April 29, 2016
The United States will be a reliable supplier of liquefied natural gas to global markets because it is “not only good for our energy security, it is good for the security of our energy partners and allies around the world,” said Robin Dunnigan, Deputy Assistant Secretary of State for Energy Diplomacy at the US State Department.

Dunnigan was hopeful that US LNG will be part of the energy “diversification solution” in Europe and other parts of the world. She spoke at a conference hosted by the Atlantic Council’s Global Energy Center and Eurasian Energy Futures Initiative on April 28.

In a market that is turning away from fossil fuels and toward renewable energy, natural gas is often identified as an ideal solution to bridge the technological gaps between fossil fuels and renewable energy. Recent growth in fracking in the United States has increased the availability of natural gas. This increased market availability will have positive effects on Europe’s energy security, according to the conference panelists.

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In 2016, global markets are experiencing a “pivotal moment in the energy narrative,” said Andrew Walker, Vice President, Strategy, at Cheniere Energy.

“The US is making LNG abundant…there is reason why LNG hasn’t been abundant… and that’s because it comes from countries that were centrally controlled by governments or national oil companies that controlled the exports,” he added.

The availability of US LNG will help create market security by challenging the established market shares of current LNG exporting nations.

“In Europe you don’t get the lowest price for Russian pipeline gas unless you have alternatives,” said Bud Coote, a Resident Senior Fellow at the Global Energy Center. Continued US LNG exports may provide that alternative.

“Despite US entrance into the global LNG market in February, US LNG is not going to be a major competitor of Gazprom, at least in the next few years,” Coote added, referring to the Russian gas monopoly.

However, Cheniere Energy, which shipped the first cargo of US LNG in February, recently celebrated the opening of the United States’ first LNG export terminal, Sabine Pass, as well as the seventh shipment of US LNG to international markets this past week.

“A key reason we’ve been able to take this abundant supply and turn it into economic value is because of our pervasive infrastructure,” said Paula Gant, Principal Deputy Assistant Secretary, Office of International Affairs, at the US Energy Department.

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Energy infrastructure in Europe remains a contentious issue among Western and Central European countries. Nord Stream 2, which would transport Russian natural gas to Europe, stands at the forefront of the energy debate.

In 2014, Russia annexed Crimea and today, Russia-backed separatists and pro-Ukrainian government forces remain locked in conflict. The European energy community is concerned how Russia would react if Nord Stream 2 is completed.

“You can’t separate commercial and political issues [in discussing Nord Stream 2],” said Richard L. Morningstar, Director of the Global Energy Center.

Dunnigan said the crisis between Russia and Ukraine threatens energy independence and continues to be a focus for US energy partners.

US LNG, while not yet at an export capacity that can challenge Gazprom, provides a physical threat to Russian dominance of the European market. US LNG entering the European energy market creates market pressure keeping Russia from manipulating LNG flows to Europe, the panelists contended.

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The United States and the European Union will hold the seventh annual EU-US Energy Council in Brussels in May. Key US energy officials, including US Energy Secretary Ernest Moniz, will meet their EU counterparts, according to Dunnigan.

“The commission and the United States are very closely aligned in the priorities of the energy project…The Energy Council is coming at an interesting time. It’s getting toward the end of the [Obama administration], but we have had a few important developments,” said Dunnigan.

Dunnigan was optimistic about the outcome of the summit based on the Paris climate agreement that was signed by US Secretary of State John Kerry on April 22 at the United Nations.

“[The Paris climate accord] does set the stage for how the European Union and the United States can work together not only on our own commitments, but also to help our partner and allies around the world implement their own,” she said.

Mitch Hulse is an intern and Mikaila Altenbern is a communications coordinator at the Atlantic Council.

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