The Trump administration expressed a desire in recent weeks to reduce European dependence on Russian natural gas, but the administration will have to overcome a number of obstacles if they hope to make good on their rhetoric.
Trump targeted Russia’s energy interests during his recent European trip, championing the U.S. commitment to providing Europe with increased American energy exports during his speech in Warsaw and again during the subsequent G20 summit.
It may prove difficult for Trump and his advisers to follow through on the tough rhetoric in the face of cheaper Russian natural gas and the impression among world leaders that Trump’s is simply promoting American energy interests.
“We are committed to securing your access to alternative sources of energy, so Poland and its neighbors are never again held hostage to a single supplier of energy,” Trump said during the July 6 speech in Warsaw.
The thinly-veiled jab at Russia directly preceded the G20 summit in Hamburg, where Trump continued to prioritize the expansion of American energy exports.
He reportedly negotiated for the inclusion of a passage in the final G20 communique that explicitly references the American commitment to help the rest of the world “access and use fossil fuels more cleanly and efficiently.” (RELATED: Final G20 Communique Reveals Split Over Climate Policy)
Trump’s plans to bring American natural gas to European markets runs up against problematic economic realities, namely the fact that Europeans can buy Russian gas at a cheaper price. Much of the discrepancy in pricing between Russian and American gas stems from transportation costs associated with shipping the American product over seas.
“Liquefied natural gas — due to the high costs of liquefaction, shipping and regasification — is hard pressed to compete against Russian pipeline gas on a cost basis,” David Koranyi, a director at the Atlantic Council told Axios.
This pricing issue will likely be exacerbated by Russian plans build two additional pipelines designed to funnel Russian natural gas to central and Eastern Europe. If the plans materialize it will further the disparity in the availability and price of Russian gas relative to the American alternative.
However, Trump could hurt the plan’s prospects by signing a recently passed Senate bill, which includes a provision that empowers the Treasury Department to bring sanctions against investment in Russian natural gas export pipelines. (RELATED: Trade Experts Warn New Sanctions On Russia Could Damage US Competitiveness)
The Trump administration must also overcome the perception that they are pushing American natural gas in a purely self interested play that could jeopardize Europe’s progression toward clean energy.
“That impression, valid or not, could backfire, if Europeans start to see U.S. LNG [liquefied natural gas] as just another politicized fuel source,” Tim Boersma, a natural-gas expert at Columbia University’s Center on Global Energy Policy told Axios.
Trump did his best to convey a sense of mutual benefit and cooperation during his Warsaw speech in which he said “The United States will never use energy to coerce your nations, and we cannot allow others to do so.”
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