Bloomberg View: To Hurt Putin, Keep U.S. Gas at Home

Ever since the crisis in Ukraine began, oil and gas interests have been arguing that the U.S. could roll back the Russian incursion in Crimea if only we “fast-track” U.S. exports of liquefied natural gas.

There is an easy logic to this argument -- provided you ignore some awkward arithmetic. Russia has been selling gas to Ukraine at the bargain price of about $7.50 per million British thermal units. Germany, by contrast, pays about $11. Meanwhile, gas in Oklahoma costs around $6, suggesting U.S. producers could beat OAO Gazprom’s price.

Trouble is, it's a long way from Oklahoma to Kiev. Liquefying and shipping U.S. gas to Ukraine could double its cost to more than $10.

U.S. exports cannot provide Ukrainians with the cheap gas they need. In fact, the U.S. price would barely compete with the most expensive Russian price in Europe. Worse, if U.S. exports are expanded, U.S. gas won't primarily go to Europe; it will go to Japan, China and Korea, all of which will outbid Europe because they currently pay the Organization of the Petroleum Exporting Countries around $16 for LNG.  MORE