Biden's careful embrace of U.S. gas for Europe
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The White House is looking to thread a policy needle by embracing more U.S. liquefied natural gas shipments to Europe while insisting it's not backing off its commitment to fighting climate change.
Driving the news: On Friday, U.S. and European leaders announced a task force focused on helping to cut the EU's heavy reliance on Russian fossil fuels and boosting clean energy.
- The broad outline calls for U.S. work with "international partners" to find another 15 billion cubic meters of LNG this year.
- Longer term, it calls for "additional" EU imports of roughly 50 bcm annually of U.S. LNG until at least 2030.
- However, it does not define what "additional" means with respect to existing volumes.
- "I know that eliminating Russian gas will have costs for Europe, but it's not only the right thing to do from a moral standpoint, it's going to put us on a much stronger strategic footing," Biden said Friday morning.
The context: U.S. LNG shipments to Europe grew to over 22 bcm last year, per European Commission data, and have been rising sharply in 2022 as well.
The intrigue: The U.S.-European plan aims to harmonize climate and energy security needs.
- Officials vowed to work together on cutting gas demand with renewables, hydrogen, heat pumps, efficiency and more.
- It vows to lessen the greenhouse gas footprint of new LNG infrastructure and pipelines.
The big picture: It comes as the EU is already looking to greatly cut Russian oil, gas and coal imports through diversification but also faster clean energy deployment and better efficiency. Officials there are crafting a proposal to seeks to end that reliance by 2027. Russia provides about 40% of Europe's gas and 25% of its oil.
Yes, but: Biden is already facing pushback from environmentalists."Permitting construction of any new fossil fuel infrastructure would lock America into decades of ongoing reliance on fossil fuels that is incompatible with President Biden’s climate goals," Evergreen Action's Jamal Raad said in a statement.
- There are other uncertainties too. LNG flows are based on market conditions, and constraints on how quickly total volumes can increase beyond what's already planned.
What they're saying: Nikos Tsafos, a gas market expert with the Center for Strategic and International Studies, notes a large share of U.S. LNG already goes to Europe.
- The U.S., Qatar and Australia are the world's biggest suppliers, and European buyers compete for supplies with energy-hungry countries in Asia.
- "You can shuffle gas around, but it’s costly and it’s not a permanent fix," said Tsafos. "We have to talk about adding supply, not just rearranging flows."
- But infrastructure takes years to build and those investments assume long-term exports, even as the framework with Europe has a 2030 horizon. "That’s not a signal for new investment," he said via email.
Zoom in: A separate joint U.S.-European Commission (EC) statement this provides a few more details. It says the EC will support "long-term contracting mechanisms" and work with the U.S. to "encourage relevant contracting" to back investment in new export and import infrastructure.
