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 Until the recent escalation of Russia’s confrontation with NATO
over Ukraine, the Biden administration’s solution to Europe’s energy crisis had
been to implore Russia to send more gas to Europe. EU member states are already
dependent on Moscow for roughly 40% of their gas supply. Initially, the White
House made a deal with Germany, letting the Nord Stream 2 gas pipeline move
forward. As part of an effort to repair relations with Germany, this decision
allows Russia to tighten Putin’s grip over European energy security at the
expense of our strategic partner Ukraine. Fortunately, German regulators refused
to approve the pipeline, effectively delaying the certification of the project
before July 2022. As part of the growing confrontation with Europe and the U.S.
over Ukraine, Russia has further cut gas exports to Europe.
Thus, geopolitics and energy security in Europe is front and
center of the U.S. national security interests. We need a multi-phase strategy
to protect U.S. interests while supporting our European allies in their time of
need. The Administration should champion liquefied natural gas (LNG) exports. We
are in a military face-off with Russia regarding Ukraine that worsens by the
day. Moscow has upped the pressure by repeatedly using energy as an economic
weapon. This signal would create certainty in the global market by providing
predictability of supply while also providing geopolitical and national security
benefits.
As the world’s premier energy producer, America has enormous potential to impact
both national and international security. The U.S. is set to become the world’s
largest LNG exporter by the end of 2022, an impressive milestone for a nation
that began exporting just six years ago. Calcasieu Pass and Sabine Pass Train 6,
based in Louisiana and Texas respectively, will soon come online and export LNG
to many nations. Poland is an ally on the front lines of the military
confrontation with Russia. It is also committed to reducing its dependence on
Russian gas. Poland will soon import over a third of its gas supply from the
U.S., and no longer fear that Russia will shut off its energy supply as it has
done in the past. Other European nations have also signed supply contracts with
U.S. producers to diversify their gas supply.
Fortunately, the U.S. is already moving in this direction. Gas has generated
considerable income in 2021 for U.S. oil and gas producers. This positive trend
will be necessary for a successful energy transition. Now is not the time to
undermine this progress by restricting U.S. LNG exports.
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Providing our allies with an alternative to Russia and Qatar strengthens U.S.
national security. Notably, the price of U.S. LNG can encourage lower prices
from other gas producers. From a climate point of view, less U.S. LNG on the
market means higher global prices and increased global use of coal plants to
produce electricity.
U.S. LNG exports influence geopolitics beyond Europe. The U.S. has recently
become China’s second-largest LNG supplier. Despite geopolitical tensions
between Washington and Beijing, China has recently committed to a significant
volume of long-term supply contracts of U.S. LNG, lowering the US trade deficit
with China.
Finally, U.S. LNG can reduce global carbon emissions – an important
international and national security policy objective. A 2020 ICF International
study examined U.S. LNG exports to Germany, China, and India and calculated the
climate benefits. For these three countries, the study found that “using U.S.
LNG or imported pipelined gas for electricity generation produces on average
50.5 percent lower GHG emissions than electricity from coal.” Therefore, the
transition from coal to natural gas overseas provides a proven climate solution
to meet energy demand while addressing the risks of climate change. Some
disagree, but I believe that curtailing U.S. LNG exports would set back, not
advance, the U.S.’s climate goals.
This process will not be easy: first, U.S. LNG exports may drive up domestic
U.S. gas prices if supply and demand for gas do not synch carefully, depending
on how energy markets respond to price changes. Second, producers, transporters,
and owners of U.S. natural gas have a responsibility to develop plans for a
low-carbon, clean energy future. Climate change is real. Renewable energy must
play a more significant role in reducing carbon emissions. The public and
shareholders alike believe the US private sector should be doing all it can to
reduce carbon emissions and significantly minimize methane emissions.
Fortunately, while the private sector has made progress in dealing with gas
leaks, more can be done throughout the supply chain.
The U.S. is blessed with abundant natural gas and oil. Soaring energy costs for
our allies require policies that support – not hinder – the safe and responsible
production, transportation, and export of American natural gas.
Richard D. Kauzlarich, former U.S. Ambassador to Azerbaijan, and Bosnia and
Herzegovina, and the co-director of the Center for Energy Science and Policy at
George Mason University. |
