21 February 2019

DOE Deputy Secretary Attends German LNG Conference

On February 12, 2019, U.S. Deputy Secretary of Energy Dan Brouillette and U.S. Ambassador to Germany, Richard Grenell, participated in a German LNG Conference hosted in Berlin by German Federal Minister of Economic Affairs and Energy Peter Altmaier.  The group was joined by high-level government and industry leaders, including Executive Director of the International Energy Agency, Dr. Fatih Birol. 

The meeting may represent an olive branch in what has become a contentious debate between the U.S. and Germany over the Nord Stream 2 natural gas pipeline and the future of Germany’s fuel sources. Nord Stream 2 spans between Russia, in the eastern Gulf of Finland, and the northeast coast of Germany.  Most of its approximately 764-mile route is under the Gulf of Finland and the Baltic Sea. According to its website, Nord Stream 2 is owned by Gazprom, with Shell, Engie, Uniper, Wintershall, and OMV participating as investors.

Nord Stream 2 states that the rationale for the project is to “transport natural gas into the European Union to enhance security of supply, support climate goals and strengthen the internal energy market.”  However, U.S. officials have expressed “concern that the pipeline presents broad geostrategic threats to Europe’s security.”  One specific complaint is that the pipeline cuts Ukraine out of important revenue streams because it bypasses the traditional land-based pipeline routes out of Russia in favor of an under-sea route.

In December 11, 2018, the U.S. House of Representatives agreed to a resolution in opposition to Nord Stream 2, which, although not binding, advocates sanctions against the project and its supporters.  President Trump has been outspoken against the Nord Stream 2 project, as well.  In a September 18, 2018 joint statement with Poland’s President, Andrzej Duda, Presidents Trump and Duda said: “We will explore new opportunities stemming from the transformation of energy markets and we will work to ensure better energy diversification of Europe, in which private enterprise should play a key role.  We will continue to coordinate our efforts to counter energy projects that threaten our mutual security, such as Nord Stream 2.”

But in a nod towards supply diversification and U.S. interests, the U.S. Department of Energy reports that Minister Altmaier announced on the day of the LNG conference that Germany likely would move forward with the construction of two LNG import terminals.  After the conference, Deputy Secretary Brouillette tweeted that the new import terminals would “improve Germany’s energy security and provide great potential for U.S. LNG.”

As we previously reported, the U.S. Department of Energy has recently taken steps to reduce regulatory reporting requirements for LNG exports from the U.S., which arguably makes it easier for exporters to supply the markets that DOE is helping to find for U.S. LNG.

We will continue to monitor and keep you apprised of developments in this area.  Please let us know if you have specific questions or concerns.

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