Europe is committed to phase out its dependency on Russian gas in the wake of Russia’s invasion of Ukraine, and has tied this shift to its 2050 climate goals. In achieving both, imports of US LNG have increased by both volume and importance, and have helped to stabilise gas and electricity prices for European consumers. However, current volumes of LNG coming from the US still leave a supply gap, for which we must continue to increase imports, rather than scale them back, as has been put forward by some interests in the US’ governing institutions.
If additional US LNG export capacities don’t materialise it would risk increasing and prolonging the global supply imbalance. This would inevitably prolong the period of price volatility in Europe and could lead to price increases with the consequent implications that would have for economic turmoil and social impact.
In the past two years since the Russian invasion of Ukraine, Europe has worked extremely hard to secure price stability of natural gas – with the important contribution of like-minded countries including the United States. It is essential that the United States stands with Europe, especially at a time of war where we are working together to protect our values, and does not deliberately spark a new period of price volatility in Europe caused by policy driven LNG shortages.
US LNG also offers a way to create jobs and develop economic activity in the US and economic analyses conclude that there is almost no link between the level of US LNG exports and domestic US gas prices.
US LNG is also very much needed in Europe for our energy transition, as it supports long-term supply relationships that underpin the development of infrastructure that will help us to decarbonise the energy sector. This is particularly relevant in places like Germany with easy access to coal, to support the phase out of coal in power production as soon as possible.
We therefore urge the US administration to avoid an unnecessary prohibition or limitation of new LNG exports to Europe, as these contribute to security of supply, the energy transition and the economies of both the US and EU. We need to support each other at this critical time in the Ukraine war.
Read our full statement here for more details: [PDF]