Will the EU become dependent on American LNG?
One of Brussels' top energy officials admits: the European Union will need American LNG for many years to come. Will Brussels replicate its dependence on Moscow with Washington? Not exactly. Here because
Europe will need American gas for decades to come. Ditte Juul Jørgensen, director general for Energy of the European Commission, told the Financial Times , explaining how US fossil fuel will be necessary to guarantee the bloc's energy security.
The European Union wants to completely detach itself from Russian hydrocarbons by 2027, so it needs new suppliers; and it intends to significantly expand electricity generation from renewable sources, which need to be supported by gas (or by coal, which however is more emissive, or by batteries, which are not efficient enough) as they are intermittent in production.
“THERE WILL BE A NEED FOR AMERICAN ENERGY”
The energy transition may reduce European demand for gas, but it will not eliminate it. In this regard, Jørgensen said that “in the coming decades we will need some fossil molecules in the system. And in this context, there will be a need for American energy." That is, liquefied natural gas, or LNG, of which the United States is one of the largest exporters in the world.
In short, European countries will continue to consume American LNG well beyond this decade. And there are those who think that this energy relationship could not only compromise the community objectives on reducing emissions, but also create a situation of energy dependence of Europe on the United States. A dependence, in truth, different from the previous one with Russia: any dependence on Washington will be "only" commercial; the one from Moscow was both commercial and political, given that the Kremlin has repeatedly used – and continues to do so – energy supplies as a weapon of pressure on governments.
THE WASHINGTON-BRUSSELS PACT
Last year, after the invasion of Ukraine and the deterioration of relations with Russia, Joe Biden's administration committed to supplying the European Union with an additional 50 billion cubic meters of LNG per year until 2030 ; Brussels, in exchange, would work to " guarantee stable demand " in order to give certainty to the US gas industry, which before the war sold its fuel mainly in Asia. The pact between Washington and Brussels had been greeted with skepticism by analysts for a series of technical reasons which, however, the European energy price crisis has completely overturned.
Now, experts think that Jørgensen's statements will encourage European buyers to sign long-term supply contracts, beyond 2030, with American companies: the buyers' hesitation is due to the uncertainties, created by the ecological transition, about future consumption of gas.
THE NUMBERS OF LNG EXPORTS FROM THE UNITED STATES TO THE EUROPEAN UNION
In 2022, US LNG exports to the European Union more than doubled compared to the previous year, rising from 22 to 56 billion cubic meters.
In 2021, before the war, the European Union received around 145 billion cubic meters of Russian gas via pipe from Russia. At the end of 2022, Russian gas was worth 16 percent of EU imports, compared to 37 percent in March 2022. European countries, however, have begun to import much more Russian LNG than in the pre-war period.
THE NEW US-EU LNG CONTRACTS
Speaking of contracts, Cheniere Energy, the main LNG exporter in the United States, has signed two large long-term supply contracts with Norway's Equinor and Germany's BASF: in total, it will ship 2.5 million over the Atlantic Ocean. of tons of liquefied fuel until the 2040s.
Venture Global, another American company, signed a contract in June with German state company SEFE for 2.5 million tons of LNG per year for twenty years.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/unione-europea-dipendenza-stati-uniti-gas-gnl/ on Thu, 05 Oct 2023 09:18:19 +0000.