The United States announced a deal with European leaders on Friday to increase shipments of natural gas to help wean Europe off Russian energy. And Germany set an ambitious goal of halving its imports of Russian oil and coal this year and freeing itself from its dependence on Russian natural gas by the middle of 2024.
Germany’s timelines, outlined by its vice chancellor, are a remarkable turnabout by Europe’s largest economy, which has long relied extensively on Russia for energy. Just a few months ago, Germany was still aiming to buy even more natural gas from Moscow through a new pipeline called Nord Stream 2.
But President Vladimir V. Putin’s invasion of Ukraine has forced leaders in Germany and other European countries to rip up the energy playbook they had used for years, decades even, in just a month. The German vice chancellor, Robert Habeck, said at a briefing in Berlin that his country was shifting away from Russian energy at an “insane pace.”
President Biden is seeking to encourage similar moves by other European countries, in part by offering up the United States as an energy supplier.
The deal he announced, in Brussels earlier on Friday, lacked many details but contained some big goals: The United States would send an additional 15 billion cubic meters of liquefied natural gas to Europe this year — roughly 10 to 12 percent of current annual U.S. exports to all countries. By 2030, the president said, the United States will aim to increase supplies by as much as 50 billion cubic meters a year.
The moves caught many in the U.S. energy industry by surprise. Oil and gas executives who have become accustomed to being pilloried for their contributions to climate change were suddenly being called up to help liberate European allies from Russian energy. While the industry was not certain how Europe would make such a giant pivot, executives clearly relished their new casting as saviors rather than villains.
“I have no idea how they are going to do this, but I don’t want to criticize them, because for the first time they are trying to do the right thing,” said Charif Souki, the executive chairman of Tellurian, a U.S. gas producer that is planning to build an export terminal in Louisiana.
Mr. Biden and the president of the European Commission, Ursula von der Leyen, said many of the specifics would be worked out by a task force dedicated to reducing Europe’s dependency on Russian oil and gas in ways that would not undermine the climate policies of the two partners.
Among the things they did not address was the shortage of port capacity to ship and receive more gas on both sides of the Atlantic. The effort could also struggle because the Biden administration can’t simply order U.S. exporters to sell gas to European buyers or to set prices acceptable to those buyers.
“We’re going to have to make sure that families in Europe can get through this winter and the next while we’re building an infrastructure for a diversified, resilient and clean energy future,” Mr. Biden said.
The European Union is heavily reliant on energy imports from Russia, a big producer of oil, diesel, coal and, perhaps most important, natural gas. That dependence has become a growing problem as the European Union seeks to punish Mr. Putin. Russia provides about 40 percent of Europe’s natural gas, and a sizable chunk of it is shipped by pipeline through Ukraine.
Germany has long been one of Russia’s biggest customers. Having decided to shut down its nuclear plants, Germany has increasingly relied on natural gas. Because it got relatively affordable gas by pipeline from Russia — and some from the Netherlands, Norway and other suppliers — it declined to build any terminals where liquefied natural gas could be imported.
Germany also imports nearly a third of its crude oil from Russia. It has been trying to slash its consumption with generous subsidies for electric cars and greater investment in public transportation.
The Ukraine war has accelerated such German efforts under Chancellor Olaf Scholz, who leads a coalition government made up of conservatives, liberals and environmentalists. Germany this year has revived plans to build gas importing terminals and has suspended final approvals of Nord Stream 2, an almost-complete pipeline that would have fed it a steady supply of Russian gas.
“Every supply contract that is terminated hurts Putin,” Mr. Habeck said on Friday.
Later in the day, E.U. countries agreed to jointly purchase and store natural gas. They set a target of filling 80 percent of their underground gas storage facilities by November as a buffer against supply disruptions during winter, when gas use increases for heating.
In the United States, gas exporters were already shifting sales to Europe from Asia in recent months, largely because prices in Europe have been higher than almost anywhere else in the world because of rising tensions with Russia and, more recently, the war in Ukraine. Nearly 75 percent of U.S. L.N.G. exports have gone to Europe so far this year, up from 34 percent in 2021. The Biden administration has encouraged that shift by relaxing export restrictions to certain European countries.
Charlie Riedl, the executive director at the Center for Liquefied Natural Gas, a trade group, said he thought an extra 15 billion cubic feet of U.S. gas exports to Europe could be achieved relatively easily. He said two-thirds of that total could come from diverting shipments that otherwise would be bound for Asia, and the rest could come from recent federal approvals for additional production from existing American L.N.G. export terminals.
“Obviously it’s a positive sign that Europe is making attempts to wean itself off Russian gas,” Mr. Riedl said.
Energy executives say the Biden administration could help increase the flow of gas by streamlining permitting for new U.S. export terminals, where natural gas is chilled into a liquid and pumped into oceangoing tankers. Washington and the European Union could also provide loan guarantees for U.S. export terminals and European import terminals. There are roughly a dozen U.S. export terminals that have won regulatory approval but need financing to be built. About 10 European import terminals are being built.
Executives complain it can take more time to obtain permits for pipelines and export terminals than to build them.
Export terminals require investments of up to $10 billion, while import terminals cost about $1 billion to build. The United States has seven export terminals, and Europe has 28 large-scale import terminals.
The Russia-Ukraine War and the Global Economy
Rising concerns. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes and spooking investors. The conflict has already caused dizzying spikes in energy prices, and could severely affect various countries and industries.
Environmentalists criticized Mr. Biden’s announcement because they fear it will commit the United States and Europe to using fossil fuels for decades longer than they argue is sustainable given the growing toll of climate change.
“There is no way to ramp up U.S. L.N.G. exports and deliver on the imperative climate commitments that the U.S. and E.U. have pledged,” said Abigail Dillen, the president of Earthjustice, an environmental law organization. She warned that the buildup of L.N.G. infrastructure would “lock in expensive fossil dependence and dangerous pollution for decades to come.”
American and European officials also agreed to seek ways to decrease greenhouse gas emissions from L.N.G. infrastructure and pipelines and to reduce the release of methane from gas operations. They said they would ramp up energy efficiency initiatives, such as the deployment of heat pumps and the use of clean hydrogen technologies to displace fossil fuels, as well as expedite planning and approval of renewable energy projects such as offshore wind and solar power.
The Biden administration has banned Russian energy imports as part of a set of sanctions against Mr. Putin, a relatively easy step for the United States because it is a net exporter of energy. Some U.S. lawmakers would like the European Union to stop buying oil and gas from Russia altogether, but the prospect for that has been dismissed by several E.U. leaders, who see it as a financially disastrous step that would hurt Europe more than Russia.
Some energy experts said a further escalation of the war, such as a decision by Mr. Putin to use chemical, biological or nuclear weapons, could leave the European Union with little choice but to bar the purchase of Russian energy.
“We want as Europeans to diversify away from Russia, toward suppliers that we trust, that are friends and that are reliable,” Ms. von der Leyen of the European Commission said at the announcement with Mr. Biden. “Therefore the U.S. commitment to provide the European Union with an additional at least 15 billion cubic meters of L.N.G. this year is a big step in this direction, because this will replace the L.N.G. supply we currently receive from Russia.”
Still, oil and gas executives said Mr. Biden and Ms. von der Leyen would have to be patient and recognize that decisions on who sold gas to whom would be made across negotiating tables by private companies, not by politicians. Ultimately, exporters will seek to sell their gas to buyers willing to pay the highest price.
“This is a capitalist system,” Mr. Souki, the Tellurian executive, said. “It’s people like me who make those decisions. The government can’t tell us where to send the gas.”
Reporting was contributed by Matina Stevis-Gridneff, Christopher F. Schuetze, Monika Pronczuk and Zolan Kanno-Youngs.
#Environment | https://sciencespies.com/environment/europe-and-the-u-s-make-ambitious-plans-to-reduce-reliance-on-russian-gas/
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