US should free Europe, provide non-Kremlin gasBy Cruise Hall | 03/12/2014 11:00pm
The crisis in Eastern Europe demands the unequivocal resolve of the West, but Europe can hardly afford to use harsh words, much less actions, to repel the Russian invasion of Ukraine. Today, 30 percent of Europe’s natural gas flows through Russian pipelines. The flow of gas has been shut off twice in the last decade, and Putin is again threatening to cutoff exports to certain Ukrainian markets.
While the Obama Administration has maintained a timid political stance towards natural gas exploration, the energy security of the European continent makes the fate of natural gas a matter of foreign policy. The president should use his executive power to approve drilling permits and loosen restrictions on gas exploration. The subsequent supply surge would neutralize Russia’s power-trip and level the political playing field in Europe.
Natural gas doubters fixate on the lack of transportation infrastructure, but thanks to the mechanics of the international energy market, American gas doesn’t have to leave America in order to benefit European energy security. The energy market, like other global markets, is dominated by speculators, who “buy low” today and “sell high” tomorrow. Unlike consumers, skittish speculators fear the prospect of falling prices. If the President embraces policies that promise to drastically increase the long term supply of natural gas in America, the speculation market will drive natural gas prices down in the short term. This strategy of eroding gas prices might seem irrelevant to the Ukrainian crisis, but Europe’s energy security is not unrelated to gas prices in America.
Thanks to the first law of thermodynamics, 1 kilowatt of natural gas is equivalent to 1 kilowatt of oil and 1 kilowatt of coal. So when the price of natural gas plummets, consumers find ways to get their kilowatts from natural gas. As new technology and consumer behavior suppress American demand for conventional energy sources, the first law of economics will drive excess supplies of coal and oil in other markets, namely Europe. Already the American natural gas boom has drastically reduced coal prices in Europe; an increase in natural gas supply will amplify this trend.
In the end, every kilowatt of energy imported from the US is a kilowatt that the Kremlin cannot hold over Europe’s head. Even if America has little direct interest in the outcome of the Ukrainian crisis, we, along with our European allies, will always benefit from cheap energy. The president should double down on American natural gas and liberate Europe’s economy from the arbitrary will of Vladimir Putin.
Cruise Hall is a junior majoring in mechanical engineering. His column runs biweekly.