European Union representatives will return to Washington Monday to hash out the fine details of Trump’s July deal with Europe to buy more U.S. natural gas.
President Trump had agreed to a deal in which the U.S. would move to normalize trade relations with Europe, and forgo imposing more tariffs, if the European Union began importing more U.S. liquefied natural gas.
European Commission President Jean-Claude Juncker agreed to do as much, but only if the U.S. agrees to cut regulatory burdens that make it more difficult for natural gas to flow to European shores.
The U.S. needs to “play its role in doing away with red tape restrictions,” Juncker said earlier this month.
The White House expects to build forward momentum on Trump’s July 25 trade deal at the meeting, but isn’t providing specifics on how it will address Juncker’s concerns.
“At these meetings, the U.S. hopes to make progress in keeping forward momentum between the U.S. and E.U.,” White House spokeswoman Lindsay Walters told the Washington Examiner. The administration believes liquefied natural gas exports “can help diversify Europe’s energy supply” while strengthening the strategic cooperation between America and Europe, the spokeswoman added.
The red tape Juncker was referring to is the legal obligation by the federal government to approve individual shipments of natural gas to countries, according to a European Commission statement issued ahead of the August 20 meeting in Washington.
“Currently, U.S. legislation still requires prior regulatory approval for liquefied natural gas exports to Europe,” the statement explained. “These restrictions need to be addressed and U.S. rules made easier for U.S. liquefied natural gas to be exported to the EU.”
For nearly a month after Trump and Juncker met at the White House to sign a joint statement of agreement, senior administration officials have been working with their E.U. counterparts to finalize the agreed upon deal, according to the European Commission.
A top trade adviser to President Juncker and a senior E.U. trade official will lead the Monday visit to Washington to continue work on implementing the July 25 joint statement. “In this context, the EU and the U.S. are working within the framework of this Executive Working Group to increase U.S. exports of liquefied natural gas to Europe,” European Commission statement read.
In a statement, Juncker noted that U.S. shale gas exports began arriving in the European Union for the first time in April 2016 at the Portuguese port of Sines. Since then, European imports of liquefied natural gas from the U.S. have increased from zero to 2.8 billion cubic meters, Juncker explained. In comparison, Russia exported about 198 billion cubic meters of natural gas to Europe and other destinations in 2015, according to the CIA’s World Factbook.
President Trump had pressed European leaders in Brussels last month to diversify their energy supplies, rather than be “captive” to natural gas from Russia. The administration opposes the Nord Stream II Pipeline project, which is the second large pipeline to connect Russia to Europe through Germany.
The Atlantic Council think tank, which has been heavily involved in the debate over the Russian pipeline, said the best thing the Trump administration could do to boost natural gas to Europe is begin the process of “eliminating” key parts of the complex and convoluted LNG licensing process.
“The EU’s efforts to diversify its energy imports through increased reliance on American LNG exports therefore presents a geo-strategic opportunity to increase energy and political security in Europe and bolster the transatlantic relationship in the process,” the think tank argued in an Aug. 14 policy paper. It maintained that less regulation would enable U.S. energy exports to be better able to compete with Russian pipeline gas, which is currently less expensive than LNG coming from America.
The Department of Energy and Federal Energy Regulatory Commission are key functionaries in issuing permits for LNG export terminals. But it is the Energy Department’s “national interest” determination that has been blamed in previous year for adding the most time to the process of issuing permits.
The Atlantic Council noted that a 2014 rule change that required the Energy Department to consider national interest issues only after the entire FERC review was completed made the entire process “more convoluted.”
The think tank is recommending that the Trump administration look at four possible solutions to correct the “red tape” concern.
Frist, amend the Natural Gas Act of 1938, the law that requires the permitting complexity, by eliminating the national interest determination completely. It could also change the law to create a special category of national interest associated with promoting energy diversification in Europe, according to the Atlantic Council.
Second, reinstate the original regulatory process by providing national interest certifications that become automatic as soon as FERC has issued its separate permits.
Third, streamline the national interest certification process to make it quicker.
And fourth, redefine the entire LNG export permitting process.
“These rule changes, if proposed in the autumn of 2018, could be finalized in early 2019 following formal notice and comment process in the United States,” the think tank said.
“Importantly, these reforms do not require lengthy trade treaty negotiations,” it said.
