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Russia Grabs Ukraine’s Offshore Oil & Gas Treasure

Under Putin Shadow, Europe Changes Energy Policy


By Guest Column Dr. Benny Peiser——--March 13, 2014

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EU politicians on Wednesday voted for tougher rules on exposing the environmental impact of oil and conventional gas exploration, while excluding shale gas. Member states such as Britain and Poland are pushing hard for the development of shale gas, seen as one way to lessen dependence on Russian gas, as well as to lower energy costs as it has in the United States. Green politicians, however, said the decision to leave out shale gas was a major setback. --Barbara Lewis, Reuters, 12 March 2014
The European Union has slammed the brakes on two big Russian pipeline projects to supply more natural gas to Europe, as part of its efforts to turn up the heat on Moscow over its incursion into Crimea. The move will deal a blow to Russia's ambitions of increasing its gas exports and bypassing Ukraine as a transit country. "I'm not accelerating our talks regarding pipelines such as South Stream. They will be delayed," Günther Oettinger, EU energy commissioner, told Germany's Die Welt newspaper this week. Mr. Oettinger also said that the EU should reach out to other gas exporters and build more terminals for liquefied natural gas, and that countries should also start exploratory work on shale gas. --Vanessa Mock, The Wall Street Journal, 13 March 2014 The Polish government on Tuesday decided to make it tax-free to extract shale gas at home through 2020, as the EU member strives to ensure energy independence from Russia. The nation of 38 million people hopes to exploit its shale gas reserves out of concern for its energy security, as it currently leans heavily on Russia for its natural gas — a topic of renewed concern given the Ukraine crisis. --AFP, 12 March 2014

The cradle of the Russian-Ukrainian conflict will not be the Ukrainian pipeline system, but the Crimean Peninsula. Russian control over the Crimean Peninsula – beside the fact that it would solve the ethnic problem and the question of the fleet – would create a brand new situation regarding the oil and gas market, because the stakes are high: if Crimea falls under Russian authority, Russia will be able to greatly expand its borders in the Black Sea, among others, to the three enormous oil and gas field that can be found next to Crimea. The Ukrainian leadership knows well the importance of these territories, as beside the unconventional terrestrial utilization of natural gas, the Black Sea locations form one of the keystones of their energy strategy. So Kiev will fight for the Crimean Peninsula tooth and nail, not only because of its sovereignty, but because of its hydrocarbon treasures as well. --András Jenei, - Natural Gas Europe, 12 March 2014 Markus Beyrer, the secretary general of BusinessEurope, is calling on EU leaders and stakeholders to be “less emotional” about the exploration and extraction of shale gas in Europe to ensure the continent’s energy independence. “We think that we have to balance climate policy but also cost competitiveness and security of supply. And of course recently the issue of security of supply has been added an extra element of external dependence,” he told EurActiv in an interview referring to the growing conflict between Moscow and Kyiv. --EurActiv, 13 March 2014 The strategy might be called strangulation by regulation. It has proved remarkably effective in the United States. By making regulatory barriers and the permitting process insurmountable, environmental organisations have been able to stop most fracking on lands controlled by the U.S. government. Reading the UK fracking report, the sceptical reader might wonder whether the sponsoring organisations want to ensure something similar occurs in Britain. Fracking would be allowed in theory, but not in practice. Stopping fracking in the United Kingdom will not reduce fossil fuel production and climate change - it will simply shift the impact to parts of the world where regulations are weaker. --John Kemp, Reuters, 13 March 2014 China, which sits on the world’s largest shale reserves, may exceed its 2015 output goal, as a new project in the nation’s southwest and the promise of fresh investment leave government targets looking outdated. China’s annual shale gas production surged more than fivefold in 2013 to 200 million cubic meters a year, according to the Land and Resources Ministry. The country consumed 169 billion cubic meters of gas in 2013, with about one third coming from imports. --Aibing Guo, Bloomberg, 12 March 2014

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Guest Column——

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