GAS EXPORTS TO CHINA INFLATING GLOBAL ENERGY COSTS, DEPLETING U.S. ENERGY RESERVES, THREATENING GEOPOLITICAL SECURITY OF UNITED STATES AND ALLIES

WASHINGTON, D.C. — The Biden Administration recently wrapped up one of their busiest seasons of international diplomacy to date, which included the global COP27 climate summit and the U.S. President’s first meeting with Chinese President Xi Jinping in nearly two years.

While the 200 nations assembled at COP27 were able to reach a compromise on planned climate damage reparations for lower-resourced and lower-emitting nations, plans to put the globe on track to lower emissions remained inchoate. Meanwhile, experts remain concerned that the Biden Administration’s commendable efforts to broker climate-related compromises may be insufficient.

China was virtually tied for top importer of American gas exports globally in 2020 and 2021. Even as American gas export capacity has been redirected to European import hubs since Russia’s invasion of Ukraine, China remains the fastest-growing customer of American gas, having purchased nearly half of all U.S. gas export commitments issued this year. While these deals have taken form, Asian countries, including China, also have committed $400 billion to gas infrastructure development, which would enable U.S. gas companies to ship up to 60 billion additional cubic feet of gas each day to Asian markets for generations to come.

These multi-billion dollar, multi-generational contracts have raised alarm among American lawmakers and experts, who warn that the Chinese firms buying American gas directly threaten U.S. geopolitical strength and economic health. Among leading concerns are the firms’ histories of trading oil and gas with sanctioned countries and their roles in Chinese territorial takeovers. At the same time, Chinese exports are causing American domestic and manufacturing prices to skyrocket, while China continues to hoard and later resell millions of tons of American gas.

It is worth pointing out that State energy giants Gazprom (GAZP.MM) and China National Petroleum Corporation (CNPC) signed several agreements three months ago including on the use Russian roubles and Chinese yuan to pay for Russian natural gas supplies to China, Gazprom had confirmed earlier.

According to Reuters, the agreements were in addition to a February deal between them to increase gas supplies from 2023 via the eastern route of a China-Russia pipeline, bolstering an energy alliance at a time of strained ties between Russia and the West over Ukraine and other issues.

Russia already sends gas to China via its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic metres (bcm) of gas to China in 2021. Under plans previously drawn up, Russia will increase the annual gas transmission via the pipeline to China to 38 bcm by 2025 from 5 bcm in the first year which has raised fear among US authorities about rising cost of the Gas.

The US authorities believe, Gas Export to China may drain US Gas reserves too fast and will certainly increase the Gas price as well.