President Biden and European leaders announced a deal on Friday to increase U.S. shipments of natural gas to help wean Europe off Russian energy. But it remained unclear, including to energy industry executives, exactly how the administration would achieve its goals.
The deal calls on the United States to send an additional 15 billion cubic meters of liquefied natural gas — roughly 10 to 12 percent of current annual U.S. exports to all countries. But it did not address the lack of port capacity to ship and receive more gas on both sides of the Atlantic. The effort could also struggle because the Biden administration can’t simply order U.S. exporters to sell gas to European buyers or to set prices that are acceptable to sellers and buyers.
Still, American gas executives welcomed a renewed emphasis on exports as a sign that the Biden administration was now seeking to promote the U.S. oil and gas industry rather than punish it for its contributions to climate change.
“I have no idea how they are going to do this, but I don’t want to criticize them because for the first time they are trying to do the right thing,” said Charif Souki, executive chairman of Tellurian, a U.S. gas producer that is planning to build an export terminal in Louisiana.
Mr. Biden and the president of the European Commission, Ursula von der Leyen, offered few details during a joint announcement in Brussels. They said that many of the specifics would be worked out by a task force dedicated to reducing Europe’s dependency on Russian oil and gas in ways that would not undermine the climate policies of the two partners.
“We’re going to have to make sure that families in Europe can get through this winter and the next while we’re building an infrastructure for a diversified, resilient and clean energy future,” Mr. Biden said.
The European Union is heavily reliant on energy imports from Russia, which is a big producer of oil, diesel, coal and, perhaps most importantly, natural gas. That dependence has become a growing problem as the E.U. seeks to punish President Vladimir V. Putin for invading Ukraine. Russia provides about 40 percent of Europe’s natural gas, and a sizable chunk of it is shipped by pipeline through Ukraine.
Germany said on Friday that it would seek to halve its imports of Russian oil and coal this year and end imports of most Russian natural gas by the middle of 2024. The shift away from Russian gas was happening at an “insane pace,” Robert Habeck, Germany’s vice chancellor and economic minister, said in Berlin. He added: “Every supply contract that is terminated hurts Putin.”
American exporters were already shifting sales to Europe from Asia in recent months, largely because prices in Europe have been higher than almost anywhere else in the world because of rising tensions with Russia and, more recently, the war in Ukraine. Nearly 75 percent of U.S. L.N.G. exports have gone to Europe so far this year, up from 34 percent in 2021.
The Biden administration aims to ship 50 billion cubic meters of liquefied natural gas, known as L.N.G., to Europe every year by 2030. The United States shipped 22 billion cubic meters to Europe last year.
“That’s mostly what is happening already, so I don’t know what this does beyond recognizing what is already happening,” said Nikos Tsafos, an energy analyst at the Center for Strategic and International Studies in Washington.
Charlie Riedl, the executive director at the Center for Liquefied Natural Gas, a trade group, said he thought the extra 15 billion cubic feet of gas exports could be achieved relatively easily. He said two-thirds of that total could come from diverting shipments that otherwise would be bound for Asia, and the rest could come from recent federal approvals for additional production from existing American L.N.G. export terminals.
“Obviously it’s a positive sign that Europe is making attempts to wean itself off Russian gas,” Mr. Riedl said.
Energy executives say that the Biden administration could help increase the flow of gas by streamlining permitting for new U.S. export terminals, where natural gas is chilled into a liquid and pumped into oceangoing tankers. Washington and the European Union could also provide loan guarantees for U.S. export terminals and European import terminals. There are roughly a dozen U.S. export terminals that have won regulatory approval but still need to secure financing to be built. About 10 new European import terminals are being built.
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Export terminals require investments of up to $10 billion, while import terminals cost about $1 billion to build. The United States currently has seven export terminals and Europe has 28 large-scale import terminals.
Environmentalists criticized the announcement because they fear it will commit the United States and Europe to using fossil fuels for decades longer than they argue is feasible given the growing toll of global warming.
The Russia-Ukraine War and the Global Economy
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Rising concerns. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes and spooking investors. The conflict has already caused dizzying spikes in energy prices, and could severely affect various countries and industries.
“There is no way to ramp up U.S. L.N.G. exports and deliver on the imperative climate commitments that the U.S. and E.U. have pledged,” said Abigail Dillen, the president of Earthjustice, an environmental law organization. She warned that the buildup of L.N.G. infrastructure would “lock in expensive fossil dependence and dangerous pollution for decades to come.”
American and European officials also agreed to seek ways to decrease greenhouse gas emissions from L.N.G. infrastructure and pipelines and to reduce the escape of methane from gas operations.
The Biden administration has banned Russian energy imports as part of a broader set of sanctions against Mr. Putin, a relatively easy step for the United States to take because it is a net exporter of energy. Some U.S. lawmakers would like the European Union to stop buying oil and gas from Russia altogether, but the prospect for that has been dismissed by several E.U. leaders, who see it as a financially disastrous step that would hurt Europe more than Russia.
Still, some energy experts said that a further escalation of the war, or a decision by Mr. Putin to use chemical, biological or nuclear weapons, could leave the E.U. with little choice but to bar the purchase of Russian energy.
“We want as Europeans to diversify away from Russia, toward suppliers that we trust that are friends and that are reliable,” Ms. von der Leyen of the European Commission said at the announcement with Mr. Biden. “Therefore the U.S. commitment to provide the European Union with an additional at least 15 billion cubic meters of L.N.G. this year is a big step in this direction, because this will replace the L.N.G. supply we currently receive from Russia.”
For oil and gas executives, who have grown accustomed to being criticized for not doing enough to combat climate change, the Friday announcement represented a welcome change in tone. But they said that Mr. Biden and Ms. von der Leyen will have to be patient and recognize that decisions on who sells gas to whom will be made across negotiating tables by private companies, not by politicians.
“This is a capitalist system,” said Tellurian’s Mr. Souki. “Its people like me who make those decisions. The government can’t tell us where to send the gas.”
Matina Stevis-Gridneff contributed reporting from Brussels and Christopher F. Schuetze contributed reporting from Berlin.
