The Obama administration has been getting a little smarter about taking better advantage of our shale oil-and-gas boom and ushering in approvals for the dozens of pending LNG export-terminal projects waiting for the green light; earlier this month, they approved the sixth such free-trade oriented project, but we have successfully been fracking so much natural gas in just the past few years, it would be silly not to let American producers get in on the action of globally competitive prices and reap the subsequent economic benefits.
And even besides the obvious economic benefits of freer LNG exports, we stand to gain some tactical foreign policy/national security benefits, too. Russia has successfully wielded its own hefty energy supplies as a geopolitical weapon for years now, bullying countries like Ukraine into doing what they want by periodically shutting off the natural-gas pipelines — a gambit they have used at least 50 times since the end of the Soviet Union. Getting more of our own natural gas supplies into the global market has the potential to dilute a lot of that influence, and the Kremlin is decidedly not thrilled about the world’s diversifying supply sources and the freer trade thereof.
The United States’ innovations in hydraulic fracturing and horizontal drilling just really put an unforeseen crimp in Russia’s plans for a return to great-power dominance, and although Putin will sometimes publicly admonish fracking for its ostensible environmental risks (even though Russia employs the technique, too), exactly nobody believes that that’s what really gets his goat about the whole thing. Christopher Dickey has a great explanation at the Daily Beast:
If the natural gas reserves in Ukraine are anything like as large as analysts believe—and that is a big “if,” but far from an impossibility—then the geopolitical and economic position of the former Soviet republic could be transformed; its independence from Moscow assured; its value to the West unquestioned.
Even the ousted President Viktor Yanukovych understood that. (He was never so reliable a Putin ally as his opponents painted him.) Last November, Yanukovych’s government signed a $10 billion deal for shale gas exploration and exploitation with the American-based multinational Chevron, following on another massive deal with Royal Dutch Shell. Together, Yanukovych claimed, those agreements would enable Ukraine “to have full sufficiency in gas by 2020 and, under an optimistic scenario, even enable us to export energy.” …
The strategic implications if the Russian lock on those markets is broken are lost on no one, least of all Putin. His economy is dependent on gas and oil exports, and 76 percent of the gas he pipes out of Russia goes to Germany, Turkey, Italy, France, Britain and other European countries.
In the near term, Ukraine still has 99 financial and economic problems, and if they do have those aforementioned natural gas reserves, it’ll take a while to set up shop and Russia still has a lot of power for the time being — but the spreading technological advancements in fracking and the increasing presence of U.S. LNG exports across Europe is not doing Putin’s energy-export-dependent economy nor his World Domination machinations any favors.