The U.S. and the European Union are close to a deal aimed at reducing Europe’s dependence on Russian energy sources in an effort to further isolate Russia in retribution for its invasion of Ukraine.
The deal, which could be made official this Friday, would aim to secure U.S. natural gas and hydrogen supplies to the Old Continent, Bloomberg reports, citing an official familiar with the plans.
“One of the top priorities of both the president and his European allies is to reduce Europe’s dependence on Russian gas,” as well as “the practical roadmap for doing so: what steps need to be taken, what the US can contribute, what Europe needs to do on its own,” President Joe Biden’s national security adviser, Jake Sullivan, told reporters aboard Air Force One.
“This has been the subject of intense back and forth over the course of the last few days and weeks,” Sullivan acknowledged, “and we will have more to say on this issue, specifically on Friday.” Biden’s advisor has suggested that the focus will be on diversification of European natural gas supplies. “You can expect the US to look for ways to increase LNG supplies, not just over the course of years, but also over the course of months,” he has explained.
Biden is traveling to Brussels for meetings on the Ukraine war with NATO, G7 and European Union leaders, including European Commission President Ursula von der Leyen. On Friday he will travel to Poland to show US support for NATO allies closest to Russia.
The U.S. is unlikely to guarantee specific quantities of gas supplies to the EU, say sources consulted by Bloomberg, and it’s unclear how the deal would work or whether it would include an agreement on prices.
Currently, European buyers compete with Asian countries for the limited global supply of liquefied natural gas cargoes.
Ahead of Biden’s trip, Treasury Secretary Janet Yellen, Sullivan and National Economic Council Director Brian Deese met this week with top energy company officials and bankers, including JP Morgan CEO Jamie Dimon.
Dimon recommended the White House develop what he called a ‘Marshall Plan’ to increase U.S. natural gas production and reduce the development time for renewable energy production, such as wind farms, according to people familiar with the discussion.
The group also discussed the readiness of U.S. oil and gas producers to increase production. According to Bloomberg, officials and executives discussed the possibility of making up production shortfalls if the EU ultimately decides to join the U.S. in banning Russian crude imports. The people asked not to be identified because the meeting was private.
Russia is the EU’s largest supplier of natural gas, accounting for more than 40% of imports. The EU, which also relies on the country for most of its coal and oil import needs, is struggling to shift its energy policy away from Russia.
The European Commission on Wednesday adopted a draft regulation obliging countries to ensure that gas storage is filled to 80% by next winter and 90% in subsequent years. The Commission, the bloc’s executive arm, also called for member states to jointly buy gas to help ensure the best conditions.
