Abundant supplies of U.S. natural gas have reshaped global energy markets, but countries such as Ukraine remain beholden to Russian fuel suppliers and, as a result, face serious economic and security risks, a new report shows.
Ukraine ranks dead last of 25 countries in energy security, largely because it relies on Russia for about 60 percent of its natural gas, according to a study from the U.S. Chamber of Commerce’s Institute for 21st Century Energy.
Ukraine consistently has been the least-secure nation in terms of energy since the Chamber started the yearly study in 1980. The country’s dependence on Russian gas has decreased in recent years but remains extremely high when compared to that of other nations, boosting Russian influence in the region.
The U.S. ranks sixth in the study, while Russia ranks 14th. Norway is the most energy-secure nation on Earth, the study shows, a position it has held for the past decade.
The Chamber’s report comes as Russian troops have taken over Ukraine’s strategic region of Crimea and left the U.S. and its European partners scrambling for ways to counter President Vladimir Putin’s aggressive moves. Russia’s excursion into sovereign Ukrainian territory came after Ukraine’s former president, Viktor Yanukovych, fled the country following violent street protests against his government.
Russian influence over Ukraine remains strong, especially in Crimea, home to a large ethnic Russian population.
But Russia’s natural gas exports give it even greater power over the nation as a whole.
Analysts argue that greater U.S. natural gas exports could, over the medium and long term, help reduce Russian power over Ukraine and European nations such as Germany, which also are largely dependent on Russian fuel.
Germany ranks ninth in the Chamber study, but faces greater energy risks than it did a decade ago when it ranked seventh.
Western European nations “have tremendously high risks when it comes to oil and gas imports, particularly natural gas import risks. That has a lot to do with what we’re seeing now in Europe and their dependence on Russian gas,” said Steve Eule, vice president of the Institute for 21st Century Energy, in a conference call with reporters Tuesday morning. “This argues, from our point of view, for greater exports of U.S. oil and gas to Europe. We think that would have tremendous impact in lowering risks, especially when it comes to natural gas import risks in Europe.”
While the U.S. energy landscape has been completely transformed over the past decade due to vast improvements in the drilling technique known as fracking and the discovery of huge pockets of natural gas, exports remain largely stagnant.
The federal government has approved several liquefied natural gas export projects, but about 20 others remain under review. Approval of those projects wouldn’t immediately make Ukraine or Germany less reliant on Russian gas but would send a strong signal to the market, analysts say.
“The prospect of additional supply … will have a calming effect,” said Karen Harbert, the Institute’s president and CEO.
U.S. lawmakers have begun to make similar arguments.
“Now is the time to send the signal to our global allies that U.S. natural gas will be an available and viable alternative to meet their energy needs,” said House Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, said in a statement Tuesday.