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#Europe #Biden #Gas
This video has been made possible thanks to olly unlimited international data the new hack for business Travelers more on that in a moment 2 years after the Russian invasion of Ukraine when everything seemed stable when all the support between the US and NATO countries seemed solid the Biden Administration has just
Struck an unexpected blow to Europe Biden Administration freezes gas export approvals overnight the US government has started to stop natural gas exports to European countries of course this may not only come as a setback for Europe but could end up giving Putin’s regime a Lifeline for keeping the war going for
Longer because yes although everything seems calm Russia continues to pump almost 15% of all the natural gas that Europe Imports the old continent has not yet become completely independent of Russian gas in fact it is not even close to being so and believe me it’s not because they’re trying European
Countries have launched a plan worth more than 300 billion e to achieve their energy decoupling From Russia with this money they are rebuilding liquefied natural gas regasification plants that will make it possible to bring gas by sea from anywhere in the world naturally these plants take up to 5 years to build
However the mammoth effort of countries such as Germany has made it possible to erect some of them such as the one in vilhelms Haven which you see on the screen in just a few months nevertheless the key to making all this work has a name the United States of America the US has not only been the biggest opponent of Putin’s regime so far but it has also been the key player for European countries breaking their dependence on Russian gas over the past few years the US has regained its Crown as the great fossil fuel Titan neither
Qatar nor Saudi Arabia nor the Emirates comes close Uncle Sam is once again the new king of energy with crude oil production far exceeding that of Saudi Arabia and Russia the United States is producing more oil than any country in history the fossil fuel industry is making a huge turnaround while over the
Last few decades oil was mostly stamped with a mysterious Arabian headdress these days it’s back to a cowboy hat this has been possible thanks to fracking a technology with which the United States is extracting Black Gold even from the deepest underground crevices a technological Milestone that has increased production as never before
The point is that where there is oil there is natural gas fracking makes it possible to extract both fuels at the same time and visual economic viewers that is just the key that Europe needs for replacing Russian gas European liquefied natural gas plants such as the
One we showed in Vel Haven have been built precisely to import a lot of gas especially from the USA so much so that practically 50% of European Imports come from the United States now as time goes by Europe is going to need more and more gas we are talking about demand
Increasing by about 2.5 billion cubic M by 2040 and so far Europe has only managed to to contract 32% of all the LG it will need to cover that increase and of course this is where the US plays an absolutely fundamental role following the outbreak of the war
The White House publicly and firmly committed itself to supplying Europe with as much gas as was necessary to cut Russian dependence not only that but in a joint communique with the European Union Washington assured that it would guarantee gas exports establish a reliable regulatory framework and eliminate the problem by 2027 at the
Latest however as we mentioned at the beginning everything has turned around 180° it is hard to believe but Joe Biden now seems to be betraying his promises to Europe Biden’s policy shifts risk European natural gas stability Washington has put the breaks on the issuance of new gas export licenses if
This continues it could eventually be a victory for Russia and would also mean another major blow to the already weakened European economy the question is why is Biden apparently turning his back on Europe why would Washington play in favor of Russian interests and above all what economic implications might
This curb on gas exports have today on visual economic we tell you all about it but before if you are a loyal follower of our Channel and therefore being someone who likes to keep up to date with the global economic landscape you probably also like to travel to
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Improve your productivity and control your finances no matter where you are and now let’s Start okay let’s cut to the Chase has Biden become pro-russian clearly not so then what on Earth is he doing holding back gas to Europe well the answer is much simpler than it seems so simple that it even seems pathetic the main reason Biden seems willing to do this he
Argues is climate change in a White House statement they explained that the export of natural gas could lead to a worsening of climate change which according to them is an existential threat to humanity no matter how you feel about protecting the climate let’s be clear this decision has taken
Everyone by surprise so much by surprise that it seems more like an excuse than a real motive a big lie to hide the true reasons for Biden’s blockade and why do we say this well it is true that natural gas is a fossil fuel and therefore it
Pollutes however it is a much much cleaner fuel than coal or oil in fact in 2022 the European Parliament went so far as to classify natural gas as a clean energy on a par with nuclear power the problem is that the alternative to gas is coal and if Europe becomes
Independent of Russian gas but fails to replace it with American Gas it will have no choice but to burn even more coal than it does now so is it really beneficial for the environment for the US to turn off the gas T well pay attention because the problem is not only confined to
Europe Asian and many African economies are growing like crazy and the world’s population is increasing the result energy consumption is going to Skyrocket as much as we may not like it a lot of that energy will be produced once again by burning coal but how can this be
Avoided well with natural gas natural gas that the US can produce and Export but which Joe Biden is now almost inexplicitly holding back and let’s see it is true that some climate groups explain that natural gas is not as clean as it seems for example this report
Points out that in the LG production and Export process gas leaks and losses occur and pollute the atmosphere but even allowing for these effects in the worst cases natural gas would be equal to or even less polluting than coal I repeat in the worst case and that is
Without taking into account that LG technology could improve and reduce the aforementioned leaks visual economic Community it’s clear that Joe Biden has generated a lot of uncertainty in Europe without even having clear evidence that gas is more harmful to the planet than coal and what’s worse is that what he is doing
Could be illegal specifically this is the law that regulates the gas market the natural gas act and determines that the US state must approve any export request unless it is against the public interest and yes it is true that climate change issues could be a matter of
Public interest but it first must be demonstrated in other words the law says the exports must be approved by default and only blocked if it is shown that exporting gas is against the public interest the problem is that Biden has proven nothing Biden has paed new gas export licenses simply to study the
Issue us pauses build out of natural gas export terminals to weigh climate impacts in any case in order to decide an issue of such magnitude the doctrine of the US Congress determines that it must have the support of the congressman or in other words that Biden will not be
Able to sustain this blockade for long Biden knows that what he is doing is likely to come to nothing but then why jeopardize European energy security if the gas blockade is unlikely to succeed is climate change really such a big concern for Biden well I’m telling you
No this is all part of a bigger play for Biden himself than climate change listen up the Biden Gambit let’s be clear Biden and the US gas regulators probably don’t give a damn about how natural gas exports affect climate change in fact as recently as 7 months ago several environmental groups asked the
Government to block gas exports and guess what their application was rejected in other words the blockade that Biden is now promoting was rejected only a few months ago the question is what has changed so that the block is now accepted the answer is easy us elections are coming up
When a politician nears election time he or she brings out their worst side concessions are made that they would never make elections bring out a populist side and politicians try to buy votes with questionable policies and the natural gas block Aid is just such a case Joe Biden came to power in 2021
Thanks to the support of many environmental groups and now he wants to make sure he has them on his side but hang on this is an economics Channel and the fundamental part of this issue actually has little to do with environmentalism you see parallel to the climate motives the White House has
Admitted economic motives for trying to curb gas exports what does this mean think about it if Biden curbs gas exports to the rest of the world there would be more gas available to Americans that is gas will be cheaper it is a perfect electoral Ploy Biden can portray
Himself as the savior of the middle class the hero who will reduce the electricity bill and win a lot of votes but not only that cheap natural gas is particularly attractive for many powerful business groups for example in 2017 the pharmaceutical Lobby which produces its medicines using a lot of
Electricity lobbied the White House to limit natural gas exports an industry trade group that lobbies for the big chemical companies sent a letter to Rick Perry Trump’s Energy Secretary at the time in it they practically begged him to Halt the LNG buildout in the US having the business
Lobbies on your side is a good asset for elections and in this case it’s Biden’s turn but don’t think that the situation would have been any different with the Republicans but hey I know what many of you are wondering what’s wrong with Joe Biden curbing gas exports if it will
Improve the US economy well the truth is that cutting off gas will not improve the US economy in fact it will worsen it considerably you see one of the most famous economists in history Frederick bastiat said that good economists were those who focused on long-term consequences and not on the short term
Well while it is true that in the short term curban gas exports could reduce rce US Energy prices in the long term it would be a disaster think about it if gas producers cannot export as much to other countries many will have no incentive to exploit new Fields improve
Technology or produce much more than they currently do on top of that many of the companies that have invested in fracking and LG processing thinking that they were going to be able to export and make money now see how the government could screw them out of business
Overnight and what does all this mean it is possible that due to a lack of political certainty many energy companies will invest less and that over time total gas production will be considerably reduced after all it is true that the gas produced would stay in
The USA But as there would be less gas the final price could end up being even higher than if exports were maintained but visual economic viewers this is not just a theory in 2023 liquefied natural gas exports reached an all-time high and did that mean an increase in the price of
Gas in the US no far from it quite the contrary prices plummeted by 62% and for what reason well because the us could export so much it started producing gas at record levels which in turn flooded local markets with cheap gas even so it seems the problem of blocking exports is
Not just a question of price exporting less means losing a lot of money for the economy less production fewer jobs lower wages and the dollar having a lower value in the long run limiting exports is a bad idea but do you want to know the worst think of the world’s poorest
Economies as of today there are still close to 1 billion people in the world without access to electricity the us could solve part of the problem by exporting the cheap gas it produces helping thousands of families and helping Industries in poor countries to prosper visual economic Community
Biden’s plan makes no sense at least not economic sense this electoral move could bring a lot of uncertainty to a thriving industry that could help solve the Russian gas crisis help poor countries and on on top of that improve the US economy in the long term as we have seen
The climate arguments do not seem to have sufficient support and in fact it is most likely that this whole issue will end up being overturned by Congress or even the courts so why did Biden jump in head first then probably because he knows that after winning the elections
The reasonable thing to do would be to back down and continue to allow exports but until then he has to win a few votes although having reached this point the questions are now over to you do you think Biden will try to keep the blockade in place and do you think it
Will really help him Garner a few votes you can leave me your answers in the comments and as always don’t forget that here on visual economic we release new videos every week so subscribe to the channel hit the little bell so you don’t miss any of our updates and if you like
The video like it and I’ll see you in the next one all the best see you next Time
34 Comments
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Biden threw a political punch. The environmental money poured in.
I like how you talk about the move possibly being illegal because there is not any proof of potential harm to the US public and then talk about how this could increase prices for Americans (i.e. cause material harm to the US public). That suggests it would be rather easy to switch the main reasoning to that and make the argument about environmentalism not being a good reason moot as they would have an undeniably valid reason (environmentalism is still at least a plausible excuse anyway though I agree its just an excuse).
Either way, this isn't really a big deal as you're making it out to be here. Last time I checked, this is a ban on brand new approvals and doesn't effect existing or already approved expansions (which should double or triple US export capacity in the coming years anyway). It would take years for this to have negative impact in Europe and that assumes it ever does (it might not either way and if this is just an election ploy that gets dropped even if Biden wins again it definitely won't have any negative impact).
Lets also talk about the part where you say the ban is bad for the US economy. This is in fact false. Completely and utterly false actually. Lets start by focusing a little more on that bit about price increases for US consumers. The planned and approved expansions to US export capacity are already gargantuan and if the pace keeps up its very possible a significant enough portion of US gas production would be able to be exported so as to begin to link the prices in the US (and NA in general to an extent) with that in Europe and the wider global gas prices. This could force US citizens to pay more for natural gas for things like heating and energy (natural gas is a major energy source after all). You just have to look at a graph of gas prices over time in the US vs Europe to see how bad this could be for the US. I'm going to go on a small (related) tangent here as I want to stress that this is a far bigger threat to US prices than lower production and you're "not just a theory" about how the ban could increase prices is just wrong. This is especially true as (like you mentioned) you can get oil and gas out of the same wells. In fact, if you are fracking for oil, you generally can't help but get a lot of natural gas. Its true that specifically targeting gas over oil recently has helped prices as well but even that was already happening due to US domestic demand so exports, even if they encourage a slightly accelerated increase in US production, didn't really have much if anything to do with the 2023 decreases in US prices. Finally, even if this does lead to a much lower production in the US, it won't actually raise price too severely and definitely not for long, assuming it even does at all. Unlike tradition wells, shale wells can be brought online in a matter of months or even week instead of years and years and that means any increase in price is fairly quickly met with an increase in production that stabilizes things. This means, as a closed system, US gas prices are stably pretty low. End of tangent. Anyway, the potentially (and likely) higher prices from continuing to massively build out export capacity and link the US and European markets could hit US consumers pretty hard and that would have obvious negative ramifications for any economy and even more so for one as consumer driven as the US. However, its not just the average citizen that would suffer here. Businesses rely on cheap natural gas inputs to make the US competitive in the production of a whole range of products and many of those same businesses as well as many more benefit greatly from cheap energy. Considering the US needs to bring a lot of manufacturing home for a variety of reasons (such as issues with China), significantly higher gas prices are not only bad for the US economy in general but its bad for the geo-strategic and national security interests of the US. The trends before the ban were a direct threat to many US interests so personally, even if this turns out to be a real lasting ban, I wouldn't consider it overly problematic, especially given the aforementioned massive expansions that are still going ahead should still be able to alleviate a good chunk of Europe's woes here. Worst case for Europe is they still have slightly high prices because they have to compete with East Asia for imports but even then things shouldn't get as bad as they got when they first started trying to get off Russian gas unless something dramatic happens again.
Still on the economy, there are downsides like you mentioned but they are once again not that severe. First, lets get this out of the way. The US is a massive and diversified economy and a hit to the fossil fuel industry specifically is not necessarily a big deal, especially as the "hit" may not happen at all given that the planned expansions give the industry years to adjust to any potential lower than planned future demand from not being able to export as much. I also already mentioned how quickly US producers can adjust to demand (this is true with both oil and gas by the way). So not only is there potentially no real hit to the US economy at all (though the fossil fuel lobby will insist its bad for obvious reasons) but even if there were downsides they would be more than offset by the consumers and businesses benefiting from lower prices of gas.
Forgot to mention, the technological stagnation on natural gas production is also wrong, at least as you framed it. I already mentioned a lot of reasons why the industry in general is fine which explains why it won't hurt any more than what is already going to happen. The real issue is that major oil companies have been taking over the shale industry. Early on it was a lot of small producers trying to squeeze as much out of what they had in every way they could that lead to the rapid development and increasing efficiency of the shale technologies. With the major companies that don't have to worry about squeezing out every penny swallowing everything up, its highly likely that there will begin to be relative or just straight stagnation on any improvements regardless of any other factors in the industry. So, its highly likely there will be stagnation but not because of the ban.
PS: Yes, I realize few if any people will read this and yes, I like typing because its fun
He is already nyanyuk
Biden just wants us to eat ze bugs and be happy
Fan fact:- American oil is more expensive than Saudi and Russia 😂🌝🤫🫣
I hope there isn't said environmentalist that will discover this video. While I do believe in the theory of global warming, I do think the way of going about it have been stupid due to politics.
I HATE US POLITICS! America please wake up, and realize you are not a democracy! By law you are but that is curtailed by the best propaganda in the world. Your politicians are utterly corrupt, and no one that is part of the larger demographic has any chance of becoming president, which is not the case where I live, so it is possible to change this. Please do something! I am tired of being controlled by a country where I have no vote, and the elections are so stupid. You only have TWO parties which is only one more than China! Each controlled by rich men, where here we have a dozen parties, with only a few millionaires in the mix. Please — start thinking for yourselves! You don't have to be 100% Trump or 100% Biden. Form your own opinion! Be objective.
Nord stream bombed by “terrorist”… EU buy LNG from USA at sky high prices… High energy cost caused EU industrial to cut back on production… EU companies forced by escalating cost to move production to other countries…. EU GDP suffered as a result of de-industrialization… What a perfectly executed plan..
I hate the fact that nuclear energy has become so taboo, because people don't understand it. I know it may not be the greenest option, but it is the most efficient middle ground before switching to pure green energy. What are people afraid of? It must be all the earthquakes… no because there aren't any close to serious here. Then it must be all the, tsunamis… no they also don't happen here. By exclusion, it must simply be all the meteors that fall from the sky every day in Europe that people are afraid will hit a power plant.
Dude speaking for 15 mins without any real info, expect election is coming
The goal of the United States is the de-industrialisation of Germany. That is why they are doing this and other things.
I like your content, but this is poor journalism at best. You really should do more research before you start misleading people. I'm not going to unsubscribe, but I will be taking what you say, with a pinch of salt from here on out, as well as fact checking more of your Content.
From Europes pov the US is similair to Turkey, an ally on paper, but when it comes down to it they will do anything to benefit themself at the cost of others.
With friends like that, who need enemies?
He is just doing what every US president has done since Bill Clinton. Distancing themself from Europe more and more. US won the cold war. After that they dont need Europe any more. US is doing so mutch better than Europe in every field.
– Stronger millitary
– Better energy market
– More innovative companies (Meta, Microsoft, Navida, Apple, Tesla, SnapChat, Twitter/X, etc etc)
– Younger poppulation
– Higher growt
At the same time Europe is wasting money (they dont have) on "green bullshit", and funding "zombie companies".
@visualeconomiken Europe should explorer other countries like Nigeria which has strategic location and transfer of produce for its energy expansion based on a win win deal
As an American. Its simply to punish texas for questioning his rule
please get to the real reason faster
Where is oil there is US
EU propaganda😂
Bad research on this video… The ban is on new builds not exporting! Current plans still result in double current export capacity. If I see another video this poor again, I will unsub.
Ehm, he stopped NEW export terminals construction approvals, not gas exports. Also this stop has already on it a time temporary clause, meaning it will expire after US elections :D. It is all an election stunt.
Plus five stars for Bastiat.
Watching this episode felt like watching a filler manga episode on TV. You know it's trite, you know you can skip most of the stuff, you know the the reader is vocally clickbaiting you but you just don't change the channel because the remote is in the bedroom.
Omg Biden!!!! Wtf!!!???
This is a reminder for us, Europeans that US is not our friend – but rather a distant business partner
Trump being accused by everybody of colluding with Russia?…. with what this video above has shown, how is President Biden and his U.S. Democratic Party cohorts not colluding with Russia?
How would US ever want to transition to green energy when there is so much money and jobs at stalk?
The US government bas a hidden agenda, no way I'm shocked.
Concerning gas and coal: a new study has come out just recently that stated that when you account for gas leaks and methane's much stronger greenhaus effect, natural gas is similarly bad as coal. If the timing isn't purely coincidental, Biden's decision might have something to do with this study. But be honest: Europe does not need the US of all places to urge them to cut emissions.
The real reason is one word. Just one word. Trump.
It has also returned to pollute the world. But are you sure that Biden remembers the choices he made?
I suspect some Americans watching this video will assume that Biden can simply turn on the taps if he wins in November, solving the gas crisis in Europe at a stroke. Unfortunately by then it will already be too late. Europe's gas imports don't rise and fall with demand, but are steady throughout the year, with most of the gas imported in summer being stored for use in winter. This means our gas stores need to be full by November. Biden's policy will leave them empty.
In short, YES… America clearly cant be trusted