The U.S. shale revolution continues to alter gas markets
The shale revolution has transformed global gas markets and turned the United States into the world’s leading producer. Now a net LNG exporter, the U.S. has challenged established exporters and changed the old pricing order. Europe, which is increasingly reliant on gas imports, is turning to American exports to reduce its dependency on Russia. In Asia, China sees massive growth potential in natural gas.
The future of LNG for Europe
LNG is undergoing a production boom worldwide, mostly driven by the industry’s rapid growth in the United States. This could have profound effects on Europe, which has already become the largest buyer of American LNG. As a result, big changes are coming in the global gas market, as countries like Russia and Qatar jockey to compete.
The future of Ukraine’s energy transit status
With a key contract expiring next year, Ukraine’s role in transmitting Russian gas to Europe is uncertain. The planned Nord Stream 2 pipeline threatens to circumvent Ukraine, which has offered lowered gas transit rates to Gazprom if it scraps the new project and allows other exporters to pass through the country. Russia is uninterested in such a deal, but rising forecasts of European gas demand may mean that the Kremlin must continue to rely on Ukraine or find other options.
Regional integration at the Three Seas summit
With the third summit of the Three Seas Initiative, the countries of Central and Eastern Europe are trying to come together on issues like energy and infrastructure. The effort comes after several failed attempts at regional integration in the 20th century, and this one remains mostly on paper. If the European Union and outside investors will buy into the idea, several proposed projects could help lift all boats.
The limited global impact of Trump’s ‘America First’ energy policies
Coal is back in the U.S., with production and exports rising. This has coincided with a President Donald Trump’s “America First” policies in the energy sector. But coal’s comeback is more a function of market forces than politics. And it could be short-lived. Despite all the sound and fury, Mr. Trump's initiatives to support fossil fuels will have far less of an impact on energy markets and global efforts to reduce climate change than his critics claim. Europe, however, could still benefit.
The myth of cheap Russian gas
As arguments swirl over the Nord Stream-2 gas pipeline, one thing is taken for granted – Gazprom can sell gas cheaper than rival suppliers. But reserves of low-cost gas from Russia’s West Siberian fields are dwindling, while output from the new Yamal fields must be heavily subsidized to offset high production and transport costs. The European Union could be entering an era when U.S. LNG is fully cost competitive or even cheaper than Russian gas, if it doesn’t let Russia distort the market.
The risks of German unilateralism on Nord Stream 2
Russia’s Nord Stream 2 pipeline, the most controversial energy project in Europe, is putting strain on Germany’s relationship with other European Union members. Berlin’s support of the project at the expense of other partners could deepen rifts in the EU and lead to a renationalization of energy policies, especially in Central and Eastern Europe.