Did LNG Influence U.S. Involvement? by Jessie Blaine

There are a few influential people who are going to leverage the recent Russian-Ukraine situation to gain vast amounts of power and profit.  While the United States supposedly stands on the high ground of morality to justify sanctions and the supplying of resources (cash and weapons) to Ukraine, these actions are underpinned by a deeper meaning for our involvement in another man’s conflict.

Things aren’t always black and white like they seem; there’s always a shade of gray where the two sides come together.  Sometimes it’s clean and obvious because the gray area is razor thin. Other times, it’s a bit messy because that shade of gray is undefined and blurred.

The thing is, if you’re not looking for that gray area, you’re likely to miss it.

As the conflict in Ukraine plays out, we need to keep our eyes open and look for the gray. And in doing so, it will provide better clarity and insight on the depth of our involvement.  Is it possible that the opportunity to supply Liquified Natural Gas (LNG) to parts of Europe has influenced the U.S. decision making process?

During the 2014 Russian invasion of Ukraine, the United States realized the tremendous amount of political power and financial gain that could materialize if the Russian energy pipelines were turned off and the U.S. supply turned on.

However, with long-term contracts in place between Europe and Russia, there didn’t seem to be a reasonable way for U.S. gas to enter the market in any appreciable quantity.  How could the U.S. ever get a foot in the door to the European market? Only if there was a way to have the whole world say, “Russia bad, U.S. good.”  Humm, how could that ever happen?

It was very evident that the U.S. needed a way into the European markets, and this was expressed early on by US Congressman Pete Olson from Sugarland, Texas, when he commented, “Increased exports of American gas could cut Vladimir Putin off at the knees and increase American power.” (Texas Monthly). This was said way back in 2014, more than eight years ago, during the earlier Russian invasion of Ukraine.  It seems there is a trend, here in 2022 as well as back in 2014, among the U.S. leadership…more power, more profit, less Putin.

Remember now, this was Pete Olson, a United States Congressman. He served on the powerful Energy and Commerce Committee, while rising to be the Chairman of the Subcommittee on Energy and Power.  This is the same Pete Olson who went on to leave congress recently, only to become a lobbyist for the influential firm of Hance and Scarborough.

We find ourselves under a president who flubbed the withdrawal from Afghanistan and that left a stain on America’s resume.  Before the ink was even dry on that smudge, the commander-in-chief began a new engagement on another front and it wasn’t just in Ukraine.  We are in a fight for the European energy market.

One Biden has already failed while dealing with energy on the European front, will we have to pay the price for another Biden blunder? The Biden connection to natural gas and Ukraine are extensive.  Remember, Hunter Biden was an executive for five years at Ukraine’s largest natural gas company, Burisma Holdings Ltd. and I’m sure you can see how all of this is starting to line-up.

The U.S. understands that Europe is energy dependent, a net importer.  And when you are energy dependent, you are at a huge political and economic disadvantage.  When the raw material you need for the basics of life are controlled by others, you are compromised.

Until recently, Russia was the one enjoying the benefits of being an influential provider of gas to Europe.  However, as soon as America saw a chance to change the tables, it jumped at the opportunity to do whatever it took to shut out the Bear and get Europe depending on the Eagle.

So, what’s at stake here? Money, huge amounts of money.

Before the invasion, Russia was supplying in the ballpark of 40% of the LNG to Europe, which equates at an estimated volume of 18 Billion Cubic Feet per Day (bcfd).  If American gas could replace Russian gas, that would provide amazing profit margins, while increasing our influence.

When you start looking at the numbers, it really starts adding up…and those gray lines become more apparent. The equation is relatively simple.

Gas to Europe = profits + power.

Was our desire for profits and power the real reason for such devotion to Ukraine?  I don’t think it was the only reason, but perhaps it helped influence a few decisions.  What I do know, is that the answer isn’t as black and white as it seems.  And having been in the energy sector for many years, I’ve had the chance to work a few deals and I’ve experienced how these people work.  I’ve met the CEO of a major energy corporation and know firsthand that the thirst for power and profits is strong and unquenchable.

I’ll lay out some framework, but I’ll let you paint your own picture.  Where you draw the shades of gray, well, that’s up to you.

For years, U.S. companies have been trying to export more LNG, but efforts have been stifled by homegrown environmentalist and difficult bureaucracies.

U.S. companies have been trying to partner with Germany for years in the construction of a LNG import facility in Germany, but the German government would never give approval.

But everything changed in February 2022 when Vladimir Putin made his move into Ukraine.  The door was open to the United States as European countries rallied together to shutdown Russia. Pete Olson and U.S. businesses would finally get their chance.

Remember, this opportunity was wished for at least 8 years ago.  The U.S. knew how much power and influence they would gain once Putin’s gas was isolated from Europe.  Consider how quickly the following occurred right after the February invasion:

1. The German government gave expedited approval for two LNG import facilities. Their regulatory commission gave permission to spend upwards of $1.6 billion on gas from sources other than Russia. U.S. based businesses have been trying for years to get an import facility built, and now, after the Russian invasion, approvals for construction are flying fast. (Wall Street Journal)
2. The United States Department of Energy (DOE) has suddenly given the green light to Cheniere Energy to increase LNG exports for a whopping total of.72 billion cubic feet per day of LNG. The DOE said, “U.S. LNG remains an important component to global energy security, and DOE remains committed to finding ways to help our allies and trading partners with the energy supplies they need.” (Reuters)

I’m not implying that the United States is supporting Ukraine for the sole purpose of supplying Liquified Natural Gas to Europe.  I am implying that it would be foolish to avoid the obvious; the quest for power and profits has always influenced American policy makers.  For years the export of LNG has steadily increased as American businesses realized the scope and size of the profit margins that exist for LNG exports.

No matter what the underlying factor was that compelled the United States to get involved (yes, we are deeply involved), each one of us should be taking steps to mitigate the potentially negative outcome.

We can’t go back and undo our involvement, but we can lay the groundwork for favorable advantage as we move forward.  Simply investing in training and skill development will pay huge dividends in this current struggle for power and profits.

Jessie

Jessie Blaine is a former Marine living in refuge somewhere in the Lone Star state.  He is in a perpetual state of learning, which is the second-best state to be in, with the Lone Star state being the first.