Posted on June 18, 2024 by Jeremy Harrell
This op-ed was originally published by The National Interest on June 18, 2024. Click here to read the entire piece.
America is facing a critical period of intensifying international challenges. The aggressive maneuvers of adversaries demand an increasingly robust use of U.S. foreign policy assets. Energy to sustain growing economies is at the heart of these issues. America has the opportunity to ensure its influence on the world stage as a provider of affordable, reliable, and clean energy security for decades to come. As Congress considers reauthorizing the U.S. Development Finance Corporation (DFC), whose authorization expires in 2025, it’s time to supercharge this agency as part of an integrated international energy security and climate strategy.
The DFC, the modernized U.S. government development finance institution ramped up during the Trump administration, with bipartisan Congressional support, is a crucial player in helping America compete in geoeconomic rivalries over the future of energy leadership. In 2022, following the Russian invasion of Ukraine, America demonstrated its capacity as a global energy powerhouse. For decades, the European Union (EU) had depended on Russian natural gas imports, which grew in share even after the invasion and annexation of Crimea in 2014. In just one year, the U.S. surged its LNG exports, driving Russian market share in the EU down from 40 percent in 2021 to just 8 percent in 2023.
This lifeline to Europe was partly enabled by the DFC, which provided over $1.5 billion in financing to support Europe’s energy diversification away from Russian gas. This is just one example of how the DFC has become a key federal agency in supporting America’s geopolitical and geoeconomic interests.
Energy projects supported by the DFC cut across various sectors, ranging from diversifying natural gas supplies in Poland to developing an energy supply hub in Greek shipyards to fostering clean energy generation in Bulgaria and Georgia. This provides allies and partners with U.S. alternatives to malignant energy producers like Russia and the predatory lending for energy infrastructure performed by actors like China. Furthermore, unlike most federal agencies, the DFC typically generates a financial return for taxpayer dollars. In FY 2023, the DFC returned a net positive income of $340 million to the U.S. Treasury from projects it invested in abroad.
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