EUROPE’S GAS STATION

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Replacing Russia as Europe’s gas station. A convenient storyline for politicians, but how feasible is it? The U.S. government doesn’t decide where U.S. gas is sent. Although the Department of Energy determines whether or not to approve gas shipments, it doesn’t direct where the shipments go. Since the petroleum companies aren’t guided by American foreign policy interests, they sell wherever they get the best price. For burgeoning U.S. liquified natural gas (LNG) exports, that’s probably Asia. Nevertheless, Europe has already concluded that its dependence on Russian petroleum constitutes a security threat. According to the State Department’s Bureau of Energy Resources, the EU is already in the process of diversifying the sources from which it gets petroleum. As an example, the Bureau cites the Southern Gas Corridor, “an ambitious plan to deliver Azeri Caspian Sea gas to European markets.”

Last year, after more than a decade of U.S.-led energy diplomacy…a final investment decision was made on the development of a pipeline that will bring 10 billion cubic meters of non-Russian natural gas from Azerbaijan to southern Europe by way of Georgia, Turkey, Greece, and Italy (Source: Statement of Amos J. Hochstein, Deputy Assistant Secretary for Energy Diplomacy, U.S. Department of State, Before the House Subcommittee on Energy Policy, Health Care & Entitlements).

The question is how far Europe is willing to go in this direction and to what extent it will include U.S. LNG. In any case, our work on the Southern Gas Corridor shows that, despite the comments of a few politicians, the overriding concern of the United States is for Europe’s security and stability. It is dawning on everybody that Moscow simply has too much leverage over Europe.

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