Trump plans to lift bidens export ban on natural gas, but it is of little use

22. Dezember 2024

WOM

Artikel als PDF

Kommentare

Diesen Artikel teilen:

London/Washington, DC-the designated President Donald Trump plans to remove a ban on some US exports of liquefied natural gas (LNG), which would be a positive development for US energy producers.

However, this step will probably not help combat the climate crisis, and could possibly even tighten it. The largest buyer of American LNG - Europe - has to wait until the end of the decade to benefit from this measure.

Europe's need for US LNG

The region expects additional LNG deliveries from January because it is about to lose one of the last remaining sources for Russian pipelinegas after almost three years of high energy prices.

"The global gas made remains tense before winter, slowed down by warm winter weather forecasts", wrote strategist from Bank of America in a current note. "The market remains vulnerable due to relatively low stocks in Europe, the historical inaccuracy of weather forecasts, uncertainties about gas deliveries from Russia and the schedules for the start of new LNG projects."

growth of US LNG exports

lng is a cooled, liquid form of natural gas that can be transported by ship container. The exports from the USA are booming. In less than a decade, the United States has developed from minimal sales abroad to the largest export nation and has overtaken Australia and Qatar to become the largest supplier in the world according to the US Energy Information Administration (EIA).

In January, however, the bid administration paused the federal permits for several outstanding LNG export projects, while it rated the effects of the export boom on the environment as well as on energy security and prices in their own country. This break does not apply to exports that have already been approved.

Environmental effects of LNG exports

On Tuesday, the Ministry of Energy published a , in which, in which, in which, that the increased LNG exports could lead to additional emissions of around 1.5 gigatons of climate-damaging gases a year by 2050, which corresponds to a quarter of the current annual greenhouse gas emissions in the USA

The final decision on additional LNG exports is "in the hands of the upcoming administration," Energy Minister Jennifer Granholm told reporters.

The change in European energy supply

Before the Russian attack on Ukraine in 2022, Russia was the largest natural gas supplier of the European Union. Since then, the block has reduced the proportion of Moscow to its imports from 45% in 2021 to 15% in 2023 by pressing the pipeline shells.

To fill the gap, Europe has imported large quantities LNG from the USA and other countries as well as pipeline gas from Norway. According to the EIA, the region is now the largest recipient of US LNG exports and has absorbed two thirds of deliveries last year.

The EU has also increased the imports of Russian LNG to heat its households and supply its factories with energy. However, the block must end its dependence on all fossil fuel imports from Moscow by 2027, which the United States catapults into an even more important role as an energy supplier for the region.

price development and challenges for Europe

soon, on January 1, 2025, a contract will expire that regulates the transit of Russian pipelinegas through Ukraine. These rivers make up about 5% of the total of the EU gas imports, according to the Brussels Menery of Buegel.

The analysts indicate that these countries are not in the risk of an energy half, since they will probably fill the gap from other European countries through more LNG imports or additional natural gas. Nevertheless, the loss of these rivers will make Europe more difficult to fill up its supplies before the coming winter.

The future of energy supply in Europe

The global LNG supply is expected to grow only moderately, so that Europe is "difficult to keep the storage capacities at a comfortable level until the end of the coming summer," said Massimo di Odoardo, a senior researcher for natural gas at Wood Mackenzie.

The natural gas prices in Europe have fallen since the highest levels in the summer of 2022, but remain more than twice as high as historical values. The upcoming end of the transit contract will probably prevent prices from falling significantly. Di Odoardo estimated that the prices tend to stay near their current values or may increase if the contract is not extended.

Analysts from Capital Economics state that the image for Europe in the second half of the decade looks more optimistic, since an influx of fresh LNG deliveries from the USA, Qatar and other producers is expected. At the end of the decade, the volume of the LNG traded worldwide could be about 50% higher than currently.

Although the return of LNG exports from the USA is expected, it could take until after 2030 for these additional rivers to reach the market. As soon as you arrive, you will contribute to a wider downward pressure on the natural gas prices in Europe.

Nevertheless, Francisco Blanch, head of raw materials and derivative research at Bank of America, sees a concern. "As long as Europe continues to import LNG over major distances - about the Atlantic, for example - and not from an immediate neighbor, it will bear the costs for transport and logistics," he said.

This situation provides the European company a competitive disadvantage over the US companies that generally have significantly lower energy costs.

FAZIT

The difference between the natural gas prices in Europe and the USA could increase triple by the end of 2026. In a report from September, Mario Draghi, the former President of the European Central Bank, warned that the volatility of European energy prices is a significant obstacle to energy -intensive industries and the entire economy.

"Companies move their activities away from Europe," said Blanch. "If you have an energy-intensive industry, move to the US golf coast or to the energy sources."

Thank you in Laura Paddison for the support for reporting.