Obama’s energy diplomacy can spell further profits for the likes of Exxon-Mobile, Halliburton while Ukraine crisis deepens.
BY ARA KHACHATOURIAN
The US is rushing to fast-track its ambitions to begin exporting its newfound natural gas resources to Europe in a scheme that is being framed as an effort by the Obama administration to undercut Russian President Vladimir Putin’s influence over Ukraine and Europe.
A front-page article in Thursday’s New York Times (“U.S. Hopes Boom in Natural Gas Can Curb Putin”) details the administration’s plan to leverage the US’s vast resources in order to exert influence in Ukraine, which is the second largest recipient of gas from the Russian state-run gas giant, Gazprom.
A closer read reveals that some greedy giants are already on the ground floor of this plan and are gearing up for a piece of this opportunity that has presented itself on the shoulders of a complicated democracy movement that has engulfed Ukraine and the former Soviet Union.
The US recently became the world’s largest natural gas producer largely by employing the controversial practice of hydraulic fracturing swath, known as fracking, which is deplored by environmental activists but embraced by President Obama, despite his advocacy for environmental protection.
“Over the past week, Congressional Republicans have joined major oil and gas producers like ExxonMobil in urging the administration to speed up oil and natural gas exports,” reported The New York Times adding that opposition by some Democrats, environmentalists and even US manufacturers has fallen on deaf ears in the Obama administration.
According to the Times, this new energy diplomacy has been at play in the State Department since 2011, when then secretary of state, Hillary Rodham Clinton, created the State Department’s Bureau of Energy Resources, installing US’s former ambassador to the Ukraine, Carlos Pascual as its head.
The New York Times reports that the 85-person bureau was created “for the purpose of channeling the domestic energy boom into a geopolitical tool to advance American interests around the world.”
Pascual told The New York Times that his team, in partnership with energy giants is helping countries to develop their own natural gas resource—aka reaping profits from resources in trouble spots while their population bleeds.
“Halliburton has started fracking for natural gas in Poland, while Shell last year signed a contract to explore for natural gas in Ukraine,” reported The New York Times.
The article acknowledges that even if fast-tracked, the flow of natural gas outside the US will not happen until 2017. Meanwhile, however, companies like Halliburton, which made a reported profit of $39 billion from the Iraq war, can cash in while the bankrupt Ukraine, which is in a dire financial crisis to feed its citizens, waits for handouts from the EU and others.
By 2017, as the oil giants line their already overflowing pockets with this Obama administration scheme, Russia has myriad opportunities to close the gas faucets to Ukraine to exert its own influence.
The US government can’t do more than pledge the $1 billion loan guarantee that Secretary of State John Kerry offered on Tuesday, and the cash-strapped EU can’t afford more than its pledge of $15 billion in aid. Yet, if the administration moves forward with its plan, energy giants can look forward to doubling, and even tripling their profits.
This is democracy at work in Washington. The US’s boom in natural gas is a boon for greedy oil companies.