US gas not panacea for Crimean crisis

US gas not panacea for Crimean crisis
A girl poses in front of a giant wave on Sevastopol embankment on March 17, 2014. Crimea launched a raft of measures on March 17 to facilitate its entry into Russia, a day after the separatist region voted overwhelmingly to split from Ukraine.

WHILE the Crimean crisis has focused attention on the need for energy diversification globally, experts agree that the United States shale gas revolution is years away from being able to plug that hole or to serve any current foreign policy objective in a big way.

And even when US gas exports do enter the market three to five years from now, it is likely that it will be Asia - Singapore included - that will feel the effects, more so than the Eastern Europeans currently lobbying for US energy exports.

"This crisis underscores for everyone the uncertainty of doing business with Russia," said Mr Edward Chow, formerly Chevron's principal international representative in Washington. "But all these plans, because of the nature of the industry, take time to implement. There are no easy solutions for this year."

In recent weeks, Washington has come under increased pressure to expedite energy exports as a means of undermining Russian influence in Ukraine and Eastern Europe.

The advances in hydraulic fracking technology in recent years have rapidly turned around the fortunes of the US energy industry - turning it from an energy importer to potentially the largest natural gas exporter in the world. In the US, some are now heralding a "golden age of gas".

House Speaker John Boehner recently issued a statement and wrote a commentary in the Wall Street Journal, in which he argued: "The ability to turn the tables and put the Russian leader in check lies right beneath our feet, in the form of vast supplies of natural energy."

Similarly, ambassadors from Hungary, Poland, Slovakia and the Czech Republic have made an appeal to Congress to support faster approval of natural gas exports.

The idea is that Eastern Europe - which currently depends on Russian gas for a large proportion of its supply - could loosen its ties with an increasingly aggressive Russia if only the US would send the region some gas.

Mr Chow, now a senior fellow at the Centre for Strategic and International Studies, said that while the idea could make sense in the long run, it has little relevance to Crimea now. The US simply does not have the infrastructure to export the gas yet and Eastern Europe does not have the ability to import it.

"Ukraine doesn't even have an LNG receiving terminal and if it were to start building them tomorrow, it wouldn't be ready for a few years," he said.

And while Poland is currently building a receiving terminal, Hungary, Slovakia and the Czech Republic do not have a coastline.

The first LNG - liquefied natural gas - export terminal in the US will not come online until at least the end of 2015.

And experts said the difficulty in funding, and the construction and operation of these billion-dollar projects, mean that permits are unlikely to be the bottleneck. As it is, the US had been approving a project every two to three months last year.

Indeed, the Obama administration has thus far not indicated any desire to pursue the energy angle as a means of resolving the Crimean crisis, despite Mr Boehner's comments.

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