Boehner Has an Idea to Defeat Putin: Sell More Fracked Gas
John Boehner offered one possible way of increasing pressure on Vladimir Putin: increase natural gas exports. Of course, Republicans in Washington have been calling for increased gas exports for a while.
House Speaker John Boehner offered one possible way of increasing pressure on Vladimir Putin: increase natural gas exports. Of course, Republicans in Washington have been calling for increased gas exports for a while, in an effort to expand the market for fracked gas.
Boehner's argument, presented on the House floor on Wednesday, is best explained in reverse. One point of tension between Russia and Ukraine is that the latter is an important pipeline gateway between Russia and Europe. The theory goes: supply more gas to Europe and it puts pressure on Russia, as well as weakening the economic link between Russia and Ukraine. And then American natural gas companies have more customers and everyone wins.
At issue are permits from the Department of Energy allowing the export of LNG (liquified natural gas), which are containers of gas compressed into liquid form. (Think of your grill's propane tank, but bigger and mostly methane.) Boehner's argument is similar to the one made by Michigan Rep. Fred Upton (of the "Kate Upton" Uptons) in a statement earlier this week, as reported by National Journal. "Expanding U.S. LNG exports is an opportunity to combat Russian influence and power, and we have an energy diplomacy responsibility to act quickly," Upton wrote. "The Department of Energy's approval process for LNG exports is unnecessarily putting our allies at the mercy of Vladimir Putin."
Putin joins a long list of existing reasons that conservatives and representatives of fossil fuel-dependent areas have been pushing for the exports. A number of senators pressured Ernest Moniz during the hearing on his nomination to lead the Department of Energy last year on the topic. While at MIT, Moniz emerged as a proponent of increased exports.
The natural gas industry has seen an enormous expansion over the last decade, creating entire new communities in western North Dakota as an improved process of hydraulic fracturing, or fracking, unlocks natural gas deposits trapped in shale formations. In 2012, Exxon worried that the gas was being overproduced, leading to a glut in the market and causing prices to drop. Opening up new markets in Europe would help re-balance the supply-and-demand equation, increasing the number of customers and, therefore, gas prices.
The economics aren't that easy. In January, Michigan Democrat Debbie Stabenow, raised the topic during a hearing on another DOE appointee suggesting that DOE was moving too fast in permitting LNG exports. (Stabenow's state is home to Dow Chemical, which opposes the exports.) But the economics are tricky in other ways, too. A price increase from exports could have a ripple effect in the domestic economy in a variety of ways.
And, of course, there are environmental questions. Keeping natural gas prices low, some people feel, would limit new fracking, since the economics wouldn't work as well. Fracking and fracking wastewater have been linked to earthquakes and, much more controversially, water pollution. While natural gas burns much more cleanly than other fossil fuel sources, limiting greenhouse gas emissions, a certain amount of methane is emitted during the drilling process, and methane traps heat far more effectively than carbon dioxide, for example.
In other words, this is not as simple as "let's teach Putin a lesson." Nor is it as simple as "let's profiteer." When it comes to geopolitics, things are rarely simple.