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The crisis in Ukraine has injected a new element of Cold War politics, as well as a supporting cast of European diplomats and Washington lobbyists, into the debate on Capitol Hill over natural-gas exports.
Until now, the debate has broken down along familiar lines. The oil and gas industry and its Republican supporters have argued that larger exports of American liquefied natural gas would reduce the national deficit and create jobs.
Opposing them is a coalition of Democrats, consumer advocates, chemical companies and manufacturers who counter that increasing LNG exports would raise domestic gas prices, hurting both consumers and companies such as Dow Chemical and DuPont. Environmentalists who oppose fracking, meanwhile, fear that expanding exports will encourage more production.
But with Russian troops tightening their grip on Ukraine’s strategic Crimean Peninsula, the advocates for more U.S. gas exports have added what they hope will be a compelling geopolitical argument to their quiver: The Obama administration and Congress can use the nation’s enormous gas reserves as a weapon to help Ukraine and other European countries break their dependency on Russian gas and thereby reduce Moscow’s political leverage over them.
“Russia has repeatedly used its supply of natural gas to pressure Ukraine economically and politically, and has announced that it will significantly increase its cost in a deliberate effort to squeeze Ukraine,” California Republican Ed Royce, chairman of the House Foreign Affairs Committee, said at a hearing last week on the Ukraine crisis. “Fortunately, we have an option to counter this threat, namely reducing the current impediments to exports of American natural gas.”Europe Weighs In
The Ukraine crisis also has brought new players to the debate. European officials who want to reduce their dependency on Russian gas also have seized on the situation to mount a major lobbying campaign in Washington for new legislation to ease regulations on American LNG exports. Some of these countries, including Bulgaria, Sweden and the Baltic states, rely on Russia for 100 percent of their gas supplies, and Moscow has shown repeatedly it is willing to crimp supplies for leverage in political disputes. Just last week, Russia’s state-owned Gazprom threatened to cut off gas exports to Ukraine over unpaid bills, as it did in 2009.