- The Washington Times - Friday, July 31, 2009

ANALYSIS/OPINION:

Recently the European Commission urgently recommended that all European Union member-state governments begin filling natural-gas storage facilities in preparation for energy cutoffs from Russia. If Russia’s Kremlin-controlled energy monopoly Gazprom gets its way, such emergency measures may also become a reality in the United States.

In January, the citizens of Bulgaria suddenly found themselves without heat in the middle of a winter cold spell. Entire countries are normally only in such a position due to large-scale conflicts or natural disasters. But not this three-week deep-freeze.

This one had its origin in Russia’s assertive foreign policy, particularly Moscow’s contempt for Ukraine’s ambitions of joining the European Union (EU). Gazprom cut off Ukraine’s gas to force Kiev to sign a new energy deal with Moscow. Once it was signed, Prime Minister Vladimir Putin himself showed up at the Russia-Ukraine border to order the taps open again. This energy blackmail means that EU countries dependent on Russian gas piped through Ukraine not only freeze, but are also subject to Moscow’s political pressure.

U.S. diplomats scolded the Bulgarians for their irresponsible dependence on Russian gas and recommended that they diversify their sources through new pipeline routes to the Caspian region and potentially Iraq. Washington has been nudging the EU to push harder for new routes so that key U.S. allies like Germany and Italy will have more freedom of action in setting Russia policy.

These diplomats may soon be eating their words. Last month, Gazprom’s deputy chief executive officer, Alexander Medvedev, announced that the Russian behemoth plans to supply 10 percent of U.S. natural-gas needs by 2025. This could be realized, he said, with the development of liquefied natural-gas facilities for Russia’s gargantuan Arctic fields: Shtokman and Yamal. Gazprom’s share in the U.S. market now stands at about 0.5 percent, a proportion that could be made up quickly by domestic or Canadian reserves should it be cut off. But a 10 percent share could not be made up in a timely fashion, and could present Kremlin decision-makers with significant leverage over Washington.

Energy analysts have recently pointed to Gazprom’s falling output and perceived losses as a sign that its ambitions for expansion outside Eurasia will be brought to a halt. If Gazprom were a genuinely private-sector energy company like ExxonMobil Corp. or Shell Oil Co., this might be the case. But Gazprom is an arm of the Russian government; its true budget is a state secret. Using Russia’s immense energy assets as a foreign-policy tool is a highlight of Moscow’s recently released national-security strategy. Ukraine’s gas wars are a testament to the implementation of that strategy.

One might argue that the U.S. is not Ukraine: Russia wouldn’t dare cut off supplies to a superpower with which it is engaged on so many other issues, from nuclear-arms reduction to resupplying forces in Afghanistan. But a cutoff may never be needed. Just the hint at disruption of supplies and the functional link to Gazprom has effectively cowed Germany into sabotaging Europe-wide energy policies in favor of its “special relationship” with Russia. After all, it wouldn’t be in the interests of constituents to undermine Russia’s energy policy, because 40 percent of them depend on Russian gas.

Gazprom — i.e., Kremlin — plans for enlarging its share of the U.S. gas market necessitate a more rapid development of alternative reserves. New extraction technologies have now made it feasible to reach so-called tight gas, much of which can be found within U.S. borders. It is unfortunate that last month’s energy bill passed by Congress contained few incentives for domestic natural-gas extraction. Before we scold our European allies for an addiction to Russian gas, we ought to coldly assess our own future sources. If we don’t, we may well find ourselves left out in the cold.

Alexandros Petersen is Dinu Patriciu fellow for trans-Atlantic energy security and associate director of the Eurasia Energy Center at the Atlantic Council of the United States.

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