Sunday, March 16, 2014

Expanding U.S. Gas Exports to Europe and the Ukaraine isn't as easy as it Sounds

U.S. lawmakers are pushing proposals they say will unleash a wave of American natural-gas exports to replace the Russian gas now flowing to Ukraine and to other  parts of Europe. 
But experts and industry observers caution that such a move isn't as easy as flipping a switch. 
Neither the infrastructure nor international markets for natural gas have evolved to the point where the U.S. can step in and provide the kinds of energy supplies that would quickly reduce these nations' dependency on Russian gas.
U.S. energy companies need several more years to build plants to export the gas—and Ukraine doesn't have the facilities to receive it. Shipping natural gas on a tanker requires chilling it to a liquid state at minus-260 degrees Fahrenheit. The giant machines and cooling towers it takes to make liquefied natural gas, or LNG, take years to construct and cost billions of dollars. 
Moreover, some experts say, whatever Washington does now on natural-gas exports won't have an immediate impact on Russian President Vladimir Putin's decisions.
"The fact that U.S. liquefied natural gas might go to Europe in three or four years is not going to change Putin's calculus," said Daniel Yergin, vice chairman of the energy consultancy IHS. "His calculus is about the here and now." 
Lawmakers who want to assert America's energy might on the global stage were pushing this idea long before the crisis in Ukraine. The current situation, though, has given them new ammunition. They say that even a signal that the U.S. plans to export natural gas—even if it happens years from now—could have an immediate impact on Mr. Putin's action and energy markets in Europe.
"The message we're sending right now is we're actually more willing to protect Russia's energy monopoly," Sen. John Barrasso (R., Wyo.) said Wednesday at a Senate Foreign Relations Committee meeting, where he tried to amend a Ukraine aid package with measures that would speed the flow of gas to Kiev. "The irony of what's happening today is not going to be lost on the people of Ukraine, our allies and the leaders of the Kremlin."
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