Russia Threatens to Turn Off Europe’s Gas

May 5, 2014

H.R. 6 will Weaken Russia’s Influence, Help Provide Allies with Reliable and Affordable U.S. Energy Supplies

Russia is continuing to wield its natural gas supplies as an economic weapon against Ukraine and other European countries, now going so far as threatening to completely cut off energy supplies. According to The Moscow Times, “Russia has threatened to cut natural gas supplies to Ukraine in June if it receives no prepayment in an escalating row between Moscow, Ukraine and the European Union over energy supplies.”

Ukraine has struggled to afford Gazprom’s unfair price targeting, and this discrimination has increased in the midst of the conflict in Ukraine against pro-Russian forces. The Wall Street Journal reports, “As of April 1, Russia nearly doubled what it charges Ukraine to $485.50 per 1,000 cubic meters from $268.50 per 1,000 cubic meters.”

Turning off the spigot to Ukraine would have far-reaching impacts across Europe. CNN Money explains, “Europe relies on Russia for more than 30 percent of its gas, and half of that is pumped through Ukraine. Any significant disruption in supplies to Ukraine could hurt European companies and households.” Russia's Energy Minister Alexander Novak warned, “Ukraine might not be able to store enough gas during the summer for transit to European countries in the winter.”

This is just the latest aggressive action by Russia that underscores the need for increased U.S. liquefied natural gas (LNG) exports to help free our allies from Putin’s grip. The House Energy and Commerce Committee last week approved legislation, H.R. 6, the Domestic Prosperity and Global Freedom Act, that would expedite U.S. LNG exports by reforming DOE’s approval process. DOE would have 90 days to decide on an application after the comment period closes. To date, the administration has only approved seven applications while 24 are still awaiting action. Some of these applications have been under review now for over two years.

Our allies in Europe have stressed the need for action by Congress to send the signal to Russia and the world that U.S. gas will be a viable energy alternative. Hungarian Ambassador-at-Large for Energy Security Anita Orban recently testified that allowing more U.S. LNG exports “would immediately change the business calculus of infrastructure investments and send an extremely important message of strategic reassurance to the region which currently feels more threatened than any time since the Cold War.”

Upon the committee’s passage of H.R. 6, the bill’s author Rep. Cory Gardner (R-CO) stated,  “By passing H.R. 6, we are sending a clear signal to the world that the U.S. is serious about exporting LNG to our friends abroad. But in reality, the geopolitical benefits are just a fringe benefit of a sound economic policy. Our nation is in need of high-paying, quality jobs. Coupled with the fact that the United States is blessed with an abundant source of natural gas, H.R. 6 presents us with the unique opportunity to strengthen our allies, weaken our enemies, and create economic opportunities here at home, all with just one piece of legislation.”

To learn more about the committee’s work on LNG exports, click HERE.