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OIL AND GAS
Germany 'controlled' by Russia on gas, Trump says
by Daniel J. Graeber
Washington (UPI) Jul 11, 2018

Germany is within the Russian sphere of influence because of its support for a Gazprom pipeline and dependency on Russian gas, the U.S. president said.

U.S. President Donald Trump arrived Wednesday in Brussels to meet with NATO representatives. Seated across from NATO Secretary General Jens Stoltenberg, the president said U.S. commitments to European defense were undermined by Germany's ties to the Russian energy sector.

German energy company Wintershall is involved with Russian natural gas company Gazprom's push to double the Nord Stream pipeline running through the Baltic Sea to Germany. The Kremlin contends the pipeline supports European security because it avoids security risks in Ukraine, through which several Soviet-era gas pipelines stretch. Some European leaders, however, worry Nord Stream would strengthen Russian influence in the energy sector.

Trump said "Germany is totally controlled by Russia," because of those ties. "And you tell me if that's appropriate, because I think it's not."

Stoltenberg acknowledged that Nord Stream was a source of disagreement with Germany.

"But the strength of NATO is that despite these differences, we have always been able to unite around our core task, to protect and defend each other, because we understand that we are stronger together than apart," he said.

A spokesperson for Wintershall said in response to emailed questions the company doesn't comment on political statements. The company's chief executive officer, Mario Mehran, told UPI last year that Europe shouldn't get caught in the geopolitical issues of energy.

"The framework conditions for the energy cooperation between Russia and Europe are determined by the European countries themselves -- and not by third-party countries," he said in August 2017.

Some voices in the European energy sector contend U.S. pressure on Germany and Russia is a veiled way to advance liquefied natural gas into the region. Some countries like Poland, which has few resources of its own, have already received LNG from the United States.

Pointing to conflict between Russia and Georgia a decade ago, which threatened the 1,099-mile Baku-Tbilisi-Ceyhan oil pipeline, Healy Baumgardner, a global fossil fuel adviser and the former press secretary for the Energy Department under President George W. Bush, told UPI it's naïve to try to decouple energy from political issues.

"Facts are, energy is a key component of national security -- would you rather rely on Russia or the United States?" she said. "This narrative has much deeper context because whoever controls energy distribution in Eurasia has the control and this has always been the contest between the United States and Russia."

Why is Trump targeting a new pipeline to Germany?
Brussels (AFP) July 11, 2018 - US President Donald Trump's opening salvo at the NATO summit against Germany over its dependence on Russian gas may fuel Europe's own splits about a new and controversial pipeline called Nord Stream II.

Trump took aim at the project which is set to run from Russia to Germany under the Baltic Sea, where preparatory work for its construction began off the German and Finnish coasts in May.

Owned by a company based in Switzerland and controlled by Russia's Gazprom monopoly, it will follow the same route as Nord Stream I, launched in 2011, which brings gas from Russia to Germany.

It is due to be completed late next year.

AFP explains the geopolitics, the political divisions and the mechanics of the pipeline in five questions:

- What's the logic behind it? -

To justify the project, the Nord Stream II company predicts the European Union will need to an extra 120 billion cubic metres of gas over the next 20 years.

With Norway and North Africa unable to boost supplies, analysts believe Gazprom will have to step in, along with liquefied natural gas (LNG) suppliers.

EU gas imports come mainly from Russia, which accounts for 41 percent of them, then Norway at 35 percent, North Africa at 12 percent and LNG suppliers at 12 percent.

Qatar is the main LNG supplier to the EU, while the share of US LNG has fallen from six percent in the first quarter a year ago to one percent this year.

- Why is Europe divided? -

The pipeline has caused splits within the EU, with Poland and other eastern states fearing it could be used as a tool to boost Russian influence over the bloc.

Nord Stream II "is an example of European countries supplying funds to Russia, which can be used against the security of Poland," Polish Foreign Minister Jacek Czaputowicz said on Wednesday.

The pipeline has been approved by Russia and three other countries whose territorial waters are being used to lay the pipeline: Sweden, Finland and Germany.

But the approval process is pending in Denmark, the fourth EU country where the pipeline will be routed through.

- What about Ukraine? -

The Baltic route allows Germany and other European countries to avoid gas piped through a vulnerable Ukraine, where pro-Russian separatists are fighting the pro-EU government in Kiev.

Russia has shut off gas supplies to Ukraine in the past, having knock-on effects in the European Union.

Transit of Russian gas through Ukraine has declined since the Nord Stream I pipeline opened in 2011.

In the first quarter of 2018, it became the main route for Russian gas to Europe, accounting for 36 percent of the total compared to 34 percent via Ukraine, EU officials said.

- Does it affect US business interests? -

Yes. Trump has backed a push by US gas suppliers to find new markets and an increase in cheap Russian gas supplies to Europe would reduce their export opportunities.

Until now US exporters have targeted markets in south America and Asia, including China, where prices are firmer.

- What's the link to NATO? -

In slamming Germany for its deal to double imports of Russian gas through Nord Stream II, Trump charged Berlin was spending billions of euros for its energy needs from Russia that it could be spending on NATO's defence.

Unlike past US administrations, Trump links Washington's commitment to collective transatlantic defence to his demand that the 28 allies pay more.

Expanding his line of attack Trump took his complaints beyond NATO member country defence budgets to an economic project that has already divided Europeans.

Analysts see the tycoon-turned-president as embracing a transactional approach to international politics rather than a strategic one against a newly assertive Russia.

The previous Barack Obama administration nonetheless pointed out the disconnect from a Germany that could sign on to EU-US sanctions against Russia over Ukraine and pursue energy deals with Moscow.


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