Americain gas bubble rushes to Europe
Donald Trump strives to make his country «the gas empire», and this commitment played a cruel joke with the US. America learned to extract «the freedom gas» almost from air which led to major companies declaring last week the oversupply of the so called blue fuel.
Currently mining companies suffer billions of dollars in losses because of low fuel pricing. In near future such situation may lead to bankruptcy. In the first quarter of the year gas prices in the US fell below four-year minimum – which is lower than 70$ per thousand cubic meters. This price formation leads to miners losing profits. Meanwhile industry cannot stop the gas overflow in the market. Moreover, export of liquefied natural gas (LNG) brings profits close to none since international market is full with resources.
These circumstances lead Donald Trump to strengthen the fight for European gas market with Russia being its most successful actor. Any tricks come in handy. The battle for Turkish stream for Trump is lost already, and «Nord stream – 2» (NS2) is on its way. The new stream will definitely alienate Trump from European gas market, but he will most certainly not surrender without a proper fight.
Obviously there is no place for fair competition for the US. As was mentioned, any tricks come in handy. Extortion of European partners takes common place as well as threatens and sanctions against Russia. Trump emphasizes the independency of Germany (and most of European countries) from Russian gas; he also mentions ambiguous political decisions coming from Kremlin with a soul purpose of tearing Europe apart.
Luckily Europe understands the cynicism. German newspaper Die Welt stated that Trump couldn’t care less about Germany or any other European country. The only thing that the US President has in mind is to find his way into the European gas market to make profits and reliefs for his domestic gas industry.
Die Wel noted that Russia has an advantage of instant LNG export via stream with no outside factors affecting this process. On the other hand, using tankers to transport LNG across the Atlantic is laborious and costly. That is the reason for noticeable difference in American and Russian gas prices in favor of the latter.
Increased supply of American gas to Europe will not lead to high profits for the US. Since the whole process is about the market leadership around the globe, there are efforts to maintain conflict using different approaches.
Currently American sanctions against «Nord stream – 2» project participants led to prolonged deadline of one more year. But luckily the understanding is there – the sole purpose for the sanctions from the US is to achieve unilateral advantages to the detriment of European interests in gas market. That is why Angela Merkel, the German chancellor, confirmed the NS2 project support and expressed dissatisfaction with Trumps politics. Europe is tired of threats and blackmail, that is why it will be a daunting task for Trump to break the Russian – German gas union.