Germany is helping to build a LNG terminal to bring in Appalachian gas and correct for the failure of its Energiewende, which led to more coal and emissions.
The U.S. predominance in energy production is reshaping the world’s geopolitical situation, enabling the U.S. to strengthen economic ties with European countries. The combination of horizontal drilling and hydraulic fracturing has not just been good for American jobs and energy prices, it has become a major foreign policy tool that increases in utility as U.S. production grows.
One consequence of U.S. energy production is that Germany has decided to co-finance the construction of a €500 million ($576 million) liquefied natural gas (LNG) shipping terminal in northern Germany. Germany currently gets most of its natural gas by pipeline from Russia. Nord Stream 2, a German-Russian natural gas pipeline, has been proposed to double Russia’s existing gas export capacity to Germany. Russia accounts for over 50 percent of German natural gas imports, with the rest primarily coming from Norway and the Netherlands. The Trump Administration has been lobbying Germany to reduce its dependence on Russian natural gas and to buy U.S. LNG instead. LNG is about 20 percent more expensive than Russian natural gas, but European buyers are showing a willingness to pay a premium to reduce dependence on Russia.