America's Natural Gas Could Cut into Russia's Influence Abroad

With the president once again managing to divert attention from a sensible policy to a vulgar tweet, you might not have noticed that this past week has been “Energy Week.” The immediate result has been a lot of speeches, including one by Harold Hamm, the Trump-supporting oil-and-gas man who played a key role in the development of our shale resources, and another from energy secretary Rick Perry. Unfortunately, the former governor of oil- and gas-rich Texas temporarily confused the words “imports” and “exports,” which might have sent chills up the spines of those who know that his Department of Energy is in charge of our nuclear arsenal. That’s for another day—this has been Energy Week, a time for celebration.

Unfortunately, Secretary Perry pasted a typically offensive Trumpian label on an unexceptionable policy: “The path forward is for U.S. energy dominance …,” he told reporters. Fortunately, it will be a benign if also self-serving dominance: “An energy-dominant America will export to markets around the world, increasing our global leadership and influence.”

In practice, this will mean a major increase in exports of liquefied natural gas (LNG): natural gas cooled to -260 degrees Fahrenheit, condensing it to a liquid. Which is good news for Europe and Asia, and bad news for Vladimir Putin, who has not hesitated to use Western Europe’s dependence on Russian gas as a geopolitical bargaining chip. The EU now depends on Russia for 30 percent of its gas. Germany leads the dependency parade: Russia provides 40 percent of its natural gas and is negotiating to make Germany even more dependent on it by building the Nord Stream 2 pipeline to supply natural gas from Russia’s Baltic coast to the German port of Greifswald. So much for Germany’s cooperation in tightening the sanctions on Putin, who knows that when it comes to its interests, as chancellor Angela Merkel understands them, it is Deutschland über alles rather than cooperating with the United States by ratcheting up pressure on Putin to pull his forces out of Ukraine.

It has been a long road since this then-young economist was involved in negotiations to bring the first shipment of LNG to Boston from Algeria in 1968. Fear of supply interruptions due to instability in Algeria, and of an accident that might destroy Boston harbor, dominated discussions. That was then, this is now. We no longer rely on individual point-to-point shipments, but on a global market for LNG. A few months ago an LNG tanker headed from the U.S. to Portugal received a sudden, higher bid for its cargo from Mexico’s power company. “At the Bahamas, the ship made a starboard turn and headed south,” reports the Wall Street Journal. And just a few days ago, a tanker loaded with Qatari LNG, planning to dock at South Hook LNG terminal in Britain, changed course to sail around the Cape of Good Hope to avoid the Suez Canal, controlled by Egypt, now part of an Arab boycott of Qatar.

That flexibility is important. Qatar, a tiny speck with a population of a mere 2.3 million, putting the country right up there with Queens in the number of residents, has stirred the ire of Saudi Arabia and its Arab allies for—get this—supporting terrorism. Never mind that 15 of the 19 hijackers who brought down the World Trade Center were Saudi citizens. Or that the Saudis support madrassas around the world that teach the Salafi theology on which ISIL and other jihadi movements rest their claim for a caliphate.