\n<\/p>\n
The United States today is the world\u2019s biggest exporter of liquefied natural gas, accounting for nearly a quarter of the global trade in LNG. By the end of Donald Trump\u2019s second term as president, the U.S. will have more than\u00a0doubled the molecules of methane that it ships abroad.\u00a0<\/p>\n
Oil and gas companies are celebrating the new administration\u2019s rollback of regulations, expediting of permits, and vigorous promotion of fossil fuels in trade negotiations with other nations. Some analysts see Trump\u2019s return to office ushering in a \u201cgolden age\u201d for the LNG industry. Eight projects \u2014 some expansions of existing facilities, some new projects, all but one on the Gulf Coast \u2014 have been approved by federal regulators and\u00a0are under construction. Another 10 have received approval but not yet broken ground.\u00a0<\/p>\n
This new wave of investment in export terminals could have major consequences for energy markets in the U.S. and abroad and for the climate.<\/p>\n
With a string of recent deals and milestones, the LNG industry is booming. In August, U.S. exports of liquefied natural gas\u00a0reached a record-high 9.3 million tons. In late July, developer Venture Global\u00a0announced it had secured $15 billion in financing and would commence construction of its CP2 project in Louisiana, which will be the country\u2019s largest LNG facility once completed. That was the third new LNG project to announce it had lined up enough financing to start building thus far in 2025, and industry analysts expect more to come before year\u2019s end.\u00a0<\/p>\n
\u201cCountries are committing to buy lots of U.S. energy,\u201d says an analyst. \u201cI would call it a step change.\u201d<\/p>\n
\u201cIt will be the biggest year ever for U.S. LNG,\u201d says Douglas Hengel, a senior consultant to industry trade group LNG Allies and adjunct faculty member at Johns Hopkins University\u2019s School of Advanced International Studies. \u201cThere seems to be a lot of interest in U.S. LNG, even aside from it being promoted in trade negotiations. Countries are committing to buy lots of U.S. energy.\u201d\u00a0<\/p>\n
\u201cI would call it a step change,\u201d he says.\u00a0<\/p>\n
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One reason for that bullish outlook is Trump\u2019s reversal of a Biden administration freeze on permitting. In January 2024, after months of pressure from climate advocates, President Biden paused reviews of projects seeking to export gas to countries that do not have free trade agreements with the U.S., in order to fully study their climate and economic impacts and assess whether they were in the \u201cpublic interest.\u201d In December, a month before Trump took office, the Department of Energy (DOE) released its report finding that those LNG facilities would lead to increases in greenhouse gas emissions, domestic energy prices, and exposure to pollution in local communities.<\/p>\n
On his first day in office President Trump reversed that order, directing the DOE to resume permitting LNG projects as part of his \u201cEnergy Dominance\u201d agenda. In May, the DOE issued a revised version of the Biden-era report, dismissing the risks that the gas export boom would result in both more climate-warming pollution and steeper costs for U.S. gas consumers.\u00a0<\/p>\n
LNG export terminals on the Gulf Coast. Source: FERC.<\/span> \u201cIt was a huge shift on day one from the Biden administration and the \u2018pause\u2019 to the Trump administration,\u201d Hengel says. Developers of LNG projects need billions in financing from banks, which require proof that they have signed up enough buyers of future shipments of gas. \u201cSome contracts were not yet agreed but close, but [buyers] wanted to be sure that the pause was lifted,\u201d he says. \u201cSo, it has a practical impact.\u201d<\/p>\n The Trump administration\u2019s trade policies are generating another possible tailwind for the industry, one that could push more long-term purchase deals over the finish line. U.S negotiators have wielded the threat of tariffs to pressure trading partners into pledging to buy more gas from American exporters.\u00a0<\/p>\n During the final stretch of trade negotiations between the U.S. and the European Union, Venture Global inked a 20-year contract with Eni, a major Italian energy company, for its new CP2 project. And in late July, the White House announced that the EU had committed to buying a staggering $250 billion worth of U.S. liquefied natural gas, oil, and nuclear fuel each year through 2028. The news sent the stock prices of Venture Global and Cheniere, the largest U.S. LNG exporter, surging.<\/p>\n As part of another recent trade deal, South Korea \u201cagreed to purchase $100 billion in U.S. LNG or other energy,\u201d according to President Trump, over an unspecified time frame. In another bilateral agreement, Japan agreed to \u201cexplore\u201d a potential future investment in a proposed massive LNG export project in Alaska.<\/p>\n Advocates are concerned that countries are caving in to the Trump administration\u2019s demands that they buy more U.S. gas.<\/p>\n But Seb Kennedy, a veteran gas market analyst who writes the Energy Flux newsletter, contends that, for the LNG sector, Trump\u2019s approach to trade is \u201claced with contradictions.\u201d Tariffs are already driving up the cost of steel and other materials needed for construction of LNG storage tanks, pipelines, and ships. Economists have forecast that the Trump administration\u2019s tariffs will, on balance, result in slower global economic growth, which in turn could dampen demand for energy.<\/p>\n \u201cU.S. LNG projects will be more expensive to build and find it harder to get buyers to commit to long-term contracts because it\u2019s such an unstable, unknowable demand horizon,\u201d says Kennedy. \u201cIt\u2019s like kryptonite for the LNG space.\u201d<\/p>\n Some analysts also question the concrete benefits of vaguely outlined energy provisions in these trade deals.<\/p>\n \u201cWhat I have observed about all these trade announcements, especially the energy parts, is that there is very little data behind them,\u201d says Anne-Sophie Corbeau, who tracks gas markets as a global research scholar at the Center on Global Energy Policy\u00a0at Columbia University\u2019s School of International and Public Affairs.\u00a0<\/p>\n For one, they may not be enforceable: These agreements are between governments, which can\u2019t simply force private firms to sign contracts. And the numbers in the U.S.-EU trade agreement elicited skepticism from experts, who noted that its targets weren\u2019t physically or financially feasible. \u00a0<\/p>\n The Venture Global Plaquemines gas export terminal under construction in Port Sulphur, Louisiana last year.<\/span> \u201cEven if we take into account that some Russian energy [consumed in Europe] is going to be replaced by U.S. energy, the numbers don\u2019t add up,\u201d says Corbeau. The value of U.S. LNG imported by Europe in 2024 was less than $20 billion, she points out. \u201cExplain to me how we are going to reach $250 billion per year?\u201d<\/p>\n Why U.S. geothermal may advance, despite political headwinds. Read more.<\/p>\n The U.S. government\u2019s strategy for meeting that target entails playing up allies\u2019 geopolitical constraints while downplaying climate concerns. Energy Secretary Chris Wright attended the world\u2019s largest annual gas conference in Italy this month, where he pressed European officials to back away from their climate targets and\u00a0loosen their new regulations on methane emissions of energy imports.\u00a0<\/p>\n Such appeals may find a receptive audience. The war in Ukraine has made countries in Europe and beyond increasingly mindful of their own energy security, analysts say.\u00a0<\/p>\n Climate advocates are concerned that countries are caving to the Trump administration\u2019s demands that they import more U.S. fossil energy \u2014 and abandon their own emissions reductions plans in the process \u2014 in order to escape punishing tariffs.<\/p>\n The bigger climate risk is that building more LNG infrastructure could slow the global transition to renewable energy.<\/p>\n Lorne Stockman, the research co-director at clean energy advocacy group Oil Change International, says it\u2019s important that European Union members rigorously apply new regulations that require companies to measure, report, and verify their methane emissions from LNG imports. Amidst\u00a0reports that U.S. LNG lobbyists and Trump officials have been asking European regulators to water down these rules, Stockman insists that U.S. companies shouldn\u2019t get a \u201cfree pass\u201d because they can\u2019t meet the EU\u2019s criteria for low rates of methane leakage.<\/p>\n The overall climate impact of increasing LNG exports depends on how much methane leaks on its journey from wellhead to export terminal, tanker ship, and regasification facility. Because methane traps much more heat than carbon dioxide, the climate benefits of generating electricity from natural gas instead of coal vanish if enough escapes to the atmosphere. Estimates of leakage rates vary between countries and different oil and gas basins, but scientists have consistently found that methane emissions from U.S. oil and gas fields are substantially higher than figures reported by the EPA and the industry.\u00a0<\/p>\n But the bigger climate risk is that building more LNG infrastructure could slow the global transition to renewable energy, resulting in higher carbon dioxide emissions. Stockman was a coauthor of a recent\u00a0report from Oil Change International, Greenpeace USA, and Earthworks that analyzed the climate effects of five new U.S. LNG projects, including Venture Global\u2019s CP2. Applying the methodology used in the Biden administration\u2019s 2024 DOE study, the researchers found that each project would result in a net increase in global greenhouse gas emissions under any scenario, regardless of how much they reduced methane leaks or incorporated carbon capture and sequestration technology.\u00a0<\/p>\n A new gas import facility in Wilhelmshaven, Germany.<\/span> In the past, Stockman says, industry and government analyses of LNG projects\u2019 climate impacts assumed that U.S. gas would substitute for heavily emitting sources such as coal or Russian pipeline gas. But \u201cas wind, solar, and batteries become more and more commonly used and prices go down and economies of scale increase, you can\u2019t just assume that LNG only displaces coal and other gas,\u201d he says. \u201cThis analysis shows that it also leads to less wind and solar in the energy mix \u2014 and therefore increased exports always result in a net emission increase.\u201d\u00a0<\/p>\n Some analysts are forecasting that, by the end of the Trump administration, the world will have a glut of LNG supply \u2014 and the U.S. gas export sector could see its boom become a bubble.<\/p>\n The next wave of U.S. LNG projects seeking permits, buyers, and investors is largely predicated on forecasts of ever-rising gas demand in fast-growing Asian markets. But the plunging costs and accelerating deployment of solar is set to upend the assumptions underpinning those predictions, according to Christopher Doleman, a researcher at the Institute for Energy Economics and Financial Analysis who specializes in Asia. He and other experts already see signs of a dramatic shift underway in the region.<\/p>\n \u201cChina and India are saying, \u2018We\u2019re not doing it that way. We\u2019re using utility-scale renewables to reduce our peak emissions.\u2019\u201d<\/p>\n In Pakistan, thanks to an influx of cheap solar panels from China, demand for gas for electricity generation has plummeted to the point that\u00a0Pakistan is asking Qatar, its main supplier of LNG, to delay shipments for the next few years. Even Japan, one of the world\u2019s leading LNG importers, is lowering its outlook for natural gas imports,\u00a0due to plunging demand from electricity generators. And according to Kpler, a data-tracking firm, China\u2019s LNG imports have been\u00a0declining for 10 straight months, and are 9 percent lower than this time last year.\u00a0<\/p>\n Asia\u2019s appetite for U.S. gas in the next decade could prove much smaller than projected by the industry, because it is relatively expensive compared to other sources (such as Qatar, a huge LNG exporter) and, increasingly, compared to renewable energy. And many countries, analysts say, are wary of getting locked into dependence on one fuel source. \u201cParticularly for developing economies in Southeast Asia, it\u2019s a massive fiscal burden if you make these commitments to buy LNG,\u201d says Kennedy.\u00a0<\/p>\n In the transition to renewable energy, China is at a crossroads. Read more.<\/p>\n In the U.S., coal\u2019s shares of electricity production and carbon emissions were slashed by cheap natural gas unleashed by the shale fracking boom. Doleman sees a different story playing out in Asia\u2019s biggest markets. \u201cChina and India are saying, \u2018We\u2019re not doing it that way. We\u2019re using utility-scale renewables to peak and reduce our coal usage and emissions.\u2019\u201d<\/p>\n Euan Graham, a research analyst at Ember, an energy think tank, believes these trends mean that investors in new U.S. LNG projects should tread carefully. \u201cThere\u2019s a hell of a lot of risks in banking your business model on a sustained boom and structural rise in gas demand,\u201d he says.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" The United States today is the world\u2019s biggest exporter of liquefied natural gas, accounting for nearly a quarter of the global trade in LNG. By the end of Donald Trump\u2019s second term as president, the U.S. will have more than\u00a0doubled the molecules of methane that it ships abroad.\u00a0 Oil and gas companies are celebrating the<\/p>\n","protected":false},"author":1,"featured_media":23315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[2822,186,226,1545,14223,3899,982,811],"class_list":{"0":"post-23314","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-age","9":"tag-climate","10":"tag-golden","11":"tag-industry","12":"tag-lng","13":"tag-loom","14":"tag-risks","15":"tag-u-s"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/23314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23314"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/23314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/23315"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n Yale Environment 360<\/span><\/p>\n
\n Bryan Tarnowski \/ Bloomberg via Getty Images<\/span><\/p>\n
\n Sina Schuldt \/ picture alliance via Getty Images<\/span><\/p>\n