US LNG Export Infrastructure Running at ‘Max Capacity,’ US Official Says
The U.S. is facing a “real challenge” trying to meet growing EU demand for oil but is hopeful it can eventually help replace the bloc’s reliance on Russian energy imports, said Melanie Nakagawa, a National Security Council official. Nakagawa, speaking during an April 26 event hosted by the Center for Strategic & International Studies, said the U.S. is prioritizing efforts to create more U.S. energy export infrastructure so suppliers can ship more gas to the EU.
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“This is merely a physical infrastructure limitation. We don't have more export terminals that can be turned online overnight,” said Nakagawa, senior director for climate and energy at the NSC. “Everything is running at max capacity.”
Although some EU member states have objected to a Russian energy embargo (see 2204150065 and 2203240026), the Biden administration believes most of Europe is committed to eventually eliminating their dependence on Russian energy, Nakagawa said, pointing to the U.S.-EU Energy Security Task Force created in March (see 2203250035). The U.S. thinks it can eventually meet the EU’s demand for 50 billion cubic meters in additional annual U.S. liquefied natural gas imports, Nakagawa said -- it just needs the right amount of infrastructure in place.
“This is completely possible,” she said. “If you look at what we've already permitted, what's under construction today and where there's uncontracted volumes, there’s a real potential here for Europe to signal the demand for U.S. LNG, and for U.S. LNG providers to provide that gas to them in the form of long-term contracts.”
The U.S. has already used the task force to coordinate with “key” U.S. gas exporters about increasing their shipments, Nakagawa said, and has also spoken with EU countries about building more import capacity. She said Germany recently committed to building two new import terminals and acquiring floating storage regasification units, which are critical components in maritime gas trade.
“I think Germany and the European Commission have been very clear: They see a future where they're out of the game of investing or supporting Russian energy supply,” Nakagawa said. “The way to do that is by working closely with the U.S. and our partners to rapidly accelerate that transition.”
She said that transition is already underway within industry, pointing to the “self-sanctioning” among many private companies that had operated in the Russian region but have since pulled out (see 2204210052). “Look at what U.S. businesses have been doing, multinational businesses have been doing,” Nakagawa said, “and the fact that there is a transition afoot to get us out of that business.”
But she also noted that the world is facing a “volatile energy market,” and a transition away from Russian oil will take time if the U.S. and others don’t want to “affect the security of supply.” Until then, the U.S. will continue imposing sanctions and export restrictions against Russia to target its most critical sectors, Nakagawa said, including its energy industry.
“A key part of the way we designed our sanctions was to go at where it would hit Russia the most,” she said. “They're working and we can see them working today.”