News reports and politicians lauding US gas exports as “best for Crimea” don’t disclose the US gas companies pushing the line, or their Russian connections.
A small group of pundits and politicians with close ties to the fossil fuel industry are 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 liquified natural gas (LNG) trade.
On Capitol Hill, House Energy and Commerce Committee Chairman Representative 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 US 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.
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.
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’s strong signal to Russia would help Russian gas businesses.