U.S. LNG Exports are Meeting the Moment in Europe

Mark Green
Posted June 13, 2022

Europe has become the largest destination for American liquefied natural gas (LNG) exports – by a lot, reports the U.S. Energy Information Administration.

During the year’s first four months, the U.S. exported 74% of its LNG to Europe, compared with an annual average of 34% last year. The chart below shows the significant uptick in LNG exports to Europe (blue bars):

Energy exports are a key piece of American energy leadership. Russia’s aggression against Ukraine brought into sharp focus Europe’s significant energy needs – and into even sharper focus Europe’s risky dependence on Russian natural gas. Europe already was in energy difficulty when Putin’s armored columns rolled across the Ukrainian border, and the threat that Russia could cut off natural gas flows to Western Europe and cripple those countries figured into the response to its aggression.

American natural gas suppliers quickly stepped up into a gulf of uncertainty, with cargoes from the U.S. increasingly transiting the Atlantic to Europe. This coincided with President Biden’s announcement that the U.S. and European Union would work together on energy security – in which U.S. LNG could play a critical role.

Looking at the big picture, America is uniquely positioned – as the leading natural gas and oil producer in the world – to meet domestic supply needs and help allies around the world. Both depend on U.S. policy support for increasing American natural gas production, as well as the infrastructure to export some of that natural gas to Europe as LNG. We can and should continue to do both. API has specified three things Washington can do:

• Hold oil and natural gas lease sales on federal lands and waters – and complete a five-year offshore leasing plan to replace the one that is scheduled to expire July 1, just about three weeks from now.
• Approve pending applications for LNG export projects.
• Permit energy infrastructure so that natural gas and oil can move from areas of supply to areas of demand around the country.

Progress on LNG export facilities has been made recently, with Venture Global announcing last month a final investment decision to build its proposed Plaquemines LNG project in Louisiana, the company’s second LNG export facility. The $13.2 billion initial phase of the project is for 13.33 million tons per annum or about 1.75 billion cubic feet per day. It’s the first U.S. LNG export facility to reach financial close since Venture Global’s Calcasieu Pass facility in August 2019. Mike Sabel, Venture Global CEO:

“Plaquemines will build on the success of Calcasieu Pass, which broke global records for speed and execution. The project has attracted robust financial and commercial support, which has enabled us to formally sanction this project at a critical moment for energy markets. Speed matters more than ever, and Venture Global is uniquely positioned to quickly bring U.S. LNG to the market to support global energy security and environmental progress.”

Increased U.S. production is the foundation of American energy leadership, here at home and around the globe. Energy demand is projected to keep rising and so must American supply – for our own energy security, protecting American families and businesses and allies from supply disruptions.

Policy support for American natural gas and oil is pivotal to the investment needed for production and infrastructure. Washington has sent mixed signals, creating uncertainty. From a letter sent by more than 80 trade groups, including API, to the Biden administration last week, urging it to act on policies that support U.S. energy security and increase domestic production:

“We are at a critical time where a lack of federal action and regulatory uncertainty may discourage companies from making the multi-billion-dollar investments needed to develop offshore resources in the U.S. and ensure the long-term viability of a lower-carbon national strategic asset. If the door closes to new U.S. production, investment dollars will instead flow abroad to more active basins to the detriment of American workers, energy consumers, and the environment.”

Clear, pro-American oil and gas signals from policymakers are needed now more than ever with Russia’s invasion of Ukraine and our own energy needs here at home.