Daily Energy Report
US LNG exports, Biden pauses LNG projects, China presses Iran on Houthis, Russia’s stuck tankers, China solar glut, EU renewable bust, Shell shuts German refinery, OPEC+ decision, and more.
Chart of the Day: US LNG Exports
Figure (1) above shows US LNG exports by destination with an emphasis on European countries. The replacement of Russian gas started immediately after the Russian invasion of Ukraine.
More details can be found in these two reports:
EOA’s Main Takeaway
Aside from the financial benefits to US gas producers and LNG terminals, the strategic benefits of exporting LNG to Europe are priceless. Most importantly, it keeps the EU united in facing Putin while continuing to support Ukraine. However, as we mentioned in the past, shifting dependence from Russia to the US doesn’t enhance the energy security of Europe. A case in point: the decision by the Biden administration today to pause approval of new LNG export terminals, which we discuss below.
Story of the Day
President Biden has put a temporary hold on new LNG export project approvals pending an environmental and economic review, with decisions deferred until after the November 5th election. European and Asian allies, looking to reduce reliance on Russian gas and coal, respectively, watch closely as the U.S., now the leading LNG exporter, faces environmental and industrial pushback. Current projects in question may include those by Sempra Infrastructure and others. Environmental groups, a key segment of Biden’s base, applaud the decision.
EOA’s Main Takeaway
Here we repeat what we wrote on Wednesday:
"As we have been saying: US LNG has become an integral part of US foreign policy and US national security. Foreign policy and national security considerations trump climate and environmental policies. However, we must be mindful of the fact that this is an election year and there is a difference between the short run and the long run. We believe that the Biden administration realizes the role of LNG in foreign policy, but at the same time it needs to show the Democrat base that it is doing something for climate change. Delaying one project or stopping it may not be a big deal, but it is a problem if it becomes a trend."
News of the Day
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