The only economic bright spot in a country that Sen. John McCain (R-Ariz.) aptly described as a “gas station disguised as a nation” was snuffed out by Russia’s mad leader. In coming decades, this war will be seen as one of history’s worst acts of self-inflicted harm — suicide on an epic scale that will only inflict further suffering on the long-suffering Russian people.
Russia is not a country that can afford to destroy profitable businesses — Russia’s entire economy is smaller than that of Texas — but that’s exactly what Putin did. Evidence of the damage to Gazprom came last month when the state-owned company reported its first annual loss of the 21st century, the first of many losses to come.
There are two ways to export large amounts of natural gas: via pipelines, or in tanks as a liquid (if refrigerated to very low temperatures). With little investment in liquefied natural gas (LNG), Gazprom relies heavily on pipelines, which in turn rely heavily on Europe.
Pipelines aren’t built overnight. In fact, nearly 28 months after Putin’s failed invasion of Ukraine, China has yet to agree to a second pipeline from Russia to partially offset declining exports from Europe. With its pipelines to the West closed and China limping along, a report concluded that Gazprom won’t regain profitability until 2035, according to the Financial Times.
This is the opposite of propaganda, a truth that Russian insiders themselves admit: Their golden eggs are being roasted at the whims of their delusional bosses, and the next threat to the Russian economy is likely to be Venezuela-style inflation, as a devastating war is paid for with a currency that the economy lacks the productive capacity to support.
It is easy to imagine that such sobering conclusions from the Western media are a cry for help from within the increasingly repressive Russian state. Putin’s cronies have been silencing critics, flooding the Russian media – and a gullible Western world – with claims that China is saving the sanctioned economy and victory over Ukraine is near. Now, from the kleptocratic upper echelons of the state, there is evidence that even Putin’s oligarchs don’t believe his nonsense.
It is time for President Biden to bring Russia into line by reversing one of the most short-sighted pandering measures: the “moratorium” on the development of LNG export facilities. This move is a play on the Democratic base’s climate caucus, which mistakenly believes that all fossil fuels are equally bad, and it will slow U.S. exports that have rapidly emerged as an alternative to Russian gas. In fact, last year for the first time, the United States surpassed Russia in natural gas sales to the European Union.
As an environmental policy, the LNG moratorium is a failure. The United States has become the world’s largest energy producer, and using abundant natural gas supplies to generate electricity as a replacement for much more polluting coal has been a major factor in the decline of U.S. carbon emissions. Natural gas can have a similar effect in other countries that rely heavily on coal, such as China and India, where emissions are dangerously rising. Opposition to LNG is merely a virtue signaling; the issues of war and climate are too serious for the White House to indulge in it.
This suspension is also bad for the security of the United States and its allies. By invading its neighbors and waging a constant war of criminality, Russia has demonstrated that it is an intolerable threat to the security and humanitarian values of the West. Don’t just take my word for it. Take the word of those who know Russia best: its neighbors.
Poland’s defense spending increased by about 70 percent last year. After nearly 75 years on its own, Sweden joined NATO in March (following Finland) and increased its defense budget by just over 30 percent. Lithuania has increased its defense spending by nearly 30 percent, and others are following similar trends. Defense spending across Europe has increased every year since Putin annexed Crimea in 2014.
These countries do not want to become dependent on Russia again once the Ukraine war finally ends. They want an alternative to Russian gas, and for the sake of world peace, the United States should give them one.
Do not believe Putin’s desperate nonsense about Russian strength and victory. His economy’s backbone, Gazprom, a company that is more important to Russia than any company has ever been to the United States, has shown us the truth. Mr. President, now is not the time to take your foot off the gas.
