The Ukraine: A Diplomatic And Economic Crisis; The President Doesn't Even Have To Be A "Decider"

Updates

March 18, 2014: The Wall Street Journal also suggests that natural gas exports will be the next "Keystone." It looks like "we" can add a new word to the urban dictionary: key'-stone, a verb, to pocket veto; to simply ignore an issue; to "kick the can down the road"; a political non-decision.

March 16, 2014: Barron's opines that Obama is not going to approve natural gas exports on the basis of the Ukraine "crisis." Barron's agrees that global warming is so much on Obama's mind that the oil and gas industry is nowhere near appearing on his radar scope. But there are two other points, one follows the other: a) Obama has ceded the Ukraine to Putin because Obama's mantra is "no-drama Obama; and, b) Obama is literally afraid of Putin. I think Obama knows himself well enough to know that he could not come out on top of a repeat of the "Cuban missile crisis." Peggy Noonan said essentially the same thing this past weekend.
 

Original Post

The AP provides another great article on the economic and diplomatic crisis precipitated by events in the Ukraine.

The United States, with its abundant supplies of natural gas, would seem to have an easy answer to Europe's fears that a strong response to Russia's rapid takeover of Ukraine's Crimea region could prompt Vladimir Putin to shut down gas lines that keep European homes warm, factories humming and electricity flowing.

Trouble is: Right now there's no way to get meaningful American supplies across the Atlantic Ocean.

Turning U.S. natural gas into liquefied natural gas (LNG), a process that makes the fuel transportable by ship, is very expensive. Beyond that the U.S. government has — until recently — been stingy with permits to build those facilities. And regulations make it difficult to sell U.S. gas to nations that aren't in free trade compacts with Washington.

That's not good news for Europeans, who are dependent on Russia for at least 30 percent of its natural gas. Consequently, Europe's reaction to the Russian seizure of Ukraine's semi-autonomous Crimea, while noisy, has little teeth.

As I've said before, President Obama has had more than six years to study the Keystone XL and still hasn't come to a decision. It's unlikely he will come to any decision on "natural gas to Europe" given that track record. He knows that if he says "yes" the facilities won't be ready until he's out of office; if he says "no," the facilities won't need to be built. He might as well dither. The outcome is the same either way. Memo to self: put "smiley face" here.

Presidents come and go. The next president could become a national hero by simply letting free market capitalism run its course in a) energy; and, b) health care.