Trade Wars

Tom Loftus: The New Cold War Containment Strategy

The column below reflects the opinions of the author, and these opinions are not endorsed or supported by

I arrived in Norway at the end of 1993. The end of the cold war. The end of the Soviet Union. A period of optimism.

However, as my colleague from Finland, who shares a long border with Russia, said: “They are the same Russians.

Poland, Hungary and the Czech Republic, Estonia, Latvia and Lithuania had just emerged from more than 50 years of occupation, first by the Nazis, then by the Soviets.

The ambassadors of these newly independent countries were a professor of literature, a civil engineer, an academic with a doctorate in “American Women Writers from the South” – people who had never been in government let alone diplomacy. . But they were not tainted by the old communist regimes.

The priority for these countries and the United States was to wrap them in Western institutions – primarily the EU and NATO.

Finland, Sweden and non-aligned Austria joined the EU on the same day – January 1, 1995. Security was the overriding reason – read Russian protection. Trade was secondary.

The goal in Norway was to find ways to bring Norwegian natural gas to these countries. This is to try to relieve at least some of the dependence on Russian gas.

In 2021, Norwegian gas supplied nearly 25% of gas demand in the European Union and Great Britain.

The country exports around 95% of its gas via an extensive network of undersea pipelines connecting it to terminals in Germany, Britain, France and Belgium. A new pipeline to Poland will be completed this year.

While the Norwegian oil and gas fields are producing at almost 100% capacity, the mix between oil and gas can be adjusted in some cases. Less oil and more gas can be generated.

Norway can also increase LNG supply to the EU, as can the US, but terminals are needed at either end. A terminal is planned for Estonia, but it requires a commitment of EU funding. It can now happen

European Commission President Ursula von der Leyen last month announced a deal with President Biden under which the EU would guarantee long-term demand for an additional 50 billion cubic meters per year of LNG. The volumes would offset some of the 155 billion cubic meters of gas the EU imported from Russia last year.

It’s certainly a sincere long-term promise, but the lack of terminals in the United States is a problem. Domestic politics will likely delay them.

Total LNG capacity in the United States now stands at 120 billion cubic meters per year. Three other plants to be commissioned by 2025 will bring 70 billion m3 of new capacity. Another 206 billion cubic meters worth of plants have federal regulatory approval but are awaiting the final green light from their sponsors.

Trade can be a lever for peace. However, when it comes to dictators and autocrats, this is not the case. Especially when an autocrat can make a Democratic neighbor dependent on a basic economic need.

Freeing Europe from the hostage of Russian gas supplies is essential – it is part of the new Cold War containment strategy. Which is starting to look like the old Cold War policy of containment. What we were good at.

At the start of the 20th century, Norman Angell wrote a now famous book called “The Great Illusion” which argued that the industrialized nations of his time were too economically interdependent to wage war against each other. Instead, two world wars followed.

–Loftus is the former US Ambassador to Norway. He was the Speaker of the Wisconsin Assembly and a Regent of the UW. He participated in a recent WisBusiness, com-Wisconsin Technology Council Virtual Trade Policy Luncheon with other Wisconsin Ambassadors. Watch here: