I recently visited Ukraine to speak directly with leaders in the region. We talked about ways the United States could support Ukraine in its conflict with Russia. They stressed the role energy policy plays in this crisis.
Ukraine is the Grand Central Station of gas pipelines. More than half of the natural gas Russia exports to Europe flows through the country. Ukraine itself imports about 60 percent of its natural gas from Russia.
Russia’s command of the natural gas market has empowered the belligerence we are witnessing today in Crimea. While Moscow once dominated the nations of Eastern Europe through military force, it now seeks to control them economically.
Even before voting began on the referendum in Crimea, Russia’s military seized a Ukrainian natural gas distribution center.
America has the natural gas resources to greatly reduce this control. By increasing our exports, we can simultaneously help our allies, strengthen America’s foreign policy hand and create jobs at home. The Obama administration is standing in the way.
The U.S. already exports natural gas to Canada and Mexico by pipeline. Selling it overseas is more complicated. It requires the construction of port terminals and facilities to turn natural gas into a liquid that can be shipped by tanker. While the science is complicated, the permitting process has been the bigger obstacle. Producers that want to export liquefied natural gas must endure years of delay by the Department of Energy. The Obama administration has taken what should be a gusher of American energy and turned it into a trickle.
Over the past three and a half years, the Energy Department has used its discretion to approve only seven applications to export LNG. It is sitting on 24 other applications. Some have been pending for more than two years.
I have introduced bipartisan legislation to break the logjam. It would require the department to approve applications to export LNG to countries like Ukraine and Japan, as well as our NATO allies. Democrats have blocked any action so far, but I will be fighting to get a vote on this important bill.
In addition, the president needs to tell his Energy Department to expedite the existing permit process. He should set firm deadlines for the department to act on all pending applications.
The Obama administration should have done more over the past few years to give our allies an alternative supply of natural gas. Its failure to act in the past has led to increased vulnerability to Russian intimidation today.
The administration needs to approve meaningful amounts of exports, which would enhance the bargaining position of European countries in contract negotiations. Customers who previously had to accept long-term contracts indexed to world crude oil prices could demand contracts based on lower American gas prices.
It will take time to build the new LNG export facilities, but their effect on global pricing would be immediate. Customers in Europe and Asia would start signing new long-term contracts as soon as the exports are approved.
The administration’s sluggish approval process has been insufficient to give overseas customers the negotiating power they need to affect markets. The Energy Department has said that it plans to maintain its current irresponsibly slow pace of considering export applications. The president, or Congress, must force them to move faster.