Germany’s Scholz welcomes fossil gas expansion in the U.S.

German chancellor Olaf Scholz has welcomed the buildout of liquefied natural gas (LNG) export infrastructure and increased efforts to extract fossil fuels in the U.S. in an interview with business daily Handelsblatt. “A larger supply on the global market would mean lower energy prices,” which “would be good for Europe and Germany,” said Scholz. Lower energy prices would help Germany make the necessary investments in the 20-years transition phase towards climate neutrality.

The chancellor said he has always opposed a halt of LNG terminal expansion. “It is good that construction is now continuing,” he said. Scholz argued that another benefit of lower energy prices globally is that revenues would decrease for major exporter Russia.

Gas prices for German industry are still considerably higher than they were before the energy crisis, with the end of pipeline imports from Russia putting pressure on companies needing the fuel in production processes.

Still heavily reliant on fossil fuel imports, Germany sources about 95 percent of its gas needs from abroad after undergoing a major shift in its energy supply following Russia’s invasion of Ukraine in February 2022. Before the war, Russia was the main supplier of oil, gas and hard coal to Germany, covering 55 percent of the country's gas demand. Now, Norway has become the dominant supplier of fossil gas to Germany, providing 48 percent of the fuel crossing the border into the country in 2024.

It is difficult to say how high the share of U.S. LNG in the German mix currently is, because – in addition to direct imports which can be traced more easily – the country receives LNG that landed in neighbouring countries and is then fed into the well-connected European grid. Last year LNG was 29 percent of Europe’s gas supplies, up from 18 percent in 2019, with U.S. LNG covering half of all LNG imports, reported Reuters.