Here"s the rap.
SIR To suggest that "Perhaps Jay-Z should be offered a guest lectureship at Stanford Business School" is not as odd as you think ("The art of the struggle", March 15th). He is a successful entrepreneur and investor, partly owning or founding businesses such as the 40/40 Club, Rocawear, Roc-A-Fella Records and Roc Nation Sports. And he made his millions from scratch. The harder thing would be to convince Jay-Z to teach.
Anup Karath Nair.
Glasgow.
Not wild about mild.
SIR I"m sure I speak for many readers of your newspaper when I commend you on the disappearance of your all-too-frequent mantra that Recep Tayyip Erdogan"s government in Turkey is "mildly Islamic" ("Anatolia mostly loves Erdogan", March 8th).
But the void can readily be filled by a subst.i.tute: "harshly authoritarian", perhaps, or "mildly totalitarian".
Morton Keller.
Cambridge, Ma.s.sachusetts.
Just so story.
* SIR Living close by to crocodiles and hippos, I must point out that a real depiction of them as crony capitalists (Cover, March 15th) would have them doing nothing but lying around all day in pools of water, exploiting the sunshine freely given to them. The crocodile is personally abstemious, consuming only once a month; the hippo rips off only gra.s.s growing gratis on the sh.o.r.e.
I cannot vouch for the wolf, except to say that he probably fears and avoids the two-legged men mentioned in your article ("Planet Plutocrat", March 15th).
Margaret t.i.tlestad.
Mtunzini, South Africa.
* Letter appears online ony.
Briefing.
India"s new voters: We are connected.
European energy security: Conscious uncoupling India"s new voters.
We are connected.
Rapid social change and a.s.sertive voters will improve Indian democracy Apr 5th 2014 | DELHI | From the print edition INDIA"S general election, the world"s biggest democratic exercise, kicks off on April 7th. Voting will take place, across 35 states and territories, until May 12th. The country has a Westminster-style system: it is divided into 543 roughly equal const.i.tuencies (typically with some 1.5m voters), each sending a single MP to parliament. The whole electorate is a whopping 815m people, the populations of America and the EU combined.
A decade of rising incomes, on the back of a growth spurt, has improved many lives. Yet opinion polls show that voters everywhere are grumpy. One released this week by the Pew Research Centre found 70% dissatisfied with India"s prospects and more than eight out of ten bitterly gloomy about economic matters. "Everything is a problem for the Indian voter," concludes Bruce Stokes of Pew.
Politics is messy: hefty regional parties claim roughly half the total vote and run many state governments. At the national level two broad groupings exist, to which others lend support. One is led by secular Congress, which has a national presence and has ruled for a decade (and 54 of the past 67 years). The other is fronted by the right-leaning, Hindu-dominated Bharatiya Janata Party (BJP). This, the main opposition, draws most of its strength from the mostly Hindi-speaking north and west.
The village of Kamalpur, some 70km from central Delhi, shows the pre-election mood as well as any. It boasts a tarmac road, a row of tiny barber shops and fields of young green wheat. This used to be a poor, rural spot, but no longer. Half-built concrete towers line an improved highway as the city marches into western Uttar Pradesh (UP). Many locals are giving up farming to sell milk or flowers to the city, or hire out generators. Several toil in textile factories in Noida, the nearest big town.
These workers, in turn, are changing the lives of those left behind. Before 2004, says a teacher, few families sent children to school, least of all daughters. "Now you cannot earn from farming, so everyone wants to get educated and find jobs in factories near Delhi," he says. The greatest concern is jobs, say the men beside him.
The mood of Kamalpur"s residents is revealing. As they are mostly Muslims, Congress hopes for their votes. Yet the party"s main message interests n.o.body. No one speaks in favour of public welfare, subsidised rice and wheat or efforts to provide make-work jobs, policies supposed to give Congress the support of the rural poor. "A programme is good if it reaches here, but it doesn"t come," says one man, sparking a lively chat about crooked politicians. A good road to the city helps more.
By contrast, the BJP is fired up. Middle-caste Hindus whose lives are fast improving dominate nearby villages. Those who have grumbled eternally about bad rains can now moan instead about traffic jams into Delhi. Signs of their new wealth are abundant. Walk down narrow alleys and men crowd around to film you using their tablets and phones. "It is very fine here," says one. "We are connected."
These voters back the BJP and predict rapid economic gains after the election. They are impatient for a better life, having tasted the optimism that faster expansion brought in the 2000s. Frustrated since then by slower growth (stuck at 5%) and high prices, they want Congress crushed.
A watershed in three parts.
This election is likely to be seminal. A campaign strategist for a big party talks of "citizen consumers" who are intolerant of substandard politicians and readier than ever to dump them. These more demanding voters are emerging thanks to three intertwined trends: a youth bulge, urbanisation and rising incomes. In time, they should help to improve the political system.
The rise of the young is dramatic. Around half of India"s 1.2 billion people are under 26, with no memories from before the first liberalising reforms of 1991 but aware that development still lags. These "born frees" are the vanguard of a huge number who will come of age in the next two decades. Over 100m voters have been added to the electorate since 2009. Turnout is usually about 60%, but could be higher-recent state elections show people unusually eager to vote.
Shrewder politicians are taking advantage. Swapan Dasgupta, a political a.n.a.lyst close to Narendra Modi, the BJP prime-ministerial candidate, describes a campaign strategy focused on the young. He thinks 40% of voters are under 35, and care most about jobs. "They ask what their future is likely to be, that is more important than their local ident.i.ty," he says.
Women are being wooed, too. Older politicians hardly bothered, since women voted less than men, or (notably in villages) did as husbands or fathers ordered. That is changing. Studies of national and state elections show women voting more: the gap between them and men has shrunk with every decade. Nationally women"s representation is low, with just under 11% of MPs in the last parliament, but it is rising. Parties now cram campaign material with images of women voters.
The second broad trend is the rise of urban India (see chart 1). Official statistics, somewhat misleadingly, suggest that nearly two-thirds of Indians still live in villages. Boundaries drawn in 2008 also count about two-thirds of const.i.tuencies as rural. These have been frozen until 2031. But facts on the ground are changing fast: in two decades they will be utterly different.
Don"t tell them how to vote.
Urban India generates nearly two-thirds of national income. Some 50 cities have 1m residents or more; greater Delhi contains more people than the Netherlands. Connecting them, across thousands of kilometres, are incipient industrial corridors, thickening ribbons of roadside development. Increasingly, as in Kamalpur, the city matters beyond its limits. Those in villages who take on jobs-as shopkeepers, small businessmen, traders in farm equipment-are not so different from town folk.
Some 300m people will move to town in the next 25 years, almost doubling the urban population. Urban votes are destined to outnumber the rural. Out of 543 const.i.tuencies, over 150 are already "totally or substantially urban", reckons a strategist for a large party. That tally will rise fast.
Town-dwellers are said not to vote. In places this is true. A Hyderabadi politician recalls the failure in 2009 of an urban anti-corruption party, People"s Power, which tried appealing to IT workers and the like but found that only 150,000 had registered to vote in the city. However, data from the Election Commission a.n.a.lysed by a think-tank, CSDS, show that urban turnout historically differs little from rural.
As important, urban types are influencing their country cousins. Villagers studying in town, a family relying on remittances from a son there, growing numbers who watch cable television and get phone calls from town, all help shape the opinions of rural friends and relatives. Consumer-goods firms grasp this, as they see rural folk adopting urban shopping habits. The English-language Times of India reports a flourishing circulation in villages. Ideas spread, too. Small towns and villages in 2011 soon mimicked the anti-corruption protests that first erupted in Delhi.
The third big trend involves incomes. The less-poor are becoming more politically demanding, and centuries-old feudal habits are waning. Illiterate peasants often deferred to powerful local landowners, royals or famous dynasts from the ruling party. Now changes in jobs, incomes and literacy rates (74% generally, higher among the young) are helping to end that.
India may have been rotten at creating formal employment, but millions have left the fields, for at least part of the year, to work in construction, drive lorries, or do jobs in roadside cafes or beauty parlours across 646,000 towns and villages. That changes how they see themselves. Owning a phone, says one observer, brings a strong sense of status, even dignity.
Among the 200 households in Kamalpur, concrete walls are replacing mud. Nearly half the homes contain a television-cricket, soap operas and news are popular-and the teacher says 70% of families have a small motorbike. Roughly half the youngsters know how to go online using smartphones. Everyone has a mobile phone: "They"re for girlfriends," says a teenage boy, grinning. It all represents dramatic change from five years ago.
Politicians know they can profit from this. Mr Modi"s talk about jobs especially appeals to what he calls the "neo-middle cla.s.s". Rahul Gandhi, the leader of Congress, refers to a "new cla.s.s", claiming that it has "emerged now under our ten-year rule". Gurcharan Das, a former boss of Procter & Gamble, now a writer, thinks this cla.s.s already const.i.tutes a third of the population and will rise to half in a decade.
A rich Indian investor in Bangalore predicts that this group will hold more electoral sway than the very poor, whose numbers are falling. The government claims, plausibly, that 140m have escaped the worst poverty in the past ten years. More will follow, if the economy holds up. Every new English-language or computer-studies school is a sign of aspiration.
"One G.o.d, that is GDP"
The coming election is a chance to see these three broad trends reshape politics. Some argue that they decided the last one, in 2009, when urban voters bet that the prime minister, Manmohan Singh, an economist, would keep growth up and inflation down and create jobs. (They were wrong.) Frustrated, they have since protested, first against corruption, then in demonstrations over women"s safety and later by backing the new Aam Aadmi (Common Man) Party in Delhi. Now they have turned to Mr Modi.
Such voters care less about caste or religion, and more about economic prospects. This matters for how politics works. Older voters, especially in poorer areas, are more likely to be treated as part of an ident.i.ty group, and then bought off. A group leader contacts a politician and offers to sell a "vote bank" for money and goodies-in-kind, such as saris, booze or cricket sets.
So much illicit money is usually diverted to election spending that the flow of cash almost dries up in some lines of trade, such as the construction industry. Owners of building firms need strong political connections, so they provide much of the money that is dished out before polling. A journalist in Hyderabad says that a typical candidate might spend "40m-50m rupees [$700,000-800,000] per const.i.tuency to fund and feed the voters".
In old-style politics voters also seek pay-offs for their group, such as welfare, preferential status for a sub-caste or government jobs. Candidates may play up the insecurities (often genuine) of a particular minority, such as Muslims or dalits, the Hindu group formerly known as "untouchables". Big regional parties based on caste or religion preach the message that having "one of us" in office matters more than what a government actually does.
Yet that approach looks dated, at least among younger, more urban and wealthier voters. They are increasingly likely to consider themselves individuals, not members of groups. Bribing voters may become less useful if group leaders struggle to deliver promised vote banks, as is more and more the case. Canny voters know that they can often bag gifts from rival candidates, then cast their ballots as they would have done regardless.
Voters seem to be judging politicians more by their performance. In the past, delivering economic growth seemed to have little link to getting re-elected. That is changing (see chart 2). In state governments, parties presiding over decent economic growth have been re-elected, as in Gujarat, Bihar, Madhya Pradesh and Odisha; those who fail to deliver have been booted out, as in UP and Rajasthan.
Surveys point the same way. People no longer like to admit to caring about caste and religion. A team from the University of Pennsylvania, Carnegie Endowment and India"s Lok Foundation, which is interviewing 68,500 voters before and after the election, says 57% of respondents cite economic matters (growth, inflation, personal income) as most important. Just 3% mention caste or ident.i.ty.
The researchers admit that this overstates things. Most people also care strongly about candidates" caste and religion. Still, the trend is towards pragmatism, says Rajiv Lall of the Lok Foundation; politicians need to focus more on delivering development. Not everyone welcomes that. A political commentator in his club in Kolkata-West Bengal is India"s strongest bastion for lefties-harrumphs that "the post liberalisation generation, the 22-year-old, thinks there is only one G.o.d, that is GDP."
The cult of the leader.
Another change is in how campaigns are run. Of old, especially among villagers, a politician was supposed mainly to show his face at rallies. This is still true: Mr Modi, for example, plans nearly 200 by the end of voting in mid-May. But younger, better-off and more urban voters are increasingly reached through the media; and this, over time, could encourage more national voting trends.
Television matters most. Those rallies are partly designed to get coverage on evening news broadcasts, regional and national. Out of 234m households, 153m now have a set, up from 123m at the last election. Campaign adverts frequently interrupt viewing; the BJP"s are especially slick. Mr Modi now hopes television can help to spread the idea of an unstoppable wave of support for him. Creating that expectation matters: voters like to back winners in the hope of getting rewarded.
New technology is increasingly important. The better organised parties, including Arvind Kejriwal"s AAP, use ma.s.s text messages to raise lots of small donations-handy if you refuse funds from crooked businessmen. Phones also help recruit volunteers. Social media will probably have little influence. Facebook"s 93m Indian users may sound like a lot, but they are only a ninth of the electorate. Still, rapid internet growth, like the spread of phones a decade ago, points to bigger changes later.
The media also help to explain how a personality cult is rising around Mr Modi, encouraged by his gruff, rather macho personality and a desire among some for a strong leader. But his campaign, encouragingly, is mostly about his development record as chief minister in Gujarat. Few appear explicitly drawn or repelled by his much darker record from 2002, when rioting in Gujarat saw more than 1,000 killed, most of them Muslims.
Don"t tell them how to vote.
People also warm to Mr Modi"s carefully promoted story as a man who, by his own efforts, rose from humble beginnings as a tea-seller. That is a contrast to Rahul Gandhi of Congress, the pampered dynast. So far Mr Gandhi, though only 43, looks ill- at-ease with the hopes of young voters. His emphasis on offering a new "regime of rights" a.s.sumes that voters would trust government to guarantee them. That trust has faded. "He is 20 years behind the rest of India, he misses the trend, that young people want good jobs, they don"t want to dig holes in the ground or get subsidies," says a political observer in Bangalore.
Others in his party understand the changes better. Nandan Nilekani, a 58-year-old billionaire who co-founded Infosys, a successful firm, is contesting his first seat in Bangalore. His brief stump speech is businesslike, calling for transparent rules in government, saying the private sector must flourish to create millions of jobs.
An adviser speaks fluently about changing politics: "An earlier generation was content to be ruled and lorded over. Young Indians now expect more. Ambitions have grown non-linearly, but our system, our structure has not kept up. People are no longer content." The candidate himself talks of "the new, aspirational young voter, the professional, educated, who doesn"t look to the state for benefits".
Mr Nilekani"s campaign is efficient, using 1,000 volunteers, sending a personalised letter to each voter, studying electoral data from 2009 to guide canva.s.sers to the promising corners of his const.i.tuency. He calls himself a "guinea pig", experimenting with a cleaner, sharper style of campaign. Others could hardly replicate what a billionaire celebrity does, but his techniques can be adopted, if not his biography. His chances of beating his old-style opponent, a five-term inc.u.mbent from the BJP, are probably even.
Win or lose, at least he grasps what many const.i.tuents in Bangalore, and those young, increasingly urban and better-off residents of Kamalpur are demanding. They see society changing fast, and expect politics to respond. They want to hold leaders to account and judge how they perform in office. That will almost certainly mean a new party in power, very probably the BJP, come May. Beyond that, politicians need to learn that citizen consumers will prove pushier, more troublesome and more impatient than the deferential electorates of old. For India"s democracy, that can only be a good thing.
European energy security.
Conscious uncoupling.
Reducing Europe"s dependence on Russian gas is possible-but it will take time, money and sustained political will Apr 5th 2014 | From the print edition WHEN Vladimir Putin was bribing Viktor Yanukovych, then the president of Ukraine, to turn down a trade deal with the European Union last year, one of the sweeteners was cheap gas. The copious Russian gas Ukraine burns through every year-it is a profligate user of energy-would be priced at just $268.5 per thousand cubic metres (tcm), which for 2013"s total of 28 billion cubic metres (bcm) works out at $7.5 billion. Since February"s revolution ousted Mr Yanukovych, gas has become a stick, not a carrot. On April 1st Alexei Miller, the chief executive of Russia"s gas giant, Gazprom, said that the price of Ukraine"s gas was going up by 44%, to $385.5 per tcm.
This is ominous news for Europe. Ukraine already owes Gazprom $1.7 billion, according to Mr Miller. If Ukraine continues not to pay its bills-and without outside help, it cannot-Gazprom can cut it off. Such a dispute need not, in principle, have any effect on the gas that flows through Ukraine to other countries farther west (see map). But if Gazprom reduces the flow of gas to reflect the fact that Ukraine no longer has a right to its 28bcm, and Ukraine takes some of that gas anyway, or if Gazprom shuts down the pipelines going through Ukraine completely, Europe"s supplies get hit. Europe gets 24% of its gas from Russia, and half of that-80bcm a year-pa.s.ses through Ukraine. An argument between Russia and Ukraine led to the pipelines shutting down for two weeks in January 2009, to much consternation downstream.
In the short term (weeks, or a few months) such a disruption would be less damaging now than it was then. But in the medium term (many months, or a few years) Europe remains highly vulnerable to Russian control over gas supplies. This vulnerability is one of the reasons why Mr Putin thinks Europe will not act decisively against him over the annexation of Crimea, or any further territorial depredations he may have in mind. But it is a vulnerability that can, over time, be decreased; and one which Russia would lose a lot by exploiting.
Thanks for sharing.
At the moment, a lapse in supplies would see the seasons in Europe"s favour. European countries do not depend on Russian gas in the summer months (though they do refill their storage facilities with it then). And the mild winter just past means that those stores are unusually full. Richard Mallinson of Energy Aspects, a consultancy, says EU countries have 36bcm of gas in store, about 15bcm more than this time last year. They could store twice that; the EU"s total storage capacity is 75bcm.
It is a useful cushion, but a lumpy one. Some European countries have lots of storage: Latvia has at least a years" worth. Others (Moldova, Macedonia) have none. Thus ways must be found to get gas from the places where it is stored to the people who need it. Europe"s pipeline grid is not particularly well suited for this. National gas companies have long disliked cross-border interconnectors; a free flow of gas means more choice for consumers and thus lower prices. But pressure from the EU-notably in the form of the "third energy package" of liberalisations-and a growing concern, since 2009, about the risks of relying on Russian gas mean that more interconnectors have now been built, along with pumps that can reverse the flow in transit pipelines.
Poland has been connected with the Czech Republic via the small Stork pipeline since 2011; work on a larger link, with a capacity of up to 10bcm, will start before 2017. Slovakia has just opened a pipeline to Hungary. Germany can now send gas to Italy, as well as to Poland and the Czech Republic. If the political will to provide mutual support is there-quite a big "if", since it was not very apparent in 2009-the means to do so are better than they were.
Estonia, Latvia and Lithuania, though, are not connected to any source of gas save Russia. Work could start on an interconnector from Poland to Lithuania in 2018; until then Latvia"s abundant storage provides some insurance against strong-arming. Bulgaria also has a particular problem. It gets almost all its gas from a Russian pipeline that crosses Ukraine, and it has limited storage (less than two months" consumption). It is hurrying to build interconnectors to Serbia and to a planned liquefied natural gas (LNG) terminal in Greece.
Even good interconnection is only a solution for as long as there are gas supplies to feed the interconnectors. If the gas ceased flowing through Ukraine, where might more be found after stores were depleted?
One answer is, surprisingly, Russia. If Russia were to shut down the pipelines across Ukraine with the princ.i.p.al aim of hurting Ukraine itself (though accepting mind-focusing discomfort downstream as an added bonus) it would probably continue exporting gas by other channels. One of them, the newish Nord Stream pipeline on the Baltic seabed, was to some extent built with this in mind; it was designed to get gas straight from Russia to Germany, and thus give Russia the option of cutting off its near neighbours while still serving its most important market.
Now interconnectors allow gas to flow south and east out of Germany, though, Nord Stream could be something of a boon-all the more so because, at the moment, only around 30bcm of its 55bcm a year capacity is used. a.s.suming regulatory and commercial issues were resolved, and that Russia was not actively seeking to make things worse, the other 25bcm could make up a good chunk of the shortfall if supplies through Ukraine were stopped.
Help is round the corner.
Finding much more by way of replacement gas, though, would be hard. Perhaps 10bcm could come from Norway. Shares in Statoil, Norway"s state energy company, have jumped by 7% since the revolution in Ukraine, notes John Olaisen, an a.n.a.lyst at ABG Sundal Collier, a Norwegian bank. But the scope for further production inside the EU is limited. In the Netherlands public opinion wants the country to pump less gas, not more, because of worries about carbon emissions and a string of minor earthquakes a.s.sociated with the depletion of the giant Groningen field. Britain"s gasfields are also depleting. North Africa has proved an unreliable supplier, beset by terrorist threats and other unrest. Italy"s imports from Libya, once a reliable supplier, were down by 11.9% in 2013; supplies from Algeria (where local demand is booming) were down by 40%.
What about gas from farther afield? Europe has the capacity to import a lot more LNG; its 2013 LNG imports, 45.7bcm, were much lower than the 2011 peak of 86.5bcm. The problem here is inelastic supply. The countries which export LNG cannot simply churn out more of the stuff; the plants which liquefy the gas cost billions of dollars, so they tend already to be running at full blast. And most of what they make they are already selling, at high prices, in Asia (see chart 1). j.a.pan needs LNG to keep the lights on, having shut down its nuclear power plants after the f.u.kushima disaster. China is trying to burn less coal because of public anger at air pollution. Europe might be able to find another 10bcm of LNG, a.n.a.lysts reckon, but it would pay about twice what Russian pipeline gas currently costs.
There is also the option of generating electricity from coal instead of gas. But a knock-on effect of America"s shale-gas revolution is that it now exports cheap coal to the EU (this is in part why LNG imports have declined). Europe is already running most of its coal-fired stations at high capacity. There might be some slack, and there are also some mothballed stations that burn fuel oil, but there is no large pool of underused generating capacity.
Add all this together and you get around 50bcm. That means Europe would still face a 30bcm shortfall if supplies through Ukraine were cut off completely-just under half of Germany"s annual gas consumption. And even getting that far is possible only at the cost of perhaps $50 billion more spent on gas; bringing in a significant amount of LNG at Asian prices means other vendors not locked into long-term contracts will raise prices, too. Particularly cold winter weather would make things a lot worse. Given the continent"s 117 gigawatts (GW) of wind-turbine capacity, which has been growing at 10% a year, windy weather would improve matters.
Rather than face the economic pain that a 30bcm gas shortfall would impose, Europe"s leaders will focus on helping Ukraine pay its bill. This is one reason why prices for traded gas have barely budged since the crisis started. Sorting out the country"s notoriously murky energy sector will be high on the reform agenda (Ukraine still does not have meters at the points where the pipelines enter from Russia, making all discussions about quant.i.ty and price questionable). Cuts in the energy subsidies which lead Ukrainians to burn gas so wastefully are sure to be required in return for money from the IMF. Ukraine currently produces 20bcm of gas; if it were as efficient in its use as some countries are, it could be more or less self sufficient.
Europe will also seek to lessen its reliance on Russia in the longer term-a challenge made all the harder by the fact that current trends have gas demand going up in the decade to come. According to AT Kearney, a consultancy, imports are set to climb from 327bcm today to 413bcm in 2020.
Bigger, stronger.
In March the EU"s heads of government told the commission to produce a plan in June for reducing energy dependence. That is likely to give a push to storage capacity and both more and larger interconnectors. It could strengthen requirements for countries to maintain a strategic gas reserve, and it ought to stress energy efficiency, too.
It will also look at new pipeline plans. An immediate casualty is likely to be Russia"s South Stream pipeline, which, like Nord Stream, was designed to reduce Gazprom"s export dependence on Ukraine. Due for completion in 2018, with a planned capacity of 63bcm, it has already fallen foul of EU compet.i.tion rules, and EU disapproval could effectively scupper it. The corollary to spurning Russian gas piped through South Stream is favouring non-Russian schemes like the Trans-Adriatic Pipeline, due for completion by 2018, which will bring Europe 10-20bcm a year from the Caucasus via Turkey. An easing of sanctions on Iran could bring more gas from there by the same route.
Europe could also develop its shale-gas reserves (see map), though these are not the panacea enthusiasts would like to believe. The EU"s Joint Research Centre puts Europe"s technically recoverable unconventional-gas resource at 11,700bcm, about a quarter of America"s. But law, public opinion and a lack of drilling and exploration kit make European shale gas harder to get out. IHS, an energy consultancy, expects that by 2020 European shale production will only be 4bcm a year, compared with over 70bcm in America today. Conventional-gas production in Europe and its neighbouring seas could drop by ten times that over the same time.
Political excitement about the idea of America"s shale gas helping Europe out tends to overlook the practical difficulties. For a start, there are not yet any export facilities. Sabine Pa.s.s on the Texas-Louisiana border, with a capacity of up to 2bcm, will start pumping LNG only in 2015. Two dozen export applications are pending, though, and IHS reckons that a burst of projects coming online in 201820 will bring America"s total LNG export capacity to 66bcm by early in the next decade. That is appreciable, but hardly overwhelming in a world LNG market that might be 540bcm a year by that time, according to the International Energy Agency. And a significant part of that gas would be headed to high-price Asia, not just from plants on America"s Pacific coast but also from the Gulf, since from 2015 the new locks on the Panama Ca.n.a.l will enable it to take large LNG carriers.
All this depends on investors coming up with the money. But private-sector investors may be chary of putting money into costly terminals that risk not being used if Europe slips back into accepting more cheap Russian gas. And although the crisis in Ukraine has stoked America"s willingness to help allies, there is a domestic lobby that thinks restricting exports will keep prices at home low.
Technological change may help matters. The cost of import terminals that turn LNG into usable gas has fallen sharply, with customers now able to rent floating facilities when they need them, rather than building costly ones on land. Lithuania"s new $325m floating LNG terminal, the South-Korean-built, pointedly named Independence, will start work by the end of this year. In the longer term, liquefaction plants which use electric motors rather than huge turbines look set to reduce the size and capital costs of export terminals. That could bring much more LNG onto the market from offsh.o.r.e fields and remote places.