Friday, August 24, 2007

Brrrr....

According to a report on this morning's edition of "Marketplace," Gazprom (the Russian energy corporation) is negotiating a deal with the Atlantic LNG Operation to ship Liquified Natural Gas (LNG) to a port in Trinidad. This outfit in turn ships a billion cubic feet of natural gas the United States everyday. This means, effectively, that we may very soon be building a virtual "pipeline" from Russia to your furnace. Vladamir Putin will be keeping you warm at night - a comforting thought, I'm sure. After all, President Bush has looked into his heart and assures us that he is a good man.

The report notes that, while this amount of LNG is a small percentage of the overall natural gas consumption in the U.S., the amount being shipped in the form of LNG imports "is set to grow." I like this little phrase very much - it contains multitudes, as Walt Whitman might say. Why, exactly, the amount of natural gas we will be importing "is set to grow" isn't explicitly stated, but it may have something to do with the fact that natural gas reservoirs in North America are rapidly depleting. We are seeing much effort being expended to arrange gas shipments in liquified form from other parts of the world too far away to be delivered by a physical pipeline. (This means that we're not expecting much NG from Canada or Mexico, either, since supplies are also in decline there. What's left in Canada is increasingly being used to process the tar sands, with the resulting consequence that the actual energy capture of the sands is fairly low, but the result is petroleum that can be processed into gas. In effect, we will be turning down our thermostats so that we can continue to drive our cars). We use natural gas to heat our homes and cook our foods, to dry our clothes and heat our water. Less obviously, but perhaps even more importantly, it is a major component of electricity generation as well as the main source of industrial agriculture's fertilizer and pesticides. It - and everything it produces - is going to get a lot more expensive and less secure in the very near future.

Thus, before long Russia may be supplying us with large quantities of natural gas. As some of you may recall, last winter Russia cut off natural gas supplies to the Ukraine (and, incidentally, western Europe) in a strong-arm effort to control its one-time satellite. As we begin down this road of dependence upon an increasingly assertive Russia (having already handed over much to the Saudis and Chinese), are we prepared to become a subject of its dictats? Will we choose instead to shiver in our houses during the winter? Be prepared for a whole new version of the Cold War. And get out your blankets, comrade.

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