August 18, 2025 • 10 mins
Join us at Charged Conversations as we unravel Europe's journey from commitment to urgency in securing US liquefied natural gas (LNG) amidst the turmoil of Russia's invasion of Ukraine. Featuring insights from Brigham McCown, we'll explore the origins of this energy pact dating back to 2018, when Donald Trump and Jean-Claude Juncker aimed to ease tariff tensions through enhanced LNG trade. As we fast forward to today's landscape, our analysis reveals the intricate mechanics of energy procurement in Europe, where decentralized decision-making and private companies like Shell and Total Energies hold the reins.
Dive into the challenges facing the US as it strives to meet Europe's soaring energy needs. While American gas production thrives, the hurdles lie in the infrastructure and regulatory landscape, with US LNG terminals stretched to their limits. We'll touch on the Biden administration's policy shifts that have introduced uncertainties, setting back progress on expanding LNG export capacities. This episode offers a comprehensive exploration of the intricate dance between political ambition, commercial execution, and the infrastructural realities that define the future of US-European energy relations. Join us for a thought-provoking discussion on what's needed to fulfill the transatlantic energy promise.
Dive into the challenges facing the US as it strives to meet Europe's soaring energy needs. While American gas production thrives, the hurdles lie in the infrastructure and regulatory landscape, with US LNG terminals stretched to their limits. We'll touch on the Biden administration's policy shifts that have introduced uncertainties, setting back progress on expanding LNG export capacities. This episode offers a comprehensive exploration of the intricate dance between political ambition, commercial execution, and the infrastructural realities that define the future of US-European energy relations. Join us for a thought-provoking discussion on what's needed to fulfill the transatlantic energy promise.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Charged Conversations, where we discuss the latest on
energy and energy related topics. I'm your host, Brigham account Well,
this episode will be diving into the energy to mention
of the US European energy trade relationship. We'll unpack what
Europe is supposed to buy from the US, how much
energy it actually needs, and whether this transatlantic promise can
(00:24):
realistically be fulfilled. Along the way, we'll examine Donald Trump's
original approach, how the EU procures energy, and why private
companies ultimately hold the keys to success. To understand today's
(00:45):
US EU energy relationship, we need to go back a
few years. In twenty eighteen, then President Donald Trump and
European Commission President Jean Claude Junker stood at the White
House podium and announced a new trade initiative to diffuse
growing tariff tensions. One of the outcomes a commitment by
(01:06):
the EU to buy more US liquefied natural gas or LNG.
Trump famously branded American gas as freedom molecules and made
energy exports a central plank of his trade strategy. The
goal wasn't just economic, it was strategic. By reducing Europe's
(01:27):
dependence on Russian gas, the US could strengthen transatlantic ties,
weakened the Kremlin's energy leverage, and bolster American producers. At
the time, the EU said it was on board, meant
it pledged to work with member states and private firms
to facilitate lergy purchases from the US. Now, fast forwarding
to today, we find ourselves in a dramatically different landscape.
(01:51):
Russian invaded Ukraine, gas prices spiked, and the EU has
finally moved from polite interest to desperateness. But can the
US actually deliver? Well, let's clarify what Europe actually agreed
to do. In March twenty twenty two, shortly after the
war when Ukraine began, the US and EU announced a
(02:15):
joint Energy Security Task Force. Then, as part of that plan,
the US pledged to ensure an additional fifteen billion cubic
meters of LNG exports to Europe that year, with a
name to ramp up deliveries to fifty billion cubic meters
annually through at least twenty thirty. For context, fifty million
(02:35):
bcm is roughly equivalent to one third of what Europe
imported annually from Russia before the war began, So that's
the ambition, but ambition doesn't necessarily equal execution. The US
can produce the gas, no problem there. American gas production
has reached record highs in recent years, leading the world
(02:59):
in both oil and gas production. But exporting lerg requires terminals, ships,
and long term contracts, and that brings us to the
real mechanics of energy trade. Contrary to how it might
seem from high level statements, the EU doesn't actually buy
energy as a block. Energy procurement in Europe is decentralized.
(03:23):
Each member state manages its own energy mix and imports. Germany,
for example, might import from Norway, the Netherlands, or Algeria.
Poland might prioritize gas from the Baltic Sea. Spain, with
its strong energy infrastructure, might source from the US, Nigeria,
or cutter The European Commission sets policy goals like emission
(03:47):
targets or diversification objectives, but it doesn't sign a single
purchase order, and that brings us to the real driver
of transatlantic energy trade. Private companies shell, ng RWE Total
Energies and other European utilities are the ones making the
(04:07):
commercial decisions. They weigh price, availability, transportation costs, infrastructure and
regulatory risks. So even if Brussel says we want more gas,
it's up to firms to sign that ten, fifteen or
twenty year off take agreement to actually make the flow happen.
So what about on the American side? Can the US
(04:31):
supply the promise volume? In short, the answer is yes,
but not overnight. In twenty twenty three, the US exported
about one hundred and twenty two bcm of LERG globally,
up from just four bcm. If you can believe that
from a decade earlier, roughly two thirds of that went
to Asia. That means the US has already gone a
(04:52):
long way toward meeting it's fifty bcm commitment, But long
term expansion depends on infrastructure en like Sabine Pass and
Freeport or operating at or near capacity. Several new terminals
are under construction, but permitting, environmental reviews, and financing remain obstacles.
(05:13):
See our previous episode on this point. The Biden administration
paused approvals for new LNG export licenses while it was
out there reassessing climate impacts. That move introduced regulatory uncertainty
and headaches for developers. This is a piece that Trump
immediately reversed, but we're now six months to a year behind. Meanwhile,
(05:39):
companies need fifteen to twenty year purchase agreements to secure financing.
If European utilities only want a three to five year
deal or they want to purchase on the spot market,
that mismatch limits US capacity growth and results in higher
prices for the purchasers. The bottom line is that there's
gas out there, but exporting it at scale and speed
(06:01):
that Europe wants require serious policy coordination and commercial alignment.
Why does Europe need American energy so badly? Two words
energy security. After decades of relying on Russian pipeline gas,
Europe now faces a fundamental restructuring of its energy system.
(06:22):
It is committed to weaning itself off Russian fossil fuels
while accelerating its green transition. But renewables, no matter how
much you want, can't fill the gap, at least not
in the short term. Solar and wind are intermittent, battery
storage remains limited and expensive, and baseload capacity from nuclear
(06:43):
hydro varies widely across the continent. Europe has mothballed cold
plants and shuttered reactors, yet it now needs flexible reliable,
low emission fuels to bridge the gap, roll the credits.
That means natural gas and increasingly LNG. American LERG offers
(07:03):
several advantages. Hey, it's reliable, be it's free from geopolitical entanglements.
See it's relatively low and methane intensity compared to some
global competitors. In essence, US LG has become urs. In essence,
us LG has become Europe's insurance policy and the foundations
(07:25):
of its energy diplomacy with Washington. Now for the hard question,
can this trade deal actually deliver? There are reasons for optimism.
US supply is abundant, European demand is real, and infrastructure
is expanding. But there are also real challenges. Regulatory certainty
in the US could stall new terminals, and even if permitted,
(07:49):
it doesn't mean that all new terminals will receive financing
or be built. European utilities, on the other hand, may
hesitate to sign long term deals that to contradict their
pretty aggressive climate pledges. And third, rising interest rates and
inflation complicate financing. Finally, environmental opposition and new infrastructure exists
(08:14):
on both sides of the Atlantic. In short, the Transatlantic
energy relationship has strong fundamentals that need needs political will
and commercial alignment to scale up, but it also needs honesty.
Europe must be clear that it will need gas through
at least the twenty forties, if not the twenty fifties.
The US must create a permitting an investment climate that
(08:38):
enables long term energy growth. At the same time, trade
deals are easy to announce, but delivering on them that's
the hard part. So what should we watch in the
months ahead? Will we see true permitting reform in the
United States will leave you institutions create mechanisms to support
longer term contracts well major European buyers sign enough deals
(09:03):
to justify continued investment. And will the war between Ukraine
and Russia? End? Will it be business as normal? We
should also watch the more formal integrations between trade and
energy diplomacy, G seven, NATO, and the US EU Trade
and Technology Council will all have roles to play. Ultimately,
(09:24):
this just isn't about molecules, but it's also about trust, reliability,
and shared values. When your buyers American gas, it's not
just buying energy, it's buying a future where democratic nations
support each one in the face of global instability Before
we wrap up, though, I'd love to hear from you.
(09:44):
Do you think the US and the EU can fulfill
this energy trade strategy? What obstacles do you see? What
questions do you have about how global energy markets work?
If you have questions like this or are something that
you'd like to see us dig into you further, email
us anytime at Charged Conversations at bamaccown dot com. Your insights,
(10:08):
after all, help shape the show. Appreciate your time and
you've been listening to Charged Conversations, a Joe Strucker production.
If you like what you've been listening to, please hit
that subscribe button and tell a friend. Until next time,
I'm your host, Brigham McCown and I'll see it for
another episode I Charge Conversations
Welcome to Charged Conversations, where we discuss the latest on
energy and energy related topics. I'm your host, Brigham account Well,
this episode will be diving into the energy to mention
of the US European energy trade relationship. We'll unpack what
Europe is supposed to buy from the US, how much
energy it actually needs, and whether this transatlantic promise can
(00:24):
realistically be fulfilled. Along the way, we'll examine Donald Trump's
original approach, how the EU procures energy, and why private
companies ultimately hold the keys to success. To understand today's
(00:45):
US EU energy relationship, we need to go back a
few years. In twenty eighteen, then President Donald Trump and
European Commission President Jean Claude Junker stood at the White
House podium and announced a new trade initiative to diffuse
growing tariff tensions. One of the outcomes a commitment by
(01:06):
the EU to buy more US liquefied natural gas or LNG.
Trump famously branded American gas as freedom molecules and made
energy exports a central plank of his trade strategy. The
goal wasn't just economic, it was strategic. By reducing Europe's
(01:27):
dependence on Russian gas, the US could strengthen transatlantic ties,
weakened the Kremlin's energy leverage, and bolster American producers. At
the time, the EU said it was on board, meant
it pledged to work with member states and private firms
to facilitate lergy purchases from the US. Now, fast forwarding
to today, we find ourselves in a dramatically different landscape.
(01:51):
Russian invaded Ukraine, gas prices spiked, and the EU has
finally moved from polite interest to desperateness. But can the
US actually deliver? Well, let's clarify what Europe actually agreed
to do. In March twenty twenty two, shortly after the
war when Ukraine began, the US and EU announced a
(02:15):
joint Energy Security Task Force. Then, as part of that plan,
the US pledged to ensure an additional fifteen billion cubic
meters of LNG exports to Europe that year, with a
name to ramp up deliveries to fifty billion cubic meters
annually through at least twenty thirty. For context, fifty million
(02:35):
bcm is roughly equivalent to one third of what Europe
imported annually from Russia before the war began, So that's
the ambition, but ambition doesn't necessarily equal execution. The US
can produce the gas, no problem there. American gas production
has reached record highs in recent years, leading the world
(02:59):
in both oil and gas production. But exporting lerg requires terminals, ships,
and long term contracts, and that brings us to the
real mechanics of energy trade. Contrary to how it might
seem from high level statements, the EU doesn't actually buy
energy as a block. Energy procurement in Europe is decentralized.
(03:23):
Each member state manages its own energy mix and imports. Germany,
for example, might import from Norway, the Netherlands, or Algeria.
Poland might prioritize gas from the Baltic Sea. Spain, with
its strong energy infrastructure, might source from the US, Nigeria,
or cutter The European Commission sets policy goals like emission
(03:47):
targets or diversification objectives, but it doesn't sign a single
purchase order, and that brings us to the real driver
of transatlantic energy trade. Private companies shell, ng RWE Total
Energies and other European utilities are the ones making the
(04:07):
commercial decisions. They weigh price, availability, transportation costs, infrastructure and
regulatory risks. So even if Brussel says we want more gas,
it's up to firms to sign that ten, fifteen or
twenty year off take agreement to actually make the flow happen.
So what about on the American side? Can the US
(04:31):
supply the promise volume? In short, the answer is yes,
but not overnight. In twenty twenty three, the US exported
about one hundred and twenty two bcm of LERG globally,
up from just four bcm. If you can believe that
from a decade earlier, roughly two thirds of that went
to Asia. That means the US has already gone a
(04:52):
long way toward meeting it's fifty bcm commitment, But long
term expansion depends on infrastructure en like Sabine Pass and
Freeport or operating at or near capacity. Several new terminals
are under construction, but permitting, environmental reviews, and financing remain obstacles.
(05:13):
See our previous episode on this point. The Biden administration
paused approvals for new LNG export licenses while it was
out there reassessing climate impacts. That move introduced regulatory uncertainty
and headaches for developers. This is a piece that Trump
immediately reversed, but we're now six months to a year behind. Meanwhile,
(05:39):
companies need fifteen to twenty year purchase agreements to secure financing.
If European utilities only want a three to five year
deal or they want to purchase on the spot market,
that mismatch limits US capacity growth and results in higher
prices for the purchasers. The bottom line is that there's
gas out there, but exporting it at scale and speed
(06:01):
that Europe wants require serious policy coordination and commercial alignment.
Why does Europe need American energy so badly? Two words
energy security. After decades of relying on Russian pipeline gas,
Europe now faces a fundamental restructuring of its energy system.
(06:22):
It is committed to weaning itself off Russian fossil fuels
while accelerating its green transition. But renewables, no matter how
much you want, can't fill the gap, at least not
in the short term. Solar and wind are intermittent, battery
storage remains limited and expensive, and baseload capacity from nuclear
(06:43):
hydro varies widely across the continent. Europe has mothballed cold
plants and shuttered reactors, yet it now needs flexible reliable,
low emission fuels to bridge the gap, roll the credits.
That means natural gas and increasingly LNG. American LERG offers
(07:03):
several advantages. Hey, it's reliable, be it's free from geopolitical entanglements.
See it's relatively low and methane intensity compared to some
global competitors. In essence, US LG has become urs. In essence,
us LG has become Europe's insurance policy and the foundations
(07:25):
of its energy diplomacy with Washington. Now for the hard question,
can this trade deal actually deliver? There are reasons for optimism.
US supply is abundant, European demand is real, and infrastructure
is expanding. But there are also real challenges. Regulatory certainty
in the US could stall new terminals, and even if permitted,
(07:49):
it doesn't mean that all new terminals will receive financing
or be built. European utilities, on the other hand, may
hesitate to sign long term deals that to contradict their
pretty aggressive climate pledges. And third, rising interest rates and
inflation complicate financing. Finally, environmental opposition and new infrastructure exists
(08:14):
on both sides of the Atlantic. In short, the Transatlantic
energy relationship has strong fundamentals that need needs political will
and commercial alignment to scale up, but it also needs honesty.
Europe must be clear that it will need gas through
at least the twenty forties, if not the twenty fifties.
The US must create a permitting an investment climate that
(08:38):
enables long term energy growth. At the same time, trade
deals are easy to announce, but delivering on them that's
the hard part. So what should we watch in the
months ahead? Will we see true permitting reform in the
United States will leave you institutions create mechanisms to support
longer term contracts well major European buyers sign enough deals
(09:03):
to justify continued investment. And will the war between Ukraine
and Russia? End? Will it be business as normal? We
should also watch the more formal integrations between trade and
energy diplomacy, G seven, NATO, and the US EU Trade
and Technology Council will all have roles to play. Ultimately,
(09:24):
this just isn't about molecules, but it's also about trust, reliability,
and shared values. When your buyers American gas, it's not
just buying energy, it's buying a future where democratic nations
support each one in the face of global instability Before
we wrap up, though, I'd love to hear from you.
(09:44):
Do you think the US and the EU can fulfill
this energy trade strategy? What obstacles do you see? What
questions do you have about how global energy markets work?
If you have questions like this or are something that
you'd like to see us dig into you further, email
us anytime at Charged Conversations at bamaccown dot com. Your insights,
(10:08):
after all, help shape the show. Appreciate your time and
you've been listening to Charged Conversations, a Joe Strucker production.
If you like what you've been listening to, please hit
that subscribe button and tell a friend. Until next time,
I'm your host, Brigham McCown and I'll see it for
another episode I Charge Conversations
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