Shipping LNG to Europe: Pros, Cons for US Gulf Coast

International efforts to punish Russia for its war on Ukraine are being felt far from Europe, in the U.S. Gulf state of Louisiana, a hub of America’s energy sector.

Late last month, the European Union announced it was exploring ways to gain independence from Russian energy “well before 2030.” American firms took note.

“You can see most European countries don’t want to be seen as complicit with the barbarism of Russia,” said Brian Lloyd, vice president for communications at Sempra Energy, a U.S.-based energy infrastructure company with investments in natural gas production. “Many see every dollar sent to Russia’s state-owned energy companies as helping to fuel its aggression in Ukraine, so Europe is seeking energy alternatives.”

In late March, the U.S. announced a deal with the EU to begin replacing some of the natural gas Russia had been supplying. By the end of this year, President Joe Biden said, the United States would be able to ship enough gas to Europe to offset at least 10% of what Russia currently provides, or 15 billion cubic meters of liquefied natural gas.

LNG is natural gas that has been cooled to a liquid state. Its volume is approximately 600 times smaller than its gaseous state.

“This makes shipping to Europe economical when building pipelines across an ocean wouldn’t be,” explained Eric Smith, associate director of Tulane University’s Energy Institute in New Orleans.  

 The U.S. plans to meet its new commitments to Europe by increasing domestic production of natural gas. To do so, industry leaders propose building new LNG facilities and expanding and increasing the efficiency of existing ones.

“It will be like the Marshall Plan we supported Europe with after World War II, but this one will have an energy focus,” Lloyd said. “The United States is uniquely positioned to lead the way on this because we have some of the least expensive natural gas in the world.”

Much of the existing and increased LNG production capacity is centered in the states of Louisiana and Texas, along the energy-rich Gulf of Mexico. Many state and industry leaders welcome the production of LNG in the region, while environmentalists and commercial fishers are far less enthusiastic.

“We make our living in the sea,” said Dean Blanchard, a shrimper and the president of Dean Blanchard Seafood. “I don’t know much about natural gas yet, but anything that alters the dynamics of the water really screws us.”

Energy crisis abroad

Approximately 40% of the natural gas used in Europe — as well as 25% of crude oil and refined petroleum products — is produced in Russia.

“Europe is a continent that has been dependent on Russian energy for quite some time,” Smith told VOA. “So Biden’s commitment to help supply the EU with LNG became a key component in convincing some European countries to announce sanctions against Moscow. That’s why this increased production of LNG is so important.”

But Europe’s energy crisis began long before Russian’s invasion of Ukraine. Consecutive colder-than-usual winters and a world awakening from coronavirus lockdowns boosted demand for many types of energy.

Europe has moved aggressively to embrace renewable energy sources but found production to be inconsistent because it often depends on the weather.

“Europe is caught in a tough spot — they don’t want to be importing fossil fuels like natural gas as they try to reduce carbon emissions,” Smith said. “But natural gas actually makes for a perfect transition. Nuclear and coal plants take weeks to turn on and off, whereas natural gas can be switched off in minutes. When you’re low on renewables, natural gas can be an easy bridge to get you through another cold winter.”

Smith added, “It’s also, by the way, needed for fertilizer and to produce grain, which might be very important for Europe and the Middle East should this war in Ukraine continue.”

Environmental crisis at home

Much of the LNG exported by the United States will be funneled through the U.S. Gulf Coast.

“We have six or seven LNG export terminals in the United States,” explained Naomi Yoder, staff scientist at Healthy Gulf, an environmental organization focused on protecting the Gulf of Mexico. “Four of those — soon to be five — are located on the Gulf Coast in Louisiana and Texas. We have six more that are in the works in the region as well. That’s a massive number for one relatively limited region.”

And it’s a region that is no stranger to energy-related environmental disasters.

“It would take me hours to tell you about the effects of that one BP oil spill from 2010,” seafood entrepreneur Blanchard said. “Our ecosystem is still recovering from that spill — the amount of fish and shrimp and oysters are still down. And the number of humans that got sick down here in Grand Isle (small Louisiana barrier island), those people will never recover.”

Blanchard said the BP oil spill got attention only because of its magnitude. But smaller spills, he said, happen every day.

“These energy companies say they care about us and our livelihood, but they’re destroying us,” he said.

Blanchard’s hometown of Grand Isle could soon gain an LNG facility nearby. While Blanchard admits he’s unsure precisely how expanding the production and transportation of natural gas will affect the ecosystem, Yoder predicts only bad results.

“We’ve seen it many times,” Yoder said. “The production of natural gas produces air pollution through methane leaks and water pollution, too. It harms the ecosystem locally as well as the environment more generally. People like to say natural gas emits less carbon than coal, but the process of building these facilities, and liquifying that gas, and shipping it across the ocean just to turn it back into gas — that all emits a lot of carbon into the air, too. We don’t need to produce more energy from fossil fuels. We need to transition to renewables like solar, wind and water energies.”

Balancing act

Advocates of natural gas don’t oppose renewable energy, said Sempra Energy’s Lloyd. Rather, he sees them as complementing each other.

“I think we all have the same goal,” he said. “We want to see an increase in the use of renewable energy over time. But you can’t pretend like if we don’t produce this natural gas now, that Europe won’t just get it from somewhere else. They’ll probably get it from Russia, where the methane leaks are far more numerous and where they aren’t working nearly as hard as we are to further curb carbon emissions.”

Tulane University’s Smith agrees.

“Every serious analyst says we aren’t able to shift our world economy away from fossil fuels between now and 2050,” he said. “So Europe is going to get their natural gas one way or another because they’re not going to just let their people freeze or starve.”

For now, many energy industry leaders and lawmakers say, an opportunity exists to curtail a source of revenue to Russia’s war machine — and to boost jobs and revenues along the U.S. Gulf Coast.

But fishermen like Blanchard fret about a potentially costly trade-off.

“Of course I want to help Ukraine, and I’m proud of the way they’re fighting for themselves,” he said. “But how can I be expected to support something that could destroy my livelihood? I can’t do that for Ukraine or anyone else.”
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