Energy News Today

The Future Of U.S. LNG Hangs In The Balance

Soaring American exports of liquefied natural gas (LNG) could become a powerful tool of the Biden Administration to help other countries reduce their carbon footprint from more emission-intensive fossil fuels such as coal, U.S. shale gas producers say.   

Moreover, “American natural gas is the sharpest diplomatic tool the Biden administration can wield in energy-related foreign policy and international trade negotiations,” David Callahan, president of the Pittsburgh-based Marcellus Shale Coalition, wrote in InsideSources.com this week. 

However, the Biden Administration doesn’t yet have a precise position on natural gas, especially with regards to the domestic energy mix in light of the climate agenda and the ambitions to have 100 percent clean electricity by 2035. 

U.S. Secretary of Energy Jennifer Granholm said last week, “We need to get to 100% clean electricity by 2035,” acknowledging this is a very ambitious goal. 

Just for reference, natural gas accounted for the largest share of U.S. utility-scale electricity generation in 2020, at 40.3 percent, with fossil fuels at 60.3 percent share, also due to coal’s 19.3-percent share of the power mix. 

Despite the growing global backlash against natural gas and despite its clean energy agenda, the Administration may have to forgo a tough stance on gas, at least in the short and medium-term, with the narrative that American LNG is helping major coal-dependent energy consumers such as China and India to burn a fossil fuel that is cleaner than coal.   

In energy-related foreign policy, the Biden Administration is following the Trump Administration’s tough stance toward the Russia-led Nord Stream 2. It has reiterated threats of U.S. sanctions on companies helping Russian giant Gazprom to complete the controversial natural gas pipeline in Europe. 

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American LNG is gaining ground in Eastern European countries like Poland and Lithuania. Those countries are eager to shake off Russia’s dominance over their natural gas supply – and the political clout that comes with it.  But Western Europe has started to have second thoughts about imports of U.S. LNG due to the emissions associated with shale gas production. This could potentially undermine the LNG-related diplomacy in western European countries. 

In Asia, the world’s main gas demand growth driver, U.S. exports of LNG have been soaring, according to EIA data, and could contribute to the coal-to-gas switch in China and India.  

Secretary Granholm said during a confirmation hearing at the Senate Committee on Energy and Natural Resources:

“I believe U.S. LNG exports can have an important role to play in reducing international consumption of fuels that have greater contribution to greenhouse gas emissions.” 

She also noted that “If confirmed as Secretary, I also look forward to working with U.S. industry in ways to reduce emissions associated with this…

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2021-03-31 19:00:00

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