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Massachusetts delegation raises concern over sanctions, Russian gas shipments

Photo by Josh Reynolds for The Boston Globe

A State Police boat patrolled beside the LNG tanker Gaselys, docked at the LNG terminal in Everett on the Mystic River.

By Jon Chesto Globe Staff 

Liquefied natural gas is odorless, but Senator Ed Markey, Representative Seth Moulton, and other members of the Massachusetts congressional delegation say something stinks about how Russian LNG is arriving in New England despite US sanctions against the company that produces the fuel.

The lawmakers are raising concerns after a tanker carrying LNG, including some from the newly opened Yamal plant in Siberia, unloaded its cargo at the Distrigas terminal in Everett last week. Another shipment containing some Russian gas is expected to arrive in Boston Harbor this month.

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Yamal’s majority owner, a Russian company called Novatek, has faced US sanctions since 2014, when the US Treasury prohibited new financing to the company and another Russian energy firm. The measure was a response, in part, to what the agency described as Russia’s destabilization of eastern Ukraine. But the sanctions didn’t deal with fuel imports from Novatek plants, just financing for their construction.

Markey blasted the shipment in a letter on Thursday to Secretary of State Rex Tillerson and Treasury Secretary Steven Mnuchin. Markey said the shipment may violate the spirit of the sanctions by providing revenue to Novatek. He said the delivery calls into question the effectiveness of the sanctions, and he raised the prospect of adjusting them to better serve this country’s public policy goals.

Stephen Lynch, whose office reached out to the Treasury by phone about the issue, said the department should review its policies to ensure they preclude imports of LNG produced by companies with direct ties to sanctioned individuals.

Moulton called the import of LNG from Russia a “bad move, especially given how Russia has used natural gas supplies to exercise its influence and political will in Europe.”

A spokeswoman for Senator Elizabeth Warren said she doesn’t want to see any more imports from countries under US sanctions, and a spokesman for Representative Joe Kennedy III said relying on the LNG is “yet another troublesome symptom” of New England’s broken energy markets.

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Representatives at the Treasury didn’t respond to requests for a comment about the issue.

A State Department official said a free market should determine the price of energy, and companies should be able to purchase supplies that best meet their needs. The official also noted that existing energy sanctions do not create a blanket prohibition on the purchase of Russian fuel.

The Russian gas is being imported by Engie, a French conglomerate that operates the Distrigas terminal and typically gets LNG from Trinidad.

Engie spokeswoman Carol Churchill said these extra shipments are needed to meet the high demands for gas heating and power-plant fuel this winter in New England.

Federal law currently prohibits Engie from shipping LNG to New England from the Gulf of Mexico, and the gas pipelines from the west get maxed out on cold days because of the demand from heating customers, who take priority over power plants.

Churchill said the shipments that contain Russian gas are coming from European terminals and comply with all federal trade laws. Beyond the shipment due later this month, Engie is not planning for any other deliveries from Europe at the Everett terminal this winter at this time, she said.

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But Engie has already drawn the ire of the Boston branch of the Ukrainian Congress Committee of America. Members of the group delivered a letter to Engie protesting the use of Russian gas earlier this week, noting the Yamal project’s ties to Vladimir Putin ally Gennady Timchenko.

Spokesman Peter Woloschuk said his group’s protests will continue until the Russian imports stop.

“The gas comes at the cost of Ukrainian blood,” Woloschuk said. “We’re telling them that’s too high of a price.”

Alina Polyakova, a foreign policy fellow with the Brookings Institution, said she was surprised when she learned Russian LNG was coming to the United States. She noted that when Congress passed Russian sanctions legislation last summer, the energy restrictions were pared back due to concerns about how they would affect European countries that rely on Russian gas.

Still, she said the imports seem to violate the spirit of the sanctions.

“It is against the intended US policy to promote or to have a closer economic relationship with Russia, specifically with the energy sector, which is the profit-driving sector for the Russian economy and the Russian government,” Polyakova said.

But Chris Miller, a Russian expert at Tufts University’s Fletcher School of Law and Diplomacy, said the US government has made a clear policy decision to not interfere with the flow of Russian fuel, just the financing of facility construction, in part out of deference to Europe’s needs.

The Russian LNG, while new, remains but a tiny amount of the natural gas supplies used to heat homes and businesses and to run power plants in New England this winter. For that reason, Suffolk University international relations professor Roberto Dominguez said he doesn’t expect criticisms of the Trump administration to get much traction.

Still, he said, there might be political gain for Russia on the world stage.

“It might be a very subtle message from the government in Russia to say, you know, we have this leverage,” Dominguez said. “But it’s more of a symbolic message.”

Meanwhile, proponents of expanding natural gas in New England say the Russian shipments underscore the importance of access to domestic gas supplies.

Tim Buckley, senior adviser to Governor Charlie Baker, said the administration wants to add natural gas capacity, alongside new sources of hydroelectric and wind power, in part to avoid relying on expensive foreign LNG shipments.

“It’s another example of the leadership void in New England,” Tony Buxton, an energy lawyer in Maine, said of the Russian imports. “They’re trying to screw up our elections, and we’re going to buy gas from them.”


Jon Chesto can be reached at jon.chesto@globe.com
Follow him on Twitter @jonchesto.