US, EU LNG plan, take Russia out of energy loop Otesanya David March 29, 2022

US, EU LNG plan, take Russia out of energy loop

US, EU LNG plan, take Russia out of energy loop


Following a meeting in Brussels between US President Joe Biden and European Commission President Ursula von der Leyen on March 25, the United States and the EU Commission announced measures to reduce Europe’s dependency on Russian energy, planning to immediately establish a joint Task Force on Energy Security to set out the parameters of this cooperation and execute its implementation.

The US vowed to ensure additional liquified natural gas (LNG) volumes for the EU market of at least 15 billion cubic meters in 2022 with expected increases going forward. The EU Commission said it will work with EU Member States toward ensuring stable demand for additional US. LNG until at least 2030 of approximately 50 billion cubic meters per year, on the understanding that the price formula of LNG supplies to the EU should reflect long-term market fundamentals, and stability of the cooperation of the demand and supply side, and that this growth be consistent with our shared net zero goals.

The goal is to prepare European countries by ensuring appropriate levels of gas storage ahead of next winter and the following one. The US and EU also plant to continue their close cooperation on other measures to accelerate the green energy transition, lower energy consumption and reduce dependence on fossil fuels.

But promised US LNG supplies to Europe are only a small fraction of the 155 billion cubic meters a year that Russia sends to Europe. Russian supplies account for 40% of the EU’s total gas consumption.

Responding to a question from New Europe, Lori Esposito Murray, President of the Committee for Economic Development, the public policy center of The Conference Board (CED), said what’s crucially important is the EU’s decision to wean itself off Russian energy imports.

She noted that the commitments over the past 24 hours in terms of the US role to provide Europe with gas up to 2030 and the need for this year and next year to have 80% to 90% of European storages filled so they are prepared shows that the transition to cut dependence on Russian supplies is taking place no matter what happens in Ukraine. “You are going to see Russian’s role I believe really diminished in terms of Europe but also globally because there is only so much, I think China and India is now trying to fill the energy export problem that Russia is having. But they are all doing it at very reduced prices,” Esposito Murray told a United States Energy Association (USEA) Virtual Press Briefing “The War In Europe – Energy and Minerals In Crisis.”

“The most significant impact, while there are problems short term with the transition, and part of that transition is going to be stepping somewhat backwards in terms of sustainability movement and more emphasis on coal on the short term, but I think what you’re seeing happening is so fundamental because the markets will change long term and the suppliers will change long term and the move is to reduce this dependency on Russia and that’s what you’re going to see no matter what happens in Ukraine – that is just on a track, is going to happen”.

In a joint statement on March 25, the US and the EU Commission reaffirmed their joint commitment to Europe’s energy security and sustainability and to accelerate 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,” the statement read.

The EU and US 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 energy security and sustainability of the EU and Ukraine are essential for peace, freedom and democracy in Europe,” the statement read.

Through the Joint European action for more affordable, secure and sustainable energy (REPowerEU), the EU confirmed its objective to reach independence from Russian fossil fuels well before the end of the decade, replacing them with stable, affordable, reliable, and clean energy supplies for EU citizens and businesses.

The US and the EU reaffirmed their commitment to meeting the goals of the Paris Agreement, achieving the objective of net zero emissions by 2050, and keeping a 1.5 degrees Celsius limit on temperature rise within reach, including through a rapid clean energy transition, renewable energy, and energy efficiency. These policies and technologies will also contribute to making the EU independent from Russian fossil fuels, the statement read, noting that natural gas remains an important part of the EU energy system in the green transition, including by ensuring its carbon intensity decreases over time.

The US and European Commission confirmed their strategic energy cooperation for security of energy supply and reducing dependence on fossil fuels. “We share efforts to make available stable, affordable, reliable and clean energy supplies to citizens and businesses in the EU and its neighbouring partner nations. In this framework, we establish an immediate cooperation to address the emergency energy security objective of ensuring appropriate levels of gas storage ahead of next winter and the following one. We will continue our close cooperation on other measures to accelerate the green energy transition, lower energy consumption and reduce dependence on fossil fuels.

Turning to the joint Task Force, the US and EU Commission agreed to undertake efforts to reduce the greenhouse gas intensity of all new LNG infrastructure and associated pipelines, including through the use of clean energy to power onsite operations, the reduction of methane leakage, and the construction of clean and renewable hydrogen ready infrastructure.

The US commited to maintaining an enabling regulatory environment with procedures to review and expeditiously act upon applications to permit any additional export LNG capacities that would be needed to meet this emergency energy security objective and support the RePowerEU goals, affirming the joint resolve to terminate EU dependence on Russian fossil fuels by 2027.

The EU Commission said it will work with the governments of EU Member States to accelerate their regulatory procedures to review and determine approvals for LNG import infrastructure, to include onshore facilities and related pipelines to support imports using floating storage regasification unit vessels, and fixed LNG import terminals.

The EU is preparing an upgraded regulatory framework for energy security of supply and storage, the Commission said, adding that this will enhance certainty and predictability regarding security of supply and storage needs and ensure closer cooperation within the EU and its neighbouring partner nations. The European Commission has proposed regulation on energy storage to ensure that the existing storage infrastructure is filled up to 90% of its capacity by November 1 each year, with specific phase-in provisions for 2022. The Commission said it will coordinate with the Member States and provide transparency with respect to available LNG capacity in EU terminals.

follow on twitter @energyinsider


Source link

Write a comment