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    As Russia Freezes Out EU, Will Biden Unleash US Energy to Come to the Rescue?


    September 28, 2022 - Damien Fisher, InsideSources.com, Washington, D.C.

     

      Sep. 27—The headlines from Europe are shocking: Modern economies facing the potential of government-imposed rationing of electricity, perhaps even rolling blackouts. Businesses forced to close as electricity costs soar by as much as 75 percent. The looming prospect of families unable to heat their homes during the coldest days of the coming winter.

      The cause of the crisis is well known; Russia's invasion of Ukraine and the energy pipeline politics that followed. Between supply cutbacks imposed by Russian President Vladimir Putin and energy sanctions imposed by the West to punish him for the invasion, the EU has lost access to its major suppliers of liquid petroleum products like oil and natural gas.

      Putin has launched a "war on our energy, a war on our economy, a war on our values, and a war on our future," said EU Commission President Ursula von der Leyen last week in her annual State of the European Union speech. "Russia keeps on actively manipulating our energy market."

      And, according to a study commissioned by the American Petroleum Institute, the solution is obvious, too. The U.S. has more than enough liquid natural gas (LNG) to supply Europe, Asia, and the domestic market with cheap, abundant energy. However, America's domestic energy politics, in particular the policies pursued by President Joe Biden's administration, could leave Europe in the cold.

      "To harness the power of U.S. LNG, we need smart and consistent policy support here at home, including strengthening domestic pipeline networks and energy export facilities, that will ensure both American consumers and global allies have access to the reliable energy that powers our modern world," said Dustin Meyer, API's vice president of Natural Gas Markets. "We need significant investment on both sides of the Atlantic."

      While the European Union plans to eliminate its reliance on Russian natural gas no later than 2030, that is simply not possible without importing LNG from the United States according to François-Régis Mouton, the International Organization of Gas Producers (IOGP) regional director for Europe.

      "The EU needs to secure alternative supplies now if it wants to fully phase out Russian gas imports by 2027. That means acting immediately to support domestic production, secure long-term LNG contracts, and fix remaining infrastructure bottlenecks. Any further delay will extend the suffering our continent is currently experiencing and increases the risk of economic and societal damage. Industry is particularly hard hit," Mouton said.

      The current EU plan to rely on renewable energy to make up for the loss of Russian natural gas is a fantasy, Mouton said. Meanwhile, there is not enough natural gas supply to meet EU demands, he noted, and that won't change until there is the infrastructure in place to move the supply.

      "The coming three to five winters are likely to be difficult. There's not enough supply for Europe to meet demand," he said. "Demand won't magically disappear."

      According to the API-commissioned study, Europe's demand for LNG is projected to increase 150 percent from 2021-2040 as overall natural gas demand declines more slowly than domestic production and non-Russian pipeline imports. The study finds that LNG is projected to meet approximately 50 percent of Europe's natural gas demand through 2030. After 2030, LNG will meet an even greater share, reaching about 75 percent of demand by 2040.

      The U.S. is already the world's leading exporter of LNG, but more terminals and pipelines are needed to move the supply to market, Meyers said. Increasing the capacity through more pipelines and shipping terminals is vital, he said.

      "I think that continues to need to be a priority going forward," Meyer said.

      However, the Biden administration came out of the gate with an anti-fossil-fuel approach. Biden ended the Keystone XL pipeline, and during his first 19 months in office, has leased the fewest acres of land for oil and gas production of any president since World War II. Even his former boss and fellow Democrat Barack Obama issued 10 times more leases over the same period.

      Meyer said since the start of Russia's war on Ukraine, the Biden administration has been resisting the issue of oil and gas lease permits. What is really needed is the ability to move the LNG already available, he said.

      "We have the physical resources that we can produce enough LNG to meet this (European) call and produce enough for an affordable and reliable supply for U.S. consumers," Meyer said. "We need the infrastructure to meet that demand."

      New shipping terminals would help, and Meyer said the most likely location for those terminals is in the Texas Gulf Coast region, where many terminals are already operating.

      Mouton said U.S. and European leaders need to start acting to make sure LNG gets to where it is needed most and stop waiting for unrealistic plans to pan out.

      "I do believe pragmatism will prevail," Mouton said.

      ___

      (c)2022 InsideSources.com, Washington, D.C.

      Visit InsideSources.com, Washington, D.C. at www.insidesources.com

      Distributed by Tribune Content Agency, LLC.

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