The Russian Federation is capable of wielding big influence with European neighbors who depend on vast imports of natural gas, but an increased supply from the United States could undercut its advantage.
President Donald Trump and European Commission President Jean-Claude Juncker met at the Rose Garden on Wednesday to discuss trade negotiations, an issue that has ratcheted up immensely after the Republican president announced a round of tariffs against the European Union. Both Trump and Juncker expressed confidence that trade relations between the two bodies would increase for the better.
“[W]hen I was invited by the President to the White House, I had one intention: I had the intention to make a deal today. And we made a deal today,” Juncker stated to the press Wednesday.
Among the concessions, the EU agreed to purchase more soybeans from the U.S. and work toward minimizing subsidies and tariffs on non-auto industrial goods. Another notable takeaway from the press conference: The EU agreed to purchase more American liquified natural gas.
“[W]e agreed today to a strengthen and strengthening of our strategic cooperation with respect to energy,” Trump said alongside Juncker. “The European Union wants to import more liquefied natural gas — LNG — from the United States, and they’re going to be a very, very big buyer. We’re going to make it much easier for them, but they’re going to be a massive buyer of LNG, so they’ll be able to diversify their energy supply, which they want very much to do. And we have plenty of it.”
Europe becoming a “massive” buyer of American natural gas could have big implications for Russian President Vladimir Putin, who currently benefits from Russian exports of LNG to the EU. Natural gas and oil revenues account for over one-third of Russia’s federal budget revenues, with over 75 percent of its natural gas exports went to Europe in 2016, according to the Energy Information Administration.
More options — including imports from the U.S. — could give European leaders more options when dealing with Gazprom, Russia’s state-owned natural gas company.
“[A]s soon as the Russians get greedy, U.S. LNG provides a ready substitute. U.S. LNG has made the global gas market competitive. But it is unlikely we will export vast quantities of LNG to Europe unless the Russians overreach. If they do we will quickly take their market share,” David Goldwyn, a former State Department energy official, told Axios. (RELATED: Trump Calls Germany’s Relationship With Russian Energy Industry ‘Inappropriate’)
Trump has expressed great interest in breaking up Russia’s energy monopoly in Eastern Europe. The Republican president in July went so far as to say Germany was a “captive” of Russian energy.
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