US LNG Exports

Global Push for LNG Creates 'Gas Bubble' That Could Bust

Read time: 8 mins
Wet'suwet'en Solidarity Event - Rail Yard near Pioneer Village Station Blockaded - Vaughan, Toronto, Ontario - February 15, 2020

Earlier this year, Warren Buffett’s Berkshire Hathaway pulled out of a proposed liquefied natural gas (LNG) export terminal in Saguenay, Quebec. The project developer cited the “current Canadian political context” as the reason why Berkshire Hathaway bailed on them, including recent rail blockades led by hereditary chiefs of the Wet’suwet’en First Nation in British Columbia.

The rail blockades targeted an entirely separate fossil fuel project — TC Energy’s Coastal GasLink pipeline, which would cross unceded Wet’suwet’en territory. The protests rapidly spread around the country, with students, environmental groups, and other First Nations joining the rail blockades in solidarity.

While far from British Columbia, the actions spooked investors in Energie Saguenay LNG. Without Berkshire Hathaway’s promised $4 billion investment, the project has stalled.

Why ExxonMobil's Partnerships With Russia's Rosneft Challenge the Narrative of U.S. Exports As Energy Weapon

Read time: 7 mins

In a long-awaited moment in a hotly contested zone currently occupied by the Russian military, Ukraine's citizens living in the peninsula of Crimea voted overwhelmingly to become part of Russia.

Responding to the referendum, President Barack Obama and numerous U.S. officials rejected the results out of hand and the Obama Administration has confirmed he will authorize economic sanctions against high-ranking Russian officials.

“As I told President Putin yesterday, the referendum in Crimea was a clear violation of Ukrainian constitutions and international law and it will not be recognized by the international community,” Obama said in a press briefing. “Today I am announcing a series of measures that will continue to increase the cost on Russia and those responsible for what is happening in Ukraine.” 

But even before the vote and issuing of sanctions, numerous key U.S. officials hyped the need to expedite U.S. oil and gas exports to fend off Europe's reliance on importing Russia's gas bounty. In short, gas obtained via hydraulic fracturing (“fracking”) is increasingly seen as a “geopolitical tool” for U.S. power-brokers, as The New York Times explained. 

Perhaps responding to the repeated calls to use gas as a “diplomatic tool,” the U.S. Department of Energy (DOE) recently announced it will sell 5 million barrels of oil from the seldom-tapped Strategic Petroleum Reserve. Both the White House and DOE deny the decision had anything to do with the situation in Ukraine.

Yet even as some say we are witnessing the beginning of a “new cold war,” few have discussed the ties binding major U.S. oil and gas companies with Russian state oil and gas companies.

The ties that bind, as well as other real logistical and economic issues complicate the narrative of exports as an “energy weapon.”

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