USA More Than Doubles EU LNG Delivery Target

The U.S. more than doubled its target to ensure delivery of an additional 15 billion cubic meters (bcm) of LNG to the EU in 2022, a joint statement from the U.S. and EU has revealed.

Last year, U.S. exports to the EU were 56 bcm, up from 22 bcm in 2021, according to the statement, which noted that the EU was the largest destination for U.S. LNG exports, accounting for more than 52 percent of supplies. At the end of 2022, Russian gas accounted for 16 percent of the EU’s gas imports, down from 37 percent in March 2022, the statement highlighted.

“One year ago this week, the United States and the European Union stood up a joint U.S.-EU task force on energy security launched by President Biden and President von der Leyen,” the joint statement noted.

“The Task Force has made major progress in meeting its goals to reduce the EU’s reliance on Russian energy, including by diversifying its natural gas supplies in alignment with its climate objectives and reducing its overall demand for natural gas,” the statement added.

“The U.S.-EU task force on energy security builds on long-standing, transatlantic cooperation under the U.S.-EU Energy Council and is an outcome of the joint commitment to reduce the EU’s dependency on Russian energy and accelerate the global transition to clean energy,” it continued.

The joint statement said the task force provides an important platform for a regular exchange of information between the U.S. and the European Commission and highlighted that it monitors the energy security situation in the EU and neighboring countries, as well as progress on reducing dependence on fossil fuels. 

“The task force has discussed global LNG markets and market projections, the regulatory environment and permitting outlook in the United States and the EU, the development of U.S. LNG export capacities, the reinforcement of EU LNG infrastructure, and the EU Energy Platform and Joint Purchasing,” the joint statement said. 

“Further, the task force has helped to identify solutions for addressing emergency energy security objectives in the EU to ensure appropriate levels of gas storage ahead of winter seasons,” it added.

Next Steps

During this year, the task force will continue to focus on energy market shocks and high energy prices, according to the statement, which outlined three of the group’s priorities in 2023. These comprised the “continuous assessments of LNG markets and ensuring U.S. LNG deliveries to Europe of 50 bcm in 2023”, the “reduction of methane emissions”, and “energy savings and efficiency measures”.

“In the coming months, the task force will continue to work on keeping a high level of U.S. LNG supplies to Europe in 2023 of at least 50 bcm. This is necessary given the challenging supply situation and the need to ensure storage filling for the next winter 2023-24,” the statement noted.

“The EU Energy Platform will launch its first joint tenders under the Aggregate EU, a new means of demand aggregation and joint purchasing, in May 2023. Such tenders will be open to all non-Russian gas sellers. The task force has facilitated engagement with the U.S. LNG industry on the EU Energy Platform and its upcoming implementation to attract U.S. LNG to Europe,” it added.

According to the statement, the task force will also help to implement U.S. and EU efforts to reduce methane emissions, both in bilateral trade and at the global level, by supporting domestic and international measures to promote increased monitoring, reporting, and verification, as well as transparency, for methane emissions data in the fossil fuel sector.

“As discussed at the task force meeting in November 2022, both sides also plan to pursue initiatives to reduce flaring, venting, and leakage in oil and gas value chains, including through innovative purchasing frameworks to incentivize the capture of this gas to bring to market such as the EU’s proposed “you collect, we buy” approach,” the statement said.  

The statement also noted that the task force  will facilitate the exchange of best practices on energy savings and energy efficiency schemes and organize a dedicated conversation around implemented and planned policies for demand response by EU member states. 

“These measures will build on Europe’s impressive success in reducing its energy use as a means of enhancing its energy security,” the statement said.

“Europe has demonstrated notable progress in completing large-scale clean energy infrastructure projects on an accelerated timeline to respond to the energy crisis, and the task force will explore opportunities to share best practices to ensure the continued rapid deployment of large-scale clean energy technologies throughout the EU,” it added.  

Task Force Establishment

In a joint statement on March 25, 2022, the U.S. and EU announced that they would immediately establish a joint task force on energy security, adding that this would be chaired by a representative from the White House and a representative of the President of the European Commission.

That statement highlighted that the group would focus on several issues, including additional LNG volumes for the EU market of at least 15 bcm in 2022, “with expected increases going forward”. Other focus issues outlined in the statement included undertaking efforts to reduce the greenhouse gas intensity of all new LNG infrastructure and associated pipelines, partnering on technologies and energy efficiency solutions, and expediting planning and approval for renewable energy projects.

“The United States and the European Commission are committed to reducing Europe’s dependency on Russian energy,” last year’s joint statement said.

“We reaffirm our joint commitment to Europe’s energy security and sustainability and to accelerating the global transition to clean energy. In condemning in the strongest terms Russia’s further invasion of Ukraine, we express our solidarity and support for Ukraine,” it added.

“We share the objective of addressing the energy security emergency – to ensure energy supply for the EU and Ukraine. We welcome the continued progress toward the physical integration of Ukraine with the EU energy markets,” the statement continued.

Comprehensive, Dynamic Relationship

In a joint U.S.-EU statement published last month, both sides said they share “the most comprehensive and dynamic economic relationship in the world” and announced that they are taking “new steps to deepen our economic relationship as we build the clean energy economies of the future and address shared economic and national security challenges”. 

In that statement, the U.S. and EU said they are committed to addressing the climate crisis, accelerating the global clean energy economy, and building resilient, secure, and diversified clean energy supply chains. They also noted that they are working to reinforce, through transatlantic cooperation, their essential security interests and the resilience of their economies.

“We affirm that our cooperation to strengthen our economic security and national security should be rooted in maintaining the rules-based system,” they said in the statement.

“We will continue our work through the U.S.-EU Trade and Technology Council and the G7 and strengthen our bilateral coordination by tasking our Sherpas to formulate key recommendations on economic security by the summer,” they added.

“We will continue work to strengthen our economic security, responding to concrete threats we have identified. The United States and the European Union share concerns about the challenges posed by, among other issues, economic coercion, the weaponization of economic dependencies, and non-market policies and practices,” they continued.

To contact the author, email andreas.exarheas@rigzone.com