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Natural Gas: Fuel for the next cold war

, March 12, 2014, 0 Comments

Natural Gas & Cold War-MarketExpressUkraine is dependent on Russian gas – but not as much as it used to be. For years the US State Department has pushed the country toward energy independence. Congress aims to speed things up.

The United States, better known an energy guzzler, now hopes to become an energy supplier – of natural gas, that is.

“We, it turns out, are the Saudi Arabia of natural gas,” said US President Barack Obama. “We have a lot of it.”

The US natural gas boom, enabled by new fracking technologies, is fueling not only the country’s home furnaces but also its confidence. By 2020, the country aims to outrank the Middle East as the world’s leading energy nation.

The prospect of the Americans producing more oil and natural gas than they consume is viewed by many members of Congress as an opportunity to put pressure on Russian President Vladimir Putin.

Producing more than consuming

Fuel as a weapon in a new Cold War: The Crimean crisis is adding weight to that thought, especially in the ranks of the Republicans. The primary concern of the US, conservative Congressman Robert Pittenger told DW, is to support the energy requirements of Europe and Ukraine.

Pittenger and other members of Congress would like to help Eastern Europe overcome its dependence on Russian natural gas with liquified gas supplies from the US and its allies in the Middle East, such as Kuwait.

“There are some infrastructural and logistical needs that we will have to address,” said Pittenger, who is head of the US Congressional Task Force on Terrorism and Unconventional Warfare. “But I think in the near future, we could be in the position to do that.”

Currently, the US exports no natural gas. Companies like ExxonMobil, however, are lobbying Washington policymakers to finally issue the necessary permits to build export terminals. More and more Republicans support the move.

Waiting for approval

“What the President could do today is that he could expand our exports in natural gas,” said Congressman John Boehner, Speaker of the House of Representatives, adding that Obama only needs to reach for his phone to make it happen. “Over the last three years, we’ve permitted just six liquified natural gas facilities around the country. There are 24 applications at the Department of Energy.”

The Crimean crisis should be reason enough, the Republicans argue, to quickly approve the construction projects. Only then can liquified gas be exported from the US.

“The offer from the Americans, particularly the Republicans, to start gas supplies from the US to Europe and especially to Germany should be primarily understood as a political strategy,” said Annette Heuser, director of the Washington office of the Bertelsmann Stiftung. It is a clear message to the Kremlin and Putin, she added, that the transatlantic alliance stands united.

But even if the US government were to immediately grant the pending permits, its plans to export gas to Europe wouldn’t happen overnight. “Only one port in the US is currently equipped to export liquified natural gas,” Heuser said. “We also need to bear in mind that the Americans have made a long-term commitment to export this gas to Asia, primarily South Korea, Japan and India.”

Not less important, Heuser added, is that Europe has hardly any capacity at present to accept liquified gas imports from the US.

Most of the approved export terminals in the US are in the early stages of construction. Only the new facility being built in Louisiana is slated to open next year. The others aren’t expected to begin operating before 2017.

The situation on the other side of the Atlantic isn’t much better. Import terminals exist today only in Belgium, France, Spain and the Netherlands.

Energy independence

All the same, the energy debate in Washington has gained momentum. And much of the talk is about new trade routes in a geographically changed world, according to Heuser. “The Europeans have developed the first plans,” she said. “But I strongly believe the Crimean crisis has contributed to making the energy independence of the transatlantic alliance a top priority.”

Former US ambassador to Ukraine Carlos Pascual has been heavily involved in creating the so-called European energy charter. Since 2011, the diplomat has been in charge of his own department for energy reserves in the US State Department. The department’s primary task is to help countries in a democratic transition free themselves from

“As a result of the changing nature of the global gas market, we are increasingly seeing the emergence of a global type of gas market, and so anything that we do analyzing European gas issues has to be put in a far broader context,” said Pascual. “Because gas questions are no longer delimited by geography, they become global questions.”

His department, he added, has helped Ukraine over the past three years to reduce its dependence on Russian gas by a third, to 60 percent today. The department has helped other Eastern European countries connect with other countries supplying energy, such as Africa.

Germany, too, will eventually need to explore alternative suppliers, according to Bertelsmann’s Heuser. “Regardless of today’s question of how to solve the Crimean crisis, it’s clear that the issue of energy dependence is high on the European agenda,” she said. “In the future, Europeans, especially the Germans, will need to answer the question of whether they want to receive their oil and natural gas from the Russians or the Americans.”