Putin democratizing U.S. energy markets

In the decades after the Arab oil embargo, the U.S. restricted energy exports to promote self sufficiency as a matter of national security.

Now Russia’s annexation of Crimea and massing of troops on the Ukrainian border is fueling a push in Congress to remove those limits to punish President Vladimir Putin.

“In the 70s, we argued that for the sake of national security we have to prohibit exports,” Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin, said in an interview. “Now we argue that for the sake of national security we have to allow exports. Our mind has flipped in 40 years.”

Three congressional committees are holding hearings this week on whether the U.S. should sell more of its growing oil and gas resources overseas, in part to lessen European dependence on Russian oil and gas. Europe imports about 30 percent of its natural gas from Russia through pipelines that cross Ukraine.

The once-unthinkable idea of exporting large amounts of U.S. oil and natural gas has gained support as advances in drilling techniques leave the U.S. poised to surpass Saudi Arabia and Russia as the world’s largest producer of crude by 2015, according to projections by the International Energy Agency. In November, the U.S. produced more oil than it imported for the first time since 1995.

‘Energy Superpower’

“America can and should be an energy superpower,” Senator Mary Landrieu, chairman of the Energy and Natural Resources Committee, said today at her first hearing as head of the panel. “The last thing Putin and his cronies want is competition from the United States of America in the energy race.”

A House Energy and Commerce Committee panel also took up the issue of U.S. energy exports including liquefied natural gas today and the House Foreign Affairs Committee will hold a hearing on the subject tomorrow.

Some lawmakers are skeptical about stepped up overseas sales.

“Unlimited LNG exports would have serious impacts on consumers and manufacturers,” Representative Henry Waxman, a California Democrat, said at the House hearing.

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