U.S. LNG Outpaces Russia for First Time Ever as EU Opens Another Door for Natural Gas
Posted July 8, 2022
Major developments are underway in the world of natural gas, especially for U.S. liquefied natural gas (LNG).
The first comes from the International Energy Agency, which reports that for the month of June – for the first time in history – the U.S. supplied more natural gas to Europe than Russia sends by pipelines.
This is a remarkable achievement that would have been unthinkable even a few years ago and is indicative of the U.S. emerging as a leader in LNG just when the world needs it the most.
It’s also exactly what API President and CEO Mike Sommers had in mind when he wrote in March, at the beginning of Russia’s unjust invasion of Ukraine, that “America has Europe’s back.” (In 2021, Russia supplied the European Union with 45 percent of its natural gas imports and close to 40 percent of its total gas consumption.)
It’s also consistent with the European Union’s agreement to receive an additional 15 billion cubic meters of U.S. LNG this year as Western officials work to displace Russian gas and alienate Vladimir Putin.
Close readers of the API Blog may remember that API and our member companies were proud to help lay the groundwork for America overtaking Russia in supplying much-needed natural gas to Europe. (API is also involved with setting industry standards for safely transporting LNG around the world.)
In February, with Russian troops at the border of Ukraine, API convened a roundtable with European Commissioner for Energy Kadri Simson at her request to discuss the role of American LNG in bolstering the EU’s long-term energy security.
More from Sommers at the time:
“It was an honor to host Commissioner Simson for an informative and constructive dialogue on the critical role U.S. LNG can play in ensuring our European allies have access to a stable supply of reliable and affordable energy. Our industry is prepared to help the EU meet its energy needs amidst rising geopolitical tensions while furthering our shared energy security and decarbonization goals.”
Going forward, the U.S. is positioned to be an even larger supplier of gas to European and global markets. Recognizing the pace of demand growth, buyers from around the world are signing new long-term contracts for additional U.S. LNG and two new export projects (one in Louisiana, one in Texas) recently started construction. European buyers need U.S. LNG to replace Russian gas; other global buyers see it as a path to reduce their dependence on coal.
Either way, these investments create thousands of jobs in the U.S. while spurring economic growth – meaning America benefits just as much as our allies.
The critical role of natural gas is becoming ever more apparent. In another major development, the European Parliament on Wednesday voted in favor of including natural gas, in some circumstances, under its definition of “sustainable” sources of energy. As CNN reports, the new rules “could unlock billions of dollars of private investment … for natural gas and nuclear projects.”
Given an expected global population jump from 8 billion to 10 billion between now and 2050, the world will need all the energy it can get – from oil to natural gas to renewables. The conditions are there for natural gas to continue to replace coal while complementing rapidly rising generation from wind and solar – which we know from our own experience here in the U.S. is a winning recipe for significant CO2 emissions reductions.
These environmental benefits go hand-in-hand with energy security, which is front of mind for many right now, especially in Europe. The U.S. is meeting that challenge head on by supplying more natural gas than ever to our allies across the Atlantic and bolstering the global response to Russia’s cruel war in Ukraine.
About The Author
Dustin Meyer is Senior Vice President of Policy, Economics and Regulatory Affairs, leading API’s public policy departments and overseeing the organization’s economics, research, and regulatory functions.
He previously served as API’s Vice President of Natural Gas Markets, dealing with issues related to domestic and global natural gas markets, as well as natural gas technology and innovation including renewable natural gas, differentiated/responsibly sourced natural gas, hydrogen and the use of CCUS in the power sector.
Prior to joining API, Meyer led analytics, forecasting and consulting services on global LNG and renewable energy markets for Energy Ventures Analysis. He also held analysis positions at PFC Energy and then IHS Energy on upstream investment in North American oil and natural gas, including liquefaction projects in the U.S. and Canada. Meyer also worked at ICF International on the transportation policy team and for various NGOs.
He earned his undergraduate degree at Princeton University and received his Master’s focused on Energy Policy & Economics from Yale University.