US President-elect Donald Trump plans to lift a ban on some exports of liquefied natural gas (LNG), which could boost the country’s energy producers but has uncertain implications for addressing climate change.
The move is expected to benefit Europe, which currently relies heavily on LNG imports due to Russia’s reduced pipeline gas supplies. However, this delay may not address the climate crisis and could even worsen it.
According to Bank of America strategists, the global gas market remains volatile due to low inventories in Europe, inaccurate weather forecasts, and uncertainty about Russian gas supplies. The US has become a top LNG supplier, surpassing Australia and Qatar, but its impact on emissions is uncertain.
LNG studies suggest that the fuel produces less greenhouse gas pollution than other fossil fuels, but its climate effect depends on whether it replaces oil and coal or clean renewable energy. Methane leakage at various stages of production also poses a significant concern.
Europe’s energy makeover
The region has become increasingly dependent on LNG imports from the US due to Russia’s reduced pipeline supplies. Europe aims to break its dependence on fossil fuels by 2027, but the loss of Russian pipeline gas flows through Ukraine in January 2025 will worsen the energy shortage.
Analysts predict that European natural gas prices will remain high until the second half of the decade when new LNG supply enters the market. The expected increase in global LNG trading could lead to downward pressure on prices, with predictions suggesting a 50% rise by the end of the decade.
However, European businesses face significant costs due to transportation and logistics, making it challenging for them to compete with US energy producers. The disparity in natural gas prices between Europe and the US is also expected to narrow, resulting in higher prices for European consumers.
Source: https://edition.cnn.com/2024/12/22/business/trump-liquefied-natural-gas-ban-overturn-europe-intl/index.html