WASHINGTON, May 30 (RIA Novosti) — The US energy exports to Europe are unlikely to have an impact on European demand for Russian oil and natural gas, Senior Democrat of the House Foreign Affairs Committee Brad Sherman told RIA Novosti.
The congressman said that the US competition with Russia for LNG exports to Europe was unrealistic, unless they were subsidized by the US taxpayer or Europeans paid up to 50 percent more for energy.
"Even if we were to export natural gas, Asia will pay us more for it than anyone in Europe, in part because Europeans can buy it from Russians. Russia will always have a very substantial practical advantage for the natural gas market in Europe, as opposed to the United States," Sherman said following a hearing on Asian energy needs and US exports.
"Nobody in Europe thinks, ‘Oh gee, if we could just pay Asian prices for natural gas we would feel that that was wonderful because we could be protesting what’s happening in Crimea.' I don’t think anybody in Germany wants to pay Japanese prices for natural gas," he added.
In the United States, too, taxpayers are not looking to subsidize the cost so Germany or Ukraine could pay less, he said.
"No one is proposing an increase in the US income tax rate so we can afford to give US natural gas to Ukraine at a price less than what they are paying Russia today," he said.
The dispute over Ukraine’s failure to pay for delivered Russian natural gas has led some lawmakers to suggest US natural gas imports to Ukraine. However, the projected costs of US exports are based on Asian rates, which average $15 per mmBtu, approximately twice the European market rate (NBP).
During the Foreign Affairs Committee hearing, Rep. Scott Perry said that US LNG exports to Eastern Europe could have the geopolitical dimension of "increasingly damaging the negotiating power" of regional providers, particularly Russia. Other members of Congress have also suggested expediting the repeal of US energy exports, and having the US provide natural gas to Ukraine at a competitive price.
Sherman said the recently signed historic 30-year gas agreement between Russia and China, was beneficial to both parties’ economies, as well as the environment.
"It will make a lot fewer people in China die from coal dust and from coal pollution. We’re going to see new fields developed in Russia, and there will be some environmental impact from that. But the economic [and] environmental impact of less coal being burned in China will save millions of lives. And I don't know why anybody would be against that," he said.
Russian Gazprom and Chinese CNPC signed a contract on May 21 for the sale of Russian gas to China at a volume of 38 billion cubic meters per year with delivery via an eastern pipeline crossing Siberia to reach China’s populous northeast regions. The contract is estimated at $ 400 billion.
