U.S. liquefied natural gas (LNG) producers struggled for many months this year during the pandemic, until prices rose with the colder weather, and exports rose for three consecutive months.
French utility Engie recently pulled out of a long-term deal with NextDecade to import millions of tons of U.S. LNG. The Wall Street Journal said the French government was motivated by concerns about fracking: Paris considered shale fracking a high emissions method of extracting natural gas.
The French government owns 24 percent of Engie. Environmental group Les Amis de la Terre (Friends of the Earth) France called on the utility to cancel the deal because of its environmental impact. This failed deal may result in cancellation of the plan by NextDecade’s to build a new Rio Grande LNG plant.
Bloomberg reports that environmental legislation in Brussels could seriously hurt expansion of U.S. LNG exports.
The European Commission Green New Deal is based on:
- Eliminating net greenhouse gas emissions by 2050;
- Decoupling economic growth from resource use (?), and
- Leaving no person and no place behind (??)
The EU is serious about net-zero greenhouse emissions. Member countries are encouraged to spend heavily to develop solar and wind generation capacity. Even Poland, heavily dependent on coal, announced plans to boost its renewable energy capacity.
Natural gas used to be called a bridge fuel between the fossil fuel era and the future of renewable energy. Now methane leaks, and hydraulic fracturing in general, are being attacked by EU bureaucrats.
The EU needs natural gas because there is not enough battery storage, or enough generation capacity, to switch to solar and wind.
Russian is now the primary source of the EU's imported natural gas, extracted without franking, which the EU seems to believe is evil. Of course Russia has methane leaks too.
LNG competition is tough because the U.S. is not the lowest-cost producer.