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Impacts of US LNG exports on the supply security of the EU natural gas market

By Sinem Okumus

Abstract

textAdvances in drilling technology and production strategies such as hydraulic fracturing and horizontal drilling have made shale gas more accessible and have boosted US natural gas production. The US Energy Information Administration (EIA) expects that indigenous production will exceed consumption and that the US could become a liquefied natural gas (LNG) exporter by 2016. While US natural gas production has boomed, the EU has been increasingly dependent on natural gas imports mainly from Russia. In addition to rising dependency on Russian natural gas, the dispute between Russia and Ukraine has disrupted delivery of Russian gas and has threatened the security of natural gas supply to the EU. This situation has compelled the EU to seek different suppliers to reduce Russian dominance of Russia. Considering 30 percent of EU natural gas imports come from Russia an increase in EU concerns about disruption of the Russian supply has fueled a discussion of US LNG exports. As an alternative to Russian supply, US LNG exports are considered as a solution to mitigate the effects of supply interruptions and overdependence on Russia. Currently the most important question is whether US LNG exports will or will not be a panacea for the EU natural gas market. This study uses US LNG export scenarios to investigate the effects of US LNG exports on the EU natural gas market. Although I primarily expected that US LNG exports would not impact the EU natural gas market, the main findings are surprisingly different from the anticipation. The consequences are: 1.Although US LNG exports are not an elixir for the EU natural gas market to improve its security supply, they will reduce the dominance of certain exporting countries. 2.US LNG exports will not decrease the EU's dependence on its suppliers due to the EU's preference to import US LNG. This situation prevents any improvement of the security of natural gas supply in the EU. 3.US LNG exports will result in a slump in natural gas prices and a rise in natural gas demand in the EU.Energy and Earth Resource

Topics: Liquefied natural gas (LNG), Supply security, LNG export, Natural gas market, Natural gas demand, Natural gas price
Publisher: 'Aquatic Mammals Journal'
Year: 2015
DOI identifier: 10.15781/T2Q310
OAI identifier: oai:repositories.lib.utexas.edu:2152/31881
Provided by: UT Digital Repository

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