The EU and US are poised to announce a new energy partnership that envisions Europe acquiring more liquefied natural gas (LNG) from the United States to reduce dependence on Russia. European Commission President Ursula von der Leyen said the EU's plan "to break free from Russian fossil fuels," will be unveiled together with US President Joe Biden on Friday.
"There's no way to just completely remove Russian gas from the European market - it makes up far too large of a portion of the amount of gas that they use," Sitton, a former member of the Texas Railroad Commission, the oil regulator in the United States' top oil-producing state, said. "Western countries could decide to direct their gas to Europe and that will supplant some of the Russian gas but, practically speaking, there's not a realistic way to replace all of it."
Although the US can export more and Australia, which is sending a lot of gas to China, could ship more to Europe right now, it will likely not be sufficient, Sitton added.
Center for LNG and the Natural Gas Supply Association spokesperson Daphne Magnuson told Sputnik on Thursday that the United States is increasing its capacity to export more LNG to the EU after the Energy Department recently approved several pending permits with more approvals coming.
"We [the United States] have been Europe’s largest supplier of LNG throughout their energy crisis, and we reaffirm our willingness to help our customers there," Magnuson said. "We have been operating our export facilities at full capacity this winter and are adding incremental volume with the recent approval of pending permits by the Department of Energy, with more approvals waiting."
Magnuson also underscored that the US is well-positioned to continue to provide the European Union with liquefied natural gas at the time being.
"Regarding the US capability to help Europe, we are fortunate to have an abundant supply of natural gas in the United States and are well-positioned to continue providing US LNG to the European Union," Magnuson said.
Last week, the US authorized LNG exports from two current operating export facilities in the states of Louisiana and Texas.
Earlier in March, Biden announced a US-only ban on Russian oil imports although the United States imports much less oil from Russia than European states, which have been leery of imposing similar restrictions.
Before Biden departed for Europe this week, Energy Secretary Jennifer Granholm told Sky News the US would not ask Europe to fully abandon Russian energy supplies.
Impact of Ruble Payments on Energy Prices
Earlier this week, Russian President Vladimir Putin instructed Gazprom to change existing gas contracts into rubles in response to the EU, US, and Japan blocking Russia from accessing euros, dollars and yen.
The announcement caused the Russian currency to climb against the dollar while global gas prices jumped. Meanwhile, International Energy Agency chief Fatih Birol described Putin’s order as a "security threat."
However, Sitton said Moscow's demand for European countries to purchase Russian gas in rubles should not have a massive impact on energy prices.
"It just introduces another complexity, which in general, all those complexities do add cost and they add price because the more people are unsure, the higher the prices," he said.
Sitton predicts the price of Russian crude oil might actually go down a little bit while they slightly increase elsewhere.
"I think his [Putin's] logic is while he may lose a little bit more in the price of oil, his price of oil is dropping dramatically anyway, because there's just not as many buyers for it on the market. But he's going to pump up the price of his ruble, he's going to try to make it up in terms of the value of his currency," Sitton said.
Natural gas prices were surging on the European market late last year, spurred by growing energy demand amid an economic recovery after months of lockdowns, as well as a limited supply.
This has prompted the EU authorities to reinforce efforts toward ensuring the bloc's energy security, the need for which has become even more pressing during the conflict with Russia, the EU's main energy supplier, over the latter's special military operation in Ukraine.
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