{"id":1459116,"date":"2024-02-24T17:50:00","date_gmt":"2024-02-24T22:50:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1459116"},"modified":"2024-02-24T17:50:00","modified_gmt":"2024-02-24T22:50:00","slug":"the-longer-bidens-pause-on-lng-projects-goes-on-the-better-it-is-for-russia","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/the-longer-bidens-pause-on-lng-projects-goes-on-the-better-it-is-for-russia\/1459116\/","title":{"rendered":"The Longer Biden’s Pause On LNG Projects Goes On, The Better It Is For Russia"},"content":{"rendered":"

The Longer Biden’s Pause On LNG Projects Goes On, The Better It Is For Russia<\/span><\/p>\n

\n

Authored by Simon Watkins via OilPrice.com,<\/em><\/a><\/p>\n

Last week\u2019s attempt by the U.S.\u2019s Republican-controlled House of Representatives to unblock the stoppage on approvals of permits for new liquefied natural gas (LNG) looks highly unlikely to succeed.<\/strong><\/em><\/p>\n

Just after the White House\u2019s announcement on 26 January to \u2018pause\u2019 approvals of new LNG projects, the European Commission said that this will have no short- or medium-term impact on the E.U.\u2019s security of supply.<\/strong><\/em><\/p>\n

Shell: a long-term U.S. ban on issuing new LNG export permits would have \u201cquite an impact\u201d on the global LNG market.<\/strong><\/em><\/p>\n

Last week\u2019s attempt by the U.S.\u2019s Republican-controlled House of Representatives to unblock the stoppage on approvals of permits for new liquefied natural gas (LNG) looks highly unlikely to succeed. Despite the House approving a bill to remove the pause on LNG permits, it still needs to be passed in the Democratic-controlled Senate and then to be signed by Biden to become law. LNG remains the key emergency energy source in the new global oil market order,<\/strong> as\u00a0analysed in full in my new book of the same name<\/a>, and without the U.S. continuing to play its role as key producer and coordinator of other LNG supplies, the political cohesion of Europe \u2013 and of the West\u2019s core NATO security alliance \u2013 may falter.<\/p>\n

<\/a><\/p>\n

NATO\u2019s response to Russia\u2019s 2014 invasion of Ukraine and subsequent annexation of its Crimea region was non-existent to all intents and purposes. <\/strong>The reason why is that key countries in Europe \u2013 especially its\u00a0de facto<\/em>\u00a0economic leader, Germany \u2013 had become reliant on cheap and plentiful supplies of Russian gas to power their economic growth over the years. None of them wanted any major punishments meted out on Russia for the 2014 invasion that might jeopardise these gas flows. The response of these European countries to Russia\u2019s 2022 invasion of Ukraine was exactly the same at first. As also\u00a0highlighted in my book<\/a>, Germany\u2019s principal concern was ensuring that Russia did not stop supplying it, or other European countries, with either gas or oil, due to their not being able to pay in the way Moscow preferred. This followed the 31 March 2022 decree signed by President Vladimir Putin that required European buyers to pay in roubles for Russian gas via a new currency conversion mechanism or risk having supplies suspended.<\/p>\n

The official guidance document sent out to all 27 European countries that are members of the European Union (E.U.) on 21 April by its executive branch, the European Commission (EC), simply stated:<\/p>\n

\u201cIt appears possible [to pay for Russian gas after the adoption of the new decree without being in conflict with EU law],\u2026 EU companies can ask their Russian counterparts to fulfil their contractual obligations in the same manner as before the adoption of the decree, i.e. by depositing the due amount in euros or dollars.\u201d<\/em><\/p>\n

The one and only reason that the view of these European countries changed towards being willing to punish Russia for a further invasion westwards into Europe was the U.S. ensuring that substitute supplies for Russian gas became available early on. <\/strong>As also detailed in\u00a0my new book on the new global oil market order<\/a>, the U.S. strategy for replacing Russian gas supplies at that point was twofold.<\/p>\n

First, increase its own gas deliveries to Europe.<\/p>\n

Second, pressure other gas suppliers to do the same. As LNG does not require the enormous time, cost, and infrastructure build-out as pipelined gas, it was the gas resource upon which the U.S. focused these efforts.<\/p>\n

On the first point, from zero LNG exports before 2016, the U.S. quickly became the world\u2019s biggest exporter, with around 86 million metric tonnes of LNG shipped in 2022.<\/strong><\/p>\n

And around two-thirds of all the U.S.\u2019s LNG exports since Russia invaded Ukraine on 24 February 2022 have gone to Europe. The new LNG projects that have seen their permit permissions paused for an unspecified period are key to the U.S.\u2019s LNG exports doubling by the end of this decade.<\/p>\n

On the second point, the U.S. leveraged every proverbial carrot and stick available to it to pressure Qatar,<\/strong> for one, to stop signing LNG supply deals one after another with China \u2013 as it had been doing in the run-up to Russia\u2019s 2022 invasion, as also\u00a0analysed in depth in my new book. Given this, May 2022 saw Qatar signed a declaration of intent on energy cooperation with Germany aimed at becoming its key supplier of LNG into the future.<\/p>\n

These new supplies of LNG from Qatar would come into Germany through existing importation routes augmented by new infrastructure approved by the German Bundestag on 19 May.<\/strong> The plans would run in parallel with, but were likely to be finished significantly sooner than, the plans for Qatar to also make available to Germany sizeable supplies of LNG from the Golden Pass terminal on the Gulf Coast of Texas. QatarEnergy holds a 70 percent stake in the project, with the U.S.\u2019s ExxonMobil holding the remainder. The Golden Pass terminal\u2019s estimated send-out capacity is projected to be around 18 million mtpy of LNG.<\/p>\n

Just after the White House\u2019s announcement on 26 January to \u2018pause\u2019 approvals of new LNG projects, the European Commission said that this will have no short- or medium-term impact on the E.U.\u2019s security of supply.<\/p>\n

\u201cThe reality is that there\u2019s\u00a0no doubt the U.S. has been the key factor in ensuring cohesion in the E.U.\u2019s approach to punishing Russia for its invasion of Ukraine, both in terms of brokering deals with other suppliers such as Qatar, and in providing LNG itself,\u201d <\/strong>a senior figure in the E.U.\u2019s energy security complex exclusively told\u00a0OilPrice.com\u00a0last week. <\/em><\/p>\n

\u201cThe big fear here is not just that these pauses in permits for the big U.S. LNG projects will take months and maybe longer but also that some of them may not be allowed to go ahead at all,\u201d he added. <\/em><\/p>\n

\u201cBoth of them raise questions about the U.S.\u2019s entire commitment to the LNG sector now, and with that there is a very great danger of this [E.U.] cohesion [in its approach to punishing Russia for the invasion of Ukraine] being seriously undermined,\u201d <\/strong>he concluded.<\/em><\/p>\n

More recently, British oil and gas supermajor Shell warned that world demand for LNG would jump more than 50 percent by 2040. It added that a long-term U.S. ban on issuing new LNG export permits would have \u201cquite an impact\u201d on the global LNG market. <\/strong>This appears to be British understatement at its finest, as Shell also forecasts that North American LNG exports will grow to about 200 million metric tonnes per year by the end of the decade, accounting for about 30 percent of global LNG demand and about 5 percent of global natural gas demand.<\/p>\n

In the meantime, Eurogas President Didier Holleaux warned that should additional U.S. LNG export projects not materialise, it would risk increasing and prolonging the global gas supply imbalance. And last week European Commission Executive Vice President, Maros Sefcovic,\u00a0said that the U.S. is now the \u201cglobal guarantor of energy security\u201d.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSat, 02\/24\/2024 – 12:50<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

The Longer Biden’s Pause On LNG Projects Goes On, The Better It Is For Russia Authored by Simon Watkins via OilPrice.com, Last week\u2019s attempt by…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1459116","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1459116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1459116"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1459116\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1459116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1459116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1459116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}