Russia’s aggression has Europe rethinking its calculus on fracking

posted at 5:21 pm on March 18, 2014 by Erika Johnsen

Besides the obvious economic benefits and competitive advantages of allowing for freer trade and more energy exploration and development, the events of the past few weeks have starkly highlighted the geopolitical inconvenience of a European economy so deeply intertwined with Russia’s, most importantly because of their energy dependence on the same. Europe imports about a third of its natural gas supplies from Russia, and that reality makes the possibility of imposing serious economic sanctions on Russia’s recent aggression all the more difficult:

Russia, the world’s largest oil producer, exported $160 billion worth of crude, fuels and gas-based industrial feedstocks to Europe and the U.S. in 2012. While shutting the spigot on Russian energy exports would starve the Moscow government of essential flows of foreign cash, the price may be too high for European consumers and it may not alter Putin’s plans, said Jeff Sahadeo, director of Carleton University’s Institute of European, Russian and Eurasian Studies. …

Abstaining from Russian oil and gas would be “off the table” for Europe, said Marc Lanthemann, Eurasia analyst with Stratfor, a geopolitical intelligence company based in Austin, Texas. Europe risks a replay of its failed attempt six years ago to punish the Kremlin for going to war with the Republic of Georgia, when it was unable to impose sanctions after acknowledging its dependence on Russian energy.

“We’re not expecting sanctions with many teeth coming through,” Lanthemann said.

With the exception of the United Kingdom and Poland recently turning the corner, most European countries have been reluctant to expand and/or explore their own options for natural gas production. Indeed, Germany has simultaneously held off on expanding their own drilling operations while simultaneously powering down their nuclear plants in the hopes of boosting renewable energies with mandates and subsidies — resulting in little more than increased carbon emissions from the coal plants they had to bring online to make up for the subsequent shortcomings as well as continued dependence on Russian natural gas supplies (they get about 40 percent of their gas supplies from Russia).

There’s been a lot of chatter lately about the U.S. exporting more of our now flush natural gas supplies, which is definitely a helpful long-term strategy both economically and geopolitically — and besides building the requisite facilities to receive those increased exports, there’s even more that Europe can be doing to help diversify their energy supplies. As the editors of Bloomberg point out:

Breaking these links can’t be done cheaply, easily or all at once, but a patient strategy to diversify from Russian energy supplies is long overdue. It should have four parts: a stronger negotiating approach over existing supplies; new regional sources for natural gas; new infrastructure to allow delivery and distribution of natural gas in liquefied form; and alternative domestic sources of energy.

EU members currently negotiate gas prices with Russia bilaterally. Bigger countries get lower prices, an advantage they won’t wish to surrender — but Russia increases its market power by dividing its customers and discriminating among them. At a meeting last week, Polish Prime Minister Donald Tusk told German Chancellor Angela Merkel that the EU should negotiate with Russia as a bloc. It’s a good idea.

Next comes new sources of supply. The Caspian Sea region, central Asia and north Africa are capable of providing far more natural gas than they do now. Heavy investment, including in pipelines, will be needed to tap this potential. Europe’s economic and geopolitical interests lie in supporting those efforts.

And of course, Europe has its own supplies of shale gas. Geological differences might mean that Europe isn’t exactly in for a massive shale boom on the level as the United States’ overwhelming success, but there are resources there for the tapping, and Europe needs to get moving on investing in the necessary exploration and infrastructure. Fortunately, Russia’s shenanigans apparently has them thinking about it, via Keith Johnson at Foreign Policy:

On Wednesday, the European Parliament passed energy legislation that included tougher environmental rules for oil and gas exploration — but specifically excluded shale gas projects from the new regulations. This week, Poland passed tax breaks meant to juice shale gas exploration there. Big European business lobbies, including steel-makers and the EU employers’ association, just called for the continent to embrace shale gas as a way out of its energy straitjacket. …

Europe’s growing support for fracking isn’t entirely new. Business groups across the continent were calling for more shale gas production even before the Russian invasion of Ukraine triggered fears that Moscow could use energy as a weapon to prevent European powers from intervening. Even in France, home to some of the continent’s most ardent environmentalist groups, fracking’s high-profile defenders include Industry Minister Arnaud Montebourg. …

Now, though, energy security fears unleashed by Russia’s aggressive behavior have joined economic arguments in fracking proponents’ arsenal.

If Europe keeps moving to break up Russia’s energy dominance in the long term — on which Russia largely depends for the health of its own economy — Putin might eventually come to regret his strong-arming after all.


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Merkel disappoints.

Europe doesn’t defend itself.

obama no longer cares about them or the US.

It’s the Asian age. Get used to it.

They’ll get Putin too. Give them time.

Schadenfreude on March 18, 2014 at 5:24 PM

Europe’s growing support for fracking isn’t entirely new.

Wow – well that’s one way to drive around the Russian gas station.

This is something to watch.

jake-the-goose on March 18, 2014 at 5:27 PM

If Europe keeps moving to break up Russia’s energy dominance in the long term — on which Russia largely depends for the health of its own economy — Putin might eventually come to regret his strong-arming after all.

Or Putin might see that as a need for more “strong-arming”. He and his party of crooks and thieves will stay in power at all costs.

I fear that this is more wishful thinking. The only thing that will stop an aggressive expansionist power with no concern for international stability is military force.

kcewa on March 18, 2014 at 5:28 PM

Pet peeve: I hate the use of the word “calculus” in this manner.

MJBrutus on March 18, 2014 at 5:29 PM

Sooooo – Europe is now reaping the big benefits of their heavy investment in the globull warming green energy scam, and their parallel dependence on others (namely Russia, right now) for the rest of their energy.
My little tiny (microscopic even) violin cries in pity and sorrow for them….

dentarthurdent on March 18, 2014 at 5:29 PM

Meh, Putin will never cut back on fuel supplies to the West.

Ever.

Hell, he’s more likely to invade the Ukraine before he’d do something that……oh……

BobMbx on March 18, 2014 at 5:29 PM

dentarthurdent on March 18, 2014 at 5:29 PM

+1

MJBrutus on March 18, 2014 at 5:30 PM

My little tiny (microscopic even) violin cries in pity and sorrow for them….

dentarthurdent on March 18, 2014 at 5:29 PM

As long as you don’t try to sneak that violin past the TSA…….

BobMbx on March 18, 2014 at 5:31 PM

Russia figured out that the West no longer fights for any ideals, other than dough and socialist power.

Schadenfreude on March 18, 2014 at 5:32 PM

I fear that this is more wishful thinking. The only thing that will stop an aggressive expansionist power with no concern for international stability is military force.

kcewa on March 18, 2014 at 5:28 PM

Hmmmm…..meaning that John McCain is on the come-back trail as the voice of reason? Thanks, Vlad.

BobMbx on March 18, 2014 at 5:33 PM

Pet peeve: I hate the use of the word “calculus” in this manner.

MJBrutus on March 18, 2014 at 5:29 PM

You have to know calculus for the really good jobs in the Fracking industry. The engineering positions anyway.

kcewa on March 18, 2014 at 5:33 PM

This article is a little over a year old but states some of the potential and the difficulties…

Map at the link:

Extracting Europe’s shale gas and oil will be a slow and difficult business

SHALE gas and oil are propelling America to energy self-sufficiency and giving its economy a handy boost. Europe’s shale-gas deposits are said almost to match those across the Atlantic (see map). Will the old continent soon enjoy the same benefits?

The mismatch between the hope and reality for European shale gas was neatly summarised by a deal sealed on January 24th that will allow Shell to probe Ukraine for unconventional gas. Ukrainian politicians talked of a $10 billion investment. Shell took a more cautious line. The firm certainly hopes to find plenty of gas in eastern Ukraine. But it will first do some seismic testing and sink 15 test wells. If the results are disappointing it could, like ExxonMobil in Poland, walk away.

It is too early to tell whether Europe’s shale beds will really prove as bountiful as America’s. Only a handful of test wells have been sunk. Exxon may have quit Poland, the country where exploration has gone furthest, but other firms are having more joy. Determining which countries might enjoy a bonanza of cheap gas is highly speculative, a recent report by Deutsche Bank points out: many things are in flux, including extraction technologies and production rates.

Adding to the guesswork is a host of problems “above ground”, particularly in western Europe. With the exception of Britain, which recently lifted a moratorium on test drilling, progress is slow. The French are implacably opposed to shale gas. French environmentalists have taken a particular dislike to “fracking”, the technique for releasing gas from rock beds that uses a cocktail of chemicals, sand and high-pressure water. François Hollande, France’s president, has promised that a fracking ban, imposed by his predecessor, would last for his entire five-year term.

The Netherlands and Luxembourg have also suspended drilling for shale gas. Attempts to do the same in Germany were defeated in parliament in December. But North Rhine-Westphalia, the country’s most promising region for shale gas, suspended fracking last September pending research on the risks involved. In Austria the cost of complying with environmental regulations makes shale gas uneconomic.

Farther east, public disapproval is not as fierce, although the Czech Republic recently introduced a moratorium, Bulgaria has one in place and Romania only recently lifted its ban. Shale gas offers the promise of jobs and revenues. Even more important, it could mitigate the heavy reliance on gas imports from Russia. Indeed, the country signalled its disapproval—and boosted its reputation as an energy bully—as soon as the deal between Shell and Ukraine was signed. It sent its neighbour a bill for $7 billion for unused gas, arguing that Ukraine is contractually obliged to pay for it.

Oil companies will send people and equipment where the ride is easiest and the deals are tastiest, which explains why drilling rigs are scarce in Europe. Nearly 1,200 of them scoot around America’s shale beds; in Poland they number only half a dozen. But even if the welcome mat is rolled out now, it will be a long time before Europe can catch up with America. It may take five years to assess whether shale gas exists in commercial quantities, another five before production starts and then a few more before shale could provide a significant addition to supplies: in short, a fracking long time.

http://www.economist.com/news/business/21571171-extracting-europes-shale-gas-and-oil-will-be-slow-and-difficult-business-frack-future

workingclass artist on March 18, 2014 at 5:34 PM

Indeed, Germany has simultaneously held off on expanding their own drilling operations while simultaneously powering down their nuclear plants in the hopes of boosting renewable energies with mandates and subsidies — resulting in little more than increased carbon emissions from the coal plants they had to bring online to make up for the subsequent shortcomings as well as continued dependence on Russian natural gas supplies (they get about 40 percent of their gas supplies from Russia).

The Green Party needs to go away.

rbj on March 18, 2014 at 5:34 PM

Meh, Putin will never cut back on fuel supplies to the West.
BobMbx on March 18, 2014 at 5:29 PM

I do wonder – if the EU actually tried to put any real sanctions on Russia, and Putin responded by shutting off the natural gas flow – how long would it take for EU to go crawling back to Putin on their hands and knees?

dentarthurdent on March 18, 2014 at 5:35 PM

kcewa on March 18, 2014 at 5:33 PM

I have no peeve with that usage :-)

MJBrutus on March 18, 2014 at 5:35 PM

The only thing that will stop an aggressive expansionist power with no concern for international stability is military force.

kcewa on March 18, 2014 at 5:28 PM

Soooo, in other words – the only way to stop a bad country with a gun is a good country with a gun?
Hmm? Hmmm? Right?

dentarthurdent on March 18, 2014 at 5:37 PM

dentarthurdent on March 18, 2014 at 5:37 PM

I think you had it right before. If the US would drop this horrendous global warming scam and produce energy, we could lower the price of fuel across the world. That is what will put a crimp in Vlad’s style as well as the mullahs’.

MJBrutus on March 18, 2014 at 5:41 PM

Soooo, in other words – the only way to stop a bad country with a gun is a good country with a gun?
Hmm? Hmmm? Right?

dentarthurdent on March 18, 2014 at 5:37 PM

With a bigger gun.

kcewa on March 18, 2014 at 5:41 PM

Global map of shale deposits

http://geology.com/energy/world-shale-gas/

workingclass artist on March 18, 2014 at 5:41 PM

Last time I looked, ‘calculus’ and ‘calculation’ have different meanings. Not interchangeable.

I know, Obama uses calculus to mean calculation all the time. (And others do too.) But then again, he’s a pretentious twit.

Sorry to nit pick. Pretentious and/or PC language is just a pet peeve of mine. Maybe someday I’ll learn that English is a ‘living’ language.

Love your writing, Erika!

petefrt on March 18, 2014 at 5:44 PM

With a bigger gun.

kcewa on March 18, 2014 at 5:41 PM

LOL. Ya – I figgered that’s what you were saying…

Although I’ve been told it’s not the size of the gun that matters…
;)

dentarthurdent on March 18, 2014 at 5:46 PM

Fracking??

Go right ahead, if you want some damn earthquakes.

BigWyo on March 18, 2014 at 5:47 PM

Pardon the interruption, and totally off topic, but, just this instant, I completed my compilation of every gun on Planet Earth with links to every one of them. This is posted on my wildly popular website, The Gun Site, which I’ll have you know, is now averaging upwards of 50 visits a day!

Anyways, I don’t think that such a list has ever been compiled before, so this is quite likely a first.

Oh, and whatever this thread is about, I despise Obama and his miserable ilk and whatever they are doing this week to destroy the country.

justltl on March 18, 2014 at 5:48 PM

Although I’ve been told it’s not the size of the gun that matters…
;)

dentarthurdent on March 18, 2014 at 5:46 PM

You do need to know how to use it I guess.

kcewa on March 18, 2014 at 5:49 PM

I think you had it right before. If the US would drop this horrendous global warming scam and produce energy, we could lower the price of fuel across the world. That is what will put a crimp in Vlad’s style as well as the mullahs’.

MJBrutus on March 18, 2014 at 5:41 PM

Oh definitely!
If we really cut loose on producing the energy we COULD produce – we could severely limit Russia and the middle east from throwing their economic weight around.

dentarthurdent on March 18, 2014 at 5:51 PM

justltl on March 18, 2014 at 5:48 PM

Wow. That took a lot of work :)

kcewa on March 18, 2014 at 5:52 PM

I should note, in the interest of accuracy, that the list includes civilian guns currently in production and excludes those by one small manufacturer because their website flashes a malware warning if I even think about visiting it, which, by the way, I am going to write them about as a courtesy, since that can’t be good for their business, and they do make some mighty sweet guns.

justltl on March 18, 2014 at 5:52 PM

Wow. That took a lot of work :)

kcewa on March 18, 2014 at 5:52 PM

Indeed.

justltl on March 18, 2014 at 5:53 PM

Last time I looked, ‘calculus’ and ‘calculation’ have different meanings. Not interchangeable.

I know, Obama uses calculus to mean calculation all the time. (And others do too.) But then again, he’s a pretentious twit.

Sorry to nit pick. Pretentious and/or PC language is just a pet peeve of mine. Maybe someday I’ll learn that English is a ‘living’ language.

Love your writing, Erika!

petefrt on March 18, 2014 at 5:44 PM

Maybe she didn’t mean calculation.

Axe on March 18, 2014 at 5:54 PM

Pet peeve: I hate the use of the word “calculus” in this manner.

MJBrutus on March 18, 2014 at 5:29 PM

Heh, good to know I’m not the only peevish one.

petefrt on March 18, 2014 at 5:58 PM

No, forget about fracking. And let’s close down most of our own coal and gas and nuclear power plants and gut our energy and electricity producing capability and then rely on Russia and China and the Muslim countries for our critical energy. That makes sense. Not.

Earth going to pot – Marijuana grown in California produces more carbon than 3 million cars: http://wattsupwiththat.com/2014/03/17/earth-going-to-pot-marijuana-grows-in-california-produce-more-carbon-than-3-million-cars/

anotherJoe on March 18, 2014 at 6:00 PM

Al Gore = L. Ron Hubbard

William Eaton on March 18, 2014 at 6:01 PM

Maybe she didn’t mean calculation.

Axe on March 18, 2014 at 5:54 PM

Maybe not, but if she meant a branch of mathematics, then it’s too deep for my pea brain.

petefrt on March 18, 2014 at 6:01 PM

OH wonderful, Europe is going to start fracking before New York.

jmtham156 on March 18, 2014 at 6:04 PM

‘Toons of the Day: It’s A Mad, Mad, Mad, Mad March

Resist We Much on March 18, 2014 at 6:05 PM

Another ‘toon on ESPN (In case Putin is interested on watching):

Barack-etology: Men’s Preview
Andy Katz gives a brief preview of President Barack Obama’s selections for the men’s NCAA tournament.

kcewa on March 18, 2014 at 6:11 PM

The idea that European reliance on Russian oil could prevent them from one day coming to blows with Russia is a misnomer. Prior to WWI many philosophers believed wide scale war was entirely impossible in Europe because of the intertwined economies the nations had in those days (not to mention intertwined monarchies, via blood lines). We all know how those theories on war prevention turned out.

Economics are a factor, but if Europe ever begins to feel truly threatened by Putin things will change fast.

eski502 on March 18, 2014 at 6:13 PM

Too little, too late. European wussies will have to eat their crap sandwich

Whitey Ford on March 18, 2014 at 6:16 PM

Maybe not, but if she meant a branch of mathematics, then it’s too deep for my pea brain.

petefrt on March 18, 2014 at 6:01 PM

The word means methodology, system.

She seems to mean “how it sees fracking.” “Calculation” fits fine, as long as she means the equation itself, it’s members, and means Europe is changing their equation. But that would be rigidly mathematical. “Calculus” is more abstract.

. . . Maybe because it’s redundant. Reworked:

Russia’s aggression has Europe rethinking fracking.

Russia’s aggression has Europe revisiting its fracking calculus.

Axe on March 18, 2014 at 6:18 PM

Economics are a factor, but if Europe ever begins to feel truly threatened by Putin things will change fast.

eski502 on March 18, 2014 at 6:13 PM

I think the problem here is that Putin and his cronies feel threatened by the Liberal Democracies in Europe. And the rule of law idea that underpins liberal democracy.

kcewa on March 18, 2014 at 6:19 PM

Russia’s aggression has Europe revisiting its fracking calculus.

Axe on March 18, 2014 at 6:18 PM

I was sent to the principals office for saying “fracking calculus”. Or something like that.

kcewa on March 18, 2014 at 6:21 PM

I think you had it right before. If the US would drop this horrendous global warming scam and produce energy, we could lower the price of fuel across the world. That is what will put a crimp in Vlad’s style as well as the mullahs’.

MJBrutus on March 18, 2014 at 5:41 PM

No doubt about it….2 more years and we’ll see frackng take off big time in this country….and I mean big as in it will be unstoppable…everybody will love the revenues thus generated, so that once fracking unleashed on a large scale nationally, there will be no return, faux environmentalists be danged…

jimver on March 18, 2014 at 6:22 PM

Resist We Much on March 18, 2014 at 6:05 PM

Hey, our paths haven’t crossed in a while, it seems. Good to see ya!

petefrt on March 18, 2014 at 6:24 PM

I was sent to the principals office for saying “fracking calculus”. Or something like that.

kcewa on March 18, 2014 at 6:21 PM

Frak that, man. :)

Axe on March 18, 2014 at 6:29 PM

The problem MJBrutus, is that the last thing the Washington Wennies (both parties) want is for the US to be energy dependent.

Tinker on March 18, 2014 at 6:29 PM

Oh no, the hydrocarbonphobes lose again.

Viator on March 18, 2014 at 6:31 PM

http://www.economist.com/news/business/21571171-extracting-europes-shale-gas-and-oil-will-be-slow-and-difficult-business-frack-future

workingclass artist on March 18, 2014 at 5:34 PM

The Economist, and I’m a subscriber, is a social democrat publication deep in the global warming wonderland. And many other wonderlands like Keynesianism.

Viator on March 18, 2014 at 6:35 PM

So you’re saying that imports from Russia can’t be replaced by wind and solar..?

ujorge on March 18, 2014 at 6:36 PM

Axe on March 18, 2014 at 6:18 PM

Well done. So I guess we’ll have to ask Erika.

But as for Obama, there’s not a doubt in my mind his use of the word is part of his strutting pretense at understanding the topic at hand.

petefrt on March 18, 2014 at 6:45 PM

They are more concerned about Putin in Crimea than they are about the Muslims in their own cities taking over more and more parts of them. They are insane.

VorDaj on March 18, 2014 at 6:50 PM

But as for Obama, there’s not a doubt in my mind his use of the word is part of his strutting pretense at understanding the topic at hand.

petefrt on March 18, 2014 at 6:45 PM

Agreed. :)

One of the liabilities of having a philosophy of life that’s a collage of bumper stickers.

Axe on March 18, 2014 at 7:08 PM

One of the liabilities of having a philosophy of life that’s a collage of bumper stickers.

Axe on March 18, 2014 at 7:08 PM

Heh, the problem with Obama is not just that he speaks in cliches and platitudes, but that he thinks in them.

petefrt on March 18, 2014 at 7:28 PM

If Europe keeps moving to break up Russia’s energy dominance in the long term — on which Russia largely depends for the health of its own economy — Putin might eventually come to regret his strong-arming after all

….right!…oh!…that will happen!…sure!

KOOLAID2 on March 18, 2014 at 7:34 PM

http://www.economist.com/news/business/21571171-extracting-europes-shale-gas-and-oil-will-be-slow-and-difficult-business-frack-future

workingclass artist on March 18, 2014 at 5:34 PM

The Economist, and I’m a subscriber, is a social democrat publication deep in the global warming wonderland. And many other wonderlands like Keynesianism.

Viator on March 18, 2014 at 6:35 PM

Good to know

workingclass artist on March 18, 2014 at 7:44 PM

Germany has simultaneously held off on expanding their own drilling operations while simultaneously powering down their nuclear plants.

I guess it must be some kind of Popular Delusions and the Madness of Crowds thing.

Kaffa on March 18, 2014 at 7:48 PM

Pet peeve: I hate the use of the word “calculus” in this manner.

MJBrutus on March 18, 2014 at 5:29 PM

So you’re anti-integration? Raaaaacist!

I have an equivalent peeve for “utilize” when it’s used in place of “use”. The word “utilize” has some meanings that “use” does not convey, and it should be reserved for those cases. It seems “calculus”/”calculation” is similar.

The Monster on March 21, 2014 at 9:50 PM