Ukraine-Russia War and Biden News: Live Updates
President Biden and European leaders announced an agreement on Friday to increase US shipments of natural gas to help wean Europe off Russian energy. But it was still unclear, including for energy executives, how the administration would achieve its goals.
The agreement calls for the United States to send an additional 15 billion cubic meters of liquefied natural gas, or about 10-12% of current annual US exports to all countries. But he did not address the lack of port capacity to ship and receive more gas on both sides of the Atlantic. The effort could also be difficult because the Biden administration cannot simply order U.S. exporters to sell gas to European buyers or set acceptable prices for sellers and buyers.
Still, U.S. gas executives welcomed the renewed focus on exports, a sign that the Biden administration was now looking to promote the U.S. oil and gas industry rather than punish it for its contribution to climate change.
“I have no idea how they’re going to do this, but I don’t want to criticize them because for the first time they’re trying to do the right thing,” said Charif Souki, executive chairman of Tellurian, a producer. American gas. which plans to build an export terminal in Louisiana.
Mr Biden and European Commission President Ursula von der Leyen gave few details during a joint announcement in Brussels. They said many of the details would be worked out by a task force dedicated to reducing Europe’s dependence on Russian oil and gas in a way that would not compromise the climate policies of the two. partners.
“We’re going to have to make sure families in Europe can get through this winter and the next as we build infrastructure for a diverse, resilient and clean energy future,” Biden said.
The European Union is heavily dependent on energy imports from Russia, which is a major producer of oil, diesel, coal and, perhaps most importantly, natural gas. This dependency has become a growing problem as the European Union seeks to punish President Vladimir V. Putin for invading Ukraine. Russia supplies around 40% of Europe’s natural gas, and a significant portion of it is shipped by pipeline through Ukraine.
Germany said on Friday it would seek to halve its Russian oil and coal imports this year and end imports of most Russian natural gas by mid-2024. was happening at an “insane pace”, Robert Habeck, Germany’s vice-chancellor and economy minister, said in Berlin. He added: “Every supply contract that is terminated hurts Putin.”
US exporters have already shifted sales to Europe from Asia in recent months, largely because prices in Europe have been higher than almost anywhere else in the world due to rising tensions with Russia. and, more recently, the war in Ukraine. Nearly 75% of USLNG exports have gone to Europe so far this year, up from 34% in 2021.
The Biden administration aims to ship 50 billion cubic meters of liquefied natural gas, known as LNG, to Europe each year by 2030. The United States has shipped 22 billion cubic meters to Europe Last year.
“It’s mostly what’s already happening, so I don’t know what that does beyond acknowledging what’s already happening,” said Nikos Tsafos, energy analyst at the Center for Strategic and International Studies in Washington. .
Charlie Riedl, executive director of the Center for Liquefied Natural Gas, a trade group, said he believed the additional 15 billion cubic feet of gas exports could be achieved relatively easily. He said two-thirds of that total could come from diverting shipments that would otherwise go to Asia, and the rest could come from recent federal approvals for additional production from LNG export terminals. existing Americans.
“Obviously this is a positive sign that Europe is trying to wean itself off Russian gas,” Riedl said.
Energy executives say the Biden administration could help increase gas flow by streamlining approvals for new U.S. export terminals, where natural gas is cooled into liquid and pumped into ocean tankers. Washington and the European Union could also provide loan guarantees for US export terminals and European import terminals. There are about a dozen U.S. export terminals that have gained regulatory approval but have yet to secure financing to build. A dozen new European import terminals are under construction.
Export terminals require investments of up to $10 billion, while import terminals cost around $1 billion to build. The United States currently has seven export terminals and Europe has 28 large-scale import terminals.
Environmentalists slammed the ad because they fear it could commit the US and Europe to using fossil fuels for decades longer than they claim, given the rising cost of global warming climatic.
“There is no way to increase USLNG exports and meet the imperative climate commitments that the US and EU have promised,” said Abigail Dillen, president of Earthjustice, an advocacy organization. Environmental Law. She warned that the buildup of LNG infrastructure would “lock in expensive fossil fuel dependency and dangerous pollution for decades to come.”
U.S. and European officials also agreed to seek ways to reduce greenhouse gas emissions from LNG infrastructure and pipelines and reduce methane leaks from gas operations.
The Biden administration has banned Russian energy imports as part of a broader set of sanctions against Mr Putin, a relatively easy step for the United States to take because he is a net exporter of energy. ‘energy. Some U.S. lawmakers would like the European Union to stop buying oil and gas from Russia altogether, but that prospect has been dismissed by several European leaders, who see it as a financially disastrous move that would hurt Europe more than to Russia.
Still, some energy experts have said a further escalation of the war, or a move by Mr Putin to use chemical, biological or nuclear weapons, could leave the EU with little choice but to ban energy. purchase of Russian energy.
“We want, as Europeans, to diversify away from Russia, towards suppliers we trust, who are friends and who are reliable,” said Ms von der Leyen of the European Commission during the meeting. announcement with Mr. Biden. “Therefore, the United States’ commitment to supply the European Union with at least an additional 15 billion cubic meters of LNG this year is a big step in that direction, as it will replace the LNG supply we currently receive. of Russia.”
For oil and gas executives, who have become accustomed to being criticized for not doing enough to tackle climate change, Friday’s announcement represented a welcome change of tone. But they said Mr. Biden and Ms. von der Leyen should be patient and recognize that decisions on who sold gas to whom would be made across the negotiating tables by private companies, not politicians.
“It’s a capitalist system,” said Mr. Souki of Tellurian. “It’s people like me who make those decisions. The government cannot tell us where to send the gas.
Matina Stevis-Gridneff and Christopher F. Schuetze contributed report.