The US has agreed to increase gas exports to the European Union in order to reduce reliance on Russian supplies.
According to a deal announced on Friday, the US will deliver at least 15 billion cubic meters (bcm) more liquid natural gas to Europe than previously planned.
The agreement calls for the US to supply the EU with additional gas by the end of the year, amounting to roughly 10% of the gas it currently receives from Russia.
In response to Russia’s invasion of Ukraine, the EU has already stated that it will reduce its use of Russian gas. Russia currently supplies roughly 40% of the EU’s gas needs.
The new agreement will see the United States and other countries supply an additional 15 billion cubic meters of gas on top of the 22 billion cubic meters supplied last year.
The new total will account for approximately 24 percent of the gas currently imported from Russia. The ultimate goal is for the US and international partners to supply the EU with approximately 50 billion cubic metres per year.
To reduce reliance on Russia, more renewable energy will be generated, energy efficiency will be improved, and imports will be increased.
The agreement was announced on Friday during US President Joe Biden’s three-day visit to Brussels.
Mr. Biden and European Commission President Ursula von der Leyen discussed Russia’s invasion of Ukraine and offered new assistance to Kiev.
Russia supplies 40 percent of the EU’s gas. It must divert its energy elsewhere if it is to wean itself off of that dependency. Gas is already piped from Norway, but those pipelines are already at capacity. The North Sea provides little benefit to the EU.
New supplies will have to come from further afield, in the form of LNG (cooled and liquified gas). However, there is already intense competition for LNG supplies from countries such as Algeria and Qatar, which has driven up prices.
The 50 billion cubic meters of gas per year from the United States, which would be more than double the current amount, would undoubtedly be welcomed.
There are also concerns about how much gas the United States can supply, how quickly it can increase exports to the EU, and how much those shipments will cost.
For many years, the EU has enjoyed cheap gas, but it appears to have accepted that era is coming to an end.
Russia’s conflict with Ukraine has pushed energy prices to all-time highs.
Energy prices had already begun to rise prior to the invasion as economies began to recover from the Covid crisis. The invasion of Ukraine prompted the EU to pledge to cut Russian gas consumption by two-thirds this year by increasing imports from other countries and increasing renewable energy.