US should avoid military motives for LNG exports

March 14, 2014
The US natural gas industry should remind House Republicans that geopolitical power works best in silence, that bluster dissipates influence.

The US natural gas industry should remind House Republicans that geopolitical power works best in silence, that bluster dissipates influence.

Surging gas supplies do enhance the US potential to shape events abroad. Now, though, a few lawmakers want to swing what they see as a new club at Russia. They’re pushing legislation to speed approvals of LNG export projects as a way to punish Moscow for aggression in Ukraine.

The truculence should make gas producers and prospective exporters wince.

Yes, the US has been too slow to approve LNG export projects targeting countries not party to free-trade agreements. But that problem is easing. Exports haven’t begun but will, at some level, when plants are complete and economics are right.

An American LNG export industry should develop that way: economically, not militarily.

Russia, of course, uses exported gas routinely as a lever of strategy. Even now, the exporter is raising gas prices for Ukrainian sales to punish its former vassal for expelling a leader allegiant to Moscow.

The country’s brutishness in Ukraine raises legitimate alarm. It is not, however, a reason for the US to militarize its gas industry.

Gas-supply prospects that have been brightened by development of unconventional reservoirs already influence international events at Russian expense. LNG supplies once destined for the US are finding alternative markets, such as Europe, where they are easing prices and liberating contracts from oil-price indexation. The new competition was stinging Russia even before the Ukrainian revolt.

US exports of LNG, to whatever extent they materialize, will increase this pressure on Russia. But economics, not noisy geopolitics, should motivate their development.

American power comes from freedom of individuals and markets; it’s manifest in flexibility, ingenuity, and competitiveness. Russian power comes from authoritarianism feeding off a hydrocarbon-dependent economy encrusted by regulation and cronyism.

The American version of power, more durable and creative than its Russian counterpart, inevitably prevails. But it’s a process, not a showdown. Politicians need to let it happen, as silently as possible.

(This item appeared first at www.ogj.com on Mar. 14, 2014; author’s e-mail: [email protected])