US liquefied natural gas (LNG) could play a “growing and strategic role in the EU's gas supply”, “provided its price is competitive”, said European Commissioner for Climate Action and Energy Miguel Arias Cañete on Thursday 2 May in Brussels, at the first High Level Business to Business Energy Forum organised by the EU and the US.
Strategic cooperation between the EU and the United States in the field of energy seems very promising, according to the EU and the United States.
US LNG imports into the EU have increased significantly (+272%) since the first shipment delivered in April 2016 and this trend showed further growth after the meeting between US President Donald Trump and European Commission President Jean-Claude Juncker in July 2018 (see EUROPE 12071/2).
As a result, in March 2019, EU-US LNG trade exchanged the largest volume ever recorded, more than 1.4 billion cubic metres. The United States' share of total EU LNG imports was 13.4% over the last 6 months, compared to 2.3% before the Joint Statement. In 2018, more than 11% of US LNG exports went to the EU. This share rises to 30% considering the nine-month period since the joint declaration (August 2018 to April 2019).
In their joint statement of 25 July 2018 in Washington, Mr Juncker and Mr Trump agreed to strengthen strategic cooperation between the EU and the United States in the field of energy. They had agreed on the benefits of increasing exports of US liquefied natural gas (LNG) to the EU gas market (see EUROPE 12071/2).
The Energy Forum, opened by Miguel Arias Cañete and US Energy Secretary Rick Perry, provided an opportunity for US and European companies to discuss ways to further strengthen LNG trade, the role that competitively priced LNG can play in the EU market and the growing opportunities for LNG use in the transport sector.
Mr Cañete said that energy security was “one of the key achievements of our transatlantic cooperation, in which both sides have a strong mutual interest”. Natural gas will remain an important component of the EU's energy mix in the medium term, as part of the transition to cleaner energy sources, he said.
A role to play in clean energy. Speaking to the press, Mr Cañete stressed that the EU is 70% dependent on US LNG imports. He considered that LNG was essential for the diversification of European gas imports. In addition, European import terminals will be operational this year, the Commissioner confirmed.
Mr Cañete said that the EU had upgraded its gas facilities (200 billion cubic metres of capacity, plus 22 billion when Germany builds a new facility) to accommodate US LNG imports. The EU has committed to co-finance LNG infrastructure projects worth more than €638 million.
The EU is also very committed to reducing greenhouse gases and 75% of the causes of climate change are energy-related. “Clean energy is therefore needed and LNG has an important role to play”, particularly in replacing coal. LNG reduces emissions from the shipping sector.
Greater energy security. Rick Perry said that American LNG also means “greater energy security and regional autonomy”. He welcomed the progress made, which “illustrates the development of this trade”. He acknowledged that this market was quite new: “it has not reached maturity, and it is difficult to forecast five or ten years out”, he admitted. But for him, the future is very promising.
Restrictions? U.S. legislation still requires prior regulatory approval for LNG exports. Washington must therefore remedy these restrictions. But for Mr Perry, the restrictions that existed are a “legacy from the past, are in the rearview mirror”.
Mr Cañete recalled that there were no restrictions on the EU side to import LNG. “There is certainly an administrative overload, but operators tell us that authorisations and licences are obtained, so it works”, the Commissioner said.
Finally, when asked about the EU's choice in preferring US LNG to Russian gas, Ricky Perry replied that US LNG exports to the EU were “more reliable” than Russian exports, even if they were more expensive. (Original version in French by Lionel Changeur, with Hermine Donceel)