The director of operations for Cheniere Energy Inc., stands for a picture. Cheniere Energy said it started producingliquefied natural gas for the first time on Wednesday. It plans to fill up the tank with 43 million gallons of super-chilled LNG that will be shipped to gas-hungry countries like China. Photographer: Eddie Seal.
In an ideal world, developed countries like the U.S. and Germany will continue to deploy renewable power and electric vehicles. Fossil fuel usage will decline. There is no need for a Keystone XL expansion. Germany does not need to rely on Russian gas.
Ordinary people suffer when reality collides with idealistic policies. In the previous article, I pointed out that the U.S. imports more than half a million barrels of oil per day from Russia. They are the 3rd largest supplier.
The on-again, off-again project would have had a capacity of up to 830,000 BPD. It would have moved more oil from Canada to the US than from Russia or Saudi Arabia.
In an ideal world, we wouldn't need Keystone. Without all of the delays that have gone on for years, it could have been completed by now. It could have been replacing oil from Russia.
Russia's revenue comes from its oil reserves. The world is dependent on Russian oil. The price of oil would go past the previous record set in 2008 if it were removed from the market today. If only part of Russia's oil was removed from the market, they would make more money selling smaller volumes of oil.
Over time, renewables and electric vehicles will help alleviate this dependence. In the real world, American energy can do the same. We should produce as much oil as we can, while working on ways to not need oil.
The private company that paid for the project would have paid for it if needed. If oil demand falls and the company that owns the line doesn't need it, that's on them.
Russia has natural gas. A person who knows more about this than I do wrote a thread on this. The Energy Security and Climate Change Program at the Center for Strategic and International Studies has a chair in energy andgeopolitics. He explains the dynamics of Europe's dependence on Russian gas.
One of the issues in the short-term is Europe's import capacity for liquefying natural gas. Some areas have the capacity to replace the gas they get from Russia. They probably need to increase their ability to receive more gas.
Where will they get it? Let's look at the natural gas industry in the U.S.
The US has been one of the fastest growing natural gas producers in the world over the past 15 years. In 2005, Russia produced 20% more natural gas than the U.S., but the U.S. is now the largest natural gas producer in the world.
The U.S. exported 1.5 billion BCM of liquified natural gas in 2010. Russia had 13 BCM. The U.S. has grown its exports to 61 bcm from 40 bcm a decade ago. Australia and Qatar were the world's leadingLNG exporting countries in 2020.
Russia supplies up to 200BCM to Europe via apipeline every year. Demand for natural gas has grown as coal-fired power plants switch to it. If our own demand hadn't grown rapidly, the U.S. would not have been able to supply Europe with natural gas.
Europe's dependence on Russian gas is being alleviated by U.S. natural gas production growth. Russia's power in the market has been reduced by the growth of U.S.LNG. We need to keep growing America's natural gas and Liquefied Natural Gas export capabilities, while working on ways to replace the demand for Liquefied Natural Gas with renewable sources of energy and nuclear power.
Another way to weaken Russia is through this strategy.
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