ISSN 2330-717X

US Natural Gas Is The New, Global, Soft-Power Weapon – Analysis

By

United States (U.S.) carbon dioxide (CO2) emissions from the power sector, and broader economy have declined 61 percent between 2006-2014; mainly from “switching from coal-to-gas-powered generation,” according to the U.S. Department of Energy’s Second Installment of the Quadrennial Energy Review, January 2017. These environmentally sound numbers from higher use of natural gas can also be translated globally to help with pollution in countries such as China, India, and the entire continent of Africa.

The U.S. now uses natural gas converted to liquid natural gas (LNG) from shale deposits in states such as Texas, North Dakota, and Pennsylvania to transform geopolitics. Lower LNG prices stymie terrorist-financing budgets in Tehran and lower the ability for Putin’s Russia to weaponize their energy assets for geopolitical adventures in Ukraine, Crimea, Syria, Central Asian and the Middle East.

How this new soft power of energy transforms the world economically, geopolitically, and positively towards western-aligned institutions is through increasing LNG exports, which “hit a new record high at 4.7 billion cubic feet per day in May 2019.” The U.S. is approximately the world’s third largest LNG exporter. Illustrating this power has seen the U.S. add four new LNG trains “with a combined capacity of 2.4Bcf/d come online since November 2018.”

Countries with heavy LNG deposits can transform their national fate and redirect their foreign policy and national security initiatives without deploying their militaries. Energy economics overtakes military significance, because everyone needs the power generation and electricity that clean burning, LNG exports provide.

Positively, it means the U.S. no longer has to rely on Middle Eastern authoritarians to power its economy, and the world order that has depended on the U.S. for global security since the end of World War II (WWII). Negatively, since the U.S. no longer needs Saudi oil or Qatari LNG then the debate over protecting the Strait of Hormuz, where “90 percent of oil exported from the Gulf, (and) about 20 percent of the world’s supply passed through,” would be a non-starter.

Europe, led by Germany, is where the LNG’s soft power persuasiveness is changing continent-wide dynamics. In the first half of 2019 according to the U.S. Energy Information Administration (EIA): “Roughly 40 percent of U.S. LNG exports went to Europe, and in January, Europe surpassed Asia as a buyer of U.S. LNG for the first time.” This is a direct, soft power approach to countering Germany moving forward with the Russian-backed Nord Stream 2 pipeline that the U.S. and other European countries have deeply opposed.

Additionally, this newfound purchasing of U.S. LNG in Europe is another poker chip without military forces against Turkey leaning away from NATO over the purchase of the Russian S-400 anti-aircraft weapon system, and through continued encroachment by Turkish vessels off Cyprus’ coast illegally drilling for oil and natural gas. This puts the entire Mediterranean security profile at risk, says, “Athens’ newly elected government.”

But coercion, and diplomatic solutions, without shots being fired, or crippling sanctions, are the opportunities the soft power of LNG provide large and small nation-states. With the U.S. since 2017 being the world’s top producer of petroleum and natural gas hydrocarbons this offers opportunities never dreamed of during the Cold War when it was the U.S. and the west versus Russia for global supremacy.

Beating Russia at weaponization of oil and natural gas can be traced to 2009 when “U.S. natural gas production surpassed that of Russia.” Russian firms heavily influenced or owned by the Kremlin – Rosneft and Gazprom – took a serious blow, which meant they no longer had free reign to manipulate prices in Central Asia, Eastern and Western Europe whenever it suited Moscow’s needs.

As an example, the first cargo delivery of LNG arrived in Poland earlier this summer from PGNiG (a Polish firm), and U.S. LNG provider Cheniere Energy at President Lech Kaczyński LNG Terminal in Świnoujście. The long-term contract, which was signed in November of 2018, will total approximately 39 bcm of natural gas over the 24 year period of the agreement.

Piotr Woźniak, President of PGNiG Management Board said: “Our portfolio of contracts with U.S. suppliers covers over 9 billion cubic meters of natural gas after regasification annually – that is more than we import from Russia. Such a volume strengthens Poland’s energy security, but also gives us the opportunity to actively participate in LNG trading on the global market.”

This bolsters “energy relations” between Poland and the U.S. without involving military friction that normally precipitates NATO movements against Russia. Instead, U.S. LNG blocks Russian energy from interfering in Polish internal affairs or economic development.

Global security and European Union foreign policy against Russian LNG will also speed ahead in the coming years and decades ahead. New oil and natural gas project spending is expected to jump five-fold in 2019, according to Wood Mackenzie. Even smaller, geopolitical players like Mexico are seeking ways to boost their natural gas production 50% through government-owned, oil firm, Petroleo Mexicanos (PEMEX).

Fossil fuel – particularly, natural gas and/or LNG – will be at the forefront when it relates to soft power, national security, and robust economic growth for mature and emerging markets. Natural gas markets are dominated by U.S. energy decisions translated into policy more than ever before, “as Washington prosecutes a trade war with China and takes a hard line on Iran.”

The dominance takes place, because U.S. gross imports of crude and natural gas have steadied or declined whereas “rising LNG exports provide another point of US entry into world energy markets.” This balances world LNG markets, provides stability, and moves international energy trade forward in a soft power direction and platform over the weaponization of energy assets seen from Russia, China and Iran.

There is an LNG, soft power drama playing out on the world stage to to engage international relations. LNG keeps major wars from erupting, and that is a positive economic and human longevity aspect of energy that few people, companies and governments seem to understand these days.




Please Donate Today
Did you enjoy this article? Then please consider donating today to ensure that Eurasia Review can continue to be able to provide similar content.

Todd Royal

Todd Royal

Todd Royal, M.P.P. is the Managing Partner for Energy development, Oil & Gas, and Renewables for Ascendance Strategies, a global threat assessment and political consulting firm that is based in Los Angeles, California

One thought on “US Natural Gas Is The New, Global, Soft-Power Weapon – Analysis

  • Avatar
    August 3, 2019 at 9:30 pm
    Permalink

    What soft power? At the moment American LNG sold in Europe is barely recouping shipping costs. American LNG can never hope to compete in Europe with Norwegian or Russian piped gas. So what they are trying to do is to threaten European firms who are building Nord Stream 2 pipeline to supply Europe with sanctiońs. Basically racketeering. And it will not succeed.
    Indeed the US would do well not to threaten countries with sanctions and tariffs . China,Russia, Iran, Cuba, Venezuela, the EU, European companies…
    Countries are getting anxious about being involved with the dollar. God knows what will happen to the US then , with its $23 trillion debt.l

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.