* Brussels presses Washington to increase natural gas exports
* U.S. gas could give EU leverage against Russian prices
* Energy likely to complicate ambitious talks
By Barbara Lewis and Robin Emmott
BRUSSELS, Dec 16 European negotiators, hoping to cut fuel bills,
will press their U.S. counterparts in Washington this week on including energy
exports in a transatlantic trade pact that aims to integrate two markets
accounting for half the world's economy.
Bringing politically sensitive energy into the debate stands to complicate
talks spanning agriculture to finance, but the rewards could be big for the
European Union, where natural gas prices are around three times those in the
The United States has benefited from a shale gas revolution and for Europe,
U.S. imports are likely to be a faster way to lower prices than overcoming the
social, planning and geological barriers to developing the continent's own
U.S. gas exports could be up to 6 billion cubic feet, or around 170 million
cubic metres per day - half of Britain's daily demand in winter - from the end
of this decade, according to Washington-based think tank The Brookings
Asia, where prices are higher than in Europe, is likely to lure much of that
natural gas. But even the prospect of a small amount reaching Europe would
strengthen the EU's hand in contract negotiations with Russia, whose dominance
in supplying gas to the continent has locked customers into high prices.
"There is no reason why U.S. natural gas should be reserved for users in the
United States," said a senior EU official close to the negotiations.
"For us, this is one of the most important issues of the TTIP," the official
said, referring to the trade pact's name, the Transatlantic Trade and Investment
CHANGING THE RULES
In Washington, politicians have reason to be more cautious.
Exporting natural gas would push up prices at home, potentially costing
politicians votes and damaging competitiveness for industries with heavy energy
The United States has a ban on exporting crude oil without a licence, which
dates from the 1970s, when U.S. lawmakers sought to conserve reserves following
an Arab oil embargo.
Exporting gas is only slightly less contentious. The United States has begun
granting licences to export liquefied natural gas (LNG), but slowly because of
An EU-U.S. trade accord, which negotiators aim to finalise by the end of
2014, would make licence approval automatic.
The United States has said it is ready to include energy, but it remains
unclear on whose terms. When the free-trade talks were launched in July, EU and
U.S. officials made a point of including a reference to energy and raw materials
in their guidelines for the negotiations.
Help for Europe could come from those with most to gain. Energy companies,
including Exxonmobil, Chevron and BP, would make money
from exporting U.S. gas and from higher domestic prices that would be likely to
A focus of the trade talks is to drive economic growth, in which European
and U.S. companies play a major role, having invested trillions of dollars in
each other's economies.
"Because U.S. and European companies, including energy companies, have
invested heavily on both sides of the Atlantic, U.S. and EU negotiators are
essentially representing the same company interests," said Peter Chase, vice
president, Europe at the U.S. Chamber of Commerce in Brussels.
"They can take a more collaborative approach."
One bone of contention is the desire in Europe, which faces a long future as
a net energy importer, for a specific text on energy that would serve as a
blueprint for other talks because Brussels sees the TTIP as a "gold standard"
for trade deals.
"Disciplines agreed in the transatlantic context could serve as a model for
subsequent negotiations involving third countries," says a European Commission
document on raw materials and energy in the context of the EU-U.S. trade talks.
The U.S. view is that would create unnecessary problems in the U.S.
Congress, where energy resources are viewed as a highly strategic asset. U.S.
officials say energy can instead be worked in discreetly throughout the text of
the trade pact.
Another irritant is regulation. Some in industry are confident the higher
political and economic goals will ensure rules they dislike are swept away once
and for all.
The struggling European refining industry has particular hopes for the trade
Trade in refined oil products is not subject to U.S. legal restrictions.
High demand for gasoline in the United States during its summer driving season
and a shortfall of diesel refineries in Europe have meant the European Union
imports U.S. diesel and exports European gasoline.
In 2012, the U.S. refining industry exported 335,000 barrels per day (bpd)
of diesel to the European Union and the EU refining industry exported 349,000
bpd of gasoline to the United States.
Together this equated to $32 billion in trade, according to Europia, which
represents the EU refining industry.
It argues that trade is under threat because of draft EU legislation to
label products refined from tar sands as more polluting than from conventional
crude because of the amount of energy required to separate the oil from the
Industry opposition to the EU proposal has raged for years, but EU sources
say the political momentum of the trade talks is a sure way to bring about
lighter-touch regulation, which will dismay environmentalists and delight the