* U.S. LNG could work for Western Europe, not Central Europe
* Broad U.S. shipments not expected until at least 2017
* Bill in Congress would expedite exports for NATO nations
* Boosting gas storage might be better than buying LNG
(Adds comments by Speaker of the House John Boehner)
By Timothy Gardner
WASHINGTON, March 4 House Speaker John Boehner
and other supporters of U.S. energy exports pounced on the
crisis in Ukraine to pressure the Obama administration to speed
approval of liquid natural gas (LNG) exports, saying doing so
could help keep Russia in check.
LNG supplies from the United States could help some Western
European countries react to any Russian aggression in coming
years, but the added transportation costs could make the fuel
too expensive for others in Central Europe who are likely to
remain dependent on their neighbors, energy experts said.
As Russian President Vladimir Putin's forces tightened their
grip on the Crimea peninsula in the Ukraine, the moves
heightened concerns that the crisis could worsen and that Russia
could slash its shipments of natural gas to Europe, nearly half
of which are sent through Ukraine via pipeline.
The United States has become the world's top natural gas
producer in recent years, due to hydraulic fracturing, known as
fracking, and horizontal drilling. Surplus U.S. energy could
help provide Europe with an alternative to Russian supplies,
"We should not force our allies to remain dependent on Putin
for their energy needs," Boehner said in a release. "One
immediate step the president can and should take is to
dramatically expedite the approval of U.S. exports of natural
The view that President Barack Obama could brandish energy
exports as a tool to deflate Russian power over Europe is one
espoused by many in U.S. foreign policy circles.
"The U.S. energy transformation of recent years gives us
options we didn't have several years ago. So we ought to explore
using those options," said Richard Haass, the president of the
Council on Foreign Relations think tank.
U.S. LNG exports are not expected to begin in earnest until
at least 2017 as many proposals require more approval and
billion-dollar projects need to be built or expanded. In the
meantime, supplies from other global exporters, including
Australia, Canada, and Qatar, could rush in to help fill
Since 2011, the U.S. Department of Energy has conditionally
approved six proposals to export LNG to countries with which the
United States does not have free-trade agreements.
Joe McMonigle, who was chief of staff at the DOE under
former President George W. Bush, and other supporters of
unfettered exports have classified the DOE's approval rate as a
"go-slow" approach, especially given the lead time between
approval and actual exports.
The approvals total some 8.5 billion cubic feet per day of
LNG, or more than the 6 bcf per day Russia exports through
pipelines through the Ukraine to Europe. More than 20 U.S.
projects await full federal approvals.
But it is uncertain how much of that would be available to
Europe as countries in Asia have entered contracts to buy much
Exports backers are also calling for the Obama
administration to end a 40-year ban on U.S. crude exports. But
new supplies of U.S. light sweet crude may not be an ideal
substitute for Russia's heavy sour oil.
There is no expectation that the Obama administration will
lift the ban based on one crisis, and some U.S. lawmakers are
concerned that exporting crude would translate to higher
gasoline prices at home.
Still, Energy Secretary Ernest Moniz caused a stir in
December by saying the ban was outdated at a time the United
States has become an energy producing power.
The Ukraine conflict has breathed new life into bills
introduced in the Senate and House of Representatives in early
2013 that would force the DOE to speed its approvals for LNG
exports to Japan and to NATO allies.
The legislation, called the Expedited LNG for American
Allies Act, would also allow the State Department to intervene,
expediting approvals if it was determined to be in the national
The Senate version is sponsored by John Barrasso, a Wyoming
Republican. It has 13 Republican and two Democratic co-sponsors
but would need more support from Democrats who lead the Senate
to have a chance of passage.
McMonigle said if the crisis in Ukraine deepens, it could
give the legislation more support.
In the Republican-led House, Representative Tim Ryan, an
Ohio Democrat who supports the legislation, said on Monday that
the events in the Ukraine show the need to act.
"This crisis also points to the fact that the United States
should help Eastern Europe find alternative sources of natural
gas," Ryan said in a release.
U.S. Representative Fred Upton, the chairman of the House
Energy and Commerce Committee, recently met with officials from
Lithuania, Hungary and Poland who asked when U.S. LNG would be
"Now is the time to send the signal to our global allies
that U.S. natural gas will be an available and viable
alternative," Upton said late on Monday, adding that he would
work to advance legislation. The DOE's approval process is
"unnecessarily putting our allies at the mercy of Vladimir
GOT TO BE AN AFFORDABLE PRICE
Countries such as Germany and Austria might benefit from
using U.S. LNG shipments as stop-gap measures in times of crisis
or supply dislocation.
But others in central and southern Europe, such as Bulgaria,
Hungary and Greece, may remain mostly dependent on Russia, an
"It's not enough to just get the gas there, it's got to be
at a price that governments can afford," said Brenda Shaffer, an
energy security expert and visiting professor at Georgetown
University. She said U.S. LNG, after liquefaction,
regasification and shipping, may be too expensive for countries
farther from the United States.
Many of those countries could do well to increase their
storage capacity of gas to shield against supply disruptions,
she said. "I see storage as important, if not more important
than diversification," of supply for European countries, Shaffer
(Additional reporting by Julia Edwards and Ricard Cowan,
Editing by Ros Krasny, Ken Wills, Bernadette Baum and Meredith