Under fresh plans to clamp down on the rising cost of living across the UK, the government has convinced the Biden administration to double US gas exports to Britain.
Prime Minister Rishi Sunak pledged that the new partnership to boost energy security, efficiency and affordability will cut prices for Britons and ensure the UK’s national supply can “never again be manipulated by the whims of a failing regime.”
The initiative has an “immediate goal” of stabilising energy markets and reducing demand, while seeking to build long-term resilience by accelerating the shift to clean alternatives.
This will involve promoting nuclear fuels as a “safe” and “reliable” part of the transition, expediting the development of clean hydrogen, and driving international investment in offshore wind and carbon capture.
Double of 2021 levels
As part of efforts to drive down the cost of living, the US will aim to export at least nine to 10 billion cubic metres of liquified natural gas to UK terminals over the next year, more than doubling the level in 2021.
The partnership will be steered by a new UK-US joint action group, led by senior officials from the British Government and the White House, with the first meeting held virtually on Thursday.
The Prime Minister and US president Joe Biden are not expected to attend.
Rishi Sunak said the partnership will help end Europe’s dependence on Russian energy “once and for all” and bring down prices for British consumers.
“Together the UK and US will ensure the global price of energy and the security of our national supply can never again be manipulated by the whims of a failing regime” said Rishi Sunak
“We have the natural resources, industry and innovative thinking we need to create a better, freer system and accelerate the clean energy transition.”
Citing the war in Ukraine, Sunak and Biden said in a joint statement that it is “more important than ever” for allies to work together to build “resilient international systems”.
“Our immediate shared goal to stabilise energy markets, reduce demand, and ensure short-term security of supply is underpinned by the longer-term objective of supporting a stable energy transition to achieving net zero emissions by 2050, which in itself will strengthen our energy security,” they said.
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“To this end, we are establishing a Joint Action Group for Energy Security and Affordability to accelerate our immediate cooperation on short-term action to support energy security and affordability in the United Kingdom and across Europe.”
By CityAM
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But given the tight global gas market and shortages in the market, the UK has no alternative but to pay the LNG price demanded by the US.
French President has complained of double standards by the United States selling LNG to the EU at three to four times the price it sells to US citizens. Other EU members particularly Germany voiced their disgust at US exploitation of an ally.
Germany received one shipment of Australian LNG which we don’t know for sure whether despite the very high shipping costs was cheaper than US LNG price or it might have been forced to do it to satisfy its needs amid growing shortages in the market.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert