Natural Gas: America’s Greatest Weapon in Ukraine Crisis
Now that Russia has invaded Ukraine, and will likely overthrow its country’s leadership, President Joe Biden has a tough job ahead of him: How does he deal a body blow to Russia without embroiling the U.S. in a foreign conflict? Surely, he’ll impose more sanctions, but Russia’s alliance with China makes this an ineffective means of fighting back. Biden should spend less time shaking his fist at Russia and China and more time supporting American industries abroad that could cripple their hold over Western Europe.
What should Biden do now that Russian airstrikes have hit the capital and tanks are rolling through Kharkiv and Kherson? Threatening Vladimir Putin with more sanctions won’t do much, but strengthening U.S. exports of natural gas to Europe might actually help curb Russia’s chokehold on Western Europe.
Recent headlines about Russia’s invasion have reinforced a perception of a decline in American influence abroad. Biden hasn’t done himself any favors here. In late January, he said a “minor incursion” by Russia into Ukrainian territory may not precipitate any immediate U.S. military or policy action. His blasé tone surprised Ukrainian President Volodymyr Zelensky as much as it did his own staff, who scrambled to control the fallout. While the U.S. should not preempt a war with Russia over Ukraine, it also cannot ignore its position as an influential ally for Kyiv.
An announcement today by NATO articulates its commitment to increasing the number of “additional defensive land and air forces to the eastern part of [NATO], as well as additional maritime assets. We have increased the readiness of our forces to respond to all contingencies.” But no major power wants to be involved in a land war with Russia. A majority of the threats by Western powers pertaining to Russian border incursions have come in the form of sanctions, over 800 of which are U.S.-imposed and less than 3% of which come from outside the West.
It is evident that Russia’s novel pragmatic alliance with China prevents these Western-imposed sanctions from curbing Putin’s behavior. China can supply Russia with many of the goods that Europe and the U.S. may choose to embargo, if perhaps at a lower quality. Sanctioning Russia in 2014 has only increased the strength of its economic protection and given Putin a domestic mandate to take the nation’s economy out of the free market and put it under his control.
If engaging in a war with Russia is not an option, and if sanctioning is not an effective option, then what’s the best way for the U.S. to undermine Russia? Using its leverage in one of Russia’s most sensitive sectors: natural gas. If the U.S. can mobilize its LNG exports to help the European market that was previously reliant on Russia, especially if it can satisfy the German natural gas demand as they capitulate to protecting democracy over keeping energy costs down, it can effectively neutralize a large component of the bargaining advantage Russia holds over the West during this crisis.
Gazprom, the Russian energy giant, restricted its flows in 2021 by around 25% compared to 2019 levels, demonstrating Russia’s commitment to politicizing its natural gas industry as it leaves Europe literally in the cold. While Gazprom currently may be the largest global supplier of natural gas, the U.S. can become the economic LNG powerhouse that Europe needs to combat Russian invasion tactics. By supporting the development of American natural gas, Biden and the U.S. government can leverage its impact on Russian policy not in Moscow or in Washington but in the homes of Western Europeans who are feeling the financial brunt of this crisis.
American natural gas is booming: The U.S. Energy Information Association estimates that 2022 will experience a 16% growth in LNG exports relative to 2021. For the first time ever, all seven LNG docks in the U.S. were in use by ships ready to increase natural gas exportation earlier this month. In fact, partly due to a lack of pandemic-era demand for oil and natural gas that restricted the Russian power over that industry, the U.S. is now the top producer of natural gas (Biden’s mistake shutting down the Keystone XL pipeline notwithstanding). American natural gas exports are expected to increase within the coming months as new natural gas resources are identified; European political security in Ukraine and regional energy security stand to benefit from these exportation improvements.
Europe should not have to choose between heating its homes and maintaining the integrity of its national borders. Germany, whose history of promoting peace, free trade, and liberalism through the EU remains unparalleled, runs the biggest risk if the Russian natural gas market is not effectively tamed. Instead of being forced to sacrifice the Nord Stream 2 pipeline’s energy benefits for its own citizens to honor its moral commitment to European security, Germany deserves a competitive American natural gas sector to curb Russia’s power play with oil and natural gas in the region. Only through LNG market competition can the U.S. save Ukraine, Germany, and the rest of the West from Putin’s “path of evil,” to use the words of Volodymyr Zelensky.