Natural-gas boost as Biden shifts stance
Shares of large US natural-gas companies rose as Joe Biden softened the position against fossil fuels.
US President Joe Biden’s pledge to boost US liquefied natural-gas exports to Europe marks a further retreat from his hard-line stance against fossil fuels, sending share prices surging for natural gas companies.
The President, who campaigned on a platform to transition the US to cleaner energy, said on Friday the US was working to ship 50 billion cubic metres of LNG to Europe annually at least until 2030 to help the continent wean itself from dependence on Russian supplies.
The announcement came a day after Democrats on the Federal Energy Regulatory Commission backtracked on new environmental policies, suspending implementation of heightened requirements on reviews that industry officials and Republicans said would impede gas pipeline development.
Shares of large US natural gas companies rose 9 per cent on average on Friday.
The gas industry’s prospects have been a concern because of Mr Biden’s stance against fossil fuels. But the President has softened some of his positions in the wake of rising energy costs, driven by the economic rebound from Covid-19 and more recently by Russia’s invasion of Ukraine.
The White House pivot has also put the US and its vast oil and gas reserves in shale rock back at the centre of a global scramble for energy resources as a bulwark against petrostates and authoritarian regimes.
The US is the world’s largest oil and gas producer.
Daniel Yergin, the vice-chairman of S&P Global and a noted oil-industry historian, called recent developments “a huge turn”.
“There’s a recognition now that shale – and particularly LNG – is a real geopolitical asset,” Mr Yergin said.
Mr Biden and his advisers have said they are still committed to ending the world’s reliance on fossil fuels and will continue to fund renewable energy as part of their work with European allies. But they also acknowledged the need to deal with the reliance that exists today.
“While gas is still a substantial part of the energy mix, we want to make sure that the Europeans do not have to source that gas from Russia,” national security adviser Jake Sullivan told reporters on Friday.
Toby Rice, chief executive of top US natural gas producer EQT, said the Biden administration’s shift was an extremely encouraging political signal that natural gas will play a key role in the world’s future energy mix.
Mr Rice said the US could sharply increase LNG exports over time if companies built thousands of miles of new pipelines and billions worth of new LNG facilities. But unleashing that would require broader support for infrastructure and speeding up the permitting process, he said.
“The problem we face is it takes longer to permit something than it takes us to build it,” Mr Rice said.
Shippers of LNG have already sent most US cargoes to European destinations this year, as prices have skyrocketed following Russia’s invasion.
The Wall Street Journal
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