The United States is reconsidering its plans to export natural gas, causing concern for European countries.

The United States is reconsidering its plans to export natural gas, causing concern for European countries.

The European energy sector is feeling anxious about the Biden administration’s reconsideration of natural gas exports from the U.S. due to climate concerns.

The reconsideration of the process for granting gas export permits by the Department of Energy, initially disclosed by POLITICO, could potentially delay projects that are crucial for Europe’s energy needs as it endeavors to address the conflict in Ukraine caused by Russia. This is a prime example of how American policy objectives, such as decreasing dependence on fossil fuels that contribute to carbon pollution, can cause difficulties for European leaders and impede the shared security objectives of transatlantic allies.

Environmental activists who support President Joe Biden are celebrating the possibility of increased oversight on the impact of gas exports on climate change. However, this is creating discord among European business leaders due to the ongoing conflict in Ukraine.

According to the EuroGas trade association, the European Union has significantly reduced its consumption of Russian gas from 155 billion cubic meters in 2021 to less than a third. This was accomplished by increasing their import of U.S. liquefied natural gas, which reached 60 billion cubic meters in 2023.

Didier Holleaux, president of EuroGas, stated that the introduction of LNG has provided relief to Europe and helped stabilize gas and electricity prices for consumers. This comes after a prolonged period of record-breaking prices due to a decrease in Russian supply.

According to Holleaux, not having enough capacity to export gas from the United States could result in a longer and more severe global supply imbalance.

A high-ranking official from the EU stated that the leaders of the bloc will not engage in conjecture about potential decreases in production or supply from the U.S. This is because Washington has not communicated any plans to do so. The individual requested anonymity to speak about this sensitive political and diplomatic matter.

Ali Zaidi, the national climate advisor for Biden, has chosen not to disclose the specifics of the assessment process and whether it will lead to a decrease in permits from the Energy Department.

“The Department is responsible for making public interest determinations, which are based on a specific set of factors. It is necessary for the department to assess how these factors should be applied and what influences their decisions,” stated Zaidi during a press conference at the Washington, D.C. Auto Show on Thursday. “This falls within their jurisdiction.”

The Energy Department did not reply to a comment request.

Both the United States and the European Union made a commitment at the recent climate summit in Dubai to start shifting away from fossil fuels. However, this has not changed the fact that the United States remains the top oil producer in the world and the largest exporter of natural gas, and it has not decreased Europe’s demand for American fuel.

According to Tom Marzec-Manser, the head of gas analytics at ICIS, the EU has not established a timeline for eliminating gas despite its goal of achieving climate neutrality by 2050. He predicts that the EU will still rely on American gas exports for several more years.

“How has Europe managed to cope with the decrease in pipeline flows from Russia over the past two years?” Marzec-Manser inquired. “One factor is a decrease in demand. However, the demand has been offset by an increase in LNG, with a large portion coming from the U.S. This is how the equilibrium has been maintained.”

He mentioned that the United States provides nearly 20% of the gas to the European Union and the United Kingdom, which is a significant increase from the 5% in 2021. He stated that this is a significant growth trend.

According to Synmax’s head of market intelligence, Leslie Palti-Guzman, a delay in approving new U.S. export permits will not result in Europe experiencing blackouts. The U.S. Energy Information Administration predicts that the amount of liquefied natural gas from the U.S. Gulf Coast will double by 2026, thanks to five ongoing projects.

However, if there is a notable decrease in activity from the U.S., European corporations may be compelled to enter into agreements with Qatar. This is due to Qatar’s own plans for a substantial increase in the production of LNG through its state-owned company, according to Palti-Guzman.

Palti-Guzman stated that this will lead European and Asian buyers to rely on Qatar for future supplies. This creates uncertainty about future supplies and their sources, as well as the shipping routes.

The European Union is currently the top consumer of LNG globally. In order to increase its ability to import this fuel, the EU has allocated billions of dollars towards constructing new port terminals. Despite opposition from environmental organizations, the EU has continued to invest in this infrastructure as a way to reduce reliance on Russian pipeline gas. This expansion will result in an import capacity of over 400 billion cubic meters by 2030, a 25% increase from before Russia’s invasion of Ukraine.

Last year, a review of the change in supply by specialists from Rice University’s Baker Institute for Public Policy cautioned European capitals about the potential for repeating the past mistake of relying too heavily on one supplier, as they had with Moscow. The study revealed that purchasers were avoiding committing to long-term agreements with American suppliers, making them vulnerable to future interruptions or market constraints.

Not everyone in Europe is looking to maintain the status quo. Kathrin Henneberger, a member of Germany’s Greens party, wrote to U.S. regulators asking them to reject a massive LNG plant that Venture Global has proposed for Louisiana.

Henneberger stated that the growth of additional fossil fuel infrastructure, specifically LNG infrastructure for fracking gas, directly contradicts the agreement made at the previous UN climate conference.

This report was contributed by James Bikales.