for Mrs. Merkel.

Mrs. Merkel’s politics run contrary to the wishes of U.S. energy companies which are supported by Mr. Trump. The U.S. government is pressing Chancellor Merkel to accept delivery of U.S. liquefied natural gas transported by ship to German ports, realizing that such gas is more expensive than the Russian gas. While natural gas sells for between $3 and 3.30 per MMBtu, liquefied gas goes for between $5.50 and $6 per MMBtu not counting shipping charges.

German markets are very tempting. This country is by far the largest energy consumer in Europe. Despite spending hundreds of billions of Euros to build vast amounts of wind turbines and plastering hundreds of thousands of acres with solar cells, this “green energy” only supplies about 7.5 percent of Germany’s needs. The mandated closure of atomic power plants too will accelerate the need for more gas.

To make things worse, the Russian Gazprom company also is building the first of two parallel 32-inch diameter pipelines from Anapa in Russia under the Black Sea to Turkey at Klyikey and on to Greece, the so-called Southstream, with the aim of opening up new markets for Russian gas in Southern Europe. The projected pipeline capacity is 58 billion cubic feet of gas per year.

This project involves major technical challenges since the length of the pipe has to be 600 miles under water at a depth of up to 8,000 feet.

This project would not have happened if the 2016 Army uprising in Turkey would have succeeded, with a corresponding “regime change.” A resulting new government would not have allowed such a deal with Russia.

Perhaps it is time for additional U.S. sanctions against Russia to deter additional gas sales to Europe.

So much for high-stakes geopolitics.

Hans Baumann is a licensed engineer in four states and a member of Sigma Xi, the Scientific Research Society. He is an adviser to the dean of the University of New Hampshire Business School. Dr. Baumann has published manuals on valves and was a contributor to many works including the "Instrument Engineers' Handbook" and the "Control Valves Handbook." He has also published several books on business management and German history, including "Hitler's Escape," which suggests that Adolf Hitler did not commit suicide and survived World War II. In his latest book, "Atomic Irony" he proves that the Hirshoma Atom Bomb contained captured German Uranium. For more of his reports, Go Here Now.

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HansBaumann
German markets are very tempting. This country is by far the largest energy consumer in Europe.
russia, gazprom, sanctions, germany, angela merkel
505
2017-06-02
Wednesday, 02 Aug 2017 10:06 AM
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