Could Russia Spark a War Over U.S. Shale?
It doesn't take a fortune teller to see where this could lead. Mid-East oil used to spark and shape conflicts, could U.S. shale and it's LNG export industry to Europe be the new spark?
The bill, scheduled for a Tuesday House vote, will prohibit US companies from investing in Arctic, deepwater and shale crude oil projects in which Russian firms have a 33% or more ownership or control stake. That new 33% threshold was set after US oil and gas companies said language in the Senate bill could lead to Russian companies buying minimal stakes in certain energy projects and forcing US firms to relinquish their shares.
Joe McMonigle, an oil analyst for Hedgeye and a former US Department of Energy chief of staff under President George W. Bush, said US oil companies will likely find the fix to be "acceptable."
A US oil industry lobbyist told S&P Global Platts Saturday that the new, House bill is "a lot" better for US producers than the earlier Senate version and said only a few projects outside of Russia will likely be impacted.
Still, the lobbyist said, the new 33% threshold could potentially impact future negotiations in projects offshore Brazil, Mexico and Mozambique and could compel Russian companies to increase their share in other projects throughout the globe in order to block US firms' entry.
The bill states that US lawmakers "continue to oppose the Nord Stream 2 pipeline given its detrimental impacts on the European Union's energy security, gas market development in Central and Eastern Europe, and energy reforms in Ukraine."
It adds that the US government should "prioritize the export of United States energy resources in order to create American jobs, help United States allies and partners, and strengthen United States foreign policy."
European leaders, notably Germany's Angela Merkel, have criticized these provisions.https://www.platts.com/latest-news/oil/washington/us-congress-poise...
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“If the United States is to counter the global influence of Russia, Iran, China and other hostile nations, we will need to find peaceful ways to advance our interests while undermining theirs,” he wrote on the website of Washington-based Morning Consult company.
Marks singled out natural gas as “a great tool to use for this purpose,” keeping in mind that Russia is the No. 2 producer of the fuel in the world, followed by Iran, and China as No. 6.
Global demand is rising across the world for natural gas which is viewed the big fuel of the next two decades. Gas consumption is on track to hit almost 4,000 billion cubic meters by 2022 and China is projected to account for almost 40 percent of growth.
US advances in directional drilling and hydraulic fracturing has made the United States the world’s No. 1 producer of natural gas. America’s ability to extract energy from vast shale formations has put the country on the brink of being a global energy powerhouse.
President Donald Trump's refusal earlier this month to sign up to the communique pledging to implement the Paris climate accord has added new momentum to America's fracking activities. The Energy Department said on Monday that US shale production was set to rise for the eighth consecutive month in August.
“First, as we produce more of our own gas, we reduce our dependence on foreign sources of energy. Second, as our production grows, so does our ability to advance our interests abroad through exports,” Marks wrote.
“This provides America unprecedented global flexibility, to engage internationally at a time and place of our choosing,” he added.
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