Europe faces a number of challenges when addressing its future energy needs. Increasing global demand and competition for energy resources, instability in energy producing regions such as the Middle East, and a population increasingly concerned with climate change are all challenges facing Europe. As a result, energy security has become a critical issue for the European Union (EU).
To address some of these issues, Europe has turned to natural gas. Collectively, Europe is a major importer of natural gas, and Russia is one of Europe’s most important natural gas suppliers. Natural gas consumption in Europe is going to continue to grow, especially as climate change issues become more prominent. Yet, domestic natural gas production is likely …show more content…
to export LNG the European Union, specifically Germany, as a way to replace Russian natural gas in a time of crisis? If so, would either party need to build out infrastructure to accommodate U.S. LNG exports? What effect would U.S. LNG exports have on global natural gas supplies and prices?
The remainder of this paper will be structured as follows. The first section will outline Europe’s, and more specifically Germany’s, natural gas needs and how much U.S. LNG would need to be exported to replace German imports of Russian natural gas. Following that, a review of the current European capacity and infrastructure will show that the E.U. could receive U.S. LNG in a crisis. After that, I will examine the U.S.’ LNG infrastructure and export policy. I will argue that the problem with U.S. LNG exports to Europe is not due to a lack of capacity or infrastructure, but rather dated export policy. To be effective in providing energy security to the E.U. in a crisis, the U.S. will need to make policy changes. Finally, given that the U.S. will soon begin exporting LNG, the last section will analyze what effect U.S. exports will have on the global natural gas supply and the effect of non-crisis European demand for Russian natural gas.
European Natural Gas Needs
First, how much natural gas does Europe import from Russia? European dependence on gas varies by country. In 2013, roughly 33 percent of Italy’s energy needs are met with imported natural gas, and Germany was
In addition to the US peak oil situation, the US Oil Drilling and Gas Extraction Industry faces heavy foreign market competition. In 2011, the US ranked 3rd in oil production, behind Saudi Arabia and Russia (Energy, 2012). Saudi Arabia’s OPEC governor expects Saudi output to rise steadily beyond 2030 with a 1.5 million barrel per day spare production capacity then (Energy, 2012). Russia holds the world’s largest
Since 2004 the UK has been a net importer of natural gas, as the North Sea reserves have been exploited and nearly exhausted. Today, ten years later, the UK has become even more dependent on foreign gas with over 50% of demand for gas satisfied by foreign supply (Gloystein, 2013). This increasing dependence on foreign countries is a worrying trend, due to the adverse effects it can have, which include being subjected to price shocks, supply shortages and manipulation both economically and politically. Energy insecurity has arisen through a lack of investment in other
The United States must re-examine many policies previously accepted as reasonable, especially its own national energy policy. As the largest overall and per capita energy consumer in the world, the U.S. needs to decide upon a reasonable source of energy for the foreseeable future, especially since its energy needs will increase dramatically during that time. With political instability likely to remain the norm in the Middle East, oil continues to be an energy source of questionable reliability; in addition, current estimates of worldwide reserves suggest we may in fact run out of oil entirely in the next fifty years. Natural gas reserves are in fairly short supply too, and costs limit its
Energy security encompassing having affordable and reliable energy available while ensuing it is not detrimental to other natural resources. According to Mulligan (2010), “… the world’s most widely traded fuel, oil accounts for some 34 percent of primary energy consumption. Because resources are concentrated in a relatively small number of states, many other states depend upon a functioning global market and the continuing availability of imports” (p.79). The system the world obtains its fuel is one which is dependent of other countries, besides the United States. Relying on other countries can be detrimental to the United States and cause problems. Many would like to see alternatives to using natural resources. Alternatives are available to help with multiple energy
Energy is more than a utility that keeps the lights on in our homes or the gas in our cars; it’s a foundational resource that plays a key role in a nation’s ability to provided economic opportunity and basic services and security to its people. As such, it is imperative to a nation’s overall security that it develops/acquires access to energy, ensures energy needs are properly met and supplies are readily available, and disruptions minimized. Policy directs that the U.S. has a role in developing energy security throughout the world. For the U.S., we’ve long recognized the importance of energy security and have gone to great lengths to ensure its protection by developing depth and breadth in energy capabilities,
Natural gas is playing an increasingly important role in the global economy, rising to the occasion as an alternative to other fossil fuels such as coal because it burns cleaner. As the oil reserves in many parts of the world are being depleted, the availability of a viable alternative such as natural gas is becoming increasingly important. So too is the lure of the future possibility of energy independence for countries both developed and developing.
The energy crisis in America is often placed on the back burner to the average American citizen. Generally, one will only care about this crisis when the price of gas changes. The energy crisis, however, is a prominent issue as it is “ongoing and getting worse, despite many efforts” (Rinkesh). The world’s natural resources, such as oil, coal, and natural gas, cannot supply the world’s increasing demand. The amount of crude oil available is only 2 percent higher than the demand for it (Muise). If the demand expands any higher, then the limited supply of natural resources “will be gone for good” (“Learn about Energy”). It is projected that there is enough oil to last 34 more years, enough natural gas to last 53 more years, and enough coal
In the mid-1960s, sources of natural gas were found in the North Sea. By the 1980s, although coal was the primary source of electricity in the country, gas was seen as the cleanest, cheapest and most reliable source of energy available (Bradshaw, 2012, p. 7). However by 2005, North Sea production dried up and the UK was once again dependent on foreign gas imports. In 2009 imports from foreign states supplied almost half the UK’s energy needs; by 2020 this is expected to rise to between 80 and 90 percent. In 2011, the demand for gas reached 37% (Taylor, 2013, p. 109). Thus like many other countries in the EU, today the UK is debating the costs of importing energy from overseas and the importance of energy security. There
(LLNL, 2010) The difference, however, is that the world is trying to get away from high Carbon emitting fuels such as petroleum and coal. Since this is the case natural gas is currently the front runner for alternative methods with politicians and scientist agreeing that there must be a change to the old habits of achieving energy without costs. According to the U.S. Energy Information Administration (EIA) natural gas has edge out all other fuel sources for electricity generation in the United States with 31.7%, however, coal is still only 1.6% behind with 30.1% overall. As coal based power plants are retired or converted into natural gas based plants hopefully we can see these number start to separate in favor of natural gas as carbon emissions will drop
“In 2013, the U.S. overtook Qatar as the world's top propane shipper” (Dezember, 2016). Foreign markets are the major driving forces responsible for the increasing demand. About half of all U.S. exports wind up in Latin America, while the rest of US exports are shipping to northwest Europe and Asian markets. JBC Energy estimates the deficit between what Asia can supply and demand for liquefied petroleum gas will rise to a record of 1.42 million barrels per day in 2016, surpassing last year's 1.3 million barrels per day.
With many of Europe’s economically struggling countries the increase in production of oil which in return yields lower prices has benefitted them. Europe’s weak economy is able to contribute to this drop in oil prices in that Europe’s currently low inflation rate and weak economy has greatly lessened the demand for oil. The lack of demand for oil in one of the most prominent import continents in the world has forced oil manufactures to lower their prices in order to retain Europe as a top oil export. Large oil exporters do not want to lose Europe as an export because that would also mean losing billions of dollars per year.
The use of natural gas as an energy source, to produce electricity, is becoming more common in the United States. Due to growing concerns regarding global climate change and greenhouse gas emissions (GHG); the country’s dependence on foreign oil; and the fears that conventional natural gas supplies could be depleted within the next decade, the United States has begun developing alternative energy sources. Most critics would agree that clean alternative energy is the ideal source of electricity, but many argue about the available technology and efficiency of these sources. Many believe extracting unconventional natural gas sources would greatly benefit the United States in terms of limiting foreign oil dependency and providing a clean
There are several factors in Russia’s economy that may contributed to many trade opportunities being created for the United States. The US will likely be greatly affected by any shifts in the demands of Russian consumers along with any import needs the country has to maintain its society and infrastructure. One of the key considerations for examining Russia’s resource needs must be the fact that the US’s core competency as an energy producer cannot be leveraged in this scenario due to Russia’s own dominance as a producer of oil (Lavrov, 2013). The loss of the strength of the Russian ruble has caused Russia to experience a trade deficit, which has contributed to an increase in the demand for imports (Beck, Kamps, & Mileva, 2007).
Germany has been an economic power house for decades, ever since the German reunification, the country has become an active member in several influential intergovernmental organizations, such as European Union (EU) and United Nations (UN). As a highly developed country, it upholds a universal health care system, tuition-free higher education, and most importantly, a well-established environmental protection program. The Energiewende, or the Energy transition, is a sophisticated long term plan that hopes to minimize the usage of coal and other non-renewable energy by the end of 2050. The plan began in 1990 and the country has made constant progress ever since. While renewable energy technologies develop and Germany continues to dominate the world as an innovative green leader, new problems also arises. However, with the help of its well-developed laws and the cooperation of various sectors involved, it is likely that Germany is able to remain a powerful green leader and complete its energy transition by the year 2050.