MOSCOW, February 3, Natalya Dembinskaya. Having lost Russian pipeline gas, the EU turned to liquefied gas. The United States has become one of the key importers—more than 60 percent of American LNG exports go to Europe. Washington has repeatedly emphasized the stability of supplies: they will ship as much as needed. However, this week the White House suspended approvals for the contracts. The Europeans are discouraged: in particular, in Germany the Americans were called “unreliable” partners. How the pre-election surprise from Joe Biden will turn out — in the material .
New ones are banned
An exception will be made only in case of unforeseen situations in the field of national security, the White House clarifies.
“We will carefully study the impact of LNG exports on energy costs, US energy security and the environment,” Biden said.
Energy Secretary Jennifer Granholm stressed that already approved export projects or supplies to allies, including Europe, will not be affected.
Biden's decision is a victory for climate groups who have demanded a halt to the construction of LNG facilities on the Gulf Coast, writes The Wall Street Journal.
According to analysts, the president has taken a fairly broad step towards environmentalists and the climate agenda in general.
“The downside of LNG exports is the need for multi-billion dollar investments in terminals for cooling and transporting gas and, even more importantly, the disruption of incentives for the transition to renewable energy sources, not to mention the environmentally unsafe technologies of hydraulic fracturing,” explains Pavel Sevostyanov, associate professor of political science analysis and socio-psychological processes of the Plekhanov Russian University of Economics.
«Climate hysteria»
Observers point out: the decision is pre-election in nature, it is rather diplomatic. However, Europe is nervous.
The share of Russian pipeline gas in total energy imports to the EU fell sharply (from 41 percent in 2021 to about eight in 2023), the share of LNG, on the contrary, jumped from 20 to 42 percent. Last year, Washington provided almost half of the supplies (46 percent, according to the European Commission). According to this indicator, the United States came second after Norway (49 percent).
Biden's decision on new contracts shows the unreliability of the United States as a supplier of energy resources to Germany, said Steffen Cotre, a member of the climate protection and energy committee of the German parliament from the Alternative for Germany (AfD) party.
“
"The current president puts eco-socialist ideology of climate hysteria over international trade relations,” he said. This is significantly different from the time-tested German-Russian deals, which were stable even during the Cold War, the parliamentarian emphasized.
Although the existing contracts will be fulfilled, the situation is not on the side of the Europeans. Qatar, the main importer of LNG for Belgium, France, the Netherlands, and Spain, is delaying deliveries, citing instability in the Red Sea. This is a threat to the EU's energy security, notes Pavel Maryshev, development director of the engineering company Energia Plus.
The reorientation to LNG was already costly for Europe — fuel prices soared to record levels.
“Given the galloping growth in demand for LNG predicted in China and the Asia-Pacific region, and the lagging supply, American political intentions can increase the average price in the medium term by five to seven percent,” Maryshev believes.
«This is revenge»
The White House's decision does not bode well for local businesses: the ban will wrest huge sums from the income of American companies, and plans to implement multi-billion dollar programs are in question. The review will affect a dozen projects that have submitted applications but have not yet received approval. Among them is CP2, a huge LNG plant in Louisiana with a capacity of 20 million tons per year with a peak production of 24 million tons, planned by Venture Global.
“
Republican Majority Leader of the House of Representatives Steve Scalise believes Biden «yielded to the pressure of radical extremists.» This, in his words, is “an outrageous attack on American energy.”
“Not only is economic growth, jobs and energy security at risk, but also the supply of energy to our allies in Europe when they need it most,” he says.
Chairman of the Texas Railroad Commission, which serves as oil regulator, Christie Craddick, said Biden was “getting back at Texas for its unilateral handling of the immigration crisis.”
“
“We must take these actions for what they are: a deliberate undermining of US strength and national security, and direct retaliation against Texas for holding the line on our southern border,” he fumes.
US Business, EU and Japan called on Biden to resume issuing export licenses.
According to a joint letter from the US Chamber of Commerce, EU and Japanese business associations BusinessEurope and Keidanren, demand for LNG can be met without harming progress in reducing harmful emissions.
«Dirty export»
As Bloomberg writes, Europe risks becoming economically dependent on LNG from the USA.
«The EU's decision to replace Russian gas with US LNG rather than a more aggressive transition to renewables means energy security remains dependent on factors far beyond its control, such as the Atlantic hurricane season or political gamesmanship in Washington,» indicates the publication.
Actually, this dependence has long been recognized by the European Commission (EC). In particular, EC Energy Director General Ditte Juhl Jorgensen told the Financial Times about this.
The USA is angry. According to US House Speaker Mike Johnson, Biden's decision “strengthens Russia” and forces Europe to rely on its “dirty exports.”
Experts also point out that Biden is devaluing large-scale foreign policy efforts, including sanctions blockade of the Russian «Arctic LNG 2».
«
“In general, even an attempt to limit the presence of North American companies in the global LNG market is a chance for Russian companies, primarily Novatek.” In November, the EU purchased almost three million tons of LNG from Russia. The Europeans have taken a dualistic approach to sanctions: they ban pipeline gas, but they buy liquefied gas,” Maryshev notes.
Therefore, the EU may well turn to Moscow for additional supplies. Of course, there will be no talk of any discounts.
«The ongoing LNG projects are strengthening Russia's position in this market, but Moscow will not discount or in any way stimulate the loyalty of «former partners», everything will be decided on a competitive basis» , emphasizes Alexander Arsky, Associate Professor of the Department of Logistics at the Financial University under the Government of Russia.
According to the Center for German Studies at the Institute of Europe of the Russian Academy of Sciences, in 2022, Russian LNG exports to Europe reached a historical maximum of 16.7 billion cubic meters. In 2021 it was 12.3. Last year the EU imported €6.1 billion worth of fuel from Russia, taking more than half of our total LNG exports.