Under current conditions of geopolitical competition and a leadership race, the United States as a main global player will need new means to retain this status. In the case of tension with Russia and imposing sanctions against it, a new tool is available now — participation in energy source mining and trading in Europe. This could help the United States achieve a wide range of political and economic goals while also generating profits for U.S. companies.
Russia currently supplies about 160 bcm to European states (excluding CIS countries). So using the potential of Ukraine to export gas will decrease Europe’s dependency on Russia. Cutting down on Russian energy supplies to Ukraine and some other European states should in turn decrease Russia’s leverage in destabilizing the geopolitical situation. This manner of containing Russia in Europe while making the market for gas and other energy sources less concentrated can have a positive impact on geopolitical conditions in the region.
How does the United States fit into the picture? Currently the United States is the biggest player competing for leadership with other global and regional leaders, mainly China. The United States will need additional means and points of leverage to save its leading position. Besides its existing technological leadership in energy, the United States is expected to become one of the world’s biggest energy producers and exporters, competing with other giants, such as Russia and Saudi Arabia.
But experience shows that depending on energy exports is not a reliable strategy for maintaining leadership in the energy sector. Important geopolitical players must be interested in starting energy-extracting projects in other regions, too. Here the United States faces complicated logistics. The cost of transporting gas and other energy sources across the ocean will lower revenues compared to the option of trading energy sources in the country of extraction. Under current market conditions there is a near-term risk of nonprofitability in transiting gas supplies from the United States to Europe. In the case of energy trading in Europe, the United States would be competing with other producers and under less favorable conditions.
Some experts claim that the United States should be more involved in Europe now. The participation of U.S. companies in projects to extract gas and other energy sources in Ukraine and neighboring states and in the export and trade of those fuels is part of a complex strategy of gaining revenues while containing Russia. The recently adopted Countering America’s Adversaries Through Sanctions Act (P.L. 115-44, adopted August 2, 2017), stipulates, among other things, the development of an energy security plan for Ukraine in cooperation with the United States. The plan requires promoting U.S. investments in Ukrainian energy.
The sanctions bill actually opens a window of opportunity for U.S. businesses to start projects in Ukrainian energy extraction and trade. And Ukraine’s vast gas reserves are a good market to step into. That would not only provide profits for U.S. companies but would also help contain Russia, thereby increasing U.S. influence in Europe and the world. U.S. participation in European energy projects, including in Ukraine, can certainly serve different presidential administrations’ plans, including those that fall under the rubric of “Make America Great Again.”
