Europe waits: Harris vs Trump in energy showdown

The United States is a crucial ally within NATO and a guarantor of energy security for Europeans. The energy crisis triggered by Russia, which prefaced the invasion of Ukraine and eventually led to war, forced the EU to drastically alter its gas and oil supply routes. The U.S. stepped in, becoming the largest LNG supplier to the European Union.

Some EU countries have also aligned their nuclear energy programmes with the United States, a critical transformation component. The U.S. has become a key supplier of technologies and raw materials. What does the decision between Kamala Harris and Donald Trump signify, then?

In 2021, Russia provided 25% of the oil and 45% of the natural gas to Europe. The war and subsequent sanctions altered this situation significantly.

These changes opened European markets to new suppliers, including the United States, which became the largest exporter of liquefied natural gas worldwide.

American LNG exports amount to approximately 345 million cubic metres per day. Some of this reaches European markets, where it competes with Russian and Qatari LNG. By April, Europe had purchased about 12 billion cubic metres of gas from the U.S. Today, along with Norwegian resources, it is one of the most important supply sources. This includes Poland, which in 2018 signed a 20-year contract to supply 2 million tonnes of LNG annually from Port Arthur in Texas, with deliveries beginning in 2023. In January last year, Orlen signed another contract for 1 million tonnes of liquefied gas annually for 20 years starting from 2027.

Donald Trump has maintained that selling LNG to Europe represents a profitable business for the United States. During his tenure in the White House, he encouraged EU countries to invest in expanding LNG ports and cooperating with the Americans. The agreement signed in Poland in 2018 was one of his continental achievements.

However, in the face of Russian energy pressure, the war in Ukraine, and Europe's disengagement from Russian resources, it was the Biden and Harris administration that seized the opportunity. As part of their support, they proposed increased LNG supplies to Europe, thereby securing an important market.

In the reelection campaign, Trump highlights his robust support for growing gas and oil production in the United States. According to Tymon Pastucha, an analyst at the Polish Institute of International Affairs, his re-election, from the perspective of traditional hydrocarbon-based energy, could be advantageous. The Republican candidate promises increased oil and gas production and export, which will likely impact the market and energy commodity prices. The strong position of the U.S. in the European LNG market poses a risk of Trump attempting to impose conditions, but he must also contend with competition. Europe is diversifying supply sources, and the number of entities willing to supply gas to the EU market is increasing - explains the expert.

Pastucha adds that the question remains as to how Trump will approach sanctions on Russian resources. Any change will depend on the broader context, that is, policy towards Russia. - It's a challenging issue because Trump is an unpredictable player - notes Pastucha.

Conversely, Kamala Harris is seen as more critical of oil companies than Joe Biden. Previously, she adopted a restrictive approach to fracking, which harms the environment, and offshore oil production. In this campaign, however, she has considerably softened her stance.

Experts assert that, at least in this regard, Europe need not worry about who will occupy the White House. Contracts with the EU are equally important for both candidates.

Kamala Harris is more enigmatic than revealing. It is challenging to predict her stance on gas and oil extraction. She discusses this topic sparingly, likely to avoid alienating her electorate and the extraction industry. Her firm stance from years ago is still remembered, but today's Harris is not the same as she was five years ago. As vice president, she has had to balance her views - says an analyst, Tymon Pastucha.

He anticipates that Harris will continue with Biden's policies but will place greater emphasis on climate policy and greenhouse gas emissions issues, aligning her with the goals set by Europe. - I don't think a Harris presidency would threaten extraction companies or resource exports. If we examine what the Biden and Harris administration says, compared to the number of permits for fracking and extraction, it is higher than during Trump's tenure. Harris doesn't emphasise these issues much, which climate activists criticise, adds the expert.

The American oil and gas sector is anxiously awaiting election outcomes. As Marianna Sobkiewicz, an analyst, reminds us 68% of U.S. oil and gas industry enterprises feel more uncertain regarding oil price fluctuations and extraction conditions.

Studies of this sector in the U.S. indicate the highest skepticism among its representatives since the COVID-19 pandemic in 2020, with political and environmental risks cited as significant factors limiting the inclination for further investments.

However, this can also be seen as the beginning of the end of a very favourable situation for American oil and gas enterprises, caused by the steep rise in prices due to the invasion of Ukraine. Currently, the industry is adopting a wait-and-see approach - most enterprises in studies declare that they do not plan to limit investments, reduce employment, or decrease production - emphasises Marianna Sobkiewicz.

Besides gas and oil, nuclear energy, encompassing both large and small reactor technology, also plays a strategic role from Europe's perspective. The American company Westinghouse will build a reactor in Poland.

The Americans are also negotiating the construction of two reactors with Bulgaria. The nuclear energy programme is intended to be a key pillar of transformation in the EU.

As explained by a PIE expert, it remains unclear how the elections will influence the development of nuclear energy - an issue overlooked in this year's campaign.

This is not a dividing topic for Americans. Support for nuclear energy remains stable in the U.S. at 56%. This technology enjoys bipartisan support among Democrats and Republicans. The main difference is that Harris appears more predictable; her past statements don't display an anti-nuclear stance. However, Trump, in a recent interview with Joe Rogan (creator of one of the most popular podcasts in the U.S. - ed.), expressed doubts about nuclear energy, labelling it 'too complicated and too expensive' - notes a PIE expert.

Will this affect Trump's involvement in European nuclear energy? - He will likely endeavour for American nuclear energy companies, like Westinghouse, to secure contracts for building new power plants in European countries, including Poland - believes Jakub Wernik from the Kazimierz Pułaski Foundation.

According to Tymon Pastucha, nuclear energy is one of the few things that links Harris and Trump. - Both advocate the development of this energy sector's potential and its participation in the global race. Both view nuclear energy as an economic catalyst - Harris for achieving climate neutrality, and Trump as a source of cheap energy and a technological export product - explains the expert.

Experts note that Harris and Trump differ significantly on decarbonising energy through the development of renewable energy sources. A Harris presidency would likely continue Biden's climate policy - the Democratic candidate openly describes climate change as an "existential threat" - and the development of renewable energy sources.

- This might result in increased investment in low-emission technologies and strengthen cooperation with Europe and Poland in energy transformation - asserts Jakub Wiernik, an expert from the Pułaski Foundation. - It could also mean that a Harris administration would support the development of nuclear energy, integrating it into an emissions reduction strategy - which aligns with Poland's ambitions to expand in this area - he adds.

He believes a Kamala Harris victory would enhance support for green energy, and cooperation on gas and nuclear would depend on alignment with climate goals and be more restrictive regarding environmental protection.

In the case of a Trump presidency, the main issue for developing clean technologies in the U.S. could be the limitation of public funding. The Republican opposes the Inflation Reduction Act (IRA) introduced by the Biden administration, which allocates $369 billion for investments in "clean energy and climate" through tax credits, grants, and loans - reminds Marianna Sobkiewicz.

Trump has announced that he would retract unspent IRA funds. - However, the expert notes that such a decision would not be within Trump's powers and would also require Congressional approval.

Jakub Wiernik believes that such a policy could complicate energy cooperation with Europe, especially with countries that are heavily invested in transitioning and developing renewable energy. - The initiative to increase fossil fuel production could weaken the U.S.'s commitment to developing low-emission and renewable energy - believes the expert.