Washington, DC - January 24, 2024 (Investorideas.com Newswire) With European natural gas demand expected to steeply decline over the next few years as renewable energy sources expand and energy efficiency improves, European energy experts are warning policymakers and investors about the potential risks of overinvestment in imported liquefied natural gas (LNG) infrastructure.
In particular, they're addressing a few voices in the Biden administration and the oil and gas industry who argue that continuing the expansion of LNG exports is vital to ensure Europe has enough gas as well as providing a guarantee of global energy security.
"The EU has already initiated its gas phase out, our analysis shows the EU will cut its oil and gas demand by one third by 2030 and gas can be effectively phased out by 2040," said Linda Kalcher, Executive Director of Strategic Perspectives. "The price of LNG is volatile and substantially higher than the one of pipeline gas. European governments and companies are massively scaling up renewables-based solutions as it's the best economic and energy security choice. New LNG investments will be a white elephant US investors will live to regret."
The International Energy Agency forecasts European gas demand to fall 8% from 2022-2026. Existing LNG import facilities in Germany and across Europe are already underutilized. Prof. Dr. Claudia Kemfert, economic expert at the German Institute for Economic Research and Leuphana University, Germany, said "Expanding LNG infrastructure in the USA and in the EU is a high economic risk that will very likely end up as stranded assets."
"Europe's ambitious climate goals mean that gas demand will decline dramatically over the coming years. Instead of locking in new infrastructure to export fossil gas to Europe we need a renewed drive for improving energy efficiency, renewable energy and electrification to move away from gas for good," said Dr Jan Rosenow, director at the Regulatory Assistance Project.
"We are already very close to the 1.5 °C climate change limit, so we can only emit more CO2 if at the same time the fossil methane emissions are reduced drastically. Expanding LNG production would do just the opposite," said Prof. Dr. Stefan Rahmstorf, climatologist at PIK and University of Potsdam.
Other experts concur that with falling gas demand and climate imperatives, overinvestment in transatlantic LNG infrastructure poses unacceptable economic and environmental risks.
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