When president Obama announced last week that he would be imposing of a new round of sanctions on Russia, he made sure to stress that the package was designed to inflict “maximum” damage on Russia, “while limiting any spillover effects on American companies.” Left unmentioned: the fact that, earlier that same day, officials from the European Union called to inform our State Dept. that they wouldn’t be able to follow suit.
If the administration wanted to go forward, they said, it would need to do so unilaterally. Less than a week before, a State Dept. official testified before the Senate that sanctions “could only be effective” if they were done on a multilateral basis. Absent that, the administration official predicted, European firms might just “backfill” the work that U.S. companies would be forced to leave behind.
If the success of unilateral sanctions is uncertain, and military intervention is off the table, what other options does America have available to influence Russian behavior and help bring an end to the escalating violence in the region? We can start digging in to Russia’s significant share of the global natural gas market.
Unfortunately, despite overwhelming bipartisan support in Congress, nearly two dozen applications to export natural gas remain pending before the Department of Energy – trapped in the bowels of the bureaucracy. In addition to the enormous benefits the U.S. economy would see from expanded natural gas exports, it would also signal to the global marketplace that the U.S. is a reliable supplier, now and into the future. A report from Deloitte released last year found that even moderate levels of U.S. natural gas exports could result in a wealth transfer of up to $4 billion from Russia to European consumers through reduced contract prices and market share.
In failing to follow the law and in making the rules up as it goes, the Obama administration has essentially delayed the development of projects that would create – in the words of DOE’s own third party study – “net economic benefits,” encourage greater investment into the U.S. bolstering our manufacturing industry, significantly lower global carbon emissions and, last but not least, send a clear signal that the U.S. is willing to assist its allies in-need with an affordable and reliable fuel source.
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