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WHAT U.S. LNG EXPORTS ARE DOING: U.S. liquefied natural gas exports led the world through the first half of the year and are helping to insulate European allies from the worsening consequences of supply disruptions from Russia.
Some newly published data chart out how U.S. LNG producers have risen to the moment in response to volatile prices, and in response to President Joe Biden’s campaign to get Europe more gas.
Overall exports increased by 12% over the last six months versus the second half of 2021, with higher shares going to continental Europe, which is now counting on everyone but Russia to supply it with gas due to continually-disrupted pipeline flows.
Top dog: LNG shipments averaged 11.2 billion cubic feet per day during the first six months of the year, making the U.S. the world’s top exporter over that period, according to the Energy Information Administration.
EIA connected the growth to three reasons: increased LNG export capacity, higher natural gas and LNG prices internationally, and higher global demand — “especially in Europe.”
The Europeans have been getting a larger share of U.S. LNG shipments recently than they have historically. During the first five months of this year, exports to the EU and the U.K. accounted for some 71%, or 8.2 billion cubic feet per day, of the total U.S. exports.
A look through the Department of Energy’s LNG Monthly reports — which track cumulative shipments by region from February 2016 to date — illustrates the substantial redirection of volumes away from East Asia and toward Europe and Central Asian countries such as Turkey (DOE tracks Europe and Central Asia as one category.)
As recently as December 2021, East Asia accounted for the largest share of cumulative LNG deliveries at 38.2%. Europe and Central Asia since have clawed market share away and, through May, accounted for 37.9% of shipments over the covered six-year period, while cumulative volumes to East Asia fell to 34.9%.
Katharine Ehly, senior policy advisor at the Center for Liquefied Natural Gas, said the shift is being realized as “portfolio” buyers who have their own long-term LNG supply contracts (think of a firm like Shell) often turn around and put that gas on whatever spot market gets the highest price.
“Because you've had a larger price differential pointing toward Europe lately, those portfolio buyers — they're going to send to that sorting on the highest bidder as it were,” she told Jeremy. “Most of that’s been going to Europe.”
Coming to Europe’s aid: The volatile gas supply situation, about which the Europeans had been forewarned (insert freedom gas), is becoming even worse for European economies. Gazprom said it will reduce flows via Nord Stream to 20% of capacity beginning tomorrow, citing technical reasons, further strapping the Europeans’ gas-storing efforts where.
The further reduction is the latest instance of Russia inflicting energy pain on Europe – while maintaining that the reductions are the result of Western sanctions (reference the turbine saga).
EU member states this morning agreed to cut gas demand by 15%, although the commitment has exceptions.
Ultimately, no saving measures or alternative import sources can replace, on short notice, the 155 billion cubic meters of gas that Europe imported from the Russians last year. But U.S. exports are helping to fill the holes left by lower Russian flows and are on pace to outperform the minimum goal that Biden set in March.
Biden pledged to work with international partners to ensure at least an “additional” 15 bcm worth of LNG for the EU this year.
Since, through June, the U.S. exported around 39 bcm to Europe, according to data from Refinitiv. Comparatively, LNG exports to Europe for all of calendar year 2021 was 34 bcm.
Ehly noted the numbers could be higher if not for the explosion that knocked Freeport LNG offline. She said, too, that operating terminals have some small measure of “wiggle room” that can be exercised for squeaking out additional volumes, depending on how terminals’ maintenance is scheduled, but that the energy crisis shows that more liquefaction capacity is necessary.
“I think there certainly is the potential to do more, and with more permit approvals and more facilities being built, you know, that potential only increases,” she said.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email jbeaman@washingtonexaminer.com or bdeppisch@washingtonexaminer.com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
HILL STAFFERS ARRESTED AFTER STAGING CLIMATE SIT-IN: A group of six Hill staffers were arrested by U.S. Capitol Police yesterday after they staged a peaceful sit-in in Senate Majority Leader's Chuck Schumer’s office pressuring him, and the White House, to take action on climate change.
The group also sent two letters to Schumer and Biden in recent weeks calling for swift action on climate legislation and urging Biden to declare a climate emergency and “end fossil fuel extraction on federal lands,” the Examiner’s Juliegrace Brufke reports.
The group also took aim at Sen. Joe Manchin for his decision to block climate language from being included in a spending package, arguing that such inaction risks dangerous, long-term consequences for the environment. “Our country is nearing the end of a two-year window that represents a once-in-a-generation opportunity to pass transformative climate policy, we will not remain silent while we watch environmental catastrophe unfold before our eyes,” they said.
Several Democrats, including Reps. Ro Khanna of California and Ilhan Omar of Minnesota, tweeted support, with Khanna saying he stands “in solidarity” with the group, including members from his office who participated in the protest. “Protecting our planet is not a radical idea,” he said.
“We sat in Schumer’s office today for a specific reason: we want people to know that Dems leaders have not used every tool at their disposal to pass climate policy,” one protester, who works for Rep. Cori Bush of Missouri, said in a tweet last night following the sit-in.
“There will always be a straggler (Manchin), but it’s those who set the calendar and rules who need our pressure,” the staffer added.
MEANWHILE, AT THE WHITE HOUSE: Biden is planning to announce new climate actions this week to help mitigate wildfire risk and protect vulnerable communities from extreme heat.
Yesterday, the administration outlined new plans to plant 1 billion trees as part of an effort to help eliminate a “backlog” of reforestation needs in the U.S. and help mitigate wildfire risk. The Department of Agriculture has invested more than $100 million in reforestation so far this year under funds allocated by the bipartisan infrastructure bill.
Later this week, Biden also plans to announce new resources for communities dealing with extreme heat, and will detail new initiatives “to help lower families’ utility bills by expanding access to more affordable sources of clean energy,” a senior administration official told E&E News.
The announcement comes after Biden announced a series of executive actions on climate change last week, including expanding funds for natural disaster mitigation and advancing offshore wind development.
OIL INDUSTRY TOUTS EXPORTS AGAINST CALLS FOR BAN: Industry groups are marketing U.S. oil exports as a global price-lowering mechanism against calls from some Democrats and environmental groups for a ban to be reinstituted in response to high fuel prices.
The American Petroleum Institute and the American Exploration and Production Council released the findings of a jointly-commissioned study this morning, which estimated that, since the petroleum export ban was lifted in 2015, U.S. consumer spending on refined products and natural gas was $92 billion lower than it otherwise would have been because of the increase in production tied to the lifting of the ban.
The gist: “Lifting the crude oil export ban allowed U.S. oil prices to converge with international benchmarks, spurring more drilling activity and leading to higher crude oil production,” said the analysis, which was developed by consultancy ICF.
It also estimated that the lifting of the ban reduced global oil prices by $1.93 per barrel over six years and contributed $161 billion to U.S GDP.
The United States was exporting less than 500,000 barrels of crude oil per day in 2015 before the ban was lifted, and now consistently exports more than 3 million bpd.
Mike Sommers, API’s president and CEO, said the findings show that “if the U.S. is not exporting energy, it leaves the door open for unstable nations or those with less stringent environmental standards to fill the void and reap the benefits.”
Export ban chatter: A number of Democrats in Congress have lobbied the Biden administration to reinstate a ban on exports in hopes of lowering fuel prices by increasing the supply of oil and refined products domestically.
The U.S. is the largest oil producer in the world, House Energy and Commerce Chairman Frank Pallone noted in a recent letter to Biden asking for a halt to exports.
“But instead of refining that crude oil at home for domestic use, the United States is exporting near record-amounts of oil to other countries,” he said.
The Biden administration told oil producers in December that it would not pursue an export ban, although Energy Secretary Jennifer Granholm more recently said Biden isn’t willing to take it off the table.
‘ALL-OF-THE-ABOVE’ REPUBLICANS ENJOY PRIMARY WINS: Right-leaning energy group Citizens for Responsible Energy Solutions is ringing in the successes of its Republican primary endorsees.
Sixteen of CRES’s endorsed candidates, including Reps. Dan Crenshaw and Conservative Climate Caucus Chairman John Curtis, have won their contests to date. CRES emphasized that it endorsed candidates who support various clean energy technologies, domestic natural gas production, and advanced nuclear as emissions-reducing solutions.
“With skyrocketing gas prices at the pump and the threat of blackouts due to our nation’s crumbling grid, it is critical that we elect leaders committed to all-the-above policies that address climate change while reducing consumer costs,” Heather Reams, president of CRES, said in a statement.
Financial Times U.S. states divided over petrol stations as LA considers ban on new pumps
E&E News They helped create ESG. Two decades later, some see a mess.
2:30 p.m. 628 Dirksen The Senate Indian Affairs Committee will hold a hearing on "Select Provisions of the 1866 Reconstruction Treaties between the United States and Oklahoma Tribes."
10:00 a.m. 1324 Longworth Members of the House Natural Resources committee will hold a hearing exploring ways to prevent large corporate polluters from securing contracts with the Bureau of Land Management.