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Research Report

A Natural Gas Diplomacy Strategy for the New US Administration

Agnia Grigas
Copyright Date: Jan. 1, 2017
Published by: Atlantic Council
Pages: 17
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Table of Contents

  1. (pp. 10-11)

    As Donald J. Trump takes office as the forty-fifth president of the United States on January 20, 2017, his administration will have an opportunity to reassess US energy policy, specifically, its natural gas policy. This reassessment will not only be a by-product of a change in leadership in Washington, but is necessitated by the fundamental transformation of the world’s natural gas markets since President Barack Obama took office eight years ago. In 2011, the International Energy Agency proclaimed that the world energy markets were entering “the golden age of gas.”¹ Since then, the natural gas markets have seen an influx...

  2. (pp. 12-13)

    Over the last decade, the global gas sector has witnessed changes that have no real precedent in recent history. The shale gas revolution in the United States, the growing global LNG trade, and a buildup of pipeline interconnectors and gas transport infrastructure are making gas a global commodity. Recent technological achievements and various market factors have made this transformation of the natural gas industry possible. Most evidently, in the US shale boom, long-term policy planning and changing political and economic considerations have played an important role. The shale gas revolution originated from government-led research programs of the 1970s to 1990s,...

  3. (pp. 14-17)

    What are the immediate implications of the rapidly changing global gas market for the geopolitics of gas? For one, it means that the role of politics will diminish and that gas markets will have the upper hand in the gas trade. Factors like increased competition and greater market pressure will force new and traditional gas suppliers to abandon the old ways of bringing gas to consumers. As a result, it will become increasingly difficult for monopolists to maintain captive or near-captive markets. Granted, this does not mean that long-term gas supply relationships will suddenly become irrelevant; rather, the increase of...

  4. (pp. 18-19)

    The ability of the United States to fully capitalize on the globalizing gas market and the shale revolution both at home and abroad depends on domestic political currents. President Trump and the new Republican-dominated Congress have the capacity to shape the energy and foreign policy priorities of the world’s leading gas producer and consumer. They are likely to favor increased natural gas and coal production and reduced environmental and industry regulation. Democrats in Congress will likely continue to prioritize greater regulation of the gas industry, particularly when it comes to fracking, as well as to boost the profile of renewables...

  5. (pp. 20-20)

    The recent transformative developments in the United States gas sector and the global gas markets warrant a reassessment of the role natural gas can play in the Trump administration’s energy policy and international diplomacy. While the country has emerged as the greatest producer of natural gas and is on track to becoming a significant LNG exporter, which has positive implications for the United States and its allies, a number of opportunities and potential risks merit the administration’s attention. The United States needs to cement its position as a leading player in the global gasv markets and promote open, secure, and...