The U.S. will soon be an energy exporter. But administration officials are overselling that potential.
- By Keith JohnsonKeith Johnson is Foreign Policy’s acting managing editor for news. He has been at FP since 2013, after spending 15 years covering terrorism, energy, airlines, politics, foreign affairs, and the economy for the Wall Street Journal. He has reported from Europe, the Middle East, Africa, and Asia and, contrary to rumors, has absolutely no plans to resume his bullfighting career.
The Obama administration has a simple message for European countries fearful that Russia might use its energy might as a weapon: Don’t worry, because the United States can export as much natural gas in a day as the entire continent uses every 24 hours. It’s a comforting message for allies wondering whether to alienate Moscow by backing Ukraine’s fragile government. Unfortunately, it’s also wrong.
The confusion began with President Obama. On March 26, after a meeting with European leaders, the president said that future overseas sales of American natural gas could reduce Europe’s dependence on fickle energy suppliers like Russia.
"The United States is blessed with some additional energy sources that have been developed in part because of new technologies, and we’ve already licensed, authorized the export of as much natural gas each day as Europe uses each day," Obama said.
Secretary of State John Kerry made a similar claim in Brussels on Wednesday after a summit with European Union officials that was specifically dedicated to energy issues.
"Our new capacities as a gas producer and the approval of seven export licenses is going to help supply gas to global markets, and we look forward to doing that starting in 2015. And we will supply more gas than all of Europe consumes today," he said.
Neither statement, as expressed, is correct. For the moment, the U.S. is a net importer of natural gas, which means America consumes more gas than it produces. Down the road, the U.S. will produce enough natural gas to begin selling significant amounts to foreign countries. That could meet some of Europe’s gas demand, but not all of it.
Math is always fun, so here are the numbers in question. In 2013, the 28 countries of the European Union consumed about 44.7 billion cubic feet per day. In 2013, Europe imported about 4.6 billion cubic feet per day of liquefied natural gas aboard massive tankers, which is the way U.S. firms would send natural gas to the continent. They get the remaining 38.7 billion cubic feet per day from other sources, including local production and by pipelines.
To be sure, American overseas sales will soon start to grow somewhat significantly. The Department of Energy has approved seven natural gas terminals in recent years which can export a total of about 9.2 billion cubic feet per day. The department is considering whether to sign off on the construction of 30 other plants which would allow American firms to theoretically export nearly 27 billion cubic feet per day more to the EU’s member nations. In practice, many of those terminals will never be built, and much of that gas will likely be sold to customers in Asian countries in any event.
All of that is to say that Obama’s statement that Washington has already authorized the export of " as much natural gas each day as Europe uses each day" is incorrect. Asian countries have already signed long-term contracts to buy future American gas. That means it would literally be impossible for all of the future overseas sales that Obama is talking about to go to Europe.
To give the White House the benefit of the doubt, many energy experts initially puzzled by the president’s remarks speculate that he may have meant to make a different, more nuanced point. They point out that future U.S. exports could provide more gas than Europe currently imports by tanker each day. The key words there are "by tanker." European consumers would still be consuming much more energy than U.S. firms would be selling. Spokespeople for the White House and State Department didn’t respond to requests for comment.
Making the issue even more confusing is comparing future U.S. exports with current European consumption. Most U.S. export terminals won’t be operational until later in the decade, by which time European liquefied natural gas imports are expected to have risen from their lowest level in a decade as the continent races to reduce its dependence on Russia. That would make the difference between what Europe consumes, even from tanker imports, and what America exports even larger.
Kerry added to the confusion this week when he said that the United States will "supply" more gas than Europe consumes, which is also not correct. It was not clear if he was referring only to the seven approved terminals, or the other 30 that have requested approval. But even if every single molecule of that gas went to Europe the U.S. would still be unable to meet the continent’s energy needs.
One administration official, speaking on condition of anonymity, said that Kerry’s remarks were meant to compare future U.S. gas exports to current European liquefied natural gas imports, and that that is the message he will stress in future speeches.