Natural Gas Prices Disadvantage - Emory 2014

8/9/2019 Natural Gas Prices Disadvantage - Emory 2014

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Russia Gas DA

Russia Gas DA.................................................................................................1***Shell***.......................................................................................................3

1NC Natural Gas Prices DA.........................................................................4***Uniqueness***............................................................................................6

Russia Econ UQ !NC "ric#.......................................................................$Russia Econ UQ A"% Sanctions.................................................................&Russia Econ UQ A"% Unsustaina'le (Do)estic Sales...........................11Russia Econ UQ A"% Unsustaina'le (Di+ersi,cation-o/erni0ation. . .14Russia Econ UQ A"% 2en atthe2s.....................................................16Gas UQ.......................................................................................................1Gas UQ A"% Ger)an Shale......................................................................!Gas UQ A"% Polish Shale.........................................................................!1Gas UQ A"% 5altic Shale..........................................................................!!Gas UQ A"% Euroean Shale...................................................................!3

Gas UQ A"% Qatar....................................................................................!$Gas UQ A"% ther Pro/ucers..................................................................!Gas UQ A"% U.S. Pro/uction 7ne+ita'le-E8orts Not 9e:......................3

***;in#s-7nternals***.....................................................................................31!NC ;in# urt Russia.........................................................................36!NC Sot ar#et 7-;.................................................................................3E8t U.S. #t Sot Prices............................................................................3&E8t Sot Prices >urt Russia...................................................................4!US E8orts 9ill Ga0ro)...........................................................................43Russia Gas 9e:........................................................................................44

A"% Gas Deen/ence Causes Russian Dein/ustriali0ation (Diehl...........46***7)acts***................................................................................................4&

!NC 7)acts..............................................................................................=!NC "urns >e?..........................................................................................=6!NC "urns Econ.........................................................................................=$!NC De@ense 5ase 7)act.........................................................................=

A"% o/erni0ation 5a/..............................................................................6***A ANS


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***Shell***


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1NC Natural Gas Prices DA

Russian economy growing, but on the brink.;in/a Kelly =-!$-21!. Russian econo): to ?ro2 ': .= ercent in !14% central 'an#sNa'iullinaF "he Stoc# ar#et


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Russias Presi/ent Putin ur?e/ the countr:s ?as )onool: Ga0ro) to re+ise its e8ort

olic: as the shale re+olutionF an/ the /e+elo)ent o@ lique,e/ natural ?as 2illseriousl: eat into the countr:s e8ort re+enues . I E8erts a?ree that alternati+eco))o/ities ha+e alrea/: starte/ to reshae the )ar#et 2ith the US osin? tou?hco)etition to Russia. I 7 as# Ga0ro) to reort on the #e: rinciles o@ its e8ort olic: atthe ne8t )eetin? an/ the Ener?: inistr: shoul/ resent an a/Kuste/ ?eneral /e+elo)entsche)e @or the ?as in/ustr: until !3 as 2ell as the Eastern Gas Pro?ra)F sai/ Presi/entJla/i)ir Putin at a )eetin? o@ the resi/ential co))ission @or the @uel an/ ener?: sector on"ues/a:.I Such ne2 la:ers Tin the ?as )ar#et as the Unite/ States an/ Cana/a ha+e

alrea/: starte/ to )o+e. 7n the US ne2 technolo?ies allo2 @or ro,ta'le shale?as ro/uctionVPoliticians e8erts an/ 'usinesses are tal#in? a'out a real Hshalere+olutionH Putin a//e/.I "he US is a serious ri+al to Russia in a ?as )ar#et F asthe countr:s reser+es o@ shale ?as stan/ at !4trln cu'ic )etres co)are/ to 3trln cu'ic)etres o@ tra/itional ?as reser+es in Russia. Gi+en that shale co))o/ities are reall: 'oo)in?

eseciall: in the north o@ the US the countr: can outace Russia in the 2orl/ener?: )ar#et in another /eca/e Jaler: Nestero+ ener?: anal:st at S'er'an#7n+est)ent Research tol/ 5usiness R".I or the US econo): itsel@ the shale oil an/ ?asin/ustr: is a real loco)oti+e ro+i/in? an a//itional 3.=)ln Ko's accor/in? to S'er'an#7n+est)ent Research e8ert.I Shoul/ a shale re+olutionF reall: ta#e lace itll seriousl:

reshae the 2orl/ ener?: )ar#et 2here tra/itional ener?: sources coul/ 'e relace/ ':cheaer shale co))o/ities. "his will hit Russia*s bu)get har), as oil an) gasre+enues (ro+i)e #or about - o# the entire Russian bu)get. "hats2h: its +er: i)ortant @or Russia no2 to ha+e oicial in@or)ation an/ u to /ate /ataa'out e8traction o@ shale ?as in the US 2hich can 'e /one ': ?ettin? a reort @ro) the USDeart)ent o@ Ener?:F R5C /ail: quotes its sources close to Russias Accounts Cha)'er assa:in?.I Another ne2 tren/ has also lon? 'een un/er2a: the risin? tra/e in lique,e/natural ?as (;NG Putin sai/. H


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7n Russiahistoricall: econo)ic health an/ olitical sta'ilit: are intert2ine/ to a/e?ree that is rarel: encountere/ in other )aKorin/ustriali0e/ econo)ies. 7t 2asthe econo)ic sta?nation o@ the @or)er So+iet Union that le/ to its olitical /o2n@all. Si)ilarl:

e/+e/e+ an/ Putin 'oth inti)atel: acquainte/ 2ith their nations histor: areunquestiona'l: alar)e/ at the rosect that Russias econo)ic crisis 2illen/an?er the nations olitical sta'ilit: achie+e/ at ?reat cost a@ter :ears o@ chaos

@ollo2in? the /e)ise o@ the So+iet Union. Alrea/: stri#es an/ rotests are occurrin? a)on? ran# an/ ,le2or#ers @acin? une)lo:)ent or nonBa:)ent o@ their salaries. Recent ollin? /e)onstrates that theonce sure)e oularit: ratin?s o@ Putin an/ e/+e/e+ are ero/in? rai/l:. 5e:on/ the olitical elitesare the ,nancial oli?archs 2ho ha+e 'een @orce/ to /ele+era?e e+en unloa/in? their :achts an/

e8ecuti+e Kets in a /eserate atte)t to raise cash. Shoul/ the Russian econo):/eteriorate to the oint 2here econo)ic collase is not out o@ the question the i)act 2ill ?o@ar 'e:on/ the o'+ious accelerant such an outco)e 2oul/ 'e @or the Glo'alEcono)ic Crisis. "here is a ?eoolitical /i)ension that is e+en )ore rele+ant then the econo)icconte8t. Desite its econo)ic +ulnera'ilities an/ ercei+e/ /ecline @ro) suero2er status Russiare)ains one o@ onl: t2o nations on earth 2ith a nuclear arsenal o@ suicientscoe an/ caa'ilit: to /estro: the 2orl/as 2e #no2 it. or that reason it is not onl:Presi/ent e/+e/e+ an/ Pri)e inister Putin 2ho 2ill 'e l:in? a2a#e at ni?hts o+er the rosect that anational econo)ic crisis can trans@or) itsel@ into a +irulent an/ /esta'ili0in?

social an/ olitical uhea+al. 7t Kust )a: 'e ossi'le that U.S. Presi/ent 5arac# 'a)as nationalsecurit: tea) has alrea/: 'rie@e/ hi) a'out the consequences o@ a )aKor econo)ic )elt/o2n in Russia@or the eace o@ the 2orl/. A@ter all the )ost recent national intelli?ence esti)ates ut out ': the U.S.intelli?ence co))unit: ha+e alrea/: conclu/e/ that the Glo'al Econo)ic Crisis reresents the ?reatestnational securit: threat to the Unite/ States /ue to its @acilitatin? olitical insta'ilit: in the 2orl/.

Durin? the :ears5orisXeltsin rule/Russia securit: @orcesresonsi'le @or ?uar/in?thenations nuclear arsenal 2ent 2ithout a:@or )onths at a ti)e lea/in? to @earsthat/eserate ersonnel 2oul/illicitl: sell nuclear 2eaons to terroristor?ani0ations. 7@ the current econo)ic crisis in Russia 2ere to /eteriorate)uch @urther ho2 secure 2oul/ the Russian nuclear arsenal re)ain Y7t )a: 'ethat the ,nancial i)act o@ the Glo'al Econo)ic Crisis is its least /an?erous consequence.


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***Uniqueness***


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Russia 0con $ 2NC "rick

Actual economic growth is irrele+ant 333 resource re+enues are thesole )eterminant o# Russia*s (olitical stability.Jla/isla+ 4no5emtse+ 6-!4-21!. Pro@essor o@ econo)ics an/ /irector o@ the osco2B'ase/ Center @or PostB7n/ustrial Stu/ies.


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?o+ern)ents o@ risin? une)lo:)ent /oes not /istur' an:one in Russia.>ence no one cares also a'out the ?ro2th in the real sector o@ the econo):2hich coul/ a'sor' the e8cess la'or.ourth 'oth the authorities an/ the u'lic ha+e interrete/ e+er: serious crisis in the 2orl/s)aKor econo)ies in the last 3 :ears as the result o@ @orei?n inLuences not as a resulto@ /o)estic olic:."he ,nancial crash in e8ico in 1&&4 Asias trou'les o@ 1&&$ Russias /e@ault o@ 1&&an/ Ar?entinas o@ !1 the H/ot co)H crash in ! as 2ell as the ,nancial catacl:s) in theU.S. an/ Euroe in ! W all o@ the) 2ere attri'ute/ to e8ternal causes.Russian authorities in recent :ears ha+e 'een so success@ul in con+incin? its citi0ens that alle+il co)es @ro) the outsi/e that the: )a: ha+e 'eco)e con+ince/ o@ it the)sel+es."he resi/ent has o@ten e8laine/ econo)ic /iiculties as U.S. an/ Euroes @aultin articular the crisis o@ 1&& 2hich is /eicte/ as the result o@


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Russia 0con $ A"8 %anctions

%anctions currently ha+e no teeth 333 0uro(e will only (ut real(ressure on Russia when $.%. (ro)uction un)ermines Russian gas

mono(oly.Carol 9atlack :;2-!14. Russia Sanctions ;ose "heir 5ite as U.S. an/ Euroe Pull 7nDierent DirectionsF 5loo)'er? 5usiness is )ain in+est)ent +ehicle Jol?a Grou 2hich the U.S. has'een 'lac#liste/ is 'ase/ in EU )e)'er countr: ;u8e)'our?. An/

Kust a @e2 2ee#s a?ohis construction ?rou Stro:trans?a0 2on a )aKor contract to 'uil/ art o@the South Strea) ?as ieline throu?h 5ul?aria another EU )e)'er."i)chen#o also is acti+el: ursuin? 'usiness in China ran?in? @ro) a ossi'le 'ottle/B2ater+enture to ?asBin/ustr: construction roKects @ollo2in? the si?nin? o@ a )aKor RussianBChinese ?as /eal this :ear.

9o+alchu# /escri'e/ ': the U.S. as Putins ersonal 'an#erF also hasnt'een sanctione/ ': the EU.an: o@ the in/i+i/uals sanctione/ ': Euroe ha+e 'een Russian an/ ?o+ern)ent oicialsan/ )ilitar: lea/ers /irectl: in+ol+e/ in the anne8ation o@ Cri)ea an/ the ,?htin? in easternU#raine. "hose )easures ha+e )ini)al eect since the eole tar?ete/ ?enerall: /ont ha+esi?ni,cant assets in Euroe. "he:re tar?etin? the 2ron? eoleF ;ain sa:s.7neecti+e Euroean sanctions arent the onl: ro'le). 5loo)'er? Ne2s last)onth/etaile/ho2 9o+alchu# /oes 'usiness 2ith U.S. co)anies throu?h a co)le8 2e' o@

or?ani0ations that he artiall: o2ns. Still it 2oul/ 'e easier to untan?le those relationshis i@the EU ha/ also ut hi) on a 'lac#list. or e8a)le 9o+alchu# o2ns a )inorit: sta#e in aRussian )e/ia ?rou that is at least t2oBthir/s o2ne/ ': a sha/o2: ?rou o@ co)anies inC:rus another EU )e)'er countr:.


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%anctions ha+e (ut Russia*s economy on the brink, but ha+e notcause) colla(se.Antonio %(ilimbergo 6-3-21!. 7 ission Chie@ @or Russia Ph.D. in econo)ics @ro).7.". Geoolitical Ris#s Clou/ uture o@ Russian Econo):F 7 Sur+e: a?a0ine

htt%--222.i)@.or?-e8ternal-u's-@t-sur+e:-so-!14-car6314a.ht).

7 Sur+e:%


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Russia 0con $ A"8 $nsustainable our e+i)ence makes out)ate) assum(tions 333 Russia actually sells)omestic gas at (ro?table (rices.i#hail Korchemkin 4-!3-212. ana?in? /irector o@ Eastern Euroe Gas Anal:sis.7sRussia Du)in? GasYF Natural Gas Euroe htt%--222.natural?aseuroe.co)-russiaB/u)in?BnaturalB?as.

7n a recentanal:tical aerRussias Natural Gas Dile))a(@ull te8t 2ith lin#s is a+aila'lehere Strat@or clai)s that Ga0ro) is losin? )one: on its /o)estic sales."his statement is a way out)ate). Accor/in? to the ,nancial reorts o@ Ga0ro)the /o)estic sales are ro,ta'le @ro) !4. "he i)ortant s2in? @ro) loss to ro,t2as also )entione/ in the co)an:s !3 annual reort (see a?e 64.IA@ter t2oro,ta'le :ears Ga0ro)s to )ana?e)ent has /eci/e/ that all ?asro/uce/ at the hi?hest cost ?oes to Russian consu)ers an/ this si)leaccountin? tric# has create/ a loss in !$.As e8laine/ to the sharehol/ersHstrie/ ?as 'ou?ht @ro) our /au?hter co)anies is )uch )ore e8ensi+e than natural ?asan/ the strie/ ?as is 'ein? /eli+ere/ e8clusi+el: to Russian consu)ersH. 7t is 2orth notin?that in an ar'itration trial in !!Ga0ro) has ro+e/ that all strie/ ?as ?oes @or e8ort

sales (at that ti)e e8orts o@ this ro/uct 2ere @ree o@ custo)s /uties. 7n !B!11Ga0ro) reorte/ ro,ts @ro) the /o)estic sales. Ga0ro) sells ?as at thestateBre?ulate/ 2holesale rice that is a'o+e the /eli+er: cost in all re?ionso@


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Also, this im(act to this argument is that lack o# )omestic (ro?ts isun)ermining Ga5(rom in+estment in new ?el)s an) in#rastructure.@e*ll conce)e the (remise that these are key to growth an) internallink turn.

Russia will increase gas e'(orts to a(an, but (ricing is key 333 )eals

are critical #or Russian in+estment in ar 0ast ?el)s.ere: onolulu. Econo)ic cooeration can stren?then aanBRussia tiesF aan "i)eshtt%--222.Kaanti)es.co.K-te8t-eo!1!111a1.ht)l.

Recent relations 'et2een osco2 an/ "o#:o ha+e 'een roc#:. "his is lar?el:/ue toRussian Presi/ent D)itr: e/+e/e+sNo+e)'er !1+isit to /isute/islan/s.As the ,rst So+iet or Russian lea/er to +isit the islan/s(#no2n as theSouthern 9urils in Russia an/ the Northern "erritories in aan his +isit rei?nite//ilo)atic ro'le)s that ha/ lain so)e2hat /or)ant. Su'sequent hi?hBle+el+isits an/ /ecisions to in+est close to M1 )illion in socioBecono)ic /e+elo)ent an/transort in@rastructure i)ro+e)ents an/ to 'uil/ u Russias )ilitar: resence on theislan/s all ser+e/ to e8acer'ate their acer'ic relations throu?hout !11.I a'o)ai Shi#otan 9unashiri an/ a art o@ [email protected]


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technolo?: an/ )aKor roKects such as Sa#halinB1 an/ B! Russias ar Eastener?: sector re)ains un/er/e+eloe/. 4ncreasing energy e'(orts toa(an an) bolstering ties with a(anese energy ?rms coul) hel((ro+i)e this much nee)e) ca(ital.I Desite closer econo)ic ties @osterin? a 2inB2in situation relations re)ain @ro0en.


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to cru/e oil rices nor)all: throu?h oliticall: in+ol+e/ ne?otiations.Asianbuyers still ha+e #ewer o(tions #or large3scale im(orts than 0uro(eanbuyers )oW#e: 'u:ers inclu/in? aan an/ 9orea /o not ha+e access toieline i)ortsW2hich re/uces their relati+e o2er. 7n a//ition at the sa)eti)e that Euroean custo)ers 2ere ?ainin? ne2 le+era?e in !11 aan the lar?est ;NGi)orter in Asia 2as aral:0e/ ': the /isaster at its u#ushi)a nuclear o2er lant. As that

acci/ent le/ to 2i/esrea/ nuclear shut/o2ns aan )assi+el: increase/ its /e)an/ @or ;NGto )eet critical electricit: nee/s. aan /eserate to a+oi/ @urther econo)ic har) 2as not in

a osition to ne?otiate a??ressi+el: 2ith natural ?as suliers.I an: anal:sts in 'oththe Unite/ States an/ Asia ha+e seculate/ that $.%. entry into the Asian&NG market as a maor su((lier(alon? 2ith others coul) hel( create thecon)itions #or a mo+e towar) market (ricing o# natural gas, or atleast to a lessening o# in)i+i)ual (ro)ucers* market (ower an),hence, (olitical inuence. Pre/ictin? olitical inLuence is a nearBi)ossi'le'usiness 'ut to e8a)ine 2hether U.S. e8orts )i?ht hel encoura?e such a trans@or)ation itis use@ul to co)are the otential )a?nitu/e o@ U.S. ;NG /eli+eries to other i)ortant scalesin the natural ?as )ar#et. As o@ !1 the 2orl/s to ,+e ;NG e8orters 2ere Qatar (.!'c@-/ 7n/onesia (3.3 'c@-/ ala:sia (3.3 'c@-/ Australia (!.$ 'c@-/ an/ Ni?eria (!.6 'c@-/(7GU !1. "he to sulier to aan 2as 7n/onesia (!. 'c@-/ an/ the to sulier to 9orea

2as Qatar (1.1 'c@-/. "he sot )ar#et accounte/ @or sli?htl: )ore than a ,@th o@ tra/e/ ;NGtotalin? sli?htl: less than se+en 'illion cu'ic @eet a /a:. All o@ these ,?ures 2ill increase in the@uture. E7A roKections are @ar @ro) /e,niti+e 'ut the: are instructi+e.


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Russia 0con $ A"8 $nsustainable


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inno+ati+e in/ustries are real an/ are ?ainin? /o)inance thou?h so)e2hat)ini)al. Desite so)e set'ac#s @or entrereneurs those institutional @actorsoen u :et untae/ )ar#ets that asi/e @ro) 2illin? ?ro2in? )i//le classconsu)ers oer tenacit: o@ 2ellBe/ucate/ la'or @orce. "he macroeconomic(olicy momentum #or (roacti+e economic )i+ersi?cation )ri+ea((ears to be ust right. Fut it is not an) cannot be an o+ernight

trans#ormation.

Di+ersi?cation eorts sol+e long term unsustainability but high gas(rices are key to #un) in+estment in )i+ersi?cation in the short3term.@hat the Pa(ers %ay(Russia 11-!-2:. Still >oo#e/ on ilF ;e8is.

5ein? hoo#e/ on oil is the tra/e)ar# o@ the Russian econo): an/ Russianolitics as 2ell. 5ut no2 2e see Senior Deut: Pri)e inister Ser?ei 7+ano+ s)ashin?

stereot:es. H>a+e 2e )ana?e/ to en/ our /een/ence on oil an/ ?ase8ortsYHhe as#s. An/ he ans2ers hi)sel@% H


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Russia 0con $ A"8 Hwen 9atthews

Hwen 9atthews* is an anti3Putin hack who has been makingcatastro(hic (re)ictions #or years 333 )on*t trust his analysis.ar#A)omanis 1-!-21E. De?rees in Russian Stu/ies @ro) >ar+ar/ an/ 8@or/contri'utor @or or'es.


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@ro) ?ro2in?% ra)ant inLation siralin? realBestate rices an/ hi?her la'or costs'ureaucratic corrution e8ensi+e cre/it an/ 'a/ ?o+ernance ha+e co)'ine/ to stiLe theco)etiti+eness o@ )an: Russian 'usinesses.e' 13 !&% "he 9re)lin Ji?ilantes% 5ut the /a)a?e is alrea/: /one. Research last :ear ':the 7nternational r?ani0ation @or i?ration sho2e/ that $6 ercent o@ i))i?rants ha/ nointention o@ sta:in? in Russia @or )ore than a @e2 :ears or 'rin?in? their @a)ilies there. 7nthe hostile ne2 cli)ate the e8o/us o@ 2or#ers is li#el: to 'e as /ra)atic as their inLu8Wan/

those re)ainin? are li#el: to rea )ore o@ Russias an?er at ?ro2in? une)lo:)ent an/o+ert:.Au?ust = !&% Russias >ea/e/ @or a ;on? Econo)ic


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co))onlace to oose Putin on ethical ?roun/s atthe2s see)s to 'e?ra+el: )ista#en is in his esti)ation o@ the Putinist s:ste)s /ura'ilit:.atthe2s has consistentl: un/eresti)ate/ its a'ilit: to reson/ to e8ternalchallen?es an/ chan?in? circu)stances an/ consistentl: o+eresti)ate/ theinLuence o@ ne?ati+e @actors such as shale ?as the Euroean Union an/ the2orl/ ener?: )ar#et. atthe2s has 'een oenl: ar?uin? that Russias

econo): is on the +er?e o@ collase @or the 'etter art o@ a /eca/e resentin?see)in?l: reasona'le o'ser+ations on the countr:s corrution ineicienc: an/

'ac#2ar/ness. 5ut in the real 2orl/ Russias econo): a@ter a shar 'utte)orar: /o2nturn #ees on ?ro2in? an/ Putin is still suorte/ ': asi0a'le (thou?h ?reatl: re/uce/ )aKorit: o@ Russians. "o ut it as succinctl: asossi'le a countr: 2ith 3^[ GDP ?ro2th an/ 2ith a hea/ o@ state 2ith 6^[oularit: /oesnt see) articularl: rie @or a social re+olution.
http://www.forbes.com/sites/markadomanis/2012/05/21/russia-is-on-pace-to-outgrow-every-european-union-economy-in-2012/http://www.forbes.com/sites/markadomanis/2012/05/21/russia-is-on-pace-to-outgrow-every-european-union-economy-in-2012/http://www.forbes.com/sites/markadomanis/2012/05/21/russia-is-on-pace-to-outgrow-every-european-union-economy-in-2012/http://www.forbes.com/sites/markadomanis/2012/05/21/russia-is-on-pace-to-outgrow-every-european-union-economy-in-2012/


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Gas $

Deman) will kee( global &NG (rices high.

Iee Fusiness 6-!3-21!. >in/i 5usiness Ne2s Channel. Ro'ust ?lo'al /e)an/ to#ee ;NG rices hi?h sa:s reortFhtt%--0eene2s.in/ia.co)-'usiness-ne2s-international-ro'ustB?lo'alB/e)an/BtoB#eeBln?BricesBhi?hBsa:sBreort_1!3&6.ht)lAS.

"he /e)an/ is ?ro2in?'oth as a result o@ stron? Asian econo)ic ?ro2th an/ the s2itchto cleaner ener?: articularl: in China accor/in? to the QN5 Grou reort.I "histren/ is li#el: to continue not2ithstan/in? the soBcalle/ US shale ?asre+olution an/ the co)in? into oerations o@ the USD 4 'illion RussiaBChina ?as ielinesi?ne/ on a: !1 !14 it sai/.I +erall the @uture o@ the ;NG)ar#et re)ains 'ri?ht an/ is li#el: to result in hi?h ;NG rices @or :ears toco)e the reort sai/ a//in? this 2ill continue to suort Qatars lar?e current account

surluses.I "he ;NG )ar#et continue/ to ti?hten in !13. Glo'al ;NG /eli+eries 2ere anesti)ate/ !4 )illion tonnes B 'roa/l: Lat co)are/ 2ith !1!.I Qatar continue/ to 'e the

lar?est ;NG e8orter 2ith a'out one thir/ o@ ?lo'al sul:. At the sa)e ti)e /e)an/@ro) Asia an/ ;atin A)erica rose 2ith China South 9orea an/ e8icore?isterin? the lar?est increase in ;NG /e)an/ the reort sai/.I 7n articularChina'rou?ht three ne2 reB?asi,cation ter)inals online as its s2itch @ro) coal to;NG as a cleaner @uel @or electricit: ro/uction continue/.I "his ti?htenin?o@ the )ar#et resulte/ in an a+era?e USD 1 increase in ;NG rices er)illion5ritish ther)al units ()5tu /esite 5rent cru/e oil rices @allin? USD 4.= er'arrel an/ lo2er ;NG /e)an/ @ro) Euroe.I "he outloo# @or the ;NG )ar#et isli#el: to continue alon? si)ilar tren/s in !14.n the sul: si/e three ne2 ;NGtrains in Al?eria Australia an/ Paua Ne2 Guinea are e8ecte/ to co)e onBstrea) in !14.

"his is li#el: to a// a'out 1) tons to ?lo'al ;NG ro/uction B a 4.! ercentincrease.I n the /e)an/ si/e continue/ ?ro2th in Asian /e)an/ an/ the nee/ @or Euroeto /i+ersi@: a2a: @ro) Russian ieline ?as )a: outace the increase/ sul: lea/in? to as)all increase in ;NG rices o@ a'out USD .= er )5tu /esite the e8ecte/ /ecline in

5rent cru/e oil rices it sai/.I "he on?oin? +iolence in 7raq an/ S:ria coul/ho2e+er result in hi?herBthanBe8ecte/ ;NG an/ cru/e oil rices in thesecon/ hal@ o@ !14 the reort a//e/.I +er the )e/iu) ter) ?lo'al ;NG e8ortsare unli#el: to )eet the ?ro2in? ?lo'al /e)an/ lea/in? to hi?her ;NGrices.

&NG (rices will stay high 333 )eman) is strong.Jarun Chan)an 6-!6-21!. Contri'utor @or "he otle: ools ener?: )aterials an/

utilities co+era?e.


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)ore ;NG to )eet its ener?: nee/s.I "he ;NG )ar#et is also seein? stron?/e)an/ @or countries such as South 9orea China an/ 7n/ia. De)an/ has'een stron? in ;atin A)erica as 2ell.I +er the ast three :ears ;NG ricesha+e /ou'le/. Accor/in? to 5loo)'er? rices a+era?e/ M16.=1 er )illion 5ritish ther)alunits in !13. ore i)ortantl: ;NG rices coul/ re)ain hi?h in co)in? :ears2hich au?urs 2ell @or the li#es o@ Cheniere an/ Se)ra.I Prices to re)ain stron?I ;NG

rices are e8ecte/ to re)ain stron? o+er the ne8t @e2 :ears /ri+en ':/e)an/ @ro) Asia eseciall: China.I China has 'een loo#in? to cut its relianceon coal to )eet its ener?: nee/s."he 2orl/s secon/Blar?est econo): lans toincrease the share o@ natural ?as in its ener?: )i8. Recentl: China si?ne/ a )aKor ?as/eal 2ith Russian ?as ?iant Ga0ro)(NASDAQ">% G`PX . Ga0ro) 2ill sul:3 'illion cu'ic )eters o@ natural ?as annuall: to China. 5ut Chinas natural ?as /e)an/ is

increasin?.I Accor/in? to the 7nternational Ener?: A?enc: (7EA Chinas natural ?as/e)an/ is e8ecte/ to al)ost /ou'le ': !1&. 7n @act China 2ill 'e the #e: /ri+er@or ?lo'al ?as /e)an/ 2hich is e8ecte/ to rise ': !.![. "he 7EA e8ects )uch o@ the/e)an/ to 'e )et ': ;NG.I 7n a recent reort Qatars QN5 Grou also note/ a'out stron?

/e)an/ @or ;NG. "he ?rou note/ that the tren/ 2ill continue /ri+en ': t2o@actors. "he ,rst is ener?: /e)an/ in Asia 2hich is e8ecte/ to re)ain stron?

e+en a@ter ta#in? into account a slo2/o2n in China. "he reort notes that countries li#eChina 7n/ia 7n/onesia ala:sia Pa#istan an/ "hailan/ ha+e onl: Kust starte/ to @ocus on

;NG @or their ener?: nee/s an/ their reliance on ;NG sulies 2ill ?ro2 o+er thene8t @e2 :ears. "he secon/ @actor accor/in? to QN5 is Chinas s2itch to cleaner ener?:."hese t2o @actors 2oul/ )ean that ?lo'al /e)an/ 2ill continue to outace sul:notes QN5 in the reort.I aan 2hich is the lar?est i)orter o@ ;NG ha/ sai/ in a recent

ener?: lan that there is a @uture @or nuclear in the countr:. >o2e+er it is unli#el:aansreliance on nuclear ener?: 2ill 'e the sa)e as it 2as 'e@ore the u#ushi)a o2er lant

)elt/o2n. "here@ore the countr: 2ill re)ain a )aKor ;NG i)orter.I ollo2in? thecrisis in U#raine Euroehas 'een loo#in? to re/uce its /een/ence on Russian ?as. "hecontinent coul/ increase the share o@ ;NG in )eetin? its natural ?as nee/s inthe @uture as it loo#s to cut reliance on Russian ?as.I All these @actors )eanthat ;NG rices are e8ecte/ to re)ain hi?h in the co)in? :ears . "hat is

certainl: ?oo/ ne2s @or Cheniere an/ Se)ra Ener?:.


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Gas $ A"8 German %hale

Germany blocke) shale )e+elo(ment o+er en+ironmental concerns.an Broma)ko an)>arriet "orry $-4-21!. Ger)an: Shel+es ShaleBGas Drillin? orNe8t Se+en XearsF


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Gas $ A"8 Polish %hale

Polan) can*t )rill #or shale gas 333 ba) regulation an) tech."he 0conomist $-1-21E. a/ an/ ess: Re?ulationFhtt%--222.econo)ist.co)-'lo?s-easternaroaches-!13-$-shaleB?asBolan/.

P;7S> /rea)s that shale ?as 2oul/ trans@or) the countr: into a secon/Nor2a: ha+e 'een te)ere/ in recent )onths. "he ?eolo?: is )ore /iicultthan anticiate/ an/ roose/ re?ulation has 'een reeate/l: /ela:e/. A@ter?reat initial enthusias) co)anies such as E88ono'il "alis)an an/arathon il thre2 in the to2el an/ quit the countr:. 7n a recent reort in+estorsco)laine/ that the le?islation currentl: 'ein? /ra2n u i?nores )an: o@their /e)an/s. "he Polish E8loration an/ Pro/uction 7n/ustr: r?anisation(PPP


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26/102

Gas $ A"8 Faltic %hale

Faltics can*t sol+e #or shale gas e'(losi+e remnants an)en+ironmental obstacles.

Der %(iegel 4-11-21E. Dan?erous Deths% Ger)an


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Ec#ern@r/e an/ >oh2acht 5a:s an/ @arther to the east in the northeastern state o@ ec#len'ur?Bolsteinstate ?o+ern)ent note/. "he to8ic 2aste /isosal site 2as e+en a tar?et area @or the Ger)an )ilitar:s

tore/o attac# e8ercises in !1. Shis 'oun/ @or the Port o@ >el?olan/ also sail near the area. "heshells 2ill ro'a'l: re)ain on the sea Loor until the: /isinte?rateco)letel: at least accor/in? to a reco))en/ation @ro)Ger)an:s e/eralariti)e an/ >:/ro?rahic A?enc: an/ the international >elsin#i Co))ission 2hich is resonsi'le @or

en+iron)ental rotection in the 5altic Sea.


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Gas $ A"8 0uro(ean %hale

No 0uro(ean shale )e+elo(ment 333 legal restrictions an))emogra(hics.Eric Reguly $-4-21!. Euroean 5ureau Chie@. Euroes shale ?as 'ac#ers are li+in? in a@antas: 2orl/F "he Glo'e an/ ail htt%--222.the?lo'ean/)ail.co)-reortBonB'usiness-in/ustr:Bne2s-ener?:Ban/Bresources-euroesBshaleB?asB'ac#ersBareBli+in?BinBaB@antas:B2orl/-article1&4$3$1-.

"he U#raine crisis has co)e as a ?o/sen/ to the shale ?as cheerlea/ers inEuroe.Russian natural ?as e8orts to


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local councils 'ut thats not the sa)e as cash a:)ents to lan/o2ners . "he)ini)u) require)ent @or a U.S.Bst:le shale rush is chan?in? the la2 to allo2 lan/o2ners tocash in.

Concentrations o@ hu)ans )a#e an: /rillers li@e /iicult. "he oulation/ensities in Euroe are ,+e to 1 ti)es hi?her than those in the Unite/States.

Slain? a /rill ri? in or ne8t to a +illa?e lus connectin? it to a ieline an/stuin? the local roa/s 2ith truc#s to 'rin? in equi)ent an/ 'ee@: ?u:s2ith tattoos isnt ?oin? to haen.inall: en+iron)ental la2s are tou?her in Euroe than in North A)erica. 7nrance @rac#in? the use o@ che)icals an/ hi?hBressure 2ater to crac#oen the h:/rocar'onB'earin? shale is 'anne/. Ditto 5ul?aria. "he @ear isollute/ ?roun/2ater an/ )ore than a @e2 horror stories in the Unite/ States suortthe +ie2 that @rac#in? is not 2ithout en+iron)ental costs.

"he atte)ts at shale /rillin? in Euroe ha+e rett: )uch ?one no2here. Polan/ 2assuose/ to e)er?e as the ,rst 'i? Euroean shale )ar#et 'ut it hasnt2or#e/ out. So)e ener?: ?iants inclu/in? E88on o'il Cor. an/ 7tal:s Eni SAha+e ulle/ out o@ Polan/ 'ecause the ?eolo?: an/ the le?islation are not

con/uci+e to a /rillin? 'onan0a.

Russia backing en+ironmental (rotests against 0uro(ean #racking 333(olitical le+erage an) (o(ulation )ensity ensure success.9eithohnson 6-!-21!. Sta reorter @or "he ouse seech this 2ee#.INA" oicials sai/ Ras)ussens re)ar#s 2ere )eant to un/erscore NA"s

?ro2in? unease 2ith Euroes ener?: securit: situation. HClearl: it is in theinterest o@ all NA" allies to 'e a'le to ha+e a/equate ener?: sulies.


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31/102

Uni+ersit:s 5a#er 7nstitute Ener?: oru)F Reort 5el@er Center @or Science an/7nternational Aairs >ar+ar/ 9enne/: Schoolhtt%--'el@ercenter.#s?.har+ar/.e/u-u'lication-!!!1-?eoolitics_o@_natural_?as.ht)l.

9no2le/?e o@ the shale ?as resource is not ne2. Geolo?ists ha+e #no2n a'out thee8istence o@ shale @or)ations @or :ears 'ut accessin? those resources 2as

lon? hel/ to 'e an issue o@ technolo?: an/ cost . 7n the ast /eca/e inno+ationsha+e :iel/e/ su'stantial cost re/uctions )a#in? shale ?as ro/uction aco))ercial realit:. 7n @act shale ?as ro/uction in the Unite/ States hasincrease/ @ro) +irtuall: nothin? in ! to )ore than 1 'illion cu'ic @eeter /a:('c@/ in !1. Risin? North A)erica shale ?as sulies ha+e si?ni,cantl: re/uce/US require)ents @or i)orte/ ;NG an/ contri'ute/ to lo2er US /o)estic natural ?as rices.

"he natural ?as sul: icture in North A)ericawill ha+e a ri((le eectaroun) the globe that 2ill e8an/ o+er ti)e not onl: throu?h/islace)ent o@ sulies in ?lo'al tra/e but also by #ostering a growinginterest in shale resource (otential in other (arts o# the worl).

$.%. e'(orts are more im(ortant 333 0uro(ean shale will be limite).Jla/i)ir 9ilo+ 4-4-212. Presi/ent o@ the 7nstitute o@ Ener?: Polic: an/ @or)er Deut:Ener?: inister. Chan?in? Russia% "he Politics o@ Econo)ic an/ Ener?: De+elo)entFPresentation d CS7S su))ar: 2ritten ': interns an/ e/ite/ ': Dr. An/re2 9uchinscsis.or?-,les-attach)ents-1!44_ilo+[!;ecture[!Su))ar:./@.

"he ne8t articiant as#e/ ho2 the e)er?ence o@ uncon+entional ?as such as shale 2ill

i)act Ga0ro). "he e)er?ence o@liqui/ natural ?as (;NG has alrea/: Ku)Bstarte/ Euroes shi@t to2ar/s the sot )ar#et @or ?as 2hich has 'een oneo@ the ri)ar: challen?es to Ga0ro)s tra/itional )o/el o@ lon?Bter)contracts. 7t is unli#el: that /e+elo)ent o@ uncon+entional ?as in Euroe2ill 'earticular e8ansi+e 2ith Polan/ an/ U#raine as the li#el: )aincontri'utors 'utthe a+aila'ilit: o@ im(orts #rom the $nite) %tates will

continue to (ut (ressure on Ga5(rom by making the market morecom(etiti+e. "hese /e+elo)ents are also li#el: to sur the creation o@ ne2ielines an/ other in@rastructure helin? to oset /een/ence on theRussian net2or#. Ga0ro) continues to reten/ as i@ these ro'le)s /o not e8ist 'ut thei)ortance o@ shale ?as an/ ;NG 2ill e+entuall: 'e un/enia'le.

Regulatory barriers will block 0uro(ean shale )e+elo(ment.Charles 0binger 9e+in 9assy an)Go+in/aA+asarala anuar: 212. Director an/Senior ello2orei?n Polic:Ener?: Securit: 7nitiati+ed 5roo#in?s ser+e/ as an ener?:olic: a/+isor to o+er = ?o+ern)ents a/Kunct ro@essor o@ electricit: econo)ics at ohns>o#ins Nit0e SchoolZ Assistant Director o@ the Ener?: Securit: 7nitiati+e at the 5roo#in?s7nstitutionZ an/ Research Assistant Ener?: Securit: 7nitiati+e d 5roo#in?s. E+aluatin? the

Prosects @or 7ncrease/ E8orts o@ ;ique,e/ Natural Gas @ro) the Unite/ StatesF Reort o@the Ener?: Securit: 7nitiati+e htt%--222.'esaci,c.co)-)t-archi+es-!&3!4.ht)l.

As is the case in Asia uncon+entional ?as /e+elB o)ent in Euroe )a: la: alar?e role in the @uB ture o@ the Atlantic 5asin ?as )ar#et. Gi+en EastB ernEuroes /een/ence on Russia @or natural ?as sul: the rosect @or shale ?as resources isnot onl: a otential econo)ic 'oon @or countries in the re?ion 'ut also a otential

?eoolitical asB set. U#raine an/ Polan/W2ith an esti)ate/ 4! an/ 1$ tc@ o@ shale ?asresources resecti+el:W ha+e 'een articularl: intereste/ in /e+eloin? their
http://belfercenter.ksg.harvard.edu/publication/22218/geopolitics_of_natural_gas.htmlhttp://www.brookings.edu/about/programs/foreign-policyhttp://www.brookings.edu/about/programs/foreign-policyhttp://www.brookings.edu/about/projects/energy-securityhttp://www.brookings.edu/about/projects/energy-securityhttp://www.bespacific.com/mt/archives/029324.htmlhttp://www.bespacific.com/mt/archives/029324.htmlhttp://belfercenter.ksg.harvard.edu/publication/22218/geopolitics_of_natural_gas.htmlhttp://www.brookings.edu/about/programs/foreign-policyhttp://www.brookings.edu/about/projects/energy-securityhttp://www.bespacific.com/mt/archives/029324.html


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shale ?as assets. >o2e+er si)ilar to unconB +entional ?as /e+elo)ent inAsia regulatory an) in#rastructure obstacles will make large3scaleshale gas (ro)uction in the near3term )iicult. oreo+er in oc#ets o@Euroe there is an acti+e u'lic oosition to shale ?as ro/uctionin EuB roe2hich )a: threaten the /e+elo)ent o@ /oB )estic resourcesin so)e countriesan/ re?ions.$! rance has 'anne/ h:/raulic @racturin? an/ so)e

en+iron)ental an/ u'lic oosition ?rous are loo#in? @or s2eein?continental le?islation a?ainst shale ?as ro/uction.

"oo many barriers to 0uro(ean shale 333 will remain )e(en)ent onRussia.Colin %mith 4-!=-212. >ea/ o@ ener?: research at J"5 Caital. Euroes shale ?as isnot a threat @or RussiaF Russia 5e:on/ the >ea/lineshtt%--r'th.ru-articles-!1!-4-!=-euroes_shale_?as_is_not_a_threat_@or_russia_1=43.ht)l.

Accor/in? to theUS Ener?: 7n@or)ation A/)inistration Euroe has aroun/$= trillion cu'ic )eters o@ shale ?as al)ost ,+e ti)es the re+ious esti)ate. "hat is

equi+alent to a reser+e o@ 3& :ears co)are/ to the current 11B:ear con+entional ?asreser+es.I 7n earl: Aril the 5ritish shale ?as co)an: 7Gas /ou'le/ its esti)ates o@ shale?as in northB2est En?lan/ to 13 )illion cu'ic )etres otentiall: )a#in? the U9s reser+es

lar?er than those in Polan/. >o2e+er re)o+in? this shale ?as sa@el: @ro) the?roun/ an/ /istri'utin? it to custo)ers is @ar )ore co)licate/ in Euroethan it is in the US. I Euroean shale reser+es ?enerall: resent @ar ?reater?eolo?ical challen?es as its reser+oirs are ?enerall: thinner thansuccess@ull: co))erciali0e/ shale ?as sites in the US. A ?oo/ shale ?as reser+oirhas a shale thic#ness o@ 'et2een & an/ 1 )eters as is the case 2ith the )aKor US shalesites. 5ut )ost Euroean sites ha+e @ar thinner reser+oirs 2ith the U9s stan/in? at a )ere

4& )eters. ost Euroean shale reser+oirs are also /eeer than those in theUS a//in? to /rillin? costs an/ co)le8it: o@ e8traction.I Euroean shalealso @aces a nu)'er o@ olitical le?al an/ re?ulator: hur/les that are @ar

)ore ronounce/ than in the US an/ are li#el: to )a#e theco))erciali0ation o@ shale ?as si?ni,cantl: )ore challen?in? /esite thehi?her re+ailin? ?as rice.IAs the US e8erience sho2s u'lic healthconcerns o+er @rac#in?F can /e+elo rai/l: an/ ro+e a real 'arrier toaccess as /e)onstrate/ ': the 'an on /rillin? in Ne2 Xor# State.As Euroe is t:icall:@ar )ore /ensel: oulate/ than the US these concerns coul/ seriousl:/ela: /rillin? as the: ha+e /one in rance S2e/en an/ 5ul?aria .I Recente8erience o@ /rillin? Euroean shale ?as nota'l: in Polan/ 2hererosects see) )ost ro)isin? has 'een /isaointin?.I "hat is not to sa:there 2ill 'e no shale ?as ro/uction in Euroe 'ut the ace o@ ?ro2th isli#el: to 'e slo2 in relation to Euroes rai/l: ?ro2in? nee/ @or ne2sources o@ ?as. 7t 2ill ta#e to the en/ o@ the /eca/e an/ ro'a'l: 2ell 'e:on/ 'e@ore it is

e8tracte/ success@ull:. Euroe 2ill continue to nee/ Russian ?as @or the@oreseea'le @uture an/ )ost li#el: in increasin? quantities.I


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Gas $ A"8 atar

atar might be (ushing )own Russian (rices slightly, but only the$.%. can actually become a com(etitor with Russia #or M1 e'(orter,

)estroying Ga5(rom 333 that*s R".

atar can*t com(ete with Russian gas in 0uro(e 333 an) their e'(ortswill go to Asia instea).Gior?io Ca?ero an)Daniel@agner 4-!6-21!. CoB@oun/er o@ Gul@ State Anal:tics an/research anal:st 2ith Countr: Ris# Solutions a crossB'or/er ris# a/+isor: ,r)Z an/ CECountr: Ris# Solutions. As Euroe Reconsi/ers Russian Gas Qatar a?ue. >e 2as re+iousl: senior research @ello2 at the Center @or Securit:Stu/ies E"> `urich lea/in? its 2or# on ener?: securit: an/ olitical ris# senior ener?:anal:st at Data)onitor in the Cit: o@ ;on/on.


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Euroe 2ill 2atch the /e'ate 2ith consi/era'le interest not Kust 'ecausethe li#es o@ 5G Grou ha+e a 34[ sta#e in total US ;NG e8ort caacit: 'ein? /e+eloe/ 'ut 'ecause Euroean hu' rices currentl: sit )i/B2a:'et2een the US an/ Asia. Euroean sot )ar#et liqui/it: has hel/ u reasona'l: 2ellthan#s to Qatari sulies 'ut Doha is increasingly looking 0ast, a )ynamicthat coul) lea+e 0uro(e with its more tra)itional Russian, North %ea

an) North A#rican (i(eline mi'. 7@ A)erican ;NG /oesnt co)e ?oo/North


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Gas $ A"8 Hther Pro)ucers

0+en i# other (ro)ucers un)ermine Russia to some e'tent, only the$.%. can actually become the M1 &NG e'(orter an) )estroy Russian

markets 333 that*s R".

9aor barriers hol) back other shale (ro)ucers.atthe2 Bulbert -=-212. Senior @ello2 at the Clin?en/ael 7nternational Ener?:Pro?ra))e "he >a?ue. >e 2as re+iousl: senior research @ello2 at the Center @or Securit:Stu/ies E"> `urich lea/in? its 2or# on ener?: securit: an/ olitical ris# senior ener?:anal:st at Data)onitor in the Cit: o@ ;on/on.


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Gas $ A"8 $.%. Pro)uction 4ne+itable;0'(ortsNot Key

"hese car)s are new links 333 the 1AC has rea) e+i)ence that the $.%.gas in)ustry will colla(se without e'(orts;new )rillingL 333 the #actthat $.%. (ro)uction is alrea)y hurting Russia (ro+es the link, butwill be re+erse) absent the (lan.

>es, $.%. (ro)uction may ha+e im(acte) Russia somewhat, but thatwill be re+erse) absent e'(orts.atthe2 Bulbert -=-212. Senior @ello2 at the Clin?en/ael 7nternational Ener?:Pro?ra))e "he >a?ue. >e 2as re+iousl: senior research @ello2 at the Center @or Securit:Stu/ies E"> `urich lea/in? its 2or# on ener?: securit: an/ olitical ris# senior ener?:anal:st at Data)onitor in the Cit: o@ ;on/on.


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***Links/Internals***


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2NC &ink @all

$% e'(orts are the key threat to Ga5(rom 333 critical to o+erallRussian economy.Richar/@eit5 1-11-212. Senior @ello2 at the >u/son 7nstitute. Russia% 7s Putino)icsUnsustaina'leYF EurasiaNet htt%--222.eurasianet.or?-no/e-663&.

Aslun/ cast Ga0ro) the natural ?as ?iant as a 'ell2ether@or the @uture o@state caitalis) in Russian. Natural gas e'(orts are one o# the most +italcom(onents o# the Russian economy ena'lin? Putin to in/ul?e in +astsen/in? sche)es eseciall: an a)'itious )ilitar: 'uil/u.Aslun//escri'e/ Ga0ro)s contri'utions to state coers as the )ominantsource o# rents #or the Kremlin.F I 5ut Ga0ro)s a'ilit: to re)ainco)etiti+e in international )ar#ets is co)in? un/er e8tre)e ressure.:/raulic @rac#in?technolo?: threatens to /isen?a?e the U.S. )ar#et @ro) @orei?n i)orts ore+en to turn the U.S. into an ener?: e8orter/esite its )assi+e consu)tion.Plu))etin? /e)an/ 2oul/ /ra)aticall: re/uce rices (lacing Russia in)ire ?nancial eo(ar)y since it )e(en)s on gas re+enues to balanceits bu)get. Alrea/: the U.S. has o+erta#en Russia as the 2orl/s lea/in? ro/ucer o@natural ?as.

4ts not ust 0uro(e 333 $.%. e'(orts will un)ermine Russia*s attem(t to

e'(an) e'(orts to Asia.Natal:a %korlyginaan)l?a 9or)yushenko &-16-212. 9o))ersant. Ga0ro)soutloo# lique,e/F Russia 5e:on/ the >ea/lineshtt%--r'th.asia-articles-!1!-&-6-?a0ro)s_outloo#_lique,e/_16$&$.ht)l.

A@ter chan?in? the ?a)e in the ?lo'al natural ?as )ar#etlace once 'e@ore': startin? the shale re+olution the Unite/ States is ?earin? u @or :etanother cou this ti)e throu?hlique,e/ natural ?as (;NG e8orts. E88ono'ilan/ Qatar Petroleu) 2ill in+est u to M1 'illion in a ?as lique@action lant an/ an e8ortter)inal. A si)ilar roKect ': Cheniere Petroleu) has alrea/: 'een aro+e/ 2ith China an/
http://www.eurasianet.org/node/65070%20http://russophobe.blogspot.com/http://www.americanthinker.com/kim_zigfeld/http://www.readrussia.com/http://www.readrussia.com/http://pjmedia.com/blog/severe-economic-crisis-in-russia-looms/http://www.businessinsider.com/russia-and-shale-gas-2012-10http://rbth.asia/author/Natalya%20Skorlyginahttp://rbth.asia/author/Natalya%20Skorlyginahttp://rbth.asia/author/Olga%20Mordyushenkohttp://rbth.asia/author/Olga%20Mordyushenkohttp://rbth.asia/articles/2012/09/06/gazproms_outlook_liquefied_16797.htmlhttp://www.eurasianet.org/node/65070%20http://russophobe.blogspot.com/http://www.americanthinker.com/kim_zigfeld/http://www.readrussia.com/http://pjmedia.com/blog/severe-economic-crisis-in-russia-looms/http://www.businessinsider.com/russia-and-shale-gas-2012-10http://rbth.asia/author/Natalya%20Skorlyginahttp://rbth.asia/author/Olga%20Mordyushenkohttp://rbth.asia/articles/2012/09/06/gazproms_outlook_liquefied_16797.html


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Sin?aore rea/: to in+est state @un/s. "he US authorities ha+e recei+e/ alications @or atotal o@ 11 'illion cu'ic )etres in annual lique@action caacit:. 7@ all #no2n roKects ?oahea/ the co)'ine/ caacit: 2oul/ e8cee/ ! 'illion cu'ic )etres 2hich is a thir/ )ore

than Ga0ro) currentl: e8orts. oreo+erA)ericas ;NG is inten/e/ @or the AsiaBPaci,c )ar#et the )ar#et that the Russian ?as )onool: has 'een tr:in?to enetrate2ithout )uch success.I E88ono'il an/ Qatar Petroleu) 2ho hol/ a 3[an/ $[ share in "e8ass Gol/en Pass Pro/ucts re?asi,cation ter)inal resecti+el: ha+ealie/ to the US Deart)ent o@ Ener?: @or authorisation to 'uil/ the secon/ hase o@ theter)inal. 7t 2ill co)rise a 1=.6 )illionBtonne er :ear lique@action lant an/ an e8ortter)inal. "he roKect is +alue/ at aroun/ M1 'illion. "he roose/ e8ansion o@ Gol/en Pass

is an oortunit: to caitalise on A)ericas a'un/ant natural ?as resources. "heEner?:7n@or)ation A/)inistrations (E7AAnnual Ener?: utloo#!1! sho2s that theUnite/ States has su'stantial ?as sulies that can suort ?as e8ortsinclu/in? ;NG e8orts o+er the lon?er ter) the co)anies sai/.I "he E7A reortin question 2hich 2as release/ in une contains a re+ise/ @orecast o@ natural ?as ro/uctionin the Unite/ States. Accor/in? to the a?enc:s )o/el US natural ?as ro/uction 2ill )atch/o)estic consu)tion there in !!1 at the $!!.4 'illion cu'ic )etres )ar# (Russia ro/uce/6$ 'illion cu'ic )etres o@ ?as in !11 an/ 2ill continue to ?ro2 at an e+en @aster ace.E8ort otential 2ill reach 4 'illion cu'ic )etres ': !3=.I Unli#e oil 2hose i)orts )eet46[ o@ US /o)estic /e)an/ the countr: is )ore in/een/ent in ter)s o@ natural ?as.

7)orts accounte/ @or Kust =[ o@ consu)tion in 1&4. 5ut in the late 1&&s consu)tionstarte/ to outstri ro/uction ': a noticea'le )ar?in 2ith i)orts reachin? 16[ o@ totalconsu)tion (aroun/ 1 'illion cu'ic )etres ': !1. 7t 2as at that ti)e that Ga0ro)accelerate/ the /e+elo)ent o@ the Shto#)an ?as an/ con/ensate ,el/ 2hich 2as ori?inall:suose/ to ro/uce ;NG @or e8ort to the Unite/ States. "he Russian )onool: e+en starte/trial ;NG /eli+eries to the US un/er s2a ter)s an/ 2as consi/erin? the ossi'ilit: o@articiatin? in re?asi,cation ter)inals there.I >o2e+er the rai/ /e+elo)ent o@ shale ?asreser+es in the US su//enl: chan?e/ the 2hole icture. "he share o@ shale ?as in totalro/uction rose @ro) 1[ in ! to 34[ in !11 an/ is e8ecte/ to rise to 43[ ': !1= an/to 6[ ': !3=. As a result accor/in? to the E7A US natural ?as i)orts ha+e shrun# ':4=[ o+er the ast ten :ears. 7n !11 natural ?as i)orts @ell ': !=[ to the 1&&! le+el 2hile;NG i)orts /ecrease/ ': 1&[. ean2hile the Shto#)an /e+elo)ent roKect stalle/ asthe US not onl: cease/ to 'e the )ain rosecti+e 'u:er o@ its ?as 'ut also stee/ u

co)etition @or sulies to other )ar#ets.I US e8ort o@ ;NG is racticall: nonB

e8istent o2in? to the lac# o@ lique@action caacit:(a lique@action lant has not'een 'uilt in the US since 1&6$. "he onl: oeratin? lant at 9enai in Alas#a 2as slate/ @orclosure in !11 'ecause it 2as not )a#in? a ro,t. 5ut a@ter the u#ushi)a nuclear lant/isaster its o2ners chan?e/ their )in/s an/ resu)e/ sulies to aan (3$ tonnes in

!11.At the sa)e ti)e 'ecause o@ /o)estic )ar#et saturation the USstarte/ reBe8ortin? re+iousl: i)orte/ ;NG in !&. Accor/in? to the E7A reBe8orts soare/ ==[ to 1.1! )illion tonnes in !11 alone. "he Unite/ States starte/ reBe8ortin? ;NG to China @or the ,rst ti)e in !11. "hese oerations are hi?hl:ro,ta'le. or e8a)le accor/in? to the US Deart)ent o@ Ener?: A)erica i)orte/ 1.14)illion tonnes o@ ;NG o+er a threeB)onth erio/ an/ e8orte/ .!! )illion tonnes. on? 9on?Sin?aore in+est)ent @un/ RR Caital


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'ou?ht 1&[ o@ Cheniere @or M46) in a:. Reuters reorte/ that Chinas (C7C an/Sin?aores (G7C so+erei?n 2ealth @un/s 2ere a'out to in+est another M1 'illion in the

co)an:. Accor/in? to "he inancial "i)es "e)ase# an/ RR lan to set u asearate )ar#etin? su'si/iar: to?ether 2ith Cheniere to sell ;NG in Asia .I"he hea/ o@ East Euroean Gas Anal:sis i#hail 9orche)#in 'elie+es that a )ani@ol/ rice/ierential 'et2een the US an/ the AsiaBPaci,c re?ion 2ill ersist o+er the ne8t @e2 :ears2ith e8ort roKects continuin? until h:sical li)its on a+aila'le natural ?as +olu)es are

reache/. Com(etition will bene?t all e'ce(t Ga5(rom8 9orche)#inre)in/s us that a /ro in US sot rices ha/ alrea/: nu/?e/ Ga0ro)to2ar/s re/ucin? the rices it char?es its Euroean custo)ers. >e a//e/ thatthe interests o@ Russian consu)ers 2ere rotecte/ ': the ?o+ern)entB)an/ate/ rincile o@equal returns on e8ortsZ there@ore the: also stan/ to 'ene,t @ro) hea+: co)etition in the

?lo'al natural ?as )ar#etlace. 9orche)#in thin#s that Ga0ro) 2ill 'e a'le toco)ete a?ainst A)erican ?as e8orters @or e8ternal)ar#ets inclu/in? the

AsiaBPaci,c )ar#et i@ it )a#es concessions on rice an/ cuts ielineconstruction costs. Ga0ro) itsel@ re@ers not to co))ent u'licl: on the A)ericanthreat @or no2.

"he China )eal has gi+en Russia a li#eline but $.%. e'(orts are thekey threat."he Bill =-!4-21!. RussiaBChina ?as /eal @uels U.S. e8ort ushFhtt%--thehill.co)-olic:-ener?:Ben+iron)ent-!$13&BrussiaBchinaB?asB/ealB@uelsBusBe8ortBush.

;a2)a#ers2ho 2ant the Unite/ States to e8ort )ore natural ?as calle/ a 3B:ear M4'illion /eal @or China to 'u: ener?: @ro) Russias stateBo2ne/ ?as suliera2a#e u call @or oe+en (RBN.D. sai/ he 2orrie/ the /eal 2oul/ stren?then Russia a)i/ thecrisis in U#rainean/ ur?e/ his collea?ues to aro+e )ore ?as e8orts @ro) the U.S."his ?i+es Russia another otion. 7t stren?thens their han/ +isBB+is 2hat the:/eci/e to /o in Eastern EuroeF >oe+en sai/. An/ it )a#es it e+en )ore

i)erati+e that 2e a/+ance our le?islation to allo2 e8orts o@ ;NG (lique,e/natural ?as to Euroe so that the: ha+e alternati+e sources.F"he /eal in#e/ this 2ee# (ro+i)e) Russia with an economic li#eline an/raise/ @ears osco2 coul/ cut o ?as sulies to its nei?h'ors to stron?Bar)the) into suortin? Putins olicies.>oe+en an/ other la2)a#ers thou?h sa: the onl: resonse is @or the U.S. to 'oostits o2n ;NG e8orts 2hichthe: sa:woul) weaken Russia*s energyinuence2hile helin? A)erican allies.Chinas /eal 2ith RussianB,r) Ga0ro) is onl: helin? the) )a#e the case the: sa:.

>oe+en sai/ the Ga0ro) a?ree)ent sho2s )ore than e+er that e8orts@ro) the Unite/ States 2oul/ hurt Russia.Clearl: our ro+i/in? ;NG to Euroean/ 2or#in? 2ith Euroe @or the) to /e+elo

other sources o@ ener?: sul: 2ea#ens Putins han/F he sai/.
http://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-pushhttp://thehill.com/policy/energy-environment/207139-russia-china-gas-deal-fuels-us-export-push


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2NC Perce(tion &ink

"he (erce(tion o# $.%. mo+es towar)s gas e'(orts imme)iatelyun)ermines Russia by gi+ing countries le+erage to negotiate lower

(rices.@ashington Post 3-!!-21!. Usin? U.S. natural ?as as an ener?: 2e/?e a?ainstRussiaF E/itorial 5oar/ htt%--222.2ashin?tonost.co)-oinions-usin?BusBnaturalB?asBasBanBener?:B2e/?eBa?ainstBrussia-!14-3-!!-634ae=6B'13'B11e3B&=eB3&'e@e&a4'_stor:.ht)l.

DE5A"E >AS ra?e/ o+er 2hether the Unite/ States can ,?htJla/i)ir Putin ontheRussian resi/ents )ost @a+ora'le ?roun/% ener?: olitics.7t can an/ it shoul/articularl: 'ecause theres an o'+ious ath @or2ar/ that coinci/es 2ith the Unite/ States Win/ee/ the 2orl/s W econo)ic interests. "hat ath is li@tin? irrationalrestrictions one8ortsan/ )a#in? it easier to 'uil/ natural ?as e8ort ter)inals.or :ears r. Putin has use/ his nations 2ealth o@oil an/ natural ?as as a cu/?elto 'ull: his

nei?h'ors. At resent the Euroean Unions lar?e i)orts o@ Russian natural

?as /iscoura?e a @orce@ul


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0't 0'(orts Burt Russia

&ack o# )i+ersi?cation means $% e'(orts will crush Russia.7an Pry)e 1!-14-211. oun/er an/ C.E.. o@ Eurasia Strate?: \ Co))unications inosco2. Russias ener?: strate?: )ust loo# to the @utureF Russia 5e:on/ the >ea/lineshtt%--r'th.ru-articles-!11-1!-14-?lo'al_ener?:_reser+es_to_?ro2_13&&$.ht)l.

So its no 2on/er that oicials @ro) Russian ?as ?iant Ga0ro) ha+e 'eenrather s#ittish on shale ?as tr:in? to /o2nla: its otential i)act% Russia has aroun/oneBthir/ o@ the 2orl/s con+entional ?as reser+es an/ e8orts )ostl: to Euroe 2hich haslar?e shale /eosits. I "he e8istence o@ shale ?as has 'een #no2n @or :ears 'ut e8tractin?the tin: 'u''les o@ oil or ?as trae/ in roc# 2as /iicult an/ e8ensi+e eseciall: at lo2er

/eths. 5ut @rac#in? a ne2 technique that in+ol+es @orcin? liqui/s into shale roc# at hi?hressure to 'rea# it aart an/ allo2 the trae/ ?as to 'e cature/ has trans@or)e/ theU.S. ener?: in/ustr: in recent :ears not onl: /ri+in? /o2n natural ?asrices 'ut increasin? A)erican ener?: reser+es ': /eca/es an/ ena'lin?the countr: to s2itch @ro) 'ein? a )aKor i)orter o@ ?as to an e8orter inthe near @uture. I "he o'+iousl: conclusion is that other countries 2ith lenti@ul /o)esticreser+es 2ill also ha+e @ar less nee/ o@ ener?: i)orts althou?h this coul/ 'e 'alance/ ':

risin? ener?: /e)an/ e+en i@ as )an: e8erts ar?ue the /e+elo)ent o@ shale ?as inEuroe an/ Asia 2ill 'e )uch slo2er than in the U.S. /ue to ti?hterre?ulation an/ the en+iron)ental concerns arisin? @ro) @rac#in?. "he threats@ro) the rocess inclu/e earthqua#es @ro) /rillin? an/ the otential conta)ination o@ ?roun/2ater. An/ 2hile natural ?as e)its less C! than oil an/ coal it ne+ertheless e)its )ore thanrene2a'le ener?: sources an/ nuclear o2er. So)e researchers e+en ar?ue that shale ?as is

actuall: /irtier than coal.I A//itionall: Euroe an/ Asia are )uch )ore /ensel:oulate/ than the U.S. so oular oosition to @rac#in? coul/ 'e )uch?reater than in the Unite/ States. rance @or e8a)le has alrea/: 'anne/@rac#in? 'ut Polan/ 2hich has lenti@ul reser+es is ushin? ahea/ to re/uce its

/een/ence on Russian ?as.I "he 2orl/ re)ains +er: uncertain a'out ener?: olic: an/ it isstill too earl: to assess the eect the /e+elo)ent o@ shale ?as )a: ha+e on ?lo'al ener?:securit: /o)estic olitics an/ @orei?n olic: an/ the ?lo'al econo):. 5ut /esite the

accusations o@ h:e re?ar/in? shale theA)erican e8erience has sho2n that it isotentiall: trans@or)ational oenin? u the ro)ise o@ /o)esticall: ro/uce/ ener?:@or /eca/es to co)e.I "he 9re)linsstu''orn re@usalsince ! to /i+ersi@: theecono): a2a: @ro) ener?: coul/well come home to roost #ar soonerthan anyone in Russia e'(ects.

$% e'(orts weaken Russia.C00 4nsight &-13-212. Central an/ Eastern Euroe 7nsi?ht a Polish Consultin? Grou.Russia si/eline/ ': the US in ;NG e8ortsF htt%--ceeinsi?ht.net-article-336-russiaB

si/eline/B':BtheBusBinBln?Be8orts.

"he Unite/ States 2ill 'e the /o)inant sulier o@ ;NG ?as to the Euroean)ar#et surassin? Russian e8orts in the near @uture re/icte/ e8erts atthe !!n/ 9r:nica Econo)ic oru)ta#in? lace 'et2een Set. 4B6 !1!.I H5:!! there 2ill 'e )ore US ;NG ?as on the Euroean )ar#et thanuncon+entional ?as @ro) Euroean sourcesH sai/ A/nan Jatanse+er a senior@ello2 at Carne?ie En/o2)ent 7nstitute.I US ;NG e8orts 2ill cature aroun/ 1B1= ercento@ the ?lo'al ;NG )ar#et. "here is stron? suort @ro) the ?as in/ustr: in A)erica to realise


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;NG roKects as in the lon? ter) the: 2ill contri'ute to the rice sta'ilit: o@ the ?as sectorJatanse+er a//e/.I Euroe is the secon/Blar?est )ar#et in the 2orl/ in ter)s o@ ;NG

consu)tion @ollo2in? the Asia. "he Euroean share in ?lo'al ;NG i)orts co)esto !$Bercent an/ increases annuall: ': 1Bercent on a+era?e.I "he Russiansi/e o@ the anel see)e/ to /isa?ree stressin? that HA)erican ?as 2ill sta: in the A)erican)ar#et 'ecause the lo2 ?as rices are i)ortant @or the sti)ulation o@ the A)ericanecono):H accor/in? to :#hailo Gonchar /irector o@ the Ener?: Pro?ra))e at the NS

Centre.IAmerican im(orts will weaken the Russian mono(oly o+er0uro(ean energy im(orts. Currentl: the Euroean Union i)orts a thir/o@ its ?as @ro) Russia 2hich )a#es u Bercent o@ Russian ?as ?iant Ga0ro)Ysre+enues.I Ener?: securit: is a #e: EU riorit: @ollo2in? a RussianBU#rainian ?as /isute in!6 an/ a?ain in !& that ain@ull: re+eale/ Euroes /een/enc: on Russian ?as. A/isa?ree)ent o+er ?as rices sa2 Russia cut o sul: to U#raine 2hich le/ to 2i/esrea/

?as sul: /isrutions across Central an/ Eastern Euroe. ;NG i)orts @ro) A)erica2ill a// to the sul: /i+ersi,cation that the EU has 'een ushin? @or .IHEuroean consu)ers 2ill re@er to 'u: US ;NG ?as i@ rices are )ar?inall:hi?her 'ecause o@ /i+ersi,cation reasonsH Jatanse+er a//e/.

$% e'(orts will un)ermine Russia.Reuters &-!4-212. Russias "9 e8ects U.S. ?as e8ort 'oo)Fhtt%--222.reuters.co)-article-!1!-&-!4-usBrussiaBsu))itBt)#Bi/US5REN5!1!&!4.

D)itr: Pu):ans#: "9s chair)an an/ )aKorit: sta#ehol/er sai/ e8orts o@natural ?as @ro) the Unite/ States @ollo2in? its 'oo) in shale ?as e8loration2oul/ ha+e i)ortant i)lications @or the ?lo'al ener?: sector.I H7 a)a'solutel: con+ince/ that the Unite/ States 2ill 'eco)e a net e8orterH he tol/ the ReutersRussia7n+est)ent Su))it in an inter+ie2. H"his 2ill increase /e)an/ @or +arious ro/ucts

necessar: to e8tract (shale ?as inclu/in? ies.HI 5oo)in? shale ?as outut in theUnite/ States has cause/ rices there to lu))et an/ the U.S. ?o+ern)entis consi/erin? 2hether to ?rant er)ission to e8ort e8cess sul: aslique,e/ natural ?as. "his 2oul/ ease the /o)estic ?lut an/ hel satis@:

/e)an/ in ?ro2in? )ar#ets in Asia.I H"his 2ill 'e a re+olution in the ?lo'al ener?:sectorH Pu):ans#: sai/. H7@ the U.S. ?o+ern)ent ?i+es er)ission (to e8ort?as it 2ill Lo2 to Asia an/ Euroe 2hich ha+e si?ni,cantl: hi?her ?as rice thanthe U.S.H

$.%. gas (ro)uction is the key threat to Russian gas.;eonAron =-!&-21E. Resi/ent Scholar an/ Director o@ Russian Stu/ies d AE7. "heolitical econo): o@ Russian oil an/ ?asF htt%--222.aei.or?-outloo#-@orei?nBan/B/e@enseBolic:-re?ional-euroe-theBoliticalBecono):Bo@BrussianBoilBan/B?as-.

"he i))e/iate challen?e to natural ?as rents ho2e+er is a shar loss o@ro,t 'ecause o@ the co)etition @ro) alternati+e )o/es o@ ro/uction )a/eossi'le ': ne2 technolo?ies. "he latter inclu/eshori0ontal /rillin?F to tashallo2 'ut 'roa/ /eosits an/ h:/raulic @racturin? (or @rac#in?F 2hen san/ che)icalsan/ 2ater ?el or lique,e/ ?ases are inKecte/ un/er ?reat ressure into shale roc# @or)ations

to e8tract ?as an/ oil. As a result o+er the last /eca/e US ?as i)orts ha+e shrun#': 4= ercent. 5: contrast Ga0ro) has :et to start tain? theseresources. 7nstea/ the co)an:s resi/ent Ale8ei iller has reeate/l: /ecrie/ shale ?asas a ):thF an/ a 2ell lanne/ roa?an/a ca)ai?n.FT44
http://www.reuters.com/places/russiahttp://www.reuters.com/places/russia


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"he /ro in US i)orts has @ree/ u lar?e +olu)es o@ natural ?as an/lowere) (rices on the worl) market. 7n a//ition ;NG transorte/ ': tan#ers@ro) the i//le East has increase/ si?ni,cantl: Euroes reliance on ;NG has e8an/e/

an/ Euroes ;NG in@rastructure has ?ro2n. "he rai/l: chan?in? sul: an/ ricestructure 2ill 'e @urther altere/ ': a ossi'le (or e+en ro'a'letrans@or)ation o@ the Unite/ States @ro) an i)orter to an e8orter o@

natural ?as.


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2NC %(ot 9arket 4;&

$.%. e'(orts will be the )ecisi+e #actor in creating a s(ot market.atthe2 Bulbert -=-212. Senior @ello2 at the Clin?en/ael 7nternational Ener?:Pro?ra))e "he >a?ue. >e 2as re+iousl: senior research @ello2 at the Center @or Securit:Stu/ies E"> `urich lea/in? its 2or# on ener?: securit: an/ olitical ris# senior ener?:anal:st at Data)onitor in the Cit: o@ ;on/on. enr: >u' 'ac# at a sustaina'le M4B$-'tu le+el(an/ ': @ar the )ost lucrati+e @or so)e o@ the )i/Bca la:ers in+ol+e/ isto si?n u international ;NG contracts. "hats e8actl: 2hats 'ein? /one2ith so)e o@ the lar?er 7Cs(Ro:al Dutch Shell 5P an/ E88ono'il alsoa??ressi+el: ushin? @or ;NG e8ortsto caitalise on hu?e srea/s not to )entionre+entin? @urther 2riteB/o2ns on shale assets. 7ts not li#e Chinese cha)ions 2or#in? on

US la:s 2oul/ ha+e an: i/eolo?ical oosition to such a rosect. 7n total ERC hasaroun/ 1!='c)-: o@ ;NG alications currentl: a2aitin? aro+al e+en on a'a/ /a: 4B='c) e8orts shoul/ 'e +er: @easi'le ': !!. "hat 2oul/ )a#e the USthe thir/ lar?est ;NG la:er in the 2orl/. 7ts also ?oin? to 'e the crucial#actor o+er the ne't ?+e years to )eci)e where gas markets arehea)ing. A)erica 2ill 'e )ecisi+e #or #uture (ricing mo)els 2hetherthe: shi@t to ?as (rather than oil @un/a)entals. $% &NG coul) be thestraw that breaks oil in)e'ation back.

"hat crushes Russia*s economy.Da+i/ G. "arr arch 21. A/Kunct Pro@essor Ne2 Econo)ic School osco2. E8ortRestraints on Russian Natural Gas an/ Ra2 "i)'er%


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o@ /eli+ere/ lique,e/ natural ?as. "he Russian ?o+ern)ent has ?i+en Ga0ro) e8clusi+e ri?htto use the ielines @or the e8ort o@ natural ?as to Euroe.4 Gi+en its )ar#et share this

i)lies Ga0ro) has so)e )ar#et o2er in Euroe.=I Russian /o)estic consu)tionin ! o@ 4! 5C 2as !.$ ti)es Russias sales in Euroe. "he #e: oint is thatto sell si?ni,cantl: )ore o@ its ?as in Euroe Ga0ro) 2oul/ ha+e to accet a lo2er rice

i.e. it @aces a /o2n2ar/ sloin? /e)an/ cur+e. "his )eans that there is no 2orl/

riceF o@ ?as that Russia @aces. 7n this situation it is oti)al @or Ga0ro) to set)ar?inal re+enue equal to )ar?inal costs on e8orts to e8loit this )ar#eto2er 2hich i)lies its rice 2ill e8cee/ its lon? run )ar?inal costs .I "arran/ "ho)son(!3 esti)ate/ that uni@or) ricin? o@ Russian natural ?aswoul) be e'tremely costly to Russia.6 7@ Ga0ro) 2ere to sell its ?as inEuroe at lon? run )ar?inal costs(inclu/in? transortation costs its lost (ro?tswoul) eual about two (ercent o# Russian GDP.


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0't $.%. kt %(ot Prices

$.%. is the key )eterminant #or s(ot (rices 333 e'(orts )etermine it.atthe2 Bulbert =-!6-212. Senior @ello2 at the Clin?en/ael 7nternational Ener?:Pro?ra))e "he >a?ue. >e 2as re+iousl: senior research @ello2 at the Center @or Securit:

Stu/ies E"> `urich lea/in? its 2or# on ener?: securit: an/ olitical ris# senior ener?:anal:st at Data)onitor in the Cit: o@ ;on/on.


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isnt articularl: 'othere/ a'out 'ein? so Le8i'le o+er ta#e or a: clauses on lon? ter)contracts. 7@ Asia e+entuall: en/s u o+ersulie/ 2hate+er 5G @ails to sell in the East it 2ill?et si)ilar rices @or on Euroean hu's an/ erhas e+en one /a: in Ne2 Xor#.I As scar: asthat )i?ht soun/ ?i+en that an:thin? u to !=)t-: o@ ;NG )i?ht )a#e its 2a: onto ?lo'al)ar#ets o+er the ne8t t2ent: :ears @ro) e+er: oint on the co)ass Ni?eria 7n/onesia7srael PNG o0a)'ique Equatorial Guinea :ou na)e it no2 2oul/ see) a ?oo/ ti)e to

or?anise the ?as 2orl/ on ?lo'al ?as @un/a)entals. "he ne8t ,+e to ten :ears 2ill

lar?el: /eter)ine 2hich /irection 2ere hea/in? 'ut liqui/ )ar#ets are ?oo/ @or@un?i'ilit: the: are ?oo/ @or sul: an/ ?oo/ /i+ersit: o@ sources. An/ it*s $% &NG thatcoul) ti( the balanceto2ar/s those interests.I "ra/itional etroBstate 2oul/ 'e ut onthe 'ac# @ootZ ?as 2oul/ ,nall: 'rea# its oil in/e8ation shac#les ne2 )ar#et/esi?ns 2oul/ /e+elo)ent. US /eli+eries 2oul/ also hel to ut the transatlanticener?: relationshi 'ac# on trac# @or the )ore )ar#et )in/e/ at least once thehi//en han/ has /one 2hat it shoul/ /o ,rstZ let US )aKors )a#e loa/s o@ )one: in Asia

'e@ore thin?s ?lo'all: le+el out.American natural gas has the (otential tochange the worl) the only uestion that remains, is whether $%(oliticians will let glorious global con+ergence (lay out.

Hnly $.%. e'(orts will trigger s(ot (ricing."he 0conomist $-14-212. A liqui/ )ar#etFhtt%--222.econo)ist.co)-no/e-!1==4=6.

5ut that )ar#et is still s)all. r 5arallat rec#ons that althou?h the ;NG sot)ar#et is ?ro2in? @ast in !11 the in/ustr: /eli+ere/ onl: three car?oes a/a: un/er sot or shortBter) contracts a'out a quarter o@ total ;NG tra/e/

+olu)es. Still there are si?ns that ;NG )ar#ets are ?ettin? )ore Le8i'leartl: 'ecause Euroe un2illin? to let Ga0ro) /o)inate sulies is a//in? )ore ;NGi)ort caacit:. Asian 'u:ers @or their art are ?ettin? )ore reluctant to si?n !B:ear oilBin/e8e/ contracts in current ne?otiations 2ith Cana/ian suliers. 7n @uture ;NG contracts)a: 'e /ra2n u @or Kust t2o or three :ears rather than /eca/es accor/in? to >ol)anen2ic# enr: >u' rices.I uch o@ the?lo'al ?ro2th in /e)an/ 2ill co)e @ro) China. 7t is 'uil/in? ;NG i)ort ter)inals @ast 2ith@our u an/ runnin? ,+e un/er construction an/ a /o0en )ore at the lannin? sta?e. An/Shan?hai is +:in? 2ith Sin?aore to 'eco)e a re?ional hu' to /e+elo sot )ar#ets 'ase/ onco)etition 'et2een ;NG ieline ?as an/ /o)estic ro/uction. China has 'een inne?otiations a'out a ieline /eal 2ith Russias Ga0ro) @or a /eca/e 'ut has so @ar re@use/to si?n. ean2hile it has secure/ co)etin? ?as sulies ': 'uil/in? 'oth ;NG ter)inals an/ielines @ro) :an)ar an/ @ro) "ur#)enistan.I A question o@ riceI Plans @or the Russianieline re)ain on the /ra2in? 'oar/. Ga0ro) 2ants to sell ?as to China in or/er to 'eco)eless reliant on e8orts to Euroe an/ China is sure to nee/ Russian ?as in the @uture. "he)ost recent set o@ tal#s 'ro#e u 'ecause China 2ill not a: Asian oilBin/e8e/ rices asRussia /e)an/s or e+en Euroean oilBin/e8e/ rices. 7t 2ants so)ethin? closer to Euroean

sot rices 2hich Russia 2ill not entertain. 5ut a /eal )a: e+entuall: 'e struc#.I 7n the

lon?er ter) as shale ?as 'eco)es )ore 2i/esrea/outsi/e A)erica so)ecountries 2ill no lon?er nee/ to i)ort ;NG @reein? u )ore sulies @orthe sot )ar#et.Xet it 2ill ta#e a lot o@ sot ;NG to create a 'i? liqui/?lo'al )ar#et. r %to((ar) o# 4B% thinks this will ha((en only i#America takes to e'(orting &NG on a large scale.


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$% e'(orts (ut uniue (ressure #or Russia to gi+e u( oil in)e'ing.ichael Ratner et al Paul 5el#in i) Nichol an/ Ste+en


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0't %(ot Prices Burt Russia

Ga5(rom key 333 s(ot (ricing kills."he 0conomist $-14-212. Gas ricin? in Euroe% Care@ul 2hat :ou 2ish @orFhtt%--222.econo)ist.co)-no/e-!1==433.

"he lon?Bter) ta#eBorBa: contracts that ?uarantee )ini)u) urchases o@?as in/e8e/ to oil ricesWthe custo)ar: )etho/ @or 'u:in? an/ sellin? ?asin EuroeWare co)in? un/er enor)ous ressure. "his is usettin?RussiasGa0ro)an/ Nor2a:s Statoil 2hich 'et2een the) sul: 4[ o@ the continents ?as)ainl: on those ter)s. E+en Jla/i)ir Putin Russias resi/ent ac#no2le/?e/in a seechin arch that co)etition @ro) shale ?as 2oul/ ha+e a 'i? i)act on Russias?as suliers. Ga0ro) is ha+in? to ?au?e e+er )ore care@ull: ho2 )uch it can char?e itsEuroean custo)ers 2ithout uttin? the) o. Gas accounts @or 1[ o@ Russias GDPan/)a#es a han/so)e contri'ution to the states coers so r Putin is ri?ht to 'e2orrie/.


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$% 0'(orts Kill Ga5(rom

$% e'(orts )estroy Ga5(rom.@ashington Post &-!=-212. U.S. ?as e8orts coul/ li)it Putins inLuenceF E/itorial5oar/ htt%--222.2ashin?tonost.co)-oinions-usBnaturalB?asBe8ortsBcoul/Bli)itB+la/i)irButinsBinLuence-!1!-&-!=-e&4&34!cB6&1B11e!B=aB=311/@6a'4_stor:.ht)l.

NE ">7NG ">A" this :ears resi/ential can/i/ates 'oth ?et ri?ht is that the Unite/States lenti@ul reser+e o@ uncon+entional natural ?as is an e8cetionalnational asset not onl: re+olutioni0in? the ener?: 'usiness at ho)e 'ut also'ene,tin? A)erica an/ its allies a'roa/.I +er the ast /eca/e ne2 /rillin?)etho/s ha+e )a/e oceans o@ @uel once trae/ in su'terranean roc# @or)ations easil:

accessi'le. "he result is that the Unite/ States 2hich use/ to 2orr: a'outi)ortin? hu?e quantities o@ natural ?as is no2 ro/ucin? loa/s o@ its o2nso )uch that/o)estic rices ha+e tu)'le/ an/ ener?: co)anies are as#in? @orer)ission to lique@: an/ e8ort so)e o@ the countr:s outut. "hats ?oo/

@ora +ariet: o@ reasons inclu/in? as "he Posts


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Russia Gas Key

Gas is key to Russia*s economy.Ser?e: Paltse+ 211. assachusetts 7nstitute o@ "echnolo?: Ca)'ri/?e USA.Sule)entar: Paer SP 3.1% Russias Natural Gas E8ort Potential u to !=F 7" Ener?:Paer )itei.)it.e/u-s:ste)-,les-NaturalGas_Su_Paer3.1./@.

Natural ?as e8orts @ro) Russia ?et secial attention in co)arison to otherener?: e8orts 'ecause Russia has less /i+ersi,e/ 2a:s to e8ort natural?asin co)arison to oil an/ coal 2hich are in ?eneral easier to transort. n the /e)an/si/e it is also relati+el: easier to s2itch @ro) one oil or coal sulier to another hence thei)orters ha+e @e2er concerns a'out rel:in? on a sin?le sulier or a li)ite/ nu)'er o@suliers. As a result Russian oil an/ coal e8orts ha+e not ha/ the /isrutions seen in the?as transit routes throu?h U#raine an/ 5elarus. Russia tries to ,n/ a 2a: o@ re/ucin?reliance on transit countries as /isutes 2ith the) hurt sta'le ?as sulies. Euroe as thelar?est i)orter o@ Russian ?as tries to ,n/ a 2a: o@ re/ucin? reliance on Russia ': )o+in?to lique,e/ natural ?as (;NG i)orts ':I tan#ers @ro) A@rica the i//le East an/ ;atin

A)erica. "he /e+elo)ent o@ shale ?as in USA has resulte/ in a su'stantialrice /ierential 'et2een North A)erican an/ Euroean (an/ Asian natural?as )ar#ets. "his rice /ierenB tial creates a otential @or ;NG e8orts@ro) USA. uture ;NG /e+elo)ent an/ e)er?ence o@ shale ?as osequestions a'out the a'ilit: o@ Russia to #ee ?as e8orts to Euroe at therecent le+els 2hen a'out =.= trillion cu'ic @eet ("c@1 out o@ a ro/uction o@ 1&!1 "c@2ere /estine/ to Euroean )ar#ets.

Russia )e(en)ent on gas 333 key to economic growth an) (oliticalstability.Farnato 1!(9at: 5arnato a: !1 !14 China an/ Russias Ga0ro) si?n #e: ?asa?ree)entF Associate Pro/ucer CN5C.co) htt%--222.cn'c.co)-i/-44!!3&3A

RussiasstateBcontrolle/Ga0ro) si?ne/ a lon?Ba2aite/ )e?a/eal to sul: ?as toChinaon


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Graha)B


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A"8 Gas De(en)ence Causes RussianDein)ustriali5ation ar+ar/ an/ 8@or/contri'utor @or or'es. >as Russia Dein/ustriali0e/YF or'eshtt%--222.@or'es.co)-sites-)ar#a/o)anis-!1!-1!-1-hasBrussiaB/ein/ustriali0e/-.

7n the course o@ )a#in? an ar?u)ent a'out the co)in? collase o@ Chinaan/ Russiaac#son

Diehl )a/e a rather @orce@ul state)ent a'out Russias /ein/ustrialiationFun/er the )ali?nant inLuence o@Jla/i)ir Putin.7 /ont 2ant to ?et ulle/ into alar?er /iscussion a'out the accurac: o@ Diehls thesis nee/less to sa: 7) s#etical that 'othChina an/ Russia 2ill collase in the near @uture 'ut 7 /i/ 2ant to @ocus in on his co))enton the suose/ /eath o@ in/ustrial Russia (e)hasis a//e/%or Russia the /ile))a is su))e/ u in the rices o@ oil an/ ?as an/ the role those t2oco))o/ities ha+e co)e to la: /urin? the Putin era. eres@ro) RED is a ?rah o@ Russian in/ustrial ro/uction since 1&&4%

7 chose 1&&4 'ecause the ,?ures @ro) 1&&!B&3 ten/ to 'e inaccuratel: inLate/ ': theinclusion o@ 2orthless an/ nonBco)etiti+e So+iet ro/uction that 2as onl: ossi'le 2itha'sur/ state su'si/ies (once the su'si/ies 2ere re)o+e/ the ro/uction ro)tl: cease/.So+iet in/ustrial ro/uction reall: 2as 2orthless )a/e u o@ ?oo/s that no one 2ante/ro/uce/ so ineicientl: that )an: enterrises 2ere ne?ati+e +alueBa//e/. "hat is to sa:)an: So+iet in/ustrial ,r)s 2ere so oorl: run that their 'usinesses rocesses actuall:

su'stracte/ +alue @ro) their ra2 inuts. >o2e+er re?ar/less o@ 2hich :ear :ou use

as the startin? oint e+en i@ :ou ta#e the inLate/ nu)'ers o@ the i))e/iateostBSo+iet :ears the u2ar/ tren/ since the 1&& /e't /e@aultis i)ossi'le to )iss.ther /ata sources also su??est that Russian in/ustr: has not 2ithere/ onthe +ine un/er Putinsraacious an/ inco)etent rule.>eres a ?rah @ro) a recentE5RD reort%
http://blogs.forbes.com/markadomanis/http://blogs.forbes.com/markadomanis/http://www.worldaffairsjournal.org/article/coming-collapse-authoritarians-china-and-russia-face-endgamehttp://www.forbes.com/places/china/http://www.forbes.com/places/russia/http://www.forbes.com/places/ms/jackson/http://www.forbes.com/places/ms/jackson/http://www.forbes.com/places/ms/jackson/http://www.forbes.com/profile/vladimir-putin/http://www.forbes.com/business/http://research.stlouisfed.org/fred2/graph/?id=RUSPROINDMISMEIhttp://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdfhttp://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdfhttp://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdfhttp://blogs.forbes.com/markadomanis/http://www.worldaffairsjournal.org/article/coming-collapse-authoritarians-china-and-russia-face-endgamehttp://www.forbes.com/places/china/http://www.forbes.com/places/russia/http://www.forbes.com/places/ms/jackson/http://www.forbes.com/profile/vladimir-putin/http://www.forbes.com/business/http://research.stlouisfed.org/fred2/graph/?id=RUSPROINDMISMEIhttp://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdfhttp://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdf


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Ser+ices ?re2 sharl: /urin? the 1&&s as :ou 2oul/ e8ect since theSo+iet co))an/ econo): acti+el: suresse/ )ost ser+ice in/ustries an/consistentl: o+erBro)ote/ hea+: in/ustr:. >o2e+er the chan?e since !!has not e8actl: 'een o+er2hel)in? )anu@acturin?s share o@ the econo):has Luctate/ 2ithin a +er: narro2 ran?e.5ut he: )a:'e the E5RD is @ull o@ PutinBlo+ers.As :et )ore con,r)ation thatRussian in/ustr: isnt /ea/ :et heres a ?rah o@


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Russian econo): ultraBco)etiti+eY Not at all. 5ut it si)l: isnt the case that Russia is no2

a ?iant 2astelan/ o@ shuttere/ @actories a lace 2here the: /ont 'uil/ thin?s an:)ore.FAssho2n ': statistics @ro) a 2i/e ran?e o@ resecte/ international institutionsRussian in/ustrial ro/uction has 'asicall: 'een increasin? a'out as @ast asthe rest o@ the econo):. 7ts quite ossi'le in/ee/ its +er: li#el: that a 'etterBrunecono)ic olic: 2oul/ ha+e @ostere/ )ore in/ustrial ?ro2th 'ut Russian in/ustr:

actuall: see)s to 'e /oin? 9.


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***Impacts***


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Ci+il 2ar in Russia coul/ in+ol+e ,?htin? near stora?e sites @or nuclear

che)ical or biological wea(ons an/ a?ents ris#in? lar?eBscale

conta)ination an/ hu)anitarian /isaster. fA nuclear acci)ent at a o2er lant or

@acilit:coul/ en/an?er li@e an/ health in Russia an/ nei?h'orin? states. f Ache)ical acci/ent at a lant or nuclearBrelate/ @acilit: coul/ en/an?er li@e an/ health in Russia an/nei?h'orin? states. f Ethnic o?ro)s in south Russia coul/ @orce re@u?ees into Geor?ia A0er'aiKan

Ar)enia an/-or U#raine. 7llustrati+e Scenarios f Econo)ic an/ethnic conLicts in Caucasuscoul/ erut into ar)e/ clashes 2hich 2oul/ en/an?er oil an/ ?as ielines in the re?ion. f

A )assi+e ecological )isastersuch as an earthqua#e @a)ine or ei/e)iccoul/

sa2n re@u?ees an/ srea/ illness an/ /eath across 'or/ers.fAnincreasin?l: cri)inali0e/ Russian econo): coul/ create a sa@e ha+en @orcri)e or e+enterroristBlin#e/ ?rous. ro) this 'ase cri)inals /ru? tra/ers an/ terroristscoul/ threaten the eole an/ econo)ies o@ Euroe Asia an/ the Unite/ States. fAccelerate/Russian 2eaons an/ technolo?: sales or unauthoB ri0e/ /i+ersioncoul/ @oster the

(roli#eration o@ 2eaons an/ 2eaon )aterials to ro?ue states an/ nonstate

terrorist actorsincreasin? the risk o# nuclear war. "his list is @ar @ro) e8hausti+e.>o2e+er si?ni,cant these scenarios )a: 'e not all are rele+ant to U.S. )ilitar: lannin?.


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econo):. Althou?h recent in/icators o@ econo)ic ?ro2th in Russia are ositi+e their 'asis in hi?h oilrices an/ a 2ea# ru'le su??ests that 2ithout co)rehenB si+e re@or) the: are li#el: not sustaina'le.Russias shrin#in? oulation suers @ro) lo2 @ertilit: as 2ell as @ro) hi?h rates o@ /isease an/shoc#in?l: hi?h le+els o@ )ortalit: a)on? 2or#in?Ba?e )ales. 7@ these tren/s continue Russia 2ill @ace acontinue/ ?ra:in? o@ its oulation 2hich 2ill lace a//e/ strain on its econo):. 7t 2ill also raiseconcerns a'out Russias a'ilit: to )an its )ilitar:. inall: inso@ar as /e)o?rahic @actors no less thanecono)ic an/ olitical @actors aect re?ions an/ ethnic ?rous /i@B @erentl: the: ha+e the otential tola: into eorts to )o'ili0e arts o@ the oulation in 2a:s that increase the ris# o@ interethnic or inB

terre?ional conLict althou?h this is not hi?hl: li#el:. "he Russian )ilitar: is aecte/ not onl: ': thero'le)s o@ the countr: as a 2hole 'ut ': /iiculties o@ its o2n. "he /e)o?rahic /o2ntren/s )ean thateach :ear the :oun? )en 2ho reort @or /ut: are sic#er an/ @e2er. "he collase o@ la2 an/ or/er )eansthat )an: ha+e cri)inal 'ac#?roun/s. "he e8istin? )ilitar: structures are not i))une an/ tales o@corrution an/ cri)e e8ten/ to the hi?hest le+els. Un/er@un/in? an/ oor )aintenance continue to ta#etheir toll. Equi)ent a?es unreaire/ an/ troos are sent into 'attle 2ithout a/equate trainin?. Sol/iersan/ oicers ?o 2ithout a: @or )onths at a ti)e an/ are increasin?l: /een/ent on local ?o+ernB )ents@or olitical ,nancial an/ other suort. 7n this en+ironB )ent or/er an/ /isciline )ust 'e questione/2ith otentiall: terri@:in? i)lications eseciall: @or Russias nuclear 2eaons arsenal an/ relate/in@rastructure althou?h the i)act on the con+entional @orces alone is suicient ?roun/s @or seriousconcern. inall: there is the /ecline in Russias transortation an/ in/ustrial sectors inclu/in? theci+ilian nuclear o2er sector. "here are )i8e/ reorts a'out the state o@ Russias roa/ rail an/ othertransort net2or#s. Althou?h the net2or#s aear to 'e @unctionin? the: are @ar @ro) a ea# con/itiono@ eicienc: an/ sa@et:. 7n the in/ustrial sectors inclu/in? nuclear o2er ro/uction an/ eicienc: arelo2 2or#ers are unai/ @or )onths at a ti)e an/ @acilities are a?in?. "he ris# o@ acci/ents an/ the

/iiculties o@ reson/in? to such acci/ents quic#l: an/ eecti+el: are thus increase/."hese @actors

sin?l: an/ to?etherincrease the li#elihoo/ o@ crisis an/ /e)onstrate the e8tent o@ Russias/ecline as a ?reat o2er.


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an/-or its allies. "he threat o@ /i+ersion or acquisition o@ nuclear or other


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)ore @orces to the Russian 'or/er an/ shis are hea/in? @or Jla/i+osto#. Russia there@ore in+o#es itsstatus as a Partnershi @or Peace state to request NA" consultations. aan in turn as#s the Unite/States to assist in rollin? 'ac# the Chinese lan/ ?ra' in Russia. 7)lications "his scenario )a: at ,rstrea/ )ore li#e ,ction than a lausi'le @uture. ProKectin? 1= :ears @or2ar/ is /iicult un/er the 'est o@cirB cu)stances an/ /oin? it 2ith re?ar/ to t2o states in as )uch Lu8 as Russia an/ China is articularl:challen?in?. urther)ore e+en i@ e+ents 2ere to e+ol+e as outline/ the Unite/ States 2oul/ retain@ree/o) o@ choice% it 2oul/ 'e un/er no o'li?ation to inter+ene to /e@en/ Russia a?ainst the Chinese. nthe other han/ eseciall: i@ U.S.BChinese relations continue to /eteriorate the Unite/ States )a: ,n/ it

/iicult to re@use the request o@ its close all: "o#:o an/ a Russia in nee/. urther)orea conLict'et2een Russia an/ China 2oul/ 'e a clash 'et2een two nuclear wea(on

states . Althou?h China has a no ,rst useF olic: Russia /oes not. "his scenario osits that 5eiKin? is

'etB tin? that the nuclear ta'oo 2ill hol/ 'ut one can easil: i)a?ine thata Russia that is2ea#ene/ con+entionall: an/ @acin? a @orei?n incursion onto its soil )a: @eel

that it has no choice 'ut to escalate to nuclear use . "hus this scenario is notli#el: 'ut is inclu/e/ 'ecause it has serious i)lications @or U.S. interests. ea/quarters Cana/ian Deart)ent o@National De@ence 1-!=-2. Chinas Pollution an/ the "hreat toDo)estic an/ Re?ional Sta'ilit:F China 5rie@ =.!!htt%--222.0)a?.or?-content-sho2article.c@)Y7te)7DO&=&.

7n a//ition to the concerns alrea/: )entione/ ollution i@ lin#e/ to a seci,c issue li#e 2ater shorta?e

coul/ ha+e i)ortant ?eoolitical ra)i,cations.Chinas northern lains ho)e tohun/re/s o@ )illions @ace acute 2ater shorta?es . Gro2in? /e)an/ a/eca/e o@ /rou?ht ineicient /eli+er: )etho/s an/ increasin? 2aterollution ha+e re/uce/ er caita 2ater hol/in?s to critical le+els. Althou?h5eiKin? hoes to relie+e so)e o@ the ressures +ia the NorthBSouth o2e+er i@ nationsar)e/ 2ith such 2eaons ?o to 2ar then the otential @or a nuclear 2aral2a:s e8ists. oreo+er once one si/e sees that it is clearl: loosin? an/ i@
http://www.zmag.org/content/showarticle.cfm?ItemID=9509http://news.infoshop.org/article.php?story=20060215180623912http://www.zmag.org/content/showarticle.cfm?ItemID=9509http://news.infoshop.org/article.php?story=20060215180623912


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the sta#es are hi?h @or each nation then there is a stron? ossi'ilit: that thelosin? si/e 2ill atte)t to ?ain so)e a/+anta?e ': utili0in? nuclear 2eaonson the 'attle,el/. nce a 2ar has ?one nuclear escalation is al)ostine+ita'le as the other si/e retaliates an/ the tar?ets o@ the nucleare8chan?es 'eco)e )ore si?ni,cant until a @ullBscale nuclear 2ar in 2hichoulations o@ the lar?est cities 2ill li#el: 'e tar?ete/ an/ #ille/. "he

i)lications o@ e+en a s)allBscale nuclear e8chan?e (to the e8tent a nucleare8chan?e can 'e s)allBscale in Central Eurasia are sta??erin?. "he /eathtoll 2oul/ 'e in the )illions an/ the re?ion 2oul/ 'e oisone/ 2ith ra/iationan/ @allout. Since China lac#s the )assi+e nuclear arsenal o@ Russia e+en a@ullBscale nuclear e8chan?e 2oul/ not quite 'e the ?lo'al /oo)s/a: scenariothat 2oul/ arise @ro) a U.S.BRussian e8chan?e since the total nu)'er o@nuclear /etonations 2oul/ 'e 'arel: )ore than hal@ o@ the /oo)s/a:scenario an/ 2oul/ 'e restricte/ to a )uch )ore narro2 tar?etin? area. 5utthe war woul) take (lace in the most (o(ulate) (art o# the entireworl) Central Eurasia an/ 2here a hu?e a)ount o@ ?lo'al resources are@oun/. "he ra/iation an/ @allout 2oul/ aect other lar?e arts o@ the 2orl/an/ the /eath toll @ro) the initial nuclear /etonations co)'ine/ 2ith those

suerin? ra/iation sic#ness an/ lon?Bter) relate/ illnesses 2oul/ no /ou't'e in the hun/re/s o@ )illions. An/ o@ course the olitical an/ econo)ici)acts 2oul/ 'e earthBshatterin? eseciall: in li?ht o@ the scenarioslea/in? u to the 2ar an/ i@ North 9orea 2ere enliste/ to attac# South9orea at the sa)e ti)e. China 2oul/ ha+e to 'e 2illin? to ?a)'le that the2ar 2oul/ not turn nuclear unless the: /e+ise/ a 2a: to ta#e out osco22ithout an: /an?er o@ 'ein? /etecte/. ost li#el: China 2ill 'et on #eein?the 2ar con+entional an/ hoe that surrise an/ a quic# +ictor: 2ill )a#ethe oeration a success 'e@ore e+ents siral out o@ control. "he: )i?ht alsocount on Euroe an/ the U.S. ressurin? Russia not to reson/ 2ith nuclear2eaons. Ulti)atel: the realities o@ ea# oil an/ the sur+i+al o@ Chinascurrent ?o+ern)ent co)'ine to lea+e China 2ith little choice 'ut to lacetheir 'ets an/ @ace the ris# o@ the conLict 'eco)in? nuclear.


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2NC "urns Beg

Russian colla(se will shi#t the balance o# (ower away #rom the $%towar)s China7this terminally acks hegemony.

`e:no Faran et al Su))er 2:. Senior ello2 an/ Director Center @orEurasian Stu/ies >u/son 7nstitute. U.S. RUSS7AN RE;A"7NS % 7SCN;7C" 7NEJ7"A5;EYF >u/son 7nstitute S:)osiu) on USBRussianRelations 222.hu/son.or?-,les-/@_uloa/-RussiaB


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2NC "urns 0con

DA turns the case, but the case cannot turn the DAartin Gilman 1-16-2. or)er senior reresentati+e o@ the 7 in

Russia an/ ro@essor at the >i?her School o@ Econo)ics in osco2.


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2NC De#ense Fase 4m(act

$% e'(orts are the key threat to Ga5(rom 333 critical to o+erallRussian economy AND #un)ing military s(en)ing.Richar/@eit5 1-11-212. Senior @ello2 at the >u/son 7nstitute. Russia% 7s Putino)icsUnsustaina'leYF EurasiaNet htt%--222.eurasianet.or?-no/e-663&.

Aslun/ cast Ga0ro) the natural ?as ?iant as a 'ell2ether@or the @uture o@state caitalis) in Russian. Natural gas e'(orts are one o# the most +italcom(onents o# the Russian economy ena'lin? Putin to in/ul?e in +astsen/in? sche)es eseciall: an a)'itious )ilitar: 'uil/u.Aslun//escri'e/ Ga0ro)s contri'utions to state coers as the )ominantsource o# rents #or the Kremlin.F I 5ut Ga0ro)s a'ilit: to re)ainco)etiti+e in international )ar#ets is co)in? un/er e8tre)e ressure.


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roli@ eration an/ to ero/e sa@et: alon? 2ith 'asic oensi+e caa'ilit: . ore8a)le a /e?ra/e/ earl: 2arnin? net2or# is less a'le to /etect an actualattac# 'ut also less a'le to screen out @alse in/icationso@ attac#. Si)ilarl: @ailure inthe nuclear co))an/ lin# 'et2een the General Sta in osco2 an/ the launch cre2s in the ,el/ 2oul//isrut not onl: the a'ilit: o@ the General Sta to quic#l: trans)it the ?o co/e 'ut also the @ee/'ac# loo@ro) the )issiles to the General Sta that /etects an/ re+ents an unauthori0e/ launch atte)t at an:su'or/inate le+el o@ co))an/. inall: the /earture o@ securit: ?uar/s @ro) their osts at 2eaons

/eots to @ora?e @or @oo/ or escae incle)ent 2eather )a: not onl: i)e/e the authori0e/ /isersal o@those 2eaons /urin? a crisis 'ut also increase the +ulnera'ilit: o@ the 2eaons to the@t. An/ the/an?er is not )erel: theoretical. A 1&&6 C7A reort note/ that 'ro#enloc#in? /e+ices on so)e Russian nuclear 2eaons ha/ not 'een reaire/ @orlac# o@ sare arts. 7n short ro?ressi+e nuclear /eterioration in Russiaincreases the ris#s o@)ista#en illicit or acci/ental launch an/the loss o@ strict centralcontrol o+er Russias +ast nuclear co)le8 'o/es ill @or nonroli@eration. 7@ Russias nuclear/esi?ners ro/ucers an/ custo/ians surren/er to econo)ic ressure the: coul/ oen the to the illicittrans@er o@ nuclear )aterials 2eaons an/ /eli+er: technolo?ies to A)ericas a/+ersaries. A )elt/o2no@ Russian nuclear control coul/ 'e catastrohic @or A)ericans. Securin? Russias nuclear 2eaons an/)aterials an/ stren?thenin? sa@et: an/ control o+er oerational /elo:)ents /eser+e to 'illin? a)on?the securit: riorities o@ the U.S. ?o+ern)ent. "o alle+iate the i))e/iate /an?er Russian an/ U.S.strate?ic )issiles shoul/ 'e ta#en o hairBtri??er alert so that none coul/ 'e ,re/ on a )o)ents notice.DeBalertin?F our arsenals i/eall: ': /etachin? the 2arhea/s @ro) )issiles2oul/ re/uce their

susceti'ilit: to illicit or )ista#en launch."o/a: it ta#es onl: )inutes to reare those @orces @or launch.Re/ucin? the inter+al to /a:s or lon?er 2oul/ ro+i/e a @ar lar?er )ar?in o@ sa@et: a?ainst )an:scenarios ran?in? @ro) the te)orar: loss o@ le?iti)ate ci+ilian control o+er Russian 2eaons to @alse2arnin? in Russias earl: 2arnin? s:ste) 'oth )ore lausi'le /an?ers than a /eli'erate col/B'loo/e/attac# ': Russia or the Unite/ States a?ainst each other. "he challen?e o@ /eterrence to/a: ales 'esi/ethe challen?e o@ oerationa

Natural Gas Prices Disadvantage - Emory 2014

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