JRL NEWSWATCH: “Transformed Gas Markets Fuel U.S.-Russian Rivalry, But Europe Plays Key Role Too [Excerpt]” – Russia Matters/Morena Skalamera

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[Full text: russiamatters.org/analysis/transformed-gas-markets-fuel-us-russian-rivalry-europe-plays-key-role-too; This article first appeared on the Russia Matters website, russiamatters.org, with the title “Transformed Gas Markets Fuel U.S.-Russian Rivalry, But Europe Plays Key Role Too”]

“This month, the Wall Street Journal reported that U.S. President Donald Trump has been pressuring Germany to drop its support for a major new Russian gas pipeline if Europe wants to avoid a trade war with Washington, while a senior U.S. diplomat warned that the project could be hit with U.S. sanctions; Russian President Vladimir Putin responded defiantly. This development, sadly, fuels the further politicization of the European gas market-a space that, in many ways, has reflected the triumphs of a depoliticized, pro-market technocracy, which has managed to stimulate competition and lower prices irrespective of changing political trends. Just last year, Trump called on European countries to buy American liquefied natural gas, or LNG, which, for now, remains more expensive than Russia’s pipeline gas. Certainly, the U.S. has much to gain on the global gas market, which has changed drastically over the past decade, as America rapidly transformed from an importer to an exporter. Europe’s gas market, meanwhile, has much to gain from additional supply. But Trump’s approach, especially if the latest reports are true, both alienates Western European partners and feeds into a sensationalist, simplistic portrayal of the new U.S. role’s effect on Russia-as a zero-sum game, in which these new, plentiful U.S. gas supplies serve as an antidote to Russia’s “gas dominance” in Europe and hence to Moscow’s political leverage.

In fact, even if Russia remains Europe’s dominant gas supplier in the coming years-as is likely-it now has to play by EU rules and vie hard for market share, ultimately benefiting European consumers. America’s gas boom has catalyzed this thriving competition, but an equally important factor has been a massive, long-term investment in infrastructure and regulation by Brussels. These EU efforts have done a great deal to weaken Moscow’s geopolitical “gas power,” which has never been uniform across the continent. Today, gas is a prized commodity but not a major weapon in East-West relations: Russia’s gas leverage cannot harm the West, and neither does competition with U.S. gas pose a major threat to Russia as a state or, for now, to its gas behemoth, Gazprom. Moreover, in the near to medium term, Russian and U.S. gas companies may face many challenges in common: Both will be competing against new, price-lowering producers and grappling with ever “greener” regulations on the European market, while also trying to profit from Asia’s thirst for energy. * * * ….”

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