[President-elect Donald Trump is set to overturn a ban on some US exports of liquefied natural gas (LNG), which could benefit US energy producers. However, the move is unlikely to address the climate crisis and may even make it worse.
The US has become the world’s top supplier of LNG, with exports expected to continue growing. In January, the Biden administration paused federal authorizations for several pending LNG export projects while assessing their impact on the environment and energy security at home.
The assessment forecast that increased LNG exports could lead to an additional 1.5 gigatons of planet-warming pollution per year by 2050, equivalent to one-quarter of current US annual greenhouse gas emissions.
The EU is the biggest buyer of American LNG, and it will have to wait until after 2030 to see the benefit of the reversed ban. The region is currently dependent on natural gas imports, with the US and other countries supplying the bulk of its gas needs.
The global gas market is expected to remain tight, despite forecasts of warm winter weather, with low inventories in Europe, uncertainty around gas supplies from Russia, and start-up timelines for new LNG projects.
The loss of Russian pipeline gas flows through Ukraine, set to expire in 2025, will make it harder for Europe to refill its storage facilities before next winter. Europe will have to rely on more LNG imports or pipeline gas from other European nations to meet its energy needs.
Natural gas prices in Europe remain high, with analysts predicting little change in the short term. The end of the Russian pipeline contract and a modest increase in global LNG supply over 2025 will keep prices elevated, with potentials prices dropping to two-thirds of current levels by 2026.
The growing reliance on LNG imports will put European businesses at a competitive disadvantage compared to those in the US, where energy costs are significantly lower. European natural gas prices are currently up to five times higher than those in the US, with the gap expected to narrow but not close completely by the end of 2026.
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