Is President Joe Biden a Russian agent? Probably not, but you could be forgiven for thinking so given some of his policies.
Contradicting his rhetoric on the need to support allies and domestic economic growth, Biden has set his regulatory sights on America’s liquefied natural gas industry. His strategy appears two-pronged.
First, he is adding more red tape to the approval process for new LNG export terminals. While existing regulations are already laborious, Biden’s changes will make them not just tortuous but torturous. LNG terminals are of crucial importance in getting LNG exported to foreign customers in Europe and Asia. Biden is directing the Department of Energy to consider climate impacts in deciding whether to grant approval for a new terminal planned for Louisiana’s Gulf Coast. The directive would almost certainly also apply to 16 other proposed LNG terminals elsewhere in the nation.
Second, Biden announced Friday an all-out ban on new LNG export terminal licenses. This is dreadful policy.
The president is forcing European leaders to consider whether, even if a Republican is elected to the White House in November, the next Democratic president might restrict the terminals. He is introducing regulatory doubt, the pathogen most dangerous to high-value, long-term infrastructure and investment projects. That is intentional. Biden appears to have decided that climate variation is a bigger threat to national security than Russian aggression.
Were news media more balanced in their appraisal of Democrats and Republicans on foreign policy, we would hear outrage at Biden’s beneficent energy gift to Vladimir Putin. The Russian dictator is the only beneficiary of restrictions on American expansion of the LNG export market. Low prices for widely available LNG would undercut Russia’s energy blackmail strategy for Europe, with which he extracts political obedience in return for winter fuel supplies. In the aftermath of Putin’s February 2022 invasion of Ukraine, European Union nations moved to cut off his energy supplies in favor of ramped-up imports from the United States. But the EU has made only partial progress toward completely severing Putin’s energy leash.
What does Biden think will happen now that he’s returning Putin’s most hated American energy weapon to its scabbard?
Putin will move to return Russian energy influence over Europe. The ex-KGB man will recognize that faced with the choice between higher costs and cheap Russian gas, many European governments will choose the latter. Energy prices in Europe are already significantly higher than in the U.S. With populist movements rising across Europe, continental politicians will have a tough time demanding their citizens pick up the tab of Biden’s betrayal.
Biden’s actions are a stark abandonment of his inaugural pledge to “repair our alliances and engage with the world once again, not to meet yesterday’s challenges but today’s and tomorrow’s. … We will be a strong and trusted partner for peace, progress, and security.” This is a trust broken. At a minimum, Biden will cause significant LNG project delays while jeopardizing financing and investor confidence.
This is no hypothetical matter. The U.S. provided nearly half of European LNG imports in 2023. The EU wants this to continue.
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Only America can provide for Europe’s energy needs. An American Petroleum Institute study by Rystad Energy focuses on data behind the politics. It explains, “Abundant North American low-cost gas resources can backstop the global gas markets provided that necessary midstream infrastructure is constructed.”
Critically, the report underlines how “U.S. long run marginal cost is the primary driver of LNG importer prices.” Put another way, if the U.S. can produce more LNG at lower costs, it can reduce EU import prices and weaken Putin’s energy blackmail.