Obama pitches shale gas as EU seeks Russia cut

Bloomberg/BrusselsThe crisis in Ukraine underscores the need for the European Union to consider imports of natural gas from the US and development of domestic resources to diversify supplies, President Barack Obama said.The annexation of Crimea by Russia pushed the 28-nation EU to accelerate its search for ways to cut reliance on imports from Russia’s OAO Gazprom, the main supplier of gas to Europe through Ukrainian pipelines. Europe depends on purchases from abroad for more than a half of its energy consumption and governments in the bloc are divided over exploration for shale gas, which has brought the US toward energy independence. “It is useful for Europe to look at its own energy assets as well as how the US can supply additional energy assets,” Obama told reporters in Brussels after a meeting with EU President Herman Van Rompuy and European Commission President Jose Barroso.The EU’s overall energy dependency rate is set to rise to 80% by 2035 from the current 60%, according to the International Energy Agency. The bloc’s heads of state and government at a summit last week asked the European Commission, the EU executive, to prepare by June a road map on how to cut reliance on Russian imports and increase security of supply.As a part of their debate on energy policies for the next decade at the March 20-21 summit, EU leaders also urged member states to speed up integration of electricity and gas markets to help reduce costs. Power prices in some parts of Europe are double those in the US amid a shale-gas revolution.In light of the crisis in Ukraine, Europe will need to examine its energy policies to find ways to diversify supplies and accelerate its energy independence, Obama said. The US as a source of energy is one possibility, he said.“The truth of the matter is that just as there’s no easy, free, simple way to defend ourselves, there’s no perfect, free, ideal cheap energy sources,” Obama said. “Every possible energy source has some inconveniences or downsides.”Gas from Russia accounted for 30% and oil for about 35% of EU imports in 2011, according to EU data. Other major gas suppliers to Europe are Norway, Algieria and Qatar.Imports of gas from the US as an option to diversify supplies to Europe was mentioned last week by UK Prime Minister David Cameron, who is seeking a 25-year plan to improve the EU energy security. Other possibilities recommended by the UK include gas development of the so-called southern corridor for gas from the Caspian region and Iraq, and increased co-operation with Norway and North Africa, the U.K. said in a document for the EU summit.The US Department of Energy has approved seven permits to export liquefied natural gas to countries that don’t have free trade agreements with the US, with 24 applications still pending. The projects approved so far would ship 9.3bn cubic feet a day of gas overseas, or about 17% of gas demand from European countries that are part of the Organization for Economic Co-operation and Development, government data show.US and EU teams are going to meet next week to discuss energy co-operation, Barroso said.“The question is whether through our energy ministers and at the highest levels we’re able to find ways in which we can accelerate this process of diversification and this is something we’re very much committed to,” Obama said. “It’s not something that can happen overnight, but what I think this entire crisis has pointed to is the need for us to get moving now, with the sense of urgency.”