|Frackers are building a transatlantic gas network and using Congress to push policies and subsidies that will lock Europe and the U.S. into a huge, unneeded expansion of fossil fuel infrastructure. It’s the last thing we need.
AUTHORS: Frida Kieninger, Andy Gheorghiu
The gas industry is on shaky ground, and it is not just because of the global pandemic, but due to a broken business model that was already showing signs of collapse before COVID-19. Political leaders in Ireland are taking steps towards banning LNG imports and offshore oil and gas exploration, and numerous LNG projects are being cancelled around the world.
Despite leadership in places like Ireland, United States policymakers are pushing ahead for a massive expansion of European fossil fuel gas infrastructure. Other than boosting corporate profits, it’s hard to understand why anyone would back plans to expand infrastructure that poses an existential threat to humanity.
These United States Bills Meddle With Europe’s Ability To Escape Fossil Fuels
In late December when many people were preparing for the holidays, the US Congress quietly slipped two provisions in the must pass federal budget. They bolster US diplomatic pressure on Europe to accept US LNG imports and support EU infrastructure projects, many with involvement of US firms, under the guise of security and energy diversity. The ‘European Energy Security and Diversification Act’ proposes a billion dollars (over €891mio) of U.S. tax money to boost “diversification of energy.” This bill includes support for power plants using climate-wrecking fossil gas as well as gas pipelines, import terminals, and storage facilities.
The other bill that passed in December, the ‘Eastern Mediterranean Security and Energy Partnership Act’ encourages a number of costly mega pipelines and liquid natural gas (LNG) terminals in the region around the Eastern Mediterranean by making it clear that supporting LNG and gas infrastructure projects is the explicit position of the United States, bringing with it significant diplomatic pressure. With all the problems relating to the development of gas infrastructure from beginning to end, the last thing the US should be doing is using its diplomatic power to prop up fossil fuel interests.
Europe Doesn’t Need More Gas Production
Beefing up the already oversized EU gas grid and supporting gas power plants is a dangerous waste of U.S. tax money, and an extremely bad idea for our climate. Existing LNG terminals in Europe are already underused, and we do not need more expensive fossil gas infrastructure. A recent report analyzed EU top priority gas infrastructure plans — including proposed German LNG terminals and the Russian Nord Stream 2 project (worth €29 billion). It finds that these pipes, import terminals, or storage facilities are unnecessary investments that won’t enhance supply security. Instead, they lock in money that must be urgently channeled into renewables and energy efficiency. U.S. support for climate-hostile fossil gas infrastructure would only increase the amount of stranded fossil fuel investments while making it more difficult to achieve even the modest Paris Climate Agreement goals.
Russia Is A Red Herring
According to the narrative created by these moves in Congress, supporting new EU gas infrastructure supposedly helps Europe reduce its dependency on Russian gas. But most of the projects mentioned in U.S. legislation are located in Eastern Europe, and once constructed, could allow in even more Russian gas. For instance, the Trans-Caspian Mega Pipeline would deliver Azeri gas to Europe, but any excess capacity could be used to pipe Russian gas to Greece and Italy. Russia benefiting from the expansion of gas infrastructure makes this pretense for the U.S. bills even more ridiculous.
Even more importantly, particularly in southeastern Europe (where most of these gas infrastructure projects are planned), measures to reduce demand would greatly reduce dependence on fossil gas. Building renovations alone will decrease energy demand by over 50%, while lowering heating and electricity bills and increasing quality of life.
Are U.S. Bills A Trojan Horse To Dump Their Own Unprofitable Fracked Gas?
What these bills will do is boost the ailing U.S. fracking industry by creating new ways to export climate-wrecking fracked gas to Europe, a necessary move for an industry that is seeing its growth slow down due to competition from clean energy. The industry has already seen a surge in LNG exports to Europe, following a 2018 agreement between President Trump and EU Commission president Juncker, U.S. gas volumes imported into Europe went up nearly 600%.
The expansion of gas infrastructure to support the fracking industry flies in the face of the fact that a majority of EU Member States have declared fracking bans, moratoria, and restrictions. The inherent conflict of prohibiting fracking in EU territory while importing fracked gas through the back door is a hypocritical move that the new EU Commission seems content to ignore, despite a shiny new (but hollow) “European Green Deal.”
Stoking The Supply Chain For More Plastic May Be One End Goal For Frackers
It is increasingly clear that the U.S. plastics industry has reaped massive hidden benefits from the environmentally destructive fracking boom, producing an oversupply of cheap ethane (a main component for plastic production). According to a recent International Energy Agency (IEA) report, the United States is home to around 40% of the global production capacity for ethane-based petrochemicals.
Petrochemicals are rapidly becoming the largest driver of global oil consumption — ahead of trucks, aviation, and shipping. Today, the chemical sector is already the largest industrial consumer of fossil fuels, accounting for 14% of global oil and 8% of gas demand. The IEA expects that cheap ethane consumption will grow by 70% until 2030, in part due to the expansion of U.S. exports to regions like Europe.
In 2016, Ineos, the largest ethylene producer in Europe, began importing fracked U.S. ethane to Europe to manufacture plastics at its facilities in the UK and Norway. The company is planning to invest €3bn to build a new ethane cracker (a plant that chemically alters ethane so it can be turned into plastic) and a propylene-producing propane dehydrogenation (PDH) plant in the Port of Antwerp. However, a very shaky financial basis for these planned investments and a broad trans-Atlantic opposition along the supply chain makes it unlikely that these plans will ever become reality — making any financial support super risky. U.S. support for building a Transatlantic fossil fuel trade will lower the risks borne by investors, and undermine our ability to decarbonize our economy.
Europe Needs To Shut Down The Transatlantic Fossil Fuel Trade
Pressure from both the U.S. and Europe are necessary to chart a path toward a livable future. In 2020, the EU will rewrite priority infrastructure rules. These rules — dating back to 2013 — are written to enhance energy security by reducing dependency from Russian gas through diversification of supply. However, this time Europe must think about alternatives to fossil fuels, by moving full speed ahead into a renewable future, which will enhance our energy security while protecting public health and the climate.
Given everything that is on the line for the fracking industry, it is no wonder researchers are asking if entities like New Fortress are rigging the system in order to expand their reach into Puerto Rican markets. We can probably expect more backroom dealing in the EU to continue expansion of fossil fuels into Europe.
There are numerous groups all across the EU fighting unneeded and climate hostile fossil gas projects. Groups like Food & Water Action Europe will push for infrastructure rules that support a fair transition to renewables. We need the U.S. as a partner that helps us gain real energy independence by opposing new fossil fuel infrastructure and fracking, while pushing for a real Green New Deal that will build a sustainable clean energy future for all.