The Obama administration is under increasing pressure from Western European allies, U.S. lawmakers and energy industry heavyweights, who all point to the crisis in Ukraine as evidence Washington should go further than it has to pump up American oil and gas exports to Europe.
While the crisis has shone a spotlight on Europe’s deep dependence on Moscow to meet its energy needs, supporters of the Canada-to-Texas Keystone XL pipeline are even seizing on the situation to press the administration to approve the project that they say bolsters U.S. national security.
“We need to send two signals: approve the Keystone pipeline and indicate that we are going to expedite [liquefied natural gas] export permits,” said Jack Gerard, president and CEO of the American Petroleum Institute.
So far, the White House has shown no inclination to link approval of Keystone — which would carry crude from Canada’s oil sands and from North Dakota’s Bakken Shale Formation to refineries in the U.S. Gulf Coast — to its discussions on helping Europe wean itself off Russian energy.
The Obama administration has, however, shown new willingness to ease restrictions on the exports of natural gas to Europe.
Mr. Obama and European Union leaders alluded to this in a joint statement last week, saying the situation in Ukraine “proves the need to reinforce energy security in Europe” and the U.S. and EU are “considering new collaborative efforts to achieve this goal.”
The statement welcomed the prospect of the exports of liquefied natural gas from the U.S. to Europe “in the future.”
Congress in the 1970s made it illegal to export crude oil without a license. Authorizations are also required for the export of natural gas. The laws passed by Congress and shaped by the energy crisis at the time aimed to conserve domestic oil reserves and discourage foreign imports.
The catch is that Mr. Obama can allow export licenses if he determines they are in the national interest.
With the U.S. surpassing Russia to become the world’s largest producer of natural gas last year, Martin Durbin, president and CEO of America’s Natural Gas Alliance, said the developments in Ukraine have elevated the debate on exporting natural gas.
“We’re hearing positive statements,” said Mr. Durbin, who added that exporting gas gives the U.S. the opportunity to “become a much stronger player in the global energy markets, helping our friends around the world, and diminishing the ability of countries like Russia to be able to use energy as a weapon.”
In the past three years, the Energy Department has approved seven licenses to export liquefied natural gas to countries in Europe, Asia, and South America; 24 applications are still pending.
The Obama administration must expedite the approval process, said Mr. Durbin.
Even after approval is given, it could take years before natural gas is exported.