September 25, 2012

ONE THING THAT this year’s presidential candidates both get right is that the United States’ plentiful reserve of unconventional natural gas is an exceptional national asset, not only revolutionizing the energy business at home but also benefiting America and its allies abroad.

Over the past decade, new drilling methods have made oceans of fuel once trapped in subterranean rock formations easily accessible. The result is that the United States, which used to worry about importing huge quantities of natural gas, is now producing loads of its own, so much that domestic prices have tumbled and energy companies are asking for permission to liquefy and export some of the country’s output.

That’s good for a variety of reasons, including, as The Post’s Will Englund and Kathy Lally reported Monday, accelerating the decline of Gazprom, Russia’s natural-gas monopoly.

Gazprom finances Russian President Vladimir Putin’s corrupt political system. Under Mr. Putin’s direction, it has also been a notorious international villain, tying delivery of its precious fuel, a matter of life and death during European winters, to the Kremlin’s political agenda.

But with the United States no longer demanding massive quantities of liquefied natural gas from Russia or anywhere else — thus freeing up fuel for others — and gas production ramping up elsewhere, the economics that enable Gazprom’s abuse are changing.

The company, to be sure, is still a monster. It claimed $44 billion in profit last year — and that’s just what it reported. It provides most or all of the natural gas for many Eastern European nations, and it still has lucrative long-term supply contracts with European customers that link Gazprom’s prices to the price of oil.

However, a recent Brookings Institution analysis reported that a looser natural gas market has already empowered German utilities to renegotiate those contracts; some European customers are even ignoring them altogether and buying cheaper liquefied natural gas on spot markets.

If the United States begins exporting natural gas, it would only encourage positive long-term structural changes in this international trade — away from Kremlin domination and toward a larger and more nimble world market. European countries would not be the only ones to feel this effect. Gazprom intends to enter the gas-hungry Asian market, and it might find that it has less leverage over its potential customers than it had expected to wield.

If the economic case for allowing U.S. natural-gas exports, which we have made in other editorials, doesn’t persuade those fighting to limit them, the possible geopolitical benefits should. With new supply from America and others sloshing around the world market later this decade, Mr. Putin might have to make a choice — between propping up a dysfunctional and decreasingly profitable monopoly or finally liberalizing the Russian energy sector, to the benefit of customers, shareholders, Russia’s neighbors and, ultimately, Russia, too.