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Thursday, October 27, 2016

by Lee Fang, Republic Report

A small group of pundits and politicians with close ties to the fossil fuel industry is using the crisis in Crimea to demand that the United States promote natural gas exports as a quick fix for the volatile situation. But such a solution, experts say, would cost billions of dollars, require years of development, and would not significantly impact the international price of gas or Russia’s role as a major supplier for the region. Rather, the move would simply increase gas prices for American consumers while enriching companies involved in the liquefied natural gas (LNG) trade.

On Capitol Hill, House Energy and Commerce Committee Chairman Rep. Fred Upton (R-MI) was among the first to use the crisis in Ukraine to demand that the Department of Energy speed up the approval process for new LNG terminals. “Now is the time to send the signal to our global allies that U.S. natural gas will be an available and viable alternative to their energy needs,” said Upton in a statement. As we’ve reported, Upton’s committee is managed in part by Tom Hassenboehler, a former lobbyist who joined Upton’s staff last year after working for America’s Natural Gas Alliance, the primary trade group pushing to expand natural gas development and LNG exports.

Paul Bledsoe, in an opinion column for Reuterswrote that the U.S. should expedite natural gas exports to “bolster transatlantic solidarity and help to form a united U.S.-EU response to Russian intervention in Crimea.” He was identified in the piece as a member of the “White House Climate Change Task Force under President Clinton.” What wasn’t disclosed, however, is that Bledsoe is an official with a pro-fossil fuels think tank called the Bipartisan Policy Center, which is funded by the American Gas Association and energy companies with a financial stake in promoting the natural gas industry. (Although he’s not listed on the website, a representative with BPC told Republic Report that Bledsoe continues to work there.)

Groups created and funded by Charles Koch, chief executive of Koch Industries, have also demanded that America should respond to the crisis in Crimea with LNG exports. “A serious president would also fast-forward permits on new liquefied natural gas terminals that could ship to Europe,” claims a column posted by Americans for Prosperity, a Koch-run advocacy group. A similar argument is advanced by the Koch-founded Cato Institute.

What’s left undisclosed, however, is the huge financial stake in the debate for Koch Industries. A brochure for the company shows that Koch has deeply expanded its footprint into the natural gas market, and is now actively engaged in shipping, sourcing, and marketing LNG, in addition to becoming a leader in developing financial instruments related to natural gas. “To complement existing North American activities from Houston and to optimize their global portfolio, KS&T companies are expanding a Europe-wide natural gas business from Geneva and an LNG trading business from offices in Houston and London,” reads the document. Further, Koch federal lobbying disclosures show that the firm has pushed a bill to expedite LNG exports from America to NATO countries.

In perhaps the most ironic twist of this public debate around how to respond to Russia’s incursion into Crimea, American lobbyists with ties to Russia are calling for a solution that would not only shield Russian gas oligarchs, but enrich them. The National Association of Manufacturers has opposed tough sanctions on Russia. Instead, NAM has used the crisis in Ukraine to “urge speedier approval of liquefied natural gas exports, arguing that the move would weaken Vladimir Putin’s control over Europe’s energy supply.” NAM’s chief lobbyist Jay Timmons told Politico that an LNG-export response would “send a strong signal to the Russian Federation, our NATO allies, our trading partners and the rest of the world that energy exports matter and are a critical tool of American foreign policy.”

What Timmons did not mention is that ExxonMobil is a leading member of his trade association, and that ExxonMobil has extensive ties to Russian gas giants, including partnerships to develop natural gas in the United States and around the world. (For more on the business ties, see Kert Davies and Steve Horn’s recent reporting on the Putin-sanctioned alliance between ExxonMobil and Russian state-owned oil and gas giant Rosneft.) In short, Timmons’ strong signal to Russia would help Russian gas businesses.

This article originally appeared on Republic Report.

Photo: House GOP via Flickr

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  • Bill

    Stick it to the consumer to make the rich richer, nothing new about that, typical GOP policy.

    • Sand_Cat

      Trouble is, some of these idiots probably don’t even realize they’re doing that. Look at the faces in the picture: do these look like intelligent, thoughtful people, or like ignorant morons that someone stuck a suit on?

      • idamag

        The one in the foreground looks like he just came off a three-day drunk and the other looks like someone you would see in an orange jumpsuit, holding up a number.

        • Independent1

          Given that the GOP is really nothing more than a collection of hoods that are akin to the Italian Mafia, virtually all GOP reps’ pictures should be of guys in jumpsuits holding up numbers.

  • Buford2k11

    Ah, now I see who the Koch boys are really loyal to beyond the Mighty Dollar…they loves the Putie…maybe Putie reminds them of dear ol’ dad…It is now a national security problem, and the US government should nationalize ALL oil, gas, and coal production and sales…won’t that give ’em the vapors…

  • disqus_ivSI3ByGmh

    These guys do realize that the only practical way to get gas to the Ukraine is by water through the Crimean Sea, don’t they? And they do realize that the Russian Navy pretty much controls that body of water once a ship passes through Turkish control of the Dardenals, right? Or are they planning on sending our Med Fleet in to take over?

    • Independent1

      If it’s a typical GOP scheme they haven’t thought things through that far. Have you noticed how Ryan always comes out with budgets that wouldn’t work if they were approved because he’s only created a bare framework and hasn’t got a clue as to where all the revenues will come from and where all the expenditures will go.

  • Dominick Vila

    The first things to consider are (1) Russia has not announced plans to discontinue natural gas exports to Western Europe, and no EU country has expressed a desire to end that critical trade. (2) The infrastructure to transport natural gas from Russia to Western Europe is already in place and is working very efficiently and economically. (Exporting liquified natural gas to Europe would be a costly and, potentially, dangerous endeavor. (3) The likelihood of profit, in a part of the world where energy costs are already extremely high, and our ability to provide reliable supplies is very much in question, suggest we have not done our homework and, as usual, prefer to rely on pipe dreams rather than reality. (4) Last, but not least, is the impact of exporting a huge amount of liquified natural gas to satisfy the demands of a continent that relies on imports to stay warm in winter, use hot water, and cook, would deny American consumers of a resource we benefit from and, without a doubt, would result in higher prices for Americans.
    The Grand Old Party is once again looking out for the interests of the super rich who finance their campaigns, at the expense of the common man.

  • idamag

    What is so strange is that Putin’s behavior started the cold war when it was done by a former USSR leader. I should have known big money was in this somewhere.

    • Independent1

      It seems to me that Putin has really stuck his foot into things with his latest actions. In addition to the sanctions being imposed by the U.S. and other nations, Putin poured over 50 Billion into building up the Sochi area for the winter olympics hoping to turn the area into an international tourist attraction; I believe in hopes of recouping some of those billions.

      Given the negative press around the world that Putin has created for himself and Russia with his encroachment into Crimea, what non-Russians does he think are going to want to be seen vacationing in a Russian city any time in the near future? Seems to me a lot of the venues that were built for the olympics are going to erode away as there are few Russians that could afford to vacation there.