This week, it’s all about liquefied natural gas (LNG), as Asian markets eye a potential reduction in prices once US exports pick up momentum, Central Europe sends a desperate plea to Washington for exports, and the specter of a potential partnership between Ukraine and Turkey could spark off a major European energy coup.
First, the energy ambassador for the Czech Republic, Vaclav Bartuska, and his Hungarian counterpart Anita Orban penned a desperate letter to the Washington Post, noting that the US is now in a position to export gas and Central Europe is anxiously hoping to be on the receiving end of this largesse.
Thanks to the shale gas boom in the US, they write, “this surplus creates opportunities for the United States to again be a geopolitical player in Europe […] Our countries’ commitment to the transatlantic relationship is unwavering. But we remain vulnerable to energy diplomacy because of our overwhelming reliance on Russian gas and oil.”
US companies seeking to export gas to countries that do not have free-trade agreements with the United States are subject to lengthy bureaucratic procedures. Almost two dozen export license applications are pending; only a few have been granted in the past three years.
Congress, working with the Administration, can help US companies gain new business opportunities while also helping the United States and its allies diversify their energy sources. This would create a win-win situation, the letter reads.
"By making strategic choices, the United States could demonstrate, once again, that it considers the Czech Republic, Hungary, Slovakia and Poland close allies and start a new, even closer, chapter in bilateral relations."
At the same time, large-scale Asian gas importers are also eyeing more US exports, which would put downward pressure on the premium prices Asian countries are now paying for LNG.
Speaking at global energy forum in Washington, DC, earlier this week, Asian utility and gas companies noted that North American gas wealth could be a global game-changer and lead to the first significant West-to-East gas trade, keeping in mind that Asia consumes two-thirds of the world’s LNG at present, according to an article in The Washington Post.
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Not only are Europe and Asia eager to get their hands on US gas exports, but one of America’s most respected economists says it makes sense for the US economy, too. In a recent interview with Oilprice.com, economist Tyler Cowen noted: “Trade benefits both nations. And it will encourage the supply of gas all the more in the longer run. This is a win-win, and I see no good reason to restrict exports. [...] The overall record of the US federal government is pro-business and pro-export, and I see no reason to bet against that record this time around.”
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