During President Trump’s inauguration speech, he promised to unlock the “liquid gold” beneath Americans’ feet and increase fossil fuel production. He claimed this would lower gas prices and boost American wealth. In an executive order declaring a “national energy emergency,” he directed the Department of Energy to resume LNG export authorizations and prioritize LNG development in Alaska.
However, there is no actual “energy emergency” as Trump suggested. Under former President Joe Biden, the United States was already producing record amounts of oil and gas. Evidence suggests that maximizing LNG exports will have the opposite effect of Trump’s stated goals. Two reports from January indicate that increased US LNG exports will raise domestic gas prices, with most LNG profits going to foreign investors, benefiting countries like China.
Money from LNG Goes to Foreign Investors
A report from the Private Equity Stakeholder Project found a significant portion of US LNG profits go to foreign investment firms. Fourteen investment firms from eight countries have financed 11.5 billion cubic feet per day in US LNG export capacity, which is about 78% of peak US LNG export capacity in 2023.
The Golden Pass LNG terminal in Texas is 70% owned by QatarEnergy, a Qatari state-owned firm. Qatar’s energy minister recently expressed no concern over US competition in LNG, stating Trump is “good for business.” Additionally, 83% of the Freeport LNG terminal in Texas is owned by firms in Australia and Japan, while the Driftwood LNG terminal is fully owned by Australian firm Woodside Energy. Companies from Canada, France, the UAE, and Saudi Arabia also hold significant stakes in US LNG terminals.
“Trump says LNG terminals on US soil will positively impact the economy, but this oversimplifies the LNG market,” stated Nichole Heil, the report’s author. She emphasized the extent of foreign ownership and noted that profits are diverted to firms like QatarEnergy, not benefiting everyday US investors.
This situation challenges the idea of LNG serving the public interest. Previous Department of Energy (DOE) studies suggested higher energy prices would be offset by increased revenue for American companies. However, a December 2024 DOE study acknowledged this assumption is outdated, indicating LNG exports could increase domestic prices by 30%.
Heil questioned how these revenues would benefit everyday Americans, given the significant foreign investment in US LNG projects.
More Leverage for China
A report from the American Security Project indicates LNG exports are causing price volatility and providing geopolitical leverage to China.
Chris Wright and Doug Burgum, leading Trump’s Energy and Interior departments, are reversing Biden-era policies, advocating for unlimited LNG exports. Trump recently nominated a fossil fuel executive with LNG export plans to oversee LNG export applications. Yet, the US LNG industry’s growth plans appear disconnected from international demand.
China, the largest LNG importer, negotiates favorable deals with multinationals like BP and Shell, then resells US LNG at higher prices. There’s currently more American LNG in China than in the US. “They store it until smaller countries need it, then resell at a profit,” explained Courtney Manning, the report’s author.
Manning’s research also found US LNG exports support China’s renewable energy development and authoritarian aims. Manning argues Trump’s threats to cut off US LNG to China are unlikely to succeed, as China imports only 5% of its LNG from the US but accounts for 20% of US LNG exports.
In response to Trump’s policies, China imposed tariffs on LNG, highlighting the strategic flaws in the “America First” philosophy regarding LNG exports. Shipping gas overseas reduces domestic supply, raising prices. Additionally, investments in new gas production facilities require significant spending, likely keeping prices high.
It is well-known that US LNG exports increase domestic gas prices, as confirmed by a recent DOE analysis. Industry leaders acknowledge this, but Trump insists otherwise, despite evidence to the contrary.
Original Story at www.sierraclub.org