By Josh Owens of OilPrice.com
Despite the rise in U.S. energy bills, the White House will not limit in any way, let alone ban, exports of natural gas this winter, as it aims to help Europe with the energy crisis, two sources involved in the discussions told Reuters on Tuesday.
The U.S. has been sending increased volumes of liquefied natural gas (LNG) to Europe since the Russian invasion of Ukraine and the subsequent halt of Russian pipeline gas supply to most of its customers in Europe.
In fact, American LNG has been crucial in meeting demand in Europe, which is scrambling for gas supply and willing to pay up for spot deliveries, outbidding most of Asia.
High demand in Europe, high natural gas prices, and increased export capacity made the United States the world’s largest LNG exporter in the first half of 2022, the U.S. Energy Information Administration said in July. The United States is shipping record volumes of LNG to Europe to help EU allies in their efforts to fill gas storage ahead of the winter amid growing uncertainty about Russian gas supply. Most U.S. LNG exports went to the EU and the UK during the first five months of 2022, accounting for 71%, or 8.2 Bcf/d, of the total American LNG exports, according to the EIA.
For the first time ever, the European Union imported in June more LNG from the United States than gas via pipeline from Russia, as Moscow slashed its supply to Europe.
In September, as much as 70% of all U.S. LNG exports in September were headed to Europe, up from 63% in August, per Refinitiv Eikon data cited by Reuters on Monday.
But high prices and low inventories in the United States have had the White House considering a possible limit to LNG exports. An analysis found that curbs on exports would fracture U.S. relations with its key ally, the EU, Reuters’ sources said today, adding that a total ban was never seriously considered.