Powerful gas industry, with President’s support, exploits Russian war on Ukraine to boost profits
22nd September 2022, Washington D.C. – Leading US gas companies have seen huge financial gains since Russia’s invasion of Ukraine, while President Biden adopted as policy a list of demands made by a secretive gas lobby group, according to new analysis by Global Witness.
The research shows how:
- The LNG export company Cheniere increased the cash it earned from its operations by $3.8 billion in the first half of 2022, compared to the previous year. This boost was in large part down to a quadrupling of returns from short term sales ($5.11/MCF in the first six months of 2021 to $22.54/MCF this year)
- Gas liquifying company Freeport saw revenues from sales to Europe triple in the first 5 months after Russia’s invasion of Ukraine from $491 million for the same period in 2021 to more than $1.4 billion this year.
- Another gas liquifying company, Sempra, saw an eight-fold increase in revenue from LNG sales to Europe from the start of the war to the end of July compared to the same period in 2021, rocketing from $270 million to $2.1 billion.
Cheniere, Freeport and Sempra are all participants in a joint US-EU energy security taskforce, set up by President Biden and Ursula Von Der Leyen, President of the European Commission. The taskforce aims to reduce Europe’s dependence on Russian fossil fuels and increase US LNG exports to Europe. Very few details about the taskforce are publicly available, prompting Global Witness to write to the President and describe the opacity as unlawful and “reminiscent of Trump”.
New Global Witness analysis also shows how the taskforce was one of several demands by LNG Allies, a gas industry lobby group, that were made to Biden within 24 hours of Russia invading Ukraine and were subsequently all adopted. They also include:
- A resumption of fossil fuel leasing to allow for new drilling on federal lands
- Expediting new LNG export licences
- Getting regulators to approve new US gas infrastructure
- Releasing $300 million in public funding to build gas infrastructure in Europe, including LNG import facilities
Zorka Milin, Senior advisor at Global Witness, said:
“While most of the world looked on aghast at Russia’s invasion of Ukraine, the US gas industry was licking its lips. It took just 24 hours for the industry to deliver its demands to the President for LNG export expansion; you don’t have to be a cynic to understand that this was an industry ready to exploit an atrocity to suit its own interests.”
“The fact that just weeks after those demands were laid out, President Biden was turning industry wishes into policy, is a damning indictment of a President who had promised to tackle the climate crisis. The speed with which Biden was able to forget his pre-election promises and bow down to the polluting gas industry is a major step backwards for the climate movement globally.”
“There is no doubt that Biden’s apparent capitulation to the gas industry has opened the door for these companies to continue to profit off the backs of those suffering in Ukraine, those living close to new gas infrastructure in the US and the millions affected by climate change globally.”
Following the establishment of the US-EU Taskforce, LNG Allies boasted that it was a “direct response to the proposal put forward by LNG Allies, The US LNG Association, in our letter to President Biden on Feb 25 and our conversation with EU Energy Commissioner Simson earlier in the month.”
Responding to a request for comment, Cheniere stated that the company and its customers had “played a vital role in Europe’s energy security during this critical and tragic time.” Also responding, LNG Allies stated that it had not participated in taskforce meetings but had discussed it with US officials. Freeport and Sempra did not comment.
Zorka Milin added:
“Russia’s aggression in Ukraine, rising energy prices and the devastating impacts of climate change should be the biggest prompt yet to end the worlds dependence on fossil fuels. Instead, an already rich industry is trying to seize the moment and force the world to double down on the very mistakes that have led us to this situation.”
Following this research, Global Witness is calling on the US government to:
- Stop writing energy policy based on the demands of a fossil fuel industry that stands to benefit.
- Phase out gas exports in line with the Paris Agreement’s 1.5C goal.
And the EU must:
- Ensure its energy policymaking is free from the influence of fossil fuel lobbyists, including groups like LNG Allies.
- Move towards genuine energy security by rapidly phasing out fossil gas and scaling up energy savings and renewables.