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US, European Union announce new partnership to undercut Russian energy

Russian energy is a key source of income and political leverage for Moscow


Almost 40 per cent of the European Union's natural gas comes from Russia to heat homes, generate electricity and power industry

AP Brussels
The US and European Union on Friday announced a new partnership to reduce the continent's reliance on Russian energy, a step top officials characterised as the start of a years-long initiative to further isolate Moscow after its invasion of Ukraine.
US President Joe Biden asserted that Russian President Vladimir Putin uses energy to coerce and manipulate his neighbours and uses the profits from its sale to drive his war machine.
Biden said the partnership he announced jointly with a top European Union official would turn that dynamic on its head by reducing Europe's dependence on Russian energy sources, as well as the continent's demand for gas overall.
The president said such a step was not only the right thing to do from a moral standpoint but it's going to put us on a stronger strategic footing.
Under the plan, the US and other nations will increase liquified natural gas exports to Europe by 15 billion cubic metres this year. Even larger shipments would be delivered in the future.
At the same time, they will try to keep their climate goals on track by powering gas infrastructure with clean energy and reducing methane leaks that can worsen global warming.
Although the initiative will likely require new facilities for importing liquified natural gas, the partnership is also geared toward reducing reliance on fossil fuels in the long run through energy efficiency and alternative sources of energy, according to the White House.
Ursula von der Leyen, head of the EU's executive arm, said it was important for Europe to shift away from Russia and toward energy suppliers that were trustworthy, friendly and reliable.
We aim to reduce this dependence on Russian fossil fuels and get rid of it," she said.
Russian energy is a key source of income and political leverage for Moscow.
Almost 40 per cent of the European Union's natural gas comes from Russia to heat homes, generate electricity and power industry.
Biden was leaving Brussels after the announcement and heading to Rzeszw in Poland, where US troops are based roughly an hour's drive from the Ukrainian border.
He will be briefed on the humanitarian response to the refugees streaming out of Ukraine and those still suffering inside the country.
The president will also meet US service members from the 82nd Airborne Division, who serve alongside Polish troops, and then expected to fly to Warsaw for talks on Saturday with Polish President Andrzej Duda. He will also address the Polish people before departing for Washington.
While in Brussels, Biden on Thursday participated in a trio of summits hosted by NATO, the Group of Seven industrialised nations and the European Union, a move that reflected heightened concerns about the war in Ukraine that has entered its second month.
Although Ukraine has resisted the Russian invasion much more successfully than initially expected, the conflict has become a gruelling and bloody affair, with thousands of casualties on each side and millions of refugees fleeing the country.
Western leaders are also concerned that Russian President Vladimir Putin could use chemical or even nuclear weapons to regain momentum in the war.
Getting more liquefied natural gas to Europe could be difficult, even though the US has been dramatically increasing its exports in recent years. Many export facilities are already operating at capacity, and most new terminals are still only in the planning stages.
Most US shipments already go to Europe, according to the Centre for Liquefied Natural Gas, an industry lobbying group. Although much of the supply is already contracted out to buyers, there are still opportunities to shift its destination.
The US is in a unique position because it has flexible LNG that can be rerouted to Europe or to Asia, depending on who's willing to pay that price, said Emily McClain, gas markets analyst at Rystad.
Even if the US can ship more gas to Europe, the continent may struggle to receive it. Import terminals are located in coastal areas, where there are fewer pipeline connections for distributing it.
Even if all Europe's facilities were operating at capacity, the amount of gas would likely be only about two-thirds of what Russia delivers through pipelines.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mar 25 2022 | 4:35 PM IST

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