By Mathew Carr
July 22, 2022 — Some people can’t stand it when their “enemies” are winning.
For the US, their enemies, including frenemies, are the ones who stand in the way of profit, the ones who are even perceived, just minutely, to be a threat, the ones who are doing better than them through diligent, hard, clever, collaborative work on sustainability.
If you are perceived to be a big threat, forget about it. Even if that perception is misconceived, you’ll be attacked.
I believe this is what happened to Europe’s attempts to cooperate with Russia.
Take this 2008 diplomatic cable published by WikiLeaks, which exposes how the US was keen to curtail collaboration between Eni, Italy’s part-state-owned oil and natural gas company, and Gazprom, the Russian counterpart.
It’s relevant today because the energy crisis is extending into the end of 2022 and it provides historic context that many will have forgotten, despite the current war in Ukraine.
The US communication was written after American officials spoke with Marco Alvera, Eni Senior Vice President for Supply and Portfolio Development.
Alvera was responsible for all Eni activities in Russia and was Eni’s senior manager for the South Stream project (an Eni-Gazprom natgas pipeline project which later failed — read on). He’s now expanding Europe’s green-hydrogen capacity (a cleaner alternative to fossil fuels), which is also probably making the USA green with envy.
Back in 2008, Alvera was a keen collaborator with Gazprom, because of the potential access to cheap natgas, which was cleaner than coal and oil.
He was “enthusiastic about the possibility of developing new gas fields in Russia, ‘it’s easy – like the Gulf of Mexico in the 1980s,” according to the cable.
That context in 2008 is important.
Europe was arguably copying the US, which had natgas supplies that were cheaper than those in Eurpe, giving North America’s economy an important competitive advantage.
Europe was transitioning away from coal. It had just begun its carbon market in 2005, cleaning up the economy — modernizing at a faster pace than the USA.
Indeed, the US had torpedoed its own participation in the 1997 Kyoto Protocol, which has drammatically delayed global climate action since then.
This torpedoing was a deliberate plan by high-emitting American corporates to dupe the U.S. government and the world, according to the BBC’s Big Oil v the World television documentary, released July 21.
Unlike in the U.S., where giant corporations were apparently in charge, the EU was big enough to stand up against companies to force the transition. It was pushing ahead with its climate shift and was even convincing China to follow it down that path, including by putting a price on carbon emissions.
With cheap, plentiful gas, Europe could have been winning by an even bigger margin.
The US, and the pro-US global media, had other ideas.
The US apparently wasn’t keen for Europe to have cost-efficient gas from Russia, like North America had from the Gulf of Mexico.
The US diplomats:
“Eni is still 30 percent owned by the Italian government, providing us with some government-to-government leverage. The US government might find it useful to push the next Italian government to exercise its influence to redefine Eni’s interests so as to come to a different view of Italian and European energy security, one that is less reflective on Gazprom and Russia’s strategic goals.“
“The Italian government’s 30 percent ownership of Eni presents us with immediate opportunities to influence key Eni decisions. For example, Alvera told us that he thinks there is only a 60 percent chance that South Stream will actually be built. His fear is that difficulties in reaching agreement with Eastern European governments might scuttle the project. We think Washington should consider adding US government objections — presented through Eni’s government-of-Italy owners — to the list of reasons that Eni should not build Gazprom’s new pipeline.”
It worked. South Stream was scuppered, a huge wasted effort.
Not happy with that sabotage, the US (and NATO) arguably went on to prevent the expansion of Nord Stream, another gas-from-Russia-to-Europe pipeline that was a key cause of the hugely damaging Ukraine war that’s raging today. Russia holds much of the blame, too.
This conflict has caused the global energy and inflation crisis, which is in turn stoking political and debt crisies.
So Russia’s efforts to secure a future for its gas was repeatedly thwarted, by itself and by the U.S. and its allies.
(Imagine if someone had tried to limit the US’s access to cheap energy.)
My analysis is not popular.
The mainstream media messaging in 2022 is that the US warnings turned out to be correct — it was right to demonize Russia, just look at the Ukraine war.
Yet, no one is talking about what would have happened had the EU been allowed to collaborate with Russia. And why is the USA still largely failing to transition to a cleaner, greener economy — a failure that is stoking already-fraught global geopolitical tension?
Follow the money.
Look who’s benefitting from the current situation.
The US is now selling more LNG to Europe than Gazprom does by pipeline. See the Bloomberg story below in Note One. (Russia also sells LNG)
In Italy, energy company Snam has now acquired a new floating regasification vessel to contribute to Italy’s energy security and diversification ahead of winter 2022-2023, Euractiv reports. That vessel will serve US LNG, as well as gas from elsewhere.
And guess what the U.S. diplomats were talking about back in 2008? They were looking at replacing the Gazprom supply to Italy.
U.S. diplomats: “Alvera said Eni has been Gazprom’s largest natural gas customer since the 1970’s, buying between six and seven billion dollars of gas a year.
“We found Eni’s arguments far-fetched and self-serving. Eni denials notwithstanding, through its close collaboration with Gazprom, including its support for South Stream and Gazprom’s expansion into North Africa, we think this company is working against U.S.-supported EU efforts to diversify Europe’s energy sources.”
Note also that LNG damages the climate much more than piped Russian gas.
And this, again from 2008:
“Alvera characterized the (Eni Gazprom) relationship as a boon for Eni. Eni estimates Russia has 47,800 bcm of natural gas reserves and predicts Gazprom will be able to export between 166 bcm/yr and 207 bcm/yr to Europe by 2030. By comparison, Gazprom exported 133 bcm of natural gas to Europe in 2005.”
Whose comments turned out to be self serving? Those of the USA diplomats.
While Vladimir Putin struggles with sanctions, U.S. LNG exporters are taking billions of euros of market share from Russia in the market for natgas.
Now, Italy’s government has collapsed as the energy crisis ramps up inflation and causes a crisis of interest-rate and fiscal policy.
This could further distract Europe from its climate transition and its pandemic recovery.
The USA competitive advantage is now massive, and it’s getting bigger.
See this from the Telegraph newspaper:
The end of quantitative easing (QE) was always going to be a dangerous moment for the eurozone. It is even more dangerous after the collapse of Mario Draghi’s technocrat government in Italy.
Two critical mechanisms needed to keep the eurozone on the road are in jeopardy. The prospect of a hard right eurosceptic alliance in Rome – that is to say, the return to democracy after the Draghi illusion – greatly complicates efforts by the European Central Bank to devise an alternative debt-shield for southern Europe.
As Italy shows, Europe’s crisies are piling up — on top of the crisis of war.
Putin is now saying Europe should allow Nord Stream 2 to proceed. That could reverse the energy crisis as natgas prices tumble, but it seems unlikely, while the military conflict continues.
Following the money again, it’s the military / security industry, largely based in the USA, that’s getting the cash — instead of climate protection, the pandemic recovery or disadvantaged people more generally, who really need help to cope with surging prices for energy and food.
Global military spending last year surged to a record above $2 trillion, with new jumps on the way.
Before he was jailed, WikiLeaks’ founder Julian Assange said the perpetuation of war was a deliberate strategy to extract money from taxpayers around the world and funnel it to the military complex. And the way that is done is by corrupting the media and fooling the public into unnecessary wars.
Given today’s situation in Europe, he clearly had a point.
See this video:
(More to come)
Snip from Bloomberg story:
For the First Time, US Is Sending More Gas to Europe Than Russia
- US volumes were higher than Russian piped gas last month
- Russia slashed deliveries to Europe via Nord Stream pipeline
1 July 2022
US is supplying more natural gas to Europe than Russia sends by pipelines, according to the International Energy Agency.
Europe is seeking alternatives such as US liquefied natural gas to Russian supplies after Gazprom PJSC slashed shipments through Nord Stream, its biggest pipeline to Europe, and cut off shipments to countries that didn’t comply with new payment terms. Russia met more than a third of the European Union’s gas demand last year.
“Russia’s recent steep cuts in natural gas flows to the EU mean this is the first month in history in which the EU has imported more gas via LNG from the US than via pipeline from Russia,” IEA Executive Director Fatih Birol said in a tweet. “The drop in Russian supply calls for efforts to reduce EU demand to prepare for a tough winter.”
I asked Mr Alvera, formerly of Eni, to comment on who he now blames for Europe’s plight. I’ll let you know if I get a response.