Jan 7, 2021 - Energy & Environment

Known unknowns about Biden's natural gas diplomacy

Illustration of a question mark made out of blue fire
Illustration: Sarah Grillo/Axios

Part of a new post by energy analyst Nikos Tsafos raises an important point: Joe Biden's approach to U.S. financing of natural gas projects abroad and LNG exports is something of a mystery, even as he plans new domestic regulations.

The big picture: Tsafos notes there's been significant support in recent years from a pair of U.S. agencies — the Export-Import Bank and the International Development Finance Corp.

"[T]he prospect of securing finance from the DFC has been a selling point for U.S. diplomacy, especially in Southeast Asia and Eastern Europe," writes Tsafos, who's with the Center for Strategic and International Studies.

What we're watching: Tsafos says the question for the new administration is whether it will keep up support for overseas gas projects even as it plans new rules and restrictions domestically.

  • "Can the president squeeze gas at home while EXIM and the DFC finance gas projects overseas?"
  • "And if there is a shift away from gas, how will that be communicated, especially in places where countries see gas as a central element of their near-term decarbonization or energy security strategies?"

The intrigue: On a related note, it remains to be seen how Biden will approach U.S. LNG exports, which both the Obama and Trump administration supported.

  • Tsafos expects less weight given to gas exports as a diplomatic tool and a less rah-rah approach than Trump in general, but not a 180-degree policy turn.
  • "Gas will take a more appropriate place in the pecking order of U.S. priorities—important but not top-tier."

Flashback: Axios' Amy Harder also looked at this question here.

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