Growth in US gas output has turned supercooled fuel into a bargain commodity
That the Nord Stream 2 pipeline will increase Europe’s dependence on Russian natural gas is a geographic and arithmetical fact. But buried in the heated rhetoric — now rising to US sanction threats — over how much that matters, is just how inexpensive it would be for Europe to purchase supply diversity with liquefied natural gas from the US. Of course gas-by-ship costs more than gas-by-pipe. But at today’s prices and the spread between gas from Russia’s Gazprom and US LNG, the EU’s total annual energy import bill would rise by less than 5 per cent — or around $20 per head of population annually — by purchasing a volume of US gas equal to both the existing Nord Stream 1 and the planned second pipeline. Critically, Europe would also need to spend nothing to build LNG import terminals because the two-dozen that exist already are running, collectively, at barely one-fourth capacity. Operating all those terminals at full tilt could bring in triple the supply the Nord Stream 2 pipe will if it is ever completed.
Continue reading the entire piece here at the Financial Times (paywall)
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Mark P. Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering. In 2016, he was named “Energy Writer of the Year” by the American Energy Society. Follow him on Twitter here.
This piece originally appeared in Financial Times