"Armchair warriors wage phoney war": US gas exports can't help Ukraine.

Derek Brower in Petroleum Economist: “From London to Washington politicians and commentators have arrived at a solution to their Putin problem. Russia is weak, their argument claims, because it depends on oil and gas revenue. Unleash American energy on the world and watch the Kremlin crumble.”
“It’s a neat answer, because none of the Western powers wants a real war over Crimea, and UK, German, Italian and others’ financial interests make them reluctant to back sanctions on Russia.
John Boehner, speaker of the US House of Representatives, says swifter approval of liquefied natural gas (LNG) exports “is one clear step the US can take to stand by our allies and stand up to Russian aggression” Lisa Murkowski, a senator from Alaska, says oil and gas are now a “strategic asset” for the US, which should “be aware of what we have and how important a tool diplomatically an energy asset can be”.
Big media names are on board. The Wall Street Journal thinks the US can “use energy as a weapon against Putin”, sending LNG first to “our good friends in Europe”. In the UK’s Times newspaper, one commentator thinks the US unconventionals boom could “kill Russia’s energy industry”. Another in the Daily Telegraph notes that rising US energy output helped with sanctions on Iran. “Should Moscow be the next testing ground for America’s E-bomb?” asks an op-ed.
None of this bears much examination. First, there is nothing the US can do, in energy terms, about Ukraine’s plight right now. The first shipments of US LNG, from the Sabine Pass terminal in Louisiana, are at least two years away. Aside from a sales agreement with the UK’s Centrica, there is no guarantee that much of the gas will end up in Europe, let alone reach Ukraine. As Michael Levi, of the Council on Foreign Relations, points out, it isn’t the US government that will sell this LNG. Companies will – in markets where prices are highest. For the foreseeable future, that’s Asia.
Despite that commercial reality, Texan Congressman Ted Poe has just introduced bill HR 4155, “To authorise natural gas exports to certain foreign countries, and for other purposes”Â. His bill, we are told, may be referred to as the “Fight Russian Energy Exploitation (FREE) Act”. It is designed to speed LNG sales to Ukraine, even though Ukraine doesn’t have an LNG import terminal.
Lifting the ban on US exports of crude oil is a great idea – at least for US producers keen to export into the global market. But despite the success of the US tight oil sector, the country is still the world’s second largest oil importer (China overtook it last year), and will be for years. Total imports this year will be about 6 million barrels a day (b/d) – more than Germany, the UK and France, the EU’s three biggest consumers, together used last year.
….As the world’s biggest oil producer and biggest gas exporter, Russia doesn’t have much to fear from any of these ploys. Its gas sales to Europe rose to 162 billion cubic metres (cm) last year, or 33% of the continent’s market. It still meets a third of Europe’s oil needs. By May, it hopes to have signed a 30-year gas sales agreement with China, to export 38 billion cm.”
Both Gazprom and Europe can cope without Ukraine’s transit of Russian gas to Europe, at least for the short term. The 55 billion cm/y Nord Stream pipeline to Germany has spare capacity should Russia divert exports away from Ukraine. In the medium term, Gazprom will also have South Stream, its 63 billion cm/y link through the Black Sea to Bulgaria and central Europe, on stream by 2015. Europe’s dependence on Russian gas – between 50% and 100% for every country, aside from Romania, that lies east of Trieste – is growing.
The best time to reduce this exposure to Russian gas has passed. The Trans-Adriatic Pipeline, which will pipe up to 12 billion cm/y from Azerbaijan to southern Europe by 2018, is the only real outcome of the EU’s efforts to build alternative import routes earlier this century. The grander Nabucco project, which would have opened the so-called southern gas corridor, has failed.”
….In energy terms, Europe and Russia are in a lock. Whatever other solutions the West comes up with, turning energy into a weapon isn’t the answer.”