Hot Gas ?

In a move today that can only hurt European energy requirements the Biden Administration announced today the suspension of all LNG gas exports citing  climate change as the existential threat of our time – that must be acted on with the urgency it demands to protect the future for generations to come ! 

The United States currently holds the top position as the leading global exporter of liquefied natural gas (LNG), and projections indicate a doubling of U.S. LNG exports by the close of this decade. Concurrently, the U.S. remains steadfast in its commitment to supporting allies across the globe. The recent announcement is not anticipated to affect their ability to consistently provide LNG to its allies in the short term. In the previous year, approximately half of U.S. LNG exports were directed to Europe, and collaborative efforts between the U.S. and the European Union have effectively optimized consumption and storage management, safeguarding the supply against potential threats of unprovoked aggression.

Nonetheless this announcement will worry the Europeans and specifically the Germans. Europe continues to grapple with an energy crisis, with Germany, the continent’s former industrial powerhouse, facing a particularly challenging situation after discontinuing Russian gas supplies, according to Economy Minister Robert Habeck. Before sanctions were imposed on Moscow due to the Ukraine conflict, Germany relied on Russia for 40% of its gas imports. The shift to LNG from the U.S., along with energy from Norway and the Netherlands, has incurred substantial costs, leading the German government to implement sizable subsidy packages to prevent major industrial firms from relocating out of the country.

¨The era of cheap energy is over, at least as long as we continue to consume large quantities of conventionally generated energy,”

The head of the Federal Network Agency, Klaus Muller, stated in an interview with the Rheinische Post at the end of December.

Biden squeezing Europe ?

It’s possible to interpret the situation as a form of pressure from the Biden administration on Europe regarding its perceived slowdown and loss of momentum in funding and supplying armaments to Ukraine. The decision-making process and public opinion in Germany, in particular, have been scrutinized, and the United States may seek to influence European allies to take more decisive actions in supporting Ukraine against the backdrop of the conflict with Russia.

In recent days Kyiv has urged Berlin to provide Taurus missiles, potentially enabling Ukraine to inflict substantial damage in Russian-occupied areas, the German government has been cautious, fearing it could lead to an international escalation of the conflict. In an effort to address Germany’s concerns over supplying missiles to Ukraine, Britain has reportedly proposed a cruise missile swap, according to German newspaper Handelsblatt.

Chancellor Olaf Scholz, on Sunday, dismissed criticism that Germany was not taking a leading role in Western efforts to provide Ukraine with heavy weapons in response to Russia’s invasion. He emphasized a preference for cautious decision-making over hasty actions, acknowledging the pressure to supply Ukraine with heavy arms and support an immediate EU embargo on Russian energy imports. Scholz stated in an interview with Bild am Sonntag that he makes decisions swiftly but in collaboration with partners, expressing reservations about impulsive actions and independent German initiatives.

Despite the decision, Chancellor Scholz’s image as indecisive and lacking leadership did not improve. An opinion poll in Bild am Sonntag revealed that 54% of respondents were dissatisfied with Scholz’s handling of the crisis, with his approval rating dropping to 32%. Concerns about a potential expansion of the conflict beyond Ukraine led to discontent among some of Germany’s NATO partners, who expressed dissatisfaction with Scholz’s initial hesitation on providing military support to Ukraine.

Lets see how Europe responds in the next few days.