Putin Overseas $400 Billion Russia-China Pipeline Project While Obama Dithers On Keystone

While Americans were celebrating the long Labor Day weekend, Russian President Vladimir Putin oversaw the groundbreaking of major pipeline that will carry natural gas from Russia to China.

The Power of Siberia pipeline being built by the state-owned energy giant Gazprom could eventually bring $400 billion worth of natural gas to China, which has been trying to meet more of its energy needs with natural gas. The pipeline will extend 2,500 miles and symbolizes Russia’s new strategy to “wean itself off dependence on European markets that account for most of its exports,” according to Reuters.

“Just now, we along with our Chinese friends are starting the biggest construction project in the world,” Putin told a Chinese delegation on Monday, adding that the pipeline “[w]ill not only allow us to export gas, but to develop gas infrastructure in our country, to speed up (economic) development, not only in this region, but in the whole country.”

Russia’s invasion of Ukraine has put pressure on European countries to rethink their dependence on Russian natural gas. Europe gets about one-third of its gas from Russia, about half of which flows through Ukrainian pipelines.

Fears that Russia could shut off gas supplies to Europe have sparked calls for the U.S. to speed up approvals for liquefied natural gas terminals which could supplant Putin’s hold over the continent.

But Western sanctions have already spurred the Kremlin to look elsewhere for energy exports, especially in gas-hungry Asia. Reuters reports that on Putin’s command “two workers lowered their protective visors and welded the first segment of the black pipeline with flaring blowtorches. The Kremlin leader then signed his name on it.”

But while Putin is pushing for more energy exports, President Obama has not yet made a decision on the Keystone XL pipeline, which is seen as a major economic opportunity for the U.S. and Canada. The project will carry 800,000 barrels a day of oil sands from Alberta, Canada to refineries on the Gulf Coast.

The pipeline has been awaiting approval for more than five years and has been subject to heavy opposition from Democrats and environmentalists who argue the project will contribute to global warming.

The State Department indefinitely delayed the approval of the pipeline in April, citing a Nebraska court decision invalidating part of the pipeline’s proposed route. Environmentalists cheered the decision, but unions decried it.

“This is once again politics at its worst,” said Terry O’Sullivan, general president of the Laborers’ International Union of North America. “In another gutless move, the administration is delaying a finding on whether the pipeline is in the national interest based on months-old litigation in Nebraska regarding a state level challenge to a state process — and which has nothing to with the national interest.”

Nebraska’s Supreme Court is preparing to hear arguments on Friday over Keystone’s proposed route in the state. The decision of the case could be a major factor in how fast the Obama administration makes its decision on the pipeline.

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