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Trump seeks to project global power through energy exports

Published 06/29/2017, 06:36 PM
© Reuters. U.S. President Donald Trump participates in a discussion on energy at the Department of Energy in Washington
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By Timothy Gardner

WASHINGTON (Reuters) - President Donald Trump on Thursday promoted a "golden era" of the U.S. energy business by seeking to assert power abroad through a boost in natural gas, coal and petroleum exports.

In what he called a policy of "energy dominance," Trump re-branded efforts to export liquefied natural gas (LNG) to markets in Eastern Europe and Asia that had been set in motion during the previous presidential administration.

The United States also will offer to export coal to Ukraine, where energy consumers often have suffered from cuts in natural gas supply by Russia.

"We are here today to unleash a new American energy policy," Trump said at an event at the Department of Energy attended by oil and coal executives and union members who build pipelines. "We will export American energy all around the world."

Trump plans to promote U.S. LNG exports at a meeting next week in Warsaw with a dozen leaders from central and eastern Europe, a region heavily reliant on Russian supplies. Trump then will meet Russian President Vladimir Putin on the sidelines of a Group of 20 summit in Germany, in the first meeting between the two leaders, coming amid rising tensions over interference in the 2016 U.S. election.

After decades of being a major importer of natural gas, the United States is set to become a net exporter of gas later this year or in 2018 thanks to the boom in fracking in states such as Texas and Pennsylvania.

There is currently one operating U.S. LNG exporting facility in Sabine Pass, Louisiana, with four others currently under construction that are expected to become operational between 2018 and 2020.

As the United States aims to boost LNG exports, it will compete for markets with Australia, Qatar and Russia, other major gas producers.

U.S. crude oil exports have also risen after former president Barack Obama signed a law in 2015 allowing the shipments.

'HELL OF A LOT MORE FRIENDS'

While many of Trump's opponents have said his plan to pull the United States out of the 2015 Paris Agreement on climate has the potential to harm the country's relations around the world, Energy Secretary Rick Perry said at the event that energy exports will strengthen ties with allies.

The United States is in a position "to be able to clearly create a hell of a lot more friends by being able to deliver to them energy and not being held hostage by some countries, Russia in particular," Perry said.

Whether it is sending LNG to Poland or Ukraine, "the entirety of the EU totally get it that if we can lay in American LNG ... we can be able to have an alternative to Russia," for natural gas sales to Europe, Perry said.

Earlier this month, Cheniere Energy Inc (A:LNG) delivered the first U.S. cargoes of LNG to Poland and the Netherlands.

The Energy Department on Thursday approved additional LNG exports from the Lake Charles project in Louisiana, which is under development.

Trump announced plans to offer coal exports to Ukraine, as well as lift restrictions on U.S. lending for coal projects overseas.

"Ukraine already tells us they need millions and millions of metric tons (of coal)," he said. "Right now, there are many other places that need it too and we want to sell it to them and to everyone else all over the globe who need it."

The Trump administration will launch a review of the ailing nuclear power industry, which has experienced a slew of closures due to stagnant electricity demand and low natural gas prices. Trump's 2018 budget included $120 million for addressing nuclear waste at Nevada's Yucca Mountain and other projects, but most of the state's politicians oppose that project.

In addition, the State Department issued a permit for a NuStar Logistics LP for its New Burgos Pipeline oil product pipeline from the United States to Mexico with a capacity of up to 180,000 barrels per day.

© Reuters. U.S. President Donald Trump participates in a discussion on energy at the Department of Energy in Washington

In 2016, the United States exported about 879,000 barrels of petroleum products daily to Mexico, more than any other country, according to the Energy Department. For the year, the United States exported 4.7 million barrels a day of products – including gasoline, diesel and other refined products – around the world, making it the world’s largest exporter of refined petroleum products.

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