Will the US Sanction Europeans Over Nord Stream 2?

There is a growing push connected to need to prop up shale, and export terminals in Texas finished just before LNG price collapsed

There is a growing push in the U.S. Congress to slap sanctions on the Nord Stream 2 pipeline.

The pipeline under construction would carry Russian natural gas to Germany, and has been a lightning rod of controversy both in Europe and across the Atlantic. Many governments and officials from Eastern Europe fear deeper dependence on Russia for gas supplies, a sentiment echoed by the U.S. government. Meanwhile, many in Western Europe are less concerned, viewing Russia as a rather reliable low-cost supplier of gas.

The U.S. has long tried to pry away Europe from Russia for geopolitical ends, and Nord Stream 2 is merely the latest chapter in this Cold War-era calculus. But, increasingly, the pipeline has commercial implications for the United States. The U.S. has become a major exporter of LNG, a position that will only grow over time with several gas export terminals along the Gulf Coast. The flood of shale gas is finding its way around the world.

At first, when U.S. LNG exports began in 2016, shipments were going to a smattering of countries in Latin America and the Caribbean. Soon, top importers included South Korea, Japan and China. Only a handful of countries in Europe have imported U.S. LNG in any significant way.

But that is starting to change with more U.S. shipments arriving in European ports. U.S. Secretary of Energy Rick Perry has likened U.S. gas to American soldiers liberating Europe from the Nazis. “The United States is again delivering a form of freedom to the European continent,” he told reporters in Brussels earlier this month. “And rather than in the form of young American soldiers, it’s in the form of liquefied natural gas.

Over-the-top American bravado notwithstanding, U.S LNG shipments to Europe are on the rise. The wave of new LNG export terminals coming online this year – in the U.S., but also in Australia, among other places – has led to a glut for LNG. Spot prices in Asia have collapsed. Lower prices have made Europe a more attractive destination for gas, particularly as transit costs are lower than for shipments heading to Asia. The U.S.-China trade war has also boxed out American LNG from China, rerouting cargoes elsewhere.

As a result, more U.S. LNG has found its way to Europe (although in grand scheme of things, the U.S. is a marginal supplier of gas to Europe when compared to Russia, Norway or Algeria). However, gas prices in Europe, too, have collapsed, which pose a challenge to U.S. LNG exporters.

The U.S. government may offer a lifeline to gas exporters in Texas and Louisiana by targeting Nord Stream 2. Recently, Sec. Perry predicted that U.S. sanctions on Nord Stream 2 were coming in the “not too distant future.” Sanctions would hit companies working on the project.

It may or may not be a coincidence that some of the biggest proponents of sanctioning Nord Stream 2 hail from Texas, home to a growing number of LNG export terminals. “We are looking at that issue,” Rep. Michael McCaul (R-TX), ranking member of the House Foreign Relations Committee, told Politico, referring to sanctions. “I think we’re going to have legislation on it as well. The pipeline is going to empower Russia. I’m against it,” Rep. McCaul said. Senator Ted Cruz (R-TX) has spearheaded a sanctions bill in the Senate.

But, to be clear, the fight to punish Russia [and German companies involved] has bipartisan support. Politico’s Morning Energy pointed out that the House Foreign Affairs Committee unanimously approved a bill sponsored by Rep. Denny Heck (D-WA), which calls on Congress to “continue to oppose construction of the Nord Stream 2 pipeline and other Russian Federation gas pipelines in northern Europe; and take affirmative diplomatic steps to halt the construction of such pipelines.” Meanwhile, the Chairman of the committee, Rep. Eliot Engel (D-NY) told Politico that he was open to sanctions on technologies used for the Nord Stream 2 pipeline.

The overarching motivation for American politicians in targeting Nord Stream 2 continues to be geopolitical – reducing European dependence on Russian gas. However, cutting down on Russia’s market share in Europe over the long run would also have major implications for the billions of dollars’ worth of investments along the U.S. Gulf Coast. And because there is almost no constituency in the Congress in favor of Nord Stream 2, Sec. Perry might be correct in saying that sanctions are on the way.

Source: OilPrice.com

  1. Trauma2000 says

    Rick Perry has likened U.S. gas to American soldiers liberating Europe from the Nazis. “The United States is again delivering a form of freedom to the European continent,”

    Freedom From the Money in Your Bank Account. Only and Idiot – or American Stooge – would willingly by U.$. Shipped Shale LNG over Pipped Russian Gas. Russian Gas is half the price, better quality, and more plentiful with a MUCH MORE STABLE Supply. It’s a No Brainer if you need any sort of large consistent supply of gas.

    The Kicker for the U.$. will be when a pipeline from Sakhalin is completed to Northern Japan, and another pipeline is finished from Vladivostok across North Korea to South Korea – linking the Korean Peninsula. That is why Kim Jong Ung was in Russia – signing the MOU.

    The Korean Pipeline is a done deal – but hush hush lest the U.$. discover… wait for it, wait for it – A CHEMICAL WEAPONS PROGRAM about to be used on the South Koreans by the the Evil North Korean Dictator which means the Freedom Loving Americans have to come and Bomb North Korea into the stone age AGAIN until they UNDERSTAND what Freedom is.

  2. Séamus Ó Néill says

    Keep on going American bully ….you have not a clue how much you are now loathed and detested worldwide. Quietly , in the background , moves are going on to de-throne the dollar ….you most certainly will reap what you sew and the pain will be all yours. When the dollar collapses , nobody , and I mean nobody , would want to trade with a perfidious , untrustworthy ,cheating scumbag whose only method of “trade” is through every illegal means possible…..enjoy the ride !

    1. DarkEyes says

      Seamais, is there a way the American people can be informed and warned of the coming consequences for US?

      1. Séamus Ó Néill says

        DarkEyes , I hate to sound so negative , but America ha become a society built on greed and it appears that the greedier you become , the more you seem to be valued. Natural and beneficial human traits like empathy , caring , love , gratitude etc etc , all seem to have disappeared. Hundreds of millions of innocents are murdered around the world for America’s greedy obsession to steal the natural resources of others and nobody in America raises their voice in protest….it’s just bland and quiet acceptance in that demonic butchery ! Some serious soul-searching needs to happen very shortly or America will quickly crumble under the weight of this decadent and satanic behaviour

      2. Trauma2000 says

        Americans aren’t stupid. This has been going on for half a century. They can ‘educate themselves about whatever they want. But, they choose to turn a blind eye to the atrocities the ZioGovernment is committing around the world. That is the price of ‘American Democracy’. The ZioWorld is hiding behind innocent Americans because of American Ignorance. This is Americans problem and it is Americans who should be held accountable for the atrocities and crimes that are committed in THEIR name.

  3. Garry Compton says

    The Soviet Union had a very good reputation in keeping the Gaz and Electric flowing west . No way can the West compete if you do the conversion in usage. I pay 5 rubles for 1 cu/m and in winter I use 200 cu/m per month at 1000 rub or 16 bucks – { heat, hot H2O, cooking} . Convert to LPG, I would need 60-70 gals. ? How much is a gallon of LPG in the states ? Ukraine with Pres. Yanuk gave a great discount on gaz from Russia – not anymore with the NWO running things. Spacibo C A

    1. Trauma2000 says

      Is gas cheaper in the Urals that it is in Western Russia? I’m ignorant of the conversion (Australian) or the availability Russia-Wide.

      1. Garry Compton says

        Gas – as in heating or for Autos? Autos is $2.80 { dollars converted}for 4 litres – Heating gaz is probably about the same – not sure T 2000

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