US Aid Will Help Europe Replace Russian LNG but Not Pipeline Gas
The announcement Friday that the United States will help Europe find alternative sources for the 15 billion cubic meters of liquefied natural gas (LNG) that it imports from Russia every year sparked hopes that the region can reduce its reliance on Russia for energy — but it does nothing to reduce the vastly larger amount of pipeline gas that Europe buys from Moscow.
European Commission President Ursula von der Leyen and U.S. President Joe Biden announced the agreement in a joint appearance. Biden is in Europe for a series of meetings with other leaders to coordinate further responses to Russia’s invasion of Ukraine.
In prepared remarks, Biden said that Russian President Vladimir Putin “has used Russia’s energy resources to coerce and manipulate its neighbors.” He said reducing European demand for Russian gas would increase pressure on Russia to stop the war.
He noted that the U.S. had already banned all imports of Russian energy, saying that “the American people would not be part of subsidizing Putin’s brutal, unjustified war against the people of Ukraine.”
“The trans-Atlantic partnership stands stronger and more united than ever,” von der Leyen said. “And we are determined to stand up against Russia’s brutal war. This war will be a strategic failure for Putin.”
A mammoth task
In the wake of Russia’s invasion of Ukraine, countries across Europe have been reassessing their dependence on Russia for energy. Most notable was Germany’s decision to scrap the controversial Nord Stream 2 pipeline, which would have doubled the flow of Russian gas directly to Europe under the Baltic Sea.
Completely detaching Europe from Russian energy supplies will be extremely difficult, however.
While the 15 billion cubic meters (15 bcm) of LNG that the U.S. has pledged to help Europe find would replace virtually all the LNG that comes in from Russia, the countries of Europe buy an additional 150 bcm of Russian natural gas that is delivered via pipeline.
LNG and pipeline gas are the same product in different forms. LNG is compressed into a liquid for storage and transport and is “re-gasified” for use.
Europe ‘at capacity’ for LNG
Experts said that while the new sources of LNG could replace existing Russian LNG imports, they wouldn’t be able to reduce the region’s reliance on pipeline gas.
“Europe has an import capability that is limited, and they don’t have any additional infrastructure that is going to come online,” Charlie Riedl, executive director of the Center for Liquefied Natural Gas, told VOA. “Infrastructure that’s currently operational is basically running at capacity right now, and I would expect that it will run at capacity for the remainder of this year.”
Riedl said that coming into 2022, the amount of gas held in storage by European countries was well below recent averages, making the region especially vulnerable to potential supply disruptions.
In the longer term, Europe will be able to increase its capacity to import LNG, and the U.S. in turn can then increase the amount of LNG it produces and ships to Europe. On Friday, the Biden administration said that it would commit to “maintaining an enabling regulatory environment” with regard to “any additional export LNG capacities that would be needed to meet this emergency energy security objective.”
US energy industry
U.S. energy industry representatives appeared pleased with the announcement.
In a statement sent to VOA, American Petroleum Institute President and CEO Mike Sommers said, “We stand ready to work with the administration to follow this announcement with meaningful policy actions to support global energy security, including further addressing the backlog of LNG permits, reforming the permitting process, and advancing more natural gas pipeline infrastructure.”
He said that the industry had already begun the process of supplying Europe with more U.S.-sourced fuel.
“Over the past few months, American producers have significantly expanded LNG shipments to our allies, establishing Europe as the top U.S. LNG export destination,” Sommers said. “With effective policies on both sides of the Atlantic, we could do even more to support Europe’s long-term energy security and reduce their reliance on Russian energy.”
Reconciling with climate strategy
The creation of new fossil fuel infrastructure might seem difficult to square with pledges by both the European Union and the U.S. to move toward a carbon-neutral future.
However, Biden and von der Leyen on Friday reiterated their commitment to climate pledges and said that new LNG facilities will be constructed in a way that will allow them to be converted for a transition to hydrogen-based power.
In a statement, the White House said, “The United States and the European Commission will undertake efforts to reduce the greenhouse gas intensity of all new LNG infrastructure and associated pipelines, including through using clean energy to power onsite operations, reducing methane leakage, and building clean and renewable hydrogen-ready infrastructure.”
The U.S. and the European Commission also indicated that Europe, with U.S. assistance, will take other steps to reduce reliance on Russian gas, including reducing demand by bringing more renewable power resources online.