* US LNG could work for Western Europe, not Central Europe
* Bill in Congress would expedite exports for NATO nations
* Upping gas storage might be better than buying LNG
By Timothy Gardner
WASHINGTON, March 3 Supporters of U.S. energy
exports have pounced on the crisis in Ukraine to press their
case for faster approvals of liquid natural gas (LNG) projects
and for an end to the decades-long ban on exports of most U.S.
LNG supplies from the United States could help some Western
European countries react to any Russian aggression in coming
years, but because of added transportation costs the fuel could
be too expensive for others in Central Europe who are likely to
remain dependent on neighbors, energy experts said.
As President Vladimir Putin's forces tightened their grip on
the Crimea peninsula in the Ukraine on Monday, the moves
heightened concerns that the crisis could widen and that Russia
could slash its shipments of natural gas to Europe, about half
of which are sent through the Ukraine via pipeline.
The United States is the world's top natural gas producer,
due in recent years to hydraulic fracturing, known as fracking,
and horizontal drilling. Surplus U.S. energy could go a long way
to providing Europe an alternative to Russian supplies,
"Russian oil companies and the Russian state would view U.S.
energy exports as the chief competitor to one of their target
customers - that being Europe," said Joe McMonigle, who served
as chief of staff at the Department of Energy under former
President George W. Bush.
The view that President Barack Obama could brandish energy
exports as a tool to deflate Russian power over Europe is one
espoused by many in U.S. foreign policy circles.
"The U.S. energy transformation of recent years gives us
options we didn't have several years ago. So we ought to explore
using those options," said Richard Haass, the president of the
Council on Foreign Relations think tank.
Since 2011, the U.S. Department of Energy has conditionally
approved six proposals to export LNG to countries with which the
United States does not have free trade agreements.
The approvals total some 8.5 billion cubic feet per day of
LNG - more than the 6 bcf per day Russia exports through
pipelines through the Ukraine to Europe. More than 20 U.S.
projects want approvals.
But it is uncertain how much of that would be available to
Europe as countries in Asia have entered contracts to buy much
McMonigle and other supporters of unfettered exports have
classified the DOE's approval rate as a "go-slow" approach,
especially given the lead time between approval and actual
U.S. LNG exports are not expected to begin in full until at
least 2017. In the meantime, supplies from other global
exporters including Australia, Canada, and Qatar could rush in
to help fill European demand.
And new supplies of U.S. light sweet crude may not be an
ideal substitute for Russia's heavy sour oil.
Nobody expects the Obama administration to quickly void the
40-year-old ban on oil exports based on one crisis. Some U.S.
lawmakers are concerned that exporting crude oil would translate
to higher gasoline prices at home.
Still, U.S. Energy Secretary Ernest Moniz caused a stir in
December by saying the ban was outdated at a time the United
States has become an energy producing power.
The Ukrainian conflict has breathed new life into bills
introduced in the Senate and House of Representatives in early
2013 that would force the DOE to speed up its approvals for
exports of liquefied natural gas to Japan and to NATO allies.
The legislation, called the Expedited LNG for American
Allies Act, would also allow the State Department to intervene,
speeding up approvals if it was determined to be in the national
The Senate version is sponsored by John Barrasso, a Wyoming
Republican. It has 13 Republican and two Democratic co-sponsors
but would need more support from Democrats who lead the Senate
to have a chance of passage.
McMonigle said that if the crisis in the Ukraine deepens, it
could give the legislation more support.
In the Republican-led House, Representative Tim Ryan, an
Ohio Democrat who supports the legislation, said on Monday that
the events in the Ukraine show the need to act.
"This crisis also points to the fact that the United States
should help Eastern Europe find alternative sources of natural
gas," Ryan said in a release.
NOT ENOUGH JUST TO GET IT THERE
Countries such as Germany and Austria might benefit from
diversifying to U.S. LNG shipments as stop-gap measures in times
of crisis or supply dislocation.
But others in central and southern Europe, such as Bulgaria,
Hungary and Greece, may remain mostly dependent on Russia, an
"It's not enough to just get the gas there, it's got to be
at a price that governments can afford," said Brenda Shaffer, an
energy security expert and visiting professor at Georgetown
University. She said U.S. LNG, after liquefaction,
regasification and shipping, may be too expensive for countries
farther from the United States.
Many of those countries could do well to increase their
storage capacity of gas to shield against supply disruptions,
she said. "I see storage as important, if not more important
than diversification," of supply for European countries, Shaffer
(Additional reporting by Julia Edwards, Editing by Ros Krasny
and Ken Wills)