U.S. Natural Gas Exports Could Be ‘Payback’ Against Russia

The Trump administration can put severe pressure on the Russian economy without resorting to tension-escalating sanctions by working with allies to undercut Russian natural gas exports, Washington Post columnist David Ignatius explained this week.

After pointing out the presumed Russian responsibility for recent assassinations in the United Kingdom and malicious hacking into the U.S. energy grid, Ignatius asked, “how can the United States and its closest allies alter Putin’s behavior, if they’re truly serious about holding Russia to account?”

Vladimir Putin. Image courtesy of Wikimedia Commons.

Vladimir Putin. Image courtesy of Wikimedia Commons.

“Russia’s greatest vulnerability is its dependence on sales of oil and gas,” answered Ignatius. “Here, the United States is uniquely positioned for payback. Consider the ways in which Trump could stress Russia on the energy front.”

Ignatius specifically mentioned the United Arab Emirates and Qatar as nations that Trump should pressure to sell natural gas to Russian customers at low prices. Russia is the world’s leading natural gas exporter, and luring away existing customers would put additional pressure on the Russian economy.

The United States, however, does not need to put pressure on other nations to reduce their natural gas prices to undersell Russia. Thanks to favorable vast natural gas resources, favorable geology, and advances in directional drilling and hydraulic fracturing technologies, American energy companies produce and sell natural gas for approximately half the price of Russian natural gas. However, American natural gas exports are severely limited because only a single natural gas export facility exists to send American natural gas overseas.

Short-sighted political opposition has blocked the construction of new natural gas export facilities, but several new facilities are now being built. If we truly want to put pressure on Russian foreign policy and the Russian economy, while at the same time capturing valuable international trade for ourselves, policymakers should stand firm in their commitment to facilitate natural gas exports.

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