Clash over Crimea stokes U.S. energy fight

Gas, oil sales could weaken Moscow’s clout

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Cheniere Energy’s liquefied natural gas export facility at Sabine Pass, Louisiana, which is the furthest along, is estimated to only begin exporting at the earliest by late 2015.

Boosting the U.S. natural gas exports is being touted as a way to weaken Russia’s hold over Europe. Mr. Gerard described Russia’s energy industry, which generates more than 50 percent of the Russian federal government’s budget, as its Achilles’ heel. Russian revenues are dominated by the sale of oil, not gas.

“If we are serious about having an impact on Russia, you have got to go right to the No. 1 indicator and that’s energy,” he said. 

“So rather than taking punitive approaches that potentially adversely affect us and the rest of the globe, take a positive approach and move to bring more [energy] supply to the marketplace,” Mr. Gerard added, referring to fresh sanctions being considered by Western governments, including the U.S., against Russia.

Russia’s annexation of the Crimean Peninsula earlier in March was made easier by its energy grip over Ukraine, Rep. Ed Royce, California Republican and chairman of the House Foreign Affairs Committee, said at a hearing last week.

But not everyone agrees. Some analysts note the high cost of liquefying and transporting natural gas and say U.S. exports to Europe are unlikely to eliminate Russia’s edge. 

Further, exporting U.S. natural gas will lower the global cost, but could raise gas and electricity bills in the U.S., said Michael Levi, senior fellow for energy and the environment at the Council on Foreign Relations.

Mr. Levi told the House Foreign Affairs Committee last week that, even with reduced rates, Russia could still maintain its market share in Europe by underpricing U.S. exports — and instead of Europe, U.S. energy firms would look to Asia where higher prices mean a greater chance to reap a profit.

Some in Eastern Europe appear uninterested in such factors. Jaroslav Neverovic, the energy minister of one Baltic state, Lithuania, made a passionate appeal to members of the Senate Committee on Energy and Natural Resources last week to “do everything within your power” to help his country break free from its energy dependence on Russia.

And in Congress, a growing number of lawmakers are adding their voices to calls for easing energy exports. Mr. Royce and Democratic Rep. Eliot Engel of New York, the ranking member on the House Foreign Affairs Committee, authored a resolution passed by the House on March 11 that condemned Russia’s actions in Ukraine and called on the U.S. to promote natural gas exports to reduce Mr. Putin’s leverage in his neighborhood.

“Since the president has chosen not to use his authority to permit natural gas exports, Congress can do the job for him by passing legislation to increase the number of countries that would receive accelerated approval of natural gas exports,” Mr. Royce said.

 

© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.

About the Author
Ashish Kumar Sen

Ashish Kumar Sen

Ashish Kumar Sen is a reporter covering foreign policy and international developments for The Washington Times.

Prior to joining The Times, Mr. Sen worked for publications in Asia and the Middle East. His work has appeared in a number of publications and online news sites including the British Broadcasting Corp., Asia Times Online and Outlook magazine.

 

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