Was Russia’s decision to cut off natural gas exports a mistake?

“Despite Western powers’ broad condemnation of and efforts to isolate Russia, the country has managed to maintain ties and partnerships elsewhere around the world. In April, the UN General Assembly voted on a resolution to suspend Russia from the Human Rights Council over its invasion of Ukraine. The resolution succeeded after it received a two-thirds majority of votes from member states with 93 nations voting in favor of Russia’s suspension from the body. But 24 of the body’s members voted against the action while 58 members abstained from the vote altogether.

Results of the UN vote signify the complexities of real-world diplomacy even in the face of war. Countries in Africa, South America, and Asia have increasingly sought to resist taking sides as the Russia-Ukraine war threatens to shape the world into political factions. But the West’s waning influence in other parts of the globe, combined with economic and political interests at stake, has resulted in many nations opting to maintain their independence when it comes to relations with Russia.

In Asia, where growing vigilance over China’s increasing influence is shared across borders, nations in the southeast and the south of the continent have expressed their intentions to remain on good terms with Russia in spite of the situation with Ukraine. Among Russia’s most loyal partners is India, with whom it has maintained a strong relationship since the Soviet Union’s backing of India during the 1971 war with Pakistan, even as India remained officially non-aligned during the Cold War.

Another factor behind their continued friendship is India’s reliance on Russia as a military arms supplier — from the 1950s to now the country has received an estimated 65 percent of firearms exports from the Soviet Union or Russia, according to the Stockholm International Peace Research Institute. India’s border disputes in the Himalayas with China, which triggered a bloody clash in 2020, is another motivating factor for India as Russia has functioned as an important mediator in the conflict with China.

China, another key Russian partner, has refrained from condemning Russia outright, instead asking for the warring countries to reach a peaceful resolution. In a March virtual meeting with France and Germany, President Xi Jinping called for “maximum restraint” on the issue and expressed concerns over the broader impact of sanctions on Russia. But some, like Herrera, doubt how far China will continue to toe the line if the situation worsens.

“China has not said they would not abide by the sanctions and they are so far going along with the sanctions against Russia,” Herrera said. A potential turning point, she said, could be Europe’s next sanctions, particularly any secondary sanctions it puts out, which will be “a big crossroads for China to decide whether to participate with those.”

But its ties with Russia could still end up serving China economically. President Vladimir Putin has stated Russia will “redirect” its energy exports to “rapidly growing markets” elsewhere to help buttress against sanctions, perhaps an effort to maintain support from its key ally.”

Texas went big on oil. Earthquakes followed.

“Seismologists say that one of the state’s biggest industries is upsetting a delicate balance deep underground. They blame the oil and gas business — and particularly a technique called wastewater injection — for waking up ancient fault lines, turning a historically stable region into a shaky one, and opening the door to larger earthquakes that Texas might not be ready for.

The state is finally trying to change that. In December, the Texas Railroad Commission — the state agency that regulates oil and gas operations and no longer has anything to do with railroads — suspended wastewater injection at 33 sites across a region where more than half a million people live. This is a notable turnaround for the Railroad Commission, which until recently did not acknowledge a link between oil and gas operations and earthquakes, and might be a sign of just how serious the earthquakes have gotten.”

Japan’s surging electricity prices are a warning for Asian countries

” Households across Japan are likely to get hit by massive electric bills this month, after the price of wholesale electricity there spiked from about 13 cents per kilowatt-hour in December to an unprecedented peak of more than $1 on Jan. 7. ”

“The spike was partially a pandemic-related anomaly. But it was also an ominous sign of things to come for Asian countries working to curb their carbon footprints.

The immediate cause of the spike was bad weather. Japan was hit by an unseasonable cold spell, sending electricity demand in some regions to 10-year highs as homes and businesses cranked up electric heating systems. That in turn caused a sudden shortage of natural gas, which provides 20% of the country’s power and is entirely imported in liquid form (LNG) on ships. Despite the demand, several of Japan’s biggest utilities were forced to roll back power plant production, as the price of gas more than quadrupled from the beginning of December, hitting levels 1,000% higher than the record lows seen during pandemic lockdowns in May. A similar story played out in China and South Korea, turning the gas crunch into a regional issue.

The timing couldn’t have been worse: LNG was already tight as export facilities in several of the countries that normally supply it to Asia—particularly Australia, Qatar, Malaysia, and Indonesia—had experienced an unusual cluster of concurring outages in the preceding months.”

“as more Asian economies put more of their eggs in the LNG basket, they become increasingly exposed to sudden wild price swings. Supply disruptions in LNG exporting countries appear likely to continue in the near future as the global economy recovers from the pandemic”

“Part of the solution, Tsafos said, is for the Asian LNG market to embrace more steady, long-term contracts rather than the on-demand purchases that are the norm today. Delivering gas by ship on demand, instead of by a fixed pipeline, allows buyers and sellers more flexibility in theory, but becomes a problem when too many buyers are clamoring for the same shipment. Asian countries also need a better network for managing the regional flow of LNG, and will have to continue investing in alternative clean energy systems, including renewables and grid-scale energy storage, he said.
“There’s no real point, if you’re aiming for decarbonization, to go for an expensive, volatile fuel like gas,” Robertson said. “You’re better off looking at alternatives, and that’s the conclusion a lot of these countries will come to.””