Gazprom, Rabaska and Russian Interests in Canada
Russia Entering North American Natural Gas Market
Nov 5, 2008
Gazprom, a name that sends shivers down the spines of policymakers in Washington and Brussels, is displacing Western (especially Anglo-American) oil and gas giants in more and more parts of the World. Russia's largest company is the world leader in energy exportation and natural gas exploitation. Gazprom – a state-owned company, of which Russian President Dmitry Medvedev has once been chief executive – is also a direct extension of the Kremlin's foreign policy.
In fact, Russia is now in many ways the “Gazprom Nation” and when it signs a new contact with a foreign government, it is Moscow's influence that spreads itself a little more, confirming its new status as a energy superpower, one energy agreement at a time. (see Pepe Escobar's Globalistan: How the Globalized World Is Dissolving Into Liquid War, p.213)
Russians are Coming to Town
Consequently, it should not have been a surprise for anyone when last year, Gazprom stated its interest in participating in the Rabaska $840 million terminal and regasification plant near Quebec City, after the provincial government finally approved the highly controversial project. Gazprom's participation gives Rabaska an incontestable long-term viability.
The agreement between Gazprom and Quebec states that the company would import liquefied natural gas (LNG) from it's Shtokman gas field in the Barents Sea to Rabaska, from where it would be regasified and distributed all over North America. Russia has the largest natural gas reserves in the world, though many of its field are not yet exploited.
LNG is the energy of the future, many experts say. It is less and less expensive to export and its combustion – cleaner than oil – respects international environmental norms, including the Kyoto Protocol. This thus makes Gazprom – by far the biggest LNG exporter in the world – the energy company of the future.
Increasingly dominating the European gas market, Russia – through Gazprom – wants to break through the North American one and Rabaska will serve as its energy gate. To confirm this partnership, Quebec Minister of Economic Development Raymond Bachand went to Moscow last September to discuss the deal with representatives of the Russian energy giant.
Punishing Moscow through Gazprom
But then the opportunity to curb Moscow's global ambitions presents itself. In response to Russia's military intervention to repel Georgia's offensive in South Ossetia last August and the five day war that followed, Canadian Prime Minister Steven Harper – who just got reelected – let known that Ottawa was considering the possibility the punish Gazprom's interests in Canada. While Rabaska was not explicitly mentioned, it was the most obvious target of the threat.
Opposition parties have long criticized the Conservative government's alignment on US foreign policy and Harper's highly critical stance toward Moscow can be seen as further submitting to US dictates. Washington is worried of Gazprom's ambitions in a mega-project that would essentially supply the United States. While the prospect of Gazprom dominating the North American gas market as it already does in Europe is still far – and improbable before long – Washington does not want to be dependent in any way toward Russian energy in the context of its deteriorating relationship with Moscow.
But if it was only for Rabaska, it would not be so dramatic, but the Unites States are also worried about Gazprom's (and Moscow's) penetration in Latin America, especially in Venezuela and Bolivia. When the two trends are added, North and South, Washington may have reasons to fear for its energy security if the Middle East sinks further into instability and goals to access Central Asian oil and gas, while bypassing Russian territory, keeps being unachievable.
So this is Moscow's answer to the encirclement of Russia by NATO: The encirclement of the United States by Gazprom.
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