US Congress discusses natural gas exports to Europe
With central and eastern European countries concerned that Russia will cut off their natural gas supplies, U.S. lawmakers are looking to fill the trade void.…
Can US natural gas rescue Ukraine from Russia?(Shutterstock)
With central and eastern European countries concerned that Russia will cut off their natural gas supplies, U.S. lawmakers are looking to fill the trade void.
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Congress has approved seven natural gas export terminals recently, with the Jordan Cove terminal in Coos Bay, Oregon, being the most recent. The move comes as countries dependent on Russia for natural gasincluding Ukraine, Hungary, Poland, Slovakia and the Czech Republichave requested that the U.S. help them maintain an energy infrastructure without Russia.
The Senate Energy and Natural Resources Committee met Tuesday, with both Democrats and Republicans urging President Obama to further expedite natural gas exports to Europe.
Energy: A Political Tool
Given that numerous central European countries depend on Russia for hefty portions of their natural gas imports Lithuanias energy minister told U.S. officials that his country is 100 percent dependent on Russiadiplomatic shifts between the resource-rich country and its neighbors could be devastating for the latter nations.
Many analysts have suggested that Russia will do everything it can to wield energy as a keen political tool. Theres already evidence of this: According to ABC, Russian gas company Gazprom recently warned Ukraine that it will cut off its energy supply if the country doesnt pay back a $2 billion debt.
Moscow has previously cut off energy supplies when in conflict with Ukraine.
Even weeks ago, countries such as Spain and Germany warned that too severe of sanctions on Russia could upset the delicate trade balance on the continent, saying that Moscow knows just how important its natural gas reserves are. Countries pay a premium for Russias exports simply because theres a lack of other options.
By approving new natural gas export terminals in the U.S., Congress is trying to beat Putin at his own game: if Congress can move legislation through quickly, building new energy partnerships in Europe could decrease Moscows stranglehold over the energy market there and give the U.S. a piece of the pie.
Jordan Cove
The latest approval for natural gas exporting came on Monday when the U.S. Department of Energy gave the green light to Jordan Cove, which would be situated in Coos Bay, Oregon.
Can US natural gas rescue Ukraine from Russia?(Shutterstock)
The facility is the seventh approved this year, coming after a project approved for Louisiana just over a month ago. According to CS Monitor, the newest approved terminal would cost $7.5 billion and would export 0.8 billion standard cubic feet of natural gas per day for 20 years.
Senator Mark Udall (D., Colo), who voted for the Oregon terminal, feels that this is a step in the right direction but isnt enough. According to the WSJ, he argued that the White House needs to prioritize the development and approval of additional natural-gas export facilities in order to bolster our presence in Europe and counterbalance Russian influence.
Regulatory Hurdles
While approval of natural gas exports may make a theoretical point on the world stage, some lawmakers wonder if it will have any real impact on the European energy market in the near future.
Before exporting anything, U.S. lawmakers have to get past trade regulations that restrict natural gas exports to non-free-trade partners. That includes many of the central and eastern European countries in question. The Energy Department has to prove that those gas shipments are in Americas national interest after considering several factors, such as economic, environmental and geopolitical.
Though several projects, including Jordan Cove, have been approved, those regulations slow things down. The earliest that Ukraine or nearby countries would see U.S. gas exports would be late in 2015, which doesnt do much for the current energy crisis.
Other opponents point to the fact that shipping our gas overseas would both drive up energy prices at home and force our potentially new trading partners to pay the same high prices that theyre paying Russia to make up for our transport and gas re-liquification costs.
Congress will meet again on Wednesday to discuss the best means of using the countrys natural gas in the geopolitical realm.
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