Energy as a Weapon (II)

EU's "Energy Security"

These new moves favoring fracking are taking place in the run-up to the EU summit, which begins in Brussels later this week. The summit will also discuss ways the EU could reduce its "energy dependence." At present, 39 percent of the EU's gas imports originate in Russia. On May 28, the European Commission presented an "In-depth study of European Energy Security" as a basis for the current debate. The study proposes inter alia the diversification of energy supplies, enhanced energy saving measures, as well as the development of the internal energy infrastructure of the EU, to provide the possibility for operating the flow of the pipelines in both directions ("reverse flow"). This would allow countries, which had been mainly or even exclusively dependent on supplies from Russia, to receive supplies from western countries. (german-foreign-policy.com reported.[1]) The EU strategy paper also mentions "the increase of indigenous energy sources," explicitly shale gas, produced by the risky and highly controversial hydraulic fracturing. Current exploration efforts have been "hampered" not least of all by lack of public acceptance, notes the paper.[2]

Permission under Certain Conditions

Environmental organizations and citizens' initiatives in numerous countries are mobilizing against fracking - also in Germany. Nevertheless, energy companies have already begun exploring fracking possibilities in Germany. BASF subsidiary, Wintershall, for example, obtained a relevant concession in North Rhine-Westphalia. The German-Canadian "Central European Petroleum" claims to have discovered, through exploratory fracking, oil reserves of around five million tons in Mecklenburg-Western Pomerania. Its value is estimated at more three billion Euros.[3] The fracking lobby is thus intensifying its pressure. According to press reports, the German Minister of the Economy, Sigmar Gabriel (SPD), will permit hydraulic fracturing "under certain conditions" and is therefore preparing changes to "regulations concerning the assessment of environmental sustainability of mining projects," which will soon be presented to the Cabinet and the Bundestag. Already in March, Gabriel told the boulevard press that, even though he thinks that the "current techniques are too risky for human beings and the environment. But the companies are doing research on better technology." He announced, "we will need to examine the results."[4]

Support for Fracking Companies

The EU is allocating a triple-digit million sum for the relevant research. According to a report, these funds can be used within the framework of the "Horizon 2020" research fund, which the European Commission adopted in late 2013 and will remain accessible until 2020. A total of 113 million Euros have been made available for projects concerning fracking "repercussions and risks." The report notes that "the money will flow to gas companies, which otherwise would have to pay for the research themselves." The first 33 million Euros will still be allocated this year. Officially this program "was launched to promote 'competitive and low-carbon energy'." However, it will now benefit companies interested in fracking.[5]

Under Pricing Pressure

The fracking lobby considers the current situation very favorable for reaching its objectives, because the EU and the USA are reacting to the conflict with Russia by calling for a significant reduction in European dependence on Russian energy sources. Western foreign policy strategists see an opportunity to weaken or largely eliminate Russia's influence as a natural gas producer. This has to be seen in the context of the U.S. fracking boom, which has made the country the world's largest gas producer - even ahead of Russia. Russia had to stop the exploitation of the Shtokman field, for example, because the fracking boom and the increasing availability of liquefied natural gas (LNG) will, in the long run, bring down prices. The Shtokman field is one the largest gas fields in the world. But because of its location in the Arctic, its exploitation is very expensive and only worthwhile if the world market prices are high. Initially, it had been planned to supply the USA with a large portion of the Shtokman reserves.

Threatened with Loss of Power

If the EU could be supplied with more LNG and US shale gas, and if the EU could enhance its own supply through fracking, Russia could be "hard hit," according to the US magazine "Foreign Affairs". 50 percent of Russia's budget is derived from its sales of resources. A drop in prices and sales would force Russia to make painful budget reductions. "Russian President Vladimir Putin’s influence could diminish, creating new openings for his political opponents at home and making Moscow look weak abroad."[6] Russia's position in global politics would be seriously endangered.

Defamation Attempt

With this in mind, NATO circles have now openly began interfering in energy policy. Last week, outgoing NATO General Secretary Anders Fogh Rasmussen personally intervened to block resistance to fracking, claiming that environmental organizations are supported by Moscow in their struggle against hydraulic fracturing "to maintain European dependence on imported Russian gas."[7] Fracking opponents have become instruments of Russia's "sophisticated information and disinformation operation." Industrial circles confirmed that this accusation has been raised for some time. The organizations concerned, such as Greenpeace, which had been at odds with Moscow for quite some time, has reacted to this allegation with ridicule and mockery. However, this does demonstrate that the Western political establishment is not averse to slandering political opponents with insinuations that they are working as agents for its global political adversary. (german-foreign-policy.com reported.[8])

Business with Russia

Particularly those energy companies, seeking to engage or having long since been engaged in lucrative business deals with Russia, are interested in developing fracking in Europe. Among German companies, BASF subsidiary, Wintershall, holds an eminent position in hydraulic fracturing. Wintershall is exceptionally enmeshed with the Russian gas industry.[9] The US Exxon Mobile Corporation is also banking on fracking in Europe. But, aside from this, it has signed a deal with the Russian Rosneft oil company, involving "the drilling for crude in the Arctic and Siberia and liquefying natural gas for export."[10] The stigma of 'agents of Moscow' is also aimed at intimidating opponents of western elite projects in the case of fracking. This does not exclude the lucrative business deals the ruling circles have made with Russia.

[1] See Erdgas für den Fall der Fälle.
[2] European Commission: In-depth study of European Energy Security. Brussels, 16.06.2014. SWD(2014) 330 final/2.
[3] Claudia Ehrenstein: Fracking ist in Deutschland schon längst Alltag. www.welt.de 24.05.2014.
[4] So wird die Energiewende bezahlbar. www.bild.de 31.03.2014.
[5] Europa als Spielball der Fracking-Lobbyisten? www.euractiv.de 13.06.2014.
[6] Robert D. Blackwill, Meghan L. O'Sullivan: America's Energy Edge. The Geopolitical Consequences of the Shale Revolution. Foreign Affairs March/April 2014. See Energy as a Weapon.
[7] Steckt Russland hinter der Anti-Fracking-Bewegung? Frankfurter Allgemeine Zeitung 21.06.2014.
[8] See The Free World.
[9] See Russlands Erdgas-Botschafter and Global Policy Orientation.
[10] Putin's Energy Trumps U.S. Sanctions as Rosneft Extends Reach. www.businessweek.com 24.05.2014.