TCS Daily


The Promise of Gas

By Jens F. Laurson & George A. Pieler - January 28, 2009 12:00 AM

In his inaugural address, President Obama observed that, "Each day brings further evidence that the way we use energy strengthens our adversaries". Tell it to Europe, Mr. President.

Russia has resumed delivering Gas to Europe—for now. The latest crisis, with dramatic visuals from freezing Bulgarians, is out of the headlines, but the issue is only becoming more important. Europe's future will be shaped, if not determined, by how soon Western politicians realize the need for a sound, non-ideological energy policy. All talk of—and lofty ideas about—a common foreign policy is but smoke and mirrors if Europe cannot generate with a common energy policy. Energy policy is foreign policy, and it has been for some years. Those who think they can separate foreign- and energy- policy fool themselves.

Russia, with barely rational (or plausible) pretenses regarding its dealing with Ukraine, cuts off EU countries from essential gas supplies for political reasons. Russia's leadership is adept at arguing 'market forces' drive its actions, but even if they were less disingenuous, those arguments relate only to Ukraine. That countries like Bulgaria, with low reserves, experience real suffering as a result is blamed on Kiev, as if Moscow were not the source of the gas-flow stoppage and as if Europe's coldest January in years had not been deliberately chosen for this showdown.

The causes for interrupting gas service are manifold, and Ukraine paying market prices for the Russian share of its gas—on paper a perfectly sound proposition, even if it is politically motivated—is the least of them. Russia wants control of the pipelines, just as they managed to do in Belarus. Russia wants to discredit Ukraine as unreliable in energy matters, thus forcing the Germans' hand to finally get the "Nordstream" pipeline built through the Baltic Sea, a pet project of Vladimir Putin and Nordstream Chair Gerhard Schroeder, also backed by Chancellor Merkel.

Russia certainly doesn't want the Nabucco pipeline built—it transects the Caucus but bypasses Russia itself, piping gas from the Caspian Sea. Lest we forget, Russia target-bombing just missed the Baku-Tblisi-Ceyhan pipeline in Georgia last August, sending a decisive message. Indeed scaring Europe off using Georgia as a pipeline route became a key Russian objective in the Georgian conflict. Bullying works, and as Russia grapples with plummeting oil and gas prices that threaten its economic viability, it's their cheapest foreign policy tool.

Russia may see this as their last hope for ensuring German dependence (and much of Europe's) on Russian gas. Threats to energy supply are Russia's greatest source of leverage over European (and NATO, EU) policy decisions, even if the price for gas drops further. In the latter case, a guaranteed buyer adds much needed stability and reduces the risk of further price pressure from competition. Ironically, lower gas prices also help Russia maintain its energy monopoly over Germany as cheap gas makes other, domestic and alternative energy sources too expensive to be attractive. Thus, Germany will fall further from the goal of a diverse, risk-sensible energy mix.

Germany's goal of a 20% 'alternative' energy mix is illusory, environmentally unsound (the destructive power of wind parks is still underestimated, and the huge, Greenpeace-backed, Weser hydropower plant in Bremen threatens to filter the European eel permanently out of the ecosystem), and economically irresponsible in a recession. (One cannot seriously debate putting a few dozen Euros back into the pockets of the consumers via tax-cuts or rebate schemes, while taking hundreds right back out through politically motivated hikes in energy prices). The much touted "green dividend" from ecological technologies is more of a "broken window" fallacy—wreck the existing energy infrastructure to manufacture Green Jobs. Alas, ça ce ne voit pas.

As a first measure, Europe should commit to the building of the Nabucco pipeline to introduce competition from Central Asia. The US should support Europe in this, but Secretary of State Hillary Clinton sends mixed signals, asking for "perfect understanding" among all parties before proceeding. Whether this is a wink to the Schroeder-Putin forces is unclear, but Schroeder was close to her husband and unequivocally endorsed Hillary's presidential bid.

Whatever the US does, Europe must diversify much further, consider following France in making nuclear energy an important part of the energy mix and a means to achieve Europe's ambitious carbon emission goals, and cut supply deals with as many non-Russian sources as possible. With low gas prices that could and should have Russia on the defensive, now would be a good time to act.


Jens F. Laurson is Editor- in Chief of the International Affairs Forum. George A. Pieler is a Senior Fellow with the Institute for Policy Innovation.

14 Comments

All the more reason to stop blocking the utilization of all our natural resources.
It's kind of hypocritical to complain that using oil helps our adversaries, and at the same time block the drilling of American oil.

Absolutely right
Development of alternatives is also part of the equation, but drilling and mining our own resources and conservation are also a must.

H highway
"In the long term we need to get hydrogen from renewable sources. Iceland is an example of a country with indigenous resources where a future based on hydro and geothermal energy is possible – if we can create a reliable fuel system for the transport sector. This will require further developments leading on from the demonstration we see here today.""

http://www.hydro.com/en/Press-room/News/Archive/2003/April/16317/

Iceland is perfectly positioned to export hydrogen to the world.

When they make sense, the private sector will develp alternatives
no need for the govt to force it now.

Forecasting Guru Announces: “no scientific basis for forecasting climate”
Today yet another scientist has come forward with a press release saying that not only did their audit of IPCC forecasting procedures and found that they “violated 72 scientific principles of forecasting”, but that “The models were not intended as forecasting models and they have not been validated for that purpose.” This organization should know, they certify forecasters for many disciplines and in conjunction with John Hopkins University if Washington, DC, offer a Certificate of Forecasting Practice. The story below originally appeared in the blog of Australian Dr. Jennifer Marohasy.

http://wattsupwiththat.com/2009/01/28/forecasting-guru-announces-no-scientific-basis-for-forecasting-climate/#more-5370

in an energy intensive society it only makes sense to be prepared
I'm totally against the present push for alternative development; but I am all for the government pushing research and experimental development to improve the technology and have an industry ready model when the time comes.

That doesn't include the many wind farms going up virtually at tax payer expense, nor all the ethanol push now taking up a too large share of the corn crops, nor any of the other boondoggles already being done. Experimentation and development can be done with 1% of the present development and at 10% of the current cost.

Ah Mark, didn't you get the memo?
Algore and BHO said the science is decided and the policy must be instituted. They will hear no dissent as it is all funded by big oil. Therefore you are not allowed to point out anything, especially a fact, that goes against the AGW agenda.

Afterall, Algore is a Nobel Prize winner on GW as well as a Academy Award Winner. You should bow to his genius and never question the omniscience of BHO; the smartest president ever.

(BTW - good post) ;)

Hard to know which way to jump
Much of Europe heats with clean, abundant, affordable gas and the Rooskies shut off the pipeline.

Much of the Midwest heats on clean, abundant, affordable electricity and the ice storms knock all the lines down. Customers in Kentucky are being advised to wait for weeks, in cold dark homes, until the line crews can get to them.

The sun will never shut you off for nonpayment. Nor is it likely to be looking the other way when you want it to shine. There are homes that actually reliably return power to the grid now, where state law permits them to sell their excess wattage. Every state should allow the same.

Clouds, earth and angle block the sun.
Unless you have solar power satellites.

Small buried thermo nuclear reactors are a great way to jump.

Governments will have a difficult time with any power systems that is decentralized because it takes away the power of the state and puts it in the hands of the consumers.

Governments hate independent people.

More ideas
"Small buried thermo nuclear reactors are a great way to jump."

Well, first you have to put yourself to the trouble of designing and building a "small thermonuclear reactor". That in itself is a challenge.

Easier would be to just drill down to the depth where rock temps exceed about 140 degrees. Cycle water to and from. Makes a great heating system. Power your water pump with the wind turbine in your yard.

Back in the 1980s many rural Chinese were powering their homes entirely from swine and household manure. Collect the methane, link it to a cheap generator and there's enough juice to run one lightbulb and a radio.. all they had in those days. And, enough methane left over to cook dinner on a one burner gas stove.

Small nukes designed and under construction. Keep up with the times.
I have provided links.

http://www.tcsdaily.com/discussionForum.aspx?fldIdTopic=9672&fldIdMsg=98014

In your world, the sun shines every single day?
The sun is the least reliable source of power that exists.

It doesn't shine half the time. In the winter, it shines less than 40% of the time.

Every time a cloud passes over head, your energy production drops dramatically.

When you need the power the most, the sun isn't there.

First you got to deal with the corrosion.
The water coming up from the ground eats out pipes pretty quickly.

"Back in the 1980s many rural Chinese were powering their homes entirely from swine and household manure. Collect the methane, link it to a cheap generator and there's enough juice to run one lightbulb and a radio.. all they had in those days. And, enough methane left over to cook dinner on a one burner gas stove."

The sad thing is, this is the lifestyle that roy believes we should all enjoy.

the sun does shine every day
Your reasoning is sound, but only if you limit yourself to the earth's surface.
It is in fact an excellent reason as to why solar plants should be placed above the clouds, in fact well above the atmosphere itself.

Put major solar plants in space, and beam down the energy they produce.
Place heavily polluting and energy intensive industry up there as well.

Of course this will require opening up a source of raw materials in space, preferably one without a gravity well.
The asteroid belt is perfect for this.

Dreams? Maybe. But we have the technology to make it work (in fact we have had it for over 30 years).
And if we use highly automated machines we don't even have to have (initially) a very large number of people up there (semi)permanently to man it all.

Eventually though space is still the only place to go as the human population expands to beyond what humans can tollerate as comfortable elbow room.

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