Trump's energy revolution: US poised to dominate LNG market

- We will drill, baby, drill - announced Donald Trump during his inaugural speech. On his first day as president, he removed restrictions on extraction in the Arctic Ocean and the Bering Sea, allowed the resumption of oil and gas exploration in the protected Arctic National Wildlife Refuge, and expanded gas fields in the Alaska region.

He also announced the reversal of Joe Biden's decision to ban gas and oil extraction on 625 million acres (970,000 square miles) of U.S. waters. Regulation changes are intended to facilitate the development of extraction on federal lands.

Trump will need gas because it is intended to serve as the primary bargaining tool in international relations. New Secretary of State Marco Rubio confirmed that American liquefied natural gas (LNG) should be used as a "lever" in talks with China — the world's largest importer of this fuel.

However, Trump's actions are far greater in scope. He is building America's gas power by expanding extraction potential and securing better and larger contracts.

Donald Trump's strategy involves not only creating greater demand for gas in general but specifically for American gas. His numerous announcements concerning tariffs or restrictive trade policies are producing results. Europe and Asia have already declared they are willing to increase purchases from the USA - according to Szymon Pastucha, analyst at the Polish Institute of International Affairs.

Following Donald Trump's victory, European Commission President Ursula von der Leyen announced that the Union is ready to increase LNG purchases from the USA, replacing Russian supplies. In this way, it intends to take advantage of a loophole first used by her predecessor, Jean-Claude Juncker, in 2018. At that time, he presented the US President with a proposal for a joint business on LNG, in which Europe would buy gas from America.

Now, in light of the announced tariffs on EU goods ranging from 10 to 20 percent, von der Leyen is ready to play the gas card. Trump should find it profitable to trade gas with the Union, so he will soften his tariff policy.

Buyers are therefore ready to pay more for American LNG in exchange for other economic benefits - stated Szymon Pastucha.

The United States is already one of the main LNG suppliers to the EU. According to data from the Agency for Cooperation of Energy Regulators (ACER), the Union purchased approximately 40 million tons of American LNG in 2024. Trump's pressure also affects other countries. Japan, among others, wants to buy more liquefied gas from the USA, and South Korea is also considering such a step.

At the same time, as Szymon Pastucha points out, Donald Trump does not seem willing to ease sanctions where they strengthen the US position. Trump's pressure operates on two levels. He maintains a policy of sanctions on the Russian energy sector, primarily on LNG, which effectively reduces the supply of gas on world markets. At the same time, it influences price increases and limits competition, mainly from Russia, notes the expert.

After the shale revolution, the USA became a significant player in the LNG market. It has significantly expanded its infrastructure and gas export capabilities to foreign markets. Today, the main liquefied natural gas export terminals are Sabine Pass in Louisiana, Cove Point in Maryland, Cameron in Louisiana, and Corpus Christi and Freeport in Texas.

However, Joe Biden's policy of focusing on renewable energy sources slowed the development of gas fields and the issuance of licenses for LNG export projects. BloombergNEF data indicates that the number of new sales agreements fell from 38 in 2022 to just 7 in the past year.

Nevertheless, America continues to be the largest LNG exporter in the world. In 2024, US exports of this raw material reached 88.3 million tons, compared to 84.5 million tons a year earlier.

However, Donald Trump does not consider this enough. He is ready to invoke extraordinary powers under his plan to unleash domestic energy production. During the election campaign, he announced that US LNG exports would increase beyond the planned doubling by 2030.

The question remains whether the USA will be able to meet the growing demand for LNG. - Current US LNG expansion programs show that these capabilities will grow significantly. However, even the liberalization of mining rights and constructing additional fields and terminals is not a one-term perspective. Szymon Pastucha emphasized that the US share in gas production is steadily increasing.

Trump has high hopes for the Alaska LNG project, which has been developing for a decade. On Tuesday, January 21, 2025, the new president's administration announced the priority treatment of LNG development potential in Alaska, including fast-tracking the permitting process for necessary pipeline and export infrastructure.

According to data presented on the project's official website, the gas will mainly come from the Prudhoe Bay (75 percent) and Point Thomson (25 percent) fields in the North Slope area. On average, both fields will supply approximately 3.5 billion cubic feet of gas daily.

In addition to exploiting Alaskan fields, the project includes building an LNG liquefaction plant in Nikiski and laying an 806-mile pipeline connecting the North Slope with the southern part of Alaska.

The LNG liquefaction plant in Nikiski will enable the export of up to 20 million tons of LNG annually to international markets. According to Reuters, in January 2025, the Alaska Gasline Development Corporation (AGDC) signed an exclusive agreement with Glenfarne Group to develop the Alaska LNG project. Glenfarne will lead and finance the project's development. Gas deliveries are planned to start in 2031, with LNG exports following shortly after.