U.S. Fracking Success Threatens Russian Economy, Strategy

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Investors Business Daily:

Energy Revolution: America's natural gas boom threatens Russia's economic strategy, an expert says, leaving it with few alternatives to rescue its economy while threatening to shatter its energy stranglehold on Europe.

 

Russia's abundance of energy resources has long allowed it to use energy both as a foreign policy weapon and as the bedrock of the Russian economy. Whenever energy prices rose, Russia benefited and its neighbors often felt the restraining leash of dependence on Russian energy, particularly natural gas.

 

Government-controlled energy giant Gazprom was in such a strong position it could demand decade-long contracts and link the price of gas to oil, disregarding the world price for the commodity.

 

Gazprom also became a critical instrument for Russian President Vladimir Putin, who has never been shy about using it to pursue his foreign policy objectives.