Russian President Vladimir Putin is gambling in the Crimea that the West will prove incapable of any effective response. Certainly, there is no appetite in the United States or Europe for a military engagement.
There is something, however, that might make Putin re-examine his reckless course: The Russian economy and government's dependence on energy revenues. Russia in 2013 produced 10.5 million barrels of oil per day, worth about $350 billion at going world prices. Russia supplies Europe with about 30 percent of its natural gas, generating export revenues of around $60 billion in 2013.
Aggressive steps to boost U.S. oil production would create new pressures on world oil prices, potentially to Russia's detriment.
Natural gas is even more promising. The United States has been moving at a snail's pace to approve export facilities for liquefied natural gas. Increased LNG exports from the U.S. would enable Europeans to partly substitute American gas for Russian gas (or force Russia to lower its prices, wounding Putin in the pocketbook).
This might depend on significantly expanding U.S. shale gas production, so we could meet both domestic and export demands without driving U.S. gas prices up to levels that would punish American consumers and make it uncompetitive in Europe.
Fortunately, with the use of hydrofracking, and with the vast recoverable shale gas reserves in the United States, this is feasible, and could be accomplished reasonably quickly if it is made a sufficient national priority.
Shale "fracking" already is responsible for about 40 percent of U.S. natural gas production - at prices well below those of the early to mid-2000s.
The large U.S. natural gas windfall to date, however, has had to occur in the face of fierce opposition from many in the U.S. environmental movement. President Barack Obama deserves some credit for touting the benefits of U.S. natural gas production, but he has been timid about directly challenging his environmental constituents on the large gains that could be realized from expanded fracking. U.S. shale gas production thus far has occurred largely on private land, although the federal government owns about 30 percent of the land area of the United States. Opening up more government-owned land to energy development would be a wise and courageous strategic move at this time.
There is also potential for increasing natural gas production in Europe itself. Recent estimates suggest that the EU countries alone may contain about 300 trillion cubic feet of recoverable shale gas, about 30 percent of the estimated U.S. total.
Production of natural gas in Europe could be ramped up fairly quickly. Given the large geopolitical stakes, the United States could pressure our European allies to do this.
Russia's greatest vulnerability lies in its economy's dependence on energy production. If it continues to thumb its nose at international norms, what is required is strong political leadership to counter the quasi-religious opposition that many U.S. and European activists and elites have toward expanded oil and gas production.
We are not without weapons in this fight. What we lack is the political resolve and wisdom to use them.
Robert H. Nelson, a senior fellow with The Independent Institute, is a professor of environmental policy in the School of Public Policy at the University of Maryland. He wrote this for McClatchy-Tribune News Service.
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