Thursday, February 23, 2023, 02:17
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The war started by Vladimir Putin in Ukraine a year ago it upset the international markets in various fields, but also the financial exchanges. Transport routes and trade have changed around the world, and energy firms in the United States, a major NATO power, have signed major long-term contracts to deliver gas to Europe.
US oil and gas companies are pushing to solve the short-term problem of a tight gas supply to Europe caused by Russia’s invasion of Ukraine with long-term liquefied natural gas (LNG) contracts, a new report shows. recent, appropriate The Guardian.
The US fossil fuel industry has struck 45 long-term contracts and contract extensions since the start of the war, according to research by experts at Friends of the Earth, Public Citizen and BailoutWatch. This is a major increase from the 14 such contracts signed in 2021.
While gas price volatility in Europe is already easing, most new contracts will not deliver gas until 2026 or later, after which they will lock in purchases for 20 years or more.
“LNG terminals are extremely expensive, multi-decade investments,” said Lukas Ross, report co-author and program manager for Friends of the Earth. “For a bank or other investor to feel comfortable writing a check for something like this, they need market certainty. And the way this certainty is provided is through long-term contracts. But a short-term supply crisis should not be solved with long-term infrastructure.”
And then there is the issue of climate. Taken together, the 2022 LNG contracts total 58.1 million metric tons per year of LNG each year — more than half of the gas burned for cooking and heating in U.S. homes in 2021. These contracts represent 351 million metric tons of carbon dioxide emissions each year, equivalent to the annual emissions of 94 coal-fired power plants or one-third of all US households.
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“How many of these projects get built — and how many years of extraction and emissions are locked up — is perhaps the most pressing climate policy issue in the U.S. today,” Ross said.
The US government has accelerated the permitting process for several of the proposed LNG terminals, many of which had been stalled for years before the invasion of Ukraine. A terminal that Sempra Energy has been trying to build in Port Arthur, Texas since 2019, for example, announced in January 2023 that it had secured contracts covering 80 percent of its output for the next 20 years, paving the way to construction.
Oil and gas companies that have been trying for years to build terminals of export on the Pacific coast to more easily reach customers in Asia have found a home in Mexico. Several projects are being built there, most of which will still go through US permitting processes, as the gas they will export will come exclusively from the US.
