What’s bigger than the Trump-Putin meet? This is
Media will focus overwhelming attention today on the G-20 economic summit in Germany for the initial encounter between President Trump and Russia’s Vladimir Putin. We previously explored here what’s at stake in that encounter.
But from a lasting economic standpoint, folks, what happened Thursday in Poland and tomorrow in Britain could be much more important.
In Warsaw, as Ed Morrissey points out, Trump offered leaders from Poland and numerous other European countries long-term LNG deals to diversify their supplies and avoid creating undesirable political leverage with a certain large country to the East that has not hesitated to cut off natural gas supplies for political reasons.
Trump didn’t mention that nation. He didn’t have to. It contains six letters beginning with R and ending with a.
“America stands ready,” Trump declared at a news conference, “to help Poland and other European nations diversify their energy supplies, so that you can never be held hostage to a single supplier.”
In previous years, Russia has turned off natural gas exports to certain countries whose policies displeased Putin. This approach of Trump’s is another part of his tougher talk on trade, which seems to be working, as we wrote here.
Liquefied natural gas exports are a key part of this president’s energy program and trade policy, which he intends to use to help balance trade deficits and exert favorable leverage on trading partners, China, for instance, where the U.S. buys $300 billion more per year than it sells.
The United States has had an insatiable appetite for energy imports over the years. But thanks to the technical developments of fracking that tap into previously unreachable sources, the U.S. now has an immense abundance of natural gas.
It can be moved, of course, through pipelines domestically or, in special conversion facilities deeply chilled, exported in liquid form and then returned to a gaseous state by foreign customers.
By an amazing coincidence, the first massive load of U.S. LNG is due to dock in Britain Saturday. Another landed in Poland last month. Lithuania expects one soon, all among some two dozen new nation customers around the globe.
It’s all from the first LNG conversion facility in Sabine Pass, Louisiana, an $11 billion plant. Five more such plants are under construction and four others fully permitted. Each facility produces both construction and permanent jobs and, according to one analysis, some $20 billion per year in value-added economic activity. If memory serves, more new jobs fit with Trump’s economic plans too.
Additionally, natural gas burns cleaner than coal. So, the effects of fuel-switching both domestically and abroad are substantial on greenhouse gas emissions and conventional air pollutants, even without a Paris accord.
LNG export deals are privately negotiated. But Trump is so eager to push them, he jokingly offered Thursday to work out a deal on the spot with Polish President Andrzej Duda. “I think we can enter a contract for LNG within the next 15 minutes,” Trump said. “Do you have anybody available to negotiate?”
Duda laughed, but saw contracts soon between the Polish government and U.S. companies. “I believe that after the conclusion of those negotiations, there will be a long-term contract for U.S. LNG deliveries to our LNG terminal,” he said.