Lugar: Natural gas exports can be a geopolitical weapon

posted at 8:01 pm on December 12, 2012 by Erika Johnsen

I’ve been focusing a lot lately on the economic bounty that would come as part and parcel of allowing American companies to more freely export natural gas, as fewer restrictions on free trade are reliably good policies for job-and-wealth creation, but Republican Sen. Richard Lugar — who will shortly be leaving Congress after a very long career, hem hem — took a parting legislative shot by pointing out another valuable aspect of freer LNG exports.

Mitt Romney got a lot of flack for his remarks about Russia being our “number one geopolitical foe” during the campaign season, but the man had a point about the former Soviet Union being one of the world’s more nefarious actors. Right now, certain nations are beholden to Russia and Iran for their energy needs, and Lugar thinks the United States could undermine these countries’ influence by simply allowing for a little good ol’-fashioned, American-style market competition on the global scene. The WSJ reports:

Sen. Lugar, who is leaving the chamber at the end of the year, is introducing the “Liquefied Natural Gas for NATO Act,” which would essentially open the door to exports of U.S. gas to members of the North Atlantic Treaty Organization who aren’t free-trade partners of the U.S. (Gas exports to free-trade countries are automatically approved; exports to other countries have to go through a long government approval process.)

The idea is to give U.S. allies in Europe, who for decades have lived under the shadow of Russian energy bullying, a way out of their impasse, something that Secretary of State Hillary Clinton has stressed recently.

Important U.S. allies across Europe depend to a large degree on imports of Russian gas—and Moscow in recent years, unlike during the Cold War, has not shied away from using gas exports as a political weapon. The legislation is meant to accelerate the degree to which U.S. gas can undermine Russia’s dominance in Europe.

At the same time, by offering NATO allies such as Turkey an alternate source of gas, it could help them  wean off Iranian natural gas—which would further U.S. interests in economically isolating Tehran.

Lugar’s pending exit-stage-left means that he won’t be able to see the legislation all the way through, but staffers expect that other senators will pick it up again next year. I don’t doubt it, seeing as how it will likely be another powerful argument for free-trade advocates in the upcoming LNG-export tug-of-war. Allowing for more free trade in no way guarantees that our gas exports would go to our allies, as that would still be determined by the supplies and demands of the free market — but the point is, even the possibility of that outcome is currently prohibited by U.S. policy.


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I’m more worried about America’s influence on Europe than Russia’s influence on Europe. Via WikiLeaks we know that we have State Department agents 1) advocating putting Turkey in the EU 2) imposing american style affirmative action racial preferences in France 3) imposing gay marriage in poland… etc, etc, etc

ninjapirate on December 12, 2012 at 8:06 PM

As a petroleum land man for over 30 years, I can assure you that America does indeed have the Natural Gas to export.

From Houston Texas, St. James Terminal and Henry Hub Louisiana,as well as the plants being built all along the coast it is a viable solution to GDP.

From the Baken, Haynesville and many other shale plays, we do have the capacity and reserves to export.

Post Scriptum: No I have not seen “Promised Land” with Matt Damon, and probably will not.

RAGIN CAJUN on December 12, 2012 at 8:11 PM

It isn’t as easy to export natural gas, regular petroleum is much more readily available and conventional for export, and we don’t have enough of that being drilled in our own borders. I would not spend too much time exporting natural gas until it is plentiful here. Many people in our own country cannot use it, it is not installed in their neighborhoods; there is some potential to use it for transportation, to take the edge off oil imports, but there would be a market for all the natural gas you could bring up, right here in the U.s.a. That of course does not increase our exports, but both natural gas and oil could be drilled and exported if the current administration would stop dragging it’s feet, and seeming not to care.

The cost of heating oil in N.E. is over $4.00 per gallon now. That is one item that should be totally exempt from taxation. In spite of the price of gasoline at the pump down to about $3.50 in N.E. the heating oil has not fallen, but continues to go up. Today they said on WRKO this winter to expect to pay $400 more for oil, and $200 more for natural gas to heat your home. There was no mention for those who have electric heat…

Fleuries on December 12, 2012 at 8:32 PM

Lugar – dead politico walking, desperately seeking attention.

Hey, you’re outta here! Shut up and sit down.

platypus on December 12, 2012 at 8:33 PM

RAGIN CAJUN on December 12, 2012 at 8:11 PM

I managed contracts for 45TJ/day for a company in Australia, and so I watched with interest the tight gas developments in the US over the past few years (I am originally from NOLA btw). There are oceans of it, just waiting to be exported as LNG and reset markets in both the EU and Asia. And btw the movie Promised Land is a f*cking joke, you should see what the Frack Nation guys have to say about it.

Fleuries on December 12, 2012 at 8:32 PM

Natural gas is now so plentiful in the US thanks to unconventional drilling methods that Henry Hub prices literally collapsed over the past four years. Putting in natural gas lines into neighborhoods is a cost/benefit question that has absolutely nothing to do with LNG exports.

Wanderlust on December 12, 2012 at 8:40 PM

. . . Lugar thinks the United States could undermine these countries’ influence by simply allowing for a little good ol’-fashioned, American-style market competition on the global scene.

Almost going to need good ol’-fashioned America to do things like that though. I dunno if there’s enough left in the pantry.

Axe on December 12, 2012 at 8:44 PM

Lugar: Natural gas exports can be a geopolitical weapon

Under Obama, only if that weapon can be smuggled to his friends (America’s enemies) like the Muslim Brotherhood — even if the price includes the lives of U.S. Ambassadors, CIA personnel, whatever

ShainS on December 12, 2012 at 8:45 PM

There are huge areas in the southwest right now where they’re simply not drilling for natural gas unless it’s ‘wet’ gas — containing other petrochemical compounds that can be evaporated out — because the price of ‘dry’ gas alone is too low to justify drilling. So there’s certainly enough available stocks in the U.S. to begin considering export.

The problem is the most logical areas to do the exporting out of happen to be in the same Blue States that are chock full of the same sort of environmentalists who both oppose drilling for gas in the first place, and think their iPhones and HDTVs are powered by fairy dust. While you could probably get the OK at the state level to build a LNG exporting facility offshore in Texas or Louisiana, building one off the Atlantic Coast in the Northeast would immediately be turned into The Greatest Threat to the Environment in World History by the usual suspects (to the point that — given the current administration’s attitude towards energy development in the first place — they’re likely to ban any LNG shipping facilities off any coast once the issue came into the spotlight).

jon1979 on December 12, 2012 at 8:48 PM

Almost going to need good ol’-fashioned America to do things like that though. I dunno if there’s enough left in the pantry.

Axe on December 12, 2012 at 8:44 PM

Well said Axe, well said.

Rio Linda Refugee on December 12, 2012 at 8:48 PM

Fleuries on December 12, 2012 at 8:32 PM

You have absolutley no idea of what you speak regarding production, transmission and exportation of natural gas.

Let’s review, the article by Erika Johnsen details the geo political weapon, or economical hammer that could potentially be used to and I quote directly as follows:

The idea is to give U.S. allies in Europe, who for decades have lived under the shadow of Russian energy bullying, a way out of their impasse, something that Secretary of State Hillary Clinton has stressed recently.

With this being addressed, not only can we garner a foothold in the European theater of energy, we can create a financial engine to help us with our debt.

In closing we can not only pay China back, we can export energy to allies while weakening the Kremlin’s choke hold.

Natural gas is not only natural it is in great abundance here in America. It is currently trading below $4 per unit and has been low for years. It is clean burning with a high energy value. Current natural gas drilling rigs: 417 in North America.

RAGIN CAJUN on December 12, 2012 at 8:56 PM

Wanderlust on December 12, 2012 at 8:40 PM

Went to boarding school at St Pauls in Covington across the causeway.

Currently ### Midstream LNG – Mid Cont.

RAGIN CAJUN on December 12, 2012 at 9:00 PM

The Golden Triangle at Beaumont/Port Arthur/Orange is ready. Middle East gas was expected to come in and now we have so much we can ship it out but like somebody else said, until the price recovers its left in the gound.

The technology on the shipping is unbelievably cool. They fill tanks on ships with waste gas that is liquefied and a small percentage powers the ship to the ports around the world. Very interesting engineering indeed.

DanMan on December 12, 2012 at 9:03 PM

Natural gas is now so plentiful in the US thanks to unconventional drilling methods that Henry Hub prices literally collapsed over the past four years. Putting in natural gas lines into neighborhoods is a cost/benefit question that has absolutely nothing to do with LNG exports.

Wanderlust on December 12, 2012 at 8:40 PM

those of us in the woods in maine will never see that. ledge, distances, etc.
oil (#2 or Kero) works. its simple to deliver and heating systems are easy to fix.
it also can be used for other uses too. although not legal to run in a truck it works when needed.

dmacleo on December 12, 2012 at 9:43 PM

Duh!

The strategic advantages of the US using our vast oil and gas resources against Russa and OPEC have been known and discussed for a long time. The only obstacle, as usual, is our own government and the eco-Marxsts who think fossil fuels are evil. Heck, we can’t even access them for our own use.

Charlemagne on December 12, 2012 at 9:43 PM

…Luger?…whose he?

KOOLAID2 on December 12, 2012 at 10:39 PM

Our own government has been using energy as a weapon against us for years. It would be nice to see them turn it on someone else for a change.

trigon on December 12, 2012 at 11:35 PM

This self righteous senile old goat was in the local paper giving us lectures on “how divided we are as a nation”.

No mention whatsover on the “seperate but equal” healthcare, pension, salary and benefits he and his family enjoy at the
“divided nations” expense. Of course, he also forgot to mention how he and his ilk stole the social security and replaced with worthless IOU’s and how he voted for the communists that now occupy our supreme court.

The only thing this guy regrets is that he could not get a department store built in DC that served the ruling elite only.
It would have allowed him to go months and not have to mingle with
the unclean and huddled masses.

acyl72 on December 13, 2012 at 7:30 AM

Lugar wouldn’t know what the good old fashioned American market is unless he’s cut in for a piece of the pie. That’s how it works in DC. His plan would hold American companies and products hostage to the whim of whoever was in office at the time and whatever their agenda happened to be. They’ll never get the point of staying out of the marketplace.

Kissmygrits on December 13, 2012 at 8:50 AM

Did Lugar hit his head on the urinal again?

He almost sounded like a conservative there for a minute.

roy_batty on December 13, 2012 at 12:19 PM