USA: Halting LNG Export Projects Frightens Europe
This was reported by the White House, explaining that the reasons are environmental
The USA is preparing to halt projects aimed at building new liquefied natural gas export plants. A choice that frightens Europe, which after cutting supplies from Russia is now largely dependent on exports from the USA.
“My Administration today announces a temporary pause in decision-making regarding liquefied natural gas exports, except for unforeseen and urgent national security emergencies,” the White House memo said. “During this period, we will scrutinize the impact of LNG exports on energy costs, America’s energy security, and our environment. This pause in new LNG permits sees the climate crisis for what it is: an existential threat of our time.”
Thus, the move has environmental and strong political value given the approaching presidential election: Joe Biden needs to consolidate his electorate and attract voters “on the left.” However, this choice could have important implications for the global energy market, especially in European countries, which without US LNG could not overcome the recent energy shock.
In a January 17 note, Euro Gas (the association of 77 European companies operating in the sector) said: “If additional US LNG export capacity is not realized, there is a risk of increasing and extending the global supply imbalance. This will inevitably prolong the period of price volatility in Europe and could lead to higher prices, resulting in economic disruption and social consequences.” Joe Biden’s choice hung in the air so much so that Euro Gas also made a direct offer to the US administration not to reduce investment in export-related structures. “We urge the US administration to avoid unnecessarily banning or restricting new LNG exports to Europe, as they contribute to security of supply, the energy transition, and the economies of both the USA and the EU.”
It was in 2023 that US LNG exports exceeded those of Qatar: Washington sold more than 90 million tons of gas, with more than 60% of it destined for Europe. In addition to the 7 terminals in operation, according to the Italian economic newspaper Il Sole 24 Ore, 5 more are under construction, which could increase capacity by 70 million tons per year, and 17 more are planned.