This commentary was originally featured in The Hill on July 3, 2017
The first ever shipment of American liquefied natural gas bound for Poland docked earlier this month, chipping away at Russia’s energy dominance in Europe.
Poland’s Prime Minister Beata Szydlo welcomed the U.S. tanker, Clean Ocean, declaring, “today Poland can say that it is a safe and sovereign country.” Her words underscore the legacy of freedom and innovation — and the sustained productivity and economic growth that it creates — forged by the peaceful energy transformation in America.
In 2013, U.S. production of oil and natural gas surpassed that of Russia, a “shale gale” of abundant energy. Such an achievement is the result of a uniquely American story of the risk-taking entrepreneurs and independent enterprises.
A hemisphere away, the people of Poland lived under brutal oppression throughout most of the 20th Century. Many historians conclude that it was Poland, long denied the exercise of freedom and national sovereignty, which sparked the final blow to the Soviet Union. But even with the dissolution of Soviet political control, dependence on Russian energy has proved to be an even more arresting force, shackling Polish economic growth and quality of life.
Poland imports 40 percent of its oil and 60 percent of its natural gas from Russia. While Russia relies on Poland to transport its gas exports across Europe, Poland, unlike its fellow EU members in the west, lacks the infrastructural means to import cheaper gas from other sources. Without competitive leverage to negotiate, eastern-Central European countries are strategically charged higher prices by Russia’s state owned Gazprom.
For Warsaw, the American cargo received at its shores could be the kindling of renewed investment in both national security and economic vitality.
The European market as a whole imports about 30 percent of the continent’s gas needs from Russia through just three pipelines. For 13 countries in Europe, Russian natural gas constitutes more than75 percent of annual gas imports. For Estonia, Finland and Latvia the number edges near 100 percent .
Russia’s control of energy has deeper implications. In 2009, after a pricing conflict, Russia suspended gas exports to Ukraine for almost two weeks. Like Poland, Ukraine is a transit country, connecting pipelines from Russia to other countries like Bulgaria and Slovakia, who also found their energy supply promptly cut off. Russia’s coercive manipulation of energy has generated intense concern amongst world leader, who have accused the Kremlin of choking access to natural gas unless its neighbors comply on matters of diplomacy
Overdependence on any one source thwarts the development of reliable energy. In America, rising domestic production and falling imports have put the U.S. on the fast track to energy independence, spurring job creation and income growth.
Deploying American natural gas in the global market isn’t simply about trade, but also about bringing competition to anemic economies. Plentiful energy supplies have lowered prices for gas across the world. Last year, Poland opened its first floating liquefied natural gas terminal for imports, following the path of neighboring Lithuania, who saw prices drop by 20 percent when Gazprom was faced with the new prospect of competition.
While affordable energy from American shale fields has weakened Russia’s dominion over energy markets in Europe, the region still faces obstacles. The most recent is the pending Nord Stream 2. The pipeline project would reroute supplies, transporting 80 percent of Russian gas imports through a new single avenue, and most notably, bypassing the Ukrainian network that currently channels about half of Russian's natural gas. It’s Kiev’s only counterweight to Russian control.
European officials have identified energy diversity as a top priority. Warsaw recently signed a gas contract with Qatar, announcing plans to increase imports of liquefied natural gas by 50 percent.
Building new infrastructure and diversifying energy portfolios to meet demand could marginalize dependence on Russia, bolster economic growth and improve standards of living. American natural gas will help loosen Russia’s grip.
“Days like this go down in history,” Prime Minister Szydlo said. Indeed, they are a beacon signaling a new era to be had for the people both of Poland, and of Europe.