Drilling Key to US LNG Export Picture
By Jasmin Melvin – Gas Daily
Continued natural gas drilling is the only signal a Czech energy ambassador said he was looking for from the US to bolster his confidence that the country would become a global LNG supplier capable of improving the gas supply picture for markets in Europe.
“If it’s possible to get the gas out of the ground economically, … it will also probably be interesting for someone to sell it abroad,” Václav Bartuška, the Czech Republic’s ambassador-at-large for energy security, said Wednesday. “They will find a way to influence Congress or to get the permits.”
Speaking at a seminar sponsored by LNG Allies, a group of predominately Eastern European countries backing US LNG exports, Bartuška said that the opinions of politicians can turn on a dime so, for him, the only factor worth considering is “the reality on the ground—how much time it takes to drill, how much money you need for that.”
Russia’s aggressive actions toward Ukraine brought a sense of urgency to the need to expand Europe’s portfolio of reliable energy suppliers. But future energy projections, forecasting a decline in Europe’s gas output, would have required such a search for potential suppliers regardless in the years to come.
“When we look at the possible suppliers in 20 years’ time, the picture is not as clear as it is today,” Bartuška said. For this reason, the Czech Republic is eyeing ways to bring more democracies into the global gas and LNG markets to “create a more stable situation,” prompting Bartuška’s meetings with US officials and visits to US gas and oil plays.
“Democracies usually don’t tell you, ‘I’ll sell you the gas if you follow my line or if you do this for me,’ ” Bartuška said. He later quipped that Energy Secretary Ernest “Moniz doesn’t say things like ‘unless you buy our gas, you will not fly home.’ ”
When asked what the US could do to attract more commercial agreements for LNG exports and secure a foothold in the European gas market, Bartuška replied that Norway overtook Russia as the biggest supplier of gas to the European Union “simply by being Norway, by not bullying anyone, by not threatening anyone, and that was enough.”
He continued, “When you make a deal with Nigeria, you have to take into account that maybe the president will die one day and God knows what happens then. We have seen Libya … and it’s all hunky-dory until things went terribly wrong. You can say similar things about other supplies of natural gas which are not exactly stable countries.”
“Get it out of the ground, and they will come,” he said of US prospects for lining up LNG sales contracts in Europe.
However, if the US ultimately opts to side with the train of thought that increased trade of LNG would threaten US energy supplies and cause domestic gas prices to rise, Bartuška said European countries would find another source of gas.
“Look, if you don’t want to sell, don’t sell. That’s my line to your officials,” Bartuška said. “I think it’s more beneficial for your country to export oil and gas, but if you think it’s better for you to keep if for yourself, we’ll find our way. We’ve done it before.”
Bartuška noted that he believed the US administration— when it came to considering LNG export projects and export permits—was doing what any other country’s administration would do.
“Democracy can be very slow at times, but I have no objection to what [the departments of Energy and Commerce] are doing,” he said.
In the meantime, the European Union is taking “significant steps” to prepare for US LNG exports potentially hitting the market, Bartuška said. Long-term contracts for the sale of LNG from US companies directly into European markets and to traders that could end up sending the gas to Europe have already been signed.
Croatian Ambassador Josip Joško Paro added that the EU has been “very active” in planning for the start of US LNG exports, considering infrastructure needs and working to create an integrated energy market.
EU leaders appeared to be “upbeat” regarding Europe’s intentions in this regard, but a major “discrepancy” was still causing some hesitancy, he said.
“We are all encouraged by the Department of Energy, the State Department, the White House to put our money into gas transportation and regasification facilities—this is all very, very expensive—but at the same time they do not tell you we are going to sell you gas because that might increase the prices in America,” Paro said.