![Tellurian’s Souki: European Gas Crunch Must Be a Wake-up Call to America](/sites/default/files/styles/hart_news_article_image_640/public/image/2021/10/tellurians-souki-european-gas-crunch-must-be-wake-call-america.jpg?itok=7RP2SuOJ)
Charif Souki, who currently serves as executive chair of Tellurian, recently tore into American energy policy, warning that without careful supply management, the U.S. risked facing “exactly what happened in Europe.” (Source: Hart Energy)
The U.S. is barreling toward the sort of energy supply crisis that is gripping Europe unless the Biden administration comes up with a more coherent energy policy, warns Charif Souki, the executive chair of LNG developer Tellurian.
“You can see if you don’t have a very careful energy policy, what happens is exactly what happened in Europe. You go with misguided priorities and then all of a sudden you hit a wall because you don’t have supply,” Souki told the Financial Times.
Natural gas and electricity prices have spiked in the U.K. and across Europe to all-time highs. The surging prices threaten to undermine the nascent economic recovery as the region scrambles to secure supplies amid low inventory levels and rising demand. Some are warning the lights could start to go out if there is an especially cold winter and demand surges.
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Souki, who took advantage of soaring shale gas supply to pioneer the Lower 48’s LNG export industry, said any such crisis would play out differently in the U.S. because the country is a major energy producer. However, risks are especially acute for parts of the country that remain isolated from supply because it has become too difficult to build new pipelines, he argued.
“Prices are high in California today . . . and we’re starting to put gas-fired power plants back in California. But we don’t have infrastructure to take the gas to California,” Souki said.
The Biden administration should be doing more to make sure natural gas supply can reach customers, said Souki, especially in places like California and the Northeast U.S.
However, President Biden is pushing hard to wean the U.S. off fossil fuels such as natural gas and coal, and wants to see a rapid build out of wind and solar power, underpinned by batteries, with a target of rendering the power grid carbon-free by 2035.
![Tellurian Executive Chairman Charif Souki speaking during a discussion hosted by Washington-based Center for Strategic & International Studies in late September.](/sites/default/files/inline-images/Tellurian%20Executive%20Chairman%20Charif%20Souki%20speaking%20during%20a%20discussion%20hosted%20by%20Washington-based%20Center%20for%20Strategic%20and%20International%20Studies%20in%20late%20September.jpg)
But the threat of supply disruptions and high prices could undermine confidence in the existing grid and see the energy system splinter, according to Souki.
“Because the grid is so dysfunctional in states with such different political systems, such as California and Texas, you’re going to have more interruption in services,” he said.
“People will have to decide whether they’re going to accept that the grid will be there for them or whether they’re going to take things into their own hands. It’s not that expensive to put a generator in your home.”
Souki is hoping to take advantage of the emerging shortages in global gas supply by pushing ahead with a plan to build a new LNG-export plant on the Gulf coast. He expects to approve that project by the end of March next year.
But he said he hoped the European gas crisis would be a wake-up call for the administration.
“Give President Biden some time. I’m hoping that when he finishes with all the rest, he’s going to have time to focus on energy policy and to start looking at it in a holistic sense. You have to have an energy policy.”
This article is an excerpt of Energy Source, a twice-weekly energy newsletter from the Financial Times.
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