Russia has control over energy supplies and distribution systems in Ukraine and that means they control energy supplies in Western Europe.
It's made a lot of Russians rich and prevents Europe from taking any meaningful stance on Russian aggression in Crimea. Solar power subsidies are not going to be much help if Russia shuts off the power.
But if the Obama administration relaxed U.S. energy export regulations it could diminish Russia's economic leverage over Ukraine and therefore Europe. That would give America more leverage than a few words and putting sanctions on Vladimir Putin's friends. The federal government has antiquated and unnecessary restrictions on exporting liquefied natural gas (LNG) and crude oil. The US could free European energy markets and supplies by taking the lead in a broad liberalization of global energy markets.
Policy-makers have called for restrictions to be lifted on natural gas exports but companies wanting to export natural gas have to first obtain approval from both the United States Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE). This would be automatically authorized if the country has a free trade agreement with the United States but there are none with European countries.
"The decision to export natural gas should be a business decision, not a political one and natural gas should be treated as any other good traded around the world," writes Nick Loris from The Heritage Foundation in World Review. Opening markets would provide a diversity of suppliers and greater energy supplies for the global market. "This is likely to result in lower prices and would provide more choice for countries like Ukraine in the not so distant future. Providing that choice would diminish Russia's power. Establishing free market reforms and increasing energy supplies would help to prevent future incidents and price shocks in Ukraine and globally."
It is likely that Russia would respond to any attempt to undermine its energy dominance by cutting prices - everyone in Europe wins when that happens but it is not without risk. "Russia's ability to sell gas at artificially low prices could scare off potential importers," Loris says.
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