North America possesses significant natural gas resources that could combat the linked challenges of energy supply, energy costs, and greenhouse gas emissions, according to a new McKinsey study.
McKinsey’s report, How North American natural gas could help alleviate the energy crisis, explains how gas exports from North America to Europe could tackle high energy prices on both sides of the Atlantic, improve energy security, and decrease GHG emissions by reducing the use of coal globally.
Both the US and Europe face a dual challenge of providing reliable energy supply while reducing emissions. Europe’s energy security has weakened during 2022, due to the war in Ukraine and the reduced supply of Russian pipeline gas. With few options to meet security of energy supply through LNG in the near term, countries in Europe and Asia may accordingly revert to the use of domestic coal and lignite in power generation, which has a larger carbon footprint.
Europe is now beginning to act to strengthen its energy security, building infrastructure to import greater quantities of LNG – which may result in an additional 80 billion cubic meters of natural gas demand. Europe’s new focus on LNG infrastructure therefore opens the door wide for North American LNG exports to increase in the next three to five years.
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