The debate over liquefied natural gas exposes Europe’s dependence on the US

The boom in US LNG imports also has a price: Europe is once again dependent on a foreign energy power for its energy — albeit this time as an ally. Also, liquefied gas is nothing but a clean form of energy.

Both cons have been in the news lately. For example, European energy companies have clashed with key US LNG supplier Venture Global, according to reports. Reuters news agency And Business newspaper Financial Times Last weekend. British Shell and BP, Spain’s Repsol and Italy’s Edison accuse the LNG exporter of not honoring long-term contracts. An LNG company from the US state of Virginia threatens Europe’s energy security.

The companies took their complaints to the EU-US Special Task Force on Energy Security Working Group on Energy Conservation, established shortly after the Russian invasion of Ukraine. According to the energy companies, Venture Global is not using a critical LNG terminal in the state of Louisiana as storage to fulfill long-term contracts, but rather to sell LNG in the lucrative day-ahead market where prices are high. It violates contracts.

In a letter to a task force comprising senior US and EU officials, Shell accused Venture Global of “opportunistic behaviour”. BP said in a separate letter that the US company’s conduct had “damaged confidence in the reliability of US LNG suppliers”. Shell and BP are asking Brussels and Washington to intervene in the conflict.

Venture Global strikes again Published letter to the same task force. European energy companies are said to be engaged in a “concerted campaign” to negotiate better terms in their long-term contracts. The American company calls the EU and US governments this “slander”.

Emissions are increasing

LNG contracts with US suppliers often last fifteen to twenty years. It connects Europe – in the middle of the energy transition – with gas as the current energy source. Also, China is entering into long-term contracts for LNG with other LNG producing countries such as the US and Qatar.

American LNG, produced mostly from shale gas, is a growing source of CO₂emissions, according to a study by Reuters last week. The news agency looked at emissions figures from LNG producers that have been reported to the US government. Emissions from seven US LNG plants have increased 81 percent since 2019.

Five more factories will come on stream in the next five years, which is expected to increase CO emissions from 17.6 to over 45 tonnes.₂ per year. That’s about 2.5 percent of current U.S. energy sector emissions, according to Reuters. Not a very high percentage, but the US has pledged to reduce emissions.

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Is Europe now addicted to US gas?

Although gas is significantly less polluting than coal, it is doubtful that the boom in US LNG exports is good for the climate: widespread availability of gas will slow the transition to sustainable energy. Plans to capture emissions from US LNG projects have now been abandoned, Reuters writes.

The geopolitical goal — to make Europe less dependent on Russia — is at odds with the U.S. government’s climate policy, U.S. climate envoy John Kerry acknowledged last year. Additional emissions from LNG are a “disadvantage,” he told Reuters. Gas can temporarily play a role in the energy transition if emissions are captured, Kerry has previously said. But the latter doesn’t seem to be happening now.