According to sources, the U.S.’s push to export LNG during Ukraine crisis has been slowed by climate worries

A tanker of liquefied natural gases (LNG), is being towed towards a Futtsu thermal power station, east Tokyo, Japan, November 13, 2017. REUTERS/Issei Kato

WASHINGTON (Reuters) – The White House’s efforts to increase U.S. liquefied gas exports and reduce Europe’s dependence on Russian gas following the invasion of Ukraine are slowing down, industry and government sources said.

The Ukraine crisis has shown Europe’s dependence upon Russia for energy. Russia supplies around 40% of Europe’s natural gas needed to heat their homes and generate electricity. The Biden administration has promised to help its ally break that chain.

People familiar with government decision-making said that the White House was considering Tuesday’s decision to ban U.S. exports of Russian oil products and Tuesday’s announcement of an interagency assessment of ways to boost LNG imports to Europe.

However, the interagency report has been rescheduled, at least for the moment, after some White House officials argued that it would undermine the administration’s efforts in reducing U.S. fossil fuel consumption and production, and tackling climate change. Sources said.

Natural gas produces lower carbon emissions than either oil or coal. However, methane is released from natural gas as a result of its extraction and transportation via pipelines. This is the second most important cause of climate change, after carbon dioxide. The U.S. LNG Industry has long claimed that their fuel has a lower impact on climate than Russian gas. However, there isn’t much data to support this claim.

The White House did no respond to questions about the change in plans. The U.S. State Department, and the U.S. Department of Energy sent questions to the White House.

The European Commission published Tuesday plans to reduce EU dependence on Russian gas by two thirds this year and eliminate its reliance on Russian fuel supplies “well before 2030.” Read more

Sources said that some Biden officials believed that a more detailed U.S. commitment would encourage European allies to join the ban on Russian oil imports.

One source said that it was an easy decision to send a market signal. They could have combined it to push for more exports heat pumps, renewables, and other advanced nuclear to reduce natural gas demand. According to the source, the effort was stopped due to “concerns by the climate team” within the Biden administration.

TWENTY YEAR CONTRACTS

The Biden administration has faced a difficult task in trying to balance climate change and other concerns like keeping energy prices and inflation low, and supporting union jobs. The issue has been brought to a head by Russia’s invasion of Ukraine on February 24th. Moscow describes the operation as a “special military action.”

Several sources claim that officials from the White House and the Energy Department have been discussing whether the Federal Energy Regulatory Commission could expedite the approval of new pipelines or approve requests to increase the capacity at existing export terminals in order to transport natural gas to Europe.

The sources claimed that they also discussed whether the United States or the European Union could guarantee certain parts of 20-year supply agreements necessary to finance new terminals and ports. They also discussed ways to get banks to finance new projects amid U.S. climate envoy John Kerry’s efforts to convince them to avoid fossil fuel investments.

One source stated that “Perhaps there could be some waiver of some other mechanism to assist banks finance (LNG infrastructure projects”),” another said.

The State Department stated previously that financial institutions make their decisions and Kerry has not pressured them into making commitments. Read more
According to the latest government estimates the United States has enough natural energy to produce at the 2020 rate for nearly 100 more years. However, the lack of pipelines and export terminals limits the country’s ability to tap its abundant supply. This is in addition to the time and effort required to build this infrastructure.

The United States will soon have the largest LNG export capacity in the world, with seven terminals capable of shipping 11.5 billion cubic feet per hour by the end. Read more

Exports can be complicated. LNG must be transported underground to an export terminal and super-cooled before being loaded onto a ship. Once it reaches its destination it is warmed up and put into pipelines.

According to data intelligence company ICIS, the record number of U.S. cargoes that were shipped to Europe or Turkey in the first two-months of 2022 was 164. The previous record was set by 125 cargoes in 2020’s first quarter. Read more

Reporting by Jarrett Renshaw & Timothy Gardner; Editing By Heather Timmons, David Gregorio & Paul Simao

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