Sunday, October 12, 2014

Tthe Natural Gas Markets of EU n exclude Russia

using destabilization to manipulate energy markets

Mahdi Darius Nazemroaya

Wed, 08 Oct 2014 20:42 CEST
gas pipelines

© Reuters/David Alire

The US is doing its best to estrange the EU from Russia to get the upper
hand in a free trade deal, and also, to manipulate European countries
into buying America's relatively more expensive natural gas.

TTIP and Ukraine

The Transatlantic Trade and Investment Partnership (TTIP) is a
Euro-Atlantic free trade agreement that is the subject of ongoing
negotiations between the US and the EU. The deadline for finalizing the
TTIP free trade agreement is in 2015. Its goal is to create what is
referred to as the Trans-Atlantic Free Trade Area (TAFTA) and to cement
the European Union with the United States as one supranational trading

These trade negations have been passing under the public's radar,
because they have been taking place very discreetly behind closed doors.
The very TTIP's name is designed to conceal, and was selected by
policy and trade mandarins, because of their fears a public backlash
could erupt against the negotiations, as it did in the case of the Free
Trade Area of the Americas (FTAA) talks in 2001. Like the Comprehensive
Economic and Trade Agreement (CETA), which was signed in Ottawa between
Canada and the EU on September 26, wordsmiths calculatingly picked the
name TTIP to try to hide the fact that it is a free trade agreement.

Washington is doing its best to disrupt trade ties between its EU
partners and the Russian Federation in order to get greater leverage in
the TTIP negotiations. Its strategy is to economically weaken its
European partners by getting them to cut ties with Moscow through
anti-Russia sanctions that will directly hurt their economies too.
Washington calculates that this will force a weakened EU to maximize
the economic concessions to the US in the TTIP talks.

Geopolitically, this is a story about Euro-Atlantic (read Euro-US)
integration versus Eurasian (read Euro-Asian) integration. It seeks to
reduce Russian influence in the EU and any risks of the strengthening of
trade ties between Russia and the EU by trying to marginalize the
Russians in Europe. TTIP negotiations have intensified because the US
wants to amalgamate the EU with North America, because it fears that
countries like Germany could start considering a Eurasian alternative
involving Russia and the Commonwealth of Independent States (CIS) in the
post-Soviet space.

The crisis in Ukraine precisely serves the US's dual purpose to weaken
both the EU and Russia. It seeks not only to expand NATO and encircle
Russia, but also to damage EU-Russia ties. Ukraine is literally being
exploited and used by the US to create a rift between Moscow and the EU
and to portray Russia as a bogyman and threat to European security.

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

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
. 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

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.

Energy war and Syria: Mediterranean lockout?

The situation in Syria, where the US has deliberately been destroying
energy infrastructure under the mantra of fighting the ISIL, can also be
viewed from the same prism of petro-politics.
The natural gas off the
Levantine coastline that encompasses Syria, Lebanon, Israel, and Gaza
hold immense reserves of natural gas. Here too the US is working to push
out Russia and to control the gas reserves in the Eastern Mediterranean.

Since 2000, Russian engineering construction company Stroytransgaz has
been active in Syria and received contracts to build two gas refineries
in the Homs area and to construct the Syrian portion of the Arab Gas
Pipeline that connects Lebanon and Syria to Jordan and Egypt. Another
Russian energy company, Soyuzneftegaz, got a tender from Damascus to
operate on its eastern border with Iraq in 2004. In 2007, the Syria Gas
Company (SGC) and Stroytransgaz agreed to jointly work on developing the
natural gas reserves discovered in the fields of Homs. Amidst the crisis
in Syria, Soyuzneftegaz signed an important offshore exploration
agreement with Damascus on December 25, 2013.

Moreover, it just so happens that the crisis in Syria erupted during
negations between Syria, Iraq, and Iran to build a gas pipeline from the
world's largest natural gas field to the Syrian coast. Damascus signed
the agreement with Iraq and Iran on June 25, 2011. Until the contract was
cancelled in 2009, Stroytransgaz was even supposed to connect the
pipeline between the oil-rich city of Kirkuk and the Syrian port of

Qatar and Turkey were hostile to the Iran-Iraq-Syria gas pipeline
agreement since it sidelined them as a natural gas exporter and as an
energy corridor. The possibility that the Iran-Iraq-Syria pipeline could
be used to export gas to the EU as a lower-priced rival to US LNG also
had to be viewed negatively in Washington.

What the fighting in Syria and Iraq has done is put this project on
hold whereas regime change will nullify it.

Destabilization as US Bargaining Tactic?

While the US has been stoking tensions in Europe to help it in the TTIP
negations with Brussels, the Pentagon has been redeploying to the Middle
East. The Pentagon-led buildup in the region is about anything but fight
ISIL. In part, it may be tied to US nuclear negations with Iran. On top
of other goals, the US-led military buildup could be intended to give
Washington additional leverage against Tehran in the nuclear talks.

Creating instability looks to be part of a packaged approach. Whatever
the case is, its creation appears to be used to support US negotiations
and bargaining. This is very clear in the case of the tension in Ukraine,
where Washington is using the crisis to its advantage in TTIP talks and
to peddle its LNG to the EU by using sanctions to lockout Russian gas.

Comment: See also:

Behind the anti-terror campaign: Gas war and plans for remodeling of the
Middle East

Video: The geopolitics of World War III or the real reason Russia and
Syria are being targeted right now

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From: Belinda Turffrey
- 38 Degrees <>
To: Lloyd Cartey <>
Sent: Friday, 10 October 2014, 10:55
Subject: TTIP

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