Vice President, Policy, U.S. Chamber Global Energy Institute, U.S. Chamber of Commerce
February 24, 2023
One year ago, Russia’s invasion of Ukraine changed the course of world events in ways that will reverberate for decades to come. Thanks to critical energy policy decisions made in the U.S. nearly a decade prior, Europe’s resilience to those reverberations was immeasurably strengthened.
Within days of the invasion, German Chancellor Olaf Scholz delivered a major address setting forth a new era of German foreign policy aimed at responding to Vladimir Putin’s aggression. In addition to pledging a major expansion of military funding, Scholz’s declaration of “Zeitenwende”—an historic turning point—called for rapid diversification of European energy supplies away from dependence on Russia.
In a show of solidarity, weeks later President Biden and European Commission President Ursula von der Leyen announced a joint energy security task force committed to ensuring delivery of an additional 50 billion cubic meters (bcm) of U.S. liquified natural gas (LNG) to Europe through at least 2030.
Thanks largely to re-routing of cargoes destined for Asia, early progress toward that goal has been impressive. Compared to 2021, U.S. LNG exports to Europe more than doubled in 2022, with almost 70% of all cargoes finding their way to the continent.
Combined with unseasonably mild weather and aggressive efficiency measures, this flotilla of “freedom molecules” (as former Energy Secretary Rick Perry coined them) has neutralized Putin’s natural gas weapon and saved Europe from a potentially disastrous winter.
The geopolitical value of this replacement gas to both the U.S. and Europe is incalculable, and indisputable. Nonetheless, we tend to take our ability to deliver those cargoes for granted, so it is useful to revisit the long and uncertain path through which these energy security benefits came to fruition.
In order to support our allies, America first needed abundant energy supplies and the federal authority to sell them around the world. In the early 2000s, we had neither. In fact, consensus forecasts of declining domestic production at the time led several companies to begin investing billions in LNG import facilities.
However, the shale revolution ushered in an era of natural gas abundance that reversed those fortunes. And in 2010, Cheniere initiated America’s own LNG Zeitenwende by seeking federal authority to export natural gas from a once-planned import terminal.
Submitted long before escalation of Russian aggression in Europe, Cheniere’s license application emphasized the national security benefits of providing energy to our allies. The Obama Administration’s Department of Energy agreed, declaring such benefits explicitly part of the public interest determination upon which it based its approval:
"We have also considered the international consequences of our decision… To the extent U.S. exports can diversify global LNG supplies, and increase the volumes of LNG available globally, it will improve energy security for many U.S. allies and trading partners.”
Similar conclusions accompanied approvals of other facilities during both the Obama and Trump administrations, and of course we know now how prescient those determinations were.
Still, before any tankers could hit the water, those federal approvals faced a final set of hurdles: wave after wave of legal challenges from activist groups seeking to block exports on environmental grounds. (These arguments ring especially hollow given the low climate footprint of U.S. LNG and the fact that it often displaces higher-emitting coal and Russian piped gas, as we have written about here.)
If those challenges had succeeded in blocking our ability to deliver natural gas to overseas markets, there is little doubt that circumstances in Europe would have unfolded much differently this winter.
Fortunately, the courts rejected these legal challenges, and in a fitting coincidence, the first cargo of U.S. LNG left Cheniere’s Sabine Pass export terminal in Port Arthur, Texas on February 24, 2016 — a milestone reached exactly six years prior to the invasion of Ukraine. From that point forward, the race was on, and by December 2021 the U.S. surpassed Qatar and Australia to become the world’s top exporter. We now deliver about 12 bcm per day from seven different terminals in the Gulf of Mexico and Atlantic Coast.
Despite this progress, longer-term energy security concerns of our trading partners remain unsolved. Global demand for natural gas will be strong for decades to come, and American allies in Europe and Asia cannot diversify away from Russia unless and until sufficient alternatives become available.
Thus, continued expansion of LNG export capacity remains in America’s public interest. As future facilities continue to encounter legal, financial, and political obstacles similar to those that preceded them, we should hope the immense energy security benefits of U.S. LNG receive the attention they deserve.
About the authors
Dan Byers is vice president for policy at the U.S. Chamber of Commerce’s Global Energy Institute with a focus on environmental and regulatory issues, Byers develops and implements strategies in support of the Institutes broader education and advocacy efforts. Byers brings nearly two decades of public policy experience to his work directing the Institute in assessing the impact of existing and emerging federal laws and regulations on the U.S. energy industry.