“LNG exports from the United States to the European Union have almost tripled,” said Ursula von der Leyen
Since March, world exports LNG in Geria Epirus increased by 75% last year. Most of these exports come from the United States. In March, Washington agreed to deliver an additional 15 billion cubic meters of LNG to EU markets this year, a target it is likely to exceed.
Until June 2022, the United States has exported approximately 57 billion cubic meters of LNG, of which 39 billion cubic meters are destined for Europe.
“LNG exports from the United States to the European Union have almost tripled,” said European Commission President Ursula von der Leyen.
Until recently, Europeans avoided American LNG, which is more expensive than Russian gas. in August 2021, before the outbreak of the energy crisis, not the war, on the Amsterdam TTF market, the price of natural gas it was 20 euros MW/h. Today we can be satisfied because it is lower than 40 euros, whereas last year it was higher than 300 euros, but the problem remains: In the United States the price of gas is around 6 euros/MWh. Thus, in Europe, natural gas costs about six to seven times more expensive today than in the United States.
When it comes to price developments, however, uncertainty prevails: there are factors that could lead to price increases and others to price decreases. Especially if there is a slowdown in the Chinese economy, the demand for natural gas could be significantly reduced. But building new LNG regasification terminals in Europe could also bring the price down, but that takes time.
Gas from Norway
The European Union and Norway this week signed an agreement providing for privileged cooperation on climate action, clean energy, industrial transformation and environmental protection.
Ursula von der Leyen recalled that in the years to come Norway will maintain its natural gas flows to the EU at a high level, thus strengthening its role as the first supplier, after the outbreak of the war in Ukraine and the reduction of the natural gas from Russia. By comparison, a year ago Norway increased its annual production from 78 to 90 billion cubic meters of natural gas.
Norway is the country among our neighbors that has become rich through war. And the EU could have worked to cap the price of its supplies from Norway, long before it talked about a price cap on Russian gas
Experts also warn that American gas is more polluting. Most American gas comes from shale (fracking), a technique widely banned in the European Union for environmental reasons. US LNG is also more energy intensive than natural gas from Russian pipelines because it needs to be cooled and pressurized before being transported across the Atlantic.
In 2020, indeed, the Macron government asked the French energy company Engie to withdraw from an agreement to import LNG from the United States. The project “was not in line with France’s design and environmental vision,” a French source quoted by Reuters said at the time.
Berlin has been equally reluctant about American gas, even though it currently has little alternative to Russian imports. Fracking remains banned in Germany, despite the country having large reserves of shale gas. “There are enough suppliers, it doesn’t have to be America,” Green Economy Minister and German Vice-Chancellor Robert Habeck said on February 28, 2022, a few days after the invasion of Ukraine by Russia.
“The EU, according to Habeck, could have imported natural gas from other parts of the world rather than fracking gas from the United States.”
However, a few months later, on August 16, Hambeck announced the signing of a memorandum of understanding with German energy companies to maximize the use of the country’s LNG import capacity. Under the agreement, Uniper, RWE and EnBW guaranteed to buy LNG regardless of its price until 2024, to ensure that the 12.5 billion cubic meters per year of German regasification terminals are used at their full capacity.
The effects on the climate
So what is the environmental impact of American LNG compared to the Russian gas pipeline? The answer, unfortunately, is not simple. Natural gas is traditionally considered a more climate-friendly alternative energy source than coal, as it burns around 50% less CO2 to generate electricity. The main problem is leaks that occur before the gas burns. Methane is an extremely potent greenhouse gas, with impacts 27 to 30 times greater than CO2 over 100 years, according to the US Environmental Protection Agency. But measuring the losses, and therefore estimating their impact on the climate, is a difficult task. According to Daniel Zavala, a scientist at the Environmental Defense Fund (EDF), a US-based environmental group, “it is currently not possible to compare US LNG emissions with Russian gas emissions due to a lack of data”. Although there has been “a lot of progress in estimating methane emissions from US production areas”, Russia has not provided “a lot of transparent data based on measurements”. However, in a March analysis, environmental think tank Rocky Mountain Institute (RMI) concluded that Russian gas destined for Germany has a climate footprint two to three times that of US and Qatari gas, with calculations based on the assumption that Russian pipelines have double losses.
Gazprom, the Russian gas giant, says losses are close to zero due to methane being classified as a “toxic substance” in Russia. In 2020, Gazprom’s head of sustainable resources management, Konstantin Romanov, claimed that methane leaks amounted to 0.02% of the volumes of gas produced, 0.29% of the gas transported and 0.03% of the natural gas stored underground. But based on third-party measurements, the researchers estimate a minimum leak rate of 2% for Russia, significantly higher than Gazprom claims.
But U.S. natural gas production is also not leak-free, as evidenced by reports of massive leaks in the Permian Basin (between Texas and New Mexico), estimated at around 9% of gas production. natural.
According to data from the International Energy Agency, in 2021 the United States lost an estimated 6,339,000 tons of methane. By contrast, Russia lost 5,039,000, although the Agency warned that the figures on the subject are based on “low coverage”.
The United States is a bigger producer of natural gas than Russia – with around 965 billion cubic meters in 2021, compared to 762 billion of Russian gas. These losses are therefore distributed over a much larger quantity of extracted gas.