As the U.S. Senate considers a bill to clarify liquefied natural gas (LNG) export regulations, a panel of experts convened to discuss the impacts of shipping more American natural gas abroad.
Most experts agreed selling natural gas to other countries would undermine Russia’s energy hegemony.
“U.S. exports whether to Europe or Asia raise concerns in Russia about how to maintain market share for Gazprom — and therefore political influence — in markets that have traditionally been regarded in Moscow as Russian,” Richard D. Kauzlarich, former U.S. ambassador to Azerbaijan and Bosnia, told The Daily Caller News Foundation.
Kauzlarich was part of a Tuesday off-the-record panel on LNG exports at the American Security Project. The panel discussed how unleashing U.S. gas could alter the world energy stage, and the panel agreed American LNG could break Russia’s monopolistic power over Eastern Europe’s energy markets.
LNG has the potential to reduce Russia’s ability to use state-controlled companies, such as Gazprom, as a political weapon against America’s allies in Eastern Europe. Russia used interruptions in the natural gas supply in 2006, 2009 and 2015 to put political pressure on Eastern European countries like Ukraine, Poland and the Baltic states. About half of Europe’s imported natural gas comes from Russia.
Russia previously attempted to use its control over natural gas to bring Ukraine to its knees. Luckily for Ukraine, the country was able to reduce its dependence on Russian gas and switch suppliers. American LNG exports could compete against Russian gas, forcing the country to rethink how it treats American allies who can now have gas options.
“They will certainly make it more difficult for Russia to threaten to cut off gas supplies to countries who in the past have largely been dependent on Russia for energy,” Kauzlarich said. “With LNG facilities in Poland and the Baltic region, and North-South pipelines in place, US LNG exports will force Gazprom to maintain supplies — and at low prices — to avoid giving up market share to more expensive, but more reliable US LNG.”
Consumers would deal with minimal costs to export LNG and it would lead to huge economic benefits, according to a study published in December 2015 by the Department of Energy (DOE). The DOE found exporting American LNG would provide huge environmental benefits as well. The report states exporting LNG will help “address a variety of environmental concerns in the
Exporting natural gas is likely to be a growth industry, as global demand for natural gas is expected to be 50 percent higher by 2035 than it is now, according to the International Energy Agency. Demand for imports of LNG increased 27 percent in the United Kingdom last year alone.
The Obama administration hesitated to greenlight natural gas exports over environmental grounds before reversing position in late 2014 after the Russian annexation of Crimea. Europe was initially hesitant to rebuke Russia’s annexation of the Crimean peninsula because of its control over natural gas pipelines. After five years of debate, the first shipments of American liquefied natural gas were shipped to Europe in January.
The administration and the federal bureaucracy has been slow to process permits for natural gas exports, making some projects wait up to four years. The current permitting process is opaque and can be changed at any time leading to uncertainty that is preventing companies from investing in the infrastructure needed to export American LNG.
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