(Trends Wide) — The Joe Biden administration has been in regular talks with a number of countries and companies in Europe, the Middle East, North Africa and Asia about the possibility of increasing liquefied natural gas production for Europe in the event that a Russian invasion of Ukraine triggers a gas shortage, several US officials familiar with the talks told Trends Wide.
The State Department, led by senior adviser for energy security Amos Hochstein, has in the last six to eight weeks put together a comprehensive strategy exploring contingency options for redirecting and increasing gas supplies from different parts of the world, he said. a high-ranking American official.
Reuters reported last week that Hochstein had been in talks with energy companies but that the output increase was not a request. The senior US official told Trends Wide that increasing production has indeed been discussed, but that the companies acknowledge that ramping up production could be risky and would take time.
The talks are at a “fairly advanced” stage, according to the senior US official, and have been aimed at reassuring nervous European allies that imposing sanctions on Russia in coordination with the US will not cause an inordinate setback in the European economy. European allies are particularly concerned that Russia will weaponize its gas exports to Europe to retaliate against Western sanctions.
The talks have taken place amid US warnings that Russia has reached a phase in its military deployment where it could launch an attack on Ukraine “at any moment”, as the U.S. military told reporters last week. White House Press Secretary Jen Psaki.
According to Eurostat, Russia currently supplies Europe with more than 40% of its natural gas. In extreme circumstances, officials say, Europe has a store of liquefied natural gas that it could draw on, and European officials have been studying how much of a buffer it could provide.
“We are well aware of the potential impact of a reduction in Russian energy supply, both in the European and global markets, and we are working very hard to identify and manage those risks with a series of contingency options,” said a senior official of the government earlier this month.
As Trends Wide has already reported, a war between Russia and Ukraine would likely disrupt global energy markets considerably, as Russia is the world’s second-largest oil producer, behind only the United States. Russia also exports a large amount of natural gas to Europe via Ukraine, exports that would likely be severely disrupted by war and damage to critical energy infrastructure.
“A war would have a huge impact on oil prices and worsen inflation,” the senior US official said, which is why the United States has worked intensively in the past two months to try to offset any possible collateral damage that a war, and/or severe sanctions, could inflict on the world economy.
“Whatever decision we make, in conjunction with our allies and partners, is the right course for our collective interests and security, we are prepared to deliver severe costs to the Russian economy while minimizing unintended spillover effects,” he said. another senior government official told Trends Wide earlier this month.