Here Comes A Double Whammy.

This blog wrote on a number of occasions that US LNG is simply not competitive with pipeline gas practically anywhere in Eurasia EVEN without considering pure geopolitics (or geoeconomics as this term begins to enter a conversation) with the United States desperate attempts to sabotage Nord Stream-2. It is just the fact of life and technology (as in extraction, processing, liquification etc.). Poland, of course, thinks otherwise and is ready to pay about third more for US LNG, but it is Poland and basic economic logic doesn't apply there. But here comes this double whammy, which so far was merely in the background:

(Bloomberg) -- For the first time in more than a decade, U.S. natural gas is set to be the world’s most expensive as Covid-19 lockdowns wallop demand in other regions. Gas futures in the U.S. have rallied about 10% this month as traders bet that a historic crash in oil prices will drive American shale companies to halt more drilling and curb output of gas, which is extracted as a byproduct. In Europe and Asia, meanwhile, prices are sliding to fresh lows due to a supply glut and languishing consumption amid the pandemic.

So, these are not good news for the US "energy independence", because as even Bloomberg admits: 

The move is significant as it shifts the premium that gas in Asia and Europe has historically commanded over U.S. prices and adds a hurdle to American LNG exporters looking to boost sales to those regions. Buyers of U.S. fuel have canceled at least 12 cargoes for June loading, and traders estimate that more than 20 shipments could have been canceled for the month.

In general, the picture is not good since ramifications are wide and long lasting. It is one thing when Scott Ritter explains how things "will go from here" in terms of turning from net-exporter to net-importer of energy for the United States:

Even when the U.S. economy gets back online, a good segment of the U.S. oil industry won’t be there to help fuel it. U.S. energy independence, that illusory concept pursued by U.S. Presidents for the past seven decades, has evaporated. In the brief period that the U.S. was able to claim this status, it could only do so in a market that had been artificially skewed to promote U.S. overproduction at the expense of the rest of the oil producing world. This model of behavior will no longer be tolerated.  

And, mind you, actual cuts will be huge, much bigger, once the ball gets rolling and this will require a serious processing of new economic reality. But Daniel Larison came up today with a headline which was and is in heavy use here. How about that: 

 Please Tell the Establishment That U.S. Hegemony is Over.

But Larison, correctly identifies a strategic conundrum:

Our dominance in the world is in the rear view, yet Trump and other pols refuse to get the message.

This is the danger of which I warn non-stop. Stumbling into the conflict in which the United States cannot, which is pretty much anywhere in Eurasia, win may initiate a sequence of the events which may lead to a global thermonuclear catastrophe. larison, reviewing this newest book: 

    

Notes:

While the authors are quite critical of Trump’s foreign policy, they don’t pin the decline of the old order solely on him. They argue that hegemonic unraveling takes place when the hegemon loses its monopoly over patronage and “more states can compete when it comes to providing economic, security, diplomatic, and other goods.” The U.S. has been losing ground for the better part of the last 20 years, much of it unavoidable as other states grew wealthier and sought to wield greater influence. The authors make a persuasive case that the “exit” from hegemony is already taking place and has been for some time.

I write about this for years and what makes me slightly more hopeful in this truly hard time for everyone, including for majority of Americans who are already squeezed to the breaking point, is the fact that some "establishment" academic and policy-making figures begin to speak about this fait accompli more and more. It is also symptomatic that this book (I am still deciding if to buy it--I have a profound allergy to US political "science" lingo) is focused heavily on Russia (of course, China too) and finally speaks, from what I observed so far, in terms of actual.... tangibles: goods, military power, real economy. It also discusses liberalism. But in the end, Larison concludes with this:

The coronavirus pandemic has exposed how misguided our priorities as a nation have been. There is now a chance to change course, but that will require our leaders to shift their thinking. U.S. hegemony is already on its way out; now Americans need to decide what our role in the world will look like afterwards. Warmed-over platitudes about “leadership” won’t suffice and throwing more money at the Pentagon is a dead end. The way forward is a strategy of retrenchment, restraint, and renewal.

He basically spells out what Russia (Putin) were offering the United States for more than a decade. The calls have been dismissed and it may not be just up to the Americans alone anymore to decide the role the United States will play "afterwards" but only within the framework which is emerging as I type this.