How the Ukraine Crisis Has Affected Arguments For and Against Exporting American Natural Gas

Photo Courtesy:REUTERS/Mikhail Metzel/RIA Novosti/Kremlin[1]

By Richard Guerra

Background on Liquefied Natural Gas

Natural gas is primarily made up of methane.[2] When cooled to negative 260°F, natural gas condenses from a gaseous to a liquid state.[3] Typically, natural gas is domestically transported via pipelines.[4] However, liquefied natural gas (LNG) can be transported overseas to places that are not reachable by pipeline.[5] The process by which natural gas is converted to LNG is called liquefaction.[6] This process is conducted at a liquefaction terminal, also known as an LNG export terminal.[7] LNG’s volume is 600 times smaller than the volume of natural gas.[8] LNG is then transferred to specially designed LNG carriers for overseas transport.[9] Upon reaching its destination, LNG is received at a regasification terminal,[10] where it can be converted back to its gaseous state and delivered by pipeline.[11]

Since 2007, new technologies in energy production have changed the U.S.’s relationship with natural gas. U.S. shale gas production rose by 50% each year between 2007 and 2012. This has come to be known as the American Shale Revolution. Since then, the U.S. oil and gas industry has pushed for permission to export natural gas to foreign countries.[12] A company that seeks to export LNG must get permission from the Department of Energy and the Federal Energy Regulation Committee, and the application process to export LNG to non-free trade countries, including many countries in Europe, is rigorous. This is illustrated by the fact that the Department of Energy has only approved five new LNG export terminals, with 25 more terminals still pending.[13]

However, the crisis in Ukraine has prompted calls for the U.S. to hasten the process for approving LNG export terminals. One such call came from John Boehner, who argued that the U.S.’s vast energy reserves could be used to “turn the tables and put the Russian leader in check.”[14] Boehner stated that Putin’s Russia leverages its natural gas when dealing with its neighbors and even Europe. Their dependence on Russian gas makes them “reluctant to challenge some of Mr. Putin’s arrogant actions.”[15] Boehner contends that Russia’s diplomatic scheme rests on the assumption that the U.S. will not challenge Russia’s dominance as a natural gas exporter. According to Boehner, the Department of Energy’s slow approval process constitutes a de facto ban on U.S. natural gas exports, which, in turn, deprives those that are dependent on Russian gas from an alternative market that would diffuse Putin’s ability to finance his geopolitical goals.[16]

Boehner makes a valid point. Gazprom, Russia’s state-controlled energy company, controls almost one-fifth of the world’s gas reserves. Through Gazprom, Russia supplies Europe with about one third of its gas, and about 15 percent of Europe’s gas passes through Ukraine.[17] Additionally, Ukraine imports 60 percent of its natural gas directly from Russia.[18]

Meanwhile, Senator Edward Markey introduced a bill that would complicate and slow the approval process for LNG export terminals. According to Markey, “Using this crisis as an excuse to rapidly and massively expand exports of America’s natural gas will not help Ukraine now.”[19]Markey might be right. Even though the U.S. has plenty of natural gas, exporting that natural gas is a complicated process. First, consumers in Asia are willing to pay a higher price than any other importers. That means even if the U.S. could export natural gas to Europe, Ukraine, and its neighbors, there might not be an immediate market for it. Additionally, the earliest that LNG exports can leave U.S. shores will be next year, and the only one new terminal will be operational by then.[20] U.S. natural gas exports might offer some long-term solutions to some of the U.S.’s energy and diplomatic problems, but short-term solutions are not possible. The current natural gas infrastructure and the markets are not at a place where the U.S. can quickly reduce Ukrainian and European dependency on Russian gas.[21]

On the other hand, to be fair, a long-term investment can still be worthwhile. Even though the facts concerning markets and infrastructure appear to diffuse the argument for expediting the LNG export approval process, there are still other international gains from exporting American LNG. First, exporting LNG will help balance America’s current accounts deficit. Second, establishing America as a powerful exporter of natural gas can give American policy-makers diplomatic leverage when negotiating with importing countries. Third, once there is a market for exporting to countries in Western and Eastern Europe, allowing American LNG to subvert Russian gas can potentially weaken Russia’s ability to leverage its power over neighboring countries. Immediately helping Ukraine with American natural gas might not be possible, but the long-term benefits should still give us pause to seriously consider whether the U.S. should expedite the LNG export process.


Richard Guerra is a third year law student at the Penn State Dickinson School of Law. 


[2] Natural Gas Explained, U.S. Energy Information Administration, (last visited Mar. 21, 2014).

[3] LNG Overview, Federal Energy Regulatory Commission, (last visited Dec. 29, 2012) (throughout this comment, “LNG” will solely refer to liquefied natural gas and “natural gas” will solely refer to natural gas in its gaseous state).

[4] Natural Gas Explained, U.S. Energy Information Administration, (last visited Mar. 21, 2014).

[5] U.S. Energy Information Administration, The Global Liquefied Natural Gas Market: Status and Outlook 3 (2003), available at

[6]See United States Department of Energy, Liquefied Natural Gas: Understanding the Basic Facts (2005), available at

[7] Hobart King, What is LNG – Liquefied Natural Gas?,, (last visited Mar. 21, 2014).

[8] Liquefied Natural Gas, Chevron, (last visited Mar. 21, 2014).

[9] United States Department of Energy, Liquefied Natural Gas: Understanding the Basic Facts 11-12 (2005), available at

[10] United States Department of Energy, Liquefied Natural Gas: Understanding the Basic Facts 13 (2005), available at

[11] Liquefied Natural Gas, Chevron, (last visited Mar. 21, 2014).

[12] Robert D. Blackwill & Meghan L. O’Sullivan, America’s Energy Edge: The Geopolitical Consequences of the Shale Revoluton, 93 Foreign Affairs 102 (2014).

[13] Mike Orcutt, The U.S. Can’t Really Undermine Russia by Exporting Gas, MIT Technology Review (Mar. 18, 2014)

[14] John Boehner, Counter Putin by Liberating U.S. Natural Gas, The Wall Street Journal (Mar. 6, 2014, 7:12 PM)

[15] Id.

[16] John Boehner, Counter Putin by Liberating U.S. Natural Gas, The Wall Street Journal (Mar. 6, 2014, 7:12 PM)

[17] Joh Henley, Is Europe’s gas supply threatened by the Ukraine crisis?, (Mar. 3, 2014),

[18] Coral Davenport & Steven Erlanger, U.S. Hopes Boom in Natural Gas Can Curb Putin, (Mar. 5, 2014),

[19] Timothy Gardner, U.S. senator launches bill to go slow on LNG exports despite Ukraine, (Mar. 6, 2014 4:08 PM)

[20] Keith Johnson, Help Is Not on the Way, (Mar. 7, 2014)

[21] Lyn Cook and Amy Harder, U.S. Push for Natural-Gas Exports to Ukraine Faces Hurdles, The Wall Street Journal (Mar. 12, 2014, 7:38 PM)

Leave A Comment

You must be logged in to post a comment.

Skip to toolbar