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Market disruption of the best kind

Poland tells Putin: It’s been fun, but we’re going to start buying our natural gas from the U.S.


By —— Bio and Archives--November 29, 2017

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Market disruption of the best kind
I’m sorry, weren’t we told that Donald Trump was going to be some sort of toady for Vladimir Putin? And that Putin somehow engineered Trump’s victory over Hillary precisely with this in mind? That is not working out too well - for Putin.

Understand: Russia is a very large country geographically, and it aspires to be an influential global player, whether through the use of military force and intimidation or through economic power. The economic power part is essential because without it Russia can’t even afford the military through which it might intimidate others. And crucial to Russia’s economic strength is its ability to market its energy resources globally

In that regard, one of Russia’s best friends in the world has been the U.S. Democratic Party, which has steadfastly resisted the exploitation of America’s domestic energy resources whenever it could. This has helped Russia to maintain global influence beyond what it should really have. America could have been a major player in these markets but because of domestic politics did not.

Until this year. One of the most underreported stories of the Trump presidency has been the way he’s taken the shackles off domestic energy producers and cleared the way for these producers to market their product across the globe. Much of this required little more than Trump’s reversing of Obama executive orders. Some required Congress to get involved in lifting regulations.

But the effect has been extraordinary, and it recently put U.S. exporters in a position to compete for the chance to service Poland’s natural gas needs. That has been an exclusive Russian gig in recent years.

That is no longer the case:

Poland wants to reduce its reliance on Russian energy, and last week its state-owned oil and gas company, PGNiG , signed its first five-year deal to buy American liquefied natural gas. The agreement illustrates how the energy boom from the fracking revolution can serve U.S. national interests and deter the reach of dictators abroad.

Moscow has long used its energy resources as a political weapon. Gazprom , the Kremlin-owned energy company, currently provides more than two-thirds of Poland’s gas, and other European nations also rely heavily on Russian energy. President Vladimir Putin has used that dependence as a diplomatic cudgel, threatening to cut off supplies. And on several occasions he has followed through.

But Russia’s era of go-freeze-yourself foreign policy may be drawing to a close. In 2015—the year Moscow cut off gas supplies to Ukraine—the U.S. surpassed Russia as the world’s top natural-gas producer. By February 2016 major shipments of American LNG were headed abroad for the first time. Two months after U.S. LNG from the lower 48 states hit the export market, Poland’s PGNiG announced that it didn’t intend to renew its long-term agreement with Gazprom, which will expire in 2022.

President Trump has built on that momentum. “America stands ready to help Poland and other nations diversify their energy supplies so that you can never be held hostage to a single supplier,” he said during a July visit to Warsaw.

America’s emergence onto the global energy markets has been nothing short of a megabomb in its impact on both the world’s economy and our geopolitical positioning. It is much harder for nation’s to resist Putin’s imperialist ambitions when they rely on him for a commodity they desperately need, and there is no one else capable of providing it. Trump is now making sure nations have that other option, and the Poles quickly saw the wisdom in availing themselves of it.

 

 

Continued below...

It’s hard to overstate what a disaster this is for Putin, particularly in Eastern Europe, where he now seeks to wield through economics the type of influence the Soviet Union once wielded through sheer force. As long as Democrats were making it harder for us to be players in the global energy market, it was relatively easy for Putin to make this strategy work. The green lobby ruled the day in Washington and the Russians gleefully took advantage of the situation.

Natural gas is a particularly important resource for us to exploit. We’ve got lots of it and it’s relatively cheap to process, distribute and market. Demand for it is also growing as nations, companies and individuals look for plausible alternatives to fossil fuels. Not that fossil fuels will stop being in the mix any time soon. They won’t. But when you can look to a mix of options, you’re always better off.

We’re pumping a lot of oil too, and the shale discoveries in North Dakota have put us in an even stronger position to storm those markets in the years to come. You know how people are always wringing their hands about our reliance on Middle Eastern emirs who don’t like us very much? We’ve already become less reliant on them and we’re moving even further in that direction.

This is a much bigger deal that you’d think from the news coverage it receives. It’s a huge boost to our economy, an expansion of our tax base and an enormous opportunity for U.S. companies to make money overseas. By the way, the tax reform now under consideration in the Senate would make it easier for those companies to bring that money back home once they’ve made it, thus giving our economy another infusion of capital.

All of this is so good, it’s hard to understand why anyone would have ever opposed it happening. Until you remember that these were Democrats, and that’s what they do.



Dan Calabrese -- Bio and Archives | Comments

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain.com

A new edition of Dan’s book “Powers and Principalities” is now available in hard copy and e-book editions. Follow all of Dan’s work, including his series of Christian spiritual warfare novels, by liking his page on Facebook.

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