Europe makes a U-turn on American gas in the bay for fear of hydraulic fracturing

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(Bloomberg) — Less than two years ago, Engie SA abandoned its plans to buy liquefied natural gas in the United States, victorious environmentalists and urged French energy giants to stop buying due to pollution concerns.

Fast forward in 2022, the deal was signed with an agreement between Bulgaria and Poland to bring American hydraulic fracturing gas to the European coast.

The war in Ukraine has urged Europe to reshape its energy policy, and the once snubbed U.S. LNG is now pulling itself away from Russian gas, which is expected to be outlined this week. It’s an important part of the strategy. Supply security often overcomes climate problems as countries from Germany to Italy seek to reduce their dependence on Moscow.

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LNG is not only a fossil fuel, it is also contaminated by the way it is extracted, liquefied in an energy-intensive process and shipped worldwide. US supplies tend to be more dirty than in other countries because they come from thousands of shale wells. However, American producers trying to attract European customers are taking steps to reduce their footprint.

“Currently, supply safety is very important, but we need to keep the big picture in mind,” said the Hanseatic Energy Hub commercial, one of the LNG terminals Germany plans to build to reduce its dependence on Russia. Director Danielle Stoves said. “We are observing that the LNG industry is tackling the challenge of seriously reducing methane emissions.”

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Europe is at the forefront of climate change ambitions and plans to reach net zero by 2050, including replacing fossil fuels with renewable energy sources such as the sun and wind. But LNG is regaining its appeal as the EU is already trying to cut two-thirds of Russia’s gas imports this year.

EU package

The European Commission will announce a € 195 billion ($ 203 billion) review of its energy strategy on Wednesday. The plan is expected to include replacing approximately 50 billion cubic meters of Russian gas with LNG, which means that it will include about one-third of prewar imports.

“The current EU directive to procure more US LNG is essentially a U-turn,” said Kaushal Ramesh, an analyst at Norwegian consultant Rystad Energy. “This may suggest that the EU may have softened its stance on the impact of US LNG emissions, but for now it is energy security for environmental issues and within the US LNG sector. It may also accelerate the energy conversion of the United States. “

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According to Wood Mackenzie Ltd, the US LNG production process consumes more CO2 than Russian gas. Overall more emissions than the US supply.

The Rocky Mountain Institute reports that gas transportation through the Russian pipeline is three times more climate-intensive than transportation from the United States.

“By replacing high-emission Russian gas with US LNG, Europe has the potential to improve energy security and reduce its greenhouse gas footprint,” is the principle of the RMI’s Climate Intelligence Team. TJ Conway said. “But our modeling shows that emissions can fluctuate significantly and actually remain high, especially if methane is not effectively controlled.”

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Methane is a much more powerful greenhouse gas than carbon dioxide, but it has been in the atmosphere for decades, not centuries. Any effort to reduce it can bring a swift victory to the planet.

Better transparency is needed for accurate access to the climate impacts of both Russian gas and American LNG. Cheniere Energy Inc., the top US shipper of supercooled fuels, plans to disclose carbon strength to customers for all cargoes later this year and quantify emissions from wellheads.

NextDecade, which has finally signed a contract with ENGIE, aims to reduce CO2 emissions from LNG plants by more than 90% by using the technology to recover and store carbon.

Still, environmentalists are concerned about increasing dependence on natural gas no matter where it comes from. Europe is building a new LNG infrastructure, with at least six new facilities announced in countries such as Germany, Estonia and the Netherlands.

“The EU has these climate-neutral goals, but it does not necessarily guarantee that they will be achieved,” said Murray Worthy, a gas campaign leader at the non-governmental organization Global Witness. “Building a new LNG infrastructure locks in or slows the phasing out of gas in homes, heating, industry and electricity. Once these things are built, they are a financial incentive to run them for life. Is huge. ”

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