By Matthew Roy
The energy policy of the USA and Europe towards Russia is characterized by striking contradictions. On the one hand, the Biden administration, flanked by its NATO counterparts, is sending hundreds of billions of dollars in military aid to Ukraine and loudly proclaiming sanctions aimed at weakening the Russian economy. On the other hand, these same nations continue to procure Russian oil, gas and LNG, replenishing the very coffers they claim to be emptying. This hypocrisy is compounded by President Biden's own domestic energy policies, which are restricting American production at the very moment that Europe is faltering in its attempt to wean itself from dependence on Russian energy.
In this context, the new Trump administration's “energy dominance” agenda represents a necessary and impactful realignment. By expanding oil and gas production in the United States, Trump is proposing a strategy that aligns America's energy policy with its geopolitical needs. Such a framework not only improves transatlantic energy security but also enables Trump to negotiate with strength in his promised pursuit of a peace deal with Russia. As ambitious as it is pragmatic, this plan deserves the utmost attention, both for its immediate benefits and for its potential to restore coherence in an area where it has been sorely lacking.
Watching NATO countries distribute billions to Ukraine while simultaneously supporting the Kremlin's war machine through energy purchases, one is struck by the sheer absurdity of this double game. This is not just a bureaucratic oversight, but rather a lack of a comprehensive strategy. The sanctions, ostensibly designed to slow Russia's economy, will become ineffective if Europe turns around and replenishes Moscow's coffers through both direct and backdoor energy trading.
Ostensibly excluded from European markets, Russian crude finds refuge in third countries – primarily in Central and East Asia – where it is blended, refined and, with a hint of plausible deniability, sold back to Europe at an acceptable markup. Consider India: once a negligible player in Russian oil imports, now suddenly the beneficiary of almost 40% of Moscow's exports. Indian refineries convert this crude oil into diesel and other derivatives to then export it back to Europe. It is essentially a proper money laundering operation – one that ensures a steady flow of revenue to Russia while Europe pays handsomely for its pretense of self-righteous isolation. The irony would be amusing if the stakes weren't so high.
Meanwhile, President Biden's time in office has been marked by an almost doctrinaire aversion to reliable energy development in the United States, a legacy that seems less a matter of policy than a point of pride. His intentions were already clear in 2020, when he campaigned under the slogan “ban fracking,” a slogan that is as reductive as it is revealing. On his first day in office, Biden summarily canceled the final phase of the Keystone XL pipeline project, a key artery for North American energy connectivity. By the end of his first week, he had frozen all public land lease applications for oil and gas and placed additional bureaucratic review on existing leases.
Biden then doubled down on his push, endorsing new climate legislation to regulate methane emissions, a homage to Barack Obama's unvarnished ambition to choke off fossil fuel production through the regulatory apparatus. Perhaps most insulting to European allies seeking alternatives to Russian energy, Biden paused authorization for LNG export activities in January 2024. At a moment when America's energy resources could have provided a bulwark against economic instability and geopolitical vulnerability, Biden instead chose to give in to the ideological imperatives of his political base.
While it is true that U.S. LNG exports to Europe have risen to historic highs since the war began in 2022, it is important to realize that this was a market reaction and occurred despite, not because of, Biden's energy policies . Biden's priority has always been to use the government to hamper natural gas development, even as European allies faced a crisis of supply cuts and uncertainty.
The contrast between Donald Trump and Joe Biden on energy policy is a study in opposites. Trump’s slogan “Drill, Baby, Drill” encapsulates a vision of “energy dominance” that is uncompromisingly ambitious, unashamedly pro-development and unmistakably American. In his first term, Trump expedited approvals for the Keystone XL and Dakota Access pipelines, cut through red tape to expedite oil and gas leases, and delivered a remarkable quadrupling of LNG exports.
Now, with billions of dollars of capital hanging in the balance, the energy sector is eagerly awaiting a return to that ethos of decisive action. The permit backlog, a irritant of the Biden administration, has caused projects to stall for months or even years as Washington dithers. Under Trump, the energy industry thrived not through government's vigilant consideration but through liberation from it. With Chris Wright and Doug Burgum selected as energy and interior secretaries, respectively, it is safe to assume that the new administration will once again unleash the free and creative forces that drive American industry.
There are also some in Europe who are looking forward to Trump taking a new direction in energy and foreign policy. Friend and political ally Viktor Orban has opposed the European status quo and sought a negotiated end to violence in Ukraine. Orban's Hungary imports almost 100% of its natural gas, used for heating homes, generating electricity and industrial production, from Russia. Orban is heavily criticized in the West for this realpolitik approach of maintaining normal relations with the only provider of an indispensable resource to which his landlocked country currently has no alternative. But even European Commission President Ursula Von der Leyen, who has been a vocal critic of both Trump and Orban, has recently changed her mind and expressed enthusiasm for a new Trump-style energy policy.
After Donald Trump's election victory, the dialogue between Trump and von der Leyen quickly turned to issues of strategic importance, including a proposal to expand U.S. LNG exports to Europe. “LNG is one of the topics we have raised,” von der Leyen noted. “We still source a lot of LNG via Russia. And why not replace it with American LNG, which is cheaper and lowers our energy prices?” Politico's analysis concludes that this is simply a poster for upcoming tariff negotiations, a face-saving proposal to import more LNG, over trade deficits that Von der Leyen actually cannot enforce. This is a completely plausible interpretation, but there is another outstanding negotiation that is directly affected by this issue, namely a peace agreement between Russia and Ukraine.
After all, energy is never just a microeconomic issue, limited to the concerns of its own industry; It is the sine qua non of the modern economy. As such, it is an essential factor for state security and social stability. By rebalancing Europe's energy dependence on American LNG, Trump has a tool not only for economic leverage but also for geopolitical realignment that could prove indispensable in shaping the contours of peace. In this context, the LNG discussion is not just transactional but symbolic of a broader, more consistent strategy.
To claim that energy trade alone can bring Russia under control would be tantamount to unwarranted optimism. Nevertheless, it is not without use as a negotiating tool. While Ursula von der Leyen's proposal for increased LNG trade is little more than a rhetorical flourish, it still serves a tactical purpose: It signals the kind of seriousness that attracts attention and tilts the negotiating table in the United States' favor. Negotiations are, after all, a complicated ballet of feints, hints and hidden threats – each one designed to unsettle the opponent and realign the balance of power.
With a million dead or injured, Russia's recent liberalization of nuclear doctrine and the deployment of a new nuclear-capable hypersonic missile to the battlefield, the stakes have never been higher and the case for de-escalation and peace never clearer. In a proxy war against a “gas station masquerading as a country,” as John McCain famously characterized Russia, energy policy really matters. Trump's vision is not just a transactional game, but an affirmation of the principle of strength, both economic and military, that is the linchpin of effective diplomacy.
Matthew Roy is an energy industry expert with over a decade of experience in corporate leadership and strategy. He is currently a Visiting Research Fellow for the Budapest Fellowship Program at the Donau Institute with a focus on energy policy.
This article was originally published by RealClearEnergy and made available via RealClearWire.
Like this:
Load…
