BRUSSELS, BELGIUM–Citing Russia’s attack on Ukraine, President Joe Biden and European Commission President Ursula von der Leyen are touting a joint task force to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security. The task force was announced on March 25 during Biden’s trip to Europe.

The move, analysts suggest, offers hope for more U.S. liquefied natural gas exports and possibly fewer obstacles from the Biden administration to American gas production and transportation. Industry advocates, such as Mike Sommers, president and chief executive officer of the American Petroleum Institute, express encouragement.

“We welcome the president’s focus on expanding U.S. LNG exports to our European allies during this crisis, and we applaud the administration’s continued leadership in ensuring a unified international response to maximize pressure on Russia through additional sanctions,” Sommers says. “Over the past few months, American producers have significantly expanded LNG shipments to our allies, establishing Europe as the top U.S. LNG export destination. With effective policies on both sides of the Atlantic, we could do even more to support Europe’s long-term energy security and reduce its reliance on Russian energy.”

U.S. Gas To Europe

The White House says the task force will work to ensure energy security for Ukraine and the EU in preparation for next winter and beyond, while supporting the EU’s goal to stop using Russian fossil fuels. The task force is to organize its efforts around two primary goals: diversifying liquefied natural gas supplies in alignment with climate objectives and reducing natural gas demand.

On the matter of diversifying LNG supplies, the White House mentions four initiatives:

• The United States will work with international partners and strive to ensure additional LNG volumes for the EU market of at least 15 billion cubic meters in 2022, with expected increases going forward.
• The United States and the European Commission will work to reduce the greenhouse gas intensity of all new LNG infrastructure and associated pipelines, including using clean energy to power on-site operations, reducing methane leakage, and building clean and renewable hydrogen-ready infrastructure.
• The European Commission will prepare an upgraded, energy security-oriented regulatory framework for energy supply and storage, and work with EU member states to accelerate regulatory procedures to review and determine approvals for LNG import infrastructure. The United States will maintain its regulatory environment with an emphasis on supporting this emergency energy security objective and the REPowerEU goals the commission outlined on March 8 to phase out Russian fossil fuel imports.
• The European Commission will work with EU Member States toward the goal of ensuring–until at least 2030–demand for approximately 50 billion cubic meters a year of additional U.S. LNG that is consistent with the signatories’ shared net-zero goals. These arrangements will be done on the understanding that prices should reflect long-term market fundamentals and supply and demand stability.

American Exploration & Production Council CEO Anne Bradbury indicates expanding U.S. LNG exports to the country’s European allies is vital to both that continent’s long-term energy security and America’s continued energy and climate leadership. Moreover, she expresses hope that such U.S.-EU cooperation will prompt the Biden administration to adopt a more cooperative attitude toward the companies that produce, transport and export U.S. natural gas.

“We welcome the administration’s support for U.S. LNG and encourage agencies and regulatory bodies to follow through with policies that support the additional U.S. LNG exports the administration has committed to through this agreement,” Bradbury affirms.

Fossil fuel opponents, meanwhile, have panned the accord. The week before, a coalition of green activist groups penned a letter to Biden and key cabinet members in which they urged the president to halt gas exports, stop new LNG projects and expansions, accelerate renewables and energy storage, and increase federal funding for the Low-Income Home Energy Assistance Program and Weather Assistance Program.

“The time is now to stop the build-out of new and expanded LNG infrastructure and export terminals to curb rising domestic energy prices, stave off the most severe climate impacts, and to begin to address the injustices the fossil fuel industry has inflicted on low-income communities and communities of color,” the letter asserts.

After the U.S.-EU task force was announced, Earthjustice President Abigail Dillen said ramping up U.S. LNG exports contradicted U.S.-EU climate commitments. “It will take years and cost billions to build out new LNG infrastructure that will lock in expensive fossil dependence and dangerous pollution for decades to come,” she claimed. “Investing in new LNG is not a near-term fix for getting off Russian gas in Europe. It is a diversion of time and resources away from the urgent project of scaling clean energy in the last years we have left to triage in a climate emergency.”

However, press accounts note that some green advocates, such as Progressive Policy Institute strategic adviser and former Clinton administration climate official Paul Bledsoe, suggest that sending more U.S. LNG to Europe is preferrable to seeing the EU turn to coal or rely on Russian gas producers that emit more methane. “They have no regulations, no enforcement, no monitoring,” he is quoted. “If we don’t increase exports, they’ll use more coal.”

Investment And Permitting

Despite the agreement’s specific goals for LNG volumes, experts note that U.S. liquefaction terminals–as well as those in other countries–already are operating at full throttle, as are European regasification terminals. In one example, press accounts quote Louisiana Oil & Gas Association President Mike Moncla saying the state’s LNG export facilities are at “100% maximum capacity.”

Senior Biden administration officials speaking on background acknowledge capacity constraints, but note that U.S. LNG exports to Europe have nearly doubled since the beginning of 2022 and indicate the country is engaging in a lot of diplomacy to reassign cargoes originally earmarked for other destinations. “We also arranged, over the course of the winter months, a number of swaps from our partners all over the world, particularly in Asia, to supply more LNG during (Europe’s) winter, particularly given its low inventory and storage levels this year,” the official says.

Beyond the 15 bcm commitment for 2022, the official indicates the European Union is committing to 50 bcm of stable demand for U.S. LNG as part of its goal to eliminate the 155 bcm worth of Russian gas the EU consumed in 2021. “That will involve a lot of commitments by Europe to build the LNG import infrastructure, the distributional needs, the storage needs,” the official observes, adding that much of that infrastructure may be built in a way to allow it to be retrofitted for hydrogen uses.

“These are not going to be stranded assets,” the administration official assures.

As for new U.S. LNG export infrastructure, administration officials point to facilities that already have been permitted or are under construction. Nevertheless, some analysts express skepticism that the deal is enough to prompt sufficient final investment decisions to build export capacity. Among them are Center for Strategic and International Studies gas market analyst Nikos Tsafos, who in published reports questions whether the 2030 time horizon is adequate. “That’s not a signal for new investment,” he is quoted.

Congressman Garret Graves, R-La., notes he and his congressional allies have urged the Biden administration to allow U.S. energy to displace Europe’s Russian imports. He describes the deal as another step in the right direction on the heels of DOE’s recent LNG permit approvals (see article, page 23). Nevertheless, he indicates, federal regulators can do a lot more to clear the way for more export facilities.

“Until they clear the backlogged export terminal permits and allow new LNG facility construction, our ability to replace dirtier Russian gas is constrained,” Graves warns. “It’s good to see that the pressure put on the Biden administration is working, but the only real, long-term solution moving forward is to permit new LNG terminal construction and utilize domestic energy production so we can provide our allies with reliable and secure energy.”

Gas Demand

As for the agreement’s effort to shrink EU gas demand, Biden and his EU counterpart say the task force will seek to accelerate market deployment of clean energy measures.

It also invokes energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deploying heat pumps.

“As global leaders in renewable energy, the United States and the European Commission will work to expedite planning and approval for renewable energy projects and strategic energy cooperation, including on technologies where we both excel, such as offshore wind,” a White House fact sheet says.

It also mentions plans to collaborate to advance the production and use of “clean and renewable hydrogen to displace unabated fossil fuels and cut GHG emissions, which will include both technology and supporting infrastructure.”