To watch a video of Senator Manchin’s opening remarks, please click here.
To watch a video of Senator Manchin’s questioning, please click here.
U.S. Senate Energy and Natural Resources Committee held a hearing to examine the impact of the Russian Federation’s war in Ukraine on European and global energy security one year after the February 24, 2022, invasion of Ukraine. During the hearing, Senator Joe Manchin (D-WV), Chairman of the Committee, discussed how the war has affected global energy supply chains, the current state of Europe’s natural gas supply, and further action needed to ensure the United States is energy secure and able to help our allies.
“[W]ithin six months of Putin’s invasion, the U.S. sent more natural gas to Europe via ship than Russia sent by pipeline. This was an incredible feat that no one would have thought possible a year ago, but we still have a long way to go to replace the Russian energy which Europe has relied on.
“As the superpower of the world, we must evaluate our supply chains and ensure we are not beholden to countries that don’t share our values, lest we fall victim to the same weaponization we’ve seen play out over the last year. The fact is business leaders and policymakers on both sides of the Atlantic have an opportunity to do more to help Ukraine, our European allies, and ourselves…You see, my view of decarbonization includes displacing dirtier fuels sourced from around the world – whether that be dirtier environmentally or politically – and we have the abundant natural resources to do it,” said Chairman Manchin.
During the hearing, Chair Manchin heard from Dr. Anna Mikulska, a Fellow in Energy Studies at the Baker Institute for Public Policy at Rice University, about the volatility of natural gas prices in Europe.
“Last fall, wholesale prices of natural gas in Europe peaked at $90 per million Btu, compared to the average of $6-$10 from before the invasion and about $6 in the U.S. at the peak of gas prices last year. Similarly, prices of electricity and coal used to substitute for natural gas have risen to record highs. Even though prices have abated, they are still at multiples of what they were before,” said Dr. Mikulska.
Following Dr. Mikulska’s testimony, Chairman Manchin questioned Ms. Ditte Juul Jørgensen, Director General of the Directorate-General for Energy at the European Commission, about high energy prices and how long-term contracts with U.S. energy suppliers can help secure Europe’s energy supply and lower prices.
“Dr. Mikulska is absolutely accurate, it is unbelievable the prices that Europe was paying at the peak of things, but we didn’t have the production at that time and the spot markets were just out of control. We’re putting about 13 billion cubic feet per day into LNG [liquified natural gas]. We have more terminals coming online so we should be up into the 20-25 billion per day fairly soon. With that, are you all looking at longer-term contracts? Because I know American producers are looking for longer-term contracts with the Europeans to make sure you don’t have that spike,” asked Chairman Manchin.
“It is a commercial decision for companies whether they want to sign long-term contracts and I think one consideration there is the extreme volatility and uncertainty in global markets. It is certainly not helpful in that regard. We see an interest in in long-term contracts to provide the security of supply, the stability in markets. We see with some concern that a number of U.S. suppliers have signed a long-term contract with Chinese buyers and so we're following that market very closely and looking at what can we do from the European level, from the European Commission and member states to further support the development of long-term stable markets and off take,” replied Director General Jørgensen.
“When you talk about long-term contracts, what time frame are you talking about? That means you’re going to be needing this product and you’re willing to sign a contract for 5, 10, 15, 20 [years] or longer?” continued Chairman Manchin.
“As I mentioned, we see natural gas as being part of the energy transition in the European Union. So our forecast, our analysis of how to get to climate neutrality in 2050 includes a share of natural gas in our energy system all the way between now and 2050. The duration of long-term contracts is up to the commercial actors, but there is nothing in our system that would stand in the way of that,” said Director General Jørgensen.
Chairman Manchin also asked Dr. Andrew E. Light, Assistant Secretary of the Office of International Affairs at the U.S. Department of Energy (DOE), about the effect of the Inflation Reduction Act (IRA) across the globe.
“I was in Bangalore, India last week for the G20 negotiation. I have to tell you that India is ready to move forward on green hydrogen, on carbon capture and sequestration that they can scale up in a way that’s amazing. As well as now they want to talk with us about SMRs [small modular reactors]. That is coming from the capacity that has been created by this legislation. If the United States continues partnering with countries like that, countries in Europe, other countries around the world, that is where we are seeing investment in new energy technology as important, frankly, as the investment in military technology. It will really give these countries true independence and true security and stability,” said Dr. Light.
At the end of the hearing, Chairman Manchin stressed the importance of continuing to work across the Atlantic to strengthen energy security and promote energy independence.
“We can continue to go into the 21st century and on into the 22nd century if we do it together. The value of the free world is based on allies and relationships, it’s not based on one superpower. We know we can’t do it without you, and we’re going to have to make sure we all do this together,” said Chairman Manchin.
The hearing featured witnesses from the U.S. Department of Energy, European Commission, and Rice University.
To watch the hearing in full, please click here.
Original source can be found here
