Events in Europe Underscore Need to Support U.S. LNG Exports

Mark Green
Posted January 28, 2022

In the unfolding Russia-Ukraine standoff American liquefied natural gas (LNG) exports could be critically important to the economic and general security of allies in Europe. We encourage the Biden administration to look first to American natural gas and oil producers for energy leadership and to be proactive in its support of U.S. LNG exports:

• Clearly and openly communicate the importance of American LNG exports while categorically rejecting calls to halt or reduce them – now and in the future.
• Guarantee a clear and consistent permitting process for proposed export facilities.
• Further increase LNG exports by approving applications to increase export volumes from existing facilities.

As for the Russia-Ukraine crisis, the good news is U.S. LNG exports currently are running at about 13 billion cubic feet per day – approximately 100 LNG cargoes per month, with about 70% of those bound for Europe, according to the Wall Street Journal. This kind of LNG traffic is illustrated in a cargo vessel tracker from Bloomberg last month, which showed LNG ships leaving Gulf Coast export facilities and heading across the Atlantic:

Dustin Meyer, API vice president for Natural Gas Markets, says U.S. LNG exports are nearing a new peak just as European LNG imports hit a new record. Meyer:

“During this acute period of demand squeeze, the U.S. is not only exporting at record levels but has actually ramped up additional LNG capacity – responding to meet our allies’ demand when they need it the most.” 

So, we return to the point that what the administration says (or does) to support U.S. natural gas production and exports has never been more important. Europe’s energy crisis and the Russia-Ukraine conflict underscore the need for American energy leadership. Toby Rice, president and CEO of EQT, one of the country’s leading natural gas producers, in an interview with CNN:

“[T]he United States and United States LNG industry, powered by American shale, is a solution that could prevent this type of crisis that we're seeing over there in Europe from happening. Everything that we're seeing over there really started by being born out of an energy crisis. … Putin has the power, where over 40% of the energy supply to Europe comes from Russia. And this is what happens when nations give up their energy security, and it's really unfortunate and it's a terrible thing to happen. It's even more disheartening to know that this could have been completely prevented had the United States natural gas industry been able to do more, to provide more U.S. LNG to our allies in Europe.”

America is the world’s No. 1 producer of natural gas and its No. 3 LNG exporter – and projected to be No. 1 in export capacity by year’s end. U.S. LNG is critical to meeting short-term and long-term energy demand around the world – for security, alleviating energy poverty and reducing emissions. And America has the natural gas to serve these purposes as well as domestic needs. As Meyer noted recently, only about 10% of U.S. natural gas is exported as LNG, and studies have shown that the rise of LNG exports has had negligible effect on natural gas prices in the U.S.

Each of these points underscore the need for the administration to get onboard with the concept of American energy leadership around the world.