Is the US committed to European security? In European capitals, this question is no longer considered rhetorical or hypothetical. It also extends far beyond the ongoing questions about weapons and military aid packages. Energy is just as important, UK MP Craig McKinlay, chair of the UK Parliament's Net Zero Scrutiny Group, writes for CapX.
In a letter this week, nearly 40 parliamentarians from Britain, Spain, the Netherlands, Italy, Poland and other US allies urged the Biden administration to lift its pause on export approvals for new liquefied natural gas (LNG) projects in the US.
President Biden's decision is a shocking example of putting party politics above international security. With no guarantee of future LNG cargoes, America's European allies are likely to face supply constraints and rising prices. They will either be left to compete with gas-hungry China, India, South Korea and Japan for LNG cargoes from Qatar, Australia and other producers east of Suez; or worse, they will be forced to rely on Russian gas again. And if conflict in the Middle East closes the Strait of Hormuz, global LNG supplies will shrink by 20% overnight as Qatari cargoes remain stuck in the port. Any of these highly plausible scenarios would seriously undermine European security.
Biden's hiatus would also deal an economic blow to the US. The new natural gas liquefaction facilities not only provided billions in investment and skilled jobs around the US coast, but also ensured there was an export market for America's cheap and abundant shale gas. This has helped sustain investment and jobs even in North Dakota and Michigan.
There is a simple solution: President Biden's decision must be overturned. If not, this historic mistake will cause unnecessary economic damage to future generations, both in America and in Europe. The only obvious beneficiary will be Vladimir Putin, an absurd outcome for a US president.
It wasn't meant to be. As Europe rushed to wean itself off its addiction to Russian hydrocarbons after the 2022 invasion of Ukraine, the US provided an essential lifeline through increased LNG exports (up more than 140% from pre-war). Europe was lucky that such large US capacity came along at the right time - the result of investment decisions made a decade ago (it takes many years to build an LNG plant).
However, the strategy works. Russian gas now accounts for less than 8% of Europe's gas mix (pre-war it was 38%) and continues to decline today. Europe as a whole (including the UK) now accounts for 60% of all US LNG exports. These shipments are the unsung hero of NATO's response to Putin's war. The US, for its part, has already become the world's third-largest LNG exporter, just behind Qatar and Australia — both of which were due to be revisited later this decade until Biden unwisely allowed the hiatus.
The benefits to Americans are far more than the sometimes abstract concepts of "security" for the Allies across the Atlantic. These benefits are measured in the hundreds of billions of dollars: the US gains substantial revenue from increased exports to Europe, and US jobs and investment flourish in southern states such as Texas, Louisiana and Georgia and elsewhere in the supply chain.
It's a win-win - jobs and investment for Americans; energy security for Europeans - can be cemented for decades to come. The conditions are indeed now in place, for the first time, for Europe to gain access to secure energy supplies from a democratic geopolitical ally. European businesses and governments - often too slow in the past to recognize strategic energy threats - have learned from their mistakes. Investments poured in. New and expanded LNG regasification terminals to accept US cargo will soon be available in the UK, Italy, Spain and Germany.
European infrastructure is also being built at this time. Users win. Prices have stabilized. The role of the US as a global energy superpower is secure in the long term.
Only... not now.
The decision by the Biden administration to pause permits for new developments throws all these advantages on both sides of the Atlantic up in the air. With such uncertainty, no investment will be made; alternatives will be sought (in the new wave of LNG megaprojects in West Africa or on the back of Argentina's Vaca Muerta shale basin, for example); costs will rise again as global LNG demand growth - driven mainly by emerging Asian economies - again outpaces supply growth.
As we wrote in a letter to President Biden:
"The Western world cannot outpace our adversaries simply by standing still...we must plan ahead, expand our cooperation in energy and other areas, and prepare for the challenges of the future.
As politicians ourselves, we are not blind to the role of partisan politics in Washington in this election year - but surely international security concerns must rise above partisanship? Our signatures represent Conservatives and Liberals, Christian Democrats and Greens; from the Atlantic coast of Europe all the way to its eastern borders. In a dangerous and uncertain world, some issues transcend ideological labels and geographical differences.
British and European leaders have been (rightly) critical of President Trump's previous rhetoric on NATO and European security. Now is the time for our politicians to criticize President Biden's regulatory actions with the same vigor given the negative impact on current and future energy security. This is no time for a double standard.
The decision to pause permissions is an error and needs to be fixed.