AUSTIN, Texas—Exported LNG from the U.S. might just calm the troubles of a resurgent Russia under the leadership of President Vladimir Putin, former Vice President Dick Cheney told attendees at the 71st annual Texas Independent Producers & Royalty Owners Association (TIPRO) Feb. 27. Cheney said that the U.S. has an opportunity to capitalize on its growing energy production as a way to positively influence foreign affairs.

Specifically, Cheney suggested LNG exports to the Baltic states—Estonia, Latvia and Lithuania--should be considered a strategic move on a dynamic foreign policy chessboard that features Russia having re-acquired Crimea and slowly re-asserting dominion of Ukraine.

“I think a great response to Mr. Putin is for us to get in the business of aggressively using our resources, especially in developing our LNG capabilities, and substitute our product for the Baltics, which gets 100% of their energy from gas from Russia,” Cheney said. “We could do an awful lot if we were to take advantage of our expanded capabilities and all that we’ve been able to develop—and will develop in the future—and use that surplus, if it is a surplus, for our overall capabilities politically, strategically.”

Cheney’s keynote was delivered to roughly 200 TIPRO attendees who are meeting in conjunction with the state’s biennial legislative session.

“Russia is not in good shape,” Cheney said. “Putin stays on top in the polls by taking shots at us. Every time he jabs an elbow in the United States, the Russians love it. He’s at 82% in the polls. I think we should look on [U.S. energy production] as an asset and our capability in that area.”

Energy Use In The Baltics

The energy picture is evolving in the Baltic states. Latvia, Estonia and Lithuania have all sought greater integration into the EU following the collapse of the former Soviet Union nearly 30 years ago. All three states remain dependent to varying degrees on deliveries of Russian natural gas. Weaning the Baltics away from energy dependence on Russia provides both economic and strategic opportunities, Cheney said.

“I look at Russia. Putin, I think, is determined to reverse as much as he can of the territories Russia lost in the Cold War. He has aspirations,” he said. “We have already seen him move on Ukraine and Crimea and I think he has aspirations on the Baltics. I think he’d like nothing better than to do just enough to threaten the Baltics, perhaps even financially support the pro-Russian parties inside. What he really wants to do is undermine NATO and, if he does, in fact, move on the Baltics, demonstrate that NATO is weak and not able to keep its commitments.”

The Baltics represent a Gordian Knot of energy challenges.

Latvia, for example, derives a significant percentage of its electricity from alternative energy sources, but remains gas-dependent on Russia. Estonia has been burning high-carbon oil shale for electrical generation and exports surplus electricity to its Baltic neighbors. Lithuania has been seeking natural gas alternatives for power generation since the second reactor at the Ignalina nuclear power plant was shut down in 2009.

Russian natural gas underpins 80% of Lithuanian electricity generation, with Gazprom supplying about one-third of that total. Gazprom, together with a German utility and the Lithuanian government, is a major shareholder in Lithuania’s natural gas monopoly.

One of the challenges for the Baltic states is integration into the European electric grid. Presently, each of the three nations is essentially an energy island. The European Commission has expressed interest in connecting them to the European grid and subsidizing construction of a joint LNG gas terminal, but only if all three countries integrate their energy infrastructure.

To date, Lithuania and Estonia have signed on to European protocols in regards to unbundling energy production, trade and transmission, while Latvia has received an extension until April to do the same.

The three states signed a protocol to create a single gas market in 2015. The proposed European Commission-backed LNG terminal would be connected to large natural gas storage facilities at Incukans in Latvia.

Despite political discussion, several of the states are going their own way.

Lithuania is separately seeking to build a new nuclear power plant for electrical generation, and also signed a 10-year, $690 million lease to operate a floating LNG regasification facility with a Norway-based firm. The terminal can handle 4 billion cubic meters annually, or about 80%, of the gas demand in the three Baltic states. Lithuania is also importing gas from Statoil ASA (NYSE: STO).

Meanwhile, Finland and Poland are constructing Baltic LNG facilities and Russia seeks to establish its own LNG terminal at Kaliningrad.

Cheney’s Views Of Energy And Geopolitics

Cheney acknowledged that energy played a significant role in crafting the multinational military coalition that took on Saddam Hussein in the First Gulf War in 1990.

“If we had been self-sufficient in energy in 1990 when Saddam Hussein invaded Kuwait, would we have responded? I like to think that we would have—and that we should have. You cannot let somebody like Saddam Hussein gain control of a very huge part of the world’s oil reserves and say, ‘that doesn’t involve us, we should stay out of it.’ Those resources are important,” he said.

Cheney affirmed his support for Donald Trump as president, despite remaining neutral in the Republican Party primaries. He singled out several Trump appointees for praise, including Scott Pruitt, Trump’s choice to head the Environmental Protection Agency. However, Cheney took issue with Trump’s posturing on NATO and America’s international leadership.

“I think the United States has to play a major role [in world affairs],” Cheney said. “That is one place where I disagree to a certain extent with President Trump and his desire to sort of disengage, if you will. For a while there, he was being pretty critical of NATO. I think it’s a big mistake. NATO is one of the most successful alliances in the history of the republic. I think the world works much better when the United States is well armed, well equipped, on top of things, and prepared to use that capability if we have to,” Cheney said.

“Defraying the cost is fine. We had a policy of persuading our NATO allies to pick up a bigger share of the burden. The U.S. pays 75% of NATO costs,” the former vice president said. “And, I don’t have any problem with the notion on our trade deals of getting a better deal for the United States than we have sometimes in the past. The problem is when we get into the business where we raise doubts in the mind of our allies, and our adversaries, about the willingness of the United States to continue to provide the leadership we have for 75 years.”

Richard Mason can be reached at rmason@hartenergy.com.