A decision by the Biden administration to provide financial help to Poland for securing LNG supplies has prompted a loud reaction from climate activists.
Per a Bloomberg report, Washington-owned International Development Finance Corp. promised it would give Poland's PKN Orlen $500 million as a guarantee for payments due to the European arm of Goldman Sachs for hedging activities for future supply of U.S. liquefied natural gas.
Yet the Biden administration has stated it would stop financing hydrocarbon projects outside of the United States, which is the part that got climate activists angry. Bloomberg recalled that the G7 had last year committed to "end new direct public support for the international unabated fossil fuel energy sector by the end of 2022," except in "limited circumstances."
Perhaps the Biden administration would argue that this is a case of limited circumstances and it is a fact that the financing is not exactly being provided for more oil or gas production anywhere but it will not fly with activists.
"This puts the US international reputation and its position as a so-called climate leader on the line," a program co-manager at Oil Change International, per its website "a research, communications, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the ongoing transition to clean energy."
Meanwhile, the International Development Finance Corp. has responded to the criticism by saying the deal with PKN Orlen would help the latter reduce the carbon footprint of its energy portfolio as it uses more LNG at the expense of coal.
An unnamed official who spoke to Bloomberg also said the financing of the LNG hedge was part of efforts by the Biden administration to reduce Europe's dependence on Russian natural gas.
On the other hand, "This is enabling gas exports," according to Jake Schmidt, strategic director at the Natural Resources Defense Council. "And it's a failure of US leadership to lead with a clean energy agenda."
By Charles Kennedy for Oilprice.com
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