* U.S. energy secretary says industry must push case for
* OPEC minister says U.S. boom affecting all crude markets
(Adds comments from U.S. energy secretary in paragraph 15)
By Terry Wade and Ayesha Rascoe
HOUSTON, March 5 The rise of global trade in
liquefied natural gas in the coming decade could curb Russia's
foreign-policy leverage over Europe and prompt China to take a
more constructive role in global affairs as its imports of the
This view, shared by many energy experts at the IHS CERAWeek
conference in Houston, means that in the future Russia may have
less room to assert itself with neighbors the way it did when
its forces recently seized control of Ukraine's Crimea.
Moscow has in years past cut gas supplies to Ukraine in
foreign policy tussles, causing disruptions for Europe.
Russia's critical role in Europe's gas market is likely to
continue through 2020 and beyond. But longer-term its role could
fade as more shale gas is produced globally and numerous loading
and unloading terminals for liquefied natural gas (LNG) come
That will give buyers more bargaining power and undercut
pricing power for suppliers as more trade shifts to waterborne
freight and away from pipelines like those that run to Europe
from Russia, some through Ukraine.
"Russia has weaponized its gas-export capability for a long
time and they've used it to make people dance. That's what has
kept Ukraine on a short leash," said a person familiar with
Russian energy issues who asked to remain anonymous.
In 10 years or more "Russia's not going to be able to use
gas this way and they know it. They are understandably concerned
about it," the source added. "It's a geopolitical problem for
Of the EU's current annual demand for 485 billion cubic
metres (bcm) of gas, Russia supplies around 160 bcm. Around a
third of Russia's gas is exported through Ukraine.
Carlos Pascual, the U.S. State Department's senior energy
diplomat, said Ukraine before the latest crisis had already
trimmed reliance on Russian gas to around 22 billion cubic
meters (bcm) from 42 bcm a year.
Still, the Ukraine conflict has prompted calls from
lawmakers to have the U.S. Department of Energy speed approvals
for LNG export plants, following six that have received
U.S. LNG exports are not expected to begin in earnest until
at least 2017. In the meantime, supplies from other exporters,
including Australia, Canada, and Qatar, could help meet European
"We could use energy exports to wean countries off of
dependence on a country like Russia. It helps the U.S. trade
balance, which in turn, makes the United States less vulnerable
to developments in the world," said Richard Haass, head of the
Council on Foreign Relations.
"The United States ought to be making it possible to export
crude and we ought to be expanding the countries who are in a
position to receive liquefied natural gas," Haass said.
U.S. SHALE BOOM CHANGES DYNAMIC
There is also a growing debate in Washington about lifting
restrictions on crude exports as domestic oil output swells
toward a projected 43-year high of 9.3 million barrels a day
"The industry could do a lot better job talking about the
drivers for, and what the implications would be, of exports,"
U.S. Energy Secretary Ernest Moniz said.
More global gas trade may also alter Chinese diplomacy.
China is forecast to have voracious demand for gas, which
comprises some 5 percent of its current energy mix, as it pushes
to curb pollution from dirty coal plants.
"As China becomes more and more dependent on global (gas)
supply ... China is going to be the country that is greatly
disadvantaged politically," Amy Myers Jaffe of the University of
California, Davis, said at a forum last month on the geopolitics
China can currently take a "non-constructive" approach to
key global diplomatic issues and not suffer any real economic
consequences, but that will change, she said.
The United States, which pioneered the controversial
technique hydraulic fracturing, has the upper hand in the tight
oil and gas game.
"(The U.S.) is the home of oil and gas technology so the
developments are in the house and in many areas the way the
states handle the regulations and the way that mineral rights
belong to people who own the land" can facilitate doing
business, said Andrew Mackenzie, chief executive officer of
global mining and oil company BHP Billiton .
Even if export restrictions are not lifted, rising U.S.
output of oil and gas has already impacted prices for everything
from coal to refined petroleum products. Countries that relied
on exports to the United States are feeling squeezed and looking
for new buyers.
"It has affected all markets globally for crude," said
Nigerian oil minister Diezani Alison-Madueke, who serves as the
alternate president of OPEC. "Everybody is struggling to
(Additional reporting by Timothy Gardner in Washington; Editing
by Alden Bentley and Lisa Shumaker)