Russia, Iran, and the Shale Gas Revolution

Rising U.S. natural gas production from shale formations has already played a critical role in weakening Russia’s ability to wield an “energy weapon” over its European customers, and this trend will accelerate in the coming decades, according to a new Baker Institute study, “Shale Gas and U.S. National Security.” The study, funded by the U.S. Department of Energy, projects that Russia’s natural gas market share in Western Europe will decline to as little as 13 percent by 2040, down from 27 percent in 2009.

“The geopolitical repercussions of expanding U.S. shale gas production are going to be enormous,” said Amy Myers Jaffe, the Wallace S. Wilson Fellow for Energy Studies and one of the authors of the study. “By increasing alternative supplies to Europe in the form of liquefied natural gas (LNG) displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply.”

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Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.

Combat the long-term potential monopoly power of a “gas OPEC.”

Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.

Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations

The best laid plans of mice and Putin. Russia seeks to corner the market on energy, sort of like a Parker Brothers tycoon. That was the reason for the Georgian war a couple of years ago; Europe and the United States were trying to bypass Russia and the Bear’s lickspittle lackey without a razor - Iran - by running the South Caucasus Pipeline aka the Baku-Tbilisi-Erzurum Pipeline From Azerbaijan through Georgia, our ally. (The Baku-Tbilisi-Ceyhan pipeline is it’s sister, running oil.) Russia wants to be the only porthole for oil and gas to Europe, and seeks to hold the West hostage to a fuel stoppage. That is why their first target in Georgia was the pipeline.

If, say, Poland can produce natural gas…

Soon they will be able to do so.
Control of energy is power. Energy usage is a measure of wealth

Control of energy is power. Energy usage is a measure of wealth (which is why the Left is so desperate to impose Cap-and-Trade and other energy restrictions on the West; they think we live too well and are too powerful) and the power to cut, well, the power makes the holder of the switch untouchable. Russia and Iran have allied to squeeze Europe. They want to be able to do what Russia did to Ukraine, turn off the heat in winter and force them to come crawling.

It is unclear what Russia would do if her plans of energy dominance should fail. It would certainly hurt them economically; energy is the cornerstone of the Russian economy. Shale gas has already had a deleterious effect on the Russian economy. Would Russia consider some foreign adventure to squeeze her competitors? Would Medvedev and the Riddler (aka Vladimir Putin) perhaps aid Iran in some such action?

Russia invaded Georgia to maintain her monopoly; why do we think they would take this lying down?

(That would be Obama’s job!)

Now England has found huge reserves of shale gas.

First Poland and now England. The Russians will not be pleased.

This is no idle concern; Russia has traditionally used foreign aggression to cover up a bad economy, and the Russian economy is set to tank if her energy market dries up. The Middle East is a prime spot to become active, and this could touch off another world war.

Discovery of new energy sources is good - very good - but there are many vested interests who will not be happy about a worldwide drop in price. Obama certainly wouldn’t be; remember his statement that he wished the gas prices would have risen more slowly back before he was elected?

And nations like Russia, Iran, Saudi Arabia, etc. won’t be pleased to lose value on energy in general. More gas means less oil is needed in the long run. The plans so carefully laid out to dominate the energy markets are ruined, and something must be done about it. Ditto the U.N.‘s careful plans to brown-out the West and establish a worldwide socialist utopia.

So what would Putin do?

The Russians are planning to build another nuclear reactor for the Iranians. According to Pravda:

“Russia will continue cooperation with Iran in the nuclear field. Sergei Ryabkov, Deputy Foreign Minister of the Russian Federation, said that Russia may participate in the construction of another nuclear power plant in the country.”
Iran and Russian nuclear plants: Blackmailing Europe and America

Why build another plant? A military strike would be terribly difficult if the Iranians have another reactor, and the Russians know this. They are doing this to blackmail Europe and America. They know they must do something soon or their energy hegemony will evaporate, with huge reserves of natural gas being found in Poland and England, and threatening to aid Iran to further their atomic ambitions may force agreements with Europe to choke the development of those gas fields in utero.

This is power diplomacy at the point of a bayonet - a nuclear tipped bayonet.

And what will happen should the Israelis strike the Iranian nuclear facilities? Will Russia respond with military action?

The Russians will not go down quietly, and neither will Iran. Both of these nations have used the revenues generated by fossil fuels to build either more fossil-fuel capabilities or to upgrade their militaries. What they haven’t done is build their nations with this windfall. This guarantees an economic downturn of likely a severe nature in the future.

“Drill here, drill now!” led George W. Bush to open offshore drilling closed by his father when prices spiked up over four dollars a gallon for gasoline, and the result was an almost immediate drop in oil prices as the oil market feared a new competitor coming online. This triggered a crisis in the Russian economy as oil revenues dropped off and the tax base shrank. It is what spurred the Russian invasion of Georgia, and subsequently forced Russia to pull out, as I chronicled at Pajamas Media.

Russia and Iran have a strategic partnership, and it is with Russian assistance that Iran has been developing nuclear weapons and the systems to deliver them. They are truly part of an axis of evil; Russia helps Iran and Iran promotes terrorism throughout the world. Cut off their funds and all that mischief stops.

But it could drive a desperate gambit. Therein lies the danger.

Source: Canada Free Press