Central Europeans Seek to Diversify Natural Gas Supplies
According to an article in “Rigzone” the leaders of the Visegrad Group consisting of Hungary, Poland, Slovakia and the Czech Republic want the U.S. to export LNG to Europe. In a letter to John Boehner, the Republican Speaker of the House of Representatives, the ambassadors for these European nations urged Congress to support speedier approval of LNG export projects. A similar letter to Democrat Harry Reid, Senate Majority Leader, is expected shortly.
The letter states that unrest in the Ukraine has revived memories of the Cold War and heavy reliance on natural gas from Russia threatens the region’s energy security daily. However, the White House maintains that Russia’s dependence on the proceeds from these natural gas sales would make a cut-off of natural gas supplies unlikely. While that remains to be seen, the White House correctly points out that as a practical matter, U.S. LNG exports to Europe could not take place prior to the end of 2015 (http://www.rigzone.com/news/article_pf.asp?a_id=132019).
In my opinion, diversification of energy sources is clearly in the best interest of Central Europe in particular and the Western democracies in general. However, I doubt that U.S. LNG exports are the long term answer. Even if export licenses were approved tomorrow, the lead times for building liquefaction facilities, procuring tankers, and building re-gasification facilities would be significant. Also, given the immense amount of capital required for such a project, it is hard to imagine that LNG could compete economically with Russian natural gas currently being delivered by the Soyuz pipeline.