Russia Invades Ukraine 2022

[nett]

I know the Russian invasion is kind of old news, but hopefully someone still cares.

I'm confused about this European natural gas business. Russia is absolutely up to shenanigans with Nord Stream 1, Gazprom is obviously milking it with the "leaks" and "repairs" that they are using to justify their lack of supply to Europe.

But European leaders are losing their minds over this, and I don't understand how they (or the media) can even take themselves seriously. Europe has mandatory sanctions against Russia, why would they expect Russia to keep supplying them with gas? Unless I'm missing something obvious, it feels like this just another example of a post-truth world.

Of course Russia is limiting their gas supply, Europe is sanctioning Russia.

Also, why can't Europe spin up NordStream 2?

[Ken]

I know the Russian invasion is kind of old news, but hopefully someone still cares.

I'm confused about this European natural gas business. Russia is absolutely up to shenanigans with Nord Stream 1, Gazprom is obviously milking it with the "leaks" and "repairs" that they are using to justify their lack of supply to Europe.

But European leaders are losing their minds over this, and I don't understand how they (or the media) can even take themselves seriously. Europe has mandatory sanctions against Russia, why would they expect Russia to keep supplying them with gas? Unless I'm missing something obvious, it feels like this just another example of a post-truth world.

Of course Russia is limiting their gas supply, Europe is sanctioning Russia.

Also, why can't Europe spin up NordStream 2?

The war is presumably temporary or short-term while global energy markets are more permanent or long-term. I expect that Russia is facing competing and conflicting short and long term objectives with respect to energy markets. In the short term they are trying to fight back against temporary sanctions through manipulating the energy markets and supplies, while trying not to destroy their long-term future energy markets in western Europe.

In the short term it seems likely that Russia is doing what it can to fracture the western alliance against it which is largely NATO and the EU countries. Germany has been the most wishy-washy of the EU and NATO countries in terms of sanctions and supporting Ukraine. Nordstream is the main pipeline supplying Germany. The other pipelines run further south to more southern European countries. By messing around with Nordstream the Russians are focusing the economic pain primarily on Germany. So perhaps it is an attempt by Russia to use economic leverage to split the Germans off from the alliance against them or at least weaken it. Basically they are concentrating their economic attacks where the alliance seems weakest. I expect that Russia needs the cash and has nowhere else to sell the gas that would otherwise go into the Nordstream pipelines. So they are probably jerking Germany around to make a political point but will re-open the pipeline before cold weather comes and gas use increases. It is not in Russia's long-term interest to permanently close the Nordstream pipelines.

For the long term the calculation is going to be different. Presumably Russia views the war as a temporary crisis that will end before too long, perhaps in a matter of months. Whereas global energy markets move in decades-long trends and don't reverse course easily. If Russia cuts off Europe from gas and oil and forces Europe to invest in alternative energy sources and supplies that will have a MUCH longer term impact on the economy of both Europe and Russia than a war that might not last another year. For example, if Europe invests hundreds of billions of dollars into LNG terminals and renewable resources like wind and solar to avoid Russian gas they aren't going to just throw all that away once the war is over. So I'm guessing Russia is looking long-term and wants to stall those sorts of changes as much as possible. They can only go so far before Europe shifts entirely away from Russia and to other sources of energy on a permanent basis. Which would be a disaster for Russia long-term.

[Josh]

Ken,

Electric prices in the UK/Ireland are up 250% to 400%.

Gas costs in Germany are up as high as 10X. This is a win for Russia and a major loss for Europe. Nobody* can afford to heat their home or keep their business open with energy costs going up 2.5X to 10X.

*for the literalists here, by “nobody” I mean “most reasonable people”, obviously a few billionaires can afford this.

[Ken]

Ken,

Electric prices in the UK/Ireland are up 250% to 400%.

Gas costs in Germany are up as high as 10X. This is a win for Russia and a major loss for Europe. Nobody* can afford to heat their home or keep their business open with energy costs going up 2.5X to 10X.

*for the literalists here, by “nobody” I mean “most reasonable people”, obviously a few billionaires can afford this.

Yes, but that doesn't negate the fact that Russia has conflicting short and long term objectives. In the short term they want to break up or undermine the sanctions regime. It has to do with a LOT more than just oil and gas. In the long term they want to maintain their energy markets in central and western Europe. So if they squeeze too hard they may permanently shift the energy economy in Europe away from Russian sources.

On a collective basis, western Europe is immensely wealthy. Many times more wealthy than Russia. They can afford to transition to other sources of energy or subsidize their energy markets for a year or two. The question is whether they will have the political will to do so.

[nett]

I know the Russian invasion is kind of old news, but hopefully someone still cares.

I'm confused about this European natural gas business. Russia is absolutely up to shenanigans with Nord Stream 1, Gazprom is obviously milking it with the "leaks" and "repairs" that they are using to justify their lack of supply to Europe.

But European leaders are losing their minds over this, and I don't understand how they (or the media) can even take themselves seriously. Europe has mandatory sanctions against Russia, why would they expect Russia to keep supplying them with gas? Unless I'm missing something obvious, it feels like this just another example of a post-truth world.

Of course Russia is limiting their gas supply, Europe is sanctioning Russia.

Also, why can't Europe spin up NordStream 2?

The war is presumably temporary or short-term while global energy markets are more permanent or long-term. I expect that Russia is facing competing and conflicting short and long term objectives with respect to energy markets. In the short term they are trying to fight back against temporary sanctions through manipulating the energy markets and supplies, while trying not to destroy their long-term future energy markets in western Europe.

In the short term it seems likely that Russia is doing what it can to fracture the western alliance against it which is largely NATO and the EU countries. Germany has been the most wishy-washy of the EU and NATO countries in terms of sanctions and supporting Ukraine. Nordstream is the main pipeline supplying Germany. The other pipelines run further south to more southern European countries. By messing around with Nordstream the Russians are focusing the economic pain primarily on Germany. So perhaps it is an attempt by Russia to use economic leverage to split the Germans off from the alliance against them or at least weaken it. Basically they are concentrating their economic attacks where the alliance seems weakest. I expect that Russia needs the cash and has nowhere else to sell the gas that would otherwise go into the Nordstream pipelines. So they are probably jerking Germany around to make a political point but will re-open the pipeline before cold weather comes and gas use increases. It is not in Russia's long-term interest to permanently close the Nordstream pipelines.

For the long term the calculation is going to be different. Presumably Russia views the war as a temporary crisis that will end before too long, perhaps in a matter of months. Whereas global energy markets move in decades-long trends and don't reverse course easily. If Russia cuts off Europe from gas and oil and forces Europe to invest in alternative energy sources and supplies that will have a MUCH longer term impact on the economy of both Europe and Russia than a war that might not last another year. For example, if Europe invests hundreds of billions of dollars into LNG terminals and renewable resources like wind and solar to avoid Russian gas they aren't going to just throw all that away once the war is over. So I'm guessing Russia is looking long-term and wants to stall those sorts of changes as much as possible. They can only go so far before Europe shifts entirely away from Russia and to other sources of energy on a permanent basis. Which would be a disaster for Russia long-term.

I am doubtful that Europe can actually manufacture enough renewable energy generation with the current energy crisis, That's more speculative though.

I still don't understand how the European leaders can be saying the things they're saying about Russia. How can you condemn a country that you are sanctioning, for doing the same thing back?

[Josh]

Yes, but that doesn't negate the fact that Russia has conflicting short and long term objectives. In the short term they want to break up or undermine the sanctions regime. It has to do with a LOT more than just oil and gas. In the long term they want to maintain their energy markets in central and western Europe. So if they squeeze too hard they may permanently shift the energy economy in Europe away from Russian sources.

The only other sources available to them are domestic coal, nuclear power, or imported oil.

On a collective basis, western Europe is immensely wealthy. Many times more wealthy than Russia. They can afford to transition to other sources of energy or subsidize their energy markets for a year or two. The question is whether they will have the political will to do so.

... subsidise energy markets? So you think it would make sense for Ireland to subsidise €10,000/month electric bills (the profits from which are mostly going to Russia) for a single coffee shop?

[Ken]

Yes, but that doesn't negate the fact that Russia has conflicting short and long term objectives. In the short term they want to break up or undermine the sanctions regime. It has to do with a LOT more than just oil and gas. In the long term they want to maintain their energy markets in central and western Europe. So if they squeeze too hard they may permanently shift the energy economy in Europe away from Russian sources.

The only other sources available to them are domestic coal, nuclear power, or imported oil.

On a collective basis, western Europe is immensely wealthy. Many times more wealthy than Russia. They can afford to transition to other sources of energy or subsidize their energy markets for a year or two. The question is whether they will have the political will to do so.

... subsidise energy markets? So you think it would make sense for Ireland to subsidise €10,000/month electric bills (the profits from which are mostly going to Russia) for a single coffee shop?

Not true. Europe already has 28 large-scale LNG terminals and they are building new ones as fast as possible in all the major ports to accommodate increased natural gas imports from North America and the middle east. And over the longer term this war will likely accelerate investment in renewables tenfold.

If Russia wants to maintain its energy-dependent economy long-term it would be well advised to bring this war to an end before Western Europe permanently shifts its energy economy away from Russia.

[ohio jones]

Yes, but that doesn't negate the fact that Russia has conflicting short and long term objectives. In the short term they want to break up or undermine the sanctions regime. It has to do with a LOT more than just oil and gas. In the long term they want to maintain their energy markets in central and western Europe. So if they squeeze too hard they may permanently shift the energy economy in Europe away from Russian sources.

The only other sources available to them are domestic coal, nuclear power, or imported oil

Not to mention wind, solar, geothermal, hydro, and hamsters.

[Josh]

Not true. Europe already has 28 large-scale LNG terminals and they are building new ones as fast as possible in all the major ports to accommodate increased natural gas imports from North America and the middle east.

... are you saying that the U.S. has enough energy to be a net energy exporter?

And over the longer term this war will likely accelerate investment in renewables tenfold.

Renewables don't make economic sense and don't work. If they did, they would have been built already.

If Russia wants to maintain its energy-dependent economy long-term it would be well advised to bring this war to an end before Western Europe permanently shifts its energy economy away from Russia.

Western Europe doesn't have a choice. They either start digging up coal, they import oil from places like Saudi Arabia, or they cooperate with Russia.

Or, I suppose, they could go back to the Stone Age.

[temporal1]

UN ‘laughed’ at Donald Trump when he was ‘100 per cent correct’ / first 3+min are about “renewable inadequacy”