The
Russian invasion of the Crimean peninsula and the haunting fear that Moscow
will use its energy exports to bludgeon Ukraine and the European Union into compliance
have unleashed a cavalcade of calls for the United States to use its own energy
bounty to rescue Europe. Gazprom’s threat on Friday to shut off
gas supplies to Ukraine, which owes the company almost $2 billion and is late
with the payments, has added fuel to the fire.

There’s just one problem: While there is
one abundant U.S. energy source that could help Europe in the short term, it
isn’t natural gas. The United States won’t be able to export significant
amounts of liquefied natural gas (LNG) for years, much of that gas has already been
snapped up by customers with long-term contracts, and Europe must compete with
Asia, which is willing to pay far more money for the little that is left.

That may come as news to Congress, where
top lawmakers are arguing that stepping up gas exports to Ukraine would be an easy
way to boost the country’s new, fragile, and pro-Western government. House
Speaker John Boehner (R-Ohio) took to the opinion pages of the Wall Street
Journal to call on the United States to “liberate” its “natural
energy” as a weapon against Russian strongman Vladimir Putin by
accelerating a sclerotic permitting process for natural gas export terminals.
Numerous members of Congress are rushing to introduce, or reintroduce,
legislation meant to fast-track exports of U.S. gas. Rep. Michael Turner (R-Ohio),
for instance, introduced a bill on Thursday, March 6, that would
expand U.S. gas exports to all World Trade Organization countries.

Late Thursday, the ambassadors to
the United States from Hungary, Poland, the Czech Republic, and Slovakia sent
letters to Boehner and Senate Majority Leader Harry Reid (D-Nev.) urging
Congress to unshackle U.S. gas exports and help allies in Europe.

Jason Bordoff, a former energy advisor to
President Barack Obama, argued on ForeignPolicy.com that
the United States can turn gas to its advantage against Russia. The Heritage
Foundation wants U.S. gas to bolster allies in the Baltics.
The New York Times and the Wall Street Journal have reported on the
frenzy in Washington to turn energy abundance into geopolitical leverage,
including the State Department’s push to use natural gas as a diplomatic tool.
The basic thrust: Awash in natural gas, the United States needs to release the hounds, as it were, on Russia.

Those calls miss a fundamental point:
Simply making it easier for the United States to export gas won’t automatically
translate into help for beleaguered friends, especially because customers in
Asia are willing and able to pay higher prices for gas than anyone else.

“You can issue all the permits you want.
Gas companies still won’t lose money on purpose to help the United States
achieve geopolitical gains,” Michael Levi, an energy expert at the Council on
Foreign Relations, told Foreign Policy. He wrote about the limits of U.S.
gas diplomacy earlier this week.

That isn’t to say that energy exports wouldn’t serve U.S.
interests over the longer term, as Bordoff noted. The hydraulic fracturing
revolution over the last five years has unleashed a gusher of natural gas
supplies that have already reshaped the U.S. electricity sector and reinvigorated
certain manufacturing sectors and that hold promise as an alternative fuel for
transportation.

Shipping some of that gas, and eventually oil
unleashed by the same process, overseas would certainly help the U.S. trade
balance and add liquidity to global markets. More supplies of oil and gas
sloshing around the globe would reduce the likelihood of supply shocks and
buffer economies against price spikes. Greater global supplies also make
certain foreign-policy objectives, such as slapping sanctions on Iran’s oil
exports, easier to do with less pain.

But that doesn’t mean that the United States is
in a position to use its gas supplies to ride to Ukraine’s or Europe’s rescue
right now, when Moscow is jacking up prices of the gas it ships west and
hinting at a supply stoppage to Kiev.

First and foremost, it takes years and billions
of dollars to construct the specialized terminals needed to convert natural gas
into a liquid and then cram it into specially built tankers. The Energy
Department has approved six of the 30-odd applications it has for LNG
export terminals to sell gas to countries with which the United States does not
have a free trade agreement. But only one project, Cheniere Energy’s export
terminal in Sabine Pass, La., has passed all the regulatory hurdles and secured
final authorization. It hopes to begin exports late next year; few if any of
the remaining terminals waiting in line will be operational before 2018.

“We only have one approved license actually,
and the molecules still aren’t going to flow for a while,” Energy Secretary
Ernest Moniz said at a conference this week in Houston, Bloomberg reported.

On paper, there is enough potential gas
included in the pending export applications to meet two-thirds of Europe’s
annual gas consumption. Even if only a handful of terminals are finally built,
the potential gas volumes available for export could still theoretically meet a
significant part of Europe’s needs, which are estimated at about 18 trillion
cubic feet of gas per year.

In reality, exporters need to secure long-term
supply contracts with dedicated customers before they can secure the billions
of dollars they need to build the advanced LNG terminals. Terminals that have
already won conditional approval have supply contracts with power companies in
Japan, South Korea, and India. Japanese firms, for example, have secured supply
deals with four of the six terminals that have won Energy Department approval so far. Only a
handful of European firms have signed long-term contracts with U.S. LNG
exporters.

And only a small portion of the contracts are
for so-called portfolio gas sales, where the buyer can ship gas wherever it’s
needed — which is what Europe would need as a safety valve to replace Russian
supplies. In other words, even when the U.S. export terminals are up and
running at full speed in four years or so, most of their gas will be earmarked
for Asia.

Another complication is the price of exported
gas. Until recently, natural gas was cheap inside the United States because of
a sheer glut of supply, not the fracking revolution. For the last couple of
years, natural gas cost between $2 and $4 per million British thermal units (Btu) at Henry Hub, the main U.S. pricing point. But a vicious winter
has sent gas use and gas prices soaring; in the first week of March, Henry Hub
prices topped $7.

That matters for exports, because gas has to be
liquefied and transported thousands of miles, which adds to the market price of
the gas. Shipments from the United States to Europe are expected to add about $4 to the price
of gas, while the longer route to Asia will likely add about $6 to the price.
As natural gas becomes pricier at home, it becomes harder for U.S. gas to
undercut gas overseas. Much of Europe pays around $10 to $11 per million Btu for
Russian gas, for example — which would already make it tough for U.S. gas to
compete.

In Asia, LNG fetches higher prices than in other
parts of the world — about $15 per million Btu. That does provide a market for
U.S. exports, especially since Japan needs gas to replace its shuttered nuclear
fleet, and China hopes to boost the use of gas to clean up its power sector.
But it also means that gas exporters will look first to customers in Asia that are willing to pay a premium rather than to the ones in Europe that aren’t.

The United States does have one energy arrow in
its quiver that could meet some of Europe’s needs, but it isn’t one the Obama
administration is racing to embrace, or one that thrills European greens: cheap, abundant, U.S. coal.

In recent years, the gas boom has knocked King
Coal off its perch in the U.S. market; overseas markets became a natural
replacement. The United States set a record for coal exports in 2012, and
despite an apparent drop-off in 2013, it still had one of its biggest export
years ever. Despite all the talk of China’s insatiable thirst for coal, Europe
was — and remains — the biggest export market for U.S. coal.

Unlike with natural gas, coal-export facilities
are already up and running. Unlike the convoluted regulations governing natural
gas exports, coal can be traded freely. And there’s no need for European
countries to build expensive new terminals to handle coal imports.

There is one problem, of course: Coal is a lot
dirtier than gas, with about twice the emissions of greenhouse gases when
burned for power. For years, Europe has tried to curb its emissions and make
its energy sector cleaner, even though expensive local gas and cheap U.S. coal
have made that tough the last couple of years.

But as Europe grapples with long-term questions of energy security, climate change
goals, and fears about economic competitiveness, coupled with short-term fears
about a sudden end to energy supplies from Moscow, coal might just be the one
U.S. energy export that makes a difference.

Photo: Andrew Burton – Getty