Drill, baby, drill!
Plunging oil prices are hurting Russia natural-resources-dependent economy, threatening to throw it into recession along with a collapsing ruble. That’s not a good thing to have happen, but especially not when Moscow’s aggressive behavior has brought them into conflict with the West and earned them economic sanctions.
Part of the problem (from the Kremlin’s point of view) is that the hydraulic fracturing (“fracking”) technological revolution has lead to a renaissance in US oil production — we’re now one of the largest oil producers in the world, with vast reserves. We even export more than we import. And this revolution has just begun. Other nations are very interested in using fracking to bring down drilling costs, promising a larger supply on the market and concomitantly bringing crude prices down, to almost everyone’s benefit.
Well, everyone except Vladimir Putin, that is. A deep fall in Russian revenues thanks to fracking would threaten his glorious plans, the Russian economy, and maybe the stability of his rule. Consequently, we shouldn’t be surprised when people start to wonder if those anti-fracking demonstrations in Europe aren’t being ginned up in Moscow:
PUNGESTI, Romania — Vlasa Mircia, the mayor of this destitute village in eastern Romania, thought he had struck it rich when the American energy giant Chevron showed up here last year and leased a plot of land he owned for exploratory shale gas drilling.
But the encounter between big business and rural Romania quickly turned into a nightmare. The village became a magnet for activists from across the country opposed to hydraulic fracturing, or fracking. Violent clashes broke out between the police and protesters. The mayor, one of the few locals who sided openly with Chevron, was run out of town, reviled as a corrupt sellout in what activists presented as a David versus Goliath struggle between impoverished farmers and corporate America.
“I was really shocked,” recalled the mayor, who is now back at his office on Pungesti’s main, in fact only, street. “We never had protesters here and suddenly they were everywhere.”
Pointing to a mysteriously well-financed and well-organized campaign of protest, Romanian officials including the prime minister say that the struggle over fracking in Europe does feature a Goliath, but it is the Russian company Gazprom, not the American Chevron.
Gazprom, a state-controlled energy giant, has a clear interest in preventing countries dependent on Russian natural gas from developing their own alternative supplies of energy, they say, preserving a lucrative market for itself — and a potent foreign policy tool for the Kremlin.
“Everything that has gone wrong is from Gazprom,” Mr. Mircia said.
This belief that Russia is fueling the protests, shared by officials in Lithuania, where Chevron also ran into a wave of unusually fervent protests and then decided to pull out, has not yet been backed up by any clear proof. And Gazprom has denied accusations that it has bankrolled anti-fracking protests. But circumstantial evidence, plus large dollops of Cold War-style suspicion, have added to mounting alarm over covert Russian meddling to block threats to its energy stranglehold on Europe.
Via Power Line, where you can read a healthy reminder that this wouldn’t be new behavior for the Russians, as anyone who remembers the nuclear freeze movement of the 1980s knows. (Hint: All those innocent no-war types were being played for suckers by the KGB.)
If we had an administration interested in the intelligent development of America’s resources and also undercutting Putin where’s he’s most vulnerable –and hopefully we will in a couple of years– we could do a lot to jump-start our own economy and “encourage” Vlad to settle down by shutting off his money at the tap.
Still, that the Russians feel a need to break out the old KGB playbook shows how worried they are. And that sound you hear is me weeping in sympathy.
No, wait. It’s not. Not at all.
What you hear is me laughing.