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Keystone XL and Nord Stream 2 Pipelines

by Dave

It’s deja vu all over again. Yogi Berra, I say this because these were election issues in the past 4 elections. It also was an attempt to steer the debate away from Harris, to criticize Biden’s decisions.

Nord Stream 2

The Harris-Trump debate consisted of some very old recycled falsehoods from Trump, more than 2 years old. Here it is:

“Why does Biden go in and kill the Keystone pipeline and approve the single biggest deal that Russia’s ever made, Nord Stream 2?” Trump said Tuesday night. Harris finally came back with the great one liner, “Well I am not Joe Biden, and I am certainly not Donald Trump.”

I call it the double whammy, because it calls for Harris to defend Biden’s supposed “approval” of Nord Stream 2. There was no approval, because it was Germany’s decision. For now, it isn’t even an issue. No gas is flowing from Russia to Germany. The pipelines were sabotaged in September 2022 and repair is unlikely because Germany will not allow the pipeline to go in service.

Nord Stream 2 is an underwater natural gas pipeline connecting Russia and Germany, which was first planned in 2015. It is 767 miles long. Because the pipeline exports Russian gas to Germany, they must approve the project. The US can make it more difficult to construct the pipeline by sanctioning the companies involved in the construction. But approval or disapproval are not options.

Biden’s approval of Nord Stream 2 is a recycled lie. Trump’s February 2022 speech at the CPAP conference is just one long series of lies, exaggerations and deceptive statements. Of course this is a conservative Republican event that is very eager to embrace his false statements because they sound good. See link at bottom.

“It’s a good thing to get along with people not a bad thing. You can be very tough and get along. You know, I’m the one that ended [Putin’s] pipeline. He said, ‘You’re killing me with the pipeline.’ Nobody else ended his pipeline. Biden came in, he approved it.”

Sorry, This is a baseless lie. It only highlights Trump’s creativity in telling lies with Vladimir Putin, down on his knees to Trump, begging him to approve the pipeline. US sanctions may have slowed construction but they did not stop it. Per Wikipedia: “In December 2020 [while Trump was still President] , the Russian pipelaying ship Akademik Cherskiy continued pipe-laying… The laying of the second line was completed in September 2021.

In May 2021, Biden allowed soften the sanctions. At the time, Germany was very upset with the US sanctions against companies involved in the construction of the pipeline as they saw it as an interference in their foreign policy. Biden attempted to re-direct the sanctions more specifically at Russia’s economy as it became clear that the Nord Stream 2 project was going to be completed no matter what the US wanted.

Biden was looking for some leverage to negotiate with Putin. The real threat was a Russian invasion of Ukraine not Russian gas flowing to Germany. Biden was attempting to solidify European unity to counter Russia’s hostile and aggressive policies. The Ukrainian invasion occurred because of Putin’s underestimation of Ukraine’s willingness to fight, and the US and European support for an independent Ukraine.

Germany will not permit the pipeline be put in service as long as Russia occupies Ukraine. Germany never granted Russia a certification of completion for the Nord Stream pipeline.

Links:

Wikipedia: https://en.wikipedia.org/wiki/Nord_Stream_2

Fact Checking the CPAP Feb 2022 Speech

5 energy fact checks on Trump and Harris

XL Keystone Pipeline

The claim by Trump during the debate that Biden terminated the Keystone XL project is correct. He did so on his first day in office, based on environmental concerns. His agenda to rejoin the International Paris Accords and gain further cooperation for reduced CO2 emission would be inconsistent with supporting import of heavy oil from Canada. Per Wikipedia: “As of 2024, oilsands account for 8% of the total of Canadian emissions. Emissions from the oilsands continue to increase, while most other sources are decreasing.

The Keystone pipeline saga is a long one. There are multiple pipeline construction phases. The one that Biden cancelled was the fourth phase called the Keystone XL pipeline. The KXL pipeline would have shorten the route to Texas refineries. Trump tried to hasten the approval permitting process, but legal challenges in Montana succeeded in November 2018, with the judge ruling that the expediated approval violated the Administrative Procedure Act, the National Environmental Policy Act, and the Endangered Species Act.

It is true that the construction of the other phases of the Keystone project were easily approved during the Obama administration. The real issue was whether it was in the US interest to import the heavy crude (the nastiest oil, see NRDC link) which would have serious environmental and ecology impact.

Did Biden’s cancellation of the pipeline hurt the oilsands projects? Not really, as production from Canada’s oilsands continued to grow. There are still the longer route to bring Canadian oil to the US. Railcars can transport the heavy oil. And this is not good for climate change efforts. See links below.

The pipeline construction is 8% complete. TransCanada Corporation (now TC Energy, TRP stock symbol) disbanded efforts to continue the construction after Biden denied the export permit. The company is still doing well with a market cap of 42 billion dollars. The CBS article suggests that Canada production growth may flatten out in 2024, with competition from other sources.

Links:

CBS: Canada could lead the world in oil production growth in 2024

National Resource Defense Council: What Is the Keystone XL Pipeline? (NRDC supported lawsuits to end the Keystone XL pipeline.

Wikipedia: https://en.wikipedia.org/wiki/Keystone_Pipeline

(The long and controversial history of the Keystone XL pipeline stretches back to 2008 when Bush was president)

The German Experience transitioning to Green Energy

Immediately after the debate, Germany took exception to the following:

“You believe in things like, we’re not going to frack, we’re not going to take fossil fuel, we’re not going to do things that are going make this country strong, whether you like it or not,” Trump said Tuesday night, referring to Harris. “Germany tried that, and within one year, they were back to building normal energy plants.”

Their response: “Like it or not: Germany’s energy system is fully operational, with more than 50% renewables,” the ministry wrote. “And we are shutting down — not building — coal & nuclear plants. Coal will be off the grid by 2038 at the latest.”

Link: https://www.washingtonpost.com/world/2024/09/11/trump-germany-energy-fossil-fuels/

Harris stated that she supported fracking. The side comment on Germany was just thrown into the mix for effect. They also watch our debate.

Opening up and closing other potential areas for drilling by Biden

Energy policy will continue to be controversial and poorly understood by the electorate, regardless of who wins the 2024 election. Biden surprised climate activists when he approved the massive Willow project (massive in terms of investment required) in the petroleum reserve.

Link: https://www.nytimes.com/2023/03/12/climate/biden-willow-arctic-drilling-restrictions.html

The 2021 ANWR (Arctic National Wildlife Refuge) lease sale by Trump, after he lost the election in 2020, was a total disaster. The potential of ANWR is poorly defined, as no wells have been drilled inside the refuge. Chevron drilled an exploratory well just outside of the refuge in 1985. Results have never been disclosed.

Per Wikipedia:

Two small independent companies, Knik Arm Services LLC and Regenerate Alaska Inc, won one tract each. The auction generated $14.4 million, lower than the $1.8 billion estimate from the Congressional Budget Office in 2019, and the auction did not receive bids from any oil and gas companies.[53]

On June 1, 2021, Secretary of Interior Deb Haaland suspended all Trump-era oil and gas leases in the Arctic National Wildlife Refuge pending a review of how fossil fuel drilling would impact the remote landscape.[10] Indigenous and conservation groups urged Biden to make the suspension permanent. On September 6 2023, the Biden administration cancelled the leases.

The same article notes that Goldman Sachs and other investment banks stated they would not finance investments in ANWR. On September 6, 2023, the Biden administration cancelled the leases.

I doubt that the lease holders really lost because without a major oil company taking over the lease, there would be no exploratory drilling.

Summary

I have corrected the misrepresentations by Trump at the debate concerning the two pipelines, neither of which are operational. So, this is a matter of old and bitter political fights. Canada will produce their heavy oil to the chagrin of climate activists.

The supply of oil is likely to increase from new discoveries offshore Guyana, and from developments in Brazil, US (offshore developments plus fracking) and Canada. Gas prices could definitely go down, as supplies increase.

Our energy policy is too short term focused. Going forward in the long run, will mean transitioning from our dependence on fossil fuels, to renewable fuels, which includes solar and wind energy. We can’t keep building roads, and adding gasoline burning cars. Collaborating with other countries, like China and India, I hope, can lead to cutting global carbon emissions. Global problems require global solutions.

I don’t think there is any hope of a Trump administration addressing these future challenges. The hubris that comes from the MAGA folks, is competitive, and ignores the climate impact.

I am much more hopeful that a Kamala Harris would make real progress in green energy and more efficient use of our resources, for the long term future.

Stay tuned,

Dave

Prior comments on Nord Stream 2:

https://newsandviews.net/?s=Nord%20Stream%202

Hitting the “Nationalism” button too often

by Dave

It gets at times pretty scary.  What nationalism means, at least to Trump supporters, is we do what is in our interest.  Actually, the US foreign policy always has put the country’s interest at its top priority.  It’s really the short-sighted policy of Trump when our policy extends to telling  other countries  what to do or we will try to screw them over big time.   I have said about a 100 times, you can’t win a trade war or an arms race, because your enemies will retaliate, a guaranteed lose-lose outcome.  Trump’s nationalist policies have shut out international cooperation of other countries in helping solve problems.   China could have helped us with to denuclearize North Korea, but not any longer.  Most of the time, Trump’s threats are really hot air.   At the last minute, he’ll find a reason not to take immediate action, but still leave this lingering idea that other countries are doing really shameful things.   Sort of like, you’re bad and we’ll get even later.  Very dumb and kind of childish.    And he will always, always claim victory. Saber rattling, blaming others and just plain lying are sad ways to run foreign affairs.

Case in point is our Venezuela policy.  Obviously, Trump was quick to support opposition leader,  Juan Guaido on the wrong assumption that the military would throw their support behind him, Maduro would be history.   He attacked the “Biden-Obama” administration for not taking action against Maduro.   He did not mention that during the 11 years Hugo Chavez was in power, intent on destroying democratic and civil liberties, and establishing a corrupt system of governance,  George Bush could do little to prevent this.   Trump claimed his policies worked in Venezuela, as he pressured the Russians to pull out of Venezuela.   In March 2019, (about a million Trump tweets ago) Russia  responded saying this wasn’t true and they were going to honor their commitments made to Venezuela.    See link in below.

Venezuela is a great example of Russia, China and the US each doing what is in their national interest.  Russia and China have invested heavily in Venezuela, which underlies their support of Maduro.   The US would like to see Maduro gone and restoration of a stability in the country.  The  recent visit by UN Commissioner on Human Rights, Michelle Bachelet did not make headline news.  The Trump administration has cut off all funding for the UN Human Rights Council, calling it a leftist organization.  The ultra conservative National Security Adviser, John Bolton,  has really lead the way against using the UN to resolve crises.

“The destiny of more than 30 million Venezuelans resides in the will and the ability of its leaders to put the people’s human rights above any personal, political or ideological ambition,” Bachelet said… The UN human rights chief plans to set up an office in Venezuela to monitor the ongoing humanitarian crisis there. Michelle Bachelet said the dire situation must not be allowed to “deteriorate any further.”

There isn’t a quick solution to Venezuela.  Bachelet’s visit was definitely a step in the right direction.   It says to Maduro to stop lying to its people.

Perhaps, the next great example of misguided nationalism, comes from Trump’s threat to impose tariffs on imported Mexican goods.  Of course, it never happened.  Trump’s version of events is that he pressure Mexico to take action against illegals entering into Mexico by threatening tariffs.  What really happened, is that Mexico offered nothing new, and these “concessions” were made months earlier.   See links.

There are a number of great examples how this overblown nationalism theme has failed.  I’ll leave the Iran drone episode to another blog, and move on to our constant attacks on Germany.    In 2018, Trump took aim at Germany, for their cooperative agreement with Russia to build a second Baltic sea pipeline to supply Germany with natural gas.   Germany was, of course, acting in their national interest.  Trump understood that liquefied natural gas (LNG) from the US to the EU could decline once the pipeline is complete.   See my blog:  https://newsandviews.net/2018/08/08/pipeline-dollars-to-russia-are-not-acceptable/

Using natural gas to generate energy is better than using coal,   The EU  needs the Russian gas, is because the existing production from UK and  Norwegian gas fields have been declining for years.  So, Germany and other EU leaders  are doing what is their national interest, and at this point, I guess, will  just ignore Trump’s comments.

It’s fine for a politician to proclaim his love for his country.  But, any real progress in international affairs must be multi-national, and with this, some of our goals would be compromised.  I guess it’s comes down to a choice of achieving some progress with existing international institutions and agreements, or striking out alone, and coming up empty handed.

Stay tuned,

Dave

Links:

Russia scoffs at U.S. demand that it pull troops from Venezuela

US will stop funding UN Human Rights Council

As Trade War Spreads to Mexico,  Companies lose a safe harbor

Who won the Mexican Trade War of 2019

“Pipeline dollars to Russia are not acceptable!”

by Dave

Donald Trump tweeted this around the time of the NATO summit. The tweet was directed against Germany.  He said at the NATO leaders breakfast, “Germany, as far as I’m concerned, is captive to Russia, because it’s getting so much of its energy from Russia.” Wow!  Angela Merkel  knows well Soviet oppression as she lived in East Germany under Soviet control.  It was also pretty weird given the circumstances.  Most US presidents would try to get solidarity with EU countries at a NATO summit before sitting down with Putin.     Trump went to Russia, where the theme seemed to be that Obama had screwed up relations with that country through a lot of foolish decisions, and now Trump was there to repair the damage.

The US could have a friendly relation with Russia, but not Germany.  Trump has said he is guided by what is in the best interest of the US.  So, why was Trump badgering Angela Merkel for acting in the best interest of her own country?

 

Nord Stream 2 Pipeline is due to be completed next year, to double the supply of natural gas from Russia.   The 1200 km route, under the Baltic sea is nearly the same as the first Nord Stream gas pipeline.   It will make Germany more dependent on Russia for power generation needs.  Trump has repeated attacked Germany as a “captive state of Russia.”

Trump’s speech at the July 2018 NATO Summit meeting was laced with numerous false statements, particularly about NATO budgets and spending,  as documented by politifact.com (see comments/ links below).  The speech was filled with self-serving statements of how much the US is doing to keep the alliance going and how little the other  countries are doing.  I’m certain member states felt let down by Trump.

NATO is an alliance of 29 countries, with the US and Canada the only non-European countries.  NATO began as an alliance between 10  Western European countries and the US and Canada in 1949.   Western Germany became a member in 1955.  There has been a great expansion of NATO in both 1999 and 2004 as Eastern European countries left the Warsaw Pact with Russia and joined NATO.    The Warsaw Pact, formed to counterbalance NATO was disbanded in 1991.

NATO is both a political and military alliance.   The Baltic states of Estonia, Lithuania and Latvia, sitting on Putin’s doorstep, are keenly aware of potential annexation of their countries, after Crimea was annexed.  Ukraine is not a NATO member, but has close EU ties.

Natural gas production depends on an available market.  Unless there are pipelines or liquefied natural gas (LNG) processing plants,  the gas fields may not be economical to produce. This is the frustrating reality of natural gas fields.   Obviously,  Russia has no control over German power plants and their future use of fossil fuels,  but will be a large supplier of fuel for their power plants  for decades for the following reasons :  (1) The North Sea gas supply is in decline, because the area has been extensively explored and developed in the past 40 years and   (2) Other fuels are more expensive.

A recent report from the Energy Information Agency (EIA) indicates why Trump doesn’t like Russian gas going to Germany.   For decades, all the natural gas produced in the US was either flared (a common practice with offshore wells) or used for the domestic markets.   The supply of gas wasn’t sufficient to meet the demand, so 3 to 4 trillion cubic feet were imported from Canada.  But we also exported 1 to 3 tcf.   Now gas exports are likely to be higher than imports.   The next 10 years are expected to expected to increase LNG  exports by 14 tcf/yr, while imports decline to 2 to 3 tcf.

 


 

France and Spain are likely the big recipients of LNG coming from the US.   The Asian countries, including Japan and India, will be the recipients of  LNG from Iran-Qatar shared South Pars/ North Dome field.   Total will likely pull out of the joint development of the South Pars field in response to Trump’s re-imposing sanctions on Iran.  There’s speculation that Russia or China will take over Total’s contract.    India’s economy will be hurt as there is insufficient LNG, at least temporarily.    India is likely to burn more coal to generate power, hence generate more greenhouse gases.

The long term forecast by the EIA is contingent on many factors.  LNG requires enormous investments.  Cheniere Energy (LNG) is one of the largest companies in this area, and it has been a bumpy ride for investors.   Cheniere is down about 20% in the last 5 years compared to the S+P performance of up 45%.

The trend of lower gas imports and higher exports began around 2009, and has continued through the 8 years of Obama’s presidency.   But expect Trump to claim credit should the exports exceeds imports during his presidency.

Natural gas as a fuel source generates greenhouse gases.  It is better than coal, but what really helps slow global warming, is increasing alternative non-fossil fuel sources and reducing energy demand.

It’s definitely a mess.  Attacking member countries of NATO, re-imposing sanctions on Iran, and starting a trade war with China, all in the last few months, does not bode well for the global economy.   What goes around, comes around.

Stay tuned,

Dave