The U.S. will ship more liquefied natural gas to Europe starting next winter
Europe is looking to wean itself off of Russian natural gas, and President Biden wants to help by shipping more liquefied natural gas across the ocean. About 40% of the natural gas that Europe imports comes from Russia. And under a deal announced last Friday, the U.S. would start boosting supplies to Europe by next winter. For more, we’re joined by Jeff Colgan, the Richard Holbrooke associate professor of political science at Brown University and director of the Climate Solutions Lab there. Jeff, welcome to the show.
JEFF HOLGAN: Thanks so much for having me on.
MARTINEZ: All right. So the U.S. will be shipping liquefied natural gas to Europe. President Biden described the agreement as groundbreaking. Is it groundbreaking?
HOLGAN: Well, it’s nice to have, but the amount that we’re talking about for this coming year is only about 10% of the amount that Europe normally imports from Russia on a given year.
MARTINEZ: OK. Then the target is actually 50 billion cubic meters of liquefied natural gas per year from the U.S. and others. How realistic is that goal?
HOLGAN: Well, already, American industry has started to note that this is something you can’t just do overnight. You can’t just turn on the taps. And there are real supply constraints for increasing the amount of natural gas that the United States can export. Typically, the LNG terminals that export the natural gas run at close to full capacity, and increasing it beyond that is not so easy to do.
MARTINEZ: If Europe were able to completely replace its supply of Russian gas with gas from other sources, how much more effective could that be than the sanctions that have been imposed?
HOLGAN: Well, there is a real sense in which Europe is paying for both sides of the war in Ukraine. And that’s because they have a remarkable fossil fuel dependence, not just on natural gas but on oil. They are importing huge amounts from Russia and paying millions and millions of dollars every day for that oil and gas. The oil in particular is really profitable for Russia, and they only need a break even price of about $42 a barrel to pump oil. And so right now, with oil prices above $100 a barrel, Russia is making enormous amounts of money, even if they face sanctions, even if they have to sell that oil or the natural gas at a discount to what they would normally do.
MARTINEZ: So even if they had nowhere else to sell it to, the effects of that, we wouldn’t even know about that for a while.
HOLGAN: That’s right. And so getting Europe off of natural gas and on to a cleaner energy source is really important, not only for, you know, helping restrict Putin’s regime but also, of course, for climate change.
MARTINEZ: Now, Europe has been working on alternatives, including renewable energy. What are some of the options on the table right now?
HOLGAN: Well, they’re trying to ramp up electricity sources from everything except natural gas to reduce that dependence. And, of course, the best option is to increase solar and wind, and that’s going to take some time. But they will change their regulatory environment right now to try to increase the speed at which they transition to renewables. And in the short term, they’re also going to increase coal and nuclear by delaying the decommissioning of nuclear plants.
MARTINEZ: I know that liquefied natural gas plants in the U.S. are producing at full capacity right now. But given the current production and export capacity, how clear is it to you that the U.S. will be able to manage doing these shipments to Europe at some point?
HOLGAN: Well, in the long run, the U.S. industry loves this news and loves, in particular, the idea that the increase in natural gas exports might rise to 50 billion cubic meters over the next few years. But in the short term, there are real constraints on how much they can do this because, as I said, they’re already running close to full capacity.
MARTINEZ: And of course, all of this takes a long time – we mentioned that – and costs a lot of money. So how much will this impact Europe in the long term, you think?
HOLGAN: In the – the immediate concern right now for Europe is the possibility that Russia will turn off the taps for next winter, right? That’s the point at which Europe needs the natural gas most pressingly. And they could end up in a situation where they have to choose whether to run their industry or to heat people’s homes. And that, of course, is politically a real disaster. You don’t want people freezing in their homes in the winter.
MARTINEZ: That’s Jeff Colgan, director of the Brown University Climate Solutions Lab. Jeff, thanks.
HOLGAN: Thanks so much. Transcript provided by NPR, Copyright NPR.