The prospects for America’s natural gas industry were already looking up under the Trump administration — and then the president launched a global trade war.
As the White House pursues trade negotiations with more than 100 countries, America’s growing liquefied natural gas industry is being sold as a vital bargaining chip in talks.
Energy Secretary Chris Wright, currently on a two-week tour of Gulf states, raised the prospect of “large-scale investments and partnerships” in U.S. liquefied natural gas projects with the United Arab Emirates last week and planned to do the same with Saudi Arabia, according to a Department of Energy spokesperson. Those conversations included discussion of a massive proposed Alaska project that has been a popular idea with Republicans for decades, but has, until now, proven too costly and complicated to turn into reality.
The same day that Trump announced he was delaying tariff rates that had just gone into effect, Treasury Secretary Scott Bessent discussed how countries could invest in American liquefied natural gas in order to reduce their trade imbalances. “We are thinking about a big LNG project in Alaska that South Korea, Japan, Taiwan are interested in financing and taking a substantial portion of the off-take,” he said to reporters.
Even as the LNG industry is grappling with its own increased costs from tariffs, it could be one of the few industries to immediately benefit from trade negotiations — that is, if the Trump administration can convince countries that any new deals would result in a stable trade environment.
Liquefied natural gas is one of the few American-made goods any country could actually commit to buying in a large enough quantity to help offset a trade imbalance, analysts told NOTUS. Without many valuable, abundant and affordable physical goods to offer the world, the United States’ natural gas may prove to be the “coin of the realm” in the trade wars, industry analysts for Clearview Energy Partners wrote in a recent research note.
“Some countries will look to buy U.S. LNG to defuse Trump’s tariff threats, including Japan, South Korea, Taiwan and the European Union. It’s logical,” said Ben Cahill, the director for energy markets and policy at the University of Texas at Austin.
The U.S. has catapulted over the last 10 years from having zero LNG exports to being the global leader, surpassing Qatar and Australia. Trump’s campaign promise to expedite permits and ease regulatory restrictions for further developments has energized the industry. Wright, himself, was a leading and highly regarded natural gas executive before he took over the Department of Energy.
“The data over the past 10 years of U.S. LNG exports clearly shows that we can lead the world in energy production while lowering energy costs here at home. President Trump wants to grow American exports and reindustrialize America. With President Trump’s leadership, America’s energy industry is once again open for business to the world and only stands to grow in potential,” a DOE spokesperson said to NOTUS.
On Tuesday, an independent DOE arm predicted that growth in U.S. energy consumption would decline over the next decade, based on Biden administration policies. That’s an unhelpful conclusion for the Trump administration’s goals because lower energy consumption growth would likely reduce pressure for new energy production.
The DOE immediately used the findings to blast the Biden administration, saying that under Trump, the government would ensure that “America’s future is marked by energy growth and abundance — not scarcity.”
Trump last week suggested to reporters in the Oval Office that Europe would need to purchase $350 billion in U.S. energy as part of a trade deal, a number that is almost the entire size of the European Union’s fossil fuel imports from across the world. The European Union and the United Kingdom already purchased about half its total LNG supply from the United States in 2023, a large increase driven by the cutoff of gas from Russia during the war in Ukraine.
“I’m not really sure where he got that number, to be honest,” said Mathieu Utting, an analyst at Rystad Energy.
The number is significantly larger than the EU’s “goods” trade deficit with the U.S., which is the purported problem that Trump says he wants to address. Trump is especially fixated on those trade imbalances and has suggested that other countries need to commit to importing more American-made products. But committing to U.S. natural gas exports might be a tough sell for a lot of nations.
“European countries do not want to sign long-term LNG contracts” with the United States, said Ira Joseph, a leading long-time energy analyst now at Columbia University’s Center on Global Energy Policy. “They have a logical and justifiable concern that Russian pipeline gas is going to come back into the market, prices are going to go way down and Europe will end up having signed a bunch of U.S. contracts that are priced out of the market.”
There are other countries that need more LNG and might be interested in buying it specifically from the U.S., especially South Korea, Taiwan and possibly Japan. But given how many times Trump has changed his trade and tariff plans in the first few months of his second term, it would be difficult for any country to trust that trade policy would be consistent enough to justify a large commitment.
“There is now political risk associated with signing long-term deals with the U.S. that maybe we didn’t have before,” Joseph said. “It’s tricky because if someone signed a 1 billion ton contract on Friday, that’d be great. But then next Friday, they could go, ‘Oh no, that’s not good enough. We’re gonna put tariffs on you. You need to sign another billion.”
Then there’s the issue of price. “In Asia, gas demand is very price sensitive because they do have coal. And so if the price of U.S. LNG increases, which there’s a real potential of just because the cost of building these terminals is going to be a lot more expensive with tariffs on metals, we could see those emerging markets in Asia shift,” Utting said.
If countries could stomach the political risk, and if the prices aren’t too high, then one of the most logical places to purchase more LNG for Asian buyers would be Alaska. The region is geographically suited for shipments to Asia, a pitch that the developers of the project and Alaska Gov. Mike Dunleavy are now marking. The governor spent nearly two weeks traveling to Asian countries in late March trying to sell the project just before Trump announced the tariff rates.
“Alaska LNG and things like that — not all of them, financially, were meant to be built. Some of them just aren’t going to work. But you know, if you have the administration from a policy perspective putting their thumb on the scale a little bit here in favor of the projects, then yes, that can affect the project economics,” Joseph said.
Utting was even more skeptical than Joseph about the future of the project. “It’s just an extremely expensive project. And the investment environment in the U.S. is not great,” he said. “Alaska LNG is for us a little bit of a stretch, from our analysis on it.”
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Anna Kramer is a reporter at NOTUS.