Saturday, May 12, 2012

Natural Gas, the US and Russia:
Gazprom supplied 27 percent of Europe’s natural gas in 2011. While American gas is trading below $2 per MMBTU (million British thermal units), Gazprom’s prices are tied to crude oil markets, and its long-term contracts charge customers roughly $13 per MMBTU, says the FT. European customers would love to reduce their dependence on Gazprom and start to import American gas. Already Gazprom has had to make concessions to its three biggest customers, and others are increasingly dissatisfied with their contracts.
It is important to note that shipping liquid natural gas overseas is dangerous and complicated, and the US doesn't have much infrastructure to do so, so that price delta isn't straightforward. But, Russia has spent most of the past decade holding Eastern Europe hostage with gas, so this is more of a direct affront to their power projection than any anti-missile plans that NATO may harbor.
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