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America and gas

US Administration goes after oil and gas cartels Confrontation between hydrocarbon suppliers and users may enter a new phase.

The House of Representatives of the US Congress has passed a bill that proclaims establishing oil and gas cartels like OPEC anywhere in the world as unlawful. The Russian Foreign Ministry has already described this legislative initiative as unlawful in itself.

The House of Representatives of the US Congress has passed a bill that proclaims establishing oil and gas cartels like OPEC anywhere in the world as unlawful. The Russian Foreign Ministry has already described this legislative initiative as unlawful in itself.

The unprecedented bill was written by a group of US lawmakers under Judiciary Committee Chairman John Conyers. It invalidates the actions of any foreign country which conspires with other states and organizations be they cartels or associations to try and cut down production and sale of oil, gas, and oil products, sets their prices, or takes other steps to restrict trade in oil.

If and when it is approved by the US Senate and President, the bill is supposed to make life hard for countries of the still non-existent "gas OPEC" and oil producers (OPEC).

The bill will enable the US Administration to bring action against the foreign states undertaking to establish a cartel or any other organization in the sphere of oil and gas production.

US Attorney General will be permitted to prosecute these foreign states in US courts on American territory in accordance with the US legislation.

The Associated Press points out that appearance of the bill was fomented by unprecedented price-rises for gas and the high inflation rate. In other words, gas prices are compelling US legislators to regulate the international market of energy resources. That's certainly a curious form of reasoning.

It stands to reason to assume that the bill is directed against the idea of a "gas OPEC" involving Russia and other gas producers like Iran, Turkmenistan, Uzbekistan, and Kazakhstan. It may even be regarded as official Washington's reaction to the recent gas agreements reached in the course of Russian president's visits to Kazakhstan and Turkmenistan.

On the other hand, the bill may yet be stopped. It has a lot of opponents even in the United States itself. The US Chamber of Commerce appealed to Congress to drop the bill. The statement the US Chamber of Commerce reasonably points out that the bill is not going to bring oil prices down but it does "set a dangerous precedent" of ruining the sovereign immunity concept which is the basis of "any national sovereignty."

The White House is undecided. Insiders claim that George W. Bush will be advised to veto the bill because any such step on the part of the United States will be reacted to and that may "interrupt oil import and boost gas prices."

The international community is facing another absurd situation when the US Congress passes laws concerning matters outside its jurisdiction. Indeed, what does the United States have to do with international oil exporter organizations of which it is not a member?

This reaction of the United States and EU countries too shows that the Americans are certainly queasy. Meaning that Russia made its point.

Moscow is an active participant in and promoter of close cooperation between gas exporters.

On the other hand, it was not Russia that launched this "war of nerves." Some EU countries (like Poland) had suggested the idea of an "energy NATO" to deal with Europe's dependence on Russian oil and gas.

Some experts actually object to the idea of the "gas OPEC" involving Russia.

In any case, America's latest steps confirm that Russia is playing a major role in the global gas industry nowadays. The question is whether or not the Kremlin is prepared to go ahead and alter the whole global framework of trade in gas.

The impression is that action like that on the part of the United States prod Russia into becoming even more energetic in promotion of its interests in the energy sphere. Whatever the United States has been doing so far is unlikely to have any adverse effect on Russian energy companies. The obstacles the latter are facing are already serious. A great many foreign countries subscribe to the slogan "The Russians are coming to buy everything, given half a chance - so keep them out." It makes buying assets in Europe a taxing task for Russian companies.

Under the circumstances, Russia has a winning hand. EU countries need its gas, and their dependence on it (and on Russia) is growing. There was a period when Central Asian countries were considered alternative suppliers but the recent decision of Russia, Turkmenistan, and Kazakhstan to build the Caspian gas pipeline put an end to these speculations and proved Moscow's energy policy successful. The gas pipeline in question will run across Russia. Gas export from Central Asian countries to Europe will therefore be in Russia's hands.

Comments of Konstantin Simonov

Source: "Rossiiskaya Gazeta", May 24, 2007

Translated by A. Ignatkin


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