Author Topic: How the Keystone Pipeline Will Shut Putin Down  (Read 972 times)

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Offline mayya

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How the Keystone Pipeline Will Shut Putin Down
« on: April 26, 2014, 11:57:02 AM »
How the Keystone Pipeline Will Shut Putin Down

Posted: 03/31/2014 12:18 pm

It's too late to save Crimea, and possibly half of Ukraine, now that Vlad the Annexer has articulated the Putin Doctrine: Russia will invade any country that "oppresses" its Russian minority.

But Putin's Doctrine is underpinned by Russia's oil and natural-gas industry, which provides 70 percent of the country's export income and 52 per cent of its governments revenues. Moscow now controls half the energy market in Europe and is able to adjust prices to punish or reward countries and to keep others quiet.

This strategy has made Russia, with an economy the size of California's, wealthier than ever but also exceedingly vulnerable. Russia is a petro-economy and little else.

Since Ukraine's crisis, sanctions have been imposed and its stock market and currency have tanked. But a geopolitical and energy policy shift is needed to stop Putin in his tracks, and only the United States and Canada can flex enough energy muscle to impede the Russian energy juggernaut.

Together, the U.S. and Canada have more oil and natural-gas reserves than Russia or the Middle East. Obama has been dragging his feet on the pipeline, but now might be the right time to rethink his position. The Keystone pipeline would add enough barrels a day into the US oil market to replace imports from Russian ally Venezuela.
Canada is the only supplier of natural gas and largest supplier of oil to the United States, at 2.5 million barrels a day. The U.S. is nearly self-sufficient in natural gas, thanks to shale deposits, and in 2013 became the world's second-biggest oil producer at more than 10.3 million barrels a day. But Americans consume 19.4 million daily and, despite gains in oil production from shale, cannot become self-sufficient in oil until 2035, with 4 million barrels a day from the oil sands, according to the International Energy Agency.

Clearly, the two must gear up for battle by deploying oil and natural-gas weaponry. The most immediate retaliatory blow would be the approval of Keystone XL from Canada. This oil pipeline would add 830,000 barrels a day into the U.S. oil market, more than enough to replace the 755,000 barrels a day of oil imports from Russia's western hemispheric ally Venezuela.

A Keystone bomb would deliver several payloads: punishment toward anti-American Venezuela; proceeds toward Canada which buys more goods and services from the U.S. than the European Union does; punishment toward Russia by casting into the markets more Venezuelan oil; replacement of Venezuelan oil with Canadian oil that is $30 a barrel cheaper (roughly 30 percent less) and even an improved environmental outcome.

A recent study by U.S. energy consultant IHS Global Insight showed that oil sands crude represents 6 per cent more emissions than average crude consumed in the US, but Venezuela's is 14 percent higher.

President Obama has been dragging his feet on this pipeline even in light of his November speech that stated "after years of talk about reducing our dependence on foreign oil, we are actually poised to control our own energy future."
The fact is that the only way the United States can control its oil future is by tapping into the oil sands. For these and other reasons, Bill Clinton has called upon his environmental friends to "embrace" Keystone and move on.
America's other weapon is natural gas exports in concert with Canada. Natural gas can only be transported by pipeline and vessel unless chilled to -161 degrees Fahrenheit. This process makes the gas more expensive, but the world now knows that Russian energy carries with it a hefty and hidden price tag.

A glimpse into a burgeoning American-Canadian strategy occurred this week when the Department of Energy and Canadian authorities approved a liquefied natural gas (LNG) plant and port in Oregon using Canadian natural gas. Shipments will go to India and Japan, the world's largest importer of LNG, reliant on Russia for 76 percent of its LNG.
This week, Canada also approved its first four LNG projects in British Columbia and in the past 10 months, the U.S. has approved five more LNG projects. One bill in Congress proposes immediate approval of the two dozen projects pending in the U.S.. Most will help Europe and Asia reduce their dependence on Russian natural gas over time.

Europe's 22 LNG ports are under-utilized but have the capacity to reduce Russian gas imports by 25 percent. Likewise, Japan, India, China and South Korea have the facilities and are eager to reduce dependence on Russian LNG.
The importance of North America's entry into the energy war cannot be understated, as Lithuania's energy minister Jaroslav Neverovic explained to the U.S. Senate this week. His country is gouged by Russia, which has the monopoly on its gas supplies. So Lithuania is just 250 days away from completing its first LNG plant and he pleaded for the U.S. "to release its gas to world markets as quickly as possible."

The only obstacle to fighting fuel with fuel will be the environmental movement that has held up Keystone for five years and now opposes LNG exports.

But Putin is going to continue his aggression and the world is going to continue to use oil and natural gas until alternative energies are capable of replacing fossil fuels. Environmentalists should invest their time, and donations, on conservation efforts and financing scientific efforts to come up with viable alternatives -- not opposing reality.

This originally appeared on the New York Post.