Why the U.S. Can’t Quickly Wean Europe From Russian Gas

A handful of export terminals are under construction in the United States and could increase exports by roughly a third by 2026. Roughly a dozen U.S. export terminal projects have been approved by the Federal Energy Regulatory Commission but can’t go ahead until they secure financing from investors and lenders.

“That’s the bottleneck,” Mr. Tsafos said.

Roughly 10 European import terminals are being built or are in the planning stages in Italy, Belgium, Poland, Germany, Cyprus and Greece, but most still don’t have their financing lined up.

Russia provides about 40 percent of Europe’s gas, and its biggest customers tend to be in Eastern and Central Europe. Some countries have built up L.N.G. import capacity, but much of it is in Southern Europe, which is not well connected by pipeline to the countries in the north and the east.

A month into the war in Ukraine, Russian gas shipments to Europe have remained relatively stable, but that could change. Mr. Putin suggested on Wednesday that countries hostile to Russia should be required to pay for its energy in rubles rather than euros or dollars. That would force European companies to deal with Russian banks that have been sanctioned by Western governments.

There are some signs that European businesses and individuals might reduce their use of natural gas in part because it has become so expensive. For example, Yara International, a major fertilizer manufacturer in Italy and France, has said that it would reduce production because of high costs of raw materials like natural gas.

While reducing demand would help, some climate scientists and activists are worried that the Biden administration’s and European Union’s focus on building L.N.G. terminals could deal a grievous blow to the effort to address global warming by encouraging the use of fossil fuels.

“There is a risk of locking in 20 or even 30 years of emissions from export infrastructure at a time when you really need to be reducing your overall emissions,” said Clark Williams-Derry, a senior fellow at the Institute for Energy Economics and Financial Analysis, a research organization.

Article source: https://www.nytimes.com/2022/03/25/business/energy-environment/biden-europe-lng-natural-gas.html