Valery Nesterov: "United States try to play dangerous sanctions game"
The US Congress approved bill on new sanctions against Russia, which could affect European companies that work in energy sector, as well as hinder implementation of the Nord Stream-2 project. The European Union condemned this bill, promising to protect its energy interests. Sberbank CIB analyst Valery Nesterov discussed the impact of US sanctions on Russian energy sector and energy security of Europe in an interview with Vestnik Kavkaza.
- How will new US sanctions impact the development of the Russian economy?
- On the one hand, they will damage our economy, hinder its development. But there will be some benefits. For example, one of goals is to not allow Russia to develop oil and gas resources in the Arctic. But in present conditions it may even help us, because in current conditions we need to use our resources more rationally, maybe concentrate on our land resources, since we have a lot of them and we have technologies that can help us to adapt easily and lower the costs. We can redistribute resources that are left: partialy to develop land resources and to strengthen our navy. Both cases are clearly disadvantageous for the US: we will be able to increase our oil output, make progress in the development of hard-to-recover oil reserves and strengthen our defenses.
- How will new US sanctions affect implementation of the Nord Stream-2 project?
- The United States are playing a dangerous game, which may damage their relations with Europe. European business has its own interests, survival interests, competitive interests and so on. The US are trying to control them, not only regarding gas export, but also through Ukrainian gas transportation system, which will further destabilizes European market. From the point of gas supply, Europe develops just fine, there are competing projects and other promising sources, Eastern Mediterranean, for example. American gas is also perceived as one of the sources. The US not only has a lot of gas, but also ambitions to become the largest exporter of natural gas in the world and to export literally hundreds of billions of cubic meters, 200-300, if all projects will be implemented. But this is difficult to do. There are already a number of projects that just cant's compete. Largest projects in Canada, for example, are extremely restrained. Americans are very interested in Asian markets, but there is a huge competition with Australian gas. Qatar, the largest exporter, will increase its production capacity by 30%. Russian projects will soon join this competition - Arctic gas project is on the way. That's why European market is important for Americans from all points of view.
- How can the US reach this market?
- It will be difficult for America, because all forecasts, all analyzes say that Russian gas is more competitive than American. If it will be necessary, Gazprom can lower the price. That's how business works, and Americans are trying to break it, using politics to affect the economy. Such maneuvers and actions can be justified in short term, but as far as strategy goes, if we talk about many years, this is a mistake, a defective position. Poland and Lithuania have the same position, they buy expensive gas in order to not buy Russian gas. It is very controversial. In my opinion, this position can be justified only in certain examples. Yes, they are paying for independence now. But overall, energy resources are very expensive for Europe, and it's even more unprofitable for Europeans to buy even more expensive gas. Europe is a natural competitor to the United States. I don't think that European political elite wants to become completely dependent on the United States. They understand the need to defend their own national interests. Perhaps they are envious of the fact that Russia has such opportunity.
- What steps can EU leadership undertake to protect its interests?
- They should continue policy that they have been successfully implementing for several years - integrated and competitive gas market with minimal impact from different factors. Under current world economic development strategy. American gas will find a place in certain markets in certain periods. But this place will be quite modest, tens of billions of cubic meters in foreseeable future. The issue of Ukraine still exists. EU has its own problems. Of course, the lack of unity is what currently hinders all procceses, in the future it may ruin the EU. After all, all contradictions - both economical and political - are very significant, and they are growing.