Congress moved to punish Vladimir Putin for the annexation of Crimea on Tuesday by expanding America’s exports of natural gas to challenge Russia’s energy dominance.
In the first of three hearings on natural gas exports this week, the Senate energy committee was told repeatedly that exporting US gas to Europe - or even Asia - would end Putin’s “energy blackmail” by lowering prices and providing an alternative to Russia as Europe’s big energy supplier.
“America should be an energy superpower,” Mary Landrieu, the Louisiana Democrat who chairs the Senate energy committee said. “The last thing Putin and his cronies want is competition from America in the energy race.”
The full Senate was due later on Tuesday to debate a $1bn aid package for Ukraine that could also bring more calls for expanding exports of liquified natural gas (LNG).
Landrieu was one of nine US officials sanctioned by Putin last week. She continued in Tuesday’s hearing to push for America to open up exports of LNG.
“We should use our energy prowess to break the tyrants who use their energy stockpiles to crush hopes of freedom and democracy,” Landrieu told the committee.
Lithuania’s energy minister, Jaroslav Neverovič
, agreed. “Accelerating America’s entry into the global natural gas market is a win-win,” he said.
The crisis in Ukraine gave new momentum to the oil and gas industry - and members of Congress from energy states - to expand fossil fuel exports.
Fracking technology has left America awash in cheap natural gas, with prices kept low because of a glut in refining capacity.
Since the crisis erupted, Congress has introduced three bills to speed up gas exports, two brought by Democrats in the Senate, and one by a Republican in the House.
The Obama administration has been steadily granting permits for new facilities to liquify and export natural gas over the last year.
It approved a seventh licence for LNG exports on Monday - but there are still about two dozen more projects in the pipeline, and critics accuse the Obama administration of stalling approvals.
But as the hearing was told on Tuesday, even if the administration were to give an immediate go-ahead to all the export projects, it is unlikely any will be up and running and exporting LNG before the end of 2015. Even then they will fall far short of replacing Russian gas supply to Ukraine or Europe, the committee was told.
“No amount of US exports can begin to replace Russia,” Edwin Chow, senior energy fellow at the Centre for Strategic and International Studies, told the hearing. “Export of LNG is not a silver bullet for Europe.”
In an interview before the hearing, Chow said approving more LNG exports would have no immediate effect on the current crisis over Ukraine or European gas supply.
“They are using yet another argument to bolster a position they had to begin with. They were already in favour of expediting LNG approvals,” he said. But he added: “In the short to medium term, it would have zero impact on Ukraine.”
Ukraine does not at the moment have an LNG receiving terminal, and such facilities typically take years to build.
The US is unlikely to begin exporting LNG before late 2015 at the earliest - and most of those shipments are committed in advance to markets in Japan and India including the Jordan Cove facility approved on Monday.
Environmental groups meanwhile are opposed to opening up LNG exports, because it would lead to an expansion of fracking. Manufacturing and chemical companies say expanding gas exports would drive up domestic gas prices.
The Michigan Democrat, Debbie Stabenow, told the committee she was concerned exports would lead to higher energy costs and undermine a “manufacturing renaissance” that was creating jobs.
“While the natural gas industry might benefit with LNG exports, other industries may lose out because of the high energy costs,” she said. “I don’t believe in stopping exports or capping exports but I do believe in moving forward in a thoughtful way.”
