Better get fracking, eh?

President Vladimir Putin threatened the “extreme measure” on Thursday of cutting off Russian gas for Ukraine unless the country pays in advance for all its supplies.

In a stark letter to 18 world leaders, Mr Putin acknowledged that, in such a “critical situation”, gas deliveries to the European Union would also be jeopardised.

The EU buys a third of its gas from Russia, about half of which arrives through pipelines running across Ukraine. But Mr Putin accused the EU of causing the current crisis, leaving Russia with “no alternative” but to toughen its approach.

Actually, the best thing that anyone could do right now is to get as much oil and gas as we possibly can flowing into the international markets. The US should allow crude and LNG exports, the EU should be fracking all over the place, get Iran, Iraq and Saudi pumping at full capacity. There’s enough out there to potentially drop the oil price $30 or $0 a barrel.

And that would entirely screw the Russian economy. Hell, people want to play economic games then why the hell not?

34 comments on “Better get fracking, eh?

  1. Absolutely

    Stiff the guy. But not just because of the Ukraine and his threat. He needs it anyway and we need the security and drop in cost.

    The extra economic activity as you turn something worth nothing into a valuable resource will boost the economy through jobs, direct tax take (keep it low you guys in Westminster), extra personal income tax, VAT receipts and corporate income tax (that should keep the socialist/social democrats quiet) and the Greens who can provide ZERO evidence of the real dangers of fracking (as being superior to other extractive industries) can bog off as they are irrelevant.

  2. Much of that gas gets burned to generate electricity.

    Problem is, try advancing that “international markets” argument to the miners who work at Kellingley, where we apparently cannot mine coal at competitive prices to burn in the power station at Ferrybridge, which is literally in walking distance of the pit, and where thanks to the “international markets” twaddle, consumer energy prices do not drop one iota, as the country gets more and more dependent upon one energy source..

    Up until about 1990 in Germany, it was actually illegal to burn natural gas to generate electricity, for the very reason that it put the place under the control of the communists to the east.

    Far from fracking being good for the heat and power market, this simply runs down our own supply options to provide a pack of electricity generators with the lovely cheap prices they pocket the difference from and which we never see the benefits of.

    But apparently it will annoy Vladimir Putin, and protect a pack of Neo Nazis in Kiev, and that’s vitally important as you sit freezing in the dark due to the monopoly prices you are being billed for by the energy companies..

  3. Poor little Vlad was just minding his own dodgy businesses when the wicked West just backed him into a corner so he had no choice but to mug the Ukraine.
    My heart bleeds for him.

  4. “Economic games” ? You mean, being paid for the gas and oil that you have been supplying, cut-price, for the last 6 years ??

    Since when do the Saudis accept non-payment ? Apple ? Google ?

    Etc.

    Can we take our “Russian Bear” blinkers off for just a couple of minutes ?

  5. “thanks to the “international markets” twaddle, consumer energy prices do not drop one iota, as the country gets more and more dependent upon one energy source.. ”

    Bollocks. Its thanks to the State interfering in the market place with taxes and regulations that energy prices are so high. If it wasn’t for them decreeing that we have to subsidise renewable energy, and creaming off massive amounts of tax, we’d all be driving round in V8 cars and leaving the heating on 24/7, energy would be so cheap.

  6. @Nibs

    I take your point, but conversely you’d have to be drinking some particularly strong wodka to think this is just a straightforward change in the billing arrangements.

  7. Don’t tell us, you’re preaching to the converted. What we need is for all you media types to tell the fatheads in the ministry for Catastrophic Anthropogenic Warming. Shout it from the rooftops so loudly so that even Ed Davey gets the message.

  8. Thanks to their nukes the French pay about 25% of what we do.

    Tim’s suggestion has merit. So does anybody think that useless shite like Camoron and the EU would be up for it?.

    HAHAHAHAHAHA.

  9. As is not untypical of its many forays into the diplomatic sphere, the US has misplayed the whole Ukraine business spectacularly badly and its diplomats and politicians have shown themselves, not for the first time, to be naïve and inept. Kerry would be a joke, were he not a dangerous combination of powerful and thick.

  10. Re energy prices.

    In Spain we have a useful little pie chart on the bill. It shows where the money goes. It used to be 50-50, energy generation transport and distribution and the gubermint (social energy subsidy, taxes, renewables etc etc.).

    Now it is 40% energy costs. A whacking 60% goes elsewhere. Energy isn’t expensive. The politicians make it so.

  11. This aPlanet Money podcast is an interesting insight in to this problem. Ukrainians (?) have been living off free/subisidised Russian gas and no politician has had the balls to remove the subsidy.

    As always when something is subsidised the supply side is screwed and now they are at Russia’s mercy. Same goes for the subsidised supplies to the west, although the delta between market and subsidised price isn’t as great.

  12. Pingback: Foundation and Empire – Stoat

  13. The Saudis will never let prices fall that far for long – their social programmes for their citizens are so expensive that they need something like $70-80/barrel in order not to run a deficit/trigger massive social unrest

  14. Tim Newman, you’re right, Ukraine now has a lever, and a cast iron Ukrainian majority, so maybe Vlad overstepped.

    As for the gas bills, no doubt the Russians have been overbilling quantity for years and Ukrainians have been stealing it for just as long.

    Both as corrupt as each other and as Dr Johnson said it’s idiotic to try the precedence of a louse and a flea.

    When you don’t have a dog in the fight, stay out of the junkyard.

  15. Tim Newman, if Ukraine cuts of Crimea’s water supply, that’s handing Putin a perfect excuse to invade and take over eastern Ukraine. In fact maybe that’s what he’s hoping for…

  16. Tim Newman, if Ukraine cuts of Crimea’s water supply, that’s handing Putin a perfect excuse to invade and take over eastern Ukraine. In fact maybe that’s what he’s hoping for…

    I wonder that myself.

  17. If Victoria Nuland nominates the post-Commie government in Ukraine and admits to the US spending $5 billion destabilising the country then its tough titty for us for supporting massively thick American neo-cons in the first place.Why is the EU supporting all this American bollox when Nuland treats its diplomats with contempt?

  18. If Victoria Nuland nominates the post-Commie government in Ukraine and admits to the US spending $5 billion destabilising the country then its tough titty for us for supporting massively thick American neo-cons in the first place.

    The “if” in that sentence is doing an awful lot of work. Yes, I know the idea that the Americans are behind every revolution and the people protesting on the streets were happily sitting at home until the Americans paid them to do otherwise is a popular one, but it is usually bollocks and in the case of Ukraine it is assuredly so. The Ukrainians protested in force because they were fed up with the gangsters running their country, not because the Americans have been formenting unrest. Change the tune, FFS!

  19. “It’s all an American plot!” is a favorite explanation for unpleasant events, but the people who say that give Obama & Co. too much credit. They are overwhelmingly inept, especially in foreign policy, where Obama makes Carter look like Talleyrand.

  20. I made the comment on another blog recently that this current crop of EU and American politicians have managed to make Dubya Bush look like one of the finest statesmen of his generation. That takes some doing.

  21. You lot want to poke the bear with a sharp stick – who will pay for any blood that is shed?
    Russians have long memories and I hope some Europeans do as well.

  22. Russians have long memories? They seem to have forgotten all about their somewhat central role in the Soviet Union, and that was what? 25 years ago?

  23. Won’t people be glad to pay higher energy bills just so they can avoid fracking here – but won’t mind buying fracked gas & oil from elsewhere! West tries to impose sanctions and Russia is expected to not respond in any fashion? Please!

  24. TN
    No ifs about it mate.Nuland’s instructions and claims that the US has spent $5 billion on regime change in Ukraine are a matter of record.

  25. No, they’re not. She was heard saying something vaguely related to that in a tapped phone call, devoid of detail or context, and people are seizing on that. Were it not for that phone call, you’d no doubt be referring to a Unocal pipeline study from the mid-90s. That’s they problem with folk like you, you decide what American actions and motives are in advance, and then mangle everything else to support your theories.

  26. “Russians have long memories” perhaps means “Russians know more about their own history than we do”. I first went to the USSR in 1975, and was staggered at their levels of education and literacy. To my, and others’, embarrassment, they often knew more about British history than we did, not to mention their own, and as for WW2 – it was as though it had happened the week before. Like us Russians have dumbed down a bit, but they started at a much higher level.

  27. I’d not say Russians know much about history, even their own. There overall levels of education are much higher than ours yes, but I found their knowledge of history was limited to the rather skewed version that the Soviets pumped out about The Great Patriotic War.

  28. Next month, Putin meets with the Chinese to discuss energy.

    I wonder how much energy the Chinese are willing to buy from the Russians to power all those ghost towns and cities we keep hearing about.

    Because peasants won’t move in without all mod cons.

    Maybe the Chinese could even use Yuan to buy the energy, instead of dollars.

    Obviously that would send the dollar plunging and cause massive price inflation in the States.

    Oh well.

  29. @TN
    The Ron Paul Institute says much the same in: Victoria Nuland’s Ukraine -gate Deceptions. That’s Ron Paul the Libertarian Presidential Candidate, later Republican Primary candidate.

  30. I would be inclined to believe the $5 billion figure. Obama and his gang are just that stupid (assuming obummer is really in charge–a dubious assumption). However that does not mean that the Ukrainians were not pissed off with Russian-leaning gangsters anyway. The big joke is them thinking that the utterly corrupt thieves of the eeuuuww are any better.

  31. “There’s enough out there to potentially drop the oil price $30 or $0 a barrel.”
    We could all applaud that…but…so what happens to your $80/tonne Pigou carbon tax, Tim?
    B*****ed, isn’t it?

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