By freezing permits on new liquefied natural gas projects (LNG), the Biden administration appears to have hit a shot into its own goal on energy at a particularly inauspicious time.
This decision is unlikely to spur a global movement towards a greener economy. Indeed, despite pledges to move towards a greener global economy, global demand for and consumption of coal, the most polluting energy source, reached a record level in 2023. New gas finds and exports have also been a significant spur to American economic growth in the last decade, as argued at recent House Energy and Commerce Committee and Senate Energy & Natural Resources Committee hearings.
According to a Wall Street Journal editorial, the administration is telling Europe not to worry about future supplies and assuring it of support for Ukraine while telling environmentalists, whose support it presumably needs for the upcoming election, that this decision will reduce investment in LNG. The latter is likely correct.
The actual beneficiaries of this decision reside in Moscow or the Middle East, and their interests are inimical to ours and our allies, especially in Europe. Although European demand for gas is diminishing, wide areas of Europe such as the Balkans cannot modernize without secure gas supplies. Similarly, Germany’s decision to forego nuclear reactors requires spending billions on new gas power plants.
Suppose that gas does not come from the United States, which, in the wake of Russian aggression against Ukraine, had vastly increased exports to Europe. In that case, the Balkans, Germany and other significant importers may purchase from Russia again, since the pipeline and business infrastructure has long been in place for precisely this kind of arrangement. Qatar and Algeria, hardly paragons of democracy, could also benefit from this wrongheaded move, proving that this decision mainly favors unsavory actors.
So, thanks to this misconceived decision, we are forcing our allies and partners to relinquish our market share and instead turn to Moscow, subsidizing Vladimir Putin’s war and regime. Since Europe cannot produce its own gas, it will have no choice but to turn to Moscow or to Gulf State producers who may establish an LNG cartel to jack up prices at the expense of European prosperity and Ukrainian reconstruction and avert progress from a greener economy for their benefit.
Apart from this misstep, the failure to tie Europe and other markets to American suppliers that constitute the most significant gas exporters in the world today gives Moscow another chance to use its positions in the Balkans, particularly Serbia, to subvert governments, obstruct peace in Kosovo and facilitate Russia’s war against the West. Energy revenues are the basis for Russia’s multi-domain war to keep these states from fully integrating into European security structures.
At the same time, studies say that demand for gas and LNG will remain until at least 2050 and LNG is a good way to transition from oil and coal-based power systems to green ones. Does cutting off investment in gas projects that benefit our vital security interests make sense? Moreover, LNG is much less carbon-intensive than coal, and recent emissions reductions are attributable to it.
Knowing this, why would we deliberately handicap ourselves in our fight against climate change? As McKinsey’s recent report on gas argues, the way forward is to continue investment in gas and promising green technologies and systems to urgently facilitate the necessary transitions, as demand for gas is rising. That allows the U.S. and other nations to move forward on both tracks while meeting global demand.
This demand requires going beyond Europe in our thinking and approach to policy. For example, half of Africa’s people lack access to power, and it will not come to them anytime soon from green energy. Moreover, given Africa’s increasingly visible gas capabilities, local governments will prioritize that over other energy sources.
Thus, as Benjamin Lakatos, CEO and Chairman of MET Group, a leading European energy firm planning to purchase large amounts of American LNG to supply Europe observes, the main issue is “how to create a new energy market that guarantees the security of supply, ensures the expansion of renewable energies in a way that the economy and society are not confronted with escalating costs and, last but not least, creates the conditions for Europe's competitiveness.”
All those things are in America’s and arguably most of the world’s interest. But it is not clear that the decision to freeze these energy projects facilitates using LNG as a transitional fuel, while simultaneously building up green energy systems to reach these desired outcomes. As Lakatos notes, as the U.S. has become the largest supplier in the world, it has stabilized prices in the market.
Sadly, recent moves suggest we have failed to capitalize on our success. If we must relearn them again and re-confront the pre-February 2022 energy situation with Europe dependent on Russia, the cost of this is likely to be more exorbitant than anyone imagines.
Stephen Blank, Ph.D., is a Foreign Policy Research Institute senior fellow and independent consultant focused on the geopolitics and geostrategy of the former Soviet Union, Russia and Eurasia. He is a former professor of Russian national security studies and national security affairs at the Strategic Studies Institute of the U.S. Army War College and a former MacArthur fellow at the U.S. Army War College.
Biden’s absurd LNG freeze scores one for the opposing team
7
11
21.02.2024
By freezing permits on new liquefied natural gas projects (LNG), the Biden administration appears to have hit a shot into its own goal on energy at a particularly inauspicious time.
This decision is unlikely to spur a global movement towards a greener economy. Indeed, despite pledges to move towards a greener global economy, global demand for and consumption of coal, the most polluting energy source, reached a record level in 2023. New gas finds and exports have also been a significant spur to American economic growth in the last decade, as argued at recent House Energy and Commerce Committee and Senate Energy & Natural Resources Committee hearings.
According to a Wall Street Journal editorial, the administration is telling Europe not to worry about future supplies and assuring it of support for Ukraine while telling environmentalists, whose support it presumably needs for the upcoming election, that this decision will reduce investment in LNG. The latter is likely correct.
The actual beneficiaries of this decision reside in Moscow or the Middle East, and their interests are inimical to ours and our allies, especially in Europe. Although European demand for gas is diminishing, wide areas of Europe such as the Balkans cannot modernize without secure gas supplies. Similarly, Germany’s decision to forego nuclear reactors requires........
© The Hill
visit website
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Rami G Khouri
Mort Laitner
Donald Low
Ali Fathollah-Nejad
Nikkei Editorial
