EU's rising reliance on US gas brings risks, regulators warn

By Kate Abnett

BRUSSELS, May 13 (Reuters) - The European Union's growing reliance on U.S. gas carries risks, including rising dependence on a single supplier, European energy regulators warned on Wednesday.

EU countries have tripled imports of U.S. liquefied natural gas since 2021 as they race to phase out Russian energy. Last year, the bloc sourced 58% of its LNG from the U.S., equivalent to about 25% of its total gas consumption.

"The EU's reliance on U.S. LNG may raise questions of dependency on a single supplying country," the EU Agency for the Cooperation of Energy Regulators said in a report.

ACER said the severe disruption to energy markets caused by the Iran war underlined the need to cut Europe's exposure to external shocks. It urged the EU to diversify supply sources to ensure that no single supplier, transit route or conflict could destabilise Europe's energy system and broader economy.

'NEW ENERGY DEPENDENCE'

The U.S. is on track to become Europe's biggest gas supplier this year and could provide 80% of the EU's LNG by 2028, according to data published on Wednesday by the non-profit Institute for Energy Economics and Financial Analysis.

Ramping up ⁠U.S. imports risks creating a "new energy dependence", IEEFA said, urging more investment in ⁠renewable energy and heat pumps to reduce exposure to volatile global fuel markets.

The EU is already the world's largest LNG importer, and its reliance on U.S. supplies is set to rise further as it moves ahead with a ban on Russian gas imports by September 2027 - a decision prompted by Russia's 2022 invasion of Ukraine, when Moscow slashed gas deliveries to Europe.

Some EU officials voiced concerns earlier this year about growing dependence on U.S. energy following U.S. President Donald Trump's push to take over Greenland.

Others argue reliance on the U.S. - a long-time ally and NATO member - is not comparable to the bloc's former dependence on Russia.

"Transatlantic relations are under scrutiny, and we have ups and downs... but of course, we need to continue to build and to strengthen this relationship," Romania's state secretary for energy Cristian-Silviu Busoi said.

"It's a more reliable partner than maybe others that could be our partners now. Because Russia will not be a partner anymore," Busoi told reporters on Wednesday.