American LNG is the Best Option to Meet Europe's Critical Natural Gas Need
Mark Green
Posted September 28, 2022
A new study helps quantify Europe’s current energy situation and, importantly, how American liquefied natural gas (LNG) is key to helping allies across the Atlantic – right now and for years to come.
The study by Rystad Energy, “Rebalancing Europe’s Gas Supply: Opportunities in a New Era,” has three big takeaways:
- Without Russian pipeline natural gas supplies, European demand for LNG is projected to increase 150% through 2040. While overall natural gas demand is expected to decline, it will do so more slowly than domestic production and non-Russian pipeline imports can increase.
- LNG is projected to meet approximately 50% of Europe's natural gas demand by 2030. LNG’s share is projected to reach about 75% of European demand by 2040.
- Given this shifted focus to LNG, the U.S. is the most feasible, reliable and competitive source to meet that demand.
API’s Dustin Meyer, vice president of Natural Gas Markets:
“The U.S. is already the world's largest LNG exporter, and U.S. LNG is currently flowing to Europe at record levels. But this study makes clear that significantly more will be required to fully rebalance European gas markets.”
Meyer emphasized that because of America’s vast natural gas supplies, the U.S. is well-positioned to meet the moment for allies in Europe – but that policymakers in Washington and Europe need to support this role through policy and in public statements. Meyer:
“We need smart and consistent support from both European and U.S. policymakers. For starters, here at home, U.S. policymakers should state clearly and without equivocation that we are committed to being the world's leading supplier of natural gas both now and into the future. This is a message our allies need to hear from [U.S.] policymakers across the political spectrum.”
Meyer called for further developing U.S. pipeline networks and energy export facilities. There is an acute need for critical pipeline infrastructure to get natural gas from where it is produced to where it can be exported. Meyer:
“We have no doubt that we can do this. We can aid our allies by being a leading supplier of gas to global markets while still ensuring an abundant, reliable supply for domestic consumers here at home. These are long-term issues that demand long-term solutions, and we need smart and consistent policy focused on that.”
Joining Meyer to brief reporters on the Rystad study was François-Régis Mouton, regional director for Europe for the International Association of Oil & Gas Producers, the report co-sponsor with API. Mouton said the report was bad news and good news. Bad because over the next three to five winters it will be hard for Europe to have enough affordable natural gas to meet normal demand, impacting households and manufacturers.
The good news is European markets could rebalance from 2026 onward if enough LNG projects come online here in the U.S. Mouton said European policymakers need to send a “political signal” that they want this, to help facilitate and trigger long-term investments in extra U.S. liquefaction capacity and regasification capacity in Europe. Mouton:
“The situation [in Europe] … is also the consequence of underestimating the role and need for natural gas in the EU and other nations, and the strange belief that the demand will magically disappear If we stop producing gas in Europe. These will just increase our dependency on imports and from Russia in particular.”
More from Mouton:
“We hope that this crisis will make … European policymakers more pragmatic in the short term without compromising our long-term climate targets. We need a policy framework that is more in line with today’s realities, not projections based on wishful thinking. … There is no time to waste. 2026 is just around the corner, and a delay will just extend the period of economic and social suffering we are only just starting to witness in Europe.”
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.