Biden’s careful embrace of U.S. gas for Europe

The White House is looking to thread a policy needle by embracing more U.S. liquefied natural gas shipments to Europe while insisting it’s not backing off its commitment to fighting climate change, Ben writes.

Driving the news: This morning U.S. and European leaders announced a task force on helping to cut the EU’s heavy reliance on Russian fossil fuels.

• The broad outlinecalls for U.S. work with “international partners” to find another 15 billion cubic meters of LNG this year.
• Longer-term, it calls for “additional” EU imports of roughly 50 bcm annually of U.S. LNG until at least 2030.
• However, it does not define what “additional” means with respect to existing volumes.

Context: U.S. LNG shipments to Europe grew to over 22 bcm last year, per European Commission data, and have been rising sharply in 2022 as well.

The intrigue: The U.S.-European plan aims for energy security and addressing climate change.

• Officials vowed to work together on cutting gas demand with renewables, hydrogen, heat pumps, efficiency and more.
• It vows to lessen the greenhouse gas footprint of new LNG infrastructure and pipelines.

The big picture: It comes as the EU is already looking to greatly cut Russian oil, gas and coal imports through diversification but also faster clean energy deployment and better efficiency.

Officials there are crafting a proposal to seek to end that reliance by 2027. Russia provides about 40% of Europe’s gas and 25% of its oil.

Yes, but: Biden is already facing pushback from environmentalists.

“Permitting construction of any new fossil fuel infrastructure would lock America into decades of ongoing reliance on fossil fuels that is incompatible with President Biden’s climate goals,” Evergreen Action’s Jamal Raad said in a statement.

There are other uncertainties too. LNG flows are based on market conditions and constraints on how quickly total volumes can increase beyond what’s already planned.

 
-What they’re saying: the U.S.-EU energy deal

“This crisis also presents an opportunity. It’s a catalyst…that will drive the investments we need to double down on our clean energy goals and accelerate towards a net-zero future,” President Biden said in Brussels this morning at a press event with European Commission President Ursula von der Leyen.

State of play: Nikos Tsafos, a gas market expert with the Center for Strategic and International Studies, notes a large share of U.S. LNG already goes to Europe.

• The U.S., Qatar and Australia are the world’s biggest suppliers, and European buyers compete for supplies with energy-hungry countries in Asia.
• “You can shuffle gas around, but it’s costly and it’s not a permanent fix,” Tsafos said. “We have to talk about adding supply, not just rearranging flows.”
• But infrastructure takes years to build and those investments assume long-term exports, even as the framework with Europe has a 2030 horizon. “That’s not a signal for new investment,” he said via email.

Zoom in: A separate joint U.S.-European Commission statement this morning provides a few more details.

It says the EC will support “long-term contracting mechanisms” and work with the U.S. to “encourage relevant contracting” to back investment in new export and import infrastructure.

 
-Research corner: big methane leaks

 Speaking of natural gas, new research shows that methane leaks from a major U.S. oil-and-gas producing region are far higher than prior estimates, Ben writes.

Why it matters: Methane, the main component of natural gas, is a powerful planet-warming substance.

Leaks in production and transport erode — or could even erase — benefits of much lower CO2 emissions than coal when the fuels are burned for power.

Driving the news: The Stanford-led study in Environmental Science & Technology used sophisticated airborne imaging to analyze leaks on the New Mexico side of the prolific Permian Basin region.

• The topline finding is a leak rate of over 9% of gas produced (though they also offer a range of estimates).
• That’s “several-fold higher than Environmental Protection Agency estimates and well above those in the published literature,” a Stanford summary
• “It’s worse than we thought by a long shot,” co-lead author Evan Sherwin said in a statement, and in an email, he notes that’s far above the amount that nullifies the climate advantage over coal.

How it works: The survey involved over 100 flights between 2018-2020, covering roughly 14,000 square miles, over 26,000 wells and thousands of miles of pipelines, per the study and a Stanford summary.

Yes, but: One bright spot is that a relatively small number of “super-emitter” sites have an outsized impact on the region’s total emissions, with less than 4% comprising over half the total.

“Once leaks are identified, shutting them down is often an inexpensive and straightforward fix,” the summary notes.

It also comes as oil-and-gas producers have been boosting focus on curbing methane emissions.

 
Policy: “Amid pushback from industry groups and lawmakers in both parties, federal energy regulators on Thursday scaled back plans to consider how natural gas projects affect climate change and environmental justice.” (Associated Press)