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kkjili Europe Is Wrong to Blame the U.S. for Its Energy Problems
As the depth of winter approaches, Europeans are increasingly worried about their ability to heat homes and power factories. Although natural gas storage levels are nearly full and prices have eased, the European gas price is still four to five times higher than average in recent years — and President Vladimir Putin of Russia has just threatened to cut what little Russian gas still flows to Europe.
Despite the economic pain and Mr. Putin’s best efforts, the West has remained largely united in confronting his aggression in Ukraine. Yet fissures are now beginning to show in the trans-Atlantic alliance as European leaders — especially President Emmanuel Macron of France, who has been visiting Washington this week — blame U.S. energy and climate policy for worsening their energy predicament. These attacks are not only misguided but also risk aiding Mr. Putin in his attempted conquest of Ukraine.
In recent remarks to French business leaders, Mr. Macron complained about the cost of U.S. imports of liquefied natural gas and “massive state aid schemes,” referring to the clean energy subsidies in the Inflation Reduction Act. “I think it is not friendly,” he said.
Other European leaders have joined in, using inflammatory rhetoric to blame three aspects of U.S. policy.
Some European officials have accused U.S. companies of war profiteering for selling relatively inexpensive U.S. natural gas at much higher prices in Europe. These accusations are baseless. American liquefied natural gas, or L.N.G., is sold in Europe at a price set by the market. While that price is more than five times the U.S. natural gas price today, most of that L.N.G. is sold to middlemen, usually at the U.S. price plus some markup. Those middlemen, not U.S. export companies, benefit when the overseas gas price is much higher. Most of these resellers are not American. The largest are European companies — TotalEnergies and Shell.
European attacks on the United States are particularly perplexing given that American L.N.G. has played such a pivotal role in helping Europe replace gas from Russia, which had supplied around 40 percent of Europe’s imports before the war. Indeed, many European leaders questioned America’s opposition to the Nord Stream 2 pipeline, which would have further increased that dependence on Russian energy. The United States not only was the largest L.N.G. exporter in the world in the first half of 2022 but also supplied more than three-quarters of the European Union’s additional needs in the first half of the year. Unlike most other L.N.G. suppliers from other countries, whose contracts restrict where the liquefied natural gas can be sold, the vast majority of contracts for gas from the United States have no constraints on their destination, and thus most of those L.N.G. cargoes were diverted to Europe to help with the crisis.
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