Jerzy Buzek, Chairman of the European Parliament’s ITRE Committee

LNG facilities to import gas from the US cannot be constructed overnight. What is needed to make the EU ready for that project in terms of infrastructure?

Over the past decade, spectacular growth in the production of unconventional fossil fuels in the US has changed global energy flows. Whilst preparing for increased energy imports by building new LNG terminals, the USA has become a potential net energy exporter. The already existing LNG import infrastructure should be converted into LNG export terminals.

On the EU side, import infrastructure is also partly available. We need a favourable business climate to encourage investors to develop further LNG facilities, and to complete it with infrastructure - mainly pipelines and trans-border interconnectors - that would bring the US LNG to the end European users. The so-called Juncker Plan and the European Fund for Strategic Investments, currently negotiated by the European Parliament and the Council, hopefully could also help us a lot in these efforts.

The most important factor for the success of the LNG projects is political will – especially on the US side - to reduce licensing barriers and to streamline the approval procedures.

What would be the benefits of eliminating gas export bans for the EU’s economy?

Lifting the gas export ban is a ‘win-win game’. On the one hand, for the EU, it would be a great opportunity to diversify our gas supply. The simple possibility of having even slightly more imports, can already positively have an effect on our bargaining position in the global energy markets and our energy security. Also, access to more affordable and stable energy would benefit EU consumers – business and individual – thus, contributing to economic growth, job creation and improved EU competitiveness on a global scale. On the other hand, for the US, increased LNG exports in the long-run is likely to lead to net economic benefits.

Energy security is a world-wide problem. We are all dependent on the world gas market, just as we are in terms of oil. How do you think the US may help the EU face some key challenges in this field?

It is hard to over-estimate the importance of security in general – and energy security in particular – in a new, tense, geopolitical situation, when the European Neighbourhood has been transformed from “a ring of friends” to “a ring of fire”. Let us always remember: energy security means, above all, political independence!

The European energy security strategy, in addition to completion of the internal energy market and an increase in the EU’s own production, calls also on diversifying external suppliers, sources and routes. It would be difficult to find a more natural and reliable partner for the EU than the US. We, therefore, believe that our American friends are open to constructive dialogue in the energy field. Fred Upton, Chairman of the Energy and Commerce Committee of the US House of Representatives, re-assured me about it, during our meeting in Brussels, just three weeks ago.

Do you see the potential for an US–EU gas partnership in the context of the TTIP negotiations? Do you think this agreement may accelerate American gas imports to Europe?

There is no need to wait for the TTIP! A good base for the US-EU gas partnership could be created already now – once the US administration simplifies or lifts licensing requirements. However, the TTIP can be a great opportunity to take this partnership a step further. This is why the Industry, Research and Energy Committee I am chairing, in the European Parliament, called for the inclusion of a separate chapter dedicated to energy in the agreement. If this recommendation is taken on board, then the TTIP could create a very important strategic framework for an EU-US energy partnership.

Jerzy Buzek

Fred H. Hutchison, Executive Director, LNG Allies

LNG facilities to export gas to the EU cannot be constructed overnight. What is needed to make the US ready for that project in terms of infrastructure?

The United States will begin exporting LNG in late 2015, when the first “trains" of Cheniere Energy’s Sabine Pass terminal come on line. Three other “brownfield” facilities that were once slated to be LNG “import” terminals are also under construction in Texas, Louisiana, and Maryland. With America’s robust natural gas pipeline distribution system, these facilities should come online over the next three to four years without delay. Other facilities that are waiting in the ‘queue’ may require small pipeline and other infrastructure investments, but these are not expected to impede their development.

What would be the benefits of eliminating the gas export bans for the US economy?

Eliminating natural gas export restrictions will benefit the US economy in several ways. Firstly, thousands of new, high-wage jobs will be created during the construction and project operation phases. Secondly, new revenues will accrue at the national, state, and local levels, which can foster additional energy research and development, support infrastructure improvements, and other efforts. Last, but not least, the US balance of payments will be enhanced significantly.

Energy security is a world-wide problem. We are all dependent on the world gas market, just as we are in terms of oil. What do you think the US position/approach to this challenge should be?

Pulitzer Prize-winning author, Daniel Yergin, proclaimed, “the starting point for energy security today, as it has always been, is diversification of supplies and sources.” Americans learned this lesson the hard way in the 1970s, and today, much of the rest of the world knows this to be true. The United States should, therefore, do everything possible to help our allies diversify their fuel sources and improve their energy security. Lifting America’s self-imposed energy export restrictions is a great place to start.

Do you see the potential for a US–EU gas partnership in the context of the TTIP negotiations? Do you think this agreement may accelerate American gas imports to Europe?

Even if the TTIP negotiations were not taking place, the development of a US-European natural gas partnership would be of great value to people and industry on both sides of the Atlantic. Still, if the TTIP process does, in fact, move forward with strong, bipartisan support, it will signal a greater awareness that America’s energy abundance can benefit both Americans, as well as our loyal friends and allies in Europe.

 Fred H. Hutchison

Paweł Olechnowicz, Chairman of the Board of Directors, CEEP

LNG facilities to import gas from the US cannot be constructed overnight. What is needed to make the EU ready for that project in terms of infrastructure?

We definitely need to enhance our LNG receiving facilities and gas pipeline infrastructure. At the moment, none of the existing LNG import terminals is in a position to fully serve the vulnerable flanks of Europe, which, in particular, need energy supply diversification. That is why CEEP strongly advocates a holistic approach to that challenge. We believe the key to the continent’s energy security is the North–South Corridor of pipelines and interconnectors, bringing together, amongst others, new and existing LNG terminals. The North–South Corridor would integrate the different and still largely separate economies between the Baltic, Adriatic, and Black Seas. This will allow gas and other resources to flow freely wherever needed, increase energy security, and benefit consumers.

Energy security is a world-wide problem. We are all dependent on the world’s gas market, just as we are with oil. How do you think the US can help the EU face some key challenges in this field?

The US have always been active players in the global energy markets. However, in the past they played this role from the position of a massive oil and gas importer. Now the roles have shifted. The US can produce more natural gas than is needed domestically, and this situation is likely to last for many decades. At the same time, Europe is aiming to hedge itself against single supplier, and solve a general undersupply of gas in the region. We, therefore, see that there is a strong potential for a ‘win-win situation’, in which American companies acquire stable business partners, and European consumers benefit from more diversified and competitive energy markets.

What would be the benefits of eliminating the US’s gas export bans for the EU economy?

Let me underline that both the US and the EU could benefit from a more open energy market. From the European point of view, we would undoubtedly welcome more players in our gas supply market in order to strengthen competition. It is important to underline: our aim is not to eliminate anybody from this market. On the contrary, the only way to make the European market more efficient, and more resilient, is through competition. At the same time, free trade will allow the EU’s domestic refiners and chemical companies to have access to competitively priced crude oils and gas. That is a huge advantage, especially given the fact that the disparity between the US and the EU’s energy prices is very large.

Do you see the potential for a US–EU gas partnership in the context of the TTIP negotiations? Do you think this agreement may accelerate American gas imports to Europe?

It seems the TTIP may serve as a strong stimulus towards lifting the export ban on US crude oil and natural gas. This policy started in the US more than forty years ago, in what was then a totally different macroeconomic and geopolitical environment. We see that, nowadays, the ban is outdated, as you cannot keep ignoring the global nature of energy markets. The international implications of the export ban harm broader American interests and reduce whatever domestic benefits are supposedly provided. Energy security is a world-wide problem, not a US or an EU one. We are all dependent on each other in this market.

Paweł Olechnowicz