[Salon] Putin’s second front

[Chas Freeman <cwfresidence@gmail.com>]

https://www.bloomberg.com/news/newsletters/2022-07-05/gas-becomes-a-second-front-in-putin-s-war

Energy shortfalls were always part of the equation in the response to Russia’s invasion of Ukraine. But few were prepared for gas becoming a second front in President Vladimir Putin’s wider conflict with the US and its allies.

In less than five months of war, Moscow has retaliated against successive waves of international sanctions by tightening its supplies of natural gas to Europe. That’s contributed to a spike in prices, stoking inflation that’s hitting consumers and governments from the UK to Bulgaria.

Key reading

• Natural Gas Soars 700%, Becoming Driving Force in New Cold War
• Putin’s War Throws Crucial EU Vote on ‘Green’ Gas Into Doubt
• Global Gas Demand Growth Forecast to Falter for Years, IEA Says
• Germany’s Uniper in Bailout Talks to Plug $9.4 Billion Hole
• Putin Swoop on Gas Plant Risks Forcing Foreign Partners Out
• European Gas Rally Shows No Signs of Easing on Supply Concerns

It’s also triggered a free-for-all as Europe competes on the global stage to secure alternatives to Russian gas. With no time to build pipelines, countries from the Americas to the Middle East and Africa are being courted for shipments of liquefied natural gas.

But there isn’t enough to go around. The result is that gas now rivals oil as the driver of geopolitics.

Plans to tackle climate change are falling victim as a result, even as a record drought in Italy highlights the costs of inaction.

A tighter squeeze is still to come.

At the outbreak of the war, Germany put on ice the Nord Stream 2 pipeline that was due to start gas flows from Russia. Now, the first Nord Stream is about to undergo maintenance and Berlin is warning that Moscow may not bring it back online, risking the collapse of industries as Putin blackmails Europe’s largest economy.

Chancellor Olaf Scholz’s government, already in talks with gas giant Uniper over a possible bailout of as much as 9 billion euros, is preparing legislation that would enable the state to take stakes in further struggling energy companies.

Ukraine is suffering the frontal assault in this war. The rest of Europe, in aligning with Kyiv against Moscow, is straining with the repercussions too. — Alan Crawford 

Storage tanks at the Leuna refinery and chemical industrial complex in Germany, on June 7. Photographer: Krisztian Bocsi/Bloomberg