Europe's increased dependence on US liquefied natural gas (LNG) is “growing riskier by the day” amid President Joe Biden's decision to halt the approval of new export permits for the fuel, Bloomberg has reported.
The US news agency warned that even though the US remains the EU’s “major G7 ally with unsurpassed economic clout and relative political stability, an outsized dependence on even a friendly nation brings risks.”
“Europe’s decision to swap Russian gas for American LNG instead of a harder pivot to renewables means its energy security remains dependent on factors far outside its control, like the Atlantic hurricane season or political gamesmanship in Washington, DC,” according to Bloomberg.
Now, the news outlet went on, energy traders in Europe will have to factor in events that are located thousands of miles away, including outages at Gulf Coast plants or sudden cold snaps from Houston to Guangzhou, which “can redraw the map for profitable trades overnight.”
Bloomberg also quoted Ira Joseph, a senior research associate at the Center on Global Energy Policy at Columbia University, as saying that European reliance on US LNG will further grow if “more Russian gas does not reappear and the Qataris decide not to engage in a price war for market share.”
“The reward for Europe is a diverse set of US suppliers. The risk is a major change in US policy in the future,” Joseph pointed out, in an apparent reference to President Biden’s possible failure in the November 2024 presidential election in America.
Last year, Ditte Juul Jorgensen, director general for energy at the European Commission, said that the EU’s self-harming intention to diversify from Russian natural gas means it will be forced to rely on US LNG for decades to come.
Following the disruption of Russian gas supplies in 2022 due to Western sanctions on Moscow over Russia’s special military operation, Europe has been left grappling with expensive energy bills and accelerated inflation.
Germany, for instance, imported 2.5 times less gas in January-September in 2023 compared to the same period in 2021, but failed to make any savings as prices also grew 2.5 times, according to Sputnik’s calculations based on data from the German statistical office.
Also last year, Russian Energy Minister Nikolai Shulginov told Sputnik that the country’s LNG exports have already increased by several percent since early 2023. “There are buyers of Russian LNG all over the world. And these are not only our new partners in Southeast Asia, but also European consumers," Shulginov stressed.