US energy firms use Ukraine war to lock in long-term gas contracts
American oil and gas companies are pushing to solve the short-term problem of a tight European gas supply, driven by Russia’s invasion of Ukraine, with long-term liquefied natural gas (LNG) contracts, a new report shows.
The US fossil fuel industry has locked in 45 long-term contracts and contract expansions since the start of the war, according to research by Friends of the Earth, Public Citizen and BailoutWatch. That’s a major increase from the 14 such contracts signed in 2021.
While price volatility for gas in Europe is already easing, most of the new contracts won’t deliver gas until 2026 or later, after which they will lock in purchases for 20 years or more.
“LNG terminals are massively expensive, multi-decade investments,” said Lukas Ross, a co-author of the report and program manager for Friends of the Earth. “In order for a bank or other investor to feel comfortable writing a check for something like this, they need market certainty. And the way that certainty is delivered is through long-term contracts. But a short-term supply crunch should not be solved with…