Regulators warn of the risks associated with EU's increasing dependence on US gas

European energy regulators warned that the European Union's increasing reliance on U.S. natural gas poses risks, including a growing dependence on one supplier.

Since 2021, EU countries have tripled their imports of U.S. LNG as they rush to replace Russian energy. The EU sourced 58% (or 25%) of its gas from the U.S. last year.

In a recent report, the EU Agency for Cooperation of Energy Regulators stated that "the EU's dependence?on U.S. LNG could raise questions about dependency on one single supplier country."

ACER stated that the disruption of energy markets due to the?war in Iran underscored the need for Europe to be less exposed to external shocks. The report urged the EU diversify its supply sources so that a single?supplier or transit route, or conflict, could not destabilise Europe’s energy system and wider economy.

'NEW ENERGY ?DEPENDENCE'

According to the Institute for Energy Economics and Financial Analysis, a non-profit organization, the U.S. could become Europe's largest gas supplier by this year and provide up to 80% of EU LNG by 2028.

IEEFA warned that increasing U.S. energy imports could lead to a "new dependence on energy". It urged more investment in heat pumps and renewable energy to reduce the exposure to volatile fuel markets.

The EU is already the largest LNG importer in the world. Its reliance on U.S. gas is expected to increase as it bans Russian?gas imports from September 2027. This decision was prompted by Russia’s invasion of Ukraine in 2022, when Moscow cut back on gas deliveries to Europe.

Some EU officials expressed concerns about the growing dependency on U.S. oil following President Donald Trump’s attempt to "take over Greenland" earlier this year.

Some argue that the U.S., a NATO member and long-time NATO ally, is not comparable with the former dependence of the EU on Russia.

"Transatlantic relations have their ups and downsides, but we must continue to build and strengthen this relationship," said Romania's State Secretary for Energy Cristian-Silviu Buşoi.

"It is a more reliable and trustworthy partner than others who could possibly be our partners today." Busoi said to reporters Wednesday that Russia would no longer be a partnership. Kate Abnett reported. (Editing by Edmund Klamann, Mark Potter and Mark Potter.)

(source: Reuters)