Natural gas for Europe? Not a problem, if you let us produce it …
US natural gas can easily replace Russian gas in Europe, the chief executive of EQT, the country's largest gas producer, said in an interview with the BBC .
" We have the ability to do more, the desire to do more ," Toby Rice told the BBC, estimating that the United States had enough gas to quadruple current production by 2030.
However, increasing natural gas exports to Europe is not just a question of availability and willingness on the part of gas producers. There are other obstacles preventing US gas from taking the place of Russian gas in Europe.
These include the lack of import terminals on the continent and export terminals in the United States itself. Currently, there are eight operational export terminals on the Gulf Coast and another 14 have been approved for construction. However, the process of bringing an LNG plant from the final investment decision to operation takes several years, especially for the plant to liquidate: even going fast it is called four years.
Furthermore, there is also political opposition to increasing LNG export capacity for reasons of climate change. Recently, a coalition of over 100 advocacy groups called on six major US lenders to stop financing new LNG export facilities on the Gulf Coast.
If the political problem is removed, the problem of infrastructures would remain, as well as the fact that LNG costs more expensive than the one for gas pipelines, except if one does not want to make a transatlantic one.
Be that as it may, Europe has been the largest buyer of US liquefied natural gas over the past three months, absorbing more than half of total LNG exports in December and February.
Unfortunately Europe is running out of regasification capacity. Spain and France have the largest import capacity in the EU, with the UK ranking second in Europe with an annual LNG import capacity of 50 billion cubic meters. Germany, on the other hand, the largest gas market in Europe, has zero LNG import terminals, when Italy has three.
“REPowerEU will seek to diversify gas supplies, accelerate the introduction of renewable gases and replace gas in heating and power generation. This can reduce EU demand for Russian gas by two thirds before the end of the year, ”the European Commission said earlier this week when it presented its plan for independence from Russian fossil fuels.
The measures outlined in the plan include requiring EU members to fill their gas storage facilities to 90% capacity by 1 October this year, increasing LNG imports and diversifying pipeline imports and increasing energy efficiency. Of course, an increase in wind and solar power generation capacity is also part of the plan, as is an increase in hydrogen production.
Rising LNG imports appear to be one of the quickest ways to reduce dependence on Russian natural gas. The plan to build import terminals suggests that this plan is long-term. However, as an Energy Intelligence analysis strongly suggests, the chances of success for this specific part of the REPowerEU plan are rather slim, if at all. T he cry of the Commission is a plan destined to fail.
Furthermore, a very important point has to do with the price of the goods. “At the moment LMG remains a viable source of fuel for Asia only because most of it is still linked to the price of oil and therefore much cheaper than spot cargoes. This is true even though oil now far exceeds $ 100 a barrel, ”Miller writes. So without a drop in LNG oil prices it will never be economically competitive anyway. But it will make US producers rich.
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The article Natural gas for Europe? Not a problem, if you let us produce it… it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-gas-naturale-per-leuropa-non-e-un-problema-se-ce-lo-lasciate-produrre/ on Tue, 15 Mar 2022 07:00:07 +0000.