Ukranian Standoff: What's Next? | 127 comments (127 topical, editorial, 0 hidden)

Re: Ukranian Standoff: What's Next? (4.00 / 4)

Western assistance, rule of law come at the market price.

Big Oil's "Sore Losers" Lead the Drive to War » CounterPunch

The western oil giants have been playing "catch up" for more than a decade with Putin checkmating them at every turn. As it happens, the wily KGB alum has turned out to be a better businessman than any of his competitors, essentially whooping them at their own game, using the free market to extend his network of pipelines across Central Asia and into Europe. That's what the current crisis is all about. Big Oil came up "losers" in the resource war so now they want Uncle Sam to apply some muscle to put them back in the game. It's called "sour grapes", which refers to the whining that people do when they got beat fair and square [...]
In other words, Yanukovych rejected an offer from Chevron that the EU and Washington were pushing, and went with the sweeter deal from Russia. According to Ahmed, that pissed off the bigwigs who decided to incite the rioting. ("Putin's sudden offer of a 30% cheaper gas bill and a $15 billion aid package provoked the protests...")

by das monde on Fri Mar 14th, 2014 at 05:29:00 AM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (4.00 / 4)

The usual Western arrogance, that assumes no agency for the locals. Poor hapless puppets jerked around by American money eh? Not that simple.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Fri Mar 14th, 2014 at 06:41:26 AM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (4.00 / 4)

Did Western energy companies concoct the current crisis?

Seems a bit of a stretch.

Have US energy firms with interests in fracking been opportunistic about this crisis?

Umm..... yes. Without doubt.

Republicans in the US Congress are trying to fast track approval for a LNG export facilities that would be able to move enough LNG to replace Russian gas exports to Europe. Even with massive investment, this is several years off. But this would jack up the North American price of gas tremendously. Right now, in order to export gas a special permit is required if the receiving country doesn't have a free trade agreement with the US. The bill in Congress would essentially remove this.

Again, look at the price differential between North America, Japan, and the EU here:

I think it's stretch to not see a massive increase in North American gas prices, and company profits, as not being a motivation behind Washington's actions.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Mar 14th, 2014 at 06:58:34 PM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (4.00 / 2)

well, I'm confused. I thought that cheap energy prices currently gave the USA a huge economic advantage. Historically, US foreign interventions have been intended to keep US energy prices low...

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Sat Mar 15th, 2014 at 03:19:25 PM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (4.00 / 5)

Historically, US foreign interventions have been intended to keep US energy prices low.

Bullocks. Historically US foreign interventions have been intended to keep corporate profits high. That can be done equally well by gaining a massive price markup via exports as shorting producers in cowed countries royalties due. Natural gas is not oil. The US lacks the infrastructure to export right now, and that means that domestic gas producers are taking a huge price hit because they can only sell in North America.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Mar 16th, 2014 at 02:50:15 AM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (none / 1)

By having commitments and capability to EXPORT natural gas, given demand, they will be in all the better position to screw over the US domestic market, especially if their efforts to prevent the development of alternative energy sources and deployment of energy saving measures succeed. Their goal is to sell the last 100 cubic feet of natural gas at the highest possible price and get tax subsidies for doing so, even if they export that gas.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Mar 16th, 2014 at 10:35:14 PM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (none / 1)

The impact will be most severe in terms of fertilizer production. Right now the US imports quite a bit of anhydrous ammonia from Eastern Ukraine/Russia, and that tends to increase as natural gas prices do. Get ready for another food price shock when American corn prices shoot up based on increasing fertilizer costs.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Mar 17th, 2014 at 08:41:21 AM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (none / 0)

A sane reaction to increased fertilizer prices would be a reduction or elimination of requirements for ethanol additives to gasoline. This would at least match drops in feed in tariffs for wind and solar electricity and give the appearance of balance and a coherent 'no subsidies' approach, which, in itself, would be a novelty.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Mar 17th, 2014 at 11:36:59 AM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (4.00 / 2)

Eek! But then how do you expect the corn-planting industry to get its subsidies?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Mar 17th, 2014 at 12:36:50 PM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (4.00 / 2)

There are hard limits to how high ammonia can go - It is the most widely synthesized chemical on earth, and natural gas is most emphatically not a necessary ingredient. There are producers right now making money producing it via the electrolysis pathway in places with cheap electricity. I think this is due to a cartel in ammonia production, because the level of profit that implies for people producing it the lazy way is hard to explain without a cartel limiting production - but it does mean that if ammonia goes much higher a lot of people are going to start turning electricity water and atmospheric nitrogen into fertilizer.

by Thomas on Wed Mar 19th, 2014 at 04:47:41 PM EST
[ Parent ]

Re: Ukranian Standoff: What's Next? (none / 1)

There's a past series of diaries on ET about this, by SacredCowTipper, see this one for example.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Mar 20th, 2014 at 03:36:08 AM EST
[ Parent ]

Ukranian Standoff: What's Next? | 127 comments (127 topical, 0 editorial, 0 hidden)

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