Topline
The U.S. announced a deal with the EU Friday to boost its supply of liquefied natural gas to the bloc as Europe seeks to reduce its dependence on Russian gas amid its ongoing invasion of Ukraine.
Russia is the EU’s biggest supplier of natural gas and makes up more than 40% of the bloc’s imports
Key Facts
The U.S. will supply an “additional 15 billion cubic meters of liquefied natural gas this year,” President Joe Biden said Friday, on the third day of a trip to Europe to meet EU, NATO and G7 leaders.
A taskforce chaired by representatives from the White House and European Commission will ensure “energy security” for Ukraine and the EU’s 27 member nations over the next two winters, the White House said.
The move is also intended to “accelerate” a move to clean energy, Biden added, in line with climate goals, while the U.S.’ supply of LNG will also be powered using clean energy, the White House said.
The White House added that the U.S. and EU will work together to speed up renewable energy plans, and reduce dependence on gas overall through the deployment of heat pumps, while “ramping up” solutions such as smart thermostats.
Key Background
Russia is the EU’s biggest supplier of natural gas and makes up more than 40% of the bloc’s imports, which is mostly used to heat homes. But its month-long war on Ukraine has sparked concerns about the sustainability of Europe’s reliance on Russian fossil fuels. President Biden announced an historic ban on Russian oil imports in early March, and the EU has so far stopped short of an all-out ban, but has pledged to severely reduce its imports of Russian gas by the end of 2022 and completely phase out Russian fossil fuels by 2030. Western allies have levied sanctions on Russian banks, oligarchs and politicians, while dozens of multinational firms have either pulled out, suspended or scaled back business operations in Russia in efforts to squeeze Putin economically.
Tangent
As Russian troops began invading Ukraine in late February, Germany stopped the certification of Nord Stream 2, an $11 billion undersea pipeline that was not yet operational, but would have directed Russian gas to flow directly to Germany. Critics, including the U.S., has warned that certification of the pipeline would increase Europe’s reliance on Russian gas.
What To Watch For
The announcement marks a long-term blow to Putin’s plans to target nations who have punished Russia for its invasion of Ukraine. On Wednesday, the Russian president asked the nation’s central bank to make ‘unfriendly’ nations pay for natural gas in rubles. He gave both the bank and state-owned gas giant Gazprom a deadline of next week to come up with a plan to change contracts with purchasing nations.
Further Reading
Here’s How Biden’s Historic Ban On Russian Oil Will Hit The Economy (Forbes)
Putin Plans To Make ‘Unfriendly’ Countries Purchase Russian Gas In Rubles (Forbes)
Tracker: In-Depth Look At 25 Russian Billionaires Hit By Sanctions (Forbes)
Source: https://www.forbes.com/sites/isabeltogoh/2022/03/25/us-reaches-liquefied-natural-gas-deal-with-eu-to-reduce-europes-reliance-on-russia/