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OIL AND GAS
API: U.S. gas a strategic asset
by Daniel J. Graeber
Washington (UPI) Aug 26, 2016


disclaimer: image is for illustration purposes only

With U.S. Vice President Joe Biden touting diversity in the European energy market, an industry group said exports from U.S. ports could be a strategic interest.

"America's growth in natural gas production means that through liquefied natural gas exports we can give our allies stability and security in the global natural gas market," Marty Durbin, a marketing director with the American Petroleum Institute, said in a statement.

A vessel left its port at Sabine Pass, La., in February with the first cargo of LNG ever sourced from U.S. shale areas to the foreign market. Cheniere Energy Partners, which operates the Sabine Pass liquefaction plant, said the shipment marked a new era for the U.S. LNG sector.

For U.S. allies in Europe, the abundance of natural gas from domestic shale basins could be used as a tool to break the Russian grip on the European economy. European leaders said last year LNG sourced from U.S. shale basins may present a source of diversity with the right infrastructure in place.

A special permit is needed to send natural gas to countries without a U.S. free trade agreement, a scenario that could present roadblocks for LNG exports to the European market.

Speaking this week in Latvia, Biden said giving regional allies access to natural gas reserves from outlets outside of Russia was vital to European energy security.

"Europe needs diverse sources of gas, not new pipelines that lock in greater reliance on Russia," he said in a statement. "Russian gas can and should be part of the European market, but that market needs to be open and competitive."

European regulators are wary of the business practices of Russian energy company Gazprom on anti-trust grounds. A Polish government agency recently blocked a Russian move to expand the Nord Stream pipeline through the Baltic Sea because of concerns about competition.

Some countries in Eastern Europe like Poland rely almost exclusively on Russia for natural gas. API's Durbin said the abundance of U.S. natural gas in shale could be the answer.

"America's shale revolution is growing our economy, spurring environmental improvements and strengthening our own energy security," he said. "U.S. LNG will give our allies an opportunity to achieve those some goals."

Low energy prices may curb some options for exports. In July, a joint venture led by Royal Dutch Shell said capital constraints are in part behind a decision to delay a final investment decision for a gas export facility in Canada.


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