2024-01-27 14:41:00
Joe Biden does not want to expand American gas supplies to Europe and Asia. His government will not issue new licenses to companies that want to export liquefied gas (LNG), at least in the coming months.
In practice, Biden’s decision means that seventeen planned large LNG export projects will not receive permission. Environmental organizations see it as a victory, because LNG is a fossil fuel. And an export terminal is not opened for a few years, but for decades.
‘Radical environmentalists’
The reason Biden gives for his decision: he first wants to critically examine the climate impact of pumping, liquefying and exporting American (shale) gas in bulk ships. “This pause on new LNG approvals puts the climate crisis on the right foot: an existential threat of our time.” Analysts think that Biden wants to appeal to green, young voters. The American presidential elections are in November.
The Republicans, who want to use (fossil) energy exports as an economic force and job engine, are angry. The decision is harmful and Biden is listening to “radical environmentalists,” a Trump spokesperson said.
But criticism can also be heard within Biden’s own party. “If this pause is just another political ploy to appease climate activists at the expense of American workers, businesses and our allies in need, then I will do everything in my power to end this pause immediately,” said Democratic Senator Joe Manchin, who is known for critical statements.
100 Megaton
The ‘frozen’ new export projects add up to around 100 megatonnes of LNG export capacity. That’s quite a bit, because world trade consists of 500 megatons. For Europe, Biden’s decision therefore sounds like a potential risk to energy security.
Because following Europe banned natural gas from Russia due to the Ukraine war, the US in particular appeared to fill the gap. In recent years, households and industrial companies in Germany, France, Belgium and other EU member states have mainly used gas from the United States in their pipes. Is the supply going to be restricted now?
“There is no need to worry regarding the consequences of the temporary ban on expanding American export terminals,” says gas expert René Peters of the TNO knowledge institute. He points out that the US already exports 100 megatons of liquefied gas annually, mainly to Europe. That existing supply will not disappear. In addition, a few new export ports are still under construction, because the builders already had a permit in their pocket.
‘Instability threatens’
“The market is quite saturated,” says Peters. He even questions how viable and lucrative doubling U.S. LNG export capacity might be anyway. “In addition to the US, major players such as Qatar and Australia, each of which already sell 100 megatonnes of LNG abroad every year, are also simply expanding.” Russia also exports LNG, some of which ‘normally’ reaches Europe.
Liquid gas is still available, even without the 17 expansion plans. An uncertainty is still to what extent the European industry will develop an increase in gas demand. Europe managed to limit gas demand by regarding 25 percent. It appears that households will maintain this level of frugality, but industrial gas demand may return to previous levels.
The German energy company Sefe, one of the largest gas importers in Europe, fears that ‘instability’ is threatening the energy market, business newspaper reports Handelsblatt. In the Netherlands there are two terminals to import LNG for EU countries. There are a handful of large silos on the Rotterdam Maasvlakte at the Gate project and there is a floating import pipe in Groningen’s Eemshaven.
Also read:
EU countries are buying more liquid gas from Russia than before the war
By increasing the import of liquefied gas, the Netherlands wants to become less dependent on Russia in the long term. But for the time being, a large part of that extra comes from imports from Russia, it turned out last year.
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