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A Better Energy Weapon to Stop Putin

Author: Meghan L. O'Sullivan, Adjunct Senior Fellow
March 11, 2014
Bloomberg

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The Ukraine crisis has spurred calls for ramping up U.S. liquefied natural gas exports to Europe in the hope of translating our new-found energy prowess into geopolitical influence. It's a nice idea. But if the goal is to put pressure on Russian President Vladimir Putin's regime, a more considered proposal might be to lift the ban on the export of U.S. crude oil.

Advocating for American LNG exports is not a serious response to the current crisis, for the simple reason that the U.S. is currently far from being in a position to alleviate Russian energy pressure on Ukraine and Europe with exports of its own. Although American gas is plentiful, it will be years before there are terminals ready to export it. The necessary infrastructure—to liquefy the gas on one end and to re-gasify it on the other—is costly and takes time to build.

Over time, these challenges are not insurmountable. And in a future crisis—if, say, Russia halted gas exports to Europe—U.S. LNG would flow to Europe, providing an important cushion to our allies. But these volumes would not be under the direction of the American government. Instead, they would be a market response to a situation in which the price of gas would increase significantly, attracting more LNG from the U.S. and elsewhere. (And, if Europe's recent behavior is any indication, the continent would also switch to burning more coal.)

However, in more normal periods, there are constraints on America's ability to directly wield gas exports as a geopolitical tool.

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