LNG chains Europe and Germany to the USA on gas issues

Dependence on Russian gas has plunged Europe, and Germany in particular, into an energy crisis following the Russian attack on Ukraine. The EU previously imported almost half of the gas it needs from Russia. The European states have freed themselves from these chains, albeit at a high cost. Industry and consumers pay for the new independence. While many are still digesting the new reality, years ago, European governments paved the way for a new long-term gas dependency. The beginning of the war 24. February 2022 accelerated this process even more.
Which is banned in many EU countries due to environmental concerns, is being operated on an unprecedented scale in the United States: Fracking. The procedure, in which a liquid is pressed into the rock via boreholes with high hydraulic pressure, which creates or widens cracks, produces otherwise unattainable natural gas reserves. And the USA is constantly expanding its production capacities. Demand, especially from Europe, fueled the fracking boom overseas not only since the beginning of the war. In a global comparison, the USA already has the most fracking facilities. So that Germany and the EU can get urgently needed natural gas, they make themselves dependent on a conveyor technology that is prohibited in this country.
An analysis by Investigate Europe shows the extent of Europe's new dependency on the US for LNG. Accordingly, European companies have in the past ten years at least 33 US LNG contracts signed, ten of them alone 2022. Most agreements have a contract term of 20 years. Overall, EU LNG imports increased by around 150 percent.
The EU has turned its back on Russia on gas issues. But dependence on the USA also has pitfalls. At least since the presidency of Donald Trump, the country has been considered fickle. The role of the reliable partner for Europe has suffered serious damage. In general, the nation is deeply divided internally. Whether in abortion rights, in gun violence, the immigration issue or the loss of purchasing power - in many issues the poles are drifting ever further apart.

The next presidential election of the year 2024 could once again put international partnerships to the test. Donald Trump comes back to power, which currently seems unlikely, or a similarly knit Republican, the consequences for cooperation between the US and the EU are uncertain.
In addition, the price of natural gas in the USA more than doubled at the beginning of last year. Electricity prices exploded; The result was layoffs and cutbacks in production. The US is also experiencing an energy crisis. Someday hold your own gas to a large extent, a Europe that is heavily dependent on the USA faces a new old problem.
A diversification of the LNG partnerships can compensate for the loss of larger exporting countries. 2021 came around 28 Percentage of LNG for the EU from the US. 20 percent came from Russia and Qatar respectively. Three states together delivered around 70 percent.

For Germany, for example, Qatar is planning 2026 expand liquefied natural gas supplies . The Federal Republic can thus cover around three percent of its needs. Other important German partners are Nigeria and Algeria. Uniper and RWE, the operators of the first floating terminals, also have contracts with suppliers in Australia, among others, in addition to the USA, the United Arab Emirates, Oman or Canada completed.
Agreement with the USA should remain for years

The long contract periods – often conditions, to agree at all - not only create a dependency on large suppliers like the USA. From the point of view of environmentalists, they are also the basis for missing the climate targets. US President Joe Biden and EU Commission President Ursula von der Leyen announced an agreement shortly after the start of the war, designed to reduce the European Union's dependence on Russian energy.

The criticism back then: “This agreement puts the EU and the US on a wrong and dangerous path, because it drives new infrastructure for importing fossil gas to Europe”, warned Murray Worthy, Head of the gas campaign at the environmental organization Global Witness in the "Deutsche Welle".
The construction of new LNG terminals will tie down fossil gas imports for years to come. And the, the environmentalist continued, well past the point in time, when the phase-out of the climate-damaging fuel is planned.

In Germany one is prepared for this case, recently argued Federal Minister of Economics Robert Habeck (The green). LNG terminals should be sustainable. There Plan: To achieve the climate goals, should they later be able to absorb climate-friendly green hydrogen or ammonia. However, initial studies are already casting doubts, that Habeck's ambitious terminal plan could work .
High costs for Germany and the EU

In order to be able to absorb the large quantities of liquid gas from the USA and distribute them within the EU, the Europeans had to spend a lot of money. The EU only decided in December, with 67,5 billion euros 225 Billions comprehensive soft loans from the reconstruction fund to finance gas projects.
Numerous new infrastructure projects emerged. Germany stamped LNG terminals at the new “Germany pace” , like Federal Chancellor Olaf Scholz (SPD) announced at the end of December, from the soil. In many places in the EU, landing stations have been revived in addition to the terminals already in operation, newly built or are currently being built. According to the “Investigate Europe” analysis 34 LNG terminals and seven pipelines under construction or in the process of being expanded. In the Federal Ministry of Economics alone, costs for the new landing points are expected to amount to 9,7 billion euro.

The process began long before the war in Ukraine; but this fueled him again. After the attack of Russia, as the EU-US Energy Security Task Force, “additional LPG volumes (LNG) for the EU market of at least 15 billion cubic meters per year 2022 and further increases in the future”., the initiated process was particularly evident in Germany.
Until the end 2023 are seven new LNG terminals with an annual capacity of more than 30 Billions of cubic meters planned and should be connected to the gas network. The LNG terminal in Wilhelmshaven has already been approached from the USA. The tanker "Maria Energy" came across the ocean with a ton of liquid gas in its belly, to fill our stores. Many more ships will follow in the coming weeks. And just a few days ago, another floating terminal for liquefied natural gas arrived in Brunsbüttel, where the third floating LNG terminal in Germany is currently being built.


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