(Adds background on U.S. approvals process, legislation, and
lack of LNG terminals in Ukraine)
By Roberta Rampton
ON BOARD AIR FORCE ONE, March 7 The White House
on Friday appeared to play down the possibility of changing U.S.
policy on exporting natural gas to address the situation in
White House spokesman Josh Earnest told reporters on Air
Force One that policy changes would not have an immediate effect
and noted that natural gas stocks in Europe were above normal
levels because of a mild winter.
"There is no indication currently that there's much risk of
a natural gas shortage in the region," he said.
Europe and Ukraine are key export markets for natural gas
from Russia, which has historically shut down pipelines as a
pressure tactic. As Russia took control of the Crimean peninsula
this week, its state-owned energy company Gazprom said it will
stop discounting natural gas for Ukraine.
But widespread shipments of U.S. liquefied natural gas (LNG)
are still several years away.
The Department of Energy is working its way down a list of
more than 20 applications for LNG export licenses. It has
approved six licenses since 2011 and the first project is not
expected to begin exporting until late next year. The other five
still need approvals from the Federal Energy Regulatory
Commission, which can be a lengthy process.
"So proposals to try to respond to the situation in Ukraine
that are related to our policy on exporting natural gas would
not have an immediate effect," Earnest said.
Several lawmakers, including Rep. Cory Gardner, a Republican
from natural gas-rich Colorado, introduced bills this week to
try to speed up the DOE approvals, but they face an uphill
battle in the Senate.
Ukraine has no terminals to receive LNG shipments, so even
if U.S. cargoes were ready soon it is uncertain when the fuel
could be delivered.
Washington instead is working to reduce Ukraine's dependence
on any single source of natural gas.
Ukraine and Eastern Europe could get more gas from Northern
Africa, including Libya and Algeria, and from East Africa or the
Mediterranean in the next couple of years.
Washington is also hoping Croatia will build an LNG
receiving terminal, which could help Hungary, Slovenia and
Once U.S. LNG exports start they likely will first head to
Japan, India and other Asian countries that have little access
to gas sent via pipeline and are willing to pay more for the
fuel than Europe does.
As more U.S. projects are approved and investors spend
billions of dollars to build them, U.S. LNG could play a bigger
role after 2017 in reducing global prices for the commodity,
Earnest noted that Russia prides itself on being a reliable
supplier of natural gas to other countries. That reputation
would be jeopardized if it turned off the taps during the
"Russia currently yields about $50 billion a year in revenue
from exporting natural gas, so ending that kind of relationship
with Europe would have significant financial consequences for
Russia as well," he said.
(Additional reporting by Timothy Gardner, Writing by Jeff
Mason; Editing by Sandra Maler and Meredith Mazzilli)